Time to reform the Canada Health Act

With rumoured spending cuts in the upcoming federal budget, look for the Conservatives to play up one area of spending they’ve committed to increasing: health care transfers to the provinces. Last December, Finance Minister Jim Flaherty announced a new 10-year plan for health care transfers that will see transfers increase by six per cent for the next five years and thereafter by the rate of economic growth until 2024.

Rather than use the budget to brag about maintaining high rates of spending growth for health transfers, the Conservatives should offer up solutions to our poorly performing health care system. After all, it was Mr. Flaherty himself who in announcing the 10-year transfer plan admitted, “we want to put the issue of funding behind us to allow us all to focus on the real issue — how to improve the system.”

Now is the time to do so.

The primary problem with our health care system has never been a lack of spending or inappropriate levels of cash transfers from the federal government. Rather, it’s federal legislation that discourages the provinces from experimenting with policies that have been implemented in other developed nations with universal access health care.

This discouragement stems from federal legislation that threatens the provinces with potential reductions in federal transfers for health care if the provinces do not follow the rules, regulations, and federal interpretations of the Canada Health Act. 

While the Canada Health Act requires the provinces to provide universal health coverage and portability across the country, it disallows a variety of policies that are being used in other countries that provide universal health care to deliver better care at lower costs.

Until the federal government has the courage to revisit the conditions attached to the health transfers and give the provinces greater flexibility to experiment and innovate, Canadians should not expect any better results from the new 10-year federal transfer agreement than the 10-year plan implemented by Paul Martin or the large increases in health transfers introduced by Jean Chrétien after his government balanced the books in the mid-1990s.

Since 1997/98, federal cash transfers for health care have increased at an average annual rate of nearly 11 per cent. By comparison, the rate of population growth and inflation was three per cent. The significant increases in health transfers have resulted in the federal government transferring $98 billion to the provinces above and beyond what was required to compensate for population growth and inflation.

Despite these substantial transfers, the median wait time from GP referral to treatment by a specialist has increased by nearly 60 per cent since 1997. Canadians are also waiting longer now for access to high-tech medical devices such as CT scans and ultrasound scans than they were in 1997 and are served by fewer practising nurses per 1,000 people. In addition, surveys suggest roughly seven per cent of Canadians do not have a regular doctor and are unable to find one.

With a health care system that is already one of the most expensive in the developed world, especially among those that provide universal access to care, lack of money is not the problem.

If Canadians wish to have a world-class health care system, the Canada Health Act needs to be reformed. For example, the Canada Health Act disallows policies such as cost sharing for universally accessible services – which encourages more informed use of the health care system – in spite of the fact that a large majority of developed nations benefit from this policy choice.

Further, the vague nature of the Canada Health Act, and the fact that its interpretation is entirely at the federal government’s discretion, has discouraged effective provincial health policy reforms. Provinces, perhaps being risk averse and avoiding conflict with the federal government, have remained steadfast in their commitment to their current, failing models of health care. Initiatives to model provincial health care policies on those that have proven to be successful elsewhere in the developed world are notably rare and none have made it past the public discussion phase.

If Mr. Flaherty and his Conservative colleagues truly want to “improve the system,” they should trim and reform the strings attached to health care transfers. A revised Canada Health Act should require provincial health care systems to be universal and portable while leaving the details to the provinces. This would uphold the noble goals of Medicare but allow the provinces to innovate and adopt more successful approaches to universal access health care.