roughly $75 billion dollars on publicly-funded
health care (and another $30 billion or so on private health care). Mr.
Romanow’s solution to our problems is a cash infusion of up to $6.5 billion per
year. But the federal-provincial deputy ministers of health, in their last
report, made a convincing case that health care costs are rising within the
system at 5-6% a year, just under the current cost pressures, and that a
number of new pressures are likely to accelerate that trend. So, you do the
math. Add an annual tax-financed contribution of $6.5 billion to a health care
budget of $75 billion rising at 5% per year, and within two years the
ordinary and totally foreseeable costs of the existing system will have eaten up
every penny of that new funding.
Indeed, the health
care system in Canada staggers from crisis to crisis in which new funding is
promised by the federal government. But the federal government put something
like $20 billion into Medicare just before the last federal election several
years ago, and, as Mr. Romanow himself remarked in his press conference last
week, everybody wants to know what we got for that money. The queues have
lengthened, not shortened, the shortage of diagnostic equipment has gotten
worse, people are less able to find a family physician than they were five years
ago. In fact, we have had a lot of experience in Canada with new injections of
cash into the system, supposedly to "buy change". Normally what happens is that
the powerful organised interests within the system (doctors, nurses, support
staff, etc.), organise to capture a share of that money. Costs rise, but
productivity does not, and services are no better or more timely. The Canadian
Medicare system is a black hole into which we can pour seemingly infinite
amounts of money.
A final note on this
point. The Canadian Medicare system was created in the 1960s as a new layer on
top of an existing, relatively well-funded health care system. Since then, we
have paid most of the day-to-day operating costs, but we’ve been coasting on the
capital within the system, and not renewing it.
The average hospital
in Ontario, our wealthiest province, is 47 years old. David MacKinnon, the head
of the Ontario Hospitals Association and I calculate that the total working
capital deficit of Canada’s hospitals today is roughly $4 billion. On top of
that, the capital expenditures for the Canadian hospital system will be about
$2 billion a year for the next five years.
eliminating the working capital deficit in our hospitals (because working
capital represents capacity for change) and paying for the ordinary capital
costs in the hospital sector alone over the next five years, would wipe
out all the extra funding Mr. Romanow is proposing for the system as a whole.
And don’t forget that he’s not merely proposing throwing cash at the existing
system – he’s also talking about larding it with new responsibilities whose
costs are virtually guaranteed to be higher than what has been forecast. Even if
you think that money’s the solution, what Mr. Romanow is proposing is barely
enough to take the incipient crisis in Canadian health care off the boiling
point for 2-3 years at best.