Saturday, July 03, 2004

How to Fund Medicare?

After getting completely annoyed with our Provincial Government the other day in regards to King Ralph's latest decrees on what he'd like to do to our health care system, finally calmed down enough to start looking at what is being proposed in a semi-rational fashion.

The Graydon Report seems to form a key part of the positioning that the Klein government is taking with regards to health care. It is relatively short, only about 25 pages of material. The second report comes from the Conference Board of Canada, and is entitled "Challenging Health System Sustainability: understanding Health System Performance of Leading Countries". This is a much longer document - some 126 pages in length. This news release gives a brief synopsis of what the Alberta Government thinks are the key findings of these two reports.

The short synopsis is this:

Conference Board:

# Money alone is not the answer.
# Canada must do more to control escalating pharmaceutical costs.
# Creating and maintaining a satisfied and productive workforce is vital.
# Canada needs to focus more on health promotion, prevention and determinants of health.
# An aging population does not have to result in a more expensive health system.
# Investing in information technologies and training creates a more productive workforce.
# User fees/cost-sharing control costs under certain circumstances, but have consequences.
# A public system with no or low user fees needs surgical capacity to avoid long wait times.


Graydon Report:

# Wages and salaries, new technology, prescription drugs and a growing and aging population are the main cost drivers in Alberta's health care system.
# Costs are expected to continue to outpace provincial revenue growth, creating a growing gap between resources and costs.


I find it intriguing that missing from the discussion (apparently) are both the Mazankowski Report, and the Romanow Report on health care in this country. Both are large, and substantial documents - which I do not doubt I will be referring to much in the next few months. The Graydon report makes brief allusion to the Mazankowski Report, but quietly ignores the Romanow Report. (No doubt because the Romanow Report is a Federal Government document, and therefore quite inapplicable to Alberta - at least if you listen to the Alberta Government politicians.)

Two things have been brought forth that seem to have raised the most active discussions in Alberta. The first is a proposal to escalate the amount of money paid in Health Care Premiums by individual citizens; the second is a proposal to introduce a "deductible" to health care access.

Both of these options are described in the Graydon Report, along with offhandedly dismissing the idea of increasing income taxes in Alberta to fund Health Care more effectively.

Since the monies gathered as "Health Care Premiums" go into the Government "General Revenues", and not specifically into accounts set aside for Health Care, I would assert that a Health Care Premium is simply a form of poll (or head) tax - everyone pays it - regardless of their income. Worse, we pay it, ostensibly for health care, but we have no guarantee that those dollars actually go there. For all I know, my health care premium dollars from the past year could be sitting in some meat packing company's bank account. Unless you are demonstrably destitute, you are paying those premiums.

Actually, I'd rather see our income taxes go up in this province, and scrap the fiction that we pay "lower taxes". Let's deal with the reality of looking after our citizens - decently - if it costs a few dollars, so be it. The Graydon report poo-poos the idea of increasing taxes because "Albertans are not very supportive of income tax increases", and "it may affect Alberta's Tax Competitiveness". At best those are spurious arguments; at worst we should view them as insulting to the intelligence of the citizens. Income taxes actually do a far better job of managing the 'ability to pay' than do the arbitrary means tests applied to get exemptions from the Health Care Premiums this province levies.

The notion of a 'deductible' makes me shudder. Basically what the proposal in the Graydon report does is jack up the premiums we all pay, and then further punishes us if we go to the doctor by demanding that we pay up to 1.5% of our taxable income as a deductible for whatever procedures we need. Talk about kicking someone when they are down! My goodness - the year that someone needs serious health care, their income is already likely to take a significant hit due to lost work time; and those under long-term medical supervision will find themselves with an additional bill that they can ill afford. Again, a means test of sorts is suggested in the Graydon report, but it seems to be rather arbitrary - 1.5% of taxable income as a ceiling.

The second assumption that is made in the Graydon Report - and it is an attitude assumption - is that those who use the Health Care system do not "value" it appropriately. "Unlike the current system where people tend to think of health care services as "free"..." speaks strongly to a desire for a "user-pay" model. Basically, they want to punish people for going to the doctor. I think for the majority of Albertans, the assumption is completely bogus in the first place. Most of us go to the doctor once a year for a checkup, and periodically if we are under long-term supervised care - whether that is following the effects of a prescription, or just to make sure that something that could be bad doesn't change suddenly. I hardly think that constitutes abuse of the system in any way, shape or form. The idea of putting out "invoices" that tell you how much you consumed last year is somewhere between pointless and silly. First of all, most people don't understand what it costs for a mechanic to fix their car; much less what the health care providers have to deal with trying to heal people.

When a study appeared in the Canadian Medical Association Journal that reviewed 'for profit versus not-for-profit' health care delivery in the US, I think we had our first, clear, non-politically motivated review of the differences between for-profit and not-for-profit health care delivery. From 10,000 feet (e.g. scanning the study), this appears to confirm something I have long asserted - the profit motive is in direct conflict with the needs and interests of the patient. In the coming debate, especially in Alberta, we need to be cautious about this balance.

There is an underlying assumption in Canada that not-for-profit means public sector; and for-profit is immediately 'private sector'. This is not necessarily true - if there are efficiencies to be gained by creating private sector, non-profit delivery mechanisms, let's evaluate them - carefully. In any case, the biggest issue is that of transparency. Private corporations don't like opening their books up to anyone - including shareholders. Therefore, I have to suspect that any move away from public sector delivery will require a strong regulatory environment that guarantees that the activities of the provider organizations are completely transparent and reviewable at all times. (With some appropriate legislative teeth in place to ensure that things can be reined in should they start to get out of hand.)

There's a lot of material in this one - I'll probably clearer ideas once I have read through some of the verbage I've referenced in more detail.

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