Canadian Perspectives Autumn 2004

With the provincial premiers summer-time meeting in Niagara-on-the-Lake, and a planned meeting between the Prime Minister and the premiers set for mid-September, both the evidence and Canadian public opinion support public health care and oppose for-profit medicine.

Prior to the election, (now former) Health Minister Pierre Pettigrew drew a firestorm of criticism when he remarked that provincial governments could "experiment" with the private delivery of health care, a statement he hastily "clarified" - by rejecting it - the next day.

Despite promises made during the election, the Liberal and Conservative record on health care is clear enough. The 2003 health care accord - supported by Prime Minister Martin - opened the doors to privatization by making no attempt to ensure that new funding be directed to not-for-profit services. In Parliament, Stephen Harper supported this accord because, as he stated, it has "no restrictions on private health care delivery within the public system."

What both parties refuse to acknowledge is that without a corresponding increase in public delivery, the increasing role of private, for-profit delivery threatens to undermine the sustainability of a publicly funded system dedicated to ensuring universal access. The Liberals and Conservatives hold these views despite popular opinion and the facts.

Popular opinion shows that 64 per cent of Canadians believe that the health care system should exclude for-profit corporations, and instead rely on not-for-profit health care providers (see page 5). Moreover, 74 per cent of Canadians wanted the Romanow Report on the Future of Health Care in Canada - which rejected private delivery - to be implemented within the first 100 days of its release, now more than two years ago (Ekos Research, 2002).

Apart from popular opinion, what do the facts tell us? Research from the Canadian Institute for Health Information demonstrates that government spending on hospitals and on physician services has declined gradually as a share of total health expenditures over the last decade. In 2003, 30 per cent of total health expenditures went to hospitals (down from 45.2 percent in 1976), and 12.9 per cent of expenditures went to physician services (down from 15.4 per cent in 1991).

If that’s the case, though, why have health costs grown at all? Not because of the public system, but because of the private system that we do not have control over. For example, in 2003, spending on drugs is expected to represent 16.2 per cent of the total health expenditures in the country, up from 9 per cent in 1984.

Given this, Canadians might be asking if drugs are driving up health care costs for the public, what is the government doing to address this situation? Successive Liberal and Conservative governments have rewritten patent laws to extend the period of patent protection and restricted access to lower-priced generic drugs.

They also continue to ignore other evidence. A New England Journal of Medicine article in 1999 revealed that no peer-reviewed study has ever found that for-profit hospitals are less expensive than not-for-profit hospitals. Moreover, those studies have found that for-profit hospitals are 3 to 11 per cent more expensive than the not-for-profit hospitals. The facts show that for-profits spend more on administration, marketing, executive salaries, and dividends to shareholders.

If for-profit health care is not more efficient then the question becomes, is the more costly service worth it? A Journal of the American Medical Association article in 1999 found that an examination of the quality of care, for everything from heart attacks to diabetes to eye examinations, showed that investor-owned Health Maintenance Organizations deliver a lower quality of care than not-for-profit plans. A June 8, 2004 study in the Canadian Medical Association Journal concludes that for-profit hospitals result in both higher mortality rates and greater payments for care than not-for-profit hospitals.

The evidence is already in. There is no need to "experiment" with the health services that Canadians so deeply cherish. Will the new Health Minister Ujjal Dosanjh recognize and defend this truth?

Robert Chernomas is a Professor of Economics at the University of Manitoba and on the Board of Directors of the Council of Canadians.

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