Health Care Sustainability in Canada

Transcription

1 Health Care Sustainability in Canada Threatened or Secure? Presentation to CUPE Health Care Council Saskatchewan Yorkton Saskatchewan Carol Kushner May 18, 2011

2 Outline Sustainability Deniers and Affirmers Health care spending Debunking myths about aging Impact of Health Reform on Use of Funds Addressing real (not phantom) problems Questions about the future A question and an answer

3 Who says Canada s s health care system is unsustainable? Conference Board of Canada Canadian Alliance for Sustainable Healthcare David Dodge, former DM of Health Canada and former Governor of the Bank of Canada Don Drummond, former chief economist TD bank International Monetary Fund (IMF) A worried public

4 Caution.. Beware of The language of inevitability Overblown rhetoric Misleading numbers

5 Caution: Be Aware of: Who stands to gain from these messages Health Insurance providers The wealthy and the healthy Some health care providers Who stands to Lose: The unhealthy and the unwealthy

6 Conference Board of Canada Current trends and numbers suggest that Canada s s health and health- care systems may be very close [to the tipping point] The Health Enterprise, Charting a Path for Health Innovation, Dec. 2009

7 Canadian Alliance on the Sustainability of Health Care Lead Investor: Sun Life Financial Partners: CML Healthcare Inc.; The Cooperators Group Limited; IBM Canada Ltd.; Loblaw Companies Limited; Mercer (Canada) Limited; Scotiabank; ; TD Financial Group; Workplace Safety and Insurance Board of Ontario. Participants: Canadian Association for Retired Persons; Canada's Research-Based Pharmaceutical Companies (Rx&D( Rx&D); The Credit Valley Hospital & Trillium Health Centre, The Hospital for Sick Children. Scholar-in in-residence Sponsor: Canadian Imperial Bank of Commerce.

8 David Dodge His unpalatable prescription Sharply reduce public spending in non-health programs; Raise taxes Introduce copayments and de-list services Allow public health care services to deteriorate Source: Chronic Healthcare Spending Disease,, Dodge & Dion, CD Howe Institute, April 2011

9 Don Drummond, former TD chief economist Heads a Commission in Ontario looking to rein- in public sector spending, including health: people are much less troubled right now by private-sector delivery. Source: Richard Blackwell, Globe and Mail, March 29, 2011

10 IMF says so: in the longer run restraint in the growth of health-care spending would be essential. Left unchecked, such spending would put unsustainable pressure on public finances IMF, PIN No 10/161, Dec. 22, 2010

11 A Worried Public: CMA poll results during the Federal Election Campaign More than seven in 10 (73 per cent) of respondents believe it is very important that party leaders present their plan to ensure that Canadians have a sustainable health care system that meets patient needs Source: CMA commissioned Nanos to poll 1201 Canadians between April 17- April 24, 2011, margin of error 2.8%, 19 times out of 20.

12 What do they propose? A shift towards private finance through: User fees Utilization taxes Restricted public insurance coverage More private insurance coverage More private delivery All of which would tend to ADD to costs rather than contain them and SHIFT the burden onto those who are sick and poor.

13 Among those who affirm that the system IS sustainable: Robert Evans Roy Romanow Canadian Federation of Nurses Unions Canadian Doctors for Medicare Canadian Health Coalition Medical Reform Group CUPE and other Public and Private sector unions

14 Underfunded and Fiscally Unsustainable? NOT According to Bob Evans: Canada s health care system is not fiscally unsustainable In international terms it is well-financed There are still many opportunities for improved efficiency But the twin propositions above boil down to an argument for cost-shifting from public to private budgets, and cost expansion Source: Robert Evans, Introductory Lecture to Executive MBA Program, Sauder School, UBC, April 4, 2008

15 Roy Romanow Health care is as sustainable as we want it to be. In other words, it s s a choice a political choice.

16 Canadian Federation of Nurses Unions The oft-cited increase in health care spending as a share of total public spending reflects not an extraordinary increase in health care spending, but rather decisions by governments to cut taxes and public spending in areas other than health care. Source: Rachlis and Mackenzie, August 2010

17 Canadian Doctors for Medicare Proponents of for-profit private health care claim our public health care system is "unsustainable," but the facts show that these claims are driven far more by ideology than real data Source: CDM Briefing Note, August 23, 2010

18 Neat, Plausible, and Wrong Canadian Doctors for Medicare on the sustainability of health care: the facts show that Medicare and public sector health care spending in general has grown little over the last 30 years and shows no signs of rapid future growth Released March 4, 2011

19 Canadian Health Coalition Between 1975 and 2010, Medicare spending (hospitals and doctors) has been 4-5% 4 of GDP Average annual increases in the costs of private drug plans: 15% $170.8 billion in reduced public sector revenue from tax cuts between 1997 and 2004 Source: Canadian Health Coalition, facts/9- sustainability-of of-health-care/langswitch_lang/en

20 Medical Reform Group Submission to the CMA: Paying for Health care advantages of public finance Equity Efficiency (including Administration Expenses) Cost control Superior outcomes Competitive economic advantages Source: MRG Newsletter, Fall 2010

21 Unions CUPE and other public and many private sector unions have been strong supporters of Medicare Produce fact-based arguments against private for profit health insurance and delivery Contribute to income and employment equity by representing health care workers rights. Promote the business case for Medicare

22 The real problem: Reduced fiscal capacity via policy choices Successive tax cuts since the late 1990s: Federal decline in taxation revenue: 3% of GDP Provincial decline in tax revenue: 2% of GDP Local government*: 1% of GDP Total impact = tax cuts total 6% of GDP = $90 billion/year of foregone tax revenue * Since the early 1990s Source: Rachlis and Mackenzie, 2010

23 By comparison: Tax cuts = cost governments 6% of GDP Health care costs have increased by 1.5% Provincial Medicare spending has increased by 1% Source: Rachlis and Mackenzie, 2010

24 In Saskatchewan In , 06, Corporate Tax Cuts cost the province $39 million in revenue, 9.9% of the total corporate tax revenue of $393 million Personal Tax Cuts cost much more -- $673 million or 46.4 percent of total personal tax revenue.

25 Saskatchewan s s New Health Budget $4.46 b. (up $260 million from last year) accounting for nearly half the budget. Source: Scott Maclean, Global, Regina, March 23, 2011 (in fact, it s s more like 41.8 percent of the total budget or 47.6% of program spending (with debt reduction and debt servicing costs removed)

26 Total Health Spending, % of GDP Total Health Spending, % of GDP Canada

27 Sustainability of Healthcare: Myths and Facts Source: Robert Evans and the Canadian Health Care Coalition, June e 2010

28 Total Health Care Spending, per capita in US dollars, 26 selected countries

29 Public and Private Shares of Total Health Expenditure

30 Private health care spending Private insurance In Canada - 1.5% of GDP (or 15% of total health spending) In the US - 6.8% of GDP (42% of total health spending) Out of pocket spending is 15% of total health spending in Canada, higher than in the US (12%), France (7%) and the Netherlands (5.5%) Source: Rachlis and Mackenzie, 2010

31 What about the impact of Aging? The proportion of the population of Canada over 65 years of age will grow from 13% in 2001 to 23.4% in 2036 Older people use more health services Source: Statistics Canada and CIHI, 2011

32 Provincial/Territorial Government Expenditures by Age Group, 1998 versus 2008 Source: NHEX, CIHI, Statistics Canada

33 The Silver Tsunami or Glacier? The idea that aging is a major contributor to health costs is a persistent myth Aging adds about 0.8 percent a year to health costs Less than overall population growth (1%/year) Less than inflation (2.5%/year) Source: Robert Evans, Canadian Health Coalition, facts/9-sustainability sustainability-of-health-care/langswitch_lang/en

34 Cost Drivers Source: Health Council of Canada, Value for Money,, % 90% 80% % 60% 50% 40% 30% 20% 10% 0% Aging Pop. Growth Inflation Utilization

35 What are the biggest cost drivers? Service intensity (more and more services) New drugs New technology More imaging Very costly technologies More community services

36 Total health expenditure by use of funds Source: CIHI, National Health Expenditure Trends, 1975 to 2010, (forecast) Other Other Hosp. Drugs Hosp. Dent. Drugs LTC MDs LTC Dent. MD

37 What needs to be done: Address real not phantom problems Improve efficiency National Pharmacare Program National Homecare Program Continue to reorganize service delivery Primary Care Reform Team-based care Better Chronic Disease Management Maximize health human resources Use proven management techniques Address variations in service provision Focus more on prevention

38 Post 2014: a new era? The Canada Health Transfer ( ) 2014) comes up for renewal soon Will the new agreement buy change or just more of the same? What will the Harper government do about the Canada Health Act and the Canada Health Transfer now that it has a majority?

39 Public Opinion: Job 1 Repeated misinformation can turn into received wisdom The public is already worried BUT.Do not lose heart: There is still strong support for Medicare and not just among the over-60 set the strongest unequivocal support, at over 82%, is among those aged 19-29! Source: Nanos,, IRPP, 2009.

40 Time to answer the question Is Canada s s health care sustainability threatened or secure?

41 My answer is BOTH: Threatened by misleading information by proponents of private insurance and for-profit health care Secure Given the real facts and figures In the public s s determination to preserve and improve it.