The Fiscal Sustainability of Universal Health Care in Canada

1. The Fiscal Sustainability of Universal Health Care in Canada Gregory P. Marchildon, Ph.D. Canada Research Chair in Public Policy and Economic History Johnson-Shoyama Graduate School of Public Policy, University of Regina, CANADA Fiscal Space and the Financing of Universal Health Care Systems in the Americas PAHO/WHO Regional Workshop, Washington, D.C., November 29-30, 2007

2. The Many Worlds of Fiscal Sustainability • Originates from Latin: to hold or support • Achieving balance by not depleting or destroying existing resources • Having a sufficient and dependable revenue stream to finance expenditures • Romanow Commission (2002): sufficiency of resources necessary to provide citizens with timely access to quality health services • Long-term • Evolving health needs

3. Universal Health Care • Balance of resources necessary to fund a basket of public health care services available to all citizens on the same terms and conditions • Resources = $ + L + K (= $ ?) • Categorical versus universal • Benefit entitlements versus citizen rights • Definition of public health care • Definition of same terms and conditions

5. Constitution Act, 1982 Statistics Canada Transfer payments Provincial and Territorial Governments Federal Government Canadian Institutes for Health Research Federal-Provincial-Territorial Advisory Committees and Councils Minister of Health Regional Health Authorities Ministries of Health Canada Health Act, 1984 Health Canada Public Health Agency of Canada Patent Medicine Prices Review Board Mental Health and Public Health Home Care and Long-Term Care Single Payer Hospital, primary care and physician Services Provincial and Territorial Prescription Drug Subsidy Programs Canadian Institute for Health Information Health Council of Canada Canadian Agency for Drugs and Technologies in Health Canada Health Infoway Canadian Blood Services Organization of the Public System in Canada

6. Public, Mixed and Private Systems of Health Care

7. Total Health Expenditures 2005 $142 Billion Private Sector 30.4% Public Sector 69.6% Dental and vision care, complimentary and alternative medicine, and some long term care and home care Other Public Sector 6.3% Provincial Government Sector 63.3% Physician Remuneration Regional HealthAuthorities Federal Direct 4.2% Private Health Insurance 12.2% Out-of-Pocket Expenditures 14.4% Other 3.2% Provincial Drug Plans Municipal (Public Health) 0.7% Commercial Insurance Firms Hospitals Not-for-Profit Insurance Firms Long-term Care Social Security Funds 1.4% Community Care Worker’s Compensation Quebec Drug Insurance Fund Home Care Overview of Canadian Health System: Expenditure Perspective

8. Public, Mixed and Private Systems of Health Care

10. Universal Health Expenditures in as a Share of Total Health in Canada, 2007 Medicare $67b 41.8%

11. Trends in Health Expenditures, 1976-2005

12. Real Growth Trends, 1976-2005

13. Total Health care expenditures as a share of GDP in Canada and selected countries, 1960 to 2002

14. Public Health Care Expenditures as a share of GDP in Canada and selected countries, 1960 to 2002

15. Comparative Health Status Indicator Rankings (OECD rankings in brackets)

16. Malignant Neoplasms (2000) Cerebro-vascular Diseases (2000) Respiratory System Diseases (2000) Ischaemic Heart Diseases (2000) SWEDEN 1 (2) 5 (11) 1 (4) 4 (16) CANADA 4 (15) 1 (2) 3 (10) 3 (12) AUSTRALIA 2 (8) 4 (5) 4 (12) 2 (11) FRANCE 5 (18) 2 (3) 2 (8) 1 (3) UK 6 (20) 6 (18) 6 (25) 6 (22) USA 3 (14) 3 (4) 5 (22) 5 (21) Comparative Disease Indicator Rankings (OECD rankings in brackets), 2000

17. Comparatives Trends in real PUHE, PRHE, and THE, cumulative % change, 1990-2001

18. Nature of Regionalization Reforms • Had been urged for decades before by policy experts • Fiscal crisis of early 1990s finally pushed most governments to act • “Big bang” structural change • Little idea of actual consequence: i.e. a high level of uncertainty

19. Stated Policy Goals: Regionalization • Better align resources with population needs • Integrate planning and management of services • Shift emphasis to illness prevention and health promotion (from acute care) • Improve service quality and EBP • Provide accountability for “system” • Increase public participation Source: Lewis and Kouri (2004)

20. Current Debates • Fiscal sustainability • Federal-provincial conflict • HHR shortages and wait time pressures • Public-private boundaries • Chaoulli decision in Supreme Court and role of private health insurance • Private delivery and contracting out

21. Underlying Fiscal Sustainability Challenges • Transformation of primary health care • Effective management and policy/program experimentation at RHA level • Prescription drugs: major cost driver • Countervailing power • Prescription and utilization behaviour • Electronic (patient) health records

22. Political Sustainability: Public Satisfaction

23. Concluding Observations • Canadian Medicare and European v. US trajectory • Evidence from introduction of more recent universal health care systems • The revenue and responsibility challenge • Public financing of universal health care and the choices available