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The Fiscal Sustainability of Health Care in Canada

The Fiscal Sustainability of Health Care in Canada: The Romanow Papers, Volume 1

Edited by Gregory P. Marchildon
Tom McIntosh
Pierre-Gerlier Forest
Copyright Date: 2004
Pages: 422
  • Book Info
    The Fiscal Sustainability of Health Care in Canada
    Book Description:

    The Fiscal Sustainability of Health Care- the first of a three-volume set of selected papers from the Romanow Commission - comprises the most influential discussion papers on the fiscal sustainability of public health care in the future. The subjects covered include the current and potential cost drivers of the system, the financing and delivery of health care, fiscal federalism, and international trade regimes. While some of the contributors are among Canada's best known and respected figures in the field, others are relatively new scholars from Canada and abroad who bring fresh perspectives and new insights to the issue of fiscal sustainability.

    Presenting divergent diagnoses and policy prescriptions, the papers collectively highlight the many factors that governments and health care sector managers must confront to keep the Canadian health care system viable in the 21st century.

    eISBN: 978-1-4426-8128-6
    Subjects: Political Science

Table of Contents

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  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-vi)
  3. Acknowledgments
    (pp. vii-viii)
  4. Contributors
    (pp. ix-2)
  5. Introduction: The Many Worlds of Fiscal Sustainability
    (pp. 3-24)

    At the core of the Romanow Commission’s mandate was the expectation that its ultimate recommendations would ‘ensure the long-term sustainability of a universally accessible, publicly funded health care system/ In April 2001, when the commission was established, the country was in the midst of a fierce debate about whether Canada’s public system of health care was still sustainable or needed radical surgery to its funding and delivery. The debate then and now often generates more heat than light, largely because of participants differing and often-conflicting assumptions and definitions concerning sustainability.

    The word ‘sustain’ originates from the Latin for hold or...

  6. Part One: Cost Factors

    • 1 Technological Change as a Cost-Driver in Health Care
      (pp. 27-50)

      When asked about the importance of technological change to the future of the health-care sector, economists might turn to the markets for answers. The message found there is clear, summarized in a recent headline from the business section of the theNew York Times: This decade belongs to health care’ (Munger Kahn 2002). Average priceearnings ratios in high-tech health sectors are currently about twice as high as those in other industries, indicating that investors assume that health technologies are poised to pay big dividends in the near future. These beliefs are no doubt fuelled by the highly publicized enthusiasm over...

    • 2 How an Ageing Population Will Affect Health Care
      (pp. 51-80)

      Concern over ageing is not exclusive to discussions of the future of health care, nor are Canadians alone in dealing with this issue. Many countries are facing the prospect of an increase in the percentage of the population aged 65 or older because of the ageing of the baby-boom generation, as in Western nations, and/or increasing life expectancy, as in a number of countries, most notably Japan. An older population tends to increase the need for public spending – on pensions, health care, and other services – while reducing the proportion of the population paying substantial income tax.

      Forecasts of...

    • 3 Medical Malpractice, the Common Law, and Health-Care Reform
      (pp. 81-109)

      This paper provides an overview of the possible application and ramifications of malpractice jurisprudence in the context of health-care reform in Canada.¹ The changing nature of Canadian health care has shaped, and will continue to influence, the practice environment for most professionals in the field. But, as we see throughout this paper, much of this change does not fit comfortably with existing principles of common law. This is largely because cost containment and reform of health care challenge well-established legal obligations. Because tort law and fiduciary law focus largely on the interests of the patient and on the maintenance of...

    • 4 Section 7 of the Charter and Health-Care Spending
      (pp. 110-136)

      Section 7 of the Canadian Charter of Rights and Freedoms states: ‘Everyone has the right to life, liberty and security of the person and the right not to be deprived thereof except in accordance with the principles of fundamental justice.’ With the Supreme Court of Canada’s decision inEldridge v. British Columbia(1997), the applicability of section 7, and of the Charter generally, in the health-care context has expanded significantly (Jackman 2000). In theEldridgecase, the court held that the actions not only of governments, but of hospitals and other non-governmental health-care providers planning and delivering publicly funded health-care...

  7. Part Two: The Financing and Delivery of Health Care

    • 5 Financing Health Care: Options, Consequences, and Objectives
      (pp. 139-196)

      In modern health-care systems people pay for the care of other people, not for their own. A relatively small proportion of total expenditures on health care is financed through payments by the users of care, consequent on their own use. People make contributions, in varying amounts and on varying terms, to ‘third parties’ – public agencies (through general taxation or social insurance) or private insurance companies that pool these contributions and disburse funds to the providers of care.

      In Canada, for example, out-of-pocket payments by users accounted for $14.2 billion, or only 15.9 per cent, of the total of $89.5...

    • 6 Determining the Extent of Public Financing of Programs and Services
      (pp. 197-232)

      Public-sector spending accounts for almost 73 per cent of total spending on health and represents about 30 per cent of governments’ total revenues in Canada (Canadian Institute for Health Information [CIHI] 2001; Conference Board of Canada 2001). The Conference Board of Canada (2001) projects that public-health expenditures will rise from 31.1 per cent in 2000 to 42.0 per cent by 2020 as a share of total provincial and territorial government revenues, reducing the funding available for other social programs and government initiatives. As well, several other analysts and research organizations are concerned about the financial pressures on the current health-care...

    • 7 Delivering Health Care: Public, Not-for-Profit, or Private?
      (pp. 233-296)

      The appropriate mix between public and private health care has become a topic of considerable heat; the intention of this paper is to clarify the discussion. On the one hand, many recent provincial reports examining health care have suggested more ‘privatization.’ Perhaps the strongest recent such statement has come from the Premier’s Advisory Council on Health for Alberta, which argued that the current system ‘operates as an unregulated monopoly where the province acts as insurer, provider and evaluator of health services.’ None the less, that report echoes similar language from other organizations (Preker and Harding 2000; Preker, Harding, and Travis...

  8. Part Three: Federal-Provincial Fiscal Dynamics

    • 8 Increasing Provincial Revenues for Health Care
      (pp. 299-319)

      TheInterim Reportof the Commission on the Future of Health Care in Canada (Romanow Commission) outlines four options (2002, 26–7) for keeping Canada’s health-care system fiscally sustainable:

      providing more revenue to allow a basically sound system that has recently been somewhat underfunded to ‘catch up’

      searching for new revenue sources to deal with rapidly increasing costs, owing to an aging population and the supply and demand of new health technologies

      looking for ways to use the private provision of insurance and services to supplement the system

      improving service delivery within the system

      This paper focuses on the first...

    • 9 The Changing Political and Economic Environment of Health Care
      (pp. 320-339)

      Public health care in Canada is portrayed with increasing frequency and urgency as unsustainable. The desire to eliminate government deficits, reduce the debt load, and lower taxes appears to have come in conflict with the desire to sustain a comprehensive, universal, and publicly administered health-care system. Both the federal and provincial governments have had to struggle with conflicting demands from the public (and some organized interests) for lower taxes and balanced budgets while maintaining a high-quality, publicly administered, and publicly funded health-care system. This conflict has raised questions about the sustainability of the current system of health care, which in...

    • 10 Paying to Play? Government Financing and Agenda Setting for Health Care
      (pp. 340-366)

      Two overarching questions inform the relationship between governments regarding health care. First, what kind of change is desirable? Second, how is it possible politically to achieve such change? The objective of Canadian public health care is of course the health of the Canadian public: yet patients are also taxpayers and citizens and as such often have contradictory expectations. Thus to say simply that government must be responsive to the voice of the people is not particularly useful, for democracy is a cacophony. The question ofwhosevoices register is the very heart of democratic politics and may not provide a...

  9. Part Four: International Trade Regimes

    • 11 International Trade Agreements and Canadian Health Care
      (pp. 369-402)

      Canada has been a party to multilateral trade agreements since 1948, when the General Agreement on Tariffs and Trade (now known as GATT 1947) entered into force. GATT 1947, along with agreements elaborating certain of its provisions achieved in successive rounds of GATT negotiations from 1948 to 1980, had a minimal effect on the organization of Canada’s health-care system.

      Since those earlier GATT rounds, Canada has entered into trade liberalizing agreements that impose obligations that constrain governments’ ability to organize the delivery of services. The Canada-United States Free Trade Agreement (FTA), which became effective on 1 January 1989, imposed obligations...

    • 12 The Effects of International Trade Agreements and Options for Upcoming Negotiations
      (pp. 403-422)

      For half a century now, particularly since 1994, Canada has been a member of or party to a number of agreements on economic integration. These arrangements may be bilateral (for example, the Canada-Chile Free Trade Agreement), regional (the North American Free Trade Agreement [NAFTA]), or multilateral (the General Agreement on Tariffs and Trade [GATT] and the World Trade Organization [WTO]). Irrespective of their geographical scope, they all affect the role of Canadians’ governments and many aspects of their lives.

      As concrete expressions of the globalization phenomenon, these agreements affect the most significant areas of human activity, including the provision of...