The biggest issue in the federal government’s move to curb health-care spending increases isn’t the new limits, although that should be a concern.
It’s the Harper government’s decision to abandon any leadership role on health care and leave the provinces to sort things out.
The country’s finance ministers were in Victoria this week. The provincial ministers thought they would have a few meals and meetings, talk about big issues and do a little preliminary work on a new health funding plan to replace the current one, which ends in 2014.
Instead, federal Finance Minister Jim Flaherty arrived at a lunch in a dining room on a downtown hotel’s top floor – very nice harbour views – and the premiers were handed the new deal. No discussion, he said. Here’s the new funding formula.
The current arrangement provides provinces with six per cent a year increases in federal health care funding. Flaherty said that will continue until 2017, then the increases will be capped at the rate of growth in the economy. There will be minimum increases of three per cent, so health care doesn’t face deep cuts if there’s a recession.
Based on current growth and inflation, the provinces could expect increases of about 4.5 per cent a year.
The federal government provides about 20 per cent of health care costs, with the provinces paying the rest. The change means about $55 million less for B.C. in the first year, increasing by a similar amount each subsequent year. It’s not a huge amount, though after five years the shortfall will be nearing $300 million.
The reaction of the provincial ministers was mixed. Six were critical, either of the lower increases or the federal government’s failure to consult and discuss the change.
But B.C. Finance Minister Kevin Falcon said he was satisfied with the change. He welcomed the long-term certainty, so the province could plan, and supported the desire to reduce federal spending. (That’s a little odd, since during the Liberal leadership campaign he condemned a similar proposal from Christy Clark. Clark did not, it should be noted, include the promise of a minimum increase even if the economy went into reverse.)
A little more skepticism might have been in order. The proposed funding formula doesn’t include any provision for population growth, which means there will be a reduction in real per-capita funding.
Nor does it reflect the impact of an aging population, or costly technological advances.
And it isn’t based on any assessment of actual health care needs (note that the meeting involved finance ministers, not health ministers). What if a continued six per cent increases would allow dramatic reductions in wait times, or much better seniors’ care?
Instead, the Harper government picked an arbitrary ceiling that could be sold politically and went ahead.
Canada has room to increase health care spending, if it’s in the public interest. Other countries — Germany and the U.S., for example — spend a higher proportion of their GDP on health care. And the Canadian public, so far, has indicated quality health care is a priority.
The federal government initiative also abdicates any leadership role. Health care is a provincial responsibility, but provinces and territories operate under the terms of the Canada Health Act.
Federal funding is important. But federal leadership in tackling the challenges of delivering cost-effective high-quality care would also be valuable.
As a significant funder, the Harper government could have lead a national discussion of what Canadians expect from care, how technology can be used, how prevention could reduce costs and more effective ways of using health-care staff.
Instead, the provinces will be largely left to their own devices, or to figure out ways to work together on their own.
It’s probably an astute move politically — health care issues tend to earn governments more blame than praise.
But it won’t help Canada move to the best, most cost-effective care.
Footnote: Provincial and territorial premiers will meet in Victoria next week to discuss health care. They will likely call for a federal-provincial conference on the funding formula and the future of care, and Prime Minister Stephen Harper will likely reject the idea.