Ottawa warns current health transfers unsustainable

[Jerry J. Fortin]

triple post

Awesome link!

[TimG]

The Federal government oversees national standards and can tie transfer payments to better practices in terms of cost control and accountability.

I got a better idea: eliminate the health care transfer, reduce federal taxes and increase provincial taxes to make up the difference. The only reason the feds need to worry about accountability is because it is giving money away. Provincial governments should collect that money directly which means they will be held accountable by voters. Having the feds involved is unnecessary bureaucracy. Edited December 18, 2011 by TimG

[Michael Hardner]

Some excerpts from the report:

November 3, 2011—Total spending on health care in Canada is expected to grow by more than $7 billion this year to reach a forecast $200.5 billion in 2011. This amounts to roughly $5,800 per Canadian, about $150 more per person than last year, according to a new report released today by the Canadian Institute for Health Information (CIHI).

National Health Expenditure Trends, 1975 to 2011, one of two CIHI reports released today, shows that growth in health care spending is slowing down. Spending is expected to increase by 4.0% in 2011 over last year—the lowest annual growth rate seen in the last 15 years. In contrast, average annual growth in health care spending between 1998 and 2008 was 7.4%.

Main factors that drove health expenditures since 1998

Compensation of health professionals a major cost driver

CIHI’s data shows that compensation paid to health care providers has been one of the most significant cost drivers of public-sector health care spending. Hospitals represent the largest category of public-sector spending (37%), and compensation represents about 60% of total hospital budgets. Between 1999 and 2008, the number of hospital workers grew by 21%, while their compensation increased faster than that of workers in the general labour market. The hourly paid hospital employees wage index from Statistics Canada increased by an average of 3.3% per year, compared with an average annual wage increase of 2.7% in the general economy.

After hospitals, physicians represent the second-largest category of public-sector health care spending (20% in 2011). Between 1998 and 2008, physician expenditures increased on average by 6.8% a year. CIHI data shows that the price of doctors’ services was the most important cost driver of spending in this category, with compensation for doctors’ services growing by 3.6% a year—faster than that for other health workers and the labour market in general. However, physician compensation grew more slowly than the prices of other public goods and services from 1975 until 1998.

Increased use of services and evolving types of services used

Over the past decade, population growth contributed about 1% annually to health care costs. Beyond the demographic factors, the data shows that Canadians are using more health care in some areas. For example, the volume of drugs sold in Canada contributed an average increase in spending of 6.2% a year between 1998 and 2007, even after accounting for population growth and aging. Overall drug spending grew by an average of 10.1% per year during this period. This makes increased utilization the single largest cost driver of drug spending over the past decade. The increased volume was driven largely by use of anti-hypertensive, cholesterol-lowering and gastrointestinal drugs.

Canadians are also seeing their doctors more often and getting more medical procedures. Over the past decade, use of physician services grew by 1.5% annually per Canadian, after adjusting for population aging. The 10-year period also saw a significant increase in the number of Canadians receiving priority-area procedures, such as hip and knee replacements; diagnostic imaging exams, such as magnetic resonance imaging (MRI) and computed tomography (CT) scans; and cataract surgery procedures.

A change in the types of health services used by Canadians—such as the emergence of new drugs and new diagnostic and surgical tools—has also contributed to the growth in health costs. For example, changes in the types of drugs used were an important driver of drug spending, particularly during the last five years. New cancer drugs and immunosuppressants were two of the fastest-growing drug classes during this period. Investments in technologies, such as diagnostic imaging equipment, also grew significantly over this period. Between 1997 and 2010, the number of CT scanners operating in Canada nearly doubled (from 245 to 484), while the number of MRI machines increased more than fivefold (from 55 to 281).

Aging population a modest health care cost driver

CIHI also analyzed the extent to which the aging population is driving costs.

The report demonstrates that population aging is a cost driver of modest importance relative to other drivers, accounting for less than 1% of average annual growth in health care spending (0.8% per year) from 1998 to 2008.

Health care spending not growing as share of provincial and territorial government budgets

Since health care delivery is a provincial/territorial responsibility in Canada, the vast majority of public-sector health dollars are spent by provincial and territorial governments. In 2010, the latest year of available data, health care is estimated to account for about 38% of provincial/territorial government spending. However, this proportion varies among provinces, from 30.4% in Quebec and 33.9% in Newfoundland and Labrador to 44.5% in Manitoba and 47.2% in Nova Scotia.

“Our study identifies several areas to monitor for the future in terms of health care spending,” says Berthelot. “For example, increases in the number of health professionals, changes in their scope of practice and the introduction of new technologies—such as new cancer biologic drugs—may all continue to have a significant impact on what we collectively pay for health care. Canadian governments, and society as a whole, will need to balance the health needs of the population against overall costs to ensure Canadians have an efficient, effective and sustainable system.”

We should be grateful that we have CIHI, which after almost 20 years in existence now is able to provide insight and knowledge - and the framework for discussion that we need.

[Michael Hardner]

I got a better idea: eliminate the health care transfer, reduce federal taxes and increase provincial taxes to make up the difference. The only reason the feds need to worry about accountability is because it is giving money away. Provincial governments should collect that money directly which means they will be held accountable by voters. Having the feds involved is unnecessary bureaucracy.

The federal government still needs to set a standard, IMO. I think most Canadians want that too.

Getting out of healthcare altogether won't make the provinces change their ways, and in my opinion provinces are not held accountable on healthcare at the ballot box alone. McGuinty's eHealth debacle seems like conclusive proof of that to me.

[Scotty]

The system needs to be constantly maintained, but has been sustainable up until now. Why suddenly with this government do we hear these threats about it no longer being sustainable?

Commentators have been talking about the unsustainable high annual increases in health care funding for many years now. Where have you been? Health care funding has risen to the point it dwarfs all other provincial spending, rising to close to half of provincial budgets and forecast to consume two thirds of provincial budgets in coming years.

Edited December 18, 2011 by Scotty

[punked]

I got a better idea: eliminate the health care transfer, reduce federal taxes and increase provincial taxes to make up the difference. The only reason the feds need to worry about accountability is because it is giving money away. Provincial governments should collect that money directly which means they will be held accountable by voters. Having the feds involved is unnecessary bureaucracy.

To bad that would be in direct violation of the Canadian Constitution and illegal eh? I guess laws have never stopped the Conservative government before though.

[Michael Hardner]

Commentators have been talking about the unsustainable high annual increases in health care funding for many years now. Where have you been? Health care funding has risen to the point it dwarfs all other provincial spending, rising to more than half the budgets and forecast to consume two thirds of provincial budgets in coming years.

Scotty - read the link I provided.

Health care spending not growing as share of provincial and territorial government budgets

Since health care delivery is a provincial/territorial responsibility in Canada, the vast majority of public-sector health dollars are spent by provincial and territorial governments. In 2010, the latest year of available data, health care is estimated to account for about 38% of provincial/territorial government spending.

Maybe this debate will raise CIHI in the consciousness of Canadians - which would be a great thing IMO.

Total Health Expenditure as a Percentage of Gross Domestic Product has increased sharply, though.

[Bryan]

Meanwhile we are paying more and more in taxes. I don't mind to pay my fair share but I expect they should take very good care of the tax money, not waste it on stupid expensive ventures that don't provide any real value for Canadians, like the overpriced fighter jets.

We aren't paying more, we're paying less. Federally, a lot less.

Unfortunately defense was ANOTHER area where the Liberals left their funding obligations unmet so that they could post their fake 'surplus'. Yes, it's insanely expensive, but Canada has not been pulling her weight internationally for a long time, and our troops need new equipment. Some of that equipment comes with an astronomical cost, that would not have been nearly so bad had the programs been adequately funded all along. We have some huge catch-up to do, and it's going to be very expensive no matter how you slice it.

[Guest Peeves]

The federal government still needs to set a standard, IMO. I think most Canadians want that too.

Getting out of healthcare altogether won't make the provinces change their ways, and in my opinion provinces are not held accountable on healthcare at the ballot box alone. McGuinty's eHealth debacle seems like conclusive proof of that to me.

Aside>

Yes, proof in wasted $ 647 million I believe pissed away on nothing functional.

Plus the outrageous goings on.

Let's examine briefly the scandalous activities that took place at eHealth Ontario. The chief executive officer, Sarah Kramer, was paid a decent salary, $380,000, a $114,000 bonus and $317,000 in severance when she was sacked.

Ms. Kramer was forced out because she hired consultants – sometimes with untendered contracts – and those consultants were paid market rates of up to $2,700 a day. Most scandalous of all, according to media reports, is that some of these consultants expensed $1.65 for tea and $3.99 for Choco Bites.

Finally, Alan Hudson, chairman of eHealth Ontario, resigned, taking it on the neck because other people coloured outside the lines. The irony is that he received no salary or expenses for the ambitious task he undertook – creating a province-wide electronic health record system by 2015.

[jbg]

It would be better if we had a common understanding of where the increases are going and what we can do about that. In order to have that understanding, we have to have productive dialogue.

One can quibble about fraud, or hypochondria. I think the bulk of the increase si due to the rapid improvement in what medicine can do. Lifespans are now into the 90's and more people get sick at those ages.

[cybercoma]

All "medically necessary" treatment is covered - no questions asked. Seniors have their drugs paid for - a expense that is expoding over time. So unless you are talking about adding numerous 'medically necessary' treatments to the list of exlusions then you are simply creating a smoke screen to avoid acknowledging the problem.

Now you go from unlimited care to medically necessary care. It's pretty easy to always be right if you keep moving the goalposts.

Right. And what happens when they have employment no longer qualify for the 'free darecare'? They go back on welfare? Sounds to me like your are creating an entitlement that creates an incentive for single mothers to go on welfare for so they can get the 'lifetime entitlement to free childcare'.

Thought public day care was meant for people who do work?

Cybercoma tried to claim a national daycare program that is only for welfare mothers would recover its costs. I was just pointing out the contradictions in such an argument.

Yeah, I didn't say that. I didn't say mothers, I said people, because my example applies to any single-parent struggling on welfare because they have to take care of their child, but also look for work or retrain their skills. But more importantly, I never said the program would be exclusive to welfare recipients. The program doesn't exist and I never made any claims whatsoever to what such a program would look like. What I'm claiming is that research has shown that there is a benefit to the program because it allows the government to increase its revenues and decrease expenses. It would have to work as a transfer to the provinces, however. But there's no point in getting into program specifics here.

If provinces need money for healthcare they are free to raise the province sales taxes. It is not the federal government's problem. That is why tax cuts are not really the same as spending decisions.

More regressive consumption taxes. The burden of which are unevenly carried by people the poorer they are. More to the point, however, is that provinces with HST cannot actually adjust the rate without first getting approval from the federal government.

[Michael Hardner]

Aside>

Yes, proof in wasted $ 647 million I believe pissed away on nothing functional.

Plus the outrageous goings on.

Actually, Peeves, that "tea expense" scandal cost taxpayers more by being publicized than if we hadn't heard of it at all. The entire enterprise was put on hold due to the political backdraft.

The public wasn't outraged about eHealth, or even aware of it apparently, until that "tea expense" came up - and that in itself is a problem.

[Michael Hardner]

I think the bulk of the increase si due to the rapid improvement in what medicine can do. Lifespans are now into the 90's and more people get sick at those ages.

You "think" so ? You can read the link and "know" so !

Edit: here it is again

[Bryan]

That's how it works. They came to the decision in 2004.

Liberals came to a lot of decisions that never materialized. How did that national daycare plan work out? How about Kyoto? Eliminating the GST?

That is the fundamental difference: Liberals talk a big game about caring about healthcare, while making cuts to it. Conservatives were pilloried as being anti-healthcare, yet they are the ones who actually DID increase the funding. Not "planned to do it", DID IT. They are also the ones who are working out a long term plan to make that funding sustainable by tying it to the rate of inflation.

[cybercoma]

Liberals came to a lot of decisions that never materialized. How did that national daycare plan work out? How about Kyoto? Eliminating the GST?

That is the fundamental difference: Liberals talk a big game about caring about healthcare, while making cuts to it. Conservatives were pilloried as being anti-healthcare, yet they are the ones who actually DID increase the funding. Not "planned to do it", DID IT. They are also the ones who are working out a long term plan to make that funding sustainable by tying it to the rate of inflation.

Remember this argument when the Conservatives lose and other parties take credit for honouring the CPC's commitments. Somehow I highly doubt you would be singing the same tune.

[Jerry J. Fortin]

Lets get back on track here folks. The topic is Ottawa says that current transfers are unsustainable. In other words run and hide folks here comes the axe. The feds will cutback on their funding that's what they have said, so we can expect it to happen. This means that the provinces will have to fund any future shortfalls. From recent events it appears that the Government of Canada is now trying to handover to provinces more responsibilities and less financing. This could lead to many other changes.

[Bryan]

Remember this argument when the Conservatives lose and other parties take credit for honouring the CPC's commitments. Somehow I highly doubt you would be singing the same tune.

If CPC promised, but never delivered, absolutely I'd give the credit to the one that DID the job.

I wasn't always a Conservative. I was a Liberal supporter/voter at one time. I switched because I got sick of their goddamn lying about what they were planning to do, but never actually did.

[cybercoma]

If CPC promised, but never delivered, absolutely I'd give the credit to the one that DID the job.

Maybe the Liberals could have written the 2006 budget, eh?

[Bryan]

Lets get back on track here folks. The topic is Ottawa says that current transfers are unsustainable. In other words run and hide folks here comes the axe. The feds will cutback on their funding that's what they have said, so we can expect it to happen.

That is not true. There is no plan to cut health transfers. The only plan is to continue to increase the funding levels. The idea is to plan for how much those increases will be capped at.

[TimG]

Now you go from unlimited care to medically necessary care.

That is what you should have taken from the context in my original post. I did not expect nikpickers to try and create distractions.

More regressive consumption taxes. The burden of which are unevenly carried by people the poorer they are. More to the point, however, is that provinces with HST cannot actually adjust the rate without first getting approval from the federal government.

In other words, you agree with Harper's decision to cut the GST. And any province that wants to increase the HST will find that the feds with approve it. Your suggestion that it might be refused is another attempt at distraction.

The bottom line is provinces can still raise taxes to counter any decrease by the feds so tax reductions so tax reductions are not the same as spending choices.

[Bryan]

Maybe the Liberals could have written the 2006 budget, eh?

The budgets that the Liberals did write were worthless. We are in this mess specifically because the Liberals were horrifically bad fiscal managers who thought that not paying your bills was the same thing as saving money.

[Michael Hardner]

That is not true. There is no plan to cut health transfers. The only plan is to continue to increase the funding levels. The idea is to plan for how much those increases will be capped at.

Actually - I thought I saw something on this thread about a cut ? But I looked back and can't find it now.

It seems like we're talking about capping increases.

[Jerry J. Fortin]

That is not true. There is no plan to cut health transfers. The only plan is to continue to increase the funding levels. The idea is to plan for how much those increases will be capped at.

Hang on, what part about "Ottawa warns current health transfers unsustainable" do you not understand? While they have not actually come out and said it for all to hear, its still pretty clear.

[cybercoma]

You know what the problem is discussing anything with you? You make crap up. I agree with the reduction of consumption taxes. You want to give Harper credit for that, but you don't criticize him when he approves the provinces re-raising it. I didn't even imply that they wouldn't approve it. All I said is that the provinces which have HST, must seek approval from the feds first. NB already has and been approved. Now people are just waiting for Alward to raise taxes. The problem is that you support Harper reducing the GST, but then pat him on the back when he re-raises it. What should be happening is that the highest income earners ought to be paying more on capital gains and income. The inheritence tax ought to be increased for large amounts as well.

And, I'm not sure what context "unlimited care" needs to be read in. The distraction here are with your hyperbole. There's only one way to read that statement and it sure as hell isn't limited to "medically necessary treatment." That by definition is not unlimited.

Edited December 18, 2011 by cybercoma

[TimG]

And, I'm not sure what context "unlimited care" needs to be read in.

I was obviously talking about things the healthcare system currently pays for. It makes no sense to presume I would be claiming that the system provides unlimited care for items that it does not pay for.