Insights January 2012

Thoughts on Flaherty Health Announcement*

Will Falk

Finance Minister Jim Flaherty’s surprise December health announcement is a major policy shift for the Government of Canada and Canadians need to consider it thoroughly.

The federal position is clear, principled and financially generous:  6% percent through 2016/17, and from 2017-18 to 2024 increases will be matched to nominal GDP growth, with the assurance that increases  will never drop below 3%, even if economic growth lags. This position provides known long-term funding and gives the provinces what they would have had a hard time asking for (6% increases) at a First Ministers’ Meeting (FMM) held in 2014. When health budgets are likely to average growth of 3% or less over the next two years, 6% is a big ask.

The principle behind the Prime Minister Stephen Harper’s generosity is clear.  He is taking Ottawa out of the healthcare debate and ending the national discussion of health and healthcare system issues that began with federal funding of Medicare and continued with the Canada Health Act and the Health FMMs leading up to the 2004 Wait Times Accord.

But is this a good thing for Canada?  Citizens may well welcome a break from these discussions.  The national discussion of health and healthcare issues can be difficult and repetitive. Provinces may well think that this is a good deal as they get freedom to do their own reforms while receiving as much money as they could reasonably have expected. But, should we be so quick to re-define the Federal Government role in healthcare? Does the national debate really not serve a purpose in the 21st century?

The federal government should not abandon leadership of healthcare policy, understanding the fact that the federal government’s role extends well beyond simply providing funding through the Canada Health Transfer.  In the past decade, the Health FMM has emerged as a new institution representing a new type of federalism for the development of national policies. There are at least seven key areas that continue to require national policy leadership and federal attention:

  1. Transparent reporting on health quality and access.
    From 2000 to 2006, Canadians had a crisis in declining quality and access to care.  The federal government responded with national wait time standards and organizations like CIHI and the Health Council of Canada, which made reporting of results the standard across Canada.  With national discussion, leadership, and funding, most provinces have built robust quality and access systems.  Mr. Harper and his first Health Minister Tony Clement strongly supported these initiatives.  Indeed “Care Guarantees” were an important part of Mr. Harper’s 2006 election platform.  In April 2007, the PM said: "When a government makes an investment in the health of people, it’s making an investment in the country’s future. The Patient Wait Times Guarantees we have negotiated with the provinces and territories mark yet another step forward in our government’s commitment to building a stronger, safer, better Canada for all of us."

  2. Delocalization and virtualization of health care delivery. 

    The world has changed dramatically since our nation’s founders set healthcare as a provincial responsibility in the British North America Act.  Today, a woman with a possible breast tumour in Cornerbrook or Churchill may well have her cancer pathology read in Toronto.  Telemedicine is revolutionizing the way that patients are cared for and will continue to do so through the next two decades.  The assumption that services are primarily delivered locally may simply become outdated in healthcare as in other industries.  Interprovincial delivery of care is expanding and in the longer term international markets may represent an opportunity for growth in services provided and jobs created.  Having a superior healthcare system has long been a Canadian competitive advantage and there is a legitimate federal role to encourage this market growth.

  3. Health Human Resources: Credentialing and Immigration
    Health provider credentials have become inter-provincial and are now internationalizing. The flow of health immigration has become critical to meeting the human resources needs of Canadian health systems.  Mr. Harper’s government showed great foresight in quietly opening immigration for nursing and patient care workers from the Philippines and other international locations. Particularly in Toronto and western Canada these tens of thousands of skilled migrants are critical to health delivery.  The provinces need the federal government to continue to monitor this flow; as system restructuring proceeds there may be a need to adjust and coordinate regionally.  These labour flows are related to the virtualization trend discussed above; each is part of the great delocalization of health care.  Canada should seek to play a leadership role in the globalization of health services and credentialing and immigration will be central to this future.
  4. Aboriginal health system improvement.

    The federal government runs its own $2+ billion health system for First Nations and Inuit Canadians.  It does a poor job on many measures and has for decades.  It is Mr. Harper’s responsibility to focus time and resources to fix Canada’s aboriginal health system.  The Tripartite agreement among the federal government, the BC government, and band councils provides a model for health improvement that the Kelowna Accords sought to expand and provided a framework to do so.  Mr. Harper walked away from the Kelowna solution and has not proposed one of his own. Harper and his Health Minister Leona Aglukkaq should set out a credible plan to improve on the results of this health system in the same way that provinces have the responsibility to improve their health systems.  

  5. New technology approver and regulator. 

    Mr. Harper has shown leadership in seeking to create one federal regulator for financial institutions.  The same arguments of efficiency and national standards hold true for new drug and technology regulation and funding approval.  Canada has a strong basis for a national system given existing Health Canada assets, the proliferation of new targeted therapeutics, and various other innovations coming from our healthcare providers.  This federal role dovetails with the unquestioned importance of the Canadian Institutes for Health Research. Once again, this is a core part of 21st century competitiveness and excellence in healthcare system delivery.  It is simply nonsense to say that this should be done ten times by ten different provinces. 

  6. Health promotion and disease prevention.
    2014 also marks the 40th anniversary of the Lalonde Report.  A new perspective on the health of Canadians established Canada as a world leader in health promotion and disease prevention.  Health Canada has done good work in this area for decades in areas such as smoking cessation, anti-tobacco campaigns, drug abuse prevention, driver safety, and public health.  Mr. Harper’s activist first Health Minister Clement also launched national disease-based initiatives in cancer, AIDS, and mental health.  These were intelligent next steps to follow the earlier quality and access initiatives.  By investing on a disease basis, Harper the federal government increased transparency and built towards national standards.  We need more of the activism of the Clement Ministry at the national level.  Further opportunities exist for federal activism. Thoughtful condition-based programs on obesity and diabetes, for example, should be discussed.  An obesity prevention program and tax system along the lines of earlier smoking cessation efforts could be considered as part of a national discussion.
  7. Epidemic preparation.

    Canada was not prepared for the SARS epidemics of the past decade. In a pandemic situation, provincial responses alone are inadequate. As a result, the previous government established the Public Health Agency of Canada (PHAC). Provincial responses alone are inadequate as Mr. Clement would be the first to point out.  While PHAC may prepare as a standalone agency of government, future epidemics will require further cooperation among different levels of government and an ongoing national dialogue that should include first ministers.  Again, the Health FMM as an institution is about more than just funding.

Mr. Harper’s government does make one very important point underlying the December pronouncement:  that system delivery reform in the short and medium term rests with the provinces. The coming transformation is a serious undertaking which requires urgent and immediate attention: provincial reforms should not wait until 2014.  There has been broad agreement on the need for reform for decades.  The provinces have the tools to transform -- not just cut back -- the system. Guaranteeing funding to the provinces allows them to proceed with system restructuring without fear of losing funding if they implement cost reductions.  Mr. Flaherty correctly identified that stable funding helps provinces move forward and that a funding regime that ties federal revenues to provincial costs would have provided a negative feedback loop and would have been harmful.  Prime Minister Paul Martin recognized the same point in the 2004 accord when he provided ten years of increases.

But moving forward with provincial reforms does not mean giving up on national leadership.  Mr. Harper’s 2006 to 2008 health policy of care guarantees, continued transparency of quality and access reporting, and disease-based initiatives represents a solid foundation upon which the federal government can build a national system in partnership with the provinces. He should follow-up on his earlier commitments.   A robust discussion in 2014 around the seven issues outlined above, and others, could provide the basis for a national consensus on what a 21st century health system for Canadians should include.  The federal government needs to provide leadership on these issues not just money and the Health FMM provides an institutional framework to do this.

About the Author(s)

Will Falk is Executive Fellow, Mowat Centre for Policy Innovation University of Toronto


* aka Longer version of Article which appeared in the Toronto Star on January 10, 2011


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