Despite high
levels of public spending, Canada’s health-care system consistently perform
more poorly than a number of peer jurisdictions with universal health-care
systems.
Governments across the country must address this policy challenge in a
context of constrained resources, as the federal government and a number of
provinces currently face increasing debt loads and other significant fiscal
challenges.
During the 1990s, the federal government transformed its approach
to providing financial assistance to the provinces to support their welfare and
social assistance programs. Specifically, the federal government reduced
transfers to the provinces but, in exchange, removed a number of “strings”
previously attached to federal funding that prohibited certain types of policy
reform.
For example, the provinces were permitted to create work requirements
for receipt of welfare payments, which previously would have triggered the
withholding of federal transfers. The reform of federal transfers to the
provinces led immediately to a wave of policy innovation and reform at the
provincial level, as governments across the country pursued various policy
paths designed to improve their welfare programs, create solutions that
actually addressed local problems, and reduce program costs.
Many of these
reforms had the intended effects, as there was a marked decline in welfare
dependency and government spending on public assistance in subsequent years.
However, no similar wave of policy innovation occurred following the 1990's
transfer reforms in Canadian health care. This is largely because the
government maintained the various “strings” that were attached to health spending
transfers and, specifically, the terms and conditions of the Canada Health Act.
As a result, health-care policy in the Canadian provinces has since the 1990's
generally been largely characterized by policy inertia while spending on health
care has increased considerably.
Canada’s experience with welfare reform
provides a model with important implications for how to begin reforming and
improving Canadian health care. By reducing transfers in real terms while
amending specific provisions of the Canada Health Act that inhibit reform, the
federal government can partially address the fiscal challenges it
faces today while providing provinces with the freedom to innovate and pursue
policy reforms to improve their health-care systems.
Such changes would allow
for greater experimentation by each province as they seek out what policy
arrangements have the best possibility of improving health-care performance.
For instance, provinces would be well served to examine the introduction of
cost-sharing arrangements (co-insurance, deductibles, and co-payments) used in
most other universal health-care countries to ensure more efficient use of the
health-care system by patients.
Provinces might also look at removing
regulations that currently prevent a greater supply of needed health-care
professionals and investment within the health-care sector.
It is uncertain
exactly what reforms different provinces would choose and the paper does not
weigh the advantages and risks of specific reform options in detail. Instead,
based on Canada’s experience with welfare reform, this paper recommends a
crucial change, the devolvement of decision-making powers to the provinces,
with the federal government permitting each province maximum flexibility
(within a portable and universal system) to provide and regulate health-care
provision as they see fit.
Read full
article by Ben Eisen, Bacchus Barua, Jason Clemens, and Steve Lafleur @ https://www.fraserinstitute.org/sites/default/files/devolvement-initiative-post.pdf