Crisis in Canada: Are the Term Paper

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In 2000 legislation was presented by Ralph Klein to the legislature, demanding that provinces be permitted to allow private hospitals. That same year, more budget cuts slammed the health systems, when the "Federal Budget offers 2 cents for health care for every dollar of tax cuts." (Health Coalition) in 2002 the Romanow Royal Commission on the Future of Health Care in Canada was created to investigate the health-care situation in the nation and to foster (and witness) public discussion on the subject. Their report was presented in Ottawa towards the end of the year, and in 2003 some of its suggestions regarding intelligent use of federal funding were implemented. The commission, in general, supported the continuation of universal care. However, the 2003 "Health Accord" did not include any ruling against the use of federal funding contracted out to for-profit institutions (a situation that some critics claim is part of the money-crunch in the system now). (Health Coalition)

As this brief over-view shows, it would be erroneous to suppose that the reforms being currently proposed are historically unique, or that the system has been impervious to change over the last half-century. On the contrary, the universal care system in Canada has always been a dynamic entity, and adjustments and changes in its make-up have both positively and negatively affected the current situation. Any future policy decisions should take Canada's health care history into account - assuming that the only option to the status quo is to abandon the system altogether ignores the fact that this system has a long history of adaptation and evolution.

Sketching the Suspect: What is known about the so-called crisis?

Depending on who is asked, the answer varies as to what precisely the crisis in Canadian health care may be. According to pro-privatization advocates, the problem lies in government management which promotes lack of choice and ends in insufficient funding, inferior treatment, rationing, and long waiting times for treatment. According to pro-Medicare defenders, the crisis is precisely the opposite. The system, they would say, is being "creeping privatization" (Hamilton) and this is resulting in inequity of financing and inequity of care that threatens to eventually destroy the entire system. Those who are merely prognosticating point to aging populations that threaten to overdraw the resources of the younger population, and to growing disparity between Ottawa and the provinces in the balance of needs and funds. In any case, the basic claim that there is a crisis seems to be based on the same claims, whether in the present or future tense - that the hospitals are/will be under-funded, that waiting lines are/will be too long, that good or sufficient treatment is not (or will not in the future be) always available, and that certain groups are/will be put at an unfair disadvantage.

The Economics of Withdrawal: Are hospitals short on funds?

Currently Canada spends considerably less per capita on health care for its citizens than the United States does, though not as little as certain other nations with state-managed-care. In 2003, Canada averaged $3,839 per capita, which is about 10% of the gross domestic product (GDP). In terms of health spending as a percentage of GDP, Canada spends significantly less than the United States, just a little less than Switzerland and a tad bit more than France. Canada pays for about 71% of total health care expenditures with public sector money and the United States only pays for about 44% of total health care expenditures with public sector money. ("The Cost of Health Care") This has some interesting connotations. Consider the statistics from a few years ago, when "Canada insure 100% of its citizens for $2,250 per person in l998 while the United States expended $4,270 per person insuring only 84% of our citizens." (Marmor & Sullivan) if one does the math, it appears that -assuming the percentages were the same in 2003 and 1998 -- that Canada would only pays $1,597 with the public monies while America paid $1,879. This illustrates the point that Canada spends less per capita with state money than the United States does, and still provides universal care. It should be noted that these lower rates of expenditure in no way equal lower public health indicators, and Canada has a healthier and long-lived populace than America. (Marmor) This comparison shows that if Canadian hospitals are under-funded, it is not because federal care is being actively more expensive to the state or the individual than privatized care, but because Canada is simply putting less resources in that area. Of course, this in itself does not prove or disprove the existence of under-funding or the possible superiority of privatized care in other areas.

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There may or may not be a problem with under-funding in the Canadian system. Of course, it is generally understood that there are problems. Most reports on the subject claim that there are problems, which appear to have originated when federal funding to the provinces was first reduced. However, some would argue that to some degree these deficits are problematic only inasmuch as they are made problematic by the industry advocates. Image one demonstrates relatively easily how both these arguments could be construed as valid.

A red dots added]

This image shows the increases in total per capita spending on health in Canada between 1975 and 2004. Charts which show only governmental spending during the same period are very similar in general shape. As is clear by a mere glance, the real costs of medicine in Canada have been slowing increasing ever since 1977-78. They are currently almost twice what they were in 1975. This would tend to indicate that Canada would today have far more of a budget crunch than it did thirty years ago. Meanwhile, from 1977 to the present the percentage of the government spending which came from Ottawa instead of from the provinces has been steadily decreasing from 50% in 1975 (Chaudhry) to only around 15% at the current time - which would tend to indicate that the provinces' burden has increased even more than the mere rising costs would suggest. Surely there is something of a budget crush.

However, something perhaps more puzzling is shown in this graph. The first red dot indicates the point in time at which the Ottawa first cut its share of the state's cost, and extra-billing materialized. The second red dot indicates the beginning of a two-year period in which Ottawa temporarily suspended all transfer payments to the states. One notices that at that point costs stopped increasing. However, even when payments were resumed at around 30% two years later (Chaudhry), costs continued not to rise. The final red dot indicates the point in time at which Chretin was convinced by the states to let them start the process of privatization. There are many speculative answers that could suggest why this period of stability in costs occurred. What is important to the question of whether or not a crisis is real is the fact that after these six years of almost absolutely stable expenditures, then the administrators were convinced that it was necessary to allow some privatization to decrease costs. This tends to indicate that the much-announced crisis of increasing costs which is used to justify privatization may be somewhat manufactured. "In all countries with national health-insurance programs, doctors and other health-care professionals justify their demands for medical care with claims of critical shortages -- a tactic known as 'orchestrated outrage.' Under these circumstances it is easy to find an 'expert' who claims to foresee catastrophe; pending disaster is a great way to justify increased funding. (Marmor and Sullivan)

Between 1970 and 1993 -- at which point these particular records stop -- the number of physicians practicing in Canada increased by about 2.3% per year. (Chaudhry) Considering that doctors in Canada (as in America) are generally paid on a per-procedure basis, it would make sense that a higher number of doctors would "create the demand for their own services," (Chaudhry) either by manipulating patients or by manipulating the system. Doctors may have been experiencing critical shortages (of money for them!) when patients were not actually requiring any more aid.

Despite these theories, there tends to be a consensus that shortages in funds exist compared to an ideal situation.

Twiddling Broken Thumbs: Are there problematic waiting lines?

One of the most commonly listed problems with the Canadian Medicare system is that there are long waiting lines for medical care, and that care is rationed or limited. There is a very strong perception among Canadians - and even more so among Americans - that access to health care can be a severe problem in America. Marmor lists this as one of the more mythical aspects of the Canadian system, and suggests that problems of care accessibility or extended waiting time are not directly linked with the one-payer system of Medicare. He suggests that similar waiting times are faced in America as well, where similar triage is being conducted and the natural flow of….....

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