The medicare issue —election sleeper?

Warren Gerard May 14 1979

The medicare issue —election sleeper?

Warren Gerard May 14 1979

The medicare issue —election sleeper?


Warren Gerard

Canada’s health care system is showing symptoms of terminal disease-brought about, mainly, by a shortage of money, bureaucratic inefficiency, political opportunism, abuse, overuse and greed. Cracks in the system, just over a decade old, have been appearing for some time, but it is the doctors who have finally made the politicians sit up and say there is a crisis in medicare.

The doctors are fed up with what they perceive as inadequate incomes (a Weekend magazine poll shows that 57 per cent of Canadians believe that doctors are overpaid) and the intruding apparition of Big Brother in their free-enterprise dreams. In most provinces, notably Alberta and Ontario, physicians have demonstrated their dissatisfaction—37 per cent in Alberta, 19 per cent in Ontario—by billing up to 44 per cent above provincial fee schedules for some services.

This revolt led Monique Bégin, the federal health minister, to accuse the provinces of giving doctors “stingy” fee increases—7.8 per cent in Alberta, 6.6 per cent in Ontario—and of trying to undermine the system, which guarantees everyone the right of universal access to medicare. Thus the stage was set, only a short time before the election was called, for another battle of rhetoric in the continuing federal-provincial wars. She went further, strangely, by threatening to cut off payments to the provinces if universal medicare is threatened—a sure way to guarantee the destruction of the system.

Throughout the election campaign, Bégin and her boss, Prime Minister Pierre Trudeau, have made ringing pledges to defend universality. Trudeau has accused the provinces, especially the Tory provinces, of misusing the $5.7 billion in federal transfer payments intended for health care. “It’s the provinces that are not using the money as they’re supposed to under the contract that has been signed with us to get that money.”

He has a point. Manitoba received an increase of 14.6 per cent in transfer payments last year, but the provincial budget for health care increased only 7.8 per

cent. The budget in New Brunswick this year provides a $16-million increase in health care spending, while the federal contribution is up $26 million. In both cases the cost-sharing principle of health care—at least on the old 50-50 basis— appears to have been violated, but the fact of the matter, according to Ontario Treasurer Frank Miller, is that “the dollars are transferred to us unconditionally, not for health care.”

It is a tailor-made issue for the New Democratic Party. The issue, defined narrowly by party leader Ed Broadbent, is that the Liberal government created the problem in 1977 when it passed the Established Programs Financing Act. Only the NDP was opposed. Now the NDP wants a return to the 50-50 cost-sharing arrangement.

“When it became apparent to them (the federal government) that this was not going to be a free proposition and that it would cost a fair amount of federal money,” Broadbent says, “they reduced their long-term financial commitment by passing that 1977 act.”

Before the act, the federal government shared 50 per cent of the cost, dollar for dollar, of those health programs it had agreed upon, but costs were rising dramatically and many provinces were providing programs beyond what the federal government had approved—such as ambulance services, drug benefits for the old, nursing-home care, eyeglasses, etc. In fact, before the 1977 act, the provinces were

paying $1.5 billion for programs above and beyond the cost-sharing agreement with the federal government.

When Ottawa went to transfer payments, or block funding, it agreed to pay the amount it had been paying, increased each year by the increase in the Gross National Product, which has been between 3V2 and 4V2 per cent. Yet in the same time the cost of health care has increased at the rate of 16 per cent a year. Two things happened when the federal government went to transfer payments: most provinces found they were paying

more than 50 per cent of health care costs (60-40 in Ontario’s case), and the federal government abdicated its role in the management of health costs.

For Joe Clark, the health care issue has been a disaster. The Progressive Conservative leader had been carefully avoiding the issue until Broadbent produced a 1976 document—Joe Clark on Social Justice and Social Order. He had proposed deterrent taxes up to $300 a year to reduce “unnecessary visits to doctors” because “health insurance today encourages people to abuse the system.”

Clark was embarrassed. He apparently had forgotten about his 1976 proposal and dismissed it as just an idea for discussion purposes. “I’m now satisfied a deterrent fee is not a means to resolve the problem.” He added he wouldn’t have any specific proposals on health care until elected, if elected.

But the health care issue is broader and far more complex and will continue as an issue long after Trudeau, Clark and

Broadbent have left the political arena. The real issue is whether Canadians will be able to continue to seek medical care without having to pay more than they pay in taxes or premiums.

If the trends of the past few years continue, the answer is no. Some provinces, including Ontario, New Brunswick, Quebec and Newfoundland, have introduced deterrent fees. They reflect the fact that the health care system is a costly monster. Since 1960 the amount of public and private funds for health care has increased at more than 10 per cent a year,

and between 1973 and 1975 costs increased 15 per cent a year.

It appears no relief is in sight. In fact, the system will become even more expensive. One reason is that birthrates are declining and the average age of the population is rising rapidly. More than eight per cent of the country’s population is over 65 and that will climb to 12 per cent by the year 2000. An Ontario study found that people over 65 need, on a per capita basis, eight times the number of hospital beds required by younger people, and a Saskatchewan study predicts that by 1985 people over 65 will use 28 per cent of all medicare services and 46 per cent of hospital days.

Another high-cost factor will be the new technology. It has enormous cost potential and enormous medical potential. One such example is the CT scanner (computerized axial tomography), which produces television-like pictures of the inside

of the body and can detect a minute cancerous growth. The scanners cost up to $800,000 and more than $250,000 a year to operate. The new technology at tremendous start-up cost, will undoubtedly replace much of the conventional technology, but for a period both technologies will be used.

Meanwhile, the doctors are the immediate concern. They have handled themselves poorly in the political arena and they have been less than effective in fee schedule negotiations with provincial governments. Even governments admit that—especially in the case of general practitioners. But 1976 statistics, the latest available from Revenue Canada, show they still earn more than other professionals—an average of $49,310, slightly ahead of lawyers ($44,858) and dentists ($43,336), but increases in doctors’ incomes have been seriously eroded in comparison to other professions in the past decade. The average doctor’s relative spending power fell 32 per cent, while it climbed 54 per cent for lawyers, 68 per cent for dentists and 113 per cent for accountants.

While their spending power has been declining, their dissatisfaction has been increasing. It has led a number of them, 800 last year, to leave the country, most of them moving south of the border. Only 24Ô left in 1975. A survey by the Medical Post, a Maclean-Hunter publication, found that doctors are so unhappy that nearly half have seriously thought of leaving Canada and more than half would discourage their children from becoming doctors.

They said they were sick of government interference and would consider leaving for increased income, greater professional opportunity, climate and lower taxes. A Quebec surgeon said: “My dreams are shattered .. . my patients are smug: they don’t even know what I’m doing for them in the way of subsidizing medicare, specifically my emotions.”

The survey found that Ontario doctors were the most militant in Canada and more than half of them were seriously considering opting out of the health plan. So far 19 per cent have opted out, compared with 10.9 per cent a year ago. A patient pays an opted-out physician the difference between the OHIP (Ontario Hospital Insurance Plan) fee rate and the doctor’s fee. The OMA (Ontario Medical Association) has recommended a fee schedule 30 per cent above the OHIP schedule. It means that opted doctors may charge 30 per cent more for their services, although there’s nothing to stop them from charging 100 per cent above OHIP fees. In Alberta and the three Atlantic provinces it is called balance billing and in Saskatchewan it is called Mode 3 fee formula, but it means the same thing—that doctors may set their own fees.

An Alberta government survey indicates 37 per cent of the province’s doctors are balance billing patients. The survey was commissioned'after balance billing

became an issue when the government raised doctors’ fees 7.8 per cent in January. The doctors had demanded 30 to 35 per cent.

In Saskatchewan, where the NDP gave birth to medicare in Canada, the stage is set for a confrontation after the government imposed an 8.4-per-cent increase on the doctors. Health minister Ed Tchorzewski tried to sweeten the pot with an additional 1.6-per-cent increase if the doctors would stop extra billing patients, but the doctors said no and Tchorzewski imposed the 8.4-per-cent settlement. Now, according to a poll of doctors taken by the Saskatchewan Medical Association, 50 per cent of the province’s 1,100 doctors are using Mode 3 billing.

Opting out, extra billing, whatever the euphemism doctors use for charging their patients more than government-set fee schedules, is without doubt an erosion of the principle of universal access to medical care. And the threat increases as the number of doctors charging more increases.

In Ontario, the OMA and the government are making a wary attempt at cooperation without confrontation and possible legislation. Typical of the approach is Ontario’s $9.80 per day charge for patients requiring chronic hospital care. Patients who cannot afford to pay are compensated by OHIP. The OMA has agreed that optedout doctors—whole medical specialties in some hospitals are opted out—will charge the lower OHIP rates if the patient is unable to pay.

“We believe the physician must have the freedom to set the worth of his own service,” says Dr. Edward Moran, general secretary’ of the OMA. “But we also recognize that the patient must have the freedom to seek a doctor’s service at the OHIP rate. That is the fundamental dilemma. We think that while the physician must have the freedom, there’s a collective responsibility to make sure the service is not denied and that everybody has equal access—apart from the ability to pay.”

The “apart from the ability to pay” is the catch. In Ontario opted-out doctors perform 300,000 services a week, compared with 1.5 million services provided by doctors within the health plan. The trend in Alberta and Ontario, especially, is toward a means test—marketplace medicine. The implication is one standard of medicine for those who can afford it and another for those who cannot—unless those who cannot are able to prove to a doctor that indeed they can’t afford the difference between what governments pay and what doctors demand.

“I don’t think the public understands our problems,” says Dr. Robert Clark, executive director of the Alberta Medical Association. “They have all been brainwashed into believing they are entitled to free medical care.”

Most Canadians think that is why they

pay taxes, v3