Special Report

Turning point

The money is about to flow again for health care, but is that the whole solution?

John Geddes August 7 2000
Special Report

Turning point

The money is about to flow again for health care, but is that the whole solution?

John Geddes August 7 2000

If some of the grimmer predictions for health care in Canada had come to pass, nurse Evelyn Fritz would not be on the job these days at the Ottawa Hospital. Fritz, now 32, was one of the hundreds of young Canadian nurses driven to the United States in the 1990s when Canadian hospital budgets felt the squeeze from deficit-fighting governments. Her specialty as a critical-care nurse made her a valuable prize. Why would she ever come back to the strained Canadian system after she got a taste of the lavishly funded world of U.S. private medicine? Yet there she was last week, taking a brief break in the coffee room off the intensive-care ward, reflecting on her return in June to Ontario after four years in Florida, and her pleasure at seeing the situation improving. “You couldn’t have run this system on much less than they were,” Fritz recalls of the cash-strapped conditions in Canada when she left in 1996. “Now, it seems to be I turning around—we’re I starting to rebuild it.”

That hopeful note from medicine’s front lines comes as a surprisingly upbeat mood spreads through Canada’s health-care system. The main reason: money. Following federal Health Minister Allan Rock’s July 20 meeting with his provincial counterparts, Ottawa is firmly committed to pouring billions back into health transfers to the provinces. The exact amount will not be clear until Prime Minister Jean Chrétien meets with the premiers in September, but the provinces are confident it will not be far off their demand for an additional $4.2 billion a year. That would, by their estimates, lift the annual federal contribution back to where it was before Ottawa launched its battle to eliminate the deficit. Just as important, in the eyes of provincial politicians, is the fact that the money will come with no condition that they sign on to ambitious new schemes driven by Ottawa, such as Rocks cherished idea for m a national home-care program.

With a deal clearly in the works, acrimony has given way to optimism with head-spinning speed. Just days before Rock met with the provincial ministers, the Canadian Medical Association released a report that shook a finger at the politicians, scolding: “The system has become paralyzed at the political level by an obsession with assessing blame for the current conditions.” But last week, the CMA’s president, Dr. Hugh Scully, had a more positive perspective. “The politicians are talking rather than shooting at each other,” he told Maclean’s. “There’s a much more constructive dialogue going on.” Similarly, the Canadian Nurses Association is no longer lecturing both levels of government, as it did in an open letter last spring, to “start putting the health of Canadians above political and financial tensions.” Instead, CNA president Ginette Lemire Rodger had switched by last week to congratulating federal and provincial leaders for “finally singing from the same songsheet.”

Or is it the same spreadsheet? After all, cash, not creative ideas for delivering health care, is at the root of the federal-provincial entente. Ottawa is promising billions beyond the $ 15.5 billion being transferred this year to the provinces under the block fund known as the Canada Health and Social Transfer. Even this year’s amount is well above the $ 11-billion level to which the CHST sank in 1996, the toughest period of the Liberal effort to balance the federal books. So was Canada’s “healthcare crisis,” as it has so often been called, really nothing a few billion dollars couldn’t solve? Some respected authorities apparently think so. “Your system is fine,” Dr. Marcia Angell, the editor of the respected New England Journal of Medicine and a supporter of the Canadian system, reassured the recent annual meeting of the B.C. Medical Association. “You just need more money in it.”

In fact, evidence of a rebound in the system was apparent even before the latest thaw in chilly relations between Ottawa and the provinces over funding. Scully points with satisfaction to recent moves by provinces to boost the number of new doctors being educated in universities as a sign that physician shortages could soon be easing. As well, Ottawa has already ramped up funding for research, including more than $65 million to launch the new Canadian Institutes of Health Research in June, to lure home medical scientists who followed grant money to the United States. “Were seeing some reversal of the academic brain drain,” says Scully. “We now see people coming back.”

At the same time, several provinces have set up special funds to help hospitals coax back nurses who have left. Fritz returned after seeing an Internet posting touting financial bonuses for nurses to work in Ottawa. Her take-home pay is about the same, she says. As for the work, Fritz feels that patients get quicker access to diagnostic tests and surgery in the United States, but closer, more individual attention from nurses in Canada.

Some observers are worried that the emphasis on restoring funding in Canada threatens to delay badly needed reforms. Experts have long called for innovations to take into account an aging population, the shift from hospitals to home care, and increasingly expensive drugs and diagnostic techniques. For nearly seven years, the federal Liberals have vowed, on and off, to embark on ambitious initiatives like a prescription drug plan, or pharma-care, and extending public funding to more health services delivered at home. Putting these lofty goals on hold seemed unavoidable during the austerity-minded years of eliminating the deficit. But in an age of multi-billion-dollar annual federal surpluses, advocates of medicare expansion are looking for Ottawa to forge ahead with the bold ideas—not just turn on the spending tap again.

Instead, Rock has at least temporarily retreated on both the pharma-care and home-care fronts in the face of provincial reluctance to follow his lead. “It looks like the money will just be handed over,” complains Terrence Sullivan, a Toronto health researcher and member of a voluntary pro-medicare advocacy group called Dialogue on Health Reform. “There is no reason why the federal government can’t have some conditions on in the transfer—for example, that the funds are tied to some basic standard for home care.” Having long abandoned pharma-care ambitions because of the enormous cost implications, senior officials in Rocks department now concede they have, for now, stopped pressing the provinces for a home-care deal. They deny, though, that they have given up on the long-term goal. Officials say some kind of nod from the premiers in the direction of future home-care reform could emerge from their September meeting with Chrétien, or even when the premiers meet next week without the Prime Minister in Winnipeg.

‘The real danger is that as we get money back in the system we go back to the same old patterns’

But that is far from guaranteed. With the boost in cash transfers all but assured, Ottawa has little leverage to push any recalcitrant provinces into new programs. “Is the pressure off? In one sense, yes,” admits a senior Health Canada official. “But we would prefer to think of that as establishing the environment in which the work could go ahead collaboratively.” Another Health bureaucrat allows there is a risk of complacency now that the intense battle over funding has subsided. “The real danger is that as we get money back into the system, we go back to the same old patterns,” says the official, “just building up more spaces in hospitals, paying more in [doctors’ and nurses’] salaries.”

How much influence—if any—the federal government will have on exactly how the provinces spend the new money remains to be negotiated. Some provinces would like all the replenished transfer funds devoted to the CHST, which provinces essentially spend as they see fit. But there is discussion about targeting some funding for special purposes. British Columbia has taken the lead in calling for a special pool to buy new equipment, such as magnetic resonance imaging (MRI) scanners and other high-tech diagnostic tools. The Canadian Medical Association is also promoting the idea of a dedicated fund. It says $1.74 billion would have to be set aside for capital and operating costs over three years just to bring Canada up to the average technological level of other industrialized countries.

Rock is also enthusiastic about upgrading the basic computer equipment used in hospitals. Among the groups backing his push to bring the information technology revolution to the health sector is the Canadian Association of Emergency Physicians. Dr. Doug Sinclair, the association’s Halifax-based president, says a key to making ERs more efficient—and reducing the sometimes long waits for treatment that symbolize the shortcomings of many Canadian hospitals—is putting in place computer systems to analyze how patients are treated, much the way retailers commonly keep track of how customers are served. “You can go into any community in Canada,” Sinclair declares, and find more sophisticated computer equipment in the Tim Hortons than in the emergency department.”

Despite such pleas for earmarked spending, the provinces are generally reluctant to accept strings attached to money from Ottawa. Their core demand is for the additional $4.2 billion a year, plus an “escalator” to automatically increase the transfer to keep pace with growing populations and other factors steadily driving up costs. “The federal position is, We’ll give you back the base money, but we’d like it to go to particular areas,’ ” says Manitoba Health Minister Dave Chomiak, current co-chairman of the council of health ministers with Rock. “That is really the trickiest part of the negotiation.”

Tricky, but Chomiak believes the climate is now right for the differences to be ironed out. Ironically, he credits the angry outcry sparked earlier this year by Alberta’s Bill 11, which carves out a bigger role for private health-care companies in the province, with helping persuade politicians that they must come to terms. “Some of the controversy suggesting that we might lose our medicare system has caused people to reaffirm their commitment to it,” Chomiak says. Polls conducted last winter at the height of the Bill 11 debate showed public concern in Alberta over the future of health care in the province soaring, and Premier Ralph Klein’s personal-approval rating plummeting—serving notice to all Canadian politicians that they tamper with medicare at their own risk.

The debate helped convince federal Liberals to make health a cornerstone of their strategy for the election Chrétien is expected to call next spring. As Bill 11 made waves, the government quietly formed a special federal cabinet reference committee” on health care. The powerful group included Rock, Finance Minister Paul Martin, four other ministers and Chrétien's senior policy adviser, Eddie Goldenberg. Meanwhile, the provinces turned up the heat over funding levels. At a meeting with provincial health ministers in late March, Rock asked for agreement first on the shape of reform before Ottawa would promise more money. They turned him down flat. Then, in early June, the issue spilled over into a meeting of federal and provincial social-services ministers, with the provinces vowing not to co-operate with a separate federal push for a new “children's agenda” until the health funding dispute was resolved.

Around that time, Chrétien personally took control of the health file. In a series of conversations with premiers, he assured them that more money was on the way. Chrétien and Klein emerged from a key meeting in Calgary in early June in a conciliatory mood, talking optimistically about a September first ministers’ meeting that would tackle the funding question. Chomiak says “there is no doubt” that Chrétien's direct involvement and personal assurances that more money was coming “broke the logjam.” By the time the health ministers met again on July 20, the atmosphere was positively buoyant. Still, some observers suggest Chrétien's intervention left Rock with little room to bargain. “Allan Rock is, in my view, in a very, very weak position,” says Sullivan of the Dialogue on Health Reform.

There is not much doubt that the provinces won the upper hand in the funding squabble. Yet Rock still has a few options left for putting his own stamp on the next stage of the health system’s evolution. One promising idea he has championed is what is known as primary-care reform, the term used to describe a range of new ways for doctors to deal with patients on a routine basis. Although models vary, commonly discussed elements include physicians working for salaries, rather than a fee-for-service basis, in clinics that make better use of nurses and other health specialists from nutritionists to pharmacists.

The federal government has already taken a lead role in encouraging provinces to experiment with primary-care reform. In 1997, Ottawa set aside $150 million in a “health transition fund” to support 141 pilot projects across the country. One project, downtown Vancouver’s Spectrum Health clinic, teamed five doctors with a support group that includes nurses, a social worker, a pharmacist and administrative staff. The clinic serves about 4,000 patients, including more than 1,000 who are infected with HIV or have AIDS. One HIV-positive patient, Brian Descoteaux, 42, welcomes the option of seeing a nurse or pharmacist, rather than a doctor, for his frequent routine visits to the clinic. “There are some things that I can see the nurse for,” Descoteaux says, “and then the doctor is freed up to see the people who need to see a doctor.”

Dr. Carol Murphy, 49, says she expected when she helped set up Spectrum that she might find it difficult to collaborate with health-care providers who are more often regarded as working for—rather than with—physicians. But the flattened hierarchy took little adjustment. “It’s a real pleasure to see the health-care workers around us doing their jobs and the patients responding to them,” Murphy says.

Primary-care reform is not just for big cities. Dr. Jim Rafferty, who runs a clinic with one other doctor in Caledonia, N.S., population 3,400, has just brought in a nurse-practitioner under the same federally funded program. The nurse-practitioner will be able to handle routine cases, Rafferty says, freeing the doctors to spend more time on more complex medical problems. It’s a simple enough idea, but Rafferty hopes its spread will help win back frayed public confidence in the Canadian system. “Our problem is that we have this massive health system to the south of us that has a lot of cash,” he says. “We have to find solutions, not to compete with the U.S., but to be ourselves—to deliver primary care as it should be done.”

Findings from most of the 141 pilot projects set up under the health transition fund will not be formally reported until next spring. But Rock was confident enough to tout expanding primary-care reform in his opening remarks to provincial ministers at their recent meeting. With home care on the back burner and pharma-care all but forgotten, his officials are now focusing on primary-care reform as one of the few areas left where there still seems to be room for an active federal role. “We have to demonstrate beyond the theory, in real practice, how a significant group of health-care providers can work under a different system and find it superior,” explains one senior Health Canada official. And perhaps demonstrate, at the same time, that Ottawa can be more than a banker to the provinces when it comes to the future of Canadian health care. www.macleans.ca for more information and links