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Fiscal Sustainability of Alberta's Public Health Care System

Posted Apr 23 2009 12:57am

The School of Public Policy at the University of Calgary has published a new research paper this month, "The Fiscal Sustainability of Alberta's Public Health Care System". Interestingly, its authors are from Ontario: Livio Di Matteo, Department of Economics, Lakehead University in Thunder Bay, and Researcher Rosanna Di Matteo also from Thunder Bay..and may I suggest that they are probably related---just a hunch.

Having lived in Alberta for a number of years, and understanding the independent mindset that generally exists in the Wild West as well as the boom/bust cycles that seem to create a perpetual whirlwind there, it is almost expected that change will come from such a province. The other province offering up change is, of course, Quebec. I don't mean "transformation" because only  Mr. Smitherman knew what was truly meant by that. I mean real change--- maybe even an evolution/revolution toward more patient-driven care. This change can  occur if patients engage in the responsibility of their own care creating a cultural shift supported by new communications technology and a public health care conscience. If only the system would let them.

It can be argued that Alberta doesn't have a provincial sales tax and this could easily be instituted to offset the rising costs . But things are never that simple when it comes to health care as the authors of this report conclude. Several solutions are presented and not one appears to be "just add more cash to the pot" share a little secret....... the health care pot is not bottomless despite what many well-intentioned doctors seem to believe.

The recent downturn in the economy co-incides with increasing expectation and demand for health care along with  pharmaceutical advancement and technological change that the report touches on. Although ageing in itself is not the main problem for sustainability, it is the various new forms of care and treatments  that an ageing population expects that will be the cost driver.

So despite being just another report on the sustainability of health care in Alberta, I think that this time there is more urgency involved. The big health care train rolls very slowly and we need change faster than the bureaucracy can provide. Not only is health care changing, but the pace of change external to health care is happening at an even faster pace. How to keep up?

And I have to ask:

If Alberta, a "have" province, cannot sustain its level of spending on public health care, how is Ontario, a "have-not" province, going to manage? Surely, not just by shuffling  some federal money around and it doesn't look like the manufacturing sector is going to make a come-back in Ontario anytime soon. Will Ontario be relying on other provinces running deficit budgets to bail it out in equalization payments or are we all going to rely on Saskatchewan? The whole situation looks somewhat precarious.

While Mark Carney pumps out more virtual money and interest rates are held to an all time low, some uncertain times are ahead across the country.

Pertinent points from the report:

First the report summary-

"The long-term fiscal sustainability of Canada's publicly funded provincial health care systems is under pressure from an aging population, expensive technological advances, and expanding coverage that is pushing up against constraints on provincial government revenues. Alberta, for example, enjoys the benefit of energy royalties, but the volatility of this bounty has been high-lighted by the recent collapse in energy prices and the loss of upwards of $6 billion in resource royalties. Other provincial governments enjoy more stable sources of revenue but are constrained in their health care choices by heavier tax burdens and larger public debt loads. This paper examines the challenges faced by governments as they attempt to satisfy the needs of the public today, without compromising the needs of future generations."

-projections of real capital spending on public health care in Alberta over the medium term out to 2030: between $5,339 and $14,215, soaking up between 32% and 87% of total government revenues

-growth of spending on non-medicare categories such as drugs, capital and all other health expenditures are growing faster than either revenue base or the economy. Traditional core medicare areas of physician services and hospitals are not.

-options for sustaining provincial government health expenditures include: choosing what other government programs could be allowed to grow more slowly, what tax rates could be increased to cause the revenue base to grow more quickly, and what health programs currently provided by the public sector could be provided privately

-a portfolio of policies that combines these solutions likely would be a pragmatic policy outcome ensuring the fiscal sustainability of Alberta's public health care system can responsibly provide for future welfare of its citizens.

I'll post the link to the report in the comments section as well as a link from the National Post article by David Gratzer from April 22.

Just when Ontario will produce such a report on sustainability is to be seen. In an era of increased accountability and transparency one would think it would be forthcoming...but shhhhhh, maybe we just don't want to know.

Happy Reading!




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