Download The Fiscal Sustainability of Universal Health Care in Canada

The Fiscal Sustainability of
Universal Health Care in Canada
Gregory P. Marchildon, Ph.D.
Canada Research Chair in Public Policy and Economic History
Johnson-Shoyama Graduate School of Public Policy, University of Regina, CANADA
Fiscal Space and the Financing of Universal Health Care Systems in the Americas
PAHO/WHO Regional Workshop, Washington, D.C., November 29-30, 2007
The Many Worlds of Fiscal
Sustainability
• Originates from Latin: to hold or support
• Achieving balance by not depleting or destroying
existing resources
• Having a sufficient and dependable revenue
stream to finance expenditures
• Romanow Commission (2002): sufficiency of
resources necessary to provide citizens with
timely access to quality health services
 Long-term
 Evolving health needs
2
Universal Health Care
• Balance of resources necessary to fund a
basket of public health care services
available to all citizens on the same terms
and conditions
• Resources = $ + L + K (= $ ?)
• Categorical versus universal
• Benefit entitlements versus citizen rights
• Definition of public health care
• Definition of same terms and conditions
3
4
Organization of the Public System in Canada
Constitution Act, 1982
Statistics Canada
Transfer payments
Provincial and Territorial Governments
Regional
Health
Authorities
Mental
Health and
Public
Health
Federal Government
Ministries of
Health
Home
Care and
LongTerm
Care
Single
Payer
Hospital,
primary
care and
physician
Services
Canadian Institutes
for Health
Research
Federal-ProvincialTerritorial Advisory
Committees and
Councils
Minister of Health
Canada
Health Act,
1984
Health
Canada
Public Health
Agency of
Canada
Patent
Medicine
Prices
Review
Board
Provincial and Territorial
Prescription Drug Subsidy
Programs
Canadian
Institute for
Health
Information
Health
Council of
Canada
Canadian
Agency for
Drugs and
Technologies
in Health
Canada
Health
Infoway
Canadian
Blood
Services
5
Public, Mixed and Private Systems of Health Care
Funding
Administration
Delivery
Public Canada Health Act
services (hospital and
physician services plus)
and public health services
Public Taxation
Universal, single-payer
provincial systems.
Private self-regulating
professions subject to
provincial legislative
framework
Private professional,
private not-for-profit,
private-for-profit and
public arm’s-length
facilities and organizations
Mixed goods and service,
including most prescription
drugs, home care and
institutional care services
Public taxation, private
insurance and out-ofpocket payments
Public services that are
generally welfare-based
and targeted, private
services regulated in the
public interest by
governments
Private professional,
private not-for-profit and
for-profit, and public
arm’s-length facilities and
organizations
Private goods and
services including most
dental and vision care as
well as over-the-counter
drugs and alternative
medicines
Private insurance and outof-pocket payments
including full payments,
co-payments and
deductibles
Private ownership and
control; private
professions, some self
regulating with public
regulation of food, drugs
and natural health
products
Private providers and
private for-profit facilities
and organizations
6
Overview of Canadian Health System: Expenditure Perspective
Total Health Expenditures 2005
$142 Billion
Private Sector
30.4%
Public Sector
69.6%
Other Public
Sector
6.3%
Dental and vision care, complimentary
and alternative medicine, and some
long term care and home care
Private Health
Insurance
12.2%
Out-of-Pocket
Expenditures
14.4%
Commercial
Insurance Firms
Not-for-Profit
Insurance Firms
Other
3.2%
Provincial Government
Sector
63.3%
Federal Direct
4.2%
Physician
Remuneration
Regional Health
Authorities
Provincial Drug
Plans
Municipal
(Public Health)
0.7%
Hospitals
Long-term Care
Social Security
Funds
1.4%
Community Care
Worker’s
Compensation
Quebec Drug
Insurance Fund
Home Care
7
Public, Mixed and Private Systems of Health Care
Funding
Administration
Delivery
Public Canada Health Act
services (hospital and
physician services plus)
and public health services
Public Taxation
Universal, single-payer
provincial systems.
Private self-regulating
professions subject to
provincial legislative
framework
Private professional,
private not-for-profit,
private-for-profit and
public arm’s-length
facilities and organizations
Mixed goods and service,
including most prescription
drugs, home care and
institutional care services
Public taxation, private
insurance and out-ofpocket payments
Public services that are
generally welfare-based
and targeted, private
services regulated in the
public interest by
governments
Private professional,
private not-for-profit and
for-profit, and public
arm’s-length facilities and
organizations
Private goods and
services including most
dental and vision care as
well as over-the-counter
drugs and alternative
medicines
Private insurance and outof-pocket payments
including full payments,
co-payments and
deductibles
Private ownership and
control; private
professions, some self
regulating with public
regulation of food, drugs
and natural health
products
Private providers and
private for-profit facilities
and organizations
8
9
Universal Health Expenditures in as a
Share of Total Health in Canada, 2007
Private Sector
$47.1b
29.4%
Other Public Sector
$3.5b
2.2%
Provincial/Territorial
$103.8b
64.8%
CHA
Medicare
$$67b
61.3%
41.8%
Non-CHA
$31.9B
31.7%
Federal Direct
$5.7b
3.6%
10
Trends in Health Expenditures, 1976-2005
Five-Year Averages
Total health expenditure (THE) as % of GDP
Canada Health Act (CHA) services as % of THE
CHA services as % of GDP
Non-CHA services as % of THE
Non-CHA services as % of GDP
Mean annual growth rate in THE
Mean annual growth rate in CHA services
Mean annual growth rate in non-CHA services
Mean annual growth rate in GDP
Mean real annual growth rate in THE
Mean real annual growth rate in CHA services
Mean real annual growth rate in non-CHA services
Mean real annual growth rate in GDP
19761980
7.0
58.1
4.1
41.9
2.9
12.8
11.6
14.6
12.6
3.3
2.2
4.9
3.6
19811985
8.0
56.7
4.5
43.3
3.5
12.4
12.2
12.7
9.1
4.2
4.0
4.5
3.1
19861990
8.5
55.4
4.7
44.6
4.7
8.9
8.2
9.8
7.0
4.0
3.3
4.8
2.3
19911995
9.6
51.7
5.0
48.3
4.6
4.0
1.8
6.3
3.6
1.6
-0.5
3.9
2.0
19962000
9.0
46.2
4.2
53.8
4.9
5.8
3.8
7.5
5.8
4.0
2.1
5.7
4.3
20012005
10.0
43.3
4.3
56.7
5.7
7.7
6.8
8.4
4.8
5.2
4.3
5.9
2.5
11
Real Growth Trends, 1976-2005
Average Growth Rate
(in percent per year)
Medicare
2.6 %
Non-Medicare
5%
GDP
3%
12
Total Health care expenditures as a share of GDP in
Canada and selected countries, 1960 to 2002
16
14
12
8
6
4
2
AUST
CAN
FR
SWE
UK
US
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1985
1980
1970
0
1960
% of GDP
10
Public Health Care Expenditures as a share of GDP in
Canada and selected countries, 1960 to 2002
9
8
7
5
4
3
2
AUST
CAN
FR
SWE
UK
US
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1985
1980
0
1970
1
1960
% of GDP
6
Comparative Health Status Indicator
Rankings (OECD rankings in brackets)
Life
Expectancy at
Birth
(1999)
Potential
Years of LL
per 100,000
(1997)
Perinatal
Mortality per
100,000 (1999)
DPT
Immunization
% of Children
(1997)
Measles
Immunization
% of Children
(1998)
SWEDEN
1
(4)
1
(1)
2
(7)
1
(2)
1
(6)
CANADA
2
(5)
2
(8)
3 (13)
4
(22)
2
(7)
AUSTRALIA
3
(7)
3
(9)
1
(3)
6
(25)
5
(18)
FRANCE
4
(8)
5 (15)
4 (17)
2
(8)
6
(19)
UK
5 (18)
4 (10)
5 (18)
3
(18)
4
(15)
USA
6 (20)
6 (22)
6 (20)
5
(23)
3
(13)
Comparative Disease Indicator Rankings
(OECD rankings in brackets), 2000
Malignant
Neoplasms
(2000)
Cerebrovascular
Diseases
(2000)
Respiratory
System
Diseases
(2000)
Ischaemic
Heart
Diseases
(2000)
SWEDEN
1
(2)
5
(11)
1
(4)
4
(16)
CANADA
4
(15)
1
(2)
3
(10)
3
(12)
AUSTRALIA
2
(8)
4
(5)
4
(12)
2
(11)
FRANCE
5
(18)
2
(3)
2
(8)
1
(3)
UK
6
(20)
6
(18)
6
(25)
6
(22)
USA
3
(14)
3
(4)
5
(22)
5
(21)
Comparatives Trends in real PUHE, PRHE,
and THE, cumulative % change, 1990-2001
17
Nature of Regionalization Reforms
• Had been urged for decades before by
policy experts
• Fiscal crisis of early 1990s finally pushed
most governments to act
• “Big bang” structural change
• Little idea of actual consequence: i.e. a
high level of uncertainty
18
Stated Policy Goals:
Regionalization
• Better align resources with population needs
• Integrate planning and management of services
• Shift emphasis to illness prevention and health
promotion (from acute care)
• Improve service quality and EBP
• Provide accountability for “system”
• Increase public participation
Source: Lewis and Kouri (2004)
19
Current Debates
•
•
•
•
Fiscal sustainability
Federal-provincial conflict
HHR shortages and wait time pressures
Public-private boundaries
– Chaoulli decision in Supreme Court and role
of private health insurance
– Private delivery and contracting out
20
Underlying Fiscal Sustainability
Challenges
• Transformation of primary health care
• Effective management and policy/program
experimentation at RHA level
• Prescription drugs: major cost driver
Countervailing power
Prescription and utilization behaviour
• Electronic (patient) health records
21
Political Sustainability: Public Satisfaction
BC
AB
SK
MB
ON
QC
NB
NS
PEI
NL
YK
NT
NU
CANADA
2001 - % Excellent
or Good
2003 - % Excellent
or Good
84.0
83.6
85.6
80.3
84.5
85.0
82.8
85.3
89.6
88.9
81.7
80.5
70.8
84.4
82.8
85.7
88.4
85.6
87.1
89.0
86.9
87.3
88.6
86.1
85.3
79.1
77.1
86.8
22
Concluding Observations
• Canadian Medicare and European v. US
trajectory
• Evidence from introduction of more recent
universal health care systems
• The revenue and responsibility challenge
• Public financing of universal health care
and the choices available
23