MLI Managing Director lays bare the failures of central planning and federal 'leadership' to point the way to the inevitable reform of medicare

OTTAWA, March 20, 2014 – Canadians love to think that this country has "the best health care system in the world", even though that is quite obviously not the case. But it isn't really a statement about facts, explains Brian Lee Crowley, Managing Director of the Macdonald-Laurier Institute. It is a "statement about morals, beliefs and desires", he writes in a hard-hitting new MLI Commentary paper titled "Why Health Care's Broken and How to Fix It: Three drivers of system reform".

"Our system is based on values, and especially values of equity and fairness that apparently transcend any assessment of the quality of care actually received", Crowley writes. But such "magical thinking" ignores the factors that are already shaping Canada's health care system, and forcing Canadians to accept the reality that serious reform is needed to improve efficiency, save money and improve health outcomes .

The three key factors that are driving change in Canada's health care system, according to Crowley, are:

  1. Central planning doesn't work;
  2. What we've learned about federal "leadership" in areas of provincial responsibility;
  3. The moral and economic sustainability of the system.

Crowley explains that Canada's health system is a "lonely remaining outpost of the logic" behind the failed central planning systems in Communist Eastern Europe. Central planning places "impossible demands on central planners", he writes. What people at the top can know and control is nothing compared to our system in the West, based on decentralized information and control, the rule of law, individual decision making and competition. Human knowledge about health care is "expanding exponentially", says Crowley. No distant bureaucrat can anticipate the needs of individual patients and physicians.

On federal leadership, Crowley points out that many assume there's nothing that money from Ottawa can't fix, but in fact escalating federal transfers have held back necessary health care reforms in the provinces. He points to the example of welfare reform in the mid-90s, which came about because the federal government both reduced transfer payments and allowed the provinces to experiment with reforms that suited their circumstances best. The best reforms were adopted nation-wide. Now medicare must undergo a similar process, and the current federal government seems to be heeding this advice by reducing the growth in health transfer payments.

Finally, Crowley asserts that there is a moral imperative to stop health spending from crowding out spending on programmes such as education, which invest in the future prosperity of the nation. "We cannot impoverish the rising generation to pay for the health care of the old", he writes.

Crowley believes these drivers will lead to the "inevitable" necessary changes to how Canada funds and delivers health care. But, he writes "I am personally amazed by how much effort it takes to make the inevitable happen."

Brian Lee Crowley's Commentary is based on the keynote talk he gave to the national conference of the Canadian Association of Healthcare Reimbursement held in Ottawa  in 2013.

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The Macdonald-Laurier Institute is the only non-partisan, independent national public policy think tank in Ottawa focusing on the full range of issues that fall under the jurisdiction of the federal government.

For more information, please contact David Watson, managing editor and communications director, at 613-482-8327 x. 103 or email at david.watson@macdonaldlaurier.ca. On Twitter @MLInstitute