Institute's health care work shows why provinces should stop relying on federal largesse and start experimenting with new ways of delivering health services

OTTAWA, March 31, 2014 – While some Canadians are concerned about the expiry today of the $41-billion, 10-year Health Accord negotiated by former Prime Minister Paul Martin, it is actually great news for the future of medicare.

In its Medicare's Midlife Crisis project (MMC), the Macdonald-Laurier Institute has made the case that no new accord is needed, and that the 6% annual rise in federal transfers to provincial health systems was in fact a harmful barrier to necessary change. After 2017, federal transfers will be pegged to growth in the economy and the federal government will be largely out of the business of telling provinces how to manage their systems. This will allow for the expansion of an effective new approach to health care that has been emerging over the last five years or so that serves Canadians better than the old approach embodied in the expiring accord.

Among the works published by the Institute over the past few years are these building blocks of the new policy approach:

1. In a March 2014 commentary titled Why Health Care's Broken and How to Fix It: Three drivers of system reform,  MLI Managing Director Brian Lee Crowley makes the case that increased federal funding and "leadership" have obstructed health care reform and innovation. Far from damaging medicare, the federal government's announcement of a slowing in the rate of increase in federal funding to health care in 2017 is a positive step that puts the focus where it belongs: the provincial governments who have the constitutional and legislative authority to fix health care according to local conditions and priorities. The model here is the welfare reform of the 1990s that was originally intended as a cost-cutting measure by Ottawa but resulted in a spate of creative and productive innovation by provinces all across the country.

2. There is an increasing cross-party consensus that the private sector can and should play a role in providing capital, expertise and health care services within a publicly funded system. This new approach was laid out by former Saskatchewan NDP minister of finance Janice MacKinnon in her January 2013 paper titled Health Care Reform From the Cradle of Medicare.

3. Far from having "the best health care system in the world", says Jeffrey Simpson in an MLI Straight Talk interview, we have a system which is one of the most expensive in the world but whose services are only of indifferent quality when compared against other major industrialised countries that offer universal coverage.

4. If Canadians can be convinced their system is not the best, they would do well to look abroad for ideas about how to improve the performance of a universal access system. Swedish health policy expert Mattias Lundbäck profiles two systems that get better outcomes for their health care spending than Canada does in his paper, A European Flavour for Medicare: Learning from experiments in Switzerland and Sweden. He finds they rely to a great extent on policies similar to those recommended by other MMC authors in the Canadian context.

5. Politicians can no longer hide behind the Canada Health Act when faced with calls for reform, which should be clear if one reads the actual legal text of the CHA. Put that close legal reading together with the impact of the Supreme Court's 2005 Chaoulli decision, says prominent health care lawyer Michael Watts in an MLI paper titled Debunking the Myths: A Broader Perspective of the Canada Health Act, and suddenly it becomes clear that the provinces have little excuse not to tackle the tough issues raised by Canada's underperforming and disproportionately expensive health care system.

6. The reasons why private sector provision can be a major step forward are laid out in prominent U of T health care economist Audrey Laporte's January 2014 MLI paper, How Markets Can Put Patients First: Economics before politics in Canadian health care delivery. She makes a strong case for integrating competition and insurance principles into a universal coverage system.

The case for reform is clear. But as Crowley argues, we will only get real system reform if Ottawa stands fast against provincial demands for increased funding. The system is not underfunded by international standards, so more money is not the solution. Almost all the needed reforms are entirely compatible with the provisions of the Canada Health Act. The solutions, laid out by Crowley, MacKinnon, Laporte, Simpson, Watts, Lunbäck and others, are well established. And they lie in the hands of the provinces, not Ottawa. Now that Ottawa has given the provinces long-term certainty on federal health transfers and signalled that the Canada Health Act will not be used to obstruct reform, the provinces have no excuse not to tackle needed reforms now.

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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 or to schedule an interview with Brian Lee Crowley or one of MLI's authors, please contact David Watson, managing editor and communications director, at 613-482-8327 x. 103 or email at On Twitter @MLInstitute

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