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Health-care insanity: tax till you feel better

Author: John Williamson 2004/04/11
Health care as we know it in Canada is unsustainable. Whether it is funded by well-heeled governments running multiyear surpluses, as is the case with high-taxing Ottawa and low-taxing Alberta, or by cash-strapped governments facing budget deficits, such as moderate-taxing Ontario and high-taxing Newfoundland and Labrador, health budgets are not able to keep up with rising costs.

What is Ottawa's solution to ever-increasing waiting lines, crowded emergency rooms and the coming crunch when baby boomers hit old age and require more health services? It is to tax and spend more. According to a recent Globe and Mail story, the federal government is studying a plan to levy a new surtax on Canadians to pay for health care. "A poll tax or a dedicated tax is a possibility," said an anonymous source. "I don't think you can rule it off the table, if there's nothing else."

Canada's "single public payer" model, whereby public-sector monopolies deliver health services, is ripe for reform. It is only a question of time before our health system hits the fiscal wall, if it has not already, yet the best Ottawa can do is suggest more of the same. While additional tax money will delay the inevitable, no amount of cash can stop it in the face of rapidly rising demand. It was Albert Einstein who said insanity is doing the same thing over and over again, and expecting different results. This sums up Ottawa's position on health care: More of the same by way of higher taxes.

Prime Minister Paul Martin says he hopes to reach an agreement with the provinces to put health care on a sustainable footing. But instead of examining options used successfully by other countries, the federal government's solution is to dig deeper into the pockets of Canadians.

What do taxpayers receive for the $85-billion governments budget annually for health care? A system that is good, but not anywhere near "the best," as claimed by our politicians. The World Health Organization (WHO) recently ranked our health system 30th out of 196 surveyed countries.

A starting point for Canadian politicians to reform the health system and improve our ranking is to recognize the need for a greater role for the private sector. This is heresy to some, particularly public-sector workers with a vested interest in keeping the health-care monopoly. But it has been done in places like Germany, the Netherlands, Britain, Sweden, Australia, Singapore and other countries.

Ottawa should follow the examples of these nations by giving Canadians the choice of spending more of their own money to get better health care, and more of it. Allowing a parallel, private system to co-exist alongside the public system, as is done throughout the world, is key to improving our health-care system. This requires amending the Canada Health Act and replacing the principal of public administration with the principles of choice, sustainability, quality and accountability. The state will, of course, continue to provide support for core services, but also grant access to private providers to deliver health care.

Opening up the health-care system to competition and private providers will save money and improve the quality of service delivery. Moreover, governments should look upon the private health sector as an important economic engine in the 21st century. It is estimated that $1-billion is spent by Canadians each year on private health services in the United States, money that should be spent here. Provinces, meanwhile, should become laboratories of social policy, whereby each is permitted to experiment with different mixes of private and public health care. The system will remain regulated by elected governments with the best delivery practices duplicated across the country.

Another tax grab for our government health monopoly cannot fix health care. A system where public, private and community-based providers compete is long overdue. It is time to let a thousand flowers bloom and allow Canadians to pick the health providers they want.

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Franco Terrazzano
Federal Director at
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Federation

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