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A paralysis has gripped Canada's health-care debate while the medicare system continues to weaken. While bureacrats and social activists defend the status quo and demand more money for it, and while politicians duck the underlying problems of a sick health care system, polls show that most Canadians will consider new ideas for health care delivery.

Originally published in the Globe and Mail. Republished with the permission of the author.


David Gratzer

 Author Notes

Student at the Faculty of Medicine, University of Manitoba, where he served on the university's Board of Governors for four years. Author of a weekly column for the Halifax Herald and contributor to over a dozen newspapers and magazines including the National Post, the Calgary Herald, the Ottawa Citizen, and the Toronto Star. Author of Code Blue (1999), winner of the Donnor Prize for outstanding books on public policy.

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Code Blue: Reviving Canada's Health Care System
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 Essay - 11/25/1999

A paralysis has gripped this country's health-care debate while the medicare system continues to weaken.

In Ontario, 65 per cent of cancer patients don't receive radiation therapy within the recommended time. On the positive side of things, that's better than the 68-per-cent figure of six months ago, observes Health Minister Elizabeth Witmer. (At this rate, cancerpatients can expect timely care by roughly 2020.) The British Columbia government releases waiting-list data showing that, despite pouring millions of new dollars into the system, waiting times for surgeries continue to grow. Manitoba commits itself to sending cancer patients south of the border for treatment -- the sixth province to do so this year.

Last week, the Alberta Ministry of Health released the now famous Policy Statement on the Delivery of Surgical Services. In it, the government proposes that regional health boards be allowed to contract-out to private providers for surgeries, subject to approval by the Alberta Minister of Health.

The document released by the Alberta government of Ralph Klein is, in many ways, a policy statement about nothing. Private contracting-out of health services already exists in spades. The chair of the Calgary Regional Health Board estimates that his administration spent $250-million on such contracts last year. Alberta boards contract out to private clinics for cataract surgeries, as well as abortions and ear, nose and throat procedures.

You wouldn't know this by the angry rhetoric. Declared federal Health Minister Allan Rock: "We would be very concerned about any proposal that would erode public medicare either directly or by stealth."

As with any suggestion of change -- even one as modest as this -- journalists, social activists and politicians lashe out with indignation. Call them the Indignant Majority. But, wait. A new Pollara poll observes that 73 per cent of Canadians favour change, including the option of buying private care. Call Mr. Rock and his friends, then, the Indignant Minority.

Statements that medicare must never face a "two-tier, American-style system," or user fees or any speedier service for those who pay don't come just from the Indignant Minority, they're also echoed by Mr. Klein. In the premier's 10-minute speech on the policy statement, newspaper columnist Andrew Coyne counted 13 such assurances. I'll take his word for it -- I stopped at five.

The reality is that the Indignant Minority has won the health-care debate so handily that no one -- not even popular, surplus-rich Mr. Klein -- dares attempt any real reform of medicare.

Medicare is a system built on perverse incentives for patients to overconsume services and doctors to overprovide them. Add to this a governance structure that makes your local city council look like a bastion of efficiency, and it's easy to understand why our cherished medicare system falls short.

We need a new way of organizing health care to place decisions in the hands of individuals, not government bureaucrats. We need, in short, medical savings accounts (MSAs).

MSAs have become a popular way of providing health-care coverage in the United States. The United Mine Workers Union recently negotiated a plan to provide 15,000 members with MSA coverage. Across the Pacific Ocean, Singapore introduced MSAs to its citizens in 1984. In the early 1990s, the Chinese government began its own experimentation with the idea, now with more than five million participants.

While the models vary, MSAs empower the patient. To work out how the system would work best for us, we will need provincial experimentation, but we can start with the following model: Today, the government spends about $800 on health care for a young man. Under the new system, the government would deposit the money into an individual's medical savings account, from which he would pay his medical bills, such as blood tests and checkups. (Of course, how much an individual gets would depend on a number of factors such as age, gender, and general health -- but this is a detail.) To protect Canadians against the high costs of major surgeries and lengthy hospitalizations, mandatory insurance would kick in above a certain threshold, say $2,000. The bills between the account balance and the catastrophic threshold would be paid out of pocket.

In the case of the poor or chronically ill, the government would simply fill in the difference. Thus, MSAs shield patients from catastrophic medical bills while letting them control their health-care dollars.

To reward smart spending, at year's end, the citizen can withdraw all or some of the unspent MSA. This will also encourage efficient health-care providers who offer competitively priced services, since individuals will seek them out.

It's a pretty simple but powerful idea. MSAs would reinvigorate the doctor-patient relationship, end waiting lists, and introduce a competitive health market -- while still providing health insurance for every Canadian.

Mr. Klein's suggested change is that Alberta regional boards have more flexibility in providing patients with health services. But patients at the end of the day will be offered no choice. Government officials can contract-out to private clinics. Patients can't.

Mr. Klein's big reform idea is a way for government to better micromanage health care. But is better government micromanagement the key to improved health care?

Governments have been pushing new management ideas for two decades. The phases are familiar: closure of acute-care beds, regional health boards, community care. So too is the push to spend more on health care.

If authoritarians in Singapore, central planners in China, and union leaders in the United States see the value in medical-savings accounts, why can't the Indignant Minority?

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