Introduction

Thank you for that introduction and thanks to everyone who came to this luncheon to hear my thoughts on the state of Health Care in Canada.

The title of my presentation is the Myths and Truths about Canada’s Unsustainable Health Care System. It’s not intended to alarm you. It’s simply a frank talk about today’s realities.

Several months ago the Canadian Life and Health Insurance Association entered the debate with a position paper calling for a sustainable, accessible and quality health care system.

I want to expand a bit on that paper but first I think it would be useful to address what I call some of the “myths” surrounding health care because I think they have a very large impact on our ability to move forward.

Myths that somehow Canada’s health system is superior, that private participation is unwelcome, that we can just carry on under the current regime despite mushrooming costs, or that there is nothing we can learn from other international public health care systems.  If we don’t address some of these myths, there can be no way to introduce reforms that will ensure a healthy and economically sustainable future for all Canadians.

Myth #1 – Canadian Identity

The first and most pervasive myth I’d like to talk about is that the Canadian identity is somehow tied to our public health care system.  It’s true, we have a caring and sharing system of values behind the system but that doesn’t define the health care system itself. The values are at the heart of our national legislation – open, universal access to health care for all Canadians. But that kind of self-identification can lead to a very narrow and protectionist view... that any changes to our present Health Care System is an attack on what it means to be a Canadian. Frankly, that’s just ridiculous.

The Canadian Life and Health Insurance Association believes the public system should be the firm foundation that we will never lose but there are many ways of making the system more efficient and for the private sector to play a role…   We shouldn’t be afraid to try; our Canadian identity is not at stake.

When it comes to an identity crisis, you only have to look south of the border to see how promoting public health care can lead to a dialogue of the deaf. Terms like death panels, socialism, even communism have clouded what should be a rational approach to finding a common ground for broader health care coverage of American citizens.

Myth #2 – Tweak the System

The second myth is that our current system is working pretty well and that only some minor tweaking is needed. That reminds me of the overly optimistic driver who thinks his 10-year old clunker needs only a regular oil change but ignores the growing squeaks and groans under the hood.

Our doctors on the front lines know better. A poll last month of over 2,000 Canadian physicians shows four out of five of them believe there is an urgent need to fix Canada’s health care system.  And the vast majority of the doctors say it needs more than tinkering or a simple oil change.  They believe both more money and a transformation are required to enable the health care system to remain viable.

Myth #3 – Only Two Systems

My third myth is again aimed at a familiar but parochial perception of health care: That is: There are only two choices – The current Canadian system or the American system.  Believe me, it’s not the case.  There are other models around the world that have proven to be successful. In fact, a 2006 Conference Board of Canada study comparing 24 leading OECD countries, ranked Canada 11th in terms of overall health.  There are more recent studies that rank us even lower.  So there are plenty of countries for us to learn from.  Home-grown success stories of public-private partnerships can also be studied and built on.  For instance, there is the Shouldice Clinic here in Toronto – a leader in privately-delivered hernia surgery – and similarly the Gimbel Eye Clinic in Calgary – the first out-of-hospital institution in Canada to offer small-incision cataract surgery.

Myth #4 – Free Public System

My fourth and final myth that I would like to dispel is the notion that Canadian health care is a totally free, public system.  Again, the OECD tells a different story.  The average public health care spending by partner nations is 73%.  Canada’s public spending ranks below this at 70%.  The rest comes from private sources, a mixture of private health care providers and directly from your pocket.
So you can see, the private sector is a valuable partner in the funding of health services to Canadians. Without this contribution, the already stretched public resources would be in danger of bursting at the seams.

CLHIA Policy

Enough myth busting.  But it’s important to put them on the table if we hope to have a rational discussion on what should be done. 

That’s part of the reason the CLHIA entered the debate last June with our report on health care policy. And the paper is not about new insurance business opportunities.  Rather, our main interest is seeing a good, healthy primary system.  Without a well functioning primary system, it is very tough to have a supplementary system that can work effectively.

The report’s baseline assertion is that the current public health care system in Canada is not sustainable.  We are in the midst of an aging population and there are newer and more expensive treatments.  If the trend continues, in ten years time many provinces will spend 70 cents of every budget dollar on health care with little remaining for education, infrastructure and innovation. 

I believe it is critically important to redesign the health care system to enhance the health of Canadians while at the same time ensuring their economic future and prosperity.  In other words, good personal health would be little comfort in a world where the rest of our basic needs are left in peril.

The Canadian Life and Health Insurance Association recommends a four point approach to reaching an affordable balance.

First, a Patient-Focused Approach to Health Care  means a fundamental change in thinking – concentrating resources on patients, not just on health care institutions.

This method would lower costs and improve health outcomes.  One simple change, which is already occurring in a few provinces, is the adoption of patient based funding – that is where the money follows the patient in hospital care. Most hospitals in Canada receive “block funding” where a fixed amount is provided annually. When a patient arrives at the door, he or she is perceived as a cost to the hospital. However, if the hospital receives its funding based on the patients it serves, the patient at the door will be now seen as a revenue source. This creates all the proper incentives.

A patient focussed approach to health care would also allow us to contemplate some private sector solutions to build on success stories such as Shouldice, Gimbel and ambulatory care in Atlantic Canada to increase efficiencies and fill in the gaps in service delivery.  We should not be afraid to be active and creative in this area. Focus on the patient also requires government investments in technology such as electronic health records, better health human resource planning and integration of foreign trained professionals.

Our second key recommendation is Affordable Prescription Drugs.

Health care may be a universal benefit of living in Canada but it is not the same reality when it comes to affordable drugs.  Consumers continue to face prescription drug costs that can be staggering.  Supplementary insurance provides some drug coverage assistance, but not all Canadians have such insurance.  All levels of government must ensure that no Canadian need  take on undue financial hardship to get the drugs they need to remain healthy.

Our paper calls for catastrophic drug coverage for all Canadians, equitable drug pricing across private and public programs, and a competitive generic drug regime.

In the past, perhaps we have all associated health care with treating people already afflicted.  But there is another side of the coin and that brings me to our paper’s third recommendation –

Wellness and Disease Prevention

Public health professionals across Canada have long argued for a greater emphasis on disease prevention and health promotion within the system to improve health and lower costs. Our industry agrees.

More investments in prevention will achieve better health outcomes for Canadians and contribute to the long-term sustainability of Medicare by reducing pressure on the system.  Financial and tax incentives in this area would also assist in enhancing and maintaining the physical and mental health of Canadians.  More health promotion is another key component of prevention--for instance, targeting the growing trend in child obesity today to reap dividends in the future.  It is shown that every dollar invested in disease prevention realizes a three dollar return.

At the other end of the spectrum is our fourth and final recommendation – Continuing Long Term Care.

There is already a growing need for long term care as the population ages and life expectancy increases. But continuing care is not universally available.  Our industry recommends that governments provide more support to Canadians for their continuing care needs.  We believe governments need to ensure that people living with a chronic illness receive health care services that are integrated across the primary care system and coordinated by family doctors or clinics.  Tax and financial incentives for Canadians would also help them take greater responsibility for the care of aging or ill family members at home through the purchase of private insurance.

Conclusion

So let me wrap up my comments today by making clear what we stand for:

• The life and health insurance industry strongly supports Canada’s universal public health care system.
• We are saying that Canada should move towards a made in Canada system with the universal public system remaining at its core.
• A full range of health care services must be available to all Canadian citizens, regardless of their ability to pay.
• This is not about throwing more money into the system; it’s about introducing changes to make the system better, along the lines of what I have outlined today in our four point approach.
• We need an intelligent, rational debate about the future of health care in Canada, not a perpetuation of the myths I addressed earlier in my presentation.

And finally, the Canadian life and health insurance industry feels strongly that the time for reform and revitalization of our public health care system is now.  Canadians may already be thinking further ahead on this issue than the country's collective political leadership. That was certainly the case several years ago on another urgent public issue. I witnessed this during my days in the 1990’s at the federal Finance Department.  People accepted the fact that we could no longer live with huge annual deficits.  So it took political leadership, backed by public urging, to finally bring budgets in line. 

Likewise for health care, Canadians are realizing that the current structure is not sustainable and they are willing to undertake fundamental reform to make the system better.  As Canadians have proven over the years on other issues, we have the will, the vision and the expertise to bring this about. 

The insurance industry is just one voice on the public health care system.  We want to hear from leaders such as you so we can have a real debate that leads to concrete reforms to turn the unsustainable into the sustainable.

Thank you.