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Hasty diagnosis

Influential senators are quietly making a case against medicare as we know it. Their problem, though, is an absence of facts

Thomas Walkom
national affairs writer

CANADA HAS NEVER suffered a shortage of official medicare inquiries. Ottawa now has two on the go. The best known is former Saskatchewan premier Roy Romanow's one-man commission into the future of medicare. Michael Kirby runs the other, perhaps more important, one.

Kirby is a senator with impeccable connections. Since his elevation to the Senate at the ripe young age of 42, he has played a key role sometimes visible, sometimes less so in the machinations of the Liberal party.

As former chair of the Senate's powerful banking committee, he worked hand in glove with finance minister and prime ministerial hopeful Paul Martin. He counts Bank of Canada Governor David Dodge a friend. In fact it was Dodge, also closely associated with Martin, who suggested back in 1999 that Kirby use his Senate post to look into medicare.

Kirby is also well-connected to the private health sector, primarily through his role as an active director of the nursing home giant Extendicare Inc. He sits on the boards of six other companies, including the Bank of Nova Scotia.

Now, Kirby's Senate committee on social affairs is preparing a report on where it thinks medicare should go. As always, his timing is exquisite. Romanow is due to release an interim report in late January, but his final recommendations are not expected until November. Kirby, who expects to release the fifth and final volume of his report in February, will scoop him by nine months.

While this doesn't make Romanow irrelevant, it does mean that by the time he makes his case, the public debate over the future of medicare will already have been framed by Michael Kirby and his colleagues.

Technically, the Kirby committee has so far only raised possibilities. In the language of Ottawa, Volume 4 of the Kirby report, which was released last fall, sets out "options."

But like most option papers, Volume 4 gives a pretty good idea of what the final recommendations will be. Its focus is money. It says there is not enough in the public treasury to cover the expanded health demands of Canadians. To deal with this shortfall, it suggests:

  • Amending the Canada Health Act to break the government's monopoly over physician and hospital services — even if this results in a so-called second tier.
  • Allowing people to buy physician and hospital care privately and, in particular, removing the ban on the sale of private insurance for so-called medically necessary services (such as heart surgery).
  • Putting in place some kind of user fees for physician and hospital services — either up-front charges (such as a payment each time a patient visits the doctor), financial penalties for those who demand second opinions or special income-tax levies for the sick.
  • Shifting some of the money saved by these measures into public support for pharmaceuticals and home care, perhaps through income-tax credits.

    There are other recommendations the committee has suggested it might make, such as encouraging the provinces to buy pharmaceuticals jointly for their publicly subsidized drug plans (usually aimed at the elderly and poor).

    But the committee is unlikely to recommend that Ottawa and the provinces expand the current medicare system, which is virtually 100 per cent publicly funded, into new areas such as home care and pharmaceuticals.

    In itself, that is curious, since Kirby and his 14 fellow senators also concluded medicare's so-called single-payer system in which a public monopoly, like the Ontario Health Insurance Plan, funds physician and hospital care is more efficient than a mixed private-public system.

    Kirby is asked about this in an interview. While it might be costlier for governments, wouldn't it be cheaper overall for Canadians if home care and drugs were fully covered by medicare? After all, Canadians already pay for extras either out-of-pocket or through employer-financed drug plans.

    "I wouldn't argue with that," Kirby says. "But how do you get there from here?"

    Politically, he says, expanding public medicare into areas that are currently the preserve of the private sector would be tricky. Too many oxen would be gored. Some might be better off, but others might lose. "It's the problem of the distributional effects," says Kirby.

    He notes the National Forum on Health, the last body appointed by Prime Minister Jean Chrétien's federal Liberal government to investigate medicare, did recommend expanding public health insurance into new fields such as home care and drugs precisely because this would be cheaper overall.

    What he doesn't need to say is that the forum's 1997 report was resolutely ignored by the government that commissioned it.


    When Kirby released the first of his five-volume report in March, he promised recommendations that would avoid ideology and be based firmly on demonstrable evidence.

    Since then, the Kirby committee has been surrounded by controversy. The Canadian Health Coalition, a pro-medicare group associated with the Canadian Labour Congress, has demanded Kirby resign as head of the committee, citing what it calls his conflict of interest as a director of Extendicare.

    (Kirby, in turn, asked for and received a clean bill of health from Chrétien's hand-picked ethics counsellor, Howard Wilson. Wilson said, since the Senate committee is only making recommendations about health care, Kirby is not in conflict.)

    Perhaps more serious, however, were the charges levelled during hearings in Winnipeg in October. Noralou Roos, head of the Manitoba Centre for Health Policy and Evaluation at the University of Manitoba, calmly eviscerated the committee's fourth volume, labelling it ideological and non-factual.

    The committee's most striking omission, she said, was that it had produced no evidence for its most basic starting points that more money is needed for health care and that more private involvement is the obvious solution.

    Kirby responded with what he called "teasing" rebuttals. But, clearly, Roos had hit a sore point.

    Indeed, a careful reading of Volume 4 shows there is little evidence cited for most of the committee's observations. any appear to be based on common wisdom what people believe to be true rather than verifiable fact. References to sources are virtually non-existent.

    For example, the report says Canadian medicare "is not nearly as one-tier as most Canadians believe or as most government spokespersons claim," noting "people who can afford it can, and do, already go out of Canada (usually to the United States) to receive the medical services they require if their only alternative is a long waiting line in Canada."

    This claim is widely believed. But is it true? Do those who can afford it get their medical care in the U.S.? The report offers no evidence to back up its claim. Indeed, there is evidence to the contrary.

    A study published in the Journal Of Health Affairs in 1998 that looked at Ontario found the practice of crossing the border to obtain medical care, while widely reported, was relatively rare, usually representing less than 1 per cent of health spending.

    Noting most Ontarians treated in the U.S. did so because they suffered a medical emergency while travelling, the authors of that 1998 study concluded: "These occurrences represent a tip without an iceberg."

    As further evidence for what it calls Canada's existing two-tier health system, the Kirby committee points out provincial workers' compensation systems already operate outside of medicare. And the committee is correct; they do as do health systems for the military, the RCMP, status Indians and federal prisoners.

    But does the existence of these parallel systems matter? Do industrial accident victims or federal prisoners receive, on average, faster health care than other Canadians?

    Kirby says the committee doesn't know and never tried to find out.

    The report cites what it calls "anecdotal evidence" to conclude that people with money and connections routinely jump the medicare queue.

    Again, this is what many people believe. But is it true? If true, how widespread is the practice? Is queue-jumping by the wealthy and powerful more endemic in Canada than in nations with explicit two-tier health systems, such as Australia?

    The report doesn't answer these questions. "There's no way we can quantify that," says Kirby.

    On it goes. The options report notes approvingly that Sweden, "which is generally recognized as being among the most socialized of the European countries," levies user fees on those who visit doctors and hospitals and concludes these fees "are not perceived as impeding access (to care)."

    Again, no evidence is given for this conclusion. And again, the committee seems unaware of research that contradicts its claim. A 1998 article in the academic journal Social Science And Medicine, for instance, says even Sweden's relatively small user fees have discouraged poor people from seeking necessary medical care.

    Part of the Kirby committee's problem stems from the fact that Volumes 2 and 3 of the report, which are said to contain the evidence used to justify its suggested options in Volume 4, are not yet published even though they were signed off by the committee in August.

    Kirby cites translation problems for the delay. An aide says the committee clerk fell ill. Whatever the reason, the lack of substance makes it difficult to evaluate the Senate committee's claims.

    Take, for instance, the committee's almost casual suggestion that Ottawa consider scrapping one of the principles of the Canada Health Act, that of public administration. This is the principle requiring provincial governments to offer medically necessary services through a monopoly health insurance plan.

    It does not prevent private-sector players from operating inside medicare; most physicians are private. But it does prevent private insurance firms from covering medically necessary services. You can't buy private insurance to cover, say, a hip operation in Canada.

    Tom Kent, a key adviser to then-prime minister Lester Pearson when national medicare was implemented, points out that the principle of public administration was crucial to the scheme, because it made universal health insurance affordable. That's because a monopoly insurer, a so-called single payer, offers economies of scale that allow it to operate far more cheaply than a host of private companies.

    In fact, even the committee itself makes that point. In its first volume, published in March, it cites a New England Journal Of Medicine study that says the principle of public administration saves Canadians fully $10 billion a year.

    Yet, by Volume 4, the committee is suggesting scrapping the idea.

    "I do not know what to make of that," Kevin Taft, a Liberal member in Alberta's legislature and his party's health critic, told the committee during hearings in Edmonton. "The research is clear that a publicly administered system has enormous gains in efficiency over a (private) market-driven system."

    Kirby himself is not much help here. In an interview, he says he is firmly wedded to the notion of maintaining a government-run, single-payer monopoly over health insurance, no matter what his report says.

    As for the committee's suggestion that the government consider letting private insurers operate across the whole range of health-care services, even if this might lead to an explicit two-tier system, Kirby says he was just trying to be controversial.

    "I did that as much to be provocative as anything," he says. "What troubles us is a situation in which we have such an essential service being deliberately rationed by public policy-makers with the population cut off from any other avenues of supply."

    (In fact, the Canada Health Act does not prevent physicians from operating outside medicare. But few do. Even in Alberta, where those who opt out are allowed to charge whatever they wish, only one physician has opted out.)

    Perhaps the strangest element of the Kirby report is its internal inconsistency. At times, it is as if the committee hadn't even read its own work before listing the options it thinks the government should examine.

    In Volume 4, for instance, the committee suggests Canadians should look at two-tier medicine as one way to curb lengthy waiting lists. But Volume 1 points out that in countries that permit two-tier medicine, such as Britain and New Zealand, waiting lists are longer than in Canada. It uses the word "myth" to describe the notion that "a free-market system would solve the problem of waiting lists." It even explains why.

    Whether the health system is one-or two-tier, Volume 1 notes, there is only one set of doctors. If physicians are attracted to a lucrative private tier, they have less time to work in the less-remunerative public tier. Adding a private tier to Canadian medicare, it concludes, "would in turn create longer public-sector waiting lists."

    Similarly, the committee suggests in one part of Volume 4 that user fees charging patients up front each time they seek a medical service are worth looking at. It seems particularly amenable to targeted user fees (such as charging those who want to see a doctor instead of a nurse), saying they could reduce frivolous use of the health-care system.

    But the committee also says in another part of the same volume that user fees don't work; that when they are low they don't produce enough revenue to cover the cost of administering them, and when they are high they deny "access to the less well-off who have the misfortune to require expensive services."

    And in Volume 1, it dismisses as "myth" the notion that user fees of any kind would deter frivolous use of the health system.


    None of these contradictions may matter. In Ottawa terms, Kirby's committee is a minor powerhouse. Deputy chair Marjory LeBreton is a well-connected Tory who served as prime minister Brian Mulroney's chief patronage adviser. LeBreton has made no secret of her feelings, calling the rival Romanow commission a waste of money.

    Adding weight to the commission are Dr. Wilbert Keon, a respected Ottawa heart surgeon, and Dr. Yves Morin, a former dean at Laval University's faculty of medicine who acts as a special adviser to Health Minister Allan Rock.

    Kirby himself is indefatigable. Unlike the chronically cautious Romanow, he thrives on controversy. He is scrupulous about returning media phone calls and has made a point of traipsing to editorial boards across the country to sell his committee's take on medicare.

    Moreover, the committee's not-so-hidden leaning toward more private involvement in medicare strikes a chord with powerful forces across the country.

    Alberta Premier Ralph Klein is already chafing under what he considers to be the onerous restrictions of the Canada Health Act. Ontario's Tory government wants more private funding, as does the Ontario Hospital Association. The British Columbia Medical Association is calling for private medical savings accounts, a kind of RRSP for health.

    Perhaps most important, the Kirby committee's not-quite recommendations, even those based on flimsy or non-existent evidence, fit a certain common wisdom.

    "I believe in user fees," Senator Gerry St. Germain declared at committee hearings in Vancouver. St. Germain, who is not a member of the Kirby committee and who almost certainly has not read any of its reports, nonetheless had firm views that day as he expounded his catechism, one probably held by many Canadians.

    "I believe as well in competition in the private clinics. Competition drives everything in our system. That is proven. The U.S.S.R. tried a system without competition and that did not work. Our system is based on competition, so why not in the private hospital side?...I just cannot believe that user fees would not work."