August 6, 2004                                                                                                                         Fax number: 941-6900

The Right Honourable Paul Martin

Prime Minister

Government of Canada

80 Wellington Street

Ottawa, Ontario

K1A 0A2

Dear Prime Minister:

I am writing to you and the Premiers as you prepare for your conference on the

Canadian health care system which is extremely important to workers across the

country.

There are times in a nation’s history when strong but cooperative political leadership is of the utmost importance to the future well-being of that nation’s people. The Canadian Labour Congress believes that the efforts on which you are about to embark to ensure the sustainability of Medicare is one of those moments.

Canadians need to be reassured that our governments are committed to securing the future of Medicare in ways which reflect their values and their vision. The upcoming First Ministers’ meeting is an opportunity to assert such a commitment.

The debate today focuses on three key issues: the financial sustainability of the system; expanding the system to deal with unmet health service needs to ensure the sustainability of the quality of Medicare, and stemming the tide towards the commercial delivery of publicly-funded health care services.

Large issues, indeed, but in no sense are they insurmountable. What is required is an open transparent, factual discussion on these issues to bring clarity of understanding to both politicians and the public. This, along with political will to concretely address these challenges, is required. These are important goals for the First Ministers’ meeting this coming September.

The Canadian Labour Congress agrees with the Romanow Commission. Our health care system is as sustainable as we want it to be. While health spending is rising faster than government revenues and is consuming a greater share of provincial health budgets, Canada continues to have the capacity to publicly fund Medicare.

The Organization for Economic Cooperation and Development (OECD) recently released its most current health data on OECD countries. Health spending as a share of economic wealth (GDP) increased in 29 of 30 OECD countries.

However, Canada was at the end of the pack, not the leader, in terms of growth in health spending. Between 1990-2001, per capita health spending grew faster in twenty-one countries than it did in Canada. On average, per capita health spending increased by 3.4% per year for all OECD countries compared to only 2.3% in Canada. During that time frame, the share of GDP consumed by health care in Canada grew from 9.0% to just 9.7% of GDP.

The numbers above include both public and private spending. When public spending alone is considered, the sustainability of our spending on health care is even clearer. Public health spending as a share of GDP rose in twenty- four of thirty OECD countries but not in Canada. It was 6.7% of GDP in 1990 and 6.7% in 2002. This is not only sustainable but also indicates that health spending will not crowd out spending in other areas.

The financial sustainability of health spending was confirmed by a Department of Finance study which indicated that public health care spending is sustainable out to the year 2040, even during the ageing baby boom bulge, and that this spending will consume under 10 percent of our national wealth per year.

The concern expressed by some that health care spending is consuming an ever larger part of provincial budgets has three aspects to it. Rising health costs are certainly one factor and here increasing drug prices are certainly a large reason behind the rise. But two other factors mask the real nature of the issue.

Provincial governments have often cut the spending in other program areas. The effect of these cuts alone would be to increase the percentage of the provincial budget going to health care.

The third factor is the political choice made by some governments to cut personal and corporate taxes. This choice, not health spending, has been the most costly expenditure made by governments over the last decade. Tax cuts diminish the size of governments’ revenue so there is less money all around for spending on programs. In total, both levels of government have had almost $250 billion less in revenues over the last seven years. Had this money remained in public treasuries, health as a share of revenues would be much smaller and it would be impossible to make the case that Medicare was unsustainable.

Political choices are factors in this discussion and must be taken into account. Canadians have clearly said that they would trade tax cuts if it meant making Medicare sustainable.

Labelling the cost of Medicare as unsustainable for governments has provided fodder for those who ideologically support turning the delivery of health care into a for-profit business venture and those who have a vested financial interest in this approach. To achieve this end, Medicare must appear to be bankrupt or close to it.

The labour movement urges the Premiers and the Prime Minister not to go down this road. The Romanow Commission asked for hard research evidence supporting the view that commercial health care would improve and strengthen the public health system. No evidence was received by the Commission. Had there been any such research it certainly would have been presented to the Commission. Rather, all available evidence refutes the claims made by those who favour for-profit health care.

Many, many studies have shown that for-profit care increases overall health costs substantially. A recent study out of the Department of Medicine at Cambridge Hospital/Harvard Medical School indicated that higher costs for care in for-profit institutions is substantial at 19 percent. Moreover, an important body of research indicates that investor-owned health facilities in the United States such as hospitals, dialysis and rehabilitation clinics, nursing homes and hospices provide lower quality and fewer services than do non-profit facilities. Other research shows that a parallel tier of commercial health care actually increases, not decreases, waiting times in the public system.

This impeccable, peer-reviewed research can no longer be treated as though it doesn’t exist in the debate. In fact, this research should end the debate.  Investor-owned, for-profit health care is incompatible with the values of Canadians which underpin the public health care system, especially the value of equity in access to health care. The labour movement believes that some areas are too important to the public well-being to be provided by the market. As a public good, the provision of health care is one of those areas. Health care and patients are simply not commodities. The CLC believes that public dollars must go to patient care not to profit which necessitates the public, non-profit delivery of care.

It is worth stating that any experimentation with commercial health care is a one way street under the rules of trade and investment agreements. If any province began to deliver services in a major way through for-profit health care corporations, a future government would soon find that it would have to pay compensation to US investors to restore public delivery, or face an expensive suit for compensation under Chapter 11 of the North American Free Trade Agreement.

The extent to which the public health care system can meet the care needs of Canadians is also an issue of sustainability. The challenges are many - easing the shortages of health professionals; ensuring equitable access to health care in rural and northern communities as well as in Aboriginal communities; reducing inappropriate waiting times for services, and expanding the range of publicly insured services to include home, palliative and long-term care, and prescription drugs. It is critical that advances in medical treatments and diagnostic tests fall under the cover of the public system, provided an assessment of their effectiveness as a treatment warrants their use.

These significant challenges demand that increased funding be tied to change so that the investment of public dollars achieves the desired outcome of stabilizing and then enhancing the public health system. This includes establishing standards for expanded health services covered by Medicare; action to control skyrocketing drug costs; increased, stable funding from the federal government and an enforcement of the principles and conditions of the Canada Health Act.

The Canadian labour movement supports a national pharmacare program. Indeed unions have been in the forefront to gain coverage for the cost of drugs for both its current and retired members. We believe that a program can be devised that provides the needed benefits to Canadians within the means of both levels of government and also of Canadian employers and workers. We welcome the opportunity to participate in finding the best solution to this worthwhile end.

Canadians are very clear that they want their health care system to be responsive, comprehensive and of high quality. Moreover, they want transparency and accountability from political leaders within whose hands the integrity of Medicare rests. The openness of your meeting is an important step in that direction.

You are aware of the depth of commitment Canadians hold towards Medicare and of the strongly held values upon which that commitment is founded. The Romanow Commission identified these values after its dialogue with the Canadian public - equity, fairness and solidarity. Those values are at the heart of why Canadians view timely access to health care on the basis of need alone as a right of citizenship in Canada. They are also at the heart of why Canadians reject solutions in which public funds are used to subsidize the for-profit, commercial delivery of health care services.

 

On behalf of the Canadian labour movement, I wish you every success in reaching an agreement which represents a path to sustaining Medicare

Yours sincerely,

Kenneth V. Georgetti

President

cc: Stephen Harper

Gilles Duceppe

Jack Layton

U. Dosanjh

CLC Executive Council

CLC Staff