August 6, 2004 Fax number: 780-427-1349

The Honourable Ralph Klein

Premier of Alberta

Government of Alberta

307 Legislature Building

10800 - 97 Avenue

Edmonton, Alberta

T5K 2B7

Dear Premier Klein:

I am writing to you and your fellow first Ministers 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

Your sincerely,

Kenneth V. Georgetti

President

cc: U. Dosanjh

CLC Executive Council