Presentation to the Standing Committee on Justice and Social Policy On Bill 8

Commitment to the Future of Medicare Act
February 25, 2004

Thank you for this opportunity to speak to Bill 8 – a Bill that seeks to protect Ontarians’ right to universal public health care.

I am an economist based in Toronto, and a research associate with the Canadian Centre for Policy Alternatives based in Ottawa. In 2002 I won the first Atkinson Foundation award for Economic Justice. I work with academics, think tanks, government officials, and community activists in the pursuit of health policy reforms that can meet the tests of sustainability and accessibility our forefathers sought when they founded Medicare.

I heartily endorse this government’s stated desire to protect public health care and banish two-tier medicine. Unfortunately, this Bill does not directly accomplish this aim.

Bill 8 cannot provide a legislative framework that will protect health care against two-tier medicine because, quite simply, it does not address the fundamental pressure that leads to two-tier. It fails to address the inadequate supply of appropriate and timely care. It fails to offer a plan to tackle growing waiting lists or a system that could develop such a plan. It fails to commit itself to standards of care today and structures that can move towards goals for tomorrow. It attempts, but fails, to add real strings to the massive public resources that flowing to health care, to ensure that new money will improve the system, in both access to and quality of appropriate care.

In all these ways Bill 8 does not, and perhaps cannot, guarantee the sustainability of public health care – it simply appears to blow smoke at the core of the problem.

That is, in part, the feeling that emerges upon reading the preamble to Bill 8, which confirms the government’s “enduring commitment to the principles of public administration, comprehensiveness, universality, portability and accessibility as provided in the Canada Health Act”.

It is a laudable commitment, but also a redundant one – the CHA clearly requires all provinces to meet these principles of care or lose federal funding support. This Bill does nothing to substantially add to that commitment. Nor has that commitment been sufficient to avoid the “crisis talk” that shrouds our health policy reforms today.

Bill 8 does not clarify what is meant by medically necessary and publicly insured care. That is left to regulations. Therefore it continues to allow a legal space in which there can emerge of a second tier of care that is accessible through direct fees, permitting the continued passive-aggressive privatization of health care. Long after Bill 8 has been proclaimed, Ontario will still have the problem of people using public diagnostic service capacity to queue jump for sports injuries in “off hours”, as one example.

Bill 8 has a clear and detailed focus on greater policing of current norms of practice. This presents a disconnect between the public relations and the policy substance of this Bill. The PR says this is about preventing two-tier, which the legislation does not do. The biggest change this Bill offers is processes and structures that clamp down on fraud and abuse in billing practices.

Without question, we need to implement measures that can detect and counteract fraud and abuse in the health care system.

But is that the core of what Canadians conveyed to the Romanow Commission is necessary to protect public health care? No.

The focus was not on fraud. It was on the need to sustain quality public health care, prevent further erosion of service, and resist the encroachment of two-tier health care.

How do you protect medicare? You stabilize the system that exists and you focus on the heart of medicare – universal access, based on need, not ability to pay. You ensure that publicly insured services are sustainable by not wasting taxpayers’ dollars, and by assuring that new money buys change, not just more of the same.

As a government, it is not coherent to offer Bill 8 to the public as a protection of the universal nature of medicare and then publicly muse about the necessity of withdrawing the universality of the Ontario Drug Benefits plan, similar to the discriminatory plan in B.C.

You cannot say Bill 8 is about greater accountability and then keep the wraps on the P3 arrangements with hospitals until the deals are signed.

You cannot talk about greater accountability and transparency and proceed by not informing the public about what options have been considered for financing the needed hospitals and facilities; by not divulging the costs associated with those options; by not clarifying what the costs would be of breaking contracts apparently signed on the eve of the previous government’s defeat; by not explaining to the electorate what the difference is between being a mortgagee rather than a leasee. (For example, does this now mean that taxpayers are now liable for maintenance and repair costs, rather than the leasor?)

You cannot say Bill 8 will stop the advance of two-tier care and say nothing about how you are going to address the key pressure that is fuelling the drive for two-tier care: waiting lists.

Committing to the protection of public health care is going to require a lot more muscle than motherhood statements if we are going to ensure its sustainability. If this government is serious about closing the door on two-tier health care, it needs to embark on strategic planning for health human resources, capital requirements, and drug procurement policies.

Progress towards such an approach, an approach that plans for the maintenance and improvement of public health care in Ontario, is possible with some amendments to Bill 8, particularly in Parts I and III.


Part I of the Bill establishes a Health Quality Council, whose key function is to monitor the state of public health care in Ontario. Reporting on the pressures in the system is not the same as reducing those pressures.

Section 4 clause (b) in Part I of the Bill seeks to support continuous quality improvement. The sustainability of the system, and its long-term viability, can be addressed by adding some more specificity to this clause.

The functions of the council could include ensuring there is long-term planning being undertaken on important cost-drivers in the system. For example, what training and upgrading options could be considered to assure the adequate supply of health human resources in the medium to long term? There could be a working body that explores procurement strategies undertaken in other jurisdictions with regard to pharmaceuticals, in order to better manage the costs of the Ontario Drug Benefits plan. Annual reports to the public could and should include the full range of policy levers and options, reflecting on innovations in other provincial jurisdictions as well as other countries in these areas.

With respect to monitoring developments, the Bill addresses issues of access, human resources, consumer & population health status and health system outcomes, but fails to refer to the importance of monitoring how decisions are being made to finance capital investments -- upgrades and expansions -- of the system, an area of expenditure that will be driving costs for the next decade. This includes money for bricks and mortar infrastructure as well as information technology (building infrastructure in areas like the electronic health record).

This legislation also confers on the government the ability to collect, use and disclose patient information for the purposes of reports from the Health Quality Council (subject to approval by the Lieutenant Governor in Council). Why could it not also monitor the use of public funds in investor owned facilities to determine how greater efficiencies are achieved in such settings? Or monitor the degree of shift towards investor ownership of publicly funded services throughout the system of public care: in hospitals, diagnostics, laboratory work, home care and long term care, all of which are funded by the Ontario taxpayer. Is it not relevant to know how much is the taxpayer paying for profits and shareholders’ dividends out of these public resources, if this amount is increasing or decreasing over time, and if these payments are merited by greater cost savings or quality improvements?

The bottom line is simply this: If you want to be perceived as protecting public health care, you have to have a plan on how you are doing it, and you have to have yes from your electorate that your plan will result in sustainable public health care. Sustainability of public health care is increasingly a function of two concerns: the pressure that lurks at the edges of the system, with seemingly intractable waiting lists for basic acute and long term care; and the need to contain costs that have been consistently rising at almost double the rate of revenue growth. So what’s your plan for dealing with these two concerns?

As Gary Doer recently said – you can’t reduce waiting lists with a press release. You’ve got to do it with financial resources.

But more money is not enough. When the previous government came into power, the public treasury was spending about $18 billion a year on health care. Last year, the health care budget was $28 billion a year and rising. Waiting lists are still a problem, arguably a higher profile issue than 10 years ago, despite more resources in the system.

We can be sure there will be even more money in the system in the coming years. The federal-provincial-territorial Health Accord of February 2003 guaranteed the province of Ontario $11.5 billion more in increased federal revenues alone for health care until 2007-8. Almost a billion of that is water under the bridge (Ontario’s share of the $2.5 billion CHST Supplement, totaling $967 million), money that went straight to balancing last year’s books rather than doing anything about health care. But just a few weeks ago the federal government promised another $2 billion supplement for fiscal 2003-4, Ontario’s share of which is about $775 million.

So looking out in time, we are guaranteed at least $11.3 billion in new funds flowing into this province from the federal government to improve health care until 2007-8. But we are not guaranteed improvements to health care. The question is: What’s your plan for these funds? How does this Bill help lever improvements in how those funds are used? I would suggest the key is in Part III of this Bill – Accountability.


As it stands, this section of the Bill is basically an exercise in transferring the notion of accountability to service providers. There is nothing here to assure the public that the government has achieved the best use of public resources, through stringent government standards, and through commitments to transparency in the use of public funds and value for money. In short, the government is no more accountable to the public for the vast sums being spent on public health care than before.

You can have all the accountability mechanisms for service providers that you want, but if there are, for example, no required staff-to-patient ratios – as in long-term care –the government is shirking its responsibility to ensure that the test of public accountability for public funds and administration is met. Taxpayers expect, and have a right to expect, certain inputs and outcomes for the vast resources they are approving the government to make on their behalf. Establishing clear standards and goals that the government is willing to stand by is the real test of accountability.

Making a commitment to protect the future of medicare means assuring that this government will take steps to assure more timely and appropriate care, and will be accountable to the public that these steps have been taken in a cost-effective manner, achieving the best possible value for money for Ontario residents.

You will surely spend more money; but spending more does not automatically mean a better outcome. From a strictly functional point of few, making a system function better means looking at the components of how the system produces its product or service.


How can we make the health care system function better? We need to look at how each factor of production is being used, and plan how to improve the use of each factor.

As in any other endeavour, the factors of production are capital, labour, and technology, the know-how or technique that is used to put capital and labour together, the way we combine inputs to get the desired output.

Let me start with the “technology” factor. We could get more value, collectively, out of our inputs by changing the mix of how we use them. That requires primary care reform. This is a motherhood statement, and has been an explicit health policy reform goal for more than 30 years. The future sustainability of the system requires it to finally happen. Doctors are too costly and scarce a resource to be the sole gatekeepers to care at the first point of contact with the system. Acute care is the care system of last resort, but has become the centerpiece of health care due to inadequate investments in more cost-effective investments in preventive measures or home care. More rebalancing of how we spend the public health care dollar can and should be considered.

Labour is the most important factor of production in health care, accounting for about 80% of all costs in an input-output model of how the economy of health care functions. Measures that deal with the aging demographic profile of doctors and nurses will cost us more – more to hire new people in the context of a global labour shortage; more to credentialize existing residents who are qualified to provide health services in other jurisdictions; more to retain existing workers who are fast approaching the “normal” age of retirement; more to upgrade today’s workers and train tomorrows workers in the field of health care. The key to containing the cost increases inherent in insuring an adequate supply of labour is to plan, and to plan as much as possible with other Canadian jurisdictions to reduce whip-sawing of labour costs to a minimum.

Other planning could also achieve significant cost savings to the public treasury of Ontario. Identifying cost drivers such as expenditures on the Ontario Drug Benefits program, and identifying methods for containing these costs – through more efficacious procurement strategies, through compulsory licensing practices, and by working with our counterparts in other jurisdictions through the Common Drug Review process to move towards a streamlined assessment procedure for public formularies – all of these things can capture greater economies of scale and save literally millions of dollars. When a single player is paying $2.5 billion a year on drugs, as is Ontario through the ODB program, why pay retail? Using our collective purchasing power, through our government, makes strategic sense and is fiscally prudent.

Finally, there are a range of financing options this government can pursue to address urgent capital needs for bricks and mortar as well as information technology infrastructure upgrades and expansion. If the public is made aware of the true costs associated with each of these options, and the preferred option is widely seen as financially rational, then you are moving in a more sustainable, and politically supported, public policy direction.


With $10 billion more being spent today than ten years ago, and at least another $11 billion on the way over the next few years, it is vitally important that the public views new spending as more than just money down a black hole. It must buy improvements, and been seen to buy improvements in health care.

How can you ensure the electorate that these massive resources will not somehow get squandered? Bill 8, in its current state, cannot help you in that mission. You need a plan. You need accountability measures targeted to improving government’s performance and not just that of services providers. You need the Health Quality Council to help you meet those goals.

Assuring the appropriate mix of capital, labour and technological inputs to service delivery requires planning over the medium and long term. That planning is most effective if coordinated at a national level – for example borrowing money through bonds; developing human resource strategies particularly in training; determining which new drugs should be added to public formularies on the basis of clinical- and cost-effectiveness. The federal government, through the Romanow Report, and a new political leadership, has already signaled its desire to work in a more cooperative manner with the provinces and territories, especially on the critical issue of health care.

Ontario could play a leadership role to make that cooperation happen, in areas that would truly make a difference to the sustainability of public health care.

Let me close by saying that while I applaud this government’s stated desire to protect public health care, this legislation falls far short of that lofty goal. But with strategic planning, using the Council more effectively, and shouldering some of the duty to be accountable to the taxpayers of Ontario with clear targets for improvement, there is much that can be done to protect medicare for today’s citizens, and those of tomorrow.