The Romanow Commission: Cautious Steps in the Right Direction
Michael Rachlis
Winnipeg Free Press Sunday, "View From the West", December 1st, 2002

Roy Romanow's report has been praised as a blueprint for medicare's salvation and vilified as an ideological defense of a faltering status quo. However, closer examination reveals it as simply a few cautious steps in the right direction.

Mr. Romanow claims that the house of medicare is still on firm foundations and, therefore, needs renovation not demolition. In fact, medicare has been very good to Canadians. Up until the 1950s, Canada and the U.S. had very similar health systems and similar health status. Over the next 50 years, while almost all other sectors of our societies became more similar, we created a uniquely Canadian institution.

The results are clearly in Canada's favour. All Canadians are covered for medical and hospital care and most provinces cover at least some of the costs of home care, pharmacare and long-term care. In the U.S., 42 million people have absolutely no insurance and tens of millions have such inadequate insurance that more than 500,000 Americans declare personal bankruptcy every year because of health-care bills. Canada now spends 9.4 per cent of GDP on health care while the U.S. spends 14 per cent. Half of this difference is the increased administrative expenses in an American system which is choking on private bureaucracy. The U.S. system spends $1,150 U.S. per capita on administration while Canada spends only $325.

While spending less, we actually get more. Canadians have more doctor visits, more days in hospital, more surgery, more days in long-term care and take more drugs than Americans. We have fewer MRIs but we get more bone-marrow transplants. Finally, U.S. infant mortality is now 34-per-cent higher than Canada's and American life expectancy is almost 2.5 years lower. Clearly Mr. Romanow is correct when he maintains that we took the right fork in the road 50 years ago.

Mr. Romanow notes that our health-care system is too focussed on hospitals and treatment and not enough on community care and prevention. There are too many patients in hospital beds who should be treated in the community. We tend to treat diabetes with heart surgery and kidney dialysis even though better ambulatory care could decrease these complications by up to 75 per cent. And the vast majority of cases of diabetes, heart disease and lung cancer could be prevented with better public-health programs.

These conclusions are consistent with 30 years of reports which have recommended improving primary health care as well as providing better coverage for home care and prescription drugs. However, reform has been slow. In September 2000, the federal government tried to target new spending to these priorities but the provinces forced the feds to provide most of the money in untargeted grants. The result: the provinces immediately had their pockets picked by doctors, nurses and others who won large (albeit overdue) pay increases to do the same work as before.

Even the funds for high technology and primary health care weren't really targeted. Some provinces used the high-tech funds to buy lawn mowers. Initially the feds wanted five criteria for primary health-care pilot projects, but the provinces forced the feds to fund them if they met one. As result, the provinces were screaming for more money within months of the deal being signed.

Mr. Romanow warns the feds not make the same mistake again. He recommends targeted funds over two years where there would be strict accountability for expenditures. These include a $1.5-billion rural and remote-access fund, a $1.5-billion diagnostic services fund, a $2.5-billion primary health-care transfer, a $2-billion transfer for a limited home-care program and a $1-billion catastrophic drug transfer. These funds total $3.5 billion in 2003/04 and $5 billion in 2004/05. He further recommends that the federal government raise the transfer to $6.5 billion in 2005/06 and then grow it at a pace slightly greater than the GDP in a series of five-year plans. The federal funding would be sequestered to separate health-care funding from other transfers.

Mr. Romanow also recommends an electronic health record, better pharmaceutical and technology assessment, a national drug formulary and aboriginal health initiatives. Noting the lack of management of wait-lists, he recommends a centralization of such lists, which have reduced wait-times by up to 80 per cent in some jurisdictions. He further recommends the federal government move to protect Canada's health system in international trade agreements as well as reviewing the drug-patent legislation to prevent the brand-name companies from "evergreening" their patents through frivolous and vexatious litigation.

Some claimed that Mr. Romanow recommends elimination of for-profit providers. In fact, Mr. Romanow did not make such a recommendation, though he did expound at length on his concerns about for-profit care. Two major reports this year by Canadian researchers have confirmed previous studies that for-profit hospitals and dialysis clinics have higher death rates. Other literature indicates that for-profit hospitals have 12- to 25-per-cent higher costs than non-profits. As McMaster University cardiologist Dr. P.J. Devereaux explains, "Private for profit facilities have to generate 10 to 15 per cent profits to satisfy shareholders. Not for profit facilities can spend that money on patient care."

Mr. Romanow made two recommendations that would inhibit profit-making health-care businesses. First, he suggested that diagnostic services such as MRI and CAT scans be explicitly identified as medically necessary under the Canada Health Act. This would thwart the plans of some provinces to allow for-profit operators to sell some of their scans at market prices while having their base expenses covered by public patients. Second, Mr. Romanow recommended that the federal government close a loophole in the Canada Health Act which allows workers' compensation boards to buy services outside of medicare. For-profit surgical clinics depend upon these contracts for the majority of their income.

Because of Mr. Romanow's criticisms of for-profit care and his recommendations for targeted federal money, he has been lambasted by the usual suspects. Quebec Premier Landry and Alberta Premier Klein have rattled their sabres, although their B.C. and Ontario colleagues have been more muted in their criticism. Right-wing ideologues have shrieked that Mr. Romanow is a Marxist Luddite who is standing in the road of progress.

However, the other six provinces have signalled their interest in striking a deal with the federal government. And the B.C. and Ontario governments will have difficulty explaining to their increasingly unhappy electorates why they would refuse money for such obvious good works as home care. Mr. Romanow's right-wing critics have never produced any evidence that for-profit care is more effective or less expensive. As a result, the eventual opposition will likely consist of Quebec separatists, Alberta, the Canadian Alliance, the Fraser Institute and other shrill conservative voices. On the other hand, if the federal government adopts Romanow's recommendations, they can count on the support of every health-care group, including the Canadian Medical Association, six provinces, the NDP, perhaps the Conservatives, and roughly 70 per cent of the electorate.

Finance Minister John Manley may be the biggest barrier to Romanow's report. He claims that the cupboard is bare. However, the federal government ran a surplus of $8.9 billion in 2001/02. The $8 billion which will accrue from economic growth this year will more than offset the planned new expenditures and tax cuts. The federal government should have at least a $10-billion surplus in 2002/03 and a $17-billion surplus in 2003/04 -- and still massively overshoot its target of $100 billion in tax savings over five years.

There are some problems with Mr. Romanow's report. It recommends the creation of a National Health Council which would have an extensive mandate. However, bureaucrats would likely dominate this organization. This would decrease political accountability. The report recommends eliminating public insurance for out-of-country care. There is no mention of long-term care even though this sector represents 10 per cent of health costs, and there is limited mention of public health. The proposed home-care and pharmacare programs are considerably less comprehensive than those recommended by the National Forum on Health in 1997. Finally, there is no overall vision for the health-care system.

However, Mr. Romanow's small, pragmatic steps might be effective because they will be hard to resist. And because there is no overall blueprint, the report does not collapse completely if only some recommendations are implemented.

Mr. Romanow claims that medicare belongs to Canadians. It is now up to the rest of us to ensure that his report is implemented as soon as possible and then used as a springboard for more reforms in the future.

Canadians waited 47 years after Mackenzie King promised medicare in the 1919 election before the Pearson government finally passed the legislation in 1966. We shouldn't have to wait until 2044 for the protection of what we have now and the implementation of the home-care and pharmacare promises, which were made in the 1997 campaign.

Dr. Michael Rachlis is a Toronto-based (but Winnipeg born) health policy analyst and the co-author (with Carol Kushner) of two bestsellers on Canada's health-care system. His third book, Prescription for Excellence: How Innovation is Saving Canada's Health Care System, will be published by HarperCollins in 2003.