Fiscal Austerity and Health Reform: Why Can We Never Seem to Get It Right?

By Dr. John Church

Email: jchurch61@gmail.com

Well, almost as regular as the changing of the seasons, fiscal austerity has come to Alberta once again. Nowhere is this more apparent than in health care (see: AHS Cuts). No doubt, there will be intense discussions about how to reform the health system to save money and provide services in a more cost efficient and cost effective manner. The question is this: Will this current moment of reflection brought on by economic downturn yield better results than similar moments in the past? Probably not and here’s why: Societal decisions made a long time ago have continued to shape the health care system that we have today (see: Path Dependent). 

1) When Canadians collectively decided to create universally-accessible, publicly-funded health insurance in the middle of the 20^th Century, the decisions that they made reflected beliefs about how power should be distributed in health care. They also reflected the nature of Canadian society at that time. In essence, a social contract was struck between doctors and society for the public payment for services provided by doctors both at hospitals and in their offices in the community although the doctors, themselves, continued to operate as private businesses. Crucial to this relationship was the recognition by government and the public of doctors as best qualified to make many decisions about how to deliver health services based on their expert judgement. (see: Elites). Unfortunately, this recognition came with few strings attached, which has meant there is almost no public accountability for many decisions about how health care resources are used.

2) Although there was talk about creating a health system that struck a balance between prevention and cure, the decision to build hospitals and fund coverage of services in hospitals before funding primary care has meant that, over time, the system has become heavily centred around acute care. The result is that we have never really been able to create an effective way of delivering services outside of hospitals. Thus, we shouldn’t be surprised that people have trouble accessing primary care doctors or anything else (long term care, home care, community mental health) outside of hospitals. This glaring lack in our current system is also a major contributing factor to the access problems to hospital services and overall problems with the cost of the system. Despite our efforts to address the problem of access to services, Canada still performs poorly compared to other developed countries. Yet we are spending more than almost all of these countries (see: Access) and we are spending more than ever.

3) As Pogo said when he looked in the mirror, “we have met the enemy and he is us”  (see: Pogo). While Canadian governments have invested significant money since the 1990s in trying to reform health care, they have been largely unsuccessful in fundamentally changing the nature of the system or stemming the rising financial tide (see: Health Reform). In 1975, we spent about 25 cents of every tax dollar on health care. Currently, we are averaging a little over 40 cents, and we are on our way to spending 50 cents within the next ten years. Quite frankly, everyone (governments, health providers and the public) is in favour of health reform as long as no one has to give up anything. We are collectively hooked on the healthcare drug and, like all addicts, we can’t get enough of it; nor are we willing to admit that we have a problem (see: Hooked).

So, here we all are at another collective Aha-moment courtesy of the current economic downturn. Will this be the moment that we finally really reform our health system? Unless all of us are willing to do some serious soul searching and think differently about our health and the health care system we really need, I doubt it.

Dr. John Church is Associate Professor in the Department of Political Science at the University of Alberta. He has worked with governments in Canada and internationally over the past 25 years to evaluate health care reforms. He is a co-author of a recent book, Paradigm Freeze, on health care reform in Canada.