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Restoring access to quality health care : Brief Submitted to the House of Commons Standing Committee on Finance 1998 pre-budget consultations

https://policybase.cma.ca/en/permalink/policy1985
Last Reviewed
2019-03-03
Date
1997-11-07
Topics
Health human resources
Health systems, system funding and performance
Population health/ health equity/ public health
  1 document  
Policy Type
Parliamentary submission
Last Reviewed
2019-03-03
Date
1997-11-07
Topics
Health human resources
Health systems, system funding and performance
Population health/ health equity/ public health
Text
I. INTRODUCTION The Canadian Medical Association (CMA) commends the federal government, in its second mandate, for continuing the pre-budget consultation process. This open process encourages public dialogue in the finance and economics of the country and the CMA appreciates the opportunity to submit its views to the House of Commons Standing Committee on Finance. Many issues were raised by the CMA and other health organizations, with members of the Standing Committee, at the "health roundtable" held on October 28, 1997. This brief provides greater detail of those concerns that were discussed by the members of the CMA delegation. II. BACKGROUND "Good health is fundamental to the quality of life of every Canadian. In this century, we have learned a great deal about the effective treatment of illness and disease, which requires early access to appropriate and high-quality health care services." 1 Over the past year, Canadians, their physicians and the provincial/territorial governments have all been voicing their concerns about the state of the health care system across the country. In every instance it is a united voice that shares concerns about access to quality health care services as well as the sustainability of the health care system. A consistent theme is "will the health care system be there for me or my family when needed"? Canadians perceive that access to services has further deteriorated over the past year. CMA surveys undertaken by the Angus Reid Group between the spring of 1996 and 1997 clearly demonstrate that Canadians perceive a deterioration in many critical areas of the health care system. If one looks at indicators such as waiting times over the past two years it is quite clear that Canadians have felt the cutbacks in the health care sector: * in 1997 65% reported that waiting times in emergency departments had worsened, up from 54% in 1996, * 63% reported that waiting times for surgery had worsened, up from 53% in 1996, * 50% reported that waiting times for tests had worsened, up from 43% in 1996, * 49% reported that access to specialists had worsened, up from 40% in 1996, * 64% reported that availability of nurses in hospital had worsened, up from 58% in 1996. Physicians not only provide direct care to their patients but are also concerned about their patients' access to quality health care. In Ontario, more than 16,000 were reported to be waiting for placement in long-term care institutions 2. In Newfoundland patients requiring heart surgery have had to be sent to other provinces to alleviate growing waiting lists 3 . The Conference of Provincial/Territorial Ministers of Health has expressed concerns about the ability of provinces and territories to maintain current services. The Ministers state that "Federal reductions in transfer payments have created a critical revenue shortfall for the provinces and territories which has accelerated the need for system adjustments and has seriously challenged the ability of provinces and territories to maintain current services. Federal funding reductions are forcing the acceleration of change beyond the system's ability to absorb and sustain adjustments". 4 The concerns of the Provincial/Territorial Ministers of Health about the ability of the system to absorb and sustain adjustments are well founded as demonstrated by the anxieties expressed by the public and by physicians. The CMA has clearly stated and continues to state that "health cuts hurt everyone". III. FEDERAL HEALTH CARE FUNDING AND THE CANADA HEALTH AND SOCIAL TRANSFER (CHST) (i). Getting the facts straight Prior to April 1, 1996 the federal government's commitment to insured health services, post-secondary education and social assistance programs could be readily determined since the federal government made separate payments 5 to the provinces/territories in each of these areas. However, with the introduction of the Canada Health and Social Transfer (CHST), on April 1, 1996, the federal government combined all of its payments into one transfer payment to the provinces and territories. The net result is that there are no separately identifiable contributions to health, post-secondary education or social assistance programs. The federal government's accountability and commitment to health care have been blurred. However, prior to the CHST, the federal government's diminishing commitment to health care could at least be documented. Under the Established Programs Financing (EPF) arrangements the federal government has unilaterally revised the EPF funding formula eight times over the past decade. During the period 1986/87 to 1995/96, it was estimated that $30 billion in cash transfers has been withheld from health care (and an additional $12.1 billion for post-secondary education - for a total of $42.1 billion) 6. Federal "offloading" has forced all provinces/territories to make do with significantly less resources for their health care systems. [TABLE CONTENT DOES NOT DISPLAY PROPERLY. SEE PDF FOR PROPER DISPLAY] Table 1: Canada Health and Social Transfer (in $ billions) Year Total Entitlement (1) Tax Point Transfer (2) Cash Entitlement (3) Quebec Abatement (4) Cash Payments (5) Cumulative Reductions from 95/96 (6) 1997 Budget Health Items (7) 1995-96 29.7 11.2 18.5 1.9 16.6 0.0 1996-97 26.9 11.9 15.0 2.0 13.0 (3.6) 1997-98 25.1 12.6 12.5 2.1 10.4 (9.8) 0.1 1998-99 25.8 13.3 12.5 2.2 10.3 (16.1) 0.1 1999-00 26.5 14 12.5 2.3 10.2 (22.5) 0.1 2000-01 27.1 14.6 12.5 2.4 10.1 (29.0) 2001-02 27.8 15.3 12.5 2.5 10.0 (35.6) 2002-03 28.6 16.1 12.5 2.6 9.9 (42.3) [TABLE END] The September 1997 Throne Speech stated that the government "... will introduce legislation to increase to $12.5 billion a year the guaranteed annual cash payment to provinces and territories under the Canada Health and Social Transfer" 7. Table 1 illustrates what the $12.5 billion cash entitlement will mean in terms of actual cash payments in 2002-03. The important point to remember is that this so called "increase" in the cash entitlement (3) is merely a stop in cuts . For 1998-99 the previous cash entitlement would have dropped to $11.8 billion with a further drop in 1999-00 to $11.1 billion, whereas cash entitlements are now stabilized at $12.5 billion. However, cash payments will continue to drop into the foreseeable future. Cash payments (5) exclude the Quebec abatement which is comprised of tax points not cash payments. For Canadians the CHST has meant, and continues to mean, less federal government commitment to our health care system and has compromised the federal government's ability to preserve and enhance national standards. (ii). Implications for the future of health care in Canada The reduction in federal government funding has not only compromised the federal government's ability to preserve and enhance national standards but this continued policy of "under-funding" has compromised access to quality health care for Canadians. As previously mentioned, declining public sector resources allocated to health care has manifested itself in the form of longer waiting times in emergency departments, for surgery, for diagnostic tests and in decreased access to specialists and decreased availability of nurses in hospitals. In the federal government's 1997/98 budget released this past February much fanfare was made about sustaining and improving Canada's health care system. The government announced three health care initiatives 8 totalling $300 million in expenditures over 3 years, or $100 million per year. If, on the other hand, one looks at the accumulated reduction in CHST cash payments to the provinces/territories during the same 3 years when the federal government will spend this $300 million it can be seen that the accumulated reductions total $18.9 9 billion. Therefore, during the same 3-year period the "investment" in health care by the federal government represents 1.5% of the reductions to cash payments to the provinces and territories during the same period. For the longer term, the federal government can demonstrate its commitment to health care by linking growth in CHST cash payments to factors other than the economy. The factors that are becoming increasingly important are those such as technological change, population growth and aging. Such linkage of cash payments would be less subject to fluctuations in the economy and would be an acknowledgement of the impact of technological and population structure changes on the need for health care services. From Table 2, which shows 1994 per capita provincial government health expenditures by age group, it can be concluded that as the population of Canada ages the cost structure of health care increases reflecting the fact that as we age we make greater use of the health care system to maintain our health. The age group 65 and over continues to grow, in 1994 11.9% of the population was over the age of 65, in 2016 this is projected to increase to 16% and by 2041 to 23%. 10 [TABLE CONTENT DOES NOT DISPLAY PROPERLY. SEE PDF FOR PROPER DISPLAY] Table 2: Per Capita Provincial Government Expenditures by Age Group, Canada 1994 11 Age Group $ per Capita Increase 0-14 514 15-44 914 77.8% 45-64 1446 58.2% 65+ 6,818 371.5% Total 1,642 [TABLE END] In other areas of health care the CMA commends the federal government for their recent commitments to applied health services research. On an international basis however, Canada does not fare very well. In fact, on a per capita basis Canada came in last out of the five G-7 countries for which recent data were available. Figure 1 shows the per capita health R&D expenditures for G7 countries for which 1994 data are available. Canada's per capita spending was $22 (U.S.), compared with $35 for Japan, $59 for the U.S., $63 for France and $78 for the U.K. 12 While applied health services research is important, it must be recognized that research is a continuum beginning with basic biomedical research, moving to clinical research and ending with applied health services research. The CMA is concerned with the governments plans to cut the annual budget of the Medical Research Council (MRC) from $238 million in 1997-98 to $219 million in 2000-01. In Prime Minister Jean Chrétien's reply to the Speech from the Throne on September 24, 1997 he states that there is " . . . no better role for government than to help young Canadians prepare for the knowledge-based society of the next century." He then makes a commitment to establish, ". . . at arms-length from government, a Canada Millennium Scholarship Endowment Fund." which is to reward academic excellence. The Government of Canada should also be reminded that a knowledge-based society and scholarship also requires a commitment to research funds. Therefore the CMA calls on the Federal Government to establish national targets for spending and an implementation plan for health care research. Such an approach would buttress the other initiatives as announced by the Prime Minister. To restore access to quality health care for all Canadians, the CMA respectfully recommends: 1. At a minimum, that the federal government restore CHST cash entitlements to 1996/97 levels. 2. That, beginning April 1, 1998, the federal government fully index CHST cash payments through the use of a combination of factors that would take into account: technology, economic growth, population growth and demographics. 3. That the federal government establish a national target (either in per capita terms or as a proportion of total health spending) and an implementation plan for health research and development spending including the full spectrum of basic biomedical to applied health services research, with the objective of improving Canada's position relative to other G-7 countries where we now rank last among the five G-7 countries for which recent data are available. IV. HEALTHY PUBLIC POLICY The federal role in funding health care is clearly important to physicians and to their patients given its influence on access to quality health care services. However, there are other important issues that the CMA would like to bring to the attention of the Standing Committee on Finance. (i). Tobacco Taxation Smoking is the leading preventable cause of premature mortality in Canada. The most recent estimates suggest that more than 45,000 deaths annually in Canadaaredirectlyattributable to tobacco use., The estimated economic cost to society from tobacco use in Canada has been estimated from $11 billion to $15 billion. Tobacco use directly costs the Canadian health care system $3 billion to $3.5 billion annually. These estimates do not consider intangible costs such as pain and suffering. CMA is concerned that the 1994 reduction in the federal cigarette tax has had a significant effect in slowing the decline in cigarette smoking in the Canadian population, particularly in the youngest age groups - where the number of young smokers (15-19) is in the 22% to 30% range and 14% for those age 10-14. A 1997 Canada Health Monitor Survey found that smoking among girls 15-19 is at 42%. A Quebec study found that smoking rates for high school students went from 19% to 38%, between 1991 and 1996. The CMA understands that tobacco tax strategies are extremely complex. Strategies need to consider the effects of tax increases on reduced consumption of tobacco products with increases in interprovincial/territorial and international smuggling. In order to tackle this issue, the government could consider a selective tax strategy. This strategy requires continuous stepwise increases to tobacco taxes in those selective areas with lower tobacco tax (i.e., Ontario, Quebec and Atlantic Canada). The goal of selective increases in tobacco tax is to increase the price to the tobacco consumer over time (65-70% of tobacco products are sold in Ontario and Quebec). The selective stepwise tax increases will approach but may not achieve parity amongst all provinces however, the tobacco tax will attain a level such that inter-provincial/territorial smuggling would be unprofitable. The selective stepwise increases would need to be monitored so that the new tax level and US/Canadian exchange rates does not make international smuggling profitable. The objectives of this strategy are: * reduce tobacco consumption; * minimize interprovincial/territorial smuggling of tobacco products; and * minimize international smuggling of tobacco products. The selective stepwise increase in tobacco taxes can be combined with other tax strategies. The federal government should apply the export tax and remove the exemption available on shipments in accordance with each manufacturers historic levels. The objective of implementing the export tax would be to make cross-border smuggling unprofitable. The ultimate goals for implementing this strategy are: * reduce international smuggling of tobacco products; * reduce and/or minimize Canadian consumption of internationally smuggled tobacco products. The federal government should establish a dialogue with the US federal government. Canada and the US should hold discussions regarding harmonizing US tobacco taxes to Canadian levels at the factory gate. Alternatively, US tobacco taxes could be raised to a level that when offset with the US/Canada exchange rate differential renders international smuggling unprofitable. The objective of implementing the harmonizing US/Canadian tobacco tax levels (at or near the Canadian levels) would be to increase the price of internationally smuggled tobacco products to the Canadian and American consumers. The ultimate goals for implementing this strategy are: * reduce risk of international smuggling of tobacco products from both the Canadian and American perspective; * reduce and/or minimize Canadian/American consumption of internationally smuggled tobacco products. 4. The Canadian Medical Association is recommending that the federal government follow a comprehensive integrated tobacco tax policy: (a) That the federal government implement selective stepwise tobacco tax increases to achieve the following objectives: * reduce tobacco consumption, * minimize interprovincial/territorial smuggling of tobacco products, * minimize international smuggling of tobacco products; (b) That the federal government apply the export tax on tobacco products and remove the exemption available on tobacco shipments in accordance with each manufacturers historic levels; (c) That the federal government enter into discussions with the US federal government to explore options regarding tobacco tax policy, bringing US tobacco tax levels in line with or near Canadian levels, in order to minimize international smuggling. The Excise Act Review, A Proposal for a Revised Framework for the Taxation of Alcohol and Tobacco Products (1996), proposes that tobacco excise duties and taxes (Excise Act and Excise Tax Act) for domestically produced tobacco products be combined into a new excise duty and come under the jurisdiction of the Excise Act. The new excise duty is levied at the point of packaging where the products are produced. The Excise Act Review also proposes that the tobacco customs duty equivalent and the excise tax (Customs Tariff and Excise Tax Act) for imported tobacco products be combined into the new excise duty [equivalent tax to domestically produced tobacco products] and come under the jurisdiction of the Excise Act. The new excise duty will be levied at the time of importation. The CMA supports the proposal of the Excise Act Review. It is consistent with previous CMA recommendations calling for tobacco taxes at the point of production. (ii). Tobacco Control Taxation should be used in conjunction with other strategies for promoting healthy public policy, such as, programs for tobacco prevention and cessation. The Liberal party, recognising the importance of this type of strategy , promised: "...to double the funding for the Tobacco Demand Reduction Strategy from $50 million to $100 million over five years, investing the additional funds in smoking prevention and cessation programs for young people, to be delivered by community organizations that promote the health and well-being of Canadian children and youth". The CMA applauds the federal government's efforts in the area of tobacco prevention and cessation. However, a time limited investment is not enough. More money is required for investment in this area. Program funding is required for more efforts and programs in tobacco prevention and cessation. A possible source for this type of program investment could come from tobacco tax revenues or the tobacco surtax. 5. In the short term, the Canadian Medical Association calls upon the federal government to fulfil the its promise to invest $100 million, over five years, into the Tobacco Demand Reduction Strategy. In the longer term, the Canadian Medical Association calls upon the federal government to establish stable program funding for its comprehensive tobacco control strategy, including smoking prevention and cessation. (iii). Non-taxable health benefits The federal government is to be commended for its decision to maintain the non-taxable status of supplementary health benefits. This decision is an example of the federal governments' commitment to maintain good tax policy that supports good health policy (the current incentive fosters risk pooling). Approximately 70% or 20 million Canadians rely on full or partial private supplementary health care benefits (e.g., dental, drugs, vision care, private duty nursing, etc.). As governments reduce the level of public funding, the private component of health expenditures is expanding. Canadians are becoming increasingly reliant on the services of private insurance. In the context of funding those health care services that remain public benefits, the government cannot strike yet another blow to individual Canadians and to Canadian business by taxing the very benefits for which taxes were raised. In terms of fairness, it would seem unfair to "penalize" 70% of Canadians by taxing supplementary health benefits to put them on an equal basis with the remaining 30%. It would be preferable to develop incentives to allow the remaining 30% of Canadians to achieve similar benefits attributable to the tax status of supplementary health benefits. If supplementary health benefits were to become taxable, it is likely that young healthy people would opt for cash compensation instead of paying taxes on benefits they do not receive. These Canadians would become uninsured for supplementary health services. It follows that employer-paid premiums may increase as a result of this exodus in order to offset the additional costs of maintaining benefit levels due to diminishing ability to achieve risk pooling. In addition, 6. That the current federal government policy with respect to non-taxable health benefits be maintained. V. FAIR AND EQUITABLE TAX POLICY CMA has demonstrated that good economic policy reinforces good health policy in past submissions to the Standing Committee on Finance. The CMA again reiterated the important role that fair tax policy plays in supporting healthy public policy. (i). The Goods and Services Tax (GST)& the Harmonized Sales Tax (HST) The CMA strongly believes in a tax system that is fair and equitable. This point has been made on several occasions to the Standing Committee on Finance. In particular, the point was stressed as part of the Standing Committee's consultation process leading to the report "Replacing the GST: Options for Canada". In the case of the GST, however, the reality is that physicians as self-employed Canadians are singled out and discriminated against by virtue of not being able to claim input tax credits (ITCs) since medical services are designated as "tax exempt". The CMA does not dispute the importance that the federal government has attached to medical services such that Canadians are not subject to GST/HST for having availed themselves of such medical services from their physician. However, the GST/HST are consumption taxes and as such are paid for by the end consumer. If, however, government determines that such a consumption tax should not be applied to the consumers (in this case physicians' patients) of a particular good or service it behooves government not to implement half measures that bring into question the equity and fairness of the Canadian tax system. While other self-employed professionals and small business claim ITCs, an independent (KPMG) study has estimated that physicians have "over contributed" in terms of unclaimed ITCs to the extend of $57.2 million per year. Since the inception of the GST and by the end of this calendar year, physicians will have been unfairly taxed in excess of $400 million. All this for providing a necessary service that has been deemed so important by government. Physicians are not asking for special treatment. What they are asking for, however, is to be treated in a fair and equitable manner like other self-employed Canadians and small businesses. Unlike other businesses and professionals, physicians cannot recoup the GST/HST by claiming ITCs or passing the GST/HST onto customers/patients. The federal government has acknowledged the inequitable impact of the GST/HST on other providers in the health care sector. Municipalities, universities, schools and hospitals have been given special consideration because they, like physicians, are not able to pass the GST/HST on to their clients. Hospitals have been afforded an 83% rebate for purchases made in providing patient care while physicians must absorb the full GST/HST costs on purchases also made in providing patient care. At a time when health policy measures are attempting to expand community-based practices, the current tax policy (and now harmonized tax policy) which taxes supplies in a clinical practice setting but not in a hospital setting acts to discourage this shift in emphasis. To complicate matters further, the recent agreement between the federal government and some Atlantic provinces to harmonize their sales taxes will make matters worse for physicians. With no ability to claim ITCs, physicians will, once again, have to absorb the additional costs associated with the practice of medicine. It has been estimated that harmonization will cost physicians in Atlantic Canada an additional $4.7 million each year (over and above the current GST inequity). In the current fiscal environment, this unresolved issue does not help matters when it comes to physician recruitment and retention across the country. Furthermore, for established physicians who have had to live with the current policy, the GST/HST serves as a constant reminder that the basic and fundamental principles of equity and fairness in the tax system is not being extended to the physicians of Canada. To date, the CMA has made representations to the Minister of Finance and Finance Department Officials but yet to no avail. We look to this Committee and to the federal government to not only ensure that the tax system is perceived to be fair and equitable but that it is in fact fair and equitable to all members of society. The unfairness of the GST/HST, as applied to medical services, has raised the ire of physicians and has made them question their sense of fair play in Canada's tax system. In the interests of fairness and equity, the CMA respectfully recommends the following: 7. The CMA recommends that health care services funded by the provinces and territories be zero-rated. The above recommendation could be accomplished by amending the Excise Tax Act as follows: (1). Section 5 part II of Schedule V to the Excise Tax Act is replaced by the following: 5. "A supply (other than a zero-rated supply) made by a medical practitioner of a consultative, diagnostic, treatment or other health care service rendered to an individual (other than a surgical or dental service that is performed for cosmetic purposes and not for medical or reconstructive purposes)." (2). Section 9 Part II of Schedule V to the Excise Tax Act is repealed. (3). Part II of Schedule VI to the Excise Tax Act is amended by adding the following after section 40: 41. A supply of any property or service but only if, and to the extent that, the consideration for the supply is payable or reimbursed by the government under a plan established under an Act of the legislature of the province to provide for health care services for all insured persons of the province. Our recommendation fulfils at least two over-arching policy objectives: 1) strengthening the relationship between good economic policy and good health policy in Canada; and 2) applying the fundamental principles that underpin our taxation system (fairness, efficiency, effectiveness), in all cases. (ii). Registered Retirement Savings Plan (RRSP) Experts have stated that there are (at least) two fundamental goals of retirement savings: (1) to guarantee a basic level of retirement income for all Canadians; and, (2) to assist Canadians in avoiding serious disruption of their pre-retirement living standards upon retirement. Looking at the demographic picture in Canada, we can see that an increasing portion of society is not only aging, but is living longer. Assuming that current demographic trends will continue and peak in the first quarter of the next century, it is important to recognize the role that private RRSPs savings will play in ensuring that Canadians may continue to live dignified lives well past their retirement from the labour force. This becomes even more critical when one considers that Canadians are not setting aside sufficient resources for their retirement. Specifically, according to Statistics Canada, it is estimated that 53% of men and 82% of women starting their career at age 25 will require financial aid at retirement age - only 8% of men and 2% women will be financially secure. The 1996 federal government policy changes with respect to RRSP contribution limits run counter to the White Paper released in 1983 (The Tax Treatment of Retirement Savings), where the House of Commons Special Committee on Pension Reform recommended that the limits on contributions to tax-assisted retirement savings plans be amended so that the same comprehensive limit would apply regardless of the retirement savings vehicle or combination of vehicles used. In short, the Liberal government endorsed the principle of "pension parity". According to three more recent papers released by the federal government, the principle of pension parity would have been achieved between money-purchase (MP) plans and defined benefit (DB) plans had RRSP contribution limits risen to $15,500 in 1988. The federal government postponed the scheduling of the $15,500 limit for seven years, that is achieving the goal pension parity was delayed until 1995. In its 1996 Budget Statement, the federal government altered its course of action and froze the dollar limit of RRSPs at $13,500 through to 2003/04, with increases to $14,500 and $15,500 in 2004/05 and 2005/06, respectively. As well, the maximum pension limit for defined benefit registered pension plans will be frozen at its current level of $1,722 per year of service through 2004/05. This is a de facto increase in tax payable. The CMA is frustrated that ten years of careful and deliberate government planning around pension reform has not come to fruition, in fact if the current policy remains in place will have taken more than 17 years to implement (from 1988 to 2005). As a consequence, the current policy of freezing RRSP contribution limits and RPP limits without making adjustments to RRSP limits to achieve pension parity serves to maintain inequities between the two plans until 2005/2006. This is patently unfair for self-employed Canadians who rely on RRSPs as their sole vehicle for retirement planning. CMA respectfully recommends to the Standing Committee: 8. That the dollar limit of RRSPs at $13,500 increase to $14,500 and $15,500 in 1998/1999 and 1999/2000, respectively. Subsequently, dollar limits increase at the growth in the yearly maximum pensionable earnings (YMPE). VI. SUMMARY OF RECOMMENDATIONS With the future access to quality health care for all Canadians at stake, the CMA strongly believes that the federal government must demonstrate that it is prepared to take a leadership role and re-invest in the health care of Canadians. The CMA therefore makes the following recommendations to the Standing Committee in its deliberations: Canada Health and Social Transfer (CHST) 1. At a minimum, that the federal government restore CHST cash entitlements to 1996/97 levels. 2. That, beginning April 1, 1998, the federal government fully index CHST cash payments through the use of a combination of factors that would take into account: technology, economic growth, population growth and demographics. 3. That the federal government establish a national target (either in per capita terms or as a proportion of total health spending) and an implementation plan for health research and development spending including the full spectrum of basic biomedical to applied health services research, with the objective of improving Canada's position relative to other G-7 countries where we now rank last among the five G-7 countries for which recent data are available. Tobacco Taxation 4. The Canadian Medical Association is recommending that the federal government follow a comprehensive integrated tobacco tax policy: (a) That the federal government implement selective stepwise tobacco tax increases to achieve the following objectives: < reduce tobacco consumption, < minimize interprovincial/territorial smuggling of tobacco products, < minimize international smuggling of tobacco products; (b) That the federal government apply the export tax on tobacco products and remove the exemption available on tobacco shipments in accordance with each manufacturers historic levels; (c) That the federal government enter into discussions with the US federal government to explore options regarding tobacco tax policy, bringing US tobacco tax levels in line with or near Canadian levels, in order to minimize international smuggling. Tobacco Control 5. In the short term, the Canadian Medical Association calls upon the federal government to fulfil the its promise to invest $100 million, over five years, into the Tobacco Demand Reduction Strategy. In the longer term, the Canadian Medical Association calls upon the federal government to establish stable program funding for its comprehensive tobacco control strategy, including tobacco prevention and cessation. Non-Taxable Health Benefits 6. That the current federal government policy with respect to non-taxable health benefits be maintained. The Goods and Services Tax (GST)& the Harmonized Sales Tax (HST) 7. The CMA recommends that health care services funded by the provinces and territories be zero-rated. Registered Retirement Savings Plan (RRSP) 8. That the dollar limit of RRSPs at $13,500 increase to $14,500 and $15,500 in 1998/1999 and 1999/2000, respectively. Subsequently, dollar limits increase at the growth in the yearly maximum pensionable earnings (YMPE). 13 1 Liberal Party, Securing Our Future Together. The Liberal Party of Canada, , Ottawa, 1997. p. 71. 2 Lipovenko, D,1997: Seniors face shortage of care. Globe & Mail [Toronto]; Feb 26 Sect A:5 3 Joan Marie Aylward, Minister of Health, Newfoundland and Labrador, public statement, May 14, 1997 4 Conference of Provincial/Territorial Ministers of Health, A Renewed Vision for Canada's Health System. January 1997. p. 7. 5 Thomson, A., Diminishing Expectations - Implications of the CHST, [report] Canadian Medical Association, Ottawa. May, 1996. 6 Thomson A: Federal Support for Health Care: A Background Paper. Health Action Lobby, June 1991. 7 Speech from the Throne to Open the First Session Thirty-Sixth Parliament of Canada. Ottawa; 1997 Sept 23. 8 Health Transition Fund: $150 million over 3 years - to help provinces to test ways to improve their health system, for example, new approaches to home care, drug coverage, and other innovations. Canada Health Information System: $50 million over 3 years - to create a network for health care providers and planners for sharing information. Community Action Program for Children: $100 million over 3 years - for support of community groups for parent education for children at risk and for Canada Prenatal Nutrition Program to ensure the birth of healthy babies. 9 See Table 1: Cumulative reductions to 1999/00 of $22.5 billion subtracting $3.6 billion for 1996/97 gives a cumulative reduction during 1997/98 to 1999/00 of $18.9 billion. 10 Statistics Canada, Population Projections for Canada, Provinces and Territories 1993-2016. Ottawa: Statistics Canada; 1994. p. 73. Cat no 91-520 [occasional]. 11 Health Canada, National Health Expenditures in Canada, 1975-1994 [Full Report]. Ottawa: Health Canada; January 1996. p. 41. 12 Organization for Economic Cooperation and Development. OECD Health Data 97. Paris: OECD; 1997. 13 Cunningham R, Smoke and Mirrors: The Canadian War on Tobacco, International Development Research Centre, Ottawa, Canada, 1996. p. 8. "Restoring Access to Quality Health Care" 1998 Pre-Budget Consultations Page " 1998 Pre-Budget Consultations Page
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The impact of the Goods and Services Tax (GST) and the proposed Harmonized Sales Tax (HST) on Canadian physicians : Brief submitted to the House of Commons Standing Committee on Finance

https://policybase.cma.ca/en/permalink/policy2023
Last Reviewed
2019-03-03
Date
1997-01-21
Topics
Health human resources
Physician practice/ compensation/ forms
  1 document  
Policy Type
Parliamentary submission
Last Reviewed
2019-03-03
Date
1997-01-21
Topics
Health human resources
Physician practice/ compensation/ forms
Text
The Canadian Medical Association (CMA) commends the federal government for its clear and open process, and for encouraging a dialogue in areas of tax policy and economics. Canadians from all walks of life look to the government for strong and constructive leadership in this area. The CMA therefore appreciates the opportunity to present its views to the House of Commons Standing Committee on Finance as it considers Bill C-70 "An Act to amend the Excise Tax Act, the Federal-Provincial Fiscal Arrangements Act, the Income Tax Act, the Debt Servicing and Reduction Account Act and related Acts." The CMA has appeared before the Committee on several occasions when it has considered matters pertaining to federal tax policy in Canada. In addition to our submissions, as part of the government's pre-budget consultation process, the CMA appeared before the Committee when it examined a number of tax policy alternatives to the Goods and Services Tax (GST) in 1994. 1 At that time, the CMA clearly articulated the medical profession's concerns about the need to implement a federal sales tax system that is simplified, fair and equitable for all. The CMA remains strongly committed to the principles that underpin an efficient and effective sales tax system. However, it is of the strong view that there is, on the one hand, a need to review the relationship between sales tax policy and health care policy in Canada, and between the sales tax policy and the physicians as providers of services, on the other. Canada's health care system is a defining characteristic of what makes Canada special. It is no secret that funding for the health care system is under stress and all providers, including physicians, are being asked to shoulder their responsibility in controlling costs and responding to this fiscal challenge. However, physicians have had their costs of providing medical services increased by the federal government through the introduction of the GST. Specifically, the introduction of the GST as it applies to physicians serves as a constant reminder that there still remain some tax policy anomalies - that, without amendment, their consequences will be significantly magnified with the introduction of a proposed harmonized sales tax (HST) on April 1, 1997, as was the case with the introduction of the Quebec Sales Tax (QST) on July 1, 1992. The tax anomaly is a result of the current categorization of medical services as "tax exempt" under the Excise Tax Act. As a consequence, physicians are, on the one hand, in the unenviable position of being denied the ability to claim a GST tax refund (that is, denied the ability to claim input tax credits - ITCs), on the medical supplies (such as medical equipment, medical supplies, rent, utilities) necessary to deliver quality health care, and on the other, cannot pass the tax onto those who purchase such services (i.e., the provincial and territorial governments). Physicians, from coast to coast, are understandably angry that they have been singled out for unfair treatment under the GST, QST and the soon to be implemented HST. II. BACKGROUND The GST was designed to be a " consumer-based tax" where the tax charged for purchases during the "production process" would be refunded - with the consumer, not producer of a good or a service, bearing the full burden of the tax. As a result, self-employed individuals and small businesses are eligible to claim a tax refund of the GST from the federal government on purchases that are required in most commercial activities. It is important to understand that those who can claim a tax refund under the GST in most commercial activities will still be able to do so with the proposed introduction of a harmonized sales tax in Atlantic Canada. The rate is proposed to be set at 15% (7% federal tax, 8% provincial tax). In the case of medical services, the consumer (i.e., the one who purchases such services) is almost always the provincial and territorial governments. Since the provincial and territorial governments do not pay GST (due to their Constitutional exemption), one would have expected the cost of providing medical services to be free of GST. However, this is not the case. It is difficult to reconcile federal health care policies to preserve and protect publicly funded health care with tax policy which singles out and taxes the costs of medical services. Regrettably, physicians find themselves in an untenable situation of "double jeopardy". This is patently unfair and on the basis of the fundamental principles of administering a fair and equitable tax system should be amended accordingly. In an effort to document the impact of the federal government's decision to designate medical services as tax exempt, an independent study by the accounting firm KPMG estimated that physicians' costs increased by $60 million of GST per year. 2 Since 1991, this total is now in excess of $360 million. The recent agreement between the federal government and Atlantic provinces (except Prince Edward Island) to harmonize their sales taxes will make matters significantly worse for physicians as the HST broadens the provincial tax base to essentially that of the GST in those provinces. With no ability to claim a tax refund on the GST they currently pay (and the proposed HST effective April 1, 1997), physicians once again will have to absorb the additional costs associated with the practice of medicine. In assessing the impact of the proposed HST, KPMG has estimated that physicians in New Brunswick, Nova Scotia, and Newfoundland will be out-of-pocket an additional $4.7 million each year because they are not eligible for a tax refund for their purchases. 3 The medical profession, is not looking for special treatment. What we are asking for is to be treated no differently than other self-employed Canadians and small businesses who have the opportunity to claim ITCs, and to be placed on the same footing with other health care providers who have the ability to recoup GST costs. Physicians, as self-employed individuals are considered small businesses for tax purposes, therefore, it seems entirely reasonable that they should have the same tax rules that apply to other small businesses. This is a question of fundamental fairness. III. POLICY CONTEXT Prior to the introduction of the GST, the federal sales tax (FST) was included in the price of most goods (not services) that were produced in, or imported to, Canada. Therefore, when goods were purchased by consumers, the FST was built into the price. At that time, physicians, and other self-employed Canadians and small businesses, were essentially on a level sales tax playing field. Since 1991, however, the introduction of the GST has tilted the table against physicians. Unless this situation is rectified, with the introduction of the HST, physicians in Atlantic Canada will join those in Quebec who experience additional costs due to the GST and their provincial sales tax using the same rules. (i). The Impact of the GST on Good Tax Policy and Good Health Care Policy When it reviews Bill C-70, the Standing Committee on Finance should look for opportunities where tax policy and health care policy go hand-in-hand. The principle of aligning good health policy with sound tax policy is critical to managing change while serving to lay down a strong foundation for future growth and prosperity. Unfortunately, the current GST policy introduces a series of distortions that have tax policy and health policy working against one another. Tax policies that do not reinforce health policy are bad tax policies. Consider, for example: 1. Under the current system, hospitals (under the "MUSH" formula - Municipalities, Universities, Schools and Hospitals) have been afforded an 83% rebate on GST paid for purchases made while physicians must absorb the full GST cost on their supplies. At a time when health policy initiatives across Canada are attempting to expand community-based practices, the current GST policy (and now harmonized sales tax policy) which taxes supplies in a private clinic setting while rebating much of the tax in a hospital setting acts to discourage the shift in emphasis; 2. Prescription drugs are zero-rated. The objective was to ensure that pharmaceutical firms are no worse off than under the previous federal sales tax regime. Recognizing that medical services can play an equally important role as drugs, it appears inconsistent that the government would choose to have drugs as tax free, and medical services absorbing GST; 3. In the current fiscal climate, the current GST policy, and now the proposed harmonized sales tax in Atlantic Canada, is threatening to harm the important role when it comes to recruitment and retention of physicians across Canada, and in particular, the Atlantic provinces - where they are already experiencing difficulty; and, 4. It is estimated that the 55,000 physicians employ up to 100,000 Canadians. Physicians play an important role in job creation. The disproportionate effects of the GST policy could have an adverse effect on the number of individuals employed by physicians. With these issues at hand, it is apparent that good tax policy and good health policy are themselves not synchronized and are working at cross purposes. At this point, when the Standing Committee is reviewing Bill C-70, it is the time to address this situation based on the fundamental principle of fairness in the tax system, while ensuring that good tax policy reinforces good health care policy. (ii). Not All Health Care Services Are Created Equal under the GST/HST Physicians are not the only group of health care providers whose services are placed under the category of "tax exempt", with the result that they incur increased GST costs. For example, the services of dentists, nurses, physiotherapists, psychologists and chiropractors are categorized as "tax exempt". However, there is an important distinction between whether the services are government funded or not. Health care providers who deliver services privately and which are not publicly funded do have the opportunity to pass along the GST in their costs through their fee structures. For these services that are government funded there are no opportunities for physicians to recover the tax paid for purchases unless a specific rebate has been provided (e.g., hospitals). To date, in negotiations with the medical profession, no provincial/territorial government has agreed to provide funding to reflect the additional costs associated with the introduction of the GST. Their position has been that this is a "federal" matter. This becomes important when one considers that under the Canadian Constitution one level of government cannot tax another, and the provincial governments are not prepared to absorb the cost of the GST. It is critical to point out that since doctors receive 99% of their professional earnings from the government health insurance plans, 4 they have absolutely no other option when it comes to recovering the GST - they must absorb it! In summary, while a number of health care services are categorized as tax exempt, it must be emphasized that some providers "are more equal than others" under the GST - contrary to other health care providers, physicians do not have the ability to claim ITCs. This distinction becomes readily apparent when one considers the sources of (private and/or public) funding for such services. IV. THE SEARCH FOR A SOLUTION Like many others in Canadian society, physicians work hard to provide quality health care to their patients within what is almost exclusively a publicly-financed system for medical services. Physicians are no different from Canadians in that they, too, are consumers (and purchasers). As consumers, physicians pay their fair share of taxes to support the wide range of valued government services. By the same token, as providers of health care, physicians have not accepted, nor should they accept, a perpetuation of the fundamental injustices built into the current GST, QST and proposed HST arrangements. To date, the CMA has made representations to two Ministers of Finance and their Department Officials. We have discussed several ways to address a situation that is not sustainable, with no resolution to date. We look to this Committee and the federal government for a fair solution to this unresolved issue. V. RECOMMENDATION This unfair and discriminatory situation can be resolved. There is a solution that can serve to reinforce good economic policy with good health care policy in Canada. An amendment to the Excise Tax Act, the legislation which governs the GST (and proposed HST) can make an unfair situation fair to all Canadian physicians. In its recent submission to the Standing Committee as part of the 1997 pre-budget consultation process, the CMA recommended "that medical services be zero-rated, in order to achieve a fair and equitable GST policy for physicians." In order to achieve this objective all health care services, including medical services, funded by the provinces could be zero-rated. This recommendation serves to place physicians on a level playing field with other self-employed Canadians and small businesses. In addition, from a health care perspective, this would treat medical services in the same manner as that of prescription drugs. This is a reasonable proposition, as in many instances, medical treatments and drug regimens go hand-in-hand. Furthermore, this recommendation would ensure that medical services under the GST and proposed HST would be no worse off than other goods or services that provincial governments' purchase and where suppliers can claim a tax refund (i.e., ITCs). While the recommendation is an important statement in principle of what is required to address the current inequities under the GST, and soon to be HST, the CMA offers a more specific recommendation to the Standing Committee as to how the principles can be operationalized within the context of Bill C-70 and the Excise Tax Act. The CMA respectfully recommends the following: 1. "THAT HEALTH CARE SERVICES FUNDED BY THE PROVINCES BE ZERO-RATED." CMA has been advised that this would be accomplished by amending Bill C-70 as follows: (1). Section 5 of Part II of Schedule V to the Excise Tax Act is replaced by the following: 5. "A supply (other than a zero-rated supply) made by a medical practitioner of a consultative, diagnostic, treatment or other health care service rendered to an individual (other than a surgical or dental service that is performed for cosmetic purposes and not for medical or reconstructive purposes)." (2). Section 9 of Part II of Schedule V to the Excise Tax Act is repealed. (3). Part II of Schedule VI to the Excise Tax Act is amended by adding the following after section 40: 41. A supply of any property or service but only if, and to the extent that, the consideration for the supply is payable or reimbursed by the government under a plan established under an Act of the legislature of the province to provide for health care services for all insured persons of the province. VI. SUMMARY By adopting the recommendation above, the federal government would fulfil, at least two over-arching policy objectives, they are: 1. Strengthening the relationship between good economic policy and good health policy in Canada; and, 2. Applying the fundamental principles that underpin our taxation system (fairness, efficiency, effectiveness), in all cases. ________________________ 1 the Goods and Services Tax: Fairness for Physicians, Presentation to the House of Commons Standing Committee on Finance, Ottawa, Ontario, March 15, 1994. The Canadian Medical Association. 2 Review of the Impact of the Goods and Services Tax on Canadian Physicians, KPMG, June, 1992. 3 Review of the Impact of a Provincial Value Added Tax on Physicians in New Brunswick, Nova Scotia, and Newfoundland and Labrador, KPMG, August, 1996. 4 National Health Expenditures, 1975-1994, Health Canada, January 1996.
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Response to “Consultation Document – Disability Tax Credit Public Consultations” CMA Submission to Canada Revenue Agency

https://policybase.cma.ca/en/permalink/policy14025
Date
2014-12-19
Topics
Health systems, system funding and performance
Physician practice/ compensation/ forms
  1 document  
Policy Type
Parliamentary submission
Date
2014-12-19
Topics
Health systems, system funding and performance
Physician practice/ compensation/ forms
Text
The Canadian Medical Association (CMA) submits this response to the Canada Revenue Agency (CRA) as part of its public consultation on the Disability Tax Credit. The CMA has long-standing and significant concerns pertaining to the Disability Tax Credit. Most notable is the recent legislative development that resulted in physicians being captured in the definition of “promoter”. In light of the significant concern with physicians being captured in the definition of “promoter”, this submission will focus exclusively on the regulatory development following the enactment of the Disability Tax Credit Promoters Restrictions Act. However, the CMA will follow up at a later date with feedback and recommendations to CRA on how the Disability Tax Credit form and process can be improved. Prior to providing the CMA’s position for consideration as part of the regulatory consultation, relevant background respecting the CMA’s participation and recommendations during the legislative process is reviewed. 2. Background: CMA’s Recommendations during the Legislative Process The CMA actively monitored and participated in the consultation process during the legislative development of Bill C-462, Disability Tax Credit Promoters Restrictions Act. During its consideration by the House of Commons, the CMA appeared before the House of Commons Finance Committee and formally submitted its recommendations.1 The CMA’s submission to the Finance Committee is attached as an appendix for reference. Throughout this process, the CMA consistently raised its concern that the bill proposed to include physicians in the definition of “promoter”, to which the response was consistently that physicians would not be captured. The Member of Parliament sponsoring the bill conveyed this message at the second reading stage in the House of Commons: 1 Canada. Parliament. House of Commons. Standing Committee on Finance (2013). Evidence, May 7, 2013. 41st Parliament, 1st Session. Retrieved from www.parl.gc.ca/HousePublications/Publication.aspx?DocId=6138958&Language=E&Mode=1&Parl=41&Ses=1 “Mr. Massimo Pacetti: Mr. Speaker…[in] her bill, she says that the definition of a promoter means a person who directly or indirectly accepts or charges a fee in respect to a disability tax credit. Who is a promoter exactly? Is a doctor, or a lawyer or an accountant considered a promoter? Mrs. Cheryl Gallant: Mr. Speaker, that is an excellent question from my colleague opposite. We are looking at third party promoters quite apart from the regular tax preparers and accountants. It is a new cottage industry that sprung up once the 10- year retroactive provision was made. It recognizes that there are volunteer organizations and even constituency offices that do this type of work. They help constituents fill out applications for tax credits. There is a provision for exemptions so people who volunteer their time at no charge or doctors do not fall into this.”2 In contradiction to this statement, during the Senate National Finance Committee’s study of Bill C-462, CRA Assistant Commissioner Brian McCauley confirmed the CMA’s concerns, stating explicitly that physicians would be captured in the definition of “promoter” and explained “they have to be captured because, if they weren't, you leave a significant compliance loophole”.3 As will be explained further below in this submission, this statement reveals a lack of understanding of the implications of capturing physicians in the definition of “promoter”, in that it has established duplicative regulatory oversight of physicians, specific to the Disability Tax Credit form. 3. Priority Issue: Identify Physicians as an Exempt Profession in Regulation The CMA has been consistent in our opposition to the approach that resulted in physicians being included in the definition of “promoters”. The definition of “promoter” captures physicians who may charge a fee to complete the disability tax credit form, a typical practice 2 C. Gallant. (2013 Feb. 5) Parliament of Canada. Debates of House of Commons (Hansard). 41st Parliament, 1st Session. Retrieved at www.parl.gc.ca/HousePublications/Publication.aspx?Language=E&Mode=1&DocId=5962192#Int-7872066 3 Canada. Parliament. Senate. Standing Committee on National Finance (2014). Evidence, April 2, 2014. 41st Parliament, 2nd Session. Retrieved at www.parl.gc.ca/Content/SEN/Committee/412/nffn/09ev-51313-e.htm?Language=E&Parl=41&Ses=2&comm_id=13. for uninsured physician services. As indicated on page 4 of the CRA’s consultation document, the Disability Tax Credit Promoters Restrictions Act includes the authority to “identify the type of promoter, if any, who is exempt from the reporting requirements under the Act.” Two questions are included on page 7 of the consultation document in relation to this regulatory authority. It is the CMA’s recommendation in response to Question 12 (“Are there any groups or professions that should be exempt from the reporting requirements of the new Act?”) that physicians licensed to practice are identified in regulation as an exempt profession. Specifically, the CMA recommends that CRA include an exemption in the regulations for “a health care practitioner duly licensed under the applicable regulatory authority who provides health care and treatment” from the reporting requirements of the Disability Tax Credit Promoters Restrictions Act. As explained below, this exemption will not introduce a potential loophole that may be exploited by third party companies to circumvent the new restrictions and will mitigate the legislative development that has introduced duplicative regulatory oversight of physicians. 4. Exemption Required to Avoid Duplicative Regulatory Regime; Not a Loophole By capturing physicians in the definition of promoters, the Disability Tax Credit Promoters Restrictions Act has introduced a duplicative regulatory body for physicians: a development which the CMA has fundamentally opposed. As CMA understands it, the CRA’s key concern in capturing physicians in the definition of promoter is with respect to the possibility that third party companies may circumvent these limitations by employing a physician. As previously noted, this issue was raised by CRA’s Assistant Commissioner Brian McCauley in his appearance before the Senate National Finance Committee during its study of Bill C-462. A) CMA’s Recommendation Respects Existing Regulatory Oversight Regime of Physicians The CMA’s recommendation and regulatory proposal limits the exemption of physicians as a profession to those currently licensed under the regulatory authority of provincial/territorial medical regulatory colleges. In Canada, medical practice is the regulatory purview of provinces and territories. Charging a fee for the completion of a form is a typical practice for uninsured services – these are services that fall outside of provincial/territorial health insurance coverage. The practice of charging a fee for an uninsured service by a licensed physician is an activity that is part of medical practice. Such fees are subject to guidelines by provincial and territorial medical associations and oversight by provincial/territorial medical regulatory colleges. The regulatory oversight, including licensing, of physicians falls under the statutory authority of medical regulatory colleges, as legislated and regulated by provincial and territorial governments. For example, in the Province of Saskatchewan, the Medical Profession Act, 1981 establishes the regulatory authority of the College of Physicians and Surgeons of Saskatchewan. This regulatory authority is comprehensive and captures: medical licensure, governing standards of practice, professional oversight, disciplinary proceedings, and offences. In Ontario, this authority is established by the Regulated Health Professions Act, 1991; in British Columbia, by the Health Professions Act, 1996, and so on. B) CMA’s Recommendation Does Not Introduce a Loophole The exemption of physicians as a profession that is “duly licensed under the applicable regulatory authority who provides health care and treatment” would not constitute a loophole. Firstly, any concerns regarding the practices of a physician that is exempted based on this definition could be advanced to the applicable regulatory college for regulatory oversight and if appropriate, discipline. The CMA’s proposed regulatory exemption would not be applicable in the case of a physician not licensed to practice; in this case, the individual would not be under the regulatory authority of a medical regulatory college and would fall under the CRA’s regulatory purview, as established by the Disability Tax Credit Promoters Restrictions Act. With regard to the example raised by CRA’s Assistant Commissioner Brian McCauley in his remarks before the Senate Committee of a retired doctor hired by promoter, retired physicians can retain their licence. If this was the case for this particular physician, as noted above, when CRA had concerns regarding this physician’s actions, his or her regulatory college could have taken appropriate disciplinary action. If, on the other hand, this retired physician’s licence had lapsed, both the individual and the promoter who hired him or her would be potentially liable for fraud (assuming that the term “medical doctor” used in Form T2201 refers to an actively licensed physician) which would convey more serious consequences than those proposed by the Disability Tax Credit Promoters Restrictions Act. 5. Conclusion The CMA strongly encourages the CRA to identify physicians as a profession that is exempt from the reporting requirements of the Disability Tax Credit Promoters Restrictions Act. This exemption is critical to ensure that possible unintended consequences, specifically duplicative regulatory oversight of physicians, are avoided.
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Bill C-422 An Act respecting a National Lyme Disease Strategy

https://policybase.cma.ca/en/permalink/policy11140
Date
2014-06-02
Topics
Population health/ health equity/ public health
Health systems, system funding and performance
  1 document  
Policy Type
Parliamentary submission
Date
2014-06-02
Topics
Population health/ health equity/ public health
Health systems, system funding and performance
Text
The Canadian Medical Association is pleased to present this submission to the House of Commons Standing Committee on Health regarding Bill C-422, National Lyme disease strategy. The Canadian Medical Association (CMA) is the national organization representing over 80,000 physicians in Canada; its mission is to serve and unite the physicians of Canada and to be the national advocate, in partnership with the people of Canada, for the highest standards of health and health care. Lyme disease is a growing problem in Canada. According to the Public Health Agency of Canada (PHAC) there were 315 cases of Lyme disease reported in Canada in 2012 -two and one-half times more cases than the 128 reported in 2009, the year that it became a reportable disease. In the Ottawa area, cases have increased almost 8 fold from 6 in 2009 to 47 in 2013. The PHAC surveillance indicates that established populations of blacklegged ticks are spreading their geographic scope, and are increasing in number, in much of southern Canada. In 2013 the US Center for Disease Control and Prevention released new estimates of Lyme disease that was 10 times higher than the previous yearly reported number of 30,000 reported cases.1 This highlights the difficulty in establishing the true burden of illness from Lyme disease. Why this matters to Canada's physicians The Canadian Medical Association supports the implementation of a national strategy that can address the breath of public health and medical issues surrounding the spread of Lyme disease in Canada. As with any new infectious disease threat, Canada needs to ensure that we are prepared to address the impact of Lyme disease on Canadians. CMA's policy on climate change and human health notes that changes in the range of some infectious disease vectors such as blacklegged ticks, are a possible consequence of climate change in Canada. Research has suggested that the tick vector of Lyme disease has been expanding into southeastern Canada which can lead to increased disease risk for those living in areas with tick populations.2 In this policy, CMA recommends that the federal government report diseases that emerge in relation to global climate change, and participate in field investigations, as with outbreaks of infectious diseases like Lyme disease, and develop and expand surveillance systems to include diseases caused by global climate change. The World Medical Association Declaration of Delhi on Health and Climate Change urges colleges and universities to develop locally appropriate continuing medical and public health education on the clinical signs, diagnosis and treatment of new diseases that are introduced into communities as a result of climate change. Diagnosis of Lyme disease can be difficult, as signs and symptoms can be non-specific and found in other conditions. 3 If Lyme disease is not recognized during the early stages, patients may suffer seriously debilitating disease, which may be more difficult to treat.4 Given the increasing incidence of Lyme disease in Canada, continuing education for health care and public health professionals and a national standard of care would improve identification, treatment and management of Lyme disease. Greater awareness of where blacklegged ticks are endemic in Canada, as well as information on the disease and prevention measures, can help Canadians protect themselves from infection. Recommendation The CMA supports a national Lyme disease strategy which includes the federal, provincial and territorial governments and the medical and patient communities. This strategy must address concerns around research, surveillance, diagnosis, treatment and management of the disease and public health prevention measures will advance our current knowledge base, and improve the care and treatment of those suffering from Lyme disease. Conclusion Once again, CMA is pleased to provide this brief to the Standing Committee on Health as part of its study on this important issue. Canada's physicians recognize the importance of monitoring all emerging infectious diseases in Canada. In addition, Canada's physicians recognize the importance of developing strategies to treat, manage, and prevent Lyme disease in Canada. 1 CDC provides estimate of Americans diagnosed with Lyme disease each year, media release August 19, 2013 Accessed at http://www.cdc.gov/media/releases/2013/p0819-lyme-disease.html on Feb 21, 2014. 2 Ogden, N., L. Lindsay, and P. Leighton. 2013. Predicting the rate of invasion of the agent of Lyme disease Borrelia burgdorferi. Journal of Applied Ecology. April, 2013. 50(2):510-518. 3 Mayo Clinic, accessed at http://www.mayoclinic.org/diseases-conditions/lyme-disease/basics/tests-diagnosis/con-20019701 on Feb 21, 2014. 4 Wormser GP, Dattwyler RJ, Shapiro ED, et al. The clinical assessment, treatment, and prevention of Lyme disease, human granulocytic anaplasmosis, and babesiosis: clinical practice guidelines by the Infectious Diseases Society of America. Clin Infect Dis 2006;43: 1089-134.
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Healthier Generations for a Prosperous Economy: Canadian Medical Association 2013-2014 pre-budget consultation submission to the Standing Committee on Finance

https://policybase.cma.ca/en/permalink/policy11028
Date
2013-11-06
Topics
Health systems, system funding and performance
  1 document  
Policy Type
Parliamentary submission
Date
2013-11-06
Topics
Health systems, system funding and performance
Text
The Canadian Medical Association (CMA) submission to the House of Commons Standing Committee on Finance discusses the important role of the federal government in ensuring Canada's health care system is cost-effective, accountable and accessible in order to support the country's economic advantage. As in other leading industrialized countries, the federal government has an important role in the effective allocation of health-related resources and the health outcomes of Canadians. The purpose of this brief is to provide decision-makers with recommendations on areas within existing federal mandates in which the Government of Canada can contribute to advancing Health Care Transformation and improving the health of Canadians and the health care system - an issue Canadians consistently rank as their top concern. These recommendations focus on federal investment in a seniors care strategy, the social determinants of health and health sector innovation and productivity. Summary of Recommendations Recommendation # 1 The CMA recommends that the Government of Canada collaborate with provincial, territorial and municipal governments to establish and invest in a pan-Canadian strategy for seniors care. Recommendation # 2 The CMA recommends that funding for health infrastructure qualify under the next Building Canada Plan to support the construction, renovation and retrofitting of long-term care facilities. Recommendation # 3 The CMA recommends that the Government of Canada invest $25 million per year over five years toward a pan-Canadian dementia strategy. Recommendation # 4 The CMA recommends that the Government of Canada establish a Canada-wide injury prevention strategy to identify successful programs and facilitate the sharing of knowledge and resources that will enable them to be disseminated nationwide. Recommendation # 5 In support of a pan-Canadian palliative care strategy, CMA recommends that the Government of Canada undertake research to identify successful programs and facilitate the sharing of knowledge and resources so that they can be replicated nationwide. Recommendation # 6 The CMA recommends that the Government of Canada establish health as a required consideration in the Cabinet decision-making process. Recommendation # 7 The CMA recommends that the federal government, in consultation with the provincial and territorial governments, health care providers, the life and health insurance industry and the public, establish a program of comprehensive prescription drug coverage to be administered through reimbursement of provincial/territorial and private prescription drug plans to ensure that all Canadians have access to medically necessary drug therapies. Recommendation #8 The CMA recommends that the Government of Canada establish and invest in a comprehensive strategy for improving the health of aboriginal peoples that involves a partnership among governments, non-governmental organizations, and First Nations, Métis and Inuit communities. Recommendation #9 The CMA recommends that the federal government rescind changes made to the Interim Federal Health Program until appropriate consultation and program review occur. Introduction As in other leading industrialized countries, the federal government has an important stewardship role in the effective allocation of health-related resources and health outcomes of Canadians; this is central to a productive workforce and a strong economy. This brief provides tangible, actionable recommendations on how the federal government can contribute to transforming Canada's health care system and improving the health of Canadians. The focus is on three critical areas for federal investment: a senior's care strategy; the social determinants of health and health equity; and health sector innovation and productivity. The recommendations in these areas are aligned with the CMA's Health Care Transformation initiative, the principles of which have been endorsed by 134 organizations, representing millions of Canadians.1 1. Contributing to a National Seniors Care Strategy Issue: Engagement and investment from the Government of Canada is essential to meet the increasing needs of Canada's aging population. It is expected that by 2036, a quarter of Canada's population will be over the age of 65. The number of people in the oldest age group - the age group most likely to experience serious health problems - is expected to increase at an even faster rate: Statistics Canada predicts that in 2036 there will be 2.6 times as many people 80 years old or over as there are today. 2 Already, patients age 65 or older account for nearly half of Canada's health care spending (45% in 2009).3 Canada's governments are rightly concerned about how to provide sustainable, high-quality health care to all Canadians as the country's population ages. The Canadian public shares this concern. In an Ipsos Reid public opinion survey done for CMA in July 2013, 83% of respondents said they were concerned about their health care in their retirement years. The CMA recommends the Government of Canada collaborate with provincial, territorial and municipal governments to establish and invest in a pan-Canadian strategy for seniors care. As elaborated below, the CMA recommends that this strategy include adequate investment in long-term care, home care, as well as palliative and end-of-life care to ensure access to the continuum of care. In addition, there should be investment in programs to address age-related health risks of particular concern, notably dementia and injuries due to falls. These areas, including recommendations for immediate investment by the Government of Canada are discussed in greater detail below. i) Ensure continuing care qualifies under the new Building Canada Plan4 Addressing the gap in long-term care residency options is a critical component of an integrated continuum of care strategy that provides for increased home and community supports. Communities across Canada face a common problem of a lack of resources to properly meet the housing and care needs of their seniors population. While the percentage of older Canadians who live in long-term care facilities is declining, as the aging of Canada's population accelerates, the demand for residential care will increase significantly. The current wait times in the long-term care sector are contributing to the high number of alternate level of care patients (ALC) who occupy acute care beds; a major issue facing Canada's health care system. At more than 3 million ALC days, the high number of ALC patients in hospitals is a problem experienced across the country.5 Based on the difference between the average cost of care in hospital versus long-term care, if ALC patients were moved from hospital to long-term care this would save the health care system about $2.3 billion a year. The Conference Board of Canada has produced a bed forecast tied to the growth of the population aged 75 and over and based on a decreased bed ratio demand to reflect the greater shift to community-based services and supportive housing options being advanced at the provincial level. Based on these assumptions, over the five-year period ending in 2018, an estimated 29,693 additional beds will be required, representing a pan-Canadian investment of $7.98 billion. It is evident that the existing and planned schedule of provincial projects will be unable to meet the estimated demand. Based on a review of provincial budgets, current capital investments already committed at the provincial level represent at least $861 million allocated over the next 10 years, representing approximately 3,200 new beds. The shortfall between our projected gap (29,693) and our calculation of provincial committed projects is 26,493 beds, at a cost of $7.1 billion. The CMA recommends funding for health infrastructure qualify under the next Building Canada Plan to support the construction, renovation and retrofitting of long-term care facilities. ii) Invest in a national dementia strategy About three quarters of a million Canadians currently live with Alzheimer's disease and other forms of dementia and cognitive impairment. Our knowledge of how to prevent dementia is limited. We do not fully understand its causes and there is no known cure. People with dementia may live for years with the condition and will eventually need round-the-clock care. Dementia currently costs Canada roughly $33 billion per year, both in direct health care expenses and in indirect costs such as lost earnings of the patient's caregivers. Given that the prevalence of dementia will unquestionably increase with the aging of Canada's population, the Alzheimer Society of Canada predicts that by 2040 the annual cost to the country will reach $293 billion. 6 The CMA recommends the Government of Canada invest $25 million per year over five years toward a pan-Canadian dementia strategy. This $25 million investment would be distributed as follows: - $10 million to support research on key aspects of dementia, including prevention, treatment options, and improving quality of life. - $10 million in increased support for informal caregivers. This includes both financial support and programs to relieve the stress experienced by caregivers such as education, skill-building and provision of respite care and other support services. - $5 million toward knowledge transfer, dissemination of best practices and education and training to support: - an integrated system of care facilitated by effective co-ordination and case management - a strengthened dementia workforce, which includes development of an adequate supply of specialists and improving diagnosis and treatment capabilities of all frontline health professionals. iii) Establish an injury prevention strategy for Canada Falls are the primary cause of injury among older Canadians; they account for 40% of admissions to nursing homes, 85% of injury-related hospitalizations and nearly 90% of all hip fractures. The Public Health Agency of Canada estimates that injuries among seniors cost Canada approximately $2 billion a year in direct health care costs.7 They are also a major contributor to alternate level of care patients in hospitals given the shortages in the home care, rehabilitation or long-term care sector. Falls can be prevented, and a growing number of regional programs across Canada are identifying and modifying risk factors for falls in their client population specific to seniors. The CMA recommends the Government of Canada establish a Canada-wide injury prevention strategy to identify successful programs and facilitate the sharing of knowledge and resources that will enable them to be disseminated nationwide. iv) Support the expansion of palliative care in Canada Experts believe that a palliative-care approach - when combined with treatment - leads to better outcomes by reducing the length of stay in hospitals and the number of deaths in acute care. In Canada, according to Canadian Institute for Health Information (CIHI), only 16% to 30% of patients have access to hospice palliative and end-of-life services.8 These services tend to be delivered in institutional settings on a tertiary or intensive model; and like falls prevention programs, they tend to be delivered locally. The CMA strongly supports an approach that integrates palliative care with chronic care in the community, earlier in the patient's condition. In support of a pan-Canadian palliative care strategy, CMA recommends that the Government of Canada undertake research to identify successful programs and facilitate the sharing of knowledge and resources so that they can be replicated nationwide. 2. Social Determinants of Health and Health Equity Issue: Addressing the social and economic determinants of health is critical to ensuring improved health outcomes for Canadians. Research suggests that 15% of population health is determined by biology and genetics, 10% by physical environments, 25% by the actions of the health care system, with 50% being determined by our social and economic environment.9 While a strong health care system is vital, changes to our health system alone will not be sufficient to improve health outcomes or reduce the disparities that currently exist in disease burden and health risks. Addressing the social and economic determinants of health has an important role in ensuring the sustainability of the health care system. It is estimated that one in five dollars spent on health care in Canada can be attributed to socio-economic disparities. These are the avoidable health costs linked to issues such as poverty, poor housing, health illiteracy, and unemployment among others. In 2012 health care dollars, these potentially avoided costs represented $40 billion in public spending. 10 Many of these social and economic determinants fall within the jurisdiction of the federal government such as tax policy. The section below elaborates on how the federal government can contribute to addressing the social determinants of health and reduce health inequity. i) Ensure healthy public policy Recognizing that the social and economic determinants of health have an important role in the health of Canadians, the policy decision-making process across departments must include a consideration of health. This can be accomplished by establishing health as a required consideration in the Cabinet decision-making process to ensure that the health promoting aspects of policies and programs are strengthened while potential negative impacts can be avoided or mitigated. In short it will ensure healthy public policy. Not only could health care costs be reduced, but ensuring healthy public policy has the potential to provide significant benefits for the Canadian economy. Healthier people lose fewer days of work and contribute to overall economic productivity.11 The CMA recommends the Government of Canada establish health as a required consideration in the Cabinet decision-making process. ii) Address access to prescription pharmaceuticals Universal access to prescription drugs is widely acknowledged as part of the "unfinished business" of Medicare in Canada. What exists today is a public-private mix of funding for prescription drugs. As of 2011, CIHI has estimated that 44% of prescription drug expenditures were public, 38% were paid for by private insurance and 18% were paid out of pocket.12 At present, Quebec is the only province to have universal prescription drug coverage for its residents, either through private insurance or a public plan, introduced in 1997. Of serious concern, there is evidence of wide variability in levels of drug coverage across Canada. According to Statistics Canada, almost one in 10 (7.6%) of households spent greater than 3% of after tax income on prescription drugs in 2008. Across provinces, this ranged from 4.6% in Alberta and 4.7% in Ontario to 13.3% in PEI.13 Further, 10% of the Canadian respondents to the Commonwealth Fund's 2010 International Health Policy Survey said they had either not filled a prescription or skipped doses because of cost issues.14 Research conducted by Ipsos Reid in 2012 showed that almost one in five households (18%) does not have supplementary insurance coverage that would cover prescription drugs.15 Statistics Canada's 2011 Survey of Household spending clearly shows the burden on seniors and low-income Canadians. Households headed by a person aged 65 and older spent 50% more, on average, on prescription drugs when compared with all households.16 Those in the lowest income groups are three times less likely to fill needed prescriptions.17 This has consequences not only for their health but for the health care system as well. Individuals who are unable to manage treatable conditions often end up hospitalized at a great cost to the health care system. The CMA recommends the federal government, in consultation with the provincial and territorial governments, health care providers, the life and health insurance industry and the public, establish a program of comprehensive prescription drug coverage to be administered through reimbursement of provincial/territorial and private prescription drug plans to ensure that all Canadians have access to medically necessary drug therapies. iii) Address health disparities experienced by First Nations, Métis and Inuit During a cross-country town hall consultation in Winnipeg on Feb. 4, 2013, the CMA heard about the adverse effects of inequalities and disparities and their impact on the health and wellness of First Nations, Métis and Inuit in Canada. As elaborated below, the inequalities and disparities in the social determinants of health can have a significant impact on the health of the population. First Nations, Métis and Inuit in Canada experience higher rates of chronic disease, addictions, mental illness and childhood abuse. The Health Council of Canada reports that the crude mortality rate for First Nations is higher and life expectancy lower than the Canadian average.18 In 2009, UNICEF reported that the infant mortality rate for First Nations on reserve was seven times higher than the national average.19 First Nations, Métis and Inuit peoples suffer much higher rates of infectious and chronic diseases. Tuberculosis rates are six times higher in First Nations populations and 17 times higher in Inuit communities as compared to the rest of Canada.20 Diabetes rates are higher among First Nations, Métis and Inuit peoples - 15.5% vs. just over 4.7% for the non-Aboriginal population,21 and First Nations, Métis and Inuit communities face higher rates of heart and circulatory diseases, respiratory diseases, and mental health disorders.22 Housing is a key area of concern for First Nations, Métis and Inuit. It is estimated that there will be a backlog of 130,000 housing units in First Nations, Métis and Inuit communities between 2010 and 2031, with 44% of existing units needing significant repairs and 18% requiring complete replacement.23 This inadequate housing can lead to serious health problems. The quality of housing stock directly affects health through exposure to lead, mold and other toxins that are harmful to health. Action is needed to develop an appropriate housing strategy for Canada's First Nations, Métis and Inuit that includes consideration of expiring social housing arrangements on and off reserve. Access to health care also plays a role in determining health. This can be a challenge for First Nations, Métis and Inuit. Many live in communities with limited access to health care services, sometimes having to travel hundreds of miles to access care.24 Additionally, there are jurisdictional challenges between federal and provincial delivery of health services. First Nations, Métis and Inuit living in Canada's urban centres also face significant barriers to accessing health care. Further, even when care is available it may not be culturally appropriate. Utilizing the Non-Insured Health Benefits (NIHB) program can be problematic for some First Nations. It is the CMA's understanding that funding constraints can lead to decreased quality of services, treatment delays or even in some cases denial of services. While the federal government has committed to continuing payments for the NIHB program the CMA is aware of concerns with current funding is inadequate to account for the growing native population, the addition of other beneficiaries, and the higher health care utilization as a result of the poor health status of many of Canada's First Nations.25 The CMA recommends the Government of Canada establish and invest in a comprehensive strategy for improving the health of First Nations, Metis and Inuit that involves a partnership among governments, non-governmental organizations, and Aboriginal communities. iv) Restore coverage under the Interim Federal Health Program The CMA, together with other medical, health and social organizations, have recommended that the changes to the Interim Federal Health Program be rescinded until appropriate consultation is undertaken. The purpose of this consultation would be to identify opportunities to achieve the Government of Canada's cost saving objectives while maintaining the scope of health care coverage for the program recipients. To date, this consultation has not occurred. One of the primary rationales for the program changes was an estimated cost savings of $20 million per annum in health care costs covered by the federal government. As evident by the recent statements of provincial health ministers following the Oct. 3 Federal/ Provincial/ Territorial Health Ministers Meeting, these projected cost savings are not likely to be realized. The CMA is concerned that the costs of the program have been downloaded on the provincial health systems, the charitable sector, and other public programs and organizations that provide the uninsured with benefits. Further, there has been significant confusion that has resulted in an increased administrative burden on the health sector following continual changes in this program. The CMA recommends the federal government rescind changes made to the Interim Federal Health Program until appropriate consultation and program review occur. 3. Improving Health Care Productivity and Innovation The CMA supports federal engagement to advance a health sector innovation and productivity framework, the purpose of which would be to support the introduction and expansion of innovation in health technology and processes of delivery to yield better health outcomes and productivity. As part of this framework, the CMA encourages federal focus on accountability measures and health information technology, as elaborated below. i) Accountability mechanism to improve productivity and quality care Despite the importance of the health care sector to Canada's economy and quality of life, it is generally agreed that in health care, Canada is no longer a strong performer relative to similar nations. For instance, OECD Health Data 2012 ranks Canada seventh highest of 34 member states in per capita health care spending, while Canada's health care system continues to rank below most of our comparator countries in terms of performance. 26 According to the latest forecast report by CIHI, public spending on health care was to surpass $200 billion in 2012. According to the OECD, if the Canadian health sector was to become as efficient as the most efficient countries, we could save 2.5% of GDP in public expenditure by 2017.27 The need to improve system performance will only intensify as demand for health care services increases and the system is pressed to effectively manage the rising number of Canadians with chronic diseases. While the provinces and territories have initiated steps to collaborate on the sharing of best practices in health care, federal leadership is necessary to address the overall performance of the health care system in Canada. This includes collaborating with the provinces and territories on the identification of pan-Canadian metrics that link health expenditures to nationally comparable health outcomes and system performance. CIHI does develop and collect data on numerous health indicators and has developed a performance measurement framework with an initial set of indicators coming out in the near future. However, there is currently no pan-Canadian process to set targets and monitor outcomes and system performance, the purpose of which is to demonstrate accountability to Canadians, improve health outcomes and health sector performance. The CMA recommends the federal government engage the provinces and territories in a collaborative process to identify pan-Canadian metrics and measurements that link health expenditures to nationally comparable health outcomes and system performance. ii) Maximizing the value of Electronic Medical Records The digitization of our health care system is central to quality, safety and the continuity of patient care for all Canadians. Canada continues to make progress in the adoption of health information technology (HIT). It is forecast that 70% of physicians will have an electronic medical record (EMR) system in place by 2014. Almost 90% of the most common radiology examinations and reports in Canada's acute care hospitals are now digital, up from approximately 38% only six years ago. However, there is still a long way to go in order to share information more effectively among caregivers, enable patient access to clinical information, and optimize the use of these systems. Areas where progress has stalled include: specialist EMR needs, applied research, local interoperability, decision support tools, and analytical tools. Stalled progress in these areas has meant Canadians are not benefiting at the point of care such as allowing comparisons between patients within a practice, comparing across practices, facilitating sentinel disease surveillance and a population health approach to primary care, and allowing patients to get consistent, more understandable information from their providers electronically through portals, emails and other e-routes. As we look to the future - and in particular the next three years - there's a need to reframe the discussion from building HIT infrastructure to deriving benefits. To this end, investment is required to ensure that the efforts to date are fully utilized and support improved patient outcomes. A committee comprised of CMA and Provincial Territorial Medical Associations representatives considered this issue and developed recommendation for targeted investment in HIT; these are outlined below. The CMA recommends the Government of Canada allocate $545 million as follows: * $200 million to support an additional 10,000 physicians not covered by current programs. * $200 million to support change management for EMR adoption. * $10 million to support data migration (i.e. clinics have to move to new products). * $100 million to support local interoperability solutions. * $5 million to support the Standards Collaborative. * $20 million to support research into HIT effectiveness. * $5 million to support solutions for the integration of clinical practice guidelines (CPGs). * $5 million for applied research on patient portal. This additional investment would benefit patients, providers and governments through improved patient care and improved performance of health care systems. In addition, the appropriate use of health information technology will contribute toward a more effective health care system supporting Canada's economic competitiveness. Conclusion Working with the provinces and territories and health care providers in delivering better health care to all Canadians through enhancing productivity and innovation is a policy challenge requiring federal leadership and engagement. The CMA believes the Government of Canada should act upon the recommendations included in this brief and collaborate with stakeholders to ultimately contribute to optimal health outcomes for Canadians, and health services that are delivered in a more efficient and cost-effective manner. 1 For the latest update on the Principles to Guide Health Care Transformation, visit: www.cma.ca/cma-media-releases 2 Statistics Canada. Population projections for Canada, provinces and territories 2009 to 2036. June 2010. 91-520-X 3 CIHI. Health Care in Canada, 2011, 1. 4 CMA. The need for health infrastructure. Submission to the Minister of Infrastructure, March 1, 2013. www.cma.ca/multimedia/CMA/Content_Images/Inside_cma/Submissions/2013/Health-Infrastructure_en.pdf . 5 CIHI. 2012. Health Care in Canada, 2012: A focus on wait times. 6 Alzheimer Society of Canada. A New Way of Looking at Dementia in Canada. Based on a study conducted by RiskAnalytica. C. 2010 7 PHAC. The Safe Living Guide - A guide to home safety for seniors. 2005. Revised 2011. 8 CIHI. 2013. End-of-life hospital care for cancer patients. 9 Keon, Wilbert J. & Lucie Pépin (2008) Population Health Policy: Issues and Options. Available at: www.parl.gc.ca/Content/SEN/Committee/392/soci/rep/rep10apr08-e.pdf 10 Public Health Agency of Canada (2004) Reducing Health Disparities-Roles of the Health Sector: Discussion Paper. Available at: publications.gc.ca/collections/Collection/HP5-4-2005E.pdf 11 Munro, Daniel (2008) "Healthy People, Healthy Performance, Healthy Profits: The Case for Business Action on the Socio-Economic Determinants of Health." The Conference Board of Canada. Available at: www.conferenceboard.ca/Libraries/NETWORK_PUBLIC/dec2008_report_healthypeople.sflb 12 Canadian Institute for Health Information. Drug expenditure in Canada, 1985 to 2011. Ottawa. 13 Statistics Canada. CANSIM Table 109-5012 - Household spending on prescription drugs as a percentage of after-tax income, Canada and provinces. www5.statcan.gc.ca/cansim/pick-choisir;jsessionid=4FF8F1A5D604C73873F71D9FDE6141C5. Accessed 12/10/12. 14 Commonwealth Fund. 2010 Commonwealth Fund International Health Policy Survey. www.commonwealthfund.org/~/media/Files/Surveys/2010/IHP%202010%20Toplines.pdf Accessed 12/10/12. 15 Ipsos Reid. Supplementary health benefits research. www.cma.ca/multimedia/CMA/Content_Images/Inside_cma/Media_Release/2012/ CMA-Benefits-Research-Survey_en.pdf. Accessed 12/10/12. 16 Statistics Canada. CANSIM Table 203-0026. Accessed 06/18/13. 17 Mikkonen, Juha & Dennis Raphael (2010) Social determinants of Health: The Canadian Facts. Available at: http://www.thecanadianfacts.org/The_Canadian_Facts.pdf 18 Health Council of Canada, "The Health Status of Canada's First Nations, Métis And Inuit Peoples", 2005, online: http://healthcouncilcanada.ca.c9.previewyoursite.com/docs/papers/2005/BkgrdHealthyCdnsENG.pdf Accessed October 20, 2010. 19 National Collaborating Centre for Aboriginal Health & UNICEF Canada "Leaving no child behind - national spotlight on health gap for Aboriginal children in Canada" 2009, online: www.nccah-ccnsa.ca/s_140.asp Accessed November 20, 2009 20 Health Council, supra note 34. 21 NWAC, 2009, supra note 39. 22 Canada, Health Canada, First Nations, Inuit and Aboriginal Health, (Ottawa: Health Canada), online: www.hc-sc.gc.ca/fniah-spnia/pubs/index-eng.php Accessed November 4, 2009 23 Assembly of First Nations (2013) Taking Action Together on Shared Priorities Towards a Fair and Prosperous Future: AFN Submission to the Council of the Federation. Available at: www.afn.ca/uploads/files/13-07-23_afn_submission_to_cof_2013.pdf 24 Bowen, S. Access to Health Services for Underserved Populations. 25 Assembly of First Nations (2011) Structural Transformation & Critical Investments in First Nations on the Path to Shared Prosperity. Pre-Budget Submission, 2011. Available at: www.afn.ca/uploads/files/2011-pre-budget-submission.pdf 26 OECD Health Data 2012 - www.oecd.org/health/healthgrowthinhealthspendinggrindstoahalt.htm 27 OECD, Economic Survey of Canada 2012. www.oecd.org/eco/surveys/economicsurveyofcanada2012.htm
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Submission on Bill C-462 Disability Tax Credit Promoters Restrictions Act. Submitted to the House of Commons Standing Committee on Finance

https://policybase.cma.ca/en/permalink/policy14026
Date
2013-05-22
Topics
Health systems, system funding and performance
Physician practice/ compensation/ forms
  1 document  
Policy Type
Parliamentary submission
Date
2013-05-22
Topics
Health systems, system funding and performance
Physician practice/ compensation/ forms
Text
The Canadian Medical Association (CMA) is pleased to present this brief to the House of Commons Standing Committee on Finance regarding Bill C-462 Disability Tax Credit Promoters Restrictions Act. The Canadian Medical Association represents 78,000 physicians in Canada; its mission is to serve and unite the physicians of Canada and to be the national advocate, in partnership with the people of Canada, for the highest standards of health and health care. The CMA is pleased that the House of Commons has made Bill C-462 a priority. This bill is an important step toward addressing the unintended consequences that have emerged from the Disability Tax Credit since 2005. Part 2: Issues to be addressed In 2005, the Disability Tax Credit was expanded to allow individuals to back-file for up to 10 years. While this was a welcome tax measure for individuals with disabilities, the CMA has been urging the Canada Revenue Agency to address the numerous unintended consequences that have emerged. Central among these has been the emergence of a “cottage industry” of third-party companies engaged in a number of over-reaching tactics. The practices of these companies have included aggressive promotional activities to seek and encourage individuals to file the Disability Tax Credit. The primary driver behind these tactics is profit; some companies are charging fees of up to 40 per cent of an individual’s refund when the tax credit is approved. Further to targeting a vulnerable population, these activities have yielded an increase in the quantity of Disability Tax Credit forms in physician offices and contributed to red tape in the health sector. In some cases, third parties have placed physicians in an adversarial position with their patients. We are pleased that this bill attempts to address the concerns we have raised. The CMA supports Bill C-462 as a necessary measure to address the issues that have emerged since the changes to the Disability Tax Credit in 2005. However, to avoid additional unintended consequences, the CMA recommends that the Finance Committee address three issues prior to advancing Bill C-462. First, as currently written, Bill C-462 proposes to apply the same requirements to physicians as to third-party companies if physicians apply a fee for form completion, a typical practice for uninsured physician services. Such fees are subject to guidelines and oversight by provincial and territorial medical regulatory colleges (see Appendix 1: CMA Policy on Third Party Forms: The Physician Role). The CMA recommends that the Finance Committee: 2 Amend the definition of “promoters” under section 2 to exclude “a health care practitioner duly licensed under the applicable regulatory authority who provides health care and treatment.” If the committee imports the term “person” from the Income Tax Act, then the applicable section of Bill C-462 should be amended to specify that, for the purposes of the act, “Person does not include a health care practitioner duly licensed under the applicable regulatory authority who provides health care and treatment.” Second, the CMA is concerned that one of the reasons individuals may be engaging the services of third-party companies is a lack of awareness of the purpose and benefits of the Disability Tax Credit. Additional efforts are required to ensure that the Disability Tax Credit form (Form T2201) be more informative and user-friendly for patients. Form T2201 should explain more clearly to patients the reason behind the tax credit, and explicitly indicate there is no need to use third-party companies to submit the claim to the CRA. The CMA recommends that the Finance Committee: Recommend that the Canada Revenue Agency undertake additional efforts to ensure that the Disability Tax Credit form is more informative, accessible and user-friendly for patients. Finally, the CMA recommends that a privacy assessment be undertaken before the bill moves forward in the legislative process. It appears that, as written, Bill C-462 would authorize the inter-departmental sharing of personal information. The CMA raises this issue for consideration because protecting the privacy of patient information is a key duty of a physician under the CMA Code of Ethics. Part 3: Closing The CMA encourages the Finance Committee to address these issues to ensure that Bill C- 462 resolves existing problems with the Disability Tax Credit while not introducing new ones. The CMA appreciates the opportunity to provide input to the Finance Committee’s study of this bill and, with the amendments outlined herein, supports its passage.
3 Summary of Recommendations Recommendation 1 The definition of “promoters” under section 2 of Bill C-462 should be amended to exclude “a health care practitioner duly licensed under the applicable regulatory authority who provides health care and treatment.” Recommendation 2 If the Committee imports the definition of “persons” from the Income Tax Act, the applicable section of Bill C-462 should be amended to specify that, for the purposes of the act, “Person does not include a health care practitioner duly licensed under the applicable regulatory authority who provides health care and treatment.” Recommendation 3 The Canada Revenue Agency should undertake additional efforts to ensure that the Disability Tax Credit form is informative, accessible and user-friendly. Recommendation 4 Prior to advancing in the legislative process, Bill C-462 should undergo a privacy assessment.
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CMA Submission: The need for health infrastructure in Canada

https://policybase.cma.ca/en/permalink/policy10705
Date
2013-03-18
Topics
Health systems, system funding and performance
  2 documents  
Policy Type
Parliamentary submission
Date
2013-03-18
Topics
Health systems, system funding and performance
Text
In its Economic Action Plan 2011(Budget 2011), the Government of Canada committed to consult stakeholders on the next long-term plan for public infrastructure which would extend beyond the expiry of the current framework, the Building Canada Plan, on March 31, 2014. The CMA’s 2012-13 pre-budget brief recommends that the federal government ensure health infrastructure is eligible for funding as part of the next long-term plan for public infrastructure. The purpose of which is to address a particular health infrastructure deficit that is preventing the optimization of health care resources and exacerbating wait times and ensure that Canadian communities are able to meet the current and emerging care needs of their older seniors. The CMA has prepared this brief to provide further details on the scope of the proposed infrastructure funding for the health sector, its rationale and economic benefit, and how it could be applied. 2. Overview of proposal The CMA recommends that the federal government ensure health sector infrastructure for long-term care facilities is eligible for funding under the next long-term infrastructure program. This funding should be applicable both for new capital projects and for renovating/retrofitting existing facilities. This recommendation, and the recognition of the need for additional capacity in the long-term care sector, is part of a pan-Canadian approach to redirect alternate level of care patients from hospitals to homes, communities and long-term care facilities, where they can receive more appropriate care at a lower cost. It costs $842 per day for a hospital bed versus $126 per day for a long-term care bed. If ALC patients were moved to more appropriate care settings, in this case, from hospital to long-term care, this would save the health care system about $1.4 billion a year. For the purposes of this recommendation, long-term care facilities include long-term care residential homes, assisted living units and other types of innovative residential models that ensure residents are in the setting most appropriate to their needs. The long-term care sector is facing significant change due to increasing numbers of older seniors and their increasingly complex care needs. These pressures not only relate to the construction of new facilities but apply to the need to maintain existing facilities, including retrofitting to meet higher regulatory requirements, as well as struggling to meet higher care needs of their increasingly elderly population. The CMA’s recommendation to ensure that long-term care infrastructure qualify under the next long-term infrastructure plan is one component of the association’s Health Care Transformation initiative and would support a pan-Canadian approach for continuing care, which would integrate home care and facility-based long-term, respite and palliative care services fully within the health care system. 3. Rationale The rationale behind the recommendation for health infrastructure to qualify for the next long-term infrastructure plan is based primarily on the care needs of Canada’s growing seniors’ population and its impact on Canada’s health care system. Communities across Canada face a common problem of a lack of resources to properly meet the housing and care needs of their seniors population. Demographic trends indicate this problem will only intensify. However, as demonstrated below, investing in seniors can generate substantial direct and indirect economic benefits. Meeting the needs of Canada’s growing seniors population and their changing care needs While all advanced countries are expected to age over the coming decades, the Canadian population is projected to age more rapidly than that of most other OECD countries, according to a recent report from Finance Canada. Statistics Canada reports the number of seniors (65+) in Canada is projected to increase from 4.2 million in 2005 to 9.8 million in 2036, with their share of the total population increasing from 13.2 per cent to 24.5 per cent. The number and proportion of older seniors – those 75 and older – are expected to increase significantly as well. Ontario’s population of people aged 75 and up is expected to grow by almost 30 per cent between 2012 and 2021. According to Statistics Canada’s medium-growth population projection scenario, the population aged 80 years or over will increase 2.6 times by 2036 – to 3.3 million persons. While the rate of residency in long-term care facilities among seniors has been declining, as the aging of Canada’s population accelerates, the demand for residential care will nonetheless increase significantly over the near term due to higher numbers of elderly seniors. Not only is the size of the elderly population increasing, but their health needs are changing too, particularly among those requiring residential care. Long-term care residents are older today than in previous years and have more complex health needs than ever before. A Canadian Institute for Health Information (CIHI) comparison of home care clients and seniors who are living in residential care found that “seniors in residential care were more likely to require extensive assistance with activities of daily living (ADLs), such as bathing and toileting (74 per cent versus 18 per cent). They were also more likely to have moderate to severe cognitive impairment (60 per cent versus 14 per cent). The number of residents with dementia is expected to increase. In 2011, 747,000 Canadians were living with cognitive impairment, including dementia – that’s 14.9 per cent of Canadians 65 and older. By 2031, this figure will increase to 1.4 million. At the request of the House of Commons Finance Committee, the CMA submitted a national dementia strategy. This proposal to fund long-term care facilities supports such a strategy. Many existing residential facilities are poorly equipped to meet the care needs of their residents, which are more complex now than when these facilities were originally built. For example, many facilities do not meet current building safety standards and the limited provincial and municipal funding available is usually insufficient to bring them up to code. Also, there is a lack of units with shared space to better support residents with dementia, as well as a shortage of appropriate units to care for residents who are disabled or obese. Renovations are also required to make better use of long-term care beds for other purposes such as providing short-stay respite care or transitional care. According to the Ontario Association of Community Care Access Centres, the lack of physical facilities necessary for care was the reason most often given by homes for declining to admit a long-term care wait-list client. Opportunity to improve health care efficiency and reallocate existing program spending We recognize that addressing the current gap in long-term care residency options is only one strategy to improve the effectiveness of Canada’s health care system. However, we believe it is a critical component of an integrated continuum of care strategy that provides for increased home and community supports. Improving options for seniors will have a positive cascading effect on many other elements of the system. Not only will seniors reside in more appropriate and safer settings but acute care resources will be better used. Consider that about 45 per cent of provincial and territorial governments’ health care spending in 2009 went toward those 65 years and older, while this group constituted only 14 per cent of the population. A major issue facing Canada’s health care system is the high number of alternate level of care patients (ALC) who occupy acute care beds. ALC patients are those who have completed the acute care phase of their treatment but remain in an acute care bed or who are admitted into a hospital bed due to the lack of a more appropriate care setting. In most cases, these people would be better served living in their own home with the appropriate level of supports or in a long-term care residence. The high number of ALC patients in hospitals is a problem experienced across the country. The total number of hospital bed days for ALC patients in 2007-2008 (latest figures) was 1.7 million. Furthermore, the lack of options for ALC patients also contributes to a high percentage of these patients being readmitted to hospital within 30 days of discharge (see Appendix A). According to CIHI figures, 85 per cent of ALC patients were older than age 65, with almost half waiting for placement in long-term care. A high percentage of ALC patients suffer from dementia. It costs $842 per day for a hospital bed versus $126 per day for a long-term care bed. If ALC patients were moved to more appropriate care settings, in this case, from hospital to long-term care, this would save the health care system about $1.4 billion a year. The presence of ALC patients in hospitals also lead to longer surgical wait times and longer delays in the emergency department as acute care beds remain unavailable. In fact, the Wait Time Alliance – an alliance of 14 national medical organizations and specialties – has said “the most important action to improve timely access to specialty care for Canadians is by addressing the ALC issue.” Available wait-time data (See Appendix B) for long-term care show that wait times to access a long-term care bed can often be measured in, not months or days, but years. Data from Ontario for 2004 to 2008 found that less than 50 per cent of seniors with high or very high needs were placed in a long-term care facility within a year of being put on a wait list. The average wait time for placement in Quebec is 13 months (ranging between five months and four years). The most recent report by Ontario’s Auditor General found that 15 per cent of patients on the provincial wait list for long-term care passed away while waiting for placement. The wait to access residential care can vary immensely depending on where one resides. Often the wait is longer for residents in small, rural and northern communities. Sometimes the only route to securing a placement is for the resident to move to a facility in another community. Investment required According to Statistics Canada, there are 261,945 long-term care beds in operation in Canada (latest figures, 2009/10.) How many residential beds will be required in the future to meet the growing number of elderly seniors? The Conference Board of Canada has produced a bed forecast tied to the growth of the population aged 75 and over and based on a decreased bed ratio demand of 0.59 per cent per year to reflect the greater shift to community-based services and supportive housing options being advanced at the provincial level. This bed ratio demand is described by the Canadian Healthcare Association as representing a modest shift from the current reliance on long-term care to community services. Based on these assumptions, it has been estimated that Canada will require an average of 10,535 new beds per year over the next 35 years, for a total of 637,721 beds by 2047. Demand would vary over the 35-year period, peaking between 2022 and 2040 (See Appendix C). The five-year projection for beds is as follows: Table 1: Projected shortage in long-term care beds, 2014 to 2019 [SEE PDF FOR CORRECT DISPLAY OF TABLE] Year Number of additional beds required 2014 4,331 2015 4,715 2016 6,028 2017 6,604 2018 8,015 Projected 5-year shortage 29,693 As shown, there is a projected shortage of 29,693 beds over the next five years. For the purposes of longer-term planning, the gap in beds required for the following five-year period (2019-2023) is as follows: Table 2: Projected shortage in long-term care beds, 2019 to 2023 [SEE PDF FOR CORRECT DISPLAY OF TABLE] Year Number of additional beds required 2019 8,656 2020 8,910 2021 10,316 2022 14,888 2023 14,151 As previously outlined, the rising gap in bed numbers is affected by the increased numbers in people aged 75 and older anticipated over the next 35 years. The estimated cost to construct 10,535 beds (the average number of beds required to be built per year from 2013 to 2047) is $2.8 billion, based on a cost estimate of $269,000 per bed. This figure could include both public and private spending. The purpose of this bed projection is to provide a sense of the immense challenge Canada faces in addressing the needs of a vulnerable segment of its older seniors population. It is important to note that this forecast does not include the significant investments required to renovate and retrofit the existing stock of residential facilities, not only to meet the current standards but to effectively respond to the complex care needs of residents requiring long-term care today and in the future. Similarly, the potential facility capacity expansions through retrofit or renovation are not included. Moreover, innovative capital investment in residential facilities can provide opportunities for their greater use by other members of the community. They can, for example, provide short-stay respite to support families and convalescent care programs such as those found in the United Kingdom. We also recognize that supportive housing and healthy aging programming are important components of an integrated solution to the ALC issue and to ensuring seniors reside in the most appropriate place. 4. How the funding would work Health infrastructure could qualify under a communities component of the next long-term infrastructure plan where this federal funding can be leveraged with provincial and and / or municipal investment (e.g. 1/3 federal component matched by + 2/3 provincial and / or municipal). This funding allocation could also include the use of public-private partnership models. Investing in Canada’s Continuing Care Sector Provides a Wide Range of Economic Benefits Construction of new residential care models and renovating/retrofitting existing facilities will provide significant economic opportunities for many communities across Canada (See Appendix E for detailed figures). Based on Conference Board of Canada estimates, the construction and maintenance of 10,535 long-term care beds (the average number of new beds needed per year from 2013 to 2047) will yield direct economic benefits on an annual basis that include $1.23 billion contribution to GDP and 14,141 high value jobs during the capital investment phase and $637 million contribution to GDP and 11,604 high value jobs during the facility operation phase (based on an average annual capital investment); and close the significant gap between the projected long-term care bed shortages and current planned investment. When indirect economic contributions are included, the total estimated annual contribution to Canada’s GDP reaches almost $3 billion, yielding 37,528 new jobs (construction, care providers and other sectors). Details on these economic benefits are provided in Appendix F, but a summary is presented below: Table 3: Average annual total economic contribution of new residential care facilities [SEE PDF FOR CORRECT DISPLAY OF TABLE] (10, 535 new beds per year at market prices) GDP (in 2013 $millions) Number of jobs created Average direct contribution to GDP of investing in new facilities (construction) $1,225.4 14,141 Average direct contribution to GDP of operating the new facilities $637.0 11,604 Average indirect contribution to GDP of investing in new facilities (construction) $969.9 10,115 Average indirect contribution to GDP of operating the new facilities $135.4 1,667 TOTAL (both direct and indirect) $2,968 37,528 For every 100 jobs created in the construction of long-term care facilities, an additional 72 jobs would be created in other sectors, while for every 100 jobs created in the long-term care sector, 14 jobs would be created in other sectors. The numbers provided above reflect the annual average contribution. On a time specific level, covering the five-year period between 2014 and 2018, an estimated 167,840 jobs would be created, based on the construction of 29,693 new beds. Another important economic benefit is the return in government revenues. The increase in construction and operating spending per average year will provide over $425 million in federal government revenues and over $370 million in provincial revenues (See Appendix G). As previously identified, an improved stock of long-term care beds will provide many other economic spinoffs, including savings in health care costs that can be reallocated to better meet Canadians’ health care needs and to provide greater support for families in their role as caregivers. Without adequate provision of long-term care resources, Canada’s labour force may experience a productivity drag through increased leaves and absenteeism to care for elderly relatives. 5. Conclusion The aging of our population touches all Canadians – from seniors who need the services to families who serve as caregivers and/or contribute financially to the care of aging relatives. Recent data show that 32 per cent of caregivers who provide more than 21 hours of care per week report distress in their role – four times the proportion of distressed caregivers who provide less than 10 hours of informal care per week. The federal government has a long history of allocating capital investment in the health sector. Previous examples include the Hospitals and Construction Grants Program in 1948, the Health Resources Fund established in 1966 and, more recently, the funding of capital projects at research hospitals under the Canada Foundation for Innovation Leading Edge and New Initiatives Funds in 2012. All communities across Canada are strongly affected by the social and health care needs of their growing senior and long-term care populations (see Appendix H for a sample of recent news stories.) Federal capital investment will help narrow the significant gap between the projected long-term care bed shortages and current planned investment in the area of residential care facilities. Further, it would have a cascading effect leading to a more effective and efficient Canadian health care system. Recommendation The Canadian Medical Association recommends that the federal government allocate $2.3 billion over a five-year period in the next long-term infrastructure plan for the construction, renovation and retrofitting of long-term care facilities. Long-term care facilities include long-term care residential homes, assisted living units and other types of innovative residential models that ensure residents are in the most care setting most appropriate to their needs. This funding could be delivered as part of the communities component of the next long-term infrastructure plan. 1 Department of Finance Canada. Economic and fiscal implications of Canada's aging population. Ottawa, 2012. 2 Office of the Auditor General of Ontario. 2012 annual report. 2012. http://www.auditor.on.ca/en/reports_en/en12/2012ar_en.pdf. Accessed 01/30/13. 3 Statistics Canada. Population projections for Canada, provinces and territories 2009 to 2036. June 2010. 91-520-X 4 Alzheimer's Society Ontario. Facts about dementia. http://www.alzheimer.ca/en/on/About-dementia/Dementias/What-is-dementia/Facts-about-dementia. Accessed 01/30/13. 5 Canadian Medical Association. Toward a Dementia Strategy for Canada. Ottawa, 2013. http://www.cma.ca/submissions-to-government Accessed 01/30/13. 6 Ontario Association of Non-Profit Homes and Services for Seniors. Proposals for the Ontario Budget. Fiscal Year 2012-13. March 2012. 7 David Walker. Caring for our aging population and addressing alternate level of care. Report Submitted to the Minister of Health and Long-Term Care. June 30, 2011. Toronto. 8 Long Term Care Innovation Expert Panel. Why not now? A bold, five-year strategy for innovating Ontario's system of care for older adults. March 2012. http://www.oltca.com/axiom/DailyNews/2012/June/LTCIEPFullREport_web_jun6.pdf. Accessed 01/30/13. 9 For an example of an integrated continuum of post-acute care model see CARP, One Patient: CARP's Care Continuum. http://www.carp.ca/wp-content/uploads/2013/01/One-Patient-Brief-Updated-Oct-18.pdf. Accessed 01/30/13. 10 Canadian Life and Health Insurance Association. Improving the accessibility, quality and sustainability of long-term care in Canada. CLHIA Report on Long-Term Care Policy. June 2012. 11 Wait Time Alliance. Time out! Report card on wait times in Canada. 2011. http://www.waittimealliance.ca/media/2011reportcard/WTA2011-reportcard_e.pdf. Accessed 01/30/13. 12 Correspondence with officials from Bruyère Continuing Care in Ottawa. January 2013. 13 Canadian Institute for Health Information. Health care in Canada, 2011 2011. . 14 Rapport du Vérificateur général du Québec à l'Assemblée nationale pour l'année 2012-2013. 15 Office of the Auditor General of Ontario. 2012 annual report. 2012. 16 The .59 per cent decrease in bed ratio is presented as Scenario 2 in Lazurko, M. and Hearn, B. Canadian Continuing Care Scenarios 1999-2041, KPMG Final Project Report to FPT Advisory Committee on Health Services, Ottawa. 2000. Presented in Canadian Healthcare Association, New Directions for Facility-Based Long-Term Care. 2009. http://www.cha.ca/wp-content/uploads/2012/11/CHA_LTC_9-22-09_eng.pdf. Accessed 01/30/13. 17 Canadian Institute for Health Information, Health Care in Canada, 2011.
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