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CMA Presentation to the House of Commons Standing Committee on Health : Statutory review of the 10-Year Plan to Strengthen Health Care

https://policybase.cma.ca/en/permalink/policy9135
Last Reviewed
2020-02-29
Date
2008-05-27
Topics
Health systems, system funding and performance
  1 document  
Policy Type
Parliamentary submission
Last Reviewed
2020-02-29
Date
2008-05-27
Topics
Health systems, system funding and performance
Text
The CMA appreciates the opportunity to present to the Standing Committee on Health today. My presentation will focus on: 1. Wait Times 2. Health Human Resources; and 3. Patient Focused Care Wait Times In regard to the issue of wait times, I would echo the two main points of my colleagues from the Wait Time Alliance: * First, while progress is being made on wait times, that progress is limited and not consistent across the country; and second, * Health workforce and infrastructure capacity shortages remain the primary barriers to effectively addressing wait times. Wait times don't only exact a heavy human toll - they also carry severe economic costs. A CMA-commissioned report released earlier this year found that the economic cost of having patients wait longer than medically recommended was $14.8 billion in 2007. That stunning total was for just four of the five procedures identified as priorities in the 10-year plan - joint replacement, diagnostic imagining and cataract and bypass surgery - and it was only for one year. Over a million Canadians continue to suffer on wait lists because of deficiencies in our system. This is unacceptable. We need to "break the back" of wait times for the sake of our patients and for the economic health of Canada. This will require: * More federal leadership, not less; * A revolutionary change in the "focus" of our health care system; and * Substantial investments. Health Human Resources The 10-Year Plan to Strengthen Health Care acknowledged the need to increase the supply of health care professionals in Canada. However, not enough progress has been made. Canada is 26,000 doctors short of the average of developed countries, and we now rank a lowly 24th among OECD countries in doctors per population. A poll released today by the CMA found that Canada's doctor shortage ranked second only to the economy as a top public issue. In this same poll, 91% of Canadians say having a plan to address the doctor shortage will influence their vote in the next federal election. Federal political parties who ignore this issue in the next election could pay a price at the polls. In the 10-year plan to strengthen health care, $1-billion was set aside for the last four years (2010-2014) of the agreement. We can't afford to wait that long. This funding should be immediately fast-tracked to focus on the three priority areas in the CMA's "More Doctors. More Care" Campaign: * One, expanding health professional education and training capacity; * Two, ensuring self sufficiency in health human resources by investing in long-term health human resource planning; and. * Three, investing in health information technology to make our health care system more responsive and efficient. In terms of IT, we should be ashamed that we only spend a third of the OECD average on IT in our hospitals. Canada's poor record in avoidable adverse effects is, in part, due to our system's inability to share available information in a timely manner. Patient Focused Care Many countries have systems that provide universal care, have no wait lists and cost the same or less to run as our system does. Wait lists can and must be eliminated in Canada. The momentum to do just that depends simply on making the system work for patients, not on forcing patients to work the system. We must reposition patients to the centre of our health-care system, which requires that we move beyond block funding or global budgets for health institutions. We need a system where funds follow the patient - patient-focused funding. Block funding blocks access. Patient-focused funding will increase productivity, lead to greater efficiencies and reduce wait lists. A patient will become a value to an institution, not a cost. Canada remains the last country in the developed world to fund hospitals with block funding. In England, patient-focused funding helped eliminate wait lists in less than four years. Conclusion So, my question to the Committee is why do we wait? Why do we continue to keep patients on wait lists when research shows it costs a lot less to cut wait times then it does to have them? Why do we not make the necessary reforms and investments to provide Canadians with timely access to quality care? Thank you.
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Improving access to world-class health care by accelerating health information technology investments: CMA's 2009 pre-budget brief to the Standing Committee on Finance

https://policybase.cma.ca/en/permalink/policy9399
Last Reviewed
2020-02-29
Date
2008-08-15
Topics
Health human resources
Health systems, system funding and performance
  1 document  
Policy Type
Parliamentary submission
Last Reviewed
2020-02-29
Date
2008-08-15
Topics
Health human resources
Health systems, system funding and performance
Text
By many measures Canada's health care system is underperforming. One symptom of this weak performance are exceedingly long wait times that have an impact on care and cost patients, the system and governments money1. There are a number of responses to this poor performance including increasing the supply of health human resources2. Another response is to maximize the resources we have on the front lines and work smarter through information technology. This productivity approach is aligned with the assumptions set out in the federal government's Advantage Canada strategy. This strategy involves principally a 'knowledge advantage' and an 'infrastructure advantage'. Consequently, the Canadian Medical Association (CMA) is recommending that the federal government make a strategic "strings attached" $570-million investment to create an interconnected health information technology network3 through a Health Information System Transition Fund and time-limited accelerated IT tax incentives. This investment aims to integrate all Canadian patient health care records, an effort that will take time. However, there are foundations upon which to build thanks to federal government investments - most recently in providing $400 million for wait-time related health information systems. But for these investments to bear fruit further connectivity and integration is vital. In other words, our current system is like having an ATM card that only works at the bank's head office. We believe that additional investments must concentrate on connecting patient records in physician offices with hospitals and medical laboratories. Physicians also believe in accountability, and suggest investments should not be made unless the clinical community confirms a high level of system integration. The CMA recommends that the federal government should invest $570 million over five years in an interconnected pan-Canadian health information system that includes: => A $225 million, 5-year Health Information System Transition Fund aimed at change management training and support to convert 26-million patient records in 36,000 physician offices and community care facilities into interoperable electronic records across Canada. => $305 million for a 3-year time-limited and accelerated Capital Cost Allowance for software and hardware costs related to health information technologies that connect patient records from physician offices to laboratories and hospitals. => $10 million to sponsor a cross-country education campaign to inform Canadians of the health and system benefits of e-health connectivityi. => $2 million annually for Canada Research Chairs to promote and demonstrate the value of interconnectivity in health information between the faculties of Medicine, Management and Engineering. The federal government must also encourage provinces to increase their support of these initiatives and work to reduce the barriers to health information system interfacing, by ensuring patient record systems use similar codes in labs, hospitals and physician offices. Federal government guidance, encouragement and cooperation with the provinces is integral to making these connectivity investments a success. It is time that the federal government helped finish the job of health information system connectivity. A health information network will improve patient outcomes, system efficiency, increase accountability and save billions of dollars. 1. Why advance e-health interconnectivity now? Our health system e-performance is poor Both national and international studies confirm that Canada lags behind nearly every major industrial country when it comes to health information technology (Figure 8). The impact of this underinvestment is longer wait times, poorer quality, and a severe lack of financial accountability especially of federal dollars. Investments in connectivity are needed now because Canada's health care system compares poorly in both value and efficiency compared to other countries. The Conference Board of Canadaii, the OECDiii, the World Health Organizationiv, the Commonwealth Fundv, and the Frontier Centre for Public Policy all rate Canada's health care system poorly in terms of "value for money" as well as efficiency. Benchmarking health information connectivity-where we stand, where we must go According to the 2007 National Physician Survey, just 30% of physicians have an electronic interface with a medical laboratory or diagnostic imaging facility, while fewer than 5% have such an interface with a pharmacy/pharmacistvi. Imagine if just 30% of Canadian banks had ATMs throughout the country? This is a difference of not only convenience, but quality and cost savings. In comparison, Denmark and New Zealand have near 100% use of electronic medical records (EMRs) in ambulatory care. According to Dr. Allan Brookstonevii an EMR expert, "If most physicians in a health region or geographic area implemented an EMR system, the incentive for a local hospital or region to connect to those physicians would be significantly enhanced". In an emergency situation right now in Canada it is easier to access critical financial information than critical health information. This reality is not a matter of technology but the lack of will to put it in place. 2. Why the federal government should be interested in e-health interconnectivity. -Health information technology connectivity yields returns on investment: 8:1 International strategy and technology consulting firm Booz Allen Hamilton found that viii the benefits of an interconnected Electronic Health Record (EHR) in Canada could provide annual system-wide savings of $6.1 billion. These savings would come from reduced duplicate testing, transcription savings, fewer chart pulls and filing time, reductions in office supplies and reduced expenditures due to fewer adverse drug reactions. The study went on to state that the benefits to health care outcomes would equal or surpass these annual savings, thus providing a possible combined annual savings of $12.2 billion. In addition, a comprehensive literature reviewix comparing health IT productivity gains to similar industries in the U.S. concludes that effective EMR implementation and networking could eventually save more than $81 billion annually by improving health care efficiency and safety. Similarly, health information technology-enabled prevention and management of chronic disease could eventually double those savings while increasing health and other social benefits. Assuming that the Canadian health system is one-tenth the size of US system, savings would range from $8 to $16 billion annually. Connected health information technology - increasing performance and accountability A fundamental question the Standing Committee on Finance may ask is where $22 billion (growing at 6 % annually) in federal health care transfers to the provinces is going and what are the results of this support? Right now, we do not know exactly. Health care in Canada represents 10% of our economy ($160 billion annually and growing at 6% per year) and is larger than the total agricultural sector. The question Canadians are asking is not whether tax dollars should be spent on health care, but whether the money being spent is worth the services receivedx. Moreover, in health care, there are legitimate questions as to whether improvements to date have justified the associated costs. The public institutions and organizations that deliver health care in Canada could deliver more value than they do at present. With a national health information (management) system in place they could work to reduce variations in the quality of service and in the way services are used across the system. However at a national level, we do not have an accounting systemxi in place to uniformly measure quality across the country. 3. Who: Canadians - our patients - want and need e-health interconnectivity. Health information technology is critical to managing wait times Quality of care is an important concern for Canadians, but first they must be able to get the care they need. But waiting for health care is the principal concern for Canadiansxii. Excessive wait times result in mental anguish for patients and their families and also cost the Canadian economy billions of dollars each year. In 2007 a study commissioned by the CMAxiii conservatively calculated that excessive wait times in just four procedures (joint replacements, cataract surgery, coronary artery bypass grafts and MRIs) cost the economy over $14 billion in lost output and government revenues. It is important to note that beyond these hospital procedures there is potential to reduce wait times and cost in physician offices through information technology. This is why we have suggested accelerating the capital cost allowance tax for EMR related software and hardware purchases and that they go to community care and physician offices where most patient visits occur every day. Figure 1 below shows that in Ontario for example, just 3,000 out of an average of 247,000 patient visits per day or 1.2% of the total are made in hospitals. That is why this submission is aimed at (the circle area in the chart) increasing connectivity and tying investments to the 99% of the places where patients visit most. Figure 1 Patient visits per day in Ontario, Source: Canada Health Infoway Most of the emphasis on connectivity in Canadian health care to date has not focused on the point of care -even though the number of patient interactions with hospitals is greatly exceeded by the number of visits to physicians' officesxiv. Thus patient-physician office interactions outnumber patient-hospital interactions by a ratio of 18 to 1. It is also important that patients understand the value of electronic health records, which is why we are recommending a $10 million cross-country educational campaign to impact the demand side of this critical health and industrial equation. 4. Why physicians are involved in e-health interconnectivity The physician community can play a pivotal role in helping the federal governments make a connected health care system a realizable goal in the years to come. Through a multi-stakeholder process encompassing the entire health care team, the CMA will work toward achieving cooperation and buy-in. This will require a true partnership between provincial medical associations, provincial and territorial governments and Canada Health Infoway (CHI). Accelerating Advantage Canada through health information technologies The CMA's pre-budget submission, related to health system connectivity, incorporates the five tenets of Advantage Canadaxv. This submission principally addresses the infrastructure and knowledge advantages that are involved in investing in an interconnected network that is useless unless the 'knowledge' advantage to provide stewardship of the Electronic Health Record through our physicians' is in place. That is why we recommend that the federal government help support research, development and knowledge transfer at our major universities in health information technology by supporting 10 Canada Research Chairs in the faculties of Medicine, Management and Engineering. In addition, a pan-Canadian health information technology network will provide the kind of infrastructure that supports labour mobility where for example a migrant worker from Atlantic Canada can access his health records in Fort McMurray Alberta. 5. How to speed-up health information technology connectivity -a green tax incentive approach Thus far the strategy applied to health information connectivity in Canada has been focused on a top-down approach that has produced limited success. That is why the CMA is suggesting that the federal government accelerate the Capital Cost Allowance (CCA) on EMR-related software and hardware equipment over the next three years - an early-bird special or incentive. The CMA does not pretend to be tax policy experts however we do appreciate the federal governments' recent increase in the CCA rates for software and hardware. Our recommendation would mean changing the current software CCA (Class 12xvi) from 100% over two years to 100% in the first year specifically for EMR related investments. And for EMR hardware (Class 50xvii) accelerate the CCA to 100% in the first year from the current 55% rate for a limited time only of three years. These accelerated CCA rate proposals are also consistent with the governments' environmentally friendly CCA initiative as EMRs would save tonnes of paper for years. Mixed results for Canada Health Infoway => Health Information System Transition Fund The CMA lauds the federal government's 2008 Budget for making a $400-million investment in Canada Health Infoway (CHI) to support early movement toward patient wait time guarantees through the development of health information systems and electronic health records. At the same time the physician community believes that CHI has had mixed results, especially when it comes to digitizing and integrating patient records at the places where most patients contact the health care system: physician offices, laboratories and emergency rooms. However, we believe with targeted, conditional policies CHI can be an effective vehicle to accelerate the transition of current health centre paper practices into electronic operations through a time limited five-years Health Information Transition Fund. We also believe that federal transition funds should be matched at a fifty-fifty rate by the provinces. Although this may not be easy, there are other non-monetary policy levers (e.g. regulatory) that the federal government could and should use to persuade the provinces of the value of investing in electronic health record system integration. This is particularly true since the provinces will yield most of the return on the investment. It is imperative that the current health information technology gap be closed and be set at levels for similar service-intensive industries (see Figure 2 in the Appendix 1). That is why; beyond the figures outlined in this submission, the CMA recommends continued federal health information technology support for the next 10 years. Conclusion - Big investments. but big payoffs too As the Health Council of Canada stated in their 2008 annual reportxviii, "Change is underway, but too slowly". The OECD, WHO, The Commonwealth Fund and the Conference Board of Canada's research all strongly suggest that Canada lags behind the rest of the industrialized world in terms of health information technology investments and system integration. The investments made so far may seem large but they will be wasted if a second effort in connecting the entire system is not made now. It is time that the federal government finishes the job of health information system connectivity at the point of care. A Pan-Canadian network of health information will improve patient outcomes, health system efficiency and dramatically increase system accountability. The Health Council of Canada also said that, "These [health information technology] are big investments but the payoff is big too". Accordingly we suggest that over the next five years the following investments will improve the running of Medicare as well as the Canadian economy. The CMA recommends that the federal government should invest $570 million over five years in an interconnected pan-Canadian health information system that includes: => A $225 million, 5-year Health Information System Transition Fund aimed at change management training and support involved in converting 26 million patient records in 36,000 physician offices and community care facilities into interoperable electronic records across Canada. => $305 million for a 3-year time limited accelerated Capital Cost Allowance for EMR software and hardware costs related to health information technologies that connect patient records from physician offices to laboratories and hospitals. => $10 million to sponsor a cross-country education campaign to inform Canadians of the health and system benefits of e-health connectivityxix. => $2 million annually for Canada Research Chairs promoting the value of interconnectivity in health information between the faculties of Medicine, Management and Engineering. References 1The cumulative economic cost of waiting for treatment across just 4 priority areas in 2007 was an estimated $14.8 billion. This reduction in economic activity lowered federal and provincial government revenues in 2007 by a combined $4.4 billion. See:www.cma.ca/multimedia/CMA/Content_Images/Inside_cma/Media_Release/pdf/2008/EconomicReport.pdf 2 Almost 5-million Canadians do not have a family physician. Canada would need 26,000 more doctors to meet the OECD average of physicians per population. Physicians spend more time on paperwork and less with patients than they did 20 years ago. See: "More Doctors. More Care.": www.moredoctors.ca/take_action/ 3 Please see Table l in Appendix 1 for full investment horizon details. i Patient perspective on electronic medical record. Meldgaard M; International Society of Technology Assessment in Health Care. Meeting (19th : 2003 : Canmore, Alta.). Annu Meet Int Soc Technol Assess Health Care Int Soc Technol Assess Health Care Meet. 2003; 19: abstract no. 148. CONCLUSIONS: Patient confidence and perceived quality of care is influenced by a well informed forward-looking staff as can be obtained in settings where EPR is successfully implemented. Patient satisfaction and the functional level of EPR implementation are interdependent. ii A Report Card on Canada see: http://sso.conferenceboard.ca/HCP/overview/health-overview.aspx iii Organization for Economic Co-operation and Development [OECD] (2007). OECD Health Data 2007. Version 07/18/2007. CD-ROM. Paris: OECD. iv World Health Organization [WHO] (2007). World Health Statistics 2007. see: http://www.who. v Mirror, Mirror on the Wall: An International Update on the Comparative Performance of American Health Care May 15, 2007 (updated May 16, 2007)
Volume 59 Authors: Karen Davis, Ph.D., Cathy Schoen, M.S., Stephen C. Schoenbaum, M.D., M.P.H., Michelle M. Doty, Ph.D., M.P.H., Alyssa L. Holmgren, M.P.A., Jennifer L. Kriss, and Katherine K. Shea Editor(s):Deborah Lorber see: www.commonwealthfund.org/publications/publications_show.htm?doc_id=482678 vi See Tables Q39 and Q40a in the 2007 National Physician Survey at:www.nationalphysiciansurvey.ca/nps/ vii Dr. Alan Brookstone is a family physician in Richmond, BC and the founder of CanadianEMR. The quote was taken from: Online resource enables MDs to rate EMRs. See: www.cma.ca/multimedia/CMA/Content_Images/Inside_cma/Future_Practice/English/2007/November/Online-e.pdf The CanadianEMR Physician Resource Directory provides access to a province specific searchable list of vendors of products and services to support the EMR-based practice. http://www.canadianemr.ca/ viii Booz, Allan, Hamilton Study, Pan-Canadian Electronic Health Record, Canada's Health Infoway's 10-Year Investment Strategy, March 2005-09-06. ix Can Electronic Medical Record Systems Transform Health Care? Potential Health Benefits, Savings, And Costs Richard Hillestad, James Bigelow, Anthony Bower, Federico Girosi, Robin Meili, Richard Scoville and Roger Taylor, Health Affairs, 24, no. 5 (2005): 1103-1117. x In November 2008 the Auditor General of Canada will present it's performance audit on, "Reporting on Health Indicators-Health Canada" to Parliament. See: www.oag-bvg.gc.ca/internet/English/oag-bvg_e_29401.html xi There has been heavy emphasis is being placed on "accountability" and "performance measurement," endorsed by the Romanow Commission (Commission on the Future of Healthcare in Canada 2002), the Kirby Committee (Standing Senate Committee on Social Affairs, Science and Technology 2002), and the First Ministers' accord (First Ministers 2004). See Raisa Deber Why Did the World Health Organization Rate Canada's Health System as 30th? Some Thoughts on League Tables. Some Thoughts on League Tables xii The results of an Ipsos Reid poll (January 2008) finds that eight in ten (78%) Canadians believe that hospital and other health care wait times cost Canada money because people who are waiting for treatment are less productive and miss work. This is compared to just two in ten (19%) who think that wait times save Canada money because governments don't have to put as many resources into healthcare. xiii The economic cost of wait times in Canada, January 2008. This study was commissioned by the Canadian Medical Association (CMA) to analyze the economic costs of wait times in Canada's medical system. The CMA's membership includes more than 67,000 physicians, medical residents and medical students. It plays a key role by representing the interests of these members and their patients on the national stage. Located in Ottawa, the CMA has roots across the country through its close ties to its 12 provincial and territorial divisions. See: www.cma.ca/multimedia/CMA/Content_Images/Inside_cma/Media_Release/pdf/2008/EconomicReport.pdf xiv Sources: Physician visits - CIHI - Physicians in Canada: Fee-for-Service Utilization 2005-2006. Table 1-21. Hospital contacts - CIHI - Trends in Acute Inpatient Hospitalizations and Day surgery Visits in Canada 1995-1996 to 2005-2006 and CIHI -National Ambulatory Care Reporting System - Visit Disposition by Triage Level for All Emergency Visits - 2005-2006. xvAdvantage Canada builds on Canada's strengths and seeks to gain a global competitive advantage in five areas: 1. Tax Advantage-Reducing taxes for all Canadians and establishing the lowest tax rate on new business investment in the G7. 2. Fiscal Advantage-Eliminating Canada's total government net debt in less than a generation. 3. Entrepreneurial Advantage-Reducing unnecessary regulation and red tape and increasing competition in the Canadian marketplace. 4. Knowledge Advantage-Creating the best-educated, most-skilled and most flexible workforce in the world. 5. Infrastructure Advantage-Building the modern infrastructure we need. xvi Software: CLASS 12 , (100 per cent) Property not included in any other class that is.... (o) computer software acquired after May 25, 1976, but not including systems software or property acquired after August 8, 1989 and before 1993 that is described in paragraph (s). xvii Hardware: CLASS 45 , (45 per cent) Property acquired after March 22, 2004 (other than property acquired before 2005 in respect of which an election is made under subsection 1101(5q)) that is general-purpose electronic data processing equipment and systems software for that equipment, including ancillary data processing equipment. Draft Regulation (a) electronic process control or monitor equipment; (b) electronic communications control equipment; (c) systems software for equipment referred to in paragraph (a) or (b); or (d) data handling equipment (other than data handling equipment that is ancillary to general-purpose electronic data processing equipment). Class 50 (55 per cent) Property acquired after March 18, 2007 that is general-purpose electronic data processing equipment and systems software for that equipment, including ancillary data processing equipment, but not including property that is principally or is used principally as (a) electronic process control or monitor equipment; (b) electronic communications control equipment; (c) systems software for equipment referred to in paragraph (a) or (b); or (d) data handling equipment (other than data handling equipment that is ancillary to general-purpose electronic data processing equipment). xviii Health Council of Canada, Rekindling Reform: Health Care Renewal in Canada, 2003 - 2008, June 2008 (page 23). See: www.healthcouncilcanada.ca/docs/rpts/2008/HCC%205YRPLAN%20(WEB)_FA.pdf Appendix 1 (Table does not display correctly -- See PDF) Table 1 -Health Interconnectivity investments over five years. Figure 2 -Major Canadian health centers are well below industry IT investment standard
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CMA's letter to Mr. James Rajotte, MP Chair, Standing Committee on Industry, Science and Technology: Review of the service sector in Canada

https://policybase.cma.ca/en/permalink/policy9114
Last Reviewed
2020-02-29
Date
2008-02-23
Topics
Health human resources
Health systems, system funding and performance
  1 document  
Policy Type
Parliamentary submission
Last Reviewed
2020-02-29
Date
2008-02-23
Topics
Health human resources
Health systems, system funding and performance
Text
On behalf of the Canadian Medical Association (CMA), I want to thank you for the opportunity to provide the following information to the House of Commons Standing Committee on Industry, Science and Technology during its review of the service sector in Canada. The committee's study of the strengths and challenges facing this sector, overall employment percentage, overall average of salaries across the sector its impact on Canada's overall economy and the role of the Government of Canada in strengthening this sector comes at an opportune time. CANADA'S HEALTH SERVICES SECTOR Canada's health services sector is facing a critical shortage of physicians and other health care professionals and the CMA and our over 67,000 physician members are pleased to have the opportunity to present practical solutions within the jurisdiction of the federal government - working collaboratively with provincial/territorial governments and other health system stakeholders. Health care delivery in Canada is a $160 billion industry, representing over 10% of our country's gross domestic product (GDP).1 The 30,120 physicians' offices across Canada make important contributions to our economy. In 2003, the latest year for which data are available, offices of physicians employed 142,000 Canadians and contributed $11.6 billion to the Canadian economy.2 This represents almost 39 per cent of all Health Service Delivery establishments, and almost 11% of all HSD employees. As a standard measure of economic productivity, physician offices report the highest levels of GDP per employee within the Health Service Delivery sector. On this measure, they are approximately twice as productive as other components of Health Service Delivery. THE CHALLENGE There are simply not enough physicians to continue providing the quality health care that Canadians expect and deserve. Here are the facts: - Almost 5 million Canadians do not have access to a family physician; - By 2018 an additional 4.5 million Canadians could be without a doctor; - Canada ranks 24th in Organisation for Economic Co-operation and Development (OECD) nations in terms of physicians-per-population ratio. Canada would need 26,000 more doctors right now to meet the OECD average; - Canada spends only a third of the OECD average on information technology (IT) and diagnostic equipment in our hospitals; and - Canada has the highest hospital occupancy rate of all OECD countries and among the highest waits for access to specialty care services. The lack of physicians and other health care providers has resulted in restricted access to health care services and the growth of wait times for necessary medical procedures. In January 2008, CMA released new research by the Centre for Spatial Economics that proved that, in addition to the human health cost, waiting for care results in dramatic and excessive costs to our economy. Researchers addressed just four priority areas targeted in the 2004 First Ministers Health Accord. They used government and other data to determine how many Canadians were waiting longer than the maximum medical consensus established by the Wait Time Alliance. Selected for analysis were: joint replacement, cataract surgery, heart bypass grafts, and MRI scans. Costs, as calculated for all provinces varied from $2,900 to over $26,000 per patient. The cumulative cost of waiting in 2007, for treatment in just 4 areas, was $14.8 billion. This reduced economic activity lowered government revenues in 2007 by $4.4 billion. That is equivalent to over 1/3rd of the total Ontario health budget. The reduction in economic activity included the impact of the patient's inability to work while waiting, and direct losses from decreased production of goods and services, reduced income, and lowered discretionary spending. It is important to note that the figure of 14.8 billion dollars is based only on patients that exceed designated maximum waiting times in just 4 clinical areas. In the example of hip replacements, the research only factored in costs for waits that exceed 6 months. Of those waiting longer than the maximum recommended time, average waits were 1 year for hip and knee replacement surgery, 7 months for cataract surgery, and twice maximum for heart bypass surgery. Those who didn't make the MRI target waited an average of 12 weeks. Reduced economic activity included informal caregiver costs. These costs are generated when caregivers reduce work hours to care for family members on wait lists, or attend appointments with family members. Patients languishing on wait lists also incur additional costs for drug and other treatments that timely care would eliminate. Estimates in this study are extremely conservative. They address only the wait time to treatment after a specialist's consultation and recommendation. And exclude the growing, and significant costs of waiting to see the GP or specialist. They do not include anyone who is not working. They do not include the costs, short and long term, of the deterioration that occurs while waiting. THE SOLUTIONS To solve Canada's doctor shortage, the CMA believes governments must: - Adopt a long-term policy of self-sufficiency to provide Canadians with the health care professionals they need when and where they need them; - Establish a dedicated health human resource renewal fund to educate, retain and enhance the lives of health care professionals; and - Invest in health technology, infrastructure and innovation to make our health care system more responsive and efficient. SELF-SUFFICIENCY Over the past decade, there have been increasing concerns that Canada is not producing an adequate number of health providers to meet the growing demand for health services - now and into the future. These concerns have been consistently registered by physicians, nurses, pharmacists, technicians, in addition to other groups that represent other providers and the institutional and heath facilities community. Furthermore, the policy challenges related to health human resources (HHR) have been identified in several seminal reports - including the Royal Commission on the Future of Health Care in Canada, the Standing Senate Committee on Social Affairs, Science & Technology, and the Health Council of Canada.3 A growing number of health providers are looking to retire over the next decade (or leave the health system all together) relative to the number of trainees who are entering the health system, and at a time where a growing number of Canadians will be turning to the health system for diagnosis and treatment. Over 6% of physicians who responded to the National Physician Survey 20074 said they plan to retire from clinical practice and 1% plan to permanently leave practice for other reasons in the next 2 years. The effect of these changes could mean that, as the baby boom generation gets older, over 4,000 physicians will cease their medical practice within the next 2 years, making it even more difficult for Canadians to find a family physician. At the same time, the HHR challenges facing Canada's health care system are not unique to our country - over the next decade all western developed countries can expect intensified global competition for talent when it comes to health providers.5 While there are, no doubt, other provider groups who are also concerned about the future supply of health providers, there is a growing national consensus that, in addition to the primary role that the provinces and territories play in supporting the training of health providers across the country, there is a significant, catalytic and strong complementary role for the federal government in the area of health human resources. CMA, like many health care organizations, is of the view that there is a legitimate role for the federal government to strengthen its working relationship with the provinces and territories, and health providers through the creation of a time-limited, issue-specific and strategically-targeted fund to accelerate training capacity in the health system. The World Medical Association's ethical guidelines for international recruitment of physicians16 (2003), fully supported by the CMA, recommend that every country "should do its utmost to educate an adequate number of physicians, taking into account its needs and resources. A country should not rely on immigration from other countries to meet its need for physicians."7 However, in reality Canada continues to rely heavily on recruitment of internationally educated health professionals. Approximately one-third of the increase in physician supply each year is due to International Medical Graduates (IMGs) who are either recruited directly to practice or who have taken significant postgraduate medical training in Canada. In nursing, the number of internationally educated nurses applying for licensure is increasing rapidly, almost tripling from 1999 to 2003. Previous recommendations of the CMA to the House of Commons included improved medium- to longer-term supply projection models; sufficient opportunities for Canadians to train for health professional careers in Canada; and integration of international graduates, who are permanent residents or citizens of Canada, into practice. The CMA recognizes that professionals are working in an increasingly global world in terms of the exchange of scientific information, mutual recognition of qualifications between countries and the movement of people. The greatest barrier to enhancing Canada's ability to become more self-sufficient, in terms of physician resources, is the capacity of our medical schools. Despite recent increases in enrolment, Canada continues to turn away approximately 3 equally qualified students for every 1 that is accepted into an undergraduate medical program. This has resulted in over 1500 Canadian students, with the financial means to do so, who are training in medical schools outside of Canada. INTERNATIONAL MEDICAL GRADUATES In the larger context, Canada's current fertility rate is not sufficient to support self-sufficiency in general in relation to any professions. And, while self-sufficiency in the production of physicians is a desirable goal, it is also important to promote the international exchange of teaching and research, particularly in an increasingly global society. In this regard, IMGs should be considered as a planning component for a sustainable Canadian physician workforce. Historically IMGs have entered the practice of medicine through a variety of routes, which most typically include a recognized period of post-MD training in Canada. CMA's best estimate is that there are about 400 IMGs newly licensed to practice in Canada each year who have not completed postgraduate training in Canada. In addition, there are another 300 or so who are exiting Canadian postgraduate training programs and heading into practice. In fact, for the past few years, the College of Physicians and Surgeons of Ontario has licensed more IMGs than new Ontario medical graduates. In recent years, there have been an increasing number of opportunities for IMGs already living in Canada to achieve the required credentials for licensure. The number of ministry-funded IMG postgraduate residents has more than tripled in the past seven years from 294 to 1065 trainees. In 2007, there were almost 1500 IMGs who were qualified to compete in the Canadian Resident Matching Service (CaRMS) match. By the end of the second round, close to 300 had matched and about 60 were placed through other provincial programs. Recommendation The federal government should make a clear policy commitment to increasing self-sufficiency in the education and training of health professionals in Canada that would incorporate the following. - Short term - increase number of community preceptors to train Canadian graduates and assess internationally educated health professionals already living in Canada. Recognition of the time and value of community teaching is needed. - Medium term - support increased capacity for academic health science centres and other institutions that train health professionals. - Long term - creation of new academic health science centres to increase capacity for self-sufficiency. REPATRIATING CANADIAN DOCTORS WORKING ABROAD It is known that there are thousands of Canadian-trained health professionals practising in the United States and abroad. Between 1991 and 2004, almost 8,000 physicians left Canada (although some 4,000 returned for a net loss of 4,000).8 Of this number, roughly 80% went to the US.9 During the 1990s, approximately 27,000 nurses migrated from Canada to the US.1011 A more recent indicator of nursing outmigration is that in 2006, 943 Canadian-trained Registered Nurses and Licensed Practical Nurses wrote the US licensing board examination for the first time.12 Data for other health professional disciplines are not readily available. In 2007, with the assistance of the American Medical Association, the Canadian Medical Association (CMA) surveyed all (n=5,156) Canadian-trained physicians practicing in the US who were age 55 or under, with regard to the likelihood of their return to Canada and the importance of various factors that might be incentives to return. A 32% response rate was achieved with a single mailing with no follow-up - this is considered exceptionally high. While only 13% of respondents indicated that they were likely or very likely to return to Canada, a further 25% were neutral in their opinion. What is more telling is that more than one-half of respondents indicated that they would be willing to be contacted by CMA to explore practice opportunities and provided their contact information for this purpose. When asked about a range of potential incentives to return to Canada, 57% agreed that a relocation allowance would be somewhat or very important.13 It must be stressed, however, that it is clear from the results that a number of factors would need to be taken into consideration, such as practice opportunities. This would also be true of other disciplines; in the case of nursing, nurses will only come back for full-time jobs and healthy work environments.14 Nonetheless, expatriate Canadian medical graduates should be good candidates for recruitment on the basis of the greater likelihood that they will meet Canadian standards for full medical licensure, and it is expected that this would also apply to nursing and other disciplines. As well, significant progress has been made in restoring and adding capacity to our medical schools but, to achieve self-sufficiency, much more needs to be done. For example, we must try and repatriate Canadian medical students and doctors who are studying and working abroad. There are currently some 1500 Canadian medical students and residents training abroad, we must act now, before things get worse. During that past few years there have been efforts to enhance national coordination in the health human resources arena. One area of national focus has been the integration of International Medical Graduates, since extended to nursing and other disciplines. There have been several initiatives undertaken in this area such as the establishment of the Canadian Information Centre for International Medical Graduates15 which provides a clearinghouse of information and links to provincial/territorial jurisdictions. Relocation grants, from $10,000 up to $20,000 could be offered to Canadian-trained physicians practising in the US. It is suggested that advertising be concentrated in and around US cities where Canada maintains a consulate/office (in states with a significant concentration with recruitment candidates) and in major national and selected state health professional journals. The cost of a repatriation secretariat is estimated at $162,500 per year. Assuming that 1,500 health professionals are recruited back over the 3-year period, the total cost would range from $21.5 million to $36.5 million. This would further translate to a per recruit cost that ranges from $14,325 to $24,325. Even at the high end of the range this would be cost-effective as compared to the total cost of training a practice-entry level graduate of any licensed health professional discipline in Canada. Recommendation In light of the foregoing, the CMA has recommended that the federal government should establish a Health Professional Repatriation Program in the amount of $30 million over 3 years that would include the following: - secretariat within Health Canada that would include a clearinghouse function on issues associated with returning to Canada such as licensure, citizenship and taxation; - An advertising campaign in the US to encourage health professionals practicing south of the border to return home; and - A program of one-time relocation grants for health professionals returning to active practice in Canada. NATIONAL HEALTH HUMAN RESOURCES INFRASTRUCTURE FUND The implementation of Medicare in Canada in the 1960s required a major investment in the capacity to train more health professionals. The 1966 Health Resources Fund Act played a key role in enabling a significant expansion in training capacity across the provinces for a range of health professionals. Forty years later, Canada faces growing shortages across most health disciplines. Clearly another giant step up is required in the human and physical infrastructure needed to train health professionals if Canadians are to have timely access to care. During the years of fiscal famine of the 1990s, health professional enrolment was either reduced (e.g., 10% in the case of medicine) or flat-lined. While there have been increases since 2000, we are about to face the double impact of both an aging population as the first of the baby boomers reach 65 in 2011 and aging health professions. For example, more than 1 out of 3 physicians (35%) are aged 55 or older. As mentioned, as many as 4,000 physicians are expected to retire in the next 2 years. If we are going to have sufficient numbers of health providers to meet the needs of the next few decades, it is imperative to expand the human and physician infrastructure capacity of our health professional education and training system. The federal investments in health human resources over 2003-2005 of some $200 million have been welcome, but fall far short of what is needed. It is proposed that the federal government implement a National Health Human Resources Infrastructure Fund in the amount of $1 billion over 5 years that would be made available to the provinces/territories on an equal per capita basis, and awarded through a competitive process that would include federal/ provincial/territorial representation with consultation/engagement of health professional organizations. The fund would address the following elements: 1. The direct costs of training providers and developing leaders (e.g., cost of recruiting and supporting more community- based teachers/preceptors). 2. The indirect or infrastructure costs associated with the educational enterprise (e.g., physical plant [housekeeping, maintenance]; support for departments [information systems, library resources, occupational health, etc.]; education offices, and the materials and equipment necessary for clinical practice and practical training. 3. Resources that improve the country's overall data management capacity when it comes to health human resources, and in particular, facilitate the ability to model and forecast health human resource requirements in the face of the changing demand for health services. Clearly it would be necessary to develop guidelines around the types of expenditures that would be eligible as was done for the 1966 Health Resources Fund, and more recently for the Medical Equipment Fund II. CMA Recommendation The federal government should establish a National Health Human Resources Fund in the amount of $1 billion over 5 years to expand health professional education and training capacity by providing funding to support the: - direct costs of training providers - indirect or infrastructure costs associated with the educational enterprise - resources that improve Canada's data collection and management capacity in the area of health human resources. HEALTH INNOVATION More than 85% of the health care delivered in Canada occurs within the community. This is the most under-invested segment of the health care delivery system in terms of information technology. Dr. Brian Postl in his June 2006 wait-time report16 to the federal government noted health information technology is essential in improving wait times. He quantified the investment needed at $2.4 billion with the largest portion of this investment ($1.9 billion) targeted to automating physician offices, which are located at the front line of care in community settings and are key to managing and resolving the wait time issue in Canada. Why invest in physician office automation? Because it will lead to improved productivity from the provider community through more efficient resource usage and through improved coordination in the delivery of care; it will enable labour mobility of health care workers through portability of records; it will support the wait time agenda by improving the flow of timely information; it will build an electronic infrastructure platform to enhance patient care and health research and will provide a direct financing vehicle for the federal government to influence and shape the health care sector. The federal government has made similar types of infrastructure investment. The CFI Program was established to fund research infrastructure, which consists of the state-of-the-art equipment, buildings, laboratories and databases required to conduct research. Investing in EMR infrastructure will lead to the creation of state of the art clinical environments across Canada, electronic data base of health information and the foundational underpinnings of a health information network to support enhanced population health and health research. Under this scenario the federal contribution would provide a direct benefit to physicians without any need for provincial or territorial involvement. Second, the federal government could use existing government machinery to manage the program. Third, the federal contribution to infrastructure would only flow after a physician has introduced an EMR into his/her clinic ensuring that the funding is directly tied to building the EMR infrastructure platform. The recent National Physician Survey notes that some progress is being made across the country to automate community clinics. However without incentives the adoption trend will be incremental and extend over a further 20-year time frame. Financial incentives can shorten the timelines since it addresses one of the main adoption barriers physicians identify.17 Diffusion theory18 of new technologies into any sector of the economy demonstrates that without appropriate incentives it will take approximately 25 years the technology to reach the saturation point of integration. It is estimated that a financial incentive can shorten this timeline by 15 years. Recommendation The federal government, over a 5-year time frame, should provide a full tax credit to any physician who takes the steps to automate his or her clinical office. The tax credit would only apply to 1-time costs to establish a state of the art clinical environment. It is estimated, on average, 1-time costs would be $22,000. Total costs of the program if fully subscribed would amount to $880 million. CONCLUSION The health services sector makes significant contributions to the Canadian economy, both in terms of direct stimulus and by keeping Canadians healthy and productive. However, Canada's health services sector is facing a critical shortage of physicians and other health care professionals. By: - Adopting a long-term policy of self-sufficiency to provide Canadians with the health care professionals they need when and where they need them; - Establishing a dedicated health human resource renewal fund to educate, retain and enhance the lives of health care professionals; - Investing in health technology, infrastructure and innovation to make our health care system more responsive and efficient; the federal government, in partnership with provincial/territorial governments and other health system stakeholders can strengthen this sector. A strong health services sector means healthy Canadians and a vibrant Canadian economy. Again, on behalf of the Canadian Medical Association, Canada's doctors appreciate the opportunity to provide information to the Committee. Sincerely, Brian Day, MD President, Canadian Medical Association 1 National Health Expenditure Trends, 1975-2007. Canadian Institute for Health Information. 2007 2 Source: Business Register (STC 2003) and TIM (Informetrica Limited) 3 The Royal Commission on the Future of Health Care in Canada, November 2002. Senate Standing Committee on Social Affairs, Science & Technology, October 2002. The Health Council of Canada "Modernizing the Management of Health Human Resources in Canada: Identifying Areas for Accelerated Change: November 2005. 4 The National Physician Survey is a major ongoing research project conducted by the College of Family Physicians of Canada, Canadian Medical Association and Royal College of Physicians and Surgeons of Canada that gathers the opinions of all physicians, 2nd year medical residents and medical students from across the country. It is the largest census survey of its kind and is an important barometer of where the country's present and future doctors are on a wide range of critical issues. 5 The Economist, The Battle for BrainPower - A Survey of Talent, October 7, 2006. 7 World Medical Association. The World Medical Association Statement on Ethical Guidelines for the International Recruitment of Physicians. Geneva: The World Medical Association; 2003. Available: www.wma.net/e/policy/e14.htm 8 Canadian Institute for Health Information. 2. Canadian Institute for Health Information. 10 Zaho J, Drew D, Murray T. Barin drain and brain gain: the migration of knowledge workers from and to Canada. Education Quarterly Review 2000;6(3):8-35. 12 Little L, Canadian Nurses Association, personal communication, January 8, 2008. 13 Buske L. Analysis of the survey of Canadian graduates practicing in the United States. October 2007. http://www.cma.ca/multimedia/CMA/Content_Images/Policy_Advocacy/Policy_Research/US_survey_ver_4.pdf. Accessed 02/04/08. 14 Little L, Canadian Nurses Association, personal communication, January 28, 2008. 15 www.img-canada.ca 16 Postl, B. Final Report of the Federal Advisor on Wait Times. Ottawa: Minister of Health Canada, Health Council of Canada; 2005. 17 Canadian Medical Association/Canada Infoway. Physician Technology Usage and Attitudes Survey. Ottawa: CMA/CanadaInfoway; 2005. Available: www.cma.ca/index.cfm/ci_id/49044/la_id/1.htm (accessed 8 Jan 2008). 18 Bower, Anthony. The Diffusion and Value of Healthcare Information Technology. Santa Monica (CA): RAND Corporation; 2005
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Building bridges: the link between health policy and economic policy in Canada : A Document prepared by the Canadian Medical Association (CMA)

https://policybase.cma.ca/en/permalink/policy1990
Last Reviewed
2019-03-03
Date
1996-01-30
Topics
Health systems, system funding and performance
  1 document  
Policy Type
Parliamentary submission
Last Reviewed
2019-03-03
Date
1996-01-30
Topics
Health systems, system funding and performance
Text
I. PURPOSE The objective of this document is twofold: (1) to provide the federal government with a better understanding of the current issues that are of concern to physicians across Canada and are material to the preparation of the 1996-97 federal budget; and (2) to propose some solutions. As part of the government's pre-budget consultation process, the CMA has formally presented a brief to the House of Commons Standing Committee on Finance on November 23, 1995. II. POLICY CONTEXT Canada faces a number of important policy challenges as it moves toward the 21st century. First and foremost is the fiscal challenge to reduce Canada's debt and deficit levels while, at the same time, fostering an environment which provides for future economic growth within a globally-integrated marketplace. As of March 31, 1995 total public debt (federal/provincial/territorial levels of government) was $787.7 billion; the interest paid on the total debt for 1994 was $64.3 billion, and the 1994 total public deficit was $40.8 billion. At a minimum, government is faced with the challenge of addressing short- and long-term economic policy objectives while meeting defined social policy imperatives. In a time of continued fiscal restraint and scarce public sector economic resources, difficult choices will continue to be made. CMA acknowledges that there is an urgent need, now more than ever, for the federal government to balance a number of competing policy challenges. At a time when profound deficit reduction measures are required, all segments of society are being asked to do more with the same or less. Having already dealt with this reality for quite some time, the health care sector is no stranger to this burden. In making policy choices, careful and deliberate thought needs to be given to the repercussions such decisions will have on the Canada of tomorrow and the health and well-being of Canadians. Attacking Canada's federal debt/deficit for short-term economic gain must be balanced against any decision(s) that would serve to increase our longer-term "social" deficit. At a time when Canada is undergoing significant social, political and economic changes, CMA remains dedicated to the delivery of high quality health care and to safeguarding the national integrity of the system. However, given the need for the federal government to gain control over the deficit and national debt, it seems clear that putting Canada's fiscal house in order remains a high priority. That being said, the government must also be clear with Canadians on its intentions and priorities with respect to a long-term commitment to health and social programs, including a cash commitment. Canadians are deeply concerned that reducing the federal deficit will result in the shifting of costs to other levels of government which they cannot absorb. This may very well lead to reduced access to government programs and services, and at some point in the future, higher social costs. This is highlighted in a recent poll where 58% of Canadians reported that they expect the health care system will be worse in the next ten years. 1 It would appear that Canadians believe that the fiscal agenda will overwhelm the social agenda to the extent that the social values and ideals that sustain them will be forgotten or worse, be lost. Surveys indicate that 84% of Canadians view Medicare as a defining characteristic of being Canadian. Furthermore, 84% of Canadians feel that the system provides high quality care. However, 65% of Canadians are concerned about continued accessibility to a full range of publicly-financed benefits. According to the same poll, 83% of Canadians see current financing of the system as being "unsustainable" over the longer-term. 2 While Canadians are expressing strong concerns over the future viability of what we currently have in the area of health care, physicians are also voicing similar worries. In a recent poll, 76% of physicians surveyed agreed with the statement that Canada's health care will be worse in 10 years. 3 III. MANAGING CHANGE AND MEETING POLICY OBJECTIVES Recognizing that change is one constant that will characterize Canadian society for the foreseeable future, any further policy changes affecting the health care system must also be considered in the context of Canadian values and economic policy. Good health policy and good economic policy must reinforce one another. CMA is concerned that any short-term economic decisions on the part of the government which do not reinforce good health policy may be detrimental to the best interests of Canada. If change is to come within an overall policy framework that is strategic, coordinated and fair and preserves (or augments) the integrity of Canada's health care system, we must be careful to avoid short-term, stop-gap initiatives. As the Government's 1994 Throne Speech stated "...the agenda of the government is based on an integrated approach to economic, social, environmental and foreign policy". Accordingly, in establishing an appropriate fiscal framework for health and health care, change must take place within the context of a longer-term integrated view. The principle of aligning good health policy with sound economic policy is critical to managing change while serving to lay down a strong foundation for future economic growth and prosperity in Canada. Moreover, by better synchronizing health and economic policy as a national priority, opportunities can be created to meet a number of important "higher order" policy objectives. They are: (i) Canada building; (ii) economic development; (iii) well being of Canadians and the future of health and health care in Canada, and (iv) putting Canada's financial house in order. Each is discussed in turn. i. Canada Building In many ways, Canada is at a social, political and economic crossroads. The challenge to this government is to balance short-term fiscal pressures against the longer-term need to re-position Canada to take advantage of greater economic opportunities while preserving that which is of fundamental importance to Canadian society as a whole. In this context, of the range of social programs that the federal government supports, Medicare is strongly viewed as a defining characteristic of being Canadian. Medicare is a high priority for Canadians. Some have argued that the declining federal cash commitment to funding Medicare serves to further fragment our health care system and speeds the process of government decentralization. What better opportunity for the federal government to clarify its funding support and relationship to health care in this country? In making a clear, significant and stable financial commitment in support of health care, the government will serve notice that it is prepared to play a leadership role in ensuring that Canadians will have a sustainable, high quality "national" health care system, a value they hold deeply as Canadians. ii. Economic Development From an international perspective, Canada's Medicare system has been acknowledged as one of our greatest assets. Agencies such as the World Economic Forum tell us that Canada's method of financing health care is one of our comparative economic advantages in an evolving new world economic order. Compared to the United States, this takes the form of lower public and private expenditures on health care while maintaining the same or better health status. In terms of our European trading partners, the fact that health insurance programs are financed primarily through consolidated revenues (rather than employment-based taxes), also confers a unit cost advantage to Canadian exporters. In this sense, good health policy and good economic policy reinforce each other and the bridge between the two should be strengthened. By producing "healthier" individuals at lower cost, this relative cost advantage can translate into economic benefits that all Canadian can share in terms of expanded employment opportunities, wealth creation and economic growth. As a 1995 report form the Conference Board of Canada stated "[Canadian business is] unequivocal in terms of the high value they place on the Canadian health care system. Their support rests on their faith that the system has the capacity to deliver high-quality care while keeping public costs under control. They are also aware that Canada's health insurance system seems to provide employers with a competitive advantage over companies in the United States". 4 While the CMA is in support of a publicly-financed health system, there are serious concerns that the series of recent reforms have not been carried out in a reasonable and rational manner. Prior to implementing any further reforms, there is a pressing need to evaluate the effects of these changes. Cutting alone should not continue to be considered a catalyst for change; as an investment in the future of Canada health care is far too valuable. If health policy and economic policy are to be better synchronized, governments must not only consider the level of current public sector resources that are allocated to the health care system, but they must also re-examine the current roles of the public and private sectors. iii. Well-Being of Canadians and the Future of Health and Health Care in Canada For over twenty-five years, the Medicare system has provided all Canadians with the assurance that "it will always be there when you need it", without fear of an individual or family being forced into bankruptcy due to their health care needs. However, the security that Canadians have enjoyed in knowing that their health care system was always there when they needed it is being challenged daily. For example, Canadians are experiencing difficulties in access because of hospital closures, lengthening waiting lists and the departure of physicians from their communities. As well, physicians and patients are increasingly experiencing difficulties in accessing new medical technologies. Canadians are becoming more and more concerned that the universal Medicare system which they have known and supported through their tax dollars may not be available when they need it the most. In stepping forward and playing a leadership role, the federal government can serve to reassure Canadians that preserving the fundamentals of our health care system remains a high priority by making a significant and predictable financial cash contribution. iv. Putting Canada's Financial House in Order CMA recognizes that the federal government must attend to its own fiscal house and is meeting its fiscal targets. CMA believes that we must not pass this massive debt burden - one in which 36 cents of every federal tax dollars goes to debt servicing - onto future generations. This is not, however, to suggest that a "slash and burn" strategy should be adopted: but rather we should seek a measured approach that gains control over spending while fostering an environment of economic growth. This would bring with it increased employment opportunities and expanding societal wealth. Such an approach should be measured, deliberate and responsible. Deficit reduction should not be fought disproportionately on the back of health care, which, if viewed in its proper context, should be considered as an investment good not a consumption good. Health care is an asset to all Canadians, not a liability. IV. CONCLUSION The CMA has attempted to set out a framework that serves as a basis for defining policy objectives to which the government should give serious consideration. These "four pillars" are: (1) Canada building; (2) economic development; (3) well-being of Canadians and the future of health and health care in Canada; and (4) putting Canada's fiscal house in order. In seeking to build stronger bridges between these policy objectives is the unshakeable principle that good health and good economic policy should go hand-in-hand, reinforcing rather than neutralizing one another. The CMA's four pillars are consistent with government policy objectives as set out in the Red Book, and its 1994 throne speech. Using the four pillars as a guide, the key issues that are of immediate concern to the medical profession in a pre-budget consultation context are as follows: * the Canadian Health and Social Transfer (CHST); * Registered Retirement Savings Plan (RRSP); * the Goods and Services Tax (GST); * Non-Taxable Supplementary Health Benefits (NTSHB); * the National Health Research Program (NHRP); and, * Tobacco Taxation. The CMA is prepared to work with the government and others in a collaborative effort, within the above framework to meet sound social, health, economic and fiscal policy objectives. CANADIAN HEALTH AND SOCIAL TRANSFER (CHST) ISSUE The Canadian Medical Association (CMA) is concerned that the decreasing federal cash commitment to health care will eventually result in no federal cash flowing to some provinces in the future. This will seriously undermine the federal government's ability to set and maintain goals and standards in the health care system across the country. CONTEXT * The CMA recognizes that federal finances must be brought under better control. However, 60% of Canadians feel that social programs require federal protection while expenditures are being reduced. 5 Reforms to social programs must be phased in over a defined planning horizon. * Beginning in 1996-97, the Canadian Health and Social Transfer (CHST), a combination of the Established Programs Financing and the Canadian Assistance Plan, will result in a reduction of cash transfers to the provinces and territories of $7 billion. PHYSICIAN PERSPECTIVE * Access to Quality Health Care: Our First Priority Canadian physicians want to maintain and enhance the delivery of high quality health care services. Canadians are experiencing difficulties in access due to hospital closures, lengthening waiting lists and communities losing physicians. Furthermore, physicians and their patients are increasingly experiencing difficulty in accessing new health technologies. Canadians are becoming concerned that the universal Medicare system which they have supported through their tax dollars may not be available when they need it the most. * The CHST Threatens The Principles Of National Health Insurance Continued reductions in the CHST will make it increasingly difficult for the federal government to maintain national standards in health care. Earmarked funding for health care will enable the federal government to ensure the principles encompassed under the Canada Health Act are protected. * A Strong Federal Role Must Be Maintained The Medicare system provides all Canadians with the assurances that "it will be there when you need it"; and "you and your family won't be forced into financial ruin". Surveys indicate that 84% of Canadians see Medicare as a defining characteristic of being Canadian. Furthermore, 84% of Canadians feel that the system provides high quality care. Canadians want governments to spend more energy on the protection of Medicare and other social programs. 6 From an international perspective, Canada's Medicare system has been acknowledged as one of our greatest assets. Compared to the U.S. this takes the form of lower public and private expenditures on health care while maintaining the same or better health status. CMA RECOMMENDS... * Stable, predictable and ear-marked cash transfers with a formula for growth is required to enable all provinces and territories to plan and deliver a defined set of comparable high quality health care services to all Canadians. * A $250 per capita cash transfer for health care for the next 5 years should be established and guaranteed within the CHST framework. After the 5 year period, the federal government must preserve the real value of the cash transfer by means of an appropriate escalator. RATIONALE * Considering all options, a per capita transfer is the fairest, most equitable method of allocating cash for the health care system. It will also operationalize the CHST in such a way so as to reassure Canadians that the federal dollars will continue to be available to sustain the health system. * The Medicare system is a unifying value and defining characteristic that is recognized as a valuable resource by business and provides Canadians with an important sense of well-being. * The above recommendations would assist in ensuring a strong federal role in setting and maintaining national health care standards as promised in the Red Book. Acting on these recommendations will demonstrate to Canadians that the federal government has listened to their concerns about the CHST and the future of the health care system. A federal cash contribution to health care in Canada is important for economic reasons. * Business is growing increasingly concerned that the competitive advantage provided by the Canadian health care system is eroding. Furthermore, the universal nature of the coverage provided by our health system means it cannot be viewed as a subsidy under current trade agreements (e.g., NAFTA). REGISTERED RETIREMENT SAVINGS PLANS (RRSP) ISSUE The Canadian Medical Association (CMA) is concerned about the ability of Canadians to accrue retirement savings that will enable them to retire in dignity. CONTEXT * The numbers of those over the age of 65 continue to expand, in 1994 11.9% of the population was over the age of 65, in 2016 this will increase to 16% and by 2041 increase to 23%. The numbers of those under 18 are shrinking, in 1994 they represented 25% of the population and by 2016 they will represent 20%. 7 These demographic trends are of concern to governments and taxpayers. Employment trends indicate that an increasing number of Canadians are self-employed. In 1994, self-employment accounted for an increasingly large share of total employment growth, 25% of the overall employment gain. In 1993, 35% of the total labour force were in employment situations that provide registered pension plans (RPPs). 8 * It appears that Canadians are becoming increasingly more self-reliant when it comes to providing for their retirement years. We understand the government's concerns with respect to the retirement income system, the CMA eagerly anticipates the release of the government's intentions in relation to seniors and pension reform. PHYSICIAN PERSPECTIVE * Ensuring Dignity in Retirement Canadian physicians treat retired patients on a daily basis and are aware of the challenges many of them face. In this context, Canadian physicians are concerned that all Canadians should have the opportunity to achieve a state of financial well-being to provide for themselves in their retirement years. Recognizing Canada's demographic trends and its current fiscal challenges, governments must ensure that suitable financial incentives are in place to encourage a greater reliance on private savings vehicles. * Equal Opportunities to Accumulate Retirement Savings The vast majority of Canadian physicians are self-employed professionals and therefore are not members of an employer/employee sponsored RPP. They, like many other individuals must plan for and fund their own retirement. The principle of equity demands that the self-employed and those employed but reliant on registered retirement savings plans (RRSPs) be afforded the same opportunities and incentives to plan for their retirement as those in employment situations that provide RPPs (i.e., pension equity). * Fair Treatment Of Retirement Savings For those individuals that may suffer the misfortune of declaring bankruptcy, creditors may seize the annuitant's RRSP assets. This is patently unfair. If an employed individual declares personal bankruptcy their RPP is currently protected from creditors, however, they too run the risk of loosing their RRSP to their creditors. CMA RECOMMENDS... * The federal government should strive for equity between RRSPs and RPPs. * The federal government should refrain from making changes to the retirement income system pending a review of the system. * The federal government should consider legislation that would deem RRSP assets credit proof. * The federal government should consider gradually raising the foreign investment limits applicable to RRSPs and/or RPPs. At the end of a defined period of gradual increases, the federal government should consider removing the foreign investment limit completely. RATIONALE * All Canadians should have an equal ability to accumulate retirement savings regardless of their employment status. Assuming the current demographic and employment trends persist, it is important to recognize the role that RRSPs will play in assisting Canadians to live healthy and dignified lives well past their retirement from the labour force. * In keeping with the principles of fairness and equity, retirement income plans should be treated equally under federal legislation (e.g., Tax Act , Bankruptcy Act). Sound investment decisions and strategies are required that will enable Canadians to accumulate retirement savings and achieve financial security in their retirement. * Given the complexity of the retirement income system, changes to RRSPs and or RPPs should only be considered in the context of a thorough review of the pension system and include a thoughtful, open and meaningful consultation process. * For the past ten years the government has supported the laudable objective of attaining equity between RRSPs and RPPs. * Experts have assured Canadians that: "The two fundamental goals (of retirement savings) are: (1) to guarantee a basic level of retirement income for all Canadians, and (2) to assist Canadians to avoid serious disruption of their pre-retirement living standards upon retirement". * As governments' continue to reduce publicly funded benefits and encourage greater self-reliance, there is a need to ensure that Canadians have the ability to invest and save private dollars for their retirement years. * RRSPs and RPPs are legitimate tax deferral mechanisms and should not be viewed as tax avoidance. Income set aside for retirement should be taxed when it is received as a pension. The tax system should encourage and assist Canadians to arrange for their financial security in retirement. GOODS AND SERVICES TAX (GST) ISSUE The CMA has strong concerns regarding the effect of treating most medical services as GST exempt. Unlike other self-employed professionals, physicians are disadvantaged by the fact that they are not able to claim refunds or collect Input Tax Credits (ITCs) for GST paid. Given that medical services are designated as tax exempt, physicians are forced to absorb the additional tax payable as a result of the GST. Moreover, if the government is to proceed with harmonization, this situation will be compounded. CONTEXT * The GST was designed as a tax on "consumers" and not businesses who provide goods and services. Approximately 95% of physicians' services are paid for by the provinces. Provinces do not pay GST based on their constitutional exemption and by agreement with the federal government. In making medical services exempt, GST is payable by the provider of the service and not recoverable as an input tax credit. Therefore physicians are in the position of paying non-recoverable GST on their inputs. Attempts to recover the GST from provincial governments through increased fees have not been possible since the provinces refuse to reimburse for increased costs due to GST since they are constitutionally exempt from GST. * Unlike other professional medical groups such as dentist, physicians do not have the ability to pass increased GST costs along in the form of higher fees. Unlike other institutional health care providers such as hospitals, physicians do not recover these extra GST costs through a rebate mechanism. Therefore, given that most medical services are exempt, physicians are forced to absorb the additional tax payable as a result of the GST. * Because most medical services are treated as exempt, an independent study estimated that self-employed physicians have been forced to absorb an additional $57.2 million of incremental sales tax (net of the Federal Sales Tax) on an annual basis. The study was submitted to the Department of Finance. By the end of 1995, it is estimated that the profession will have absorbed in excess of $286 million because of the current situation. * In the government's Red Book it states: "A Liberal government will replace the GST with a system that generates equivalent revenues, is fairer to consumers and small businesses, minimizes disruptions to small business, and promotes federal-provincial cooperation and harmonization". As self-employed professionals delivering quality health care services to Canadians, physicians face the same financial realities as do other small businesses. As such, the status of medical services as tax exempt is patently unfair to these small businesses. PHYSICIAN PERSPECTIVE * Access To Quality Health Care While hospitals have been afforded an 83% rebate, self-employed physicians must absorb the full GST load on equipment and other purchases. As a result of this differential tax arrangement, a number of physicians are leaving their community-based practices and moving back into institutions. Therefore, the GST is having an adverse effect on movement towards community-based care, and is impeding patient access to physicians who re-locate from the community to institutions. In this regard, good health policy is not reinforced by good economic policy. * Good Health Policy Should Reinforce Good Economic Policy Most of Canada's premiere medical researchers are employed by hospitals. As part of their research, physicians purchase goods and services that are inputs to their investigative activities. Given that physicians work within a facility, hospitals are eligible to claim the 83% on GST paid on input costs. However, some researchers have grown increasingly concerned that the GST that is recoverable by the hospitals is not returned for medical research and serves to "subsidize" other day-to-day activities. In essence, monies that have been earmarked for specific medical research are being allocated to other areas. Increasingly, physicians are organizing themselves within group practices. While this is, in part, a response to providing greater continuity of care to patients, it is also a reaction to the series of economic decisions that have been taken in the area of health care. Currently, it is estimated that the GST "costs" the average physician $1,500 - $2,000 per year. If physicians were able to claim ITCs, this could give them the added flexibility to employ other individuals in the provision of health care. While the direct effects of the GST are significant and measurable, the indirect effects are even more significant though less measurable. It is estimated that the 55,000 physicians employ up to 100,000 Canadians. Given the disproportionate effects of the GST on the medical profession as employers, the employment dampening effects could be significant. * Fairness For many years, the CMA has supported tax reform - provided such reform improves the overall equity and efficiency of Canada's tax system. In June 1987, for example, CMA wrote to the then-Minister of Finance stating "...we at the CMA strongly support the goals of tax reform and efforts to simplify the tax system while at the same time making it more equitable". We have subsequently reiterated our support for the broad objectives of tax reform on several occasions: it remains as strong today as ever. In the area of health care, self-employed physicians (as well as others) have not been accorded the same treatment under the GST as other health groups. For example, hospitals currently receive a rebate of 83% of GST paid on the assumption that the rebate level leaves them no worse off than under the previous tax regime (i.e., whole). As well, prescription drugs are zero-rated, with the same rationale: to ensure that they are whole. Recognizing that drug regimens can play an equally important role as some physician interventions, why would the government choose to distinguish between the two and zero-rate drugs and exempt medical services. CMA RECOMMENDS... * The CMA believes that there are three ways of proceeding to address physician concerns: (1) similar to the formula for Municipalities, Universities, Schools and Hospitals (MUSH), physicians would be accorded a rebate that would leave them no worse off under the GST; an independent study suggests that 69% would leave physicians whole; or (2) to zero-rate all medical services; or (3) to zero-rate those medical services that are funded by the government. RATIONALE The three options above serve to improve overall fairness and simplify the tax system. The CMA has submitted a proposal to the Department of Finance for consideration which recommends that health care services (including medical services) funded by the provinces be zero-rated. * The proposal to zero-rate health care services funded by the provinces means: - services provided by hospitals, charities and other provincially funded organizations would be zero-rated. - the system would treat all persons in the industry in the same manner and would thus be fairer and simpler to administer. - tax cascading would be eliminated. - in the context of the regionalization of health care in Canada difficult interpretive issues (such as what constitutes a hospital or facility) would be removed. - not all government services would become zero-rated but only those for which the provincial governments fund. The remainder would continue to be exempt and thus the government would derive revenues from the tax on inputs used in providing those services. - Some complexities would remain owing to the fact that some health care services would be zero-rated and some would continue to be exempt. Therefore, any person making a mixture of zero-rated and exempt supplies would still be required to allocate inputs between commercial and non-commercial activities. * Such a proposal would put all publicly-funded health care services on the same tax footing. * The proposal does not focus on self-employed physicians only, but has been developed in the broader context of those services that are publicly-funded. * The proposal attempts to be achieve a greater degree of flexibility in the face of regionalization of health care services in Canada. * It would reinforce the principles of fairness and simplicity in the tax system. * To summarize, the CMA has reiterated its position on several occasions. Some of the major recommendations are: (1) Canadian physicians should not pay more than other professions or occupations under the GST or its replacement; (2) all taxes on business expenses be fairly and fully removed under any replacement tax for the GST; (3) that the government assign a high priority to integrating provincial and federal sales taxes in a fair and equitable way; (4) that the federal government take a leadership role in ensuring that any integrated system not perpetuate existing tax inequities facing Canadian physicians; and (5) any provisions of a replacement tax should reinforce good health and economic policy. NON-TAXABLE SUPPLEMENTARY HEALTH BENEFITS (NTSHB) ISSUE The Canadian Medical Association (CMA) is concerned that Canadians' access to health care services will be threatened if the tax status of supplementary health benefits is changed from their current tax treatment. CONTEXT * Approximately, 70% or 20 million Canadians rely on full or partial private supplementary health care benefits (e.g., dental, drugs, vision care, private health care, 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 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. * Changes in health care technology and health care management have resulted in decreased length of stays in hospitals and an increased reliance upon expensive health technologies. Many of these services are covered by private supplementary health plans, especially when individuals are discharged from hospital (e.g., drugs, private home/health care). PHYSICIAN PERSPECTIVE * Access To Quality Health Care Services: First Priority Changing the status of supplementary health benefits from non-taxable to taxable may contribute decreased access to care, and/or possibly, increased costs to these plans coupled with a reduction in service of government funded programs. * Good Tax Policy Should Support Good Health Policy Non-taxable supplementary health benefits is a good tax policy that serves to reinforce good health policy. This incentive fosters risk pooling which reduces the overall cost of premiums for supplementary health benefit plans. * Fundamental Fairness In The Tax System Incentives that enable access to a broad range of quality health care services (beyond those publicly funded) to include all Canadians should be encouraged and expanded. CMA RECOMMENDS... * That the current federal government policy with respect to employment-related supplementary non-taxable health benefits be maintained. RATIONALE * If the supplementary health benefits become taxable, it seems likely that young healthy people would opt for cash compensation instead of paying taxes on benefits they do not receive. It follows that employer-paid premiums would increase as a result of this exodus in order to offset the additional cost of maintaining benefit levels due to diminishing ability to achieve risk pooling. * The federal government is to be congratulated with respect to last years' decision to maintain the non-taxable status of supplementary health benefits. This decision is an example of the federal governments' commitment to maintain a good tax policy that supports good health policy. The federal government should explore opportunities and incentives that would expand access to supplementary health care benefits to all Canadians. * 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. NATIONAL HEALTH RESEARCH PROGRAM (NHRP) ISSUE The Canadian Medical Association (CMA) believes that the health care system must respect and foster medical education and medical research. The CMA also believes that more emphasis should be placed on health services research focussing on health system reforms and their effect on the health of Canadians. Given the magnitude of change, now is the time for an evaluation of the impact before proceeding with any further reforms. CONTEXT * Canada has experienced rapid and significant changes with respect to health care reform which remains a priority at all levels of government. This environment provides a unique opportunity for the federal government to fund a concerted national evaluation strategy of health reform to date. * On the whole, the CMA would continue to encourage the government to protect earmarked monies dedicated for research activities. PHYSICIAN PERSPECTIVE * Improving The Quality Of The Health Care: Our First Priority For a variety of reasons , in a more forceful way over the last year, the CMA and physicians expressed their concerns with respect to the future of health and the viability of the health care system. The pace of reform has been rapid and change profound. What has been accomplished needs to be evaluated. In this context, the physicians of Canada have reiterated the need to foster health and medical research. * Health Research Policy Reinforcing Economic Policy Establishing a medical and health services research program will assist in attracting and retaining world-class researchers in Canada. There are positive effects that may occur in the economy as a result of this type of research with respect to the health technology sector -- creating a demand for highly skilled jobs in addition to increasing exports in high-tech, value-added goods and services. CMA RECOMMENDS... * That the federal government continue its commitment to medical education, biomedical and health services research. * That the federal government provide funding for a national initiative in evaluating health reforms. RATIONALE * Changes within the Canadian health care system, a system that is viewed as a model around the world, should not be implemented without a sound evaluation strategy. However, with the limited funding available to health researchers and health policy analysts this aspect of health care reform is often neglected or, at best, given cursory acknowledgement. We should not undertake systemic reforms without analyzing the effects that these will have upon the quality of the health care delivered to Canadians. * It is in the government's best interest to ensure that change within the health care system does not continue without evaluating the effect this will have on Canadians' access to quality health services. Once a certain course is set it may be impossible to turn the ship around. TOBACCO TAXATION ISSUE The Canadian Medical Association (CMA) is concerned that the 1994 reduction in the federal cigarette tax will have a significant effect in slowing the decline in cigarette smoking in the Canadian population, particularly in the youngest age group (15-19). CONTEXT * In an effort to combat the smuggling of cigarettes into in Canada, the federal government announced, in early 1994, a reduction in the federal tax on cigarettes in the amount of $5 per carton. In addition, the federal government offered an additional matching reduction of up to $5 per carton for those provinces making reductions in provincial taxes. * At about the same time, in an attempt to counter the effects of the reduction in tobacco taxation, the government announced increased efforts to reduce the accessibility of tobacco products, particularly to minors, and also launched the Tobacco Demand Reduction Strategy in February, 1994. PHYSICIAN PERSPECTIVE * Smoking is the leading preventable cause of premature mortality in Canada. The most recent estimates suggest that more than 40,000 deaths annually in Canada are directly attributable to tobacco use. * Physicians are concerned that the reduction in tobacco taxation may reverse more than two decades of progress in reducing smoking rates. Based on an examination of four population-based surveys and data on tobacco consumption, a workshop convened by Health Canada in 1994 concluded that, in all likelihood, the prevalence of smoking in the Canadian population continued to decline from 1991 to 1993, reversed itself in 1993 and increased from 1993 to 1994. 9 * The effects of smoking on nonsmokers are of major concern to the CMA. More than 20% of Canadians have a health condition such as heart disease or acute respiratory disease, that is aggravated by secondary exposure to tobacco smoke. CMA RECOMMENDS * It is a matter of longstanding policy that the CMA supports the taxation of tobacco products at a level that will discourage their purchase, the revenue to be earmarked for health care budgets. 10 * The CMA has also recommended to the federal government (1994) that it institute a federal health protection assessment (a specially designated tax) on all Canadian cigarettes at the point of manufacture, regardless of their ultimate site of sale. * The CMA is also a co-signatory, along with eight other national medical and health organizations, of the brief Tobacco Taxation in Canada: New Directions, which was presented to the Honourable Paul Martin in February, 1995, and which sets out eight recommendations for the restoration of tobacco taxes, support for the Tobacco Demand Reduction Strategy and the taxation of the tobacco industry. RATIONALE * the government has made in health promotion campaigns against smoking, and which it has continued through the Tobacco Demand Reduction Strategy. _____________ 1 Posner M., Condition Critical. Maclean's. Vol. 108 No. 46, November 13, 1995, p. 46-59. 2 The Angus Reid Group, The Reid Report. Vol. 8, No. 7, July/August, 1993 and Vol. 8. No. 8. September, 1993. 3 The Medical Post 1995 National Survey of Doctors, Fall 1995, page 24. 4 Alvi S.: Health Costs and Private Sector Competitiveness, The Conference Board of Canada, Report 139-95, Ottawa, June, 1995, page 11. 5 Southam News/CTV/Angus Reid, Public Opinion On Government Cutbacks And The Policy Challenges Facing Canada, December 27, 1995. 6 The Angus Reid Group, The Reid Report. Vol. 8, No. 7, July/August, 1993 and Vol. 8. No. 8. September, 1993. 7 Mitchell, A. Population to hit 30 million in 1996: Globe and Mail, January 10, 1996. pp. B1-2. 8 Frenken, H. Capitalizing on RRSPs: Canadian Economic Observer, December 1995. p. 3.1-3.9. Statistics Canada - Cat. No. 11-010. 9 Stephens T. Workshop report: trends in the prevalence of smoking, 1991-1994. Chronic Diseases in Canada 1995; 16(1): 27-32 10 Canadian Medical Association. Smoking and Health: 1991 Update. Can. Med. Assoc. Journal 1991; 142 (2): 232A-232B.
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