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Budget 2009: Economic Stimulus through Targeted Investments in Health Infrastructure - Brief to the Minister of Finance's Roundtable

https://policybase.cma.ca/en/permalink/policy9401
Date
2009-01-12
Topics
Health systems, system funding and performance
  1 document  
Policy Type
Parliamentary submission
Date
2009-01-12
Topics
Health systems, system funding and performance
Text
With economic growth having slowed, Budget 2009 provides an historic opportunity to invest in initiatives that will stimulate the Canadian economy in the short term while also strengthening it in the long term. With the federal government now considering several areas for potential fiscal stimulus, the Canadian Medical Association (CMA) views infrastructure spending as the government's best option. In order to provide much-needed immediate economic stimulus and a responsible, long-term strategy to achieve economic stability, the CMA recommends the federal government invest $2.4 billion in health infrastructure upgrade initiatives to be carried out over the next two years. These initiatives fall into three priority areas: 1) Accelerating existing or "construction-ready" capital projects in health care facilities. The CMA recommends a federal investment of $1.5 billion over two years to accelerate existing hospital and health facility construction projects. While investments in physical infrastructure are required across the continuum of care, a focus on hospital construction - specifically on construction-ready projects already approved at the provincial level - will allow funds to flow more quickly and thus provide a more immediate economic stimulus. Federal investment in hospital and health facility construction will create 16,500 jobs over two years and 11,000 jobs in 2009 alone. These projects may be financed through existing public-private partnerships (P3s). With targeted and strategic federal investment, health facility capital projects would also stimulate further investment in the form of private-sector financing of these capital projects. 2) Accelerating implementation of electronic medical records. Health system information technology is an area where infrastructure investments are needed and would provide significant return on investment through immediate economic stimulus and improved health system efficiency in the medium and long term. CMA recommends that the federal government make a strategic "strings attached" $225-million investment in an Electronic Medical Record Patient Transition Fund that could be managed by the Canada Health Infoway. 3) Modernizing information systems in small- and medium-sized health care facilities. A federal investment of $700 million over two years to upgrade information system hardware and software in small- and medium-sized hospitals could be implemented within the next eight quarters and begin to create 7,700 jobs and rapidly improve health care efficiency. These health infrastructure investments would create 27,000 new jobs over the next two years: 1. 16,500 jobs for existing hospital building projects that are "construction ready"; 2. 4,950 jobs for electronic medical records (EMR) implementation for community-based health care offices; 3. 7,700 jobs for hospital information systems in small- and medium-sized hospitals. Introduction In these challenging economic times, the federal government is to be commended for casting a wide net in search of effective and immediate measures to stimulate Canada's economy. Of course, Canadians must also be assured that we will not be mortgaging our future by doing so. In order to both provide much-needed immediate economic stimulus and a responsible, long-term strategy to achieve economic stability, the CMA recommends that the federal government invest $2.4 billion in health infrastructure upgrade initiatives to be carried out over the next two years. These investments would stimulate further provincial/territorial and private-sector investment. To be clear: these recommendations are in the context of a fiscal stimulus plan and do not encompass CMA's entire long-term vision for high-quality and patient-focused health care. The CMA initiatives fall into three priority areas: 1) Accelerating existing or "construction-ready" capital projects in health care facilities; 2) Accelerating implementation of electronic medical records; 3) Modernizing information systems in small- and medium-sized health care facilities. A critical factor in these recommendations is the fact that the federal government already has in place funding mechanisms to deliver stimulus funds rapidly in all three areas. Canada Health Infoway is such an established vehicle for the EMR initiative and the upgrading of hospital information systems. The Canada Foundation for Innovation or an expanded "Building Canada" program are initiatives that have organizations in place to administer the investments in hospital construction projects. Additionally, these initiatives are flexible in both size and duration. Most economists agree that increasing infrastructure spending generally will boost the economy by creating jobs. In no sector is this more true than health care. Infrastructure investments, will lead to higher employment and more spending on products and services, and generate higher overall demand.i (See Appendix A for investment and job creation quarterly forecasts 2009/2010ii). The Business Register of Statistics Canada reports there were 75,615 establishments in the health service delivery (HSD) industry in 2003, employing 1.3 million people. That year, they accounted for 3.3% of all Canadian business establishments and 7.6% of total employment. In 2003, the GDP of the HSD industry was larger than wholesale trade, retail trade, and the upstream oil and gas mining industry, and almost as large as the construction sector. Physicians' offices (30,120 establishments) accounted for almost 39% of all HSD establishments and employed 142,000 people, or almost 11% of all HSD employees. By targeting investment in the three areas outlined above, the government will respond to Canadians' desire for a strengthened health care system, support Canada's competitive advantage and create 27,000 jobs in the next two years (Figure 1). 1. Accelerating Health Facility Construction Projects The CMA recommends that the federal government invest $1.5 billion over two years to accelerate hospital and/or health facility projects that are "construction ready". In 2001 the CMA identified inadequate investment in buildings, machinery and equipment and in scientific, professional and medical devices as major hurdles to timely access to health care services. While spending has increased in health care since then, governments have placed a lower priority on capital investment when allocating financial resources for health care. The CMA recommends a federal investment of $1.5 billion over two years to accelerate existing hospital and health facility construction projects. This does not capture all the capital requirements in the health system in the medium- and long-term. While investments in physical infrastructure are required across the continuum of care, a focus on hospital construction - specifically on construction-ready projects - will allow funds to flow more quickly and thus provide a more immediate stimulus to the economy. Federal investment in hospital and health facility construction will create 16,500 jobs over a two-year period and 11,000 jobs in 2009 alone. These projects may be financed through existing public-private partnerships (P3s). With targeted and strategic federal investment, health facility capital projects can also stimulate further investment in the form of private-sector financing of capital projects. Across Canada hospitals are seeking to develop innovative approaches to financing capital infrastructure. The CMA agrees with other organizations such as the Canadian Healthcare Association about the need to explore the concept of entering into public-private partnerships to address capital infrastructure needs as an alternative to relying on government funding. Joint ventures and hospital bonds are but two examples of P3 financing. As these types of partnerships are pursued, the CMA recommends that governments establish uniform requirements and regulations to ensure the transparency of the tendering process and adequate measuring of quality of care and cost-effectiveness in both public and private settings.iii The federal government has long showed great leadership in partnering to build Canada's health care system - the Hospital Construction Grants Program of 1948 and the Health Resources Fund Act of 1966. Today our country and our health care system need a new vision for replacing aging physical infrastructure. 2. Electronic Medical Records - Accelerating Coverage for 26 Million Patients CMA recommends that the federal government invest $225 million over two years to accelerate the implementation of an interoperable electronic medical record across Canada. International studies confirm that Canada lags behind nearly every major industrial country when it comes to the adoption of health information technology (Figure 8). The Conference Board of Canadaiv, the Organization for Economic Co-operation and Development (OECD)v, the World Health Organizationvi, the Commonwealth Fundvii, and the Frontier Centre for Public Policy all rate Canada's health care system poorly in terms of value for money and efficiency. The impact of this underinvestment is longer wait times, poorer quality, greater health system costs and a severe lack of financial accountability - especially when it comes to federal dollars. Health system information technology is an area where infrastructure investments are needed and would provide significant return on investment through immediate economic stimulus and improved health system efficiency in the medium- and long-term. CMA recommends that the federal government make a strategic, "strings attached,"1 $225-million investment in an Electronic Medical Record Patient Transition Fund that could be managed by the Canada Health Infoway.2 The fund would finance EMR capital equipment acquisition and EMR change management and transition support, specifically the conversion of 26 million patient records in 30,000 physician offices. This federal investment would be matched by provincial-territorial funds and would thus provide a total of $450 million in economic stimulus and create 5000 new jobs over two years. While public funds would kick-start this initiative, they would stimulate considerable private sector activity in the provision of EMR capabilities across Canada. Assuming the current trend prevails, the ongoing management of the data holdings would be outsourced to private sector companies based on application service provider arrangements. Moreover, these investments are consistent with the Building Canada plan's focus on broadband and connectivity, and with Advantage Canada's goals of creating a knowledge advantage and an infrastructure advantage. Beyond providing immediate stimulus to the Canadian economy, a fully realized EMR system will improve patient outcomes, system efficiency and accountability and save billions of dollars annually. Technology consulting firm Booz Allen Hamilton found that the benefits of an interconnected Electronic Health Record (EHR) in Canada could provide annual system-wide savings of $6.1 billion.viii These savings would come from reduced duplicate testing, transcription savings, fewer chart pulls and less filing time, reductions in office supplies and reduced expenditures due to fewer adverse drug reactions. The study also found 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. By reducing wait times, an interoperable EMR will contribute to saving the Canadian economy billions of dollars each year. A study commissioned by the CMA conservatively calculated that excessive wait times involving just four procedures (joint replacements, cataract surgery, coronary artery bypass grafts and MRIs) cost the economy over $14 billion in 2007 due to lost output and government revenues.ix The Electronic Medical Record Patient Transition Fund focuses on community care and the physician offices where most patient visits occur. 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' offices.x Thus, patient-physician office interactions outnumber patient-hospital interactions by a ratio of 18 to 1. In Ontario (Figure 2), just 3,000 of an average of 247,000 patient visits per day, or 1.2%, are made in hospitals. Figure 2 Patient visits per day in Ontario (Canada Health Infoway) 3. Modernizing Hospital Information Systems The federal government should invest $700 million over two years to modernize information systems in small- and medium-sized hospitals. Aging information systems in small hospitals (fewer than 100 beds) and medium-sized hospitals (100 to 300 beds) create considerable inefficiency in patient care and administration. While larger hospitals have upgraded their information systems, hundreds of smaller facilities have information systems that are at least 10 years old. This means that patients are often forced to provide their personal and health information many times: when checking in to the emergency department, then when having a diagnostic test performed, and again when being admitted to hospital. Each step creates room for error and needlessly wastes the time of health care staff and patients. In addition, these discrete systems may not be networked, a situation that risks compromising patient care. A federal investment of $700 million over two years to upgrade information system hardware and software in small- and medium-sized hospitals could be implemented within the next eight quarters and begin to create 7,700 jobs and rapidly improve health care efficiency. The $700 million investment is based on a recent conservative estimate for outfitting hospitals across the country (see Appendix B). There are at least 70 medium-sized Canadian hospitals requiring major system upgrades immediately at a cost of $15 million per hospital. The distribution of these hospitals would help spread out the fiscal stimulus regionally and mitigate against potential labour shortages. The $700-million recommendation assumes that the majority of hospital information system investments (64%) would need to be focused on the hardware and professional services related to implementing the new systems, with the rest focused on system software. It is important to note that these investments would help support related Canadian software, hardware and professional services firms over the next 24 months and beyond. More importantly, the hospital information system sector is a multibillion dollar global industry. A fiscal stimulus investment in this sector now would help Canadian firms to capitalize on a golden opportunity to export these goods and services, which are increasingly in high demand.xi It is also important that patients be involved in evaluating these systems in order to improve care and system efficiencies. As Roger Martin, Dean of the Rotman School of Business noted: "We can dramatically improve the production of globally competitive health care product and services firms, but only if we work to significantly improve the demand side (patients) of our innovation equation."xii This is in line with the CMA's call for patient-focused funding. Conclusion That these are extraordinary economic times is beyond question, but the CMA contends that it is precisely during such times that opportunities often present themselves. We think the federal government must continue to examine and leverage all available policy levers at its disposal, including studying how the tax system could be used to support renewal within the health care sector. The tax system's level of support for people facing high out-of-pocket expenses remains a particularly pressing question. Currently, the medical expenses tax credit provides limited relief to those whose expenses exceed $1,637, or 3% of net income. The 3% threshold was established before medicare was introduced. Does it still make sense in 2009? Are there ways to enhance this provision to reduce financial disincentives facing many Canadians when they have to pay for health services? The CMA encourages the federal government to undertake a comprehensive review of these and other tax questions pertaining to health. By itself, tax policy will not solve all the challenges facing Canada's health care system, but the CMA believes that the tax system can play a key role in helping the system adapt to changing circumstances, thereby complementing the other two components of our renewal strategy. Similarly, the government must remember that almost five million Canadians do not have a family physician and that Canada needs 26,000 more doctors to meet the OECD average of physicians per population. The federal government wisely recognized the urgency of this situation when it committed to several targeted and affordable measures to begin to address the doctor shortage. It should follow through on its election commitment to take first steps towards addressing the shortage, including contributing $10 million per year over four years to provinces to allow them to fund 50 new residencies per year in Canada's major teaching hospitals, and $5 million per year over four years to help Canadian physicians living abroad who wish to relocate to Canada. These initiatives would begin to increase the supply and retention of physicians in areas of priority need, and could bring back as many as 300 Canadian physicians over four years. Today, the federal government is focused on instituting specific, strategic and immediate economic stimulus measures, and rightfully so. However, we must not let the urgent crowd out the important in terms of building a sustainable health care system that provides timely access to quality health care services for all Canadians. Appendix A. Investment and job creation profile estimates 2009-10 B. Projected Costs to Implement / Upgrade Hospital Information Systems3 Assumptions 1. Total number of hospitals in Canada = 734 a. % small hospitals (< 100 beds) = 69% b. % medium hospitals (< 300 beds) = 18% 2. Components in hospital information systems a. Finance & Administration b. Admission, Discharge, Transfer (ADT) System c. Patient Information System d. Radiology Information System e. Laboratory Information System f. Pharmacy Information System g. Coding & Abstracting System 3. Cost to implement complete HIS for medium size hospital = $15 million a. Ratio of software to hardware and professional services - 1:1.8 b. Software = $5,357,143 c. Hardware & Professional Services = $9,642,857 4. Small hospitals (i.e. < 25 beds) would not have the resources to manage a full HIS a. Cluster implementations among 8 hospitals b. Number of clusters = 33 (total # of hospitals = 270) 5. Small hospitals would have greater requirement for full implementation of HIS a. % of hospitals requiring full implementations = 50% b. Number of hospitals (exclusive of clusters in #4) = 117 c. Total number including clusters in # 4 requiring full implementation = 91 d. Cost to implement full HIS - 60% of medium hospital implementation = $9 million 6. Medium sized hospitals with systems > 10 years old would require full implementation a. % of hospitals requiring full HIS implementation = 30% b. Number of hospitals= 40 7. Major system upgrades are estimated at 40% of cost of a full HIS a. Cost to complete system upgrade = $6 million b. % small hospitals (# of beds between 25 - 99) requiring upgrade = 30% c. Number of hospitals = 70 d. % of medium hospitals requiring upgrade = 30% e. Number of hospitals = 40 Investment Needed 1. Investment required for small hospitals - full implementation $ 9,000,000 x 91 = $ 819,000,000 2. Investment required for small hospitals - system upgrade $ 6,000,000 x 70 = $ 420,000,000 3. Investment required for medium hospitals - full implementation $ 15,000,000 x 40 = $ 600,000,000 4. Investment required for medium hospitals - system upgrades $ 6,000,000 x 40 = $ 240,000,000 5. Total investment for HIS for small and medium size hospitals $ 2,079,000,000 References 1 The conditions of this health information investment should include: * Fifty-fifty FPT cost sharing; * Involvement of the clinical community in the input and oversight of the program; * Use of consistent standards. 2 See Table l in Appendix A for full investment horizon details. 3 Prepared for the Canadian Medical Association by Branham Group December 2008 see: http://www.branhamgroup.com/company.php i Will Stimulus Help Employment in a 21st Century Economy? Wall Street Journal, Dec. 5, 2008. ii These estimates were derived using the principle of an employment multiplier and adapted using the methodology applied by Informetrica for an infrastructure study they prepared for the Federation of Canadian Municipalities (05/08). iii Improving performance measurement, quality assurance and accountability in the public-private interface - CMA Policy Statement, It's still about access! Medicare Plus, July 2007 iv A Report Card on Canada see: http://sso.conferenceboard.ca/HCP/overview/health-overview.aspx v Organization for Economic Co-operation and Development [OECD] (2007). OECD Health Data 2007. Version 07/18/2007. CD-ROM. Paris: OECD. vi World Health Organization [WHO] (2007). World Health Statistics 2007. see: http://www.who.int. vii 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 viii Booz, Allan, Hamilton. Canada Health Infoway's 10-Year Investment Strategy: pan-Canadian electronic health record, March 2005-09-06. ix The economic cost of wait times in Canada, January 2008. This study was commissioned by the Canadian Medical Association 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 x 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. xi Canada boasts a sophisticated network of providers, many globally-recognized hospitals, and a number of major centres for health research. We spend aggressively in global terms on health research, which is supported nationally by the Canadian Institutes of Health Research (CIHR). But against this backdrop lies a mystery: why do so few Canadian health care firms sell their products and services in the international market? Only nine sell as much as $100 million of any product or service to customers outside the country, with total sector sales outside Canada of less than $5 billion. This sector total compares unfavourably with the foreign sales of individual firms such as Bombardier at $22 billion, and Magna International at $14 billion; overseas health-care sales are even dominated by the export of sawn logs, at $9 billion. see: http://www.rotman.utoronto.ca/rogermartin/Canadianhealthcaremystery.pdf (accessed January 7, 2009) From: Roger, Martin, The Canadian Health Care Mystery: Where Are the Exports? Rotman magazine (Winter 2006). xii Ibid.
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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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The Canadian Medical Association's brief to the Standing Committee on Finance concerning the 2007 budget

https://policybase.cma.ca/en/permalink/policy8566
Last Reviewed
2019-03-03
Date
2006-09-27
Topics
Health systems, system funding and performance
  1 document  
Policy Type
Parliamentary submission
Last Reviewed
2019-03-03
Date
2006-09-27
Topics
Health systems, system funding and performance
Text
Making Canadians healthy and wealthy In the face of an increasingly competitive global economy, Canada must create incentives for its citizens and businesses to invest so that greater investment will increase productivity and our standard of living. The first place to invest is in the health of the workforce. The CMA recognizes the benefits of aligning tax policy with health policy in order to create the right incentives for citizens to realize their potential. Global competitiveness is about getting Canada beyond commodities The latest Canadian economic outlook is mixed. Our economy is forecast to grow by 3 per cent in 2007 which is the fastest growing economy among the G7 countries, according to the International Monetary Fund's semi-annual World Economic Outlook. While this may seem impressive, this growth is fuelled by commodity prices. "The Canadian economy continues to perform robustly, benefiting from...the boom in global commodity prices,'' the IMF said. In fact this is one of the key concerns included in the latest outlook from TD Economics, namely that, "Weakening U.S. demand will lead to a pullback in commodity prices, including a drop in the price of oil to $50 US a barrel in 2007"1. What can the federal government do to mitigate these bumps in the global economy? Investing in "specialized factors" is the key to global competitiveness Canada's place in a competitive world cannot be sustained by commodities or what the godfather of competitive advantage theory, world-renowned Harvard Professor Michael Porter, calls "non-key" factors. Instead, Porter suggests that sustainable competitive advantage is based on "specialized factors" such as skilled labour, capital and infrastructure. These specialized factors are created, not inherited. Moreover, Porter makes the important distinction that the crafting of "social" policies must make them reinforcing to the true sources of sustainable prosperity.2 The demand for highly skilled labour forces does not fluctuate as commodity prices do. This submission follows Porter's line of thinking in suggesting that Canada should build on these specialized factors, emphasizing the health of our skilled labour force, enhancing the skills of our health care providers and making key investment in our electronic health infrastructure. Why the CMA is addressing Canada's place in competitive world The 63,000 members of the Canadian Medical Association are best known for taking care of Canadians - 32.3 million of them - individually and collectively. Through prevention, treatment and research, physicians are also vital in supporting business by ensuring that our work force is as healthy as can be. But our members are also an important economic force in their own right as they own and operate over 30,000 small businesses employing 142,000 people across the country. 3 What's more, small businesses, like the ones physicians run, invest in research and development proportionally on a far larger scale than big corporations. 4 In addition to the clinical services they provide, physicians are vitally engaged in advancing medical knowledge through teaching and research, leading to greater innovation. Health as an investment -"the greatest benefit to mankind" According to distinguished Yale economist, William Nordhaus, "The medical revolution over the last century appears to qualify, at least from an economic point of view, for Samuel Johnson's accolade as "the greatest benefit to mankind." 5 People demand and spend more money on health because it is useful. The goal of a competitive economy is to produce more wealth. The wealthier our citizens become, the more health care they demand. In other words health care is in economic terms a "superior good". Short, medium and long-run incentives for increased productivity The pursuit of productivity to ensure Canada's competitiveness in the world is not and cannot be a short-term goal. Productivity is apolitical. Setting the foundation for productivity requires dedication to long-term goals in education, physical infrastructure and health. However, there are recommendations that can create immediate incentives for citizens and businesses to kick start more productive activity sooner than later. Executive Summary The CMA's pre-budget submission presents the facts on how investments in citizens, businesses and health infrastructure make our economy more competitive. Improvements in the quality of care, and especially timely access to care, enable the Canadian labour force to increase its performance and fully reach its potential. Our submission is also sensitive to the constraints facing the federal government and so we have considered the return on investment for these recommendations. The CMA recognizes the benefits of aligning tax policy with health policy in order to create the right incentives for citizens to realize their potential. Accordingly, our proposals include tax incentives for healthy living and a recommendation to encourage savings for long-term health care. The time horizon for our 10 recommendations ranges from short-term wins such as getting Canadian doctors working in the U.S. back to Canada sooner than later to turning the tide of rising obesity in Canada. We hope that the Standing Committee on Finance considers these short-term returns on investment as well as the longer returns on investment. A Greek proverb said it best, "A society grows great when old men plant trees whose shade they know they shall never sit in". This can be a great legacy of the Committee. On behalf of the members of the Canadian Medical Association, I wish you all the best in your deliberations. Recommendations for Committee consideration Medicine for a More Competitive Canadian Economy6 -10 recommendations with investment estimates A. CITIZENS - healthy living Recommendation 1: That the government consider the use of taxes on sales of high-calorie, nutrient-poor foods as part of an overall strategy of using tax incentives and disincentives to help promote healthy eating in Canada. Recommendation 2: That the government assess the feasibility of an individual, tax-sheltered, long-term health care savings plan. B. BUSINESS - healthy workforce Recommendation 3: That the government advances the remaining $1-billion from the 2004 First Ministers Accord that was originally intended to augment the Wait Times Reduction Fund (2010-2014) to support the establishment of a Patient Wait Times Guarantee and deliver on the speech from the throne commitment. Recommendation 4: That the federal government provide the Canadian Institute for Health Information with additional funding for the purpose of enhancing its information gathering efforts for measuring, monitoring and managing waiting lists and extending the development and collection of health human resource data to additional health professions. Recommendation 5: That the government launch a direct advertising campaign in the United States to encourage expatriate Canadian physicians and other health professionals to return to practice in Canada. Investment: A one-time investment of $10-million. Recommendation 6: That the government provide a rebate to physicians for the GST/HST on costs relating to health care services provided by a medical practitioner and reimbursed by a province or provincial health plan. Investment: $52.7-million per year or 0.2 % of total $31.5- billion GST revenues. C. INFRASTRUCTURE - healthy systems Recommendation 7: That the government follow through on the recommendation by the Federal Advisor on Wait Times to provide Canada Health Infoway with an additional $2.4-billion to secure an interoperable pan-Canadian electronic medical record with a targeted investment toward physician office automation. Investment: $2.4-billion over 5 years. Recommendation 8: That the government establish a Public Health Infrastructure Renewal Fund ($350-million annually) to build partnerships between federal, provincial and municipal governments, build capacity at the local level, and advance pandemic planning. Recommendation 9: That the government recommit to the $100-million per year for immunization programs under the National Immunization Strategy. Recommendation 10: That the government Increase the base budget of the Canadian Institutes of Health Research to enhance research efforts in the area of population health and public health, as well as significantly accelerate the pace of knowledge transfer. Investment: $600-million over 3 years. Introduction It is well known that Canada's place in a competitive world cannot be sustained by commodities or what the godfather of competitive advantage theory, Michael Porter calls "non-key" factors. Instead Porter suggests that sustainable competitive advantage is based on "specialized factors" such as skilled labour, capital and infrastructure. These specialized factors are created, not inherited. Moreover, Porter makes the important distinction that the crafting of "social" policies must make them reinforcing to the true sources of sustainable prosperity.7 The demand for highly skilled labour forces does not fluctuate as commodity prices do. This submission follows that line of thinking in suggesting that Canada should build on these specialized factors, emphasizing the health of our skilled labour force, enhancing the skills of our health care providers as well as making key investment in our health infrastructure - electronic and otherwise. Outline: healthy citizens, businesses, infrastructure and affordable government The Canadian Medical Association (CMA) brief submitted to the Standing Committee on Finance will make 10 recommendations on how the federal government can make our economy more competitive by investing in three priorities: health, health care and health infrastructure. The brief will address these topics, aligning them with support for our (A) citizens, (B) businesses and (C) infrastructure. The CMA also recognizes that the federal government does not have unlimited resources and suggests actions to be taken in order to ensure that these recommendations are both affordable and sustainable. Accordingly, we will also provide a "balance sheet" of investments, return on investments, as well as revenue raising possibilities that could help create incentives for healthy living and, in turn, a more competitive economy. A. Citizens - healthy living Canadians must become fitter and healthier. Almost 60% of all Canadian adults and 26% of our children and adolescents are overweight or obese. 8 Dr. Ruth Collins-Nakai, the immediate past-president of the CMA and a cardiac-care specialist, recently said ""I have a very real fear we are killing our children with kindness by setting them up for a lifetime of inactivity and poor health,". Canada should follow the lead of European countries, which have recently recommended a minimum of 90 minutes a day of moderate activity for children. Kicking a soccer ball or riding a skateboard for 15 to 30 minutes two or three times a week is not good enough, she said. Obesity costs Canada $9.6 billion per year. 9 These costs continue to climb. The federal government must use every policy lever possible at its disposal in order to empower Canadians to make healthy choices, help to reduce the incidence of obesity and encourage exercise as well as a proper diet. Obesity and absenteeism affect the bottom line Obesity not only hurts our citizens it is also a drag on Canadian competitiveness. There is a direct correlation between increasing weights and increasing absenteeism. The costs associated with employee absenteeism are staggering. Employee illness and disability cost employers over $16-billion each year.10 For instance, the average rate of absence due to illness or disability for full-time Canadian workers was 9.2 days in 2004, a 26% increase over the last 8 years, according to Statistics Canada's latest labour force survey. While there is a growing awareness of the costs due to obesity are well known. The programs and incentives in place now are clearly not working as the incidence of obesity continues to grow. The benefits of turning the tide of obesity are also clear. In his remarks to the CMA in August 2006, Minister Tony Clement made the following statement: "And you know and I know that health promotion, disease and injury prevention not only contribute to better health outcomes, they help reduce wait times as well." The experts agree, "The economic drive towards eating more and exercising less represents a failure of the free market that governments must act to reverse it."11 Recommendation 1: That the government consider the use of taxes on sales of high-calorie, nutrient-poor foods as part of an overall strategy of using tax incentives and disincentives to help promote healthy eating in Canada. Tax-sheltered savings for long-term care - aligning tax policy and health policy Canada is entering an unprecedented period of accelerated population aging that will see the share of seniors aged 65 and over increase from 13% in 2005 to 23% in 2031. At the same time, the cost of privately funded health services such as drugs and long-term care are projected to increase at double-digit rates as new technologies are developed and as governments continue to reduce coverage for non-Medicare services in order to curb fiscal pressures12. Since seniors tend to use the health system more intensively than non-seniors, the rising cost of privately funded health services will have a disproportionately high impact on seniors. Canadians are not well equipped to deal with this new reality. Private long-term care insurance exists in Canada, but is relatively on the Canadian scene and has not achieved a high degree of market penetration. New savings vehicles may be needed to help seniors offset the growing costs of privately funded health services. One approach would be extend the very successful model of RRSPs to enable individuals save for their long-term care needs via a tax-sheltered savings plan. Recommendation 2: That the government assess the feasibility of an individual tax-sheltered long-term health care savings plan. B. Business - healthy workforce In spite of the fact that health as an economic investment has proven returns, governments have been letting up in their support of their citizens' health. The impact is felt not only in terms of poorer health but it also affects businesses through increased absenteeism, as well as governments through lower tax revenues. According to the Center for Spatial Economics, "...the cumulative economic cost of waiting for treatment across Ontario, Saskatchewan, Alberta and BC in 2006 is estimated to be just over $1.8-billion. This reduction in economic activity lowers federal government revenues by $300-million." 13 The total costs to the federal government are even higher if all 10 provinces were included. The estimate is based on four of the five priority areas identified in the 2004 First Ministers Health Accord: total joint replacement surgery, cataract surgery, coronary artery bypass graft, and MRI scans. If you wonder what all this has to do with Canadian business, ask yourself how many person/hours employers lose due to illness? How much productive time is lost due to the stress of an employee forced to help an elderly parent who cannot find a doctor? This challenging situation is going to get worse, as the population ages, and as our health professionals age and retire. Supporting the Patient Wait Time Guarantee The establishment of pan-Canadian wait time benchmarks and a Patient Wait Times Guarantee are key to reducing wait times and improving access to health services. The 2004 First Ministers' health care agreement set aside $5.5-billion for the Wait Time Reduction Fund, of which $1-billion is scheduled to flow to provinces between 2010 and 2014. To assist provinces with the implementation of the wait time guarantee while remaining within the financial parameters of the health care agreement, the federal government could advance the remaining $1-billion and flow these funds to provinces immediately. Recommendation 3: That the government advances the remaining $1-billion from the 2004 First Ministers Accord that was originally intended to augment the Wait Times Reduction Fund (2010-2014) to support the establishment of a Patient Wait Times Guarantee and deliver on the speech from the throne commitment. Making investments count and counting our investments It would be irresponsible for government to make investments if the results were not being measured. As management guru Tom Peters suggests, "What you do not measure, you cannot control." And, "What gets measured gets done." As billion dollar federal funding of health care reaches new heights, the value of measuring these investment increases. That is where the Canadian Institute for Health Information (CIHI) comes in. CIHI has been involved in developing wait time indicators and tracking Canada's progress on wait times. It is essential that we have an arm's length body responsible for collecting data on wait times as part of Canada's effort to improve timely access to care for Canadians. CIHI has also played an active role in health human resource data collection and research. Their financial support for the 2004 National Physician Survey resulted in a one-of-a-kind research file with input from over 20,000 Canadian physicians. Recommendation 4: That the federal government provide the Canadian Institute for Health Information with additional funding for the purpose of enhancing its information gathering efforts for measuring, monitoring and managing waiting lists and extending the development and collection of health human resource data to additional health professions. Direct advertising in the U.S. to bolster health human resources deficit The primary barrier affecting timely access to quality health care is the shortage of health care professionals. Canada currently ranks 26th in the OECD in terms of physicians per capita, at 2.1 MDs per 1,000 people. More than three million Canadians do not have a family physician. This situation will get worse as the population ages and as our health professionals age and retire. Fortunately, another short-term source of health professionals exists that Canada should pursue. Thousands of health care professionals are currently working in the United States including approximately 9,000 Canadian trained physicians. We know that many of the physicians who do come back to Canada are of relatively young age meaning that they have significant practice life left. While a minority of these physicians do come back on their own, many more can be repatriated in the short-term through a relatively small but focussed effort by the federal government led by a secretariat within Health Canada. Recommendation 5: That the government launch a direct advertising campaign in the United States to encourage expatriate Canadian physicians and other health professionals to return to practice in Canada. Investment: A one-time investment of $10-million. Re-investing the GST for 30,000 small businesses The continued application of the GST on physician practices is an unfair tax on health. Because physicians cannot recapture the GST paid on goods and services for their practices in the same way most other businesses can, the GST distorts resource allocation for the provision of medical care. As a result, physicians end up investing less than they otherwise could on goods and services that could improve patient care and enhance health care productivity such as information management and information technology systems. The introduction of the GST was never intended to fall onto the human and physical capital used to produce goods and services. The GST is a value-added tax on consumption that was put into place to remove the distorting impact that the federal manufacturers sales tax was having on business decisions. However, the GST was applied to physician practices in a way that does exactly the opposite. The federal government must rectify the situation once and for all. Based on estimates by KPMG, physicians have paid $1.1-billion in GST related to their medical practice since 1991. This is $1.1-billion that could have been invested in better technology to increase care and productivity. Recommendation 6: That the government provide a rebate to physicians for the GST/HST on costs relating to health care services provided by a medical practitioner and reimbursed by a province or provincial health plan. Investment: $52.7-million per year or 0.2 % of total $31.5-billion GST revenues. C. Infrastructure -healthy system Recovery of health information technology investments is almost immediate A Booz, Allen, Hamilton study on the Canadian health care system estimates that the benefits of an EHR could provide annual system-wide savings of $6.1 billion, due to a reduction in duplicate testing, transcription savings, fewer chart pulls and filing time, reduction 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. Evidence shows that the sooner we have a pan-Canadian EHR in place, the sooner the quality of, and access to health care will improve.14 Mobilizing physicians to operationalize a pan-Canadian Electronic Health Record 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). The CMA is urging the federal government to allocate an additional investment of $2.4-billion to Canada Health Infoway over the next five years15 to build the necessary information technology infostructure to address wait times16 as well as support improved care delivery. Both the Federal Wait Times Report and Booz Allen Study concur that this requires automating all community points of care - i.e., getting individual physician offices equipped with electronic medical records (EMRs). This is a necessary, key element to the success of the EHR agenda in Canada and recent assessments place the investment required at $1.9-billion of the $ 2.4-billion. CHI has proven to be an effective vehicle for IT investment in Canadian health care. For example, as a result of CHI initiatives, unit costs for Digital Imaging have been reduced significantly and are already saving the health care system up to 60-million dollars. In fact as a result of joint procurements and negotiated preferred pricing arrangements through existing procurement efforts with jurisdictional partners the estimated current cost avoidance is between $135-million to $145-million. Moreover, in the area of a Public Health Surveillance IT solution, a pan Canadian approach to CHI investments with jurisdictional partners has lead to benefits for users, the vendor and Canadians. The negotiation of a pan-Canadian licence enables any jurisdiction to execute a specific licence agreement with the vendor and spawn as many copies as they need to meet their requirements. The vendor still owns the IP and is free to market the solution internationally - clearly a win/win for both industry and the jurisdictions. Recommendation 7: That the government follow through on the recommendation by the Federal Advisor on Wait Times to provide Canada Health Infoway with an additional $2.4-billion to secure an interoperable pan-Canadian electronic medical record with a targeted investment toward physician office automation. Investment: $2.4-billion over 5 years. Establishing a Public Health Infrastructure Renewal Fund The CMA remains concerned about the state of Canada's public health system. Public health, including the professionals providing public health services, constitutes our front line against a wide range of threats to the health of Canadians. While there is much talk about the arrival of possible pandemics, Canada's public health system must be ready to take on a broad range of public health issues. The CMA has been supportive of the Naylor report which provides a blue print for action and reinvestment in the public health system for the 21st century. While this will take several years to achieve, there are some immediate steps that can be taken which will lessen the burden of disease on Canadians and our health care system. These steps include establishing a Public Health Partnership Program with provincial and territorial governments to build capacity at the local level and to advance pandemic planning. In addition, we call on the government to continue its funding of immunization programs under its National Immunization Strategy. Public health must be funded consistently in order to reap the full benefit of the initial investment. Investments in public health will produce healthier Canadians and a more productivity workforce for the Canadian economy. But this takes time. By the same token, neglect of the public health system will cost lives and hit the Canadian economy hard. Recommendation 8: That the government establish a Public Health Infrastructure Renewal Fund ($350-million annually) to build partnerships between federal, provincial and municipal governments, build capacity at the local level, and advance pandemic planning. Supporting the National Immunization Strategy Dr. Ian Gemmell, Co-Chair of the Canadian Coalition for Immunization Awareness and Promotion, has said, "Vaccines provide the most effective, longest-lasting method of preventing infectious diseases in all ages." strongly urge that immunization programs be supported. Healthy citizens are productive citizens and strong immunization programs across the country pay for themselves over time. Recommendation 9: That the Federal Government recommit to the $100-million per year for immunization programs under the National Immunization Strategy. Making medical research investments count - supporting knowledge transfer The Canada Institutes of Health Research (CIHR) was created to be Canada's premier health research funding agency. One of the most successful aspects of the CIHR is its promotion of inter-disciplinary research across the four pillars of biomedical, clinical, health systems and services as well as population health. This has made Canada a world leader in new ways of conducting health research. However, with its current level of funding, Canada is significantly lagging other industrialized countries in its commitment to health research. Knowledge transfer is one of the areas where additional resources would be most usefully invested. Knowledge Translation (KT) is a prominent and innovative feature of the CIHR mandate. Successful knowledge translation significantly increases and accelerates the benefits flowing to Canadians from their investments in health research. Through the CIHR, Canada has the opportunity to establish itself as an innovative and authoritative contributor to health-related knowledge translation. Population and public health research is another area where increased funding commitments would yield long-term dividends. Recommendation 10: That the government Increase the base budget of the Canadian Institutes of Health Research to enhance research efforts in the area of population health and public health, as well as significantly accelerate the pace of knowledge transfer. Investment: $600-million over 3 years. Conclusion The CMA recognizes the benefits of aligning tax policy with health policy in order to create the right incentives for citizens to realize their potential. Accordingly our proposals include tax incentives for healthy living as well as a recommendation to encourage savings for long-term health care. The time horizon for our 10 recommendations ranges from short-term wins such as getting Canadian doctors working in the U.S. back to Canada sooner than later to turning the tide of rising obesity in Canada. We hope that the Standing Committee on Finance considers these short-term returns on investment as well as the longer returns on investment. A Greek proverb said it best, "A society grows great when old men plant trees whose shade they know they shall never sit in". This can be a great legacy of the Committee. On behalf of the members of the Canadian Medical Association, I wish you all the best in your deliberations. Appendix 1 - Recommendations for Committee consideration 10 point plan with estimated investments and revenues Appendix 2 - The Information Technology Agenda in the Canadian Health Care Sector * The Health Council of Canada, the Presidents and CEOs from the Academic Healthcare Organizations and the federal advisor on wait times all agree on the need to accelerate the building out of the information technology infostructure for the healthcare sector * All these groups amongst others argue that there are large gains to be made on improving healthcare delivery and achieving efficiencies in operating the health care system * Automating health care delivery in Canada will lead to a more efficient healthcare system and will build industry capacity to compete in the international market place * A $10-billion investment is estimated to result in a return on investment (ROI) exceeding investment dollars by an 8:1 margin, and a net savings of $39.8-billion over a 20-year period. It is estimated that a net positive cash flow would occur in Year Seven of implementation, and an investment breakeven by Year 11, resulting in an annual net benefit of $6.1-billion.17 * Part of this investment is to automate the over 35,000 physicians who have a clinic in a community setting * It is estimated that $1.9-billion is needed to accomplish this task which when complete will facilitate better management of wait times, improved patient safety, helping to address in part the human resource shortage for providers as well as make a contribution to improved First Nation health. * Our recommendation is that the Federal government provide a further direct investment of $1-billion into Canada Health Infoway (CHI) that is targeted to the automation of physician offices. This funding would pay for 50% of the costs to automate a physician's clinic. * The funds would be allocated to provinces and medical associations through CHI once an agreement has been developed. A jointly developed program would ensure complementarity with a provincial health IT strategy and a program that has been designed by physicians such that it does the most to improve health care delivery * Physicians would be asked to pay the other 50% and through tax policy they would be able to claim a deduction for capital information technology acquisitions * This arrangement mirrors current programs funded by CHI on a 75%-25% cost sharing model with provinces but with physicians picking up approximately 25% of the costs Appendix 3 Can taxation curb obesity? A recent article in the New Scientiest.com1 asks, Can taxation curb obesity? "The economic drive towards eating more and exercising less represents a failure of the free market that governments must act to reverse."18 "We have market failure in obesity, because we have social costs greater than the private costs," according to Lynee Pezullo director of the economic advisory group Access Economics. "The government also bears the health costs, and people don't take into account costs they bear themselves. If people had to pay for their own dialysis they might bear these things in mind a bit more." When two-thirds of the population of countries like Australia or the US are obese or overweight, you can't handle the problem with simple solutions like education," Barry Popkin of the University of North Carolina, Chapel Hill. A Yale University professor is generating support for a "twinkie tax"1 on high-calorie foods like french fries. This tax works In California in 1988, Proposition 99 increased the state tax by 25 cents per cigarette pack and allocated a minimum of 20% of revenue to fund anti-tobacco education. From 1988 to 1993, the state saw tobacco use decline by 27%, three times better than the U.S. average.1 CMA is not alone in supporting a junk food tax In December, 2003, the World Health Organization proposed that nations consider taxing junk foods to encourage people to make healthier food choices. According to the WHO report, "Several countries use fiscal measures to promote availability of and access to certain foods; others use taxes to increase or decrease consumption of food; and some use public funds and subsidies to promote access among poor communities to recreational and sporting facilities." The American Medical Association is planning to demand the government to levy heavy tax on the America's soft drinks industry. Currently, 18 U.S. states have some form of "snack" food tax in place and five states have proposed policy and legislative recommendations. The economic costs of obesity are estimated at $238-billion annually, and rising. Along the same lines, the former Surgeon General, C. Everett Koop, believes that after smoking, "obesity is now the number one cause of death in [the U.S.]...we're not doing the same kind of things with obesity that we have done with smoking and alcohol as far as government programs are concerned ... It's got to be like smoking, a constant drum beat." 1 "U.S. Slowdown Underway Canada in for a Bumpy Ride" See www. td.com/economics/ (accessed Sept. 19, 2006) 2www.worldbank.org/mdf/mdf1/advantge.htm (accessed Sept. 19, 2006) 3 Source: Statistics Canada, Business Register 2005. 4 Source: Statistics Canada, Industrial Research and Development -2004 intentions, No. 88-202-XIB, January 2005. 5 Nordhaus notes that over the 1990-1995 period the value of improved health or health income grew at between 2.2 and 3.0 per cent per year in the United States, compared to only 2.1 per cent for consumption. See The Health of Nations: The Contribution of Improved Health to Living Standards William D. Nordhaus, Yale University www.laskerfoundation.org/reports/pdf/economic.pdf (accessed Sept. 18, 2006) 6 See Appendix 1 for 3-year investment details as well as short, medium and long-term returns on investment 7 www.worldbank.org/mdf/mdf1/advantge.htm Accessed September 20, 2006. 8 Source: ww2.heartandstroke.ca/Page.asp?PageID=1366&ArticleID=4321&Src=blank&From=SubCategory Accessed August 14, 2006. 9 P.Katzmarzyk, I. Janssen "The Economic costs associated with physical inactivity and obesity in Canada: An Update" Can J Applied Physiology 2004 Apr; 29(2):90-115. www.phe.queensu.ca/epi/ABSTRACTS/abst81.htm Accessed August 14, 2006. 10 Staying@Work 2002/2003 Building on Disability Management, Watson Wyatt Worldwide www.watsonwyatt.com/canada-english/pubs/stayingatwork/ Accessed July 31, 2006. 11 Swinburn, et al. International Journal of Pediatric Obesity (vol 1, p 133) (accessed Sept. 19, 2006) 12 Canada's Public Health Care System Through to 2020, the Conference Board of Canada, November 2003. 13 The Economic Cost of Wait Times in Canada, by the Center for Spatial Economics, June 2006. www.cma.ca/multimedia/CMA/Content_Images/Inside_cma/CMA_This_Week/BCMA-CMA-waittimes.pdf 14 Booz, Allan, Hamilton Study, Pan-Canadian Electronic Health Record, Canada's Health Infoway's 10-Year Investment Strategy, March 2005-09-06 15 See Appendix 1 and Appendix 2 for more investment details and background. 16 Final Report of the Federal Advisor on Wait Times, June 2006, Dr. Brian Postl 17 Booz Allen Hamilton Study, Pan-Canadian Electronic Health Record, Canada Health Infoway's 10-Year Investment Strategy, March 2005 18 Can taxation curb obesity? See www.newscientist.com/article/dn9787-can-taxation-curb-obesity.html (accessed September 20, 2006.) Medicine for a more competitive Canadian economy
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Letter - CMA’s 2006 Pre-Budget Submission to the Minister of Finance

https://policybase.cma.ca/en/permalink/policy2031
Last Reviewed
2013-03-02
Date
2006-04-19
Topics
Health human resources
Health systems, system funding and performance
  1 document  
Policy Type
Parliamentary submission
Last Reviewed
2013-03-02
Date
2006-04-19
Topics
Health human resources
Health systems, system funding and performance
Text
On behalf of the Canadian Medical Association (CMA), I am pleased to present you with our pre-budget submission for your government's consideration. The CMA appreciates the opportunity to provide input into this government's first budget and to identify strategic investment opportunities for the long term health of Canadians. While Canada's health system faces many challenges, we believe that immediate action by the federal government in four key areas will offer both short term and long term benefits. They are: (1) the establishment of a Canada Health Access Strategy to support a patient wait-times guarantee; (2) a proposed Visa position buyback program and a repatriation program to immediately address shortfalls in health human resources; (3) a strengthening of Canada's public health infrastructure; and (4) a remedy for GST-induced distortions in the health care system.We believe these proposals fit well with the government's stated priorities. While information on each of these recommendations is attached for your information and consideration, I would like to provide you with an overview of each. 1. CANADA HEALTH ACCESS STRATEGY The CMA has been advocating for the implementation of maximum wait time thresholds or care guarantees for a number of years and is pleased that the government has included this as one of its top five priorities. As a first step, the CMA worked with six other specialty societies as part of the Wait Times Alliance (WTA) to develop a set of pan-Canadian wait-time benchmarks or performance goals released last August. We believe this work served as a catalyst for the provincial and territorial governments to move some way toward meeting their commitment in announcing pan-Canadian wait-time benchmarks last December. We must continue to work with governments and the academic community to improve access to medical care beyond the five priority health issues identified in the First Ministers' 2004 10-year health care plan. The second step in implementing patient wait-time guarantees is the issue of honouring the commitment and providing for patient recourse. As a member of the WTA, the CMA strongly supports accelerating the timetable to reduce wait times nationwide. However, the federal government needs to do its part to assist provinces in advancing the timetable by stepping up the flow of funds earmarked for the last four years of the accord. Our proposed Canada Health Access Strategy is comprised of three components directed at making this happen: supporting provinces to expand capacity and to handle surges in demand; supporting the creation of regional and/or national referral networks; and establishing a Canada Health Access Fund for a "safety valve" to help Canadians access care elsewhere when necessary. Details on how this Strategy would work are attached. The point is that this Strategy is necessary to assure Canadians that they get the care they need when they need it. Recommendation 1. The federal government advance the remaining $1 billion from the 2004 First Ministers Accord that was originally intended to augment the Wait Times Reduction Fund (2010-2014) to support a Canada Health Access Strategy by: (a) expanding provincial surge capacity : $500 million to be flowed immediately to provinces on a per capita basis in return for agreement to accelerate the timetable for bringing down wait times, as was promised in the recent federal election campaign; (b) improving national coordination of wait time management: $250 million to support creation of regional and/or national referral networks, a more coordinated approach to health human resource planning, expansion of information technology solutions to wait time management and facilitation of out-of-country referrals; and (c) establishing a Canada Health Access Fund: $250 million initial investment in an alternative patient recourse system or "safety valve" when and if clinically-indicated maximum wait time benchmarks as agreed to by provinces/territories last December are exceeded. Addressing Shortfalls in Health Human Resources As identified by Minister Clement in a recent speech at the "Taming of the Queue III" wait-time conference, addressing shortages in health human resources is a key element of any strategy for reducing lengthy wait-times. Unfortunately, we face serious physician shortages, starting with family physicians. The bad news is that it can take several years to educate and train the necessary professionals. The good news is that there are some strategies that can be undertaken to address the situation in the short term. 2. VISA POSITION BUYBACK FUND One such strategy is our Visa Position Buyback proposal that would eliminate the backlog of 1,200 qualified international medical graduates (IMGs) over the next five to seven years. Currently, these qualified IMGs, who are either Canadian citizens or landed immigrants, are unable to access the necessary residency training. One existing source for training capacity exists with the positions purchased by foreign governments for visa trainees. We estimate that there are over 900 current visa trainees at all rank levels. By implementing the Visa Position Buyback program, the government is able to take an immediate step that will produce tangible results as soon as a two to four years from now. This initiative would be part of a longer term plan to fully address the shortages in health human resources and help the government meet its commitment to implement a properly functioning patient wait-time guarantee. Recommendation 2a. The federal government allocate $381.6 million toward the training of up to 1,200 IMGs through to practice over the 2007/08 to 2015/16 period. Funding would be made available in two installments: an immediate investment of $240 million and the remaining $140 million subject to a satisfactory progress report at the end of five years. Repatriate Health Professionals Working in the United States Fortunately, another short-term source of health professionals exists that Canada should pursue. Thousands of health care professionals are currently working in the United States including approximately 9,000 Canadian trained physicians. We know that many of the physicians who do come back to Canada are of relatively young age meaning that they have significant practice life left. While a minority of these physicians do come back on their own, many more can be repatriated in the short-term through a relatively small but focussed effort by the federal government led by a secretariat within Health Canada. Recommendation 2b. The federal government should establish a secretariat within Health Canada that would provide funding to national professional associations to conduct targeted campaigns to encourage the repatriation of Canadian health professionals working in the United States, and act as a clearinghouse on issues associated with returning to Canada (e.g., citizenship, taxation, etc.). 3. PUBLIC HEALTH INFRASTRUCTURE RENEWAL The CMA remains concerned about the state of Canada's public health system. Public health, including the professionals providing public health services, constitutes our front line against a wide range of threats to the health of Canadians. While there is much talk about the arrival of possible pandemics, Canada's public health system must be ready to take on a broad range of public health issues. The CMA has been supportive of the Naylor report which provides a blue print for action and reinvestment in the public health system for the 21st century. While this will take several years to achieve, there are some immediate steps that can be taken which will lessen the burden of disease on Canadians and our health care system. These steps include establishing a Public Health Partnership Program with provincial and territorial governments to build capacity at the local level and to advance pandemic planning. In addition, we call on the government to continue its funding of immunization programs under its National Immunization Strategy. Recommendation 3a. The federal government should establish a Public Health Infrastructure Renewal Fund in the amount of $350 million annually to establish a Public Health Partnership Program with the provincial/territorial governments for the purposes of building capacity at the local level and advancing pandemic planning. In addition, the $100 million per year for immunization programs under the National Immunization Strategy should be continued. 4. A REMEDY FOR GST-RELATED DISTORTIONS IN THE HEALTH SYSTEM The CMA and many other national health organizations are concerned about the increasing, unintended and negative consequences the GST is having on health care. For example, the 83% rebate originally provided for under the so-called "MUSH" formula is no longer tax neutral and is acting as a deterrent in some cases toward increased use of ambulatory care services such as day surgeries. Over the past 15 years the physicians of Canada have faced a large and growing unfair tax burden due to the GST. Since physicians' services are tax exempt under the law, physicians are unable to either claim input tax credits or pass on the tax because of the prohibition under the Canada Health Act of billing patients directly. This puts physicians in a unique and patently unfair catch 22 that now amounts to over $65 million per year, which further acts as a deterrent to repatriating or retaining Canadian physicians. Recommendation: 4a. That the federal government, in the course of reducing the GST from 7% to 5% further to its campaign commitments, remove the large and growing deterrent effects of the GST on the efficient and effective delivery of health care in Canada. In summary, the CMA is providing you with recommendations on strategic investments to help your government honour its commitment to timely access to care and to improve the health of Canadians. Our recommendations are financially reasonable, making good use of Canadians' tax dollars. We look forward to meeting with you on April 19 to discuss our proposals with you. Sincerely, Ruth L. Collins-Nakai, MD, MBA, FRCPC, MACC President c.c. The Honourable Tony Clement, Health Minister
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"More Doctors. More Care:" A Promise Yet Unfulfilled - The Canadian Medical Association's brief to the House of Commons Standing Committee on Health concerning health human resources

https://policybase.cma.ca/en/permalink/policy9438
Date
2009-04-28
Topics
Health systems, system funding and performance
Health human resources
  1 document  
Policy Type
Parliamentary submission
Date
2009-04-28
Topics
Health systems, system funding and performance
Health human resources
Text
The Canadian Medical Association (CMA) brief submitted to the House of Commons Standing Committee on Health makes 12 practical recommendations within the jurisdiction of the federal government for investing in the capacity needed to expand and retain our practising physician population. These recommendations are a clarion call for pan-Canadian planning and innovative thinking to meet an ever-increasing demand for physician services from the Canadian public. CMA's research on Health Care Transformation has shown that a commitment to ensuring an adequate supply of health human resources (HHR) is a common trait shared by high-performing European health systems. The last federal election campaign saw most political parties pledge to urgently address HHR shortages. Now is the time to keep those election commitments. A. Capacity Cuts to medical school enrolment in the 1990s contributed to Canada's significant shortage of physicians. Growing demand for physician services, the aging of the physician population and changing practice styles among younger physicians are further compounding the problem. Seriously addressing HHR shortages is crucial to transforming Canada's health care system into one that is truly patient focused. Canada should strive for self-sufficiency in physician supply and do more to repatriate Canadians studying and practising medicine abroad. The CMA supports bringing into practice qualified international medical graduates (IMGs) already in Canada. IMGs should be assessed according to the same evaluation standards as Canadian graduates and more should be done to reduce the backlog in assessing IMGs. With recent increases to medical school enrolment, more support must also be given for the capital infrastructure and faculty required to ensure the highest standard of medical education. B. Retention Competition for physicians is an issue with both international and inter-provincial/territorial facets. The revised Agreement on Internal Trade (AIT) and bilateral agreements will ease the movement of health professionals across jurisdictions, but may exacerbate retention difficulties in underserviced areas. Canada should be active in retaining and repatriating our health care professionals, particularly since the predicted physician shortage in the United States may result in a return to the physician out-migration seen in the 1990s. C. Innovation Canada must do more to encourage innovation within our health care system. Collaborative care - including care delivered with the assistance of Physician Assistants (PAs) - and advances in information technology hold the promise of helping create a more efficient health care system that provides higher quality care. Introduction Canada has suffered from a significant physician shortage since the mid-1990s. Nationally, we rank 26th of 30 Organisation for Economic Co-operation and Development (OECD) member countries in physician-to-population ratio. We would need 20,000 new physicians just to meet the OECD average. Figure 1: Physicians per 1000 population (including residents) Source: OECD 2008 Health Data; CMA Physician Resources Evaluation Template During the 2008 federal election campaign, four of the five parties represented in the House of Commons recognized the urgency of this situation and promised measures that would address HHR shortages. Following through on these promises is critical if we are to transform Canada's health care system into one that truly puts the needs of patients first. Research conducted for CMA's Health Care Transformation initiative demonstrates that European countries whose health care systems outperform our own all share a strong commitment to HHR, as demonstrated by their higher physician-to-population rankings. A. Capacity First-year medical school enrolment was already in decline when health ministers imposed a further 10% cut resulting in a low of 1,577 places in 1997. While there have been substantial increases since then, it took a decade to rebound. In 2007, first-year enrolment stood at 2,569 - 63% higher than a decade earlier. If we had left our domestic production unchanged, we would have almost 1,300 more physicians than we have today. Canada remains well behind other industrialized countries in the education and training of physicians. In 2005, Canada graduated 5.8 physicians per 100,000 population, 40% below the 9.6 average for the OECD. Currently, between 4 and 5 million Canadians do not have a family physician. Over one-third of all Canadian physicians are over the age of 55. Many will either retire soon or reduce their practice workload. Most are not accepting new patients. Ironically, advances in medicine and lifestyle that are helping Canadians live better and longer also mean increased demand for health care professionals. An aging population with high expectations of the health care system is increasing pressure on health care providers to ensure they maintain a high quality of life through their elder years. A growing culture of 'health consumerism,' facilitated by the Internet has resulted in a very knowledgeable patient population that expects top quality care delivered in a timely manner by the appropriate health professional. Advances in medical diagnostics and technology, new and evolving diseases and increasingly complex protocols and guidelines for medical care all increase the demand for physician services. Declining mortality rates for patients with diseases such as cancer have increased treatment of what have become 'chronic' diseases. In a collaborative care setting, physicians often take responsibility for the most complex patients. There is evidence of a cultural change among physicians to place greater importance on their home life by working less. This trend may have a positive effect on the health of the profession but it means Canada will need more physicians to provide the same volume of services. Greater coordination among jurisdictions is needed to facilitate HHR planning on a national scale. Canada's doctors and other health professions are ready to assist policy-makers in their planning and coordination to better meet the health care needs of Canadians. During the 2008 federal election campaign, most political parties recognized the urgency of addressing HHR shortages. The Conservative Party, specifically, promised to fund 50 new residency positions to increase supply of physicians in areas of priority need. Recommendation 1: The federal government should fulfill its promise to fund 50 new residency positions at a cost of $10 million per year for four years. Support for IMGs The CMA fully supports bringing into practice qualified IMGs already in Canada. Canada has historically benefited from a steady flow of IMGs to our country. In fact, close to one quarter of all physicians in Canada and over 50% of doctors in Saskatchewan are IMGs. Many areas in Canada would have no physicians if not for the contribution of these practitioners. While IMGs are a boon to Canada, actively recruiting from developing countries is not an acceptable solution to our physician shortage. Canada must strive for greater self-sufficiency in the education and training of physicians. In fact, self-sufficiency is a key principle of the government's Advisory Committee on Health Delivery and Human Resources' Framework for Collaborative Pan-Canadian Health Human Resources Planning. CMA supports online assessment tools and websites that provide information to foreign-trained physicians so they know what standards they must meet once they arrive in Canada. In 2006, over 1700 people used the online assessment tool established by the Medical Council of Canada (MCC). CMA also supports applying the same evaluation standards to international graduates as it does to graduates of Canadian medical schools. Despite a four-fold increase in the number of IMGs in ministry-funded postgraduate training programs over the last decade, there is still a backlog of IMGs awaiting entry into these programs. About 1300 IMGs applied for a postgraduate training position last year but only 350 (27%) were successful. CMA recommends that funding be made available to provinces for use in mentoring IMGs towards licensure. This could lower costs for the IMGs, pay the community preceptors, cover operational costs and defray other expenses. It is estimated that up to 1500 Canadians are studying medicine abroad. Two-thirds of these IMGs want to come home to complete their postgraduate training. Canada turns away four good applicants for every student accepted into medical school. Increased training opportunities for all groups of IMGs will ensure that Canada fully utilizes the skills and knowledge of its citizens who have studied medicine. Recommendation 2: The federal government should make $5 million (over five years), available to provinces/territories to address the backlog of IMGs through community preceptorship programs that mentor and assess IMGs for integration into the physician community. Recommendation 3: The federal government should take concrete steps to ensure Canada becomes self-sufficient when it comes to the supply of health care professionals. Recommendation 4: The federal government should continue to fund information tools such as the IMG-Canada website to better inform offshore physicians. Infrastructure and faculty Canada's teaching centres have had to absorb increases in operational and infrastructure costs to accommodate increased enrolment. This includes instructors, space, overhead and supplies. While it appears that the number of faculty members has kept pace with the increased number of medical students, part-time faculty now make up a much larger proportion of the total than 10 years ago. i In addition to the traditional academic centres, much of the training of doctors now occurs in a community environment. Mentoring is provided by physicians who may have less experience or resources than do those in the larger centres. Those who teach often experience lost productivity in their practice and receive little or no remuneration. This deficiency must be addressed to achieve a sustainable educational workforce. Recommendation 5: The federal government should implement a Health Human Resources Infrastructure 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; and * Resources that improve Canada's data collection and management capacity in the area of health human resources. B. Retention of Canadian Physicians Competition for physicians is both an international and an inter-jurisdictional challenge. The new Agreement on Internal Trade within Canada and numerous bilateral agreements will no doubt ease the movement of health professionals. This may exacerbate the already difficult task of retaining physicians in underserviced areas. On the positive side, it is hoped this will facilitate the movement of physicians who provide short-term relief for physicians needing time off for continued professional development and vacation (i.e., locum tenens). Repatriation As the political situation and health care plans evolve south of our border, Canada should remain active in the quest to retain the health professionals we have educated and trained and make it easier for those who have emigrated to return to practice in Canada. The Conservative Party committed in the 2008 election campaign to create a repatriation fund for Canadian physicians practising abroad. The federal government should keep this important commitment. Migration to the United States peaked in the late 1990s when Canada lost between 600 and 700 physicians per year. While some physicians returned to Canada each year, our net losses for this period were over 400 per year. Today we are enjoying small net gains each year but this may not last given the predicted shortages in the U.S. of between 80,000 and 100,000 physicians in the years ahead. We can expect U.S. recruiters to ramp up activities in Canada in the near future. Recommendation 6: The federal government should fulfill its election promise to establish a fund of $5 million per year over four years to help Canadian physicians living abroad who wish to relocate to Canada. It is thought this initiative could bring back as many as 300 Canadian physicians over four years. Recommendation 7: The federal government should establish a Health Professional Repatriation Program in the amount of $30 million over 3 years that would include the following: * A secretariat within Health Canada that would include a clearinghouse function on issues associated with health care workers returning to practise in Canada. * An ad campaign in the United States. * A program of one-time relocation grants for returning health professionals. Physician Health and Well Being Ultimately, we hope that healthier physicians will create a more vibrant profession. Hopefully these healthier physicians will in turn create a more healthful professional environment that will support their ability to provide patient care of the highest quality. Through programs and conferences, the CMA has contributed to growing efforts to reduce the stigma surrounding physician ill-health and to support a new, healthier culture for the profession. Given the myriad other issues that contribute to our doctor shortage, it is clear that Canada cannot afford to lose a single physician to ill health. Our research shows that the most stressful aspect of the medical profession is being on call after hours. Physicians average 50 hours a week in the usual settings of office, hospital or clinic but then 70% are on call for another 30 hours per week. In small communities, physicians are often on call all the time. A quarter of all physicians face some form of mental health challenge that makes their work difficult. This is higher than the 1 in 5 Canadians that will face a mental illness over their lifetime.ii The ongoing pressures experienced by overworked physicians can result in stress related disorders and burn-out and are frequently a precursor to more significant physical and mental health problems. If not addressed early, these conditions can lead to physicians taking prolonged periods of time off work, changing their practice patterns or leaving the practice of medicine altogether. Prevention programs are the key to assisting physicians before they are at significant risk. The CMA visited such a program in Norway which has been shown to significantly reduce burn-out and reduce the subsequent time-off work related to stressiii. A program to enhance physician resiliency and prevent stress related disorders, based on the Norway model, could be expanded to include services for all health professionals. The potential impact would be improved provider health and morale, reduced sick days and fewer long-term leaves. Recommendation 8: The federal government should invest in research directed at assessing the quality of work life among health workers through an interprofessional survey at a cost of $1.5 million. Recommendation 9: The federal government should explore the feasibility of developing a 'made in Canada' Resiliency Program for Health Professionals that would include the development of a feasibility study, including a business case, and a pilot curriculum, at a cost of $500,000. C. Innovation While Canada must do more to increase both our supply and retention of HHR, we must also encourage innovation within our health care system to make better use of our existing health resources. Collaborative models of interprofessional care and advances in information technology hold the promise of helping create a more efficient health care system that provides higher quality care. Physician Assistants Increasingly physicians are working in interprofessional teams that may include professions that are relatively new to Canada's health workforce such as physician assistants (PAs). The CMA accredits PA curricula and has held two conferences to promote the use of PAs in all levels of care. Recommendation 10: The federal government should fund a study to evaluate the impact of physician assistants on access to health care and to determine their cost effectiveness relative to other providers at cost of $150,000. Technology to Support Health Care Delivery Information technology will continue to create a more efficient and effective health care system. It will lead to more patient safety, more Canadians finding a physician, better care, cost avoidance such as eliminating duplicate tests and the establishment of collaborative interprofessional health care teams. Canada's adoption of electronic medical records lags behind other OECD countries. We only spend a third of the OECD average on information technology in our hospitals. The adoption of EMRs in community settings (primary care, home care and long-term care facilities) also trails most other countries (Figure 2iv). This is not due to any general resistance by providers, but rather a combination of: a lack of evidence on how best to use electronic records to improve care delivery; a need to improve the return on investment for physicians by providing value-added solutions such as greater connectivity to lab results, drug data and colleagues; the time it takes to implement a new electronic record capability and a lack of funds to acquire new technology. Recent investments in Canada Health Infoway (CHI) will help address some of these issues but it is estimated that for Canada to have a fully automated health care delivery system we need to invest $ 10 to $12 billionv. An overall investment of $2 billion is required to fully IT enable the community-based health care delivery sector. While Budget 2009 provided $500 million to CHI for EMRs, more is still required. Recommendation 11: The federal government should provide a further investment of $500 million for new technology to fully enable all points of care in the community settings and an enhanced change management program to speed up EMR adoption. Recommendation 12: The federal government should create a $10-million fund to establish an applied research program for the next five years that will provide evidence on how best to integrate information technology into the health care delivery system. D. Conclusion Canada's doctors believe that we can build a health care system where all Canadians can get timely access to quality health care services regardless of their ability to pay. Developing a comprehensive HHR strategy that assures an adequate supply of all health care providers, including physicians, is a pillar of achieving timely access to high quality care. Building such a system requires that we shift our attitude and move to implement new strategies, new ideas and new thinking. That new thinking must begin with a commitment to act now to address Canada's physician shortage. A promise made must be a promise fulfilled. References i Canada's Health Care Providers 2007, Ottawa: CIHI, 2007 ii Frank E. Canadian physicians healthy - national survey finds. A report from the 2008 International Conference on Physician Health. London, UK Nov 2008. iii Isaksson Ro, K et al. Counselling for burnout in Norwegian doctors : One year cohort study. BMJ. November 2008. Vol 337, 1146-9. iv * Count of 14: EMR, EMR access other doctors, outside office, patient; routine use electronic ordering tests, prescriptions, access test results, access hospital records; computer for reminders, Rx alerts, prompt test results; easy to list diagnosis; medications, patients due for care. v Vision 2015 - Advancing Canada's Next Generation of Healthcare, Canada Health Infoway, 2008
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Supply of Medical Isotopes : CMA's Presentation to the House of Commons Standing Committee on Health

https://policybase.cma.ca/en/permalink/policy9703
Date
2009-11-23
Topics
Health systems, system funding and performance
  1 document  
Policy Type
Parliamentary submission
Date
2009-11-23
Topics
Health systems, system funding and performance
Text
It is my pleasure to address the committee as part of its monitoring of the situation related to the supply of medical isotopes. While I am not an expert in nuclear medicine, I do refer patients for diagnostic and treatment services that require the use of medical isotopes. First and foremost, I want to note that the CMA is proud of the efforts and dedication of health care providers from across the country who have stepped up to help meet patients' needs during this ongoing, stressful and demanding time. Through their concerted efforts, and those of the industry and governments, the system appears to be "coping." Patients are receiving needed diagnostic and treatment services, either through radiopharmaceutical models or their alternatives. However, there are reports of sporadic adverse events, as has been the case since the beginning of this situation. These include delays of 48-72 hours and suboptimal imaging due to the extensive use of thallium-201 rather than technetium-99m, which is in short supply. The CMA and representatives from the nuclear medical community continue to work with Health Canada to mitigate the impact of the shortage of medical isotopes. Scheduling appropriate care commensurate with the expected supply of isotopes has been aided by the efforts of Lantheus and Covidien, suppliers of generators and radiopharmaceuticals, who regularly share vital production information with the nuclear medical community. This has improved communications and allowed for the better predictability of supply than had been the case last May and June. Lest you interpret my comments to mean "all is well", let me be clear: Much is being done, but the current situation is neither optimal nor sustainable and there appears to be no long term plan. Canada's physicians are concerned about the toll the current shortage of isotopes is taking on the health care system as a whole. In particular, the resulting increased demand on resources - both human and financial - and especially now in the midst of a pandemic, is not sustainable. Therefore, we have called upon governments to invest in a five-year action plan, that includes an emergency fund, to increase the use of positron emission technology and the production of associated radiopharmaceuticals across Canada. At our annual meeting this August, Canada's physicians expressed their concerns by passing a series of motions calling for government action. This action included demands that the federal government: * retain Canada's leadership and ability to produce and export medical isotopes, and reconsider its decision to withdraw from their production; * appoint an international independent expert panel to assess thoroughly the decision to abandon the MAPLE I & II nuclear reactors at Chalk River: and * release promptly the conclusions and recommendations of the panel to the public. Our delegates also demanded that the federal government conduct open, meaningful and ongoing consultations with nuclear medicine physicians and their respective national associations on any and all federal decisions directly affecting the supply of medical isotopes. Concern was expressed that decisions have been, and will continue to be, made for political and financial expediency without taking into account medical ramifications of those decisions. We appreciated having the opportunity to participate in discussions with the Expert Review Panel on Medical Isotope appointed by the Minister of Natural Resources. While it is anticipated the panel will report to the Minister by the end of this month, we do not know when that report will be made public and how long it will take to move recommendations to action. Canadian physicians also urge the federal government to invest immediately in research in basic and clinical science to find viable alternative solutions to the production and use of technetium-99m. The announcement of $6 million for research into alternatives to medical isotopes through a partnership between the Canadian Institutes of Health Research (CIHR) and the Natural Sciences and Engineering Research Council of Canada (NSERC) is a good start. We must emphasize that bench to bedside research is critical - there must be a clinical translation of new technology to the provision of care. To conclude, the CMA remains concerned about health care providers' and the health care system's ability to sustain the current shortage; Canada's ability to ensure a long-term stable and predictable supply of medically necessary isotopes and our lack of contingency planning for the next shortage. The CMA will continue to work with all involved to ensure Canadians have access to the best possible care and treatment.
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Transforming Health Care, Securing Canada's Competitive Advantage: The Canadian Medical Association's brief to the Standing Committee on Finance's pre-budget consultation

https://policybase.cma.ca/en/permalink/policy9585
Date
2009-08-14
Topics
Health systems, system funding and performance
Health human resources
  1 document  
Policy Type
Parliamentary submission
Date
2009-08-14
Topics
Health systems, system funding and performance
Health human resources
Text
As signs of economic recovery begin to emerge, both in Canada and globally, the Canadian Medical Association is pleased to put forward three recommendations that will initiate a needed transformation of our health care system so that it is truly patient focused and sustainable. Additionally, these measures will create 17,000 jobs and solidify Canada's health care competitive advantage. Although related to the health care sector, these recommendations are within the context of ensuring a prosperous, and sustainable economic, social and environmental future for Canada in the short, medium and long-term. Each of these three recommendations also takes into account the finance committee's questions: 1. What federal tax and program spending measures are needed to ensure prosperity and a sustainable future for Canadians from an economic, social and/or environmental perspective? 2. What federal stimulus measures have been effective and how might relatively ineffective measures be changed to ensure that they have the intended effects? CMA research demonstrates that it is possible to maintain a universally accessible health care system without long waits for care. In 2007 alone, waiting for care in just four clinical areas cost the Canadian economy $14.8 billion. In particular, two areas require federal attention: 1. ENHANCING PATIENT ACCESS ACROSS THE CONTINUUM OF CARE Continuing care (ie. long-term care and home care) and prescription drug coverage need urgent attention. Many Canadians do not have access to as wide a range of insured care as citizens in other highly industrialized countries. Recommendation 1: The federal government should expand the Building Canada Plan to include 'shovel-ready' health facility construction projects including ambulatory, acute and continuing care facilities. Cost: $1.5 billion over 2 years 2. HELPING PROVIDERS HELP PATIENTS a. Accelerating physician EMR adoption: Both national and international studies confirm that Canada lags behind nearly every major industrialized country when it comes to health information technology. Accelerating physician EMR adoption will reduce wait times, improve quality, and improve financial accountability especially of federal dollars. Budget 2009 proposed $500 million in additional funding to Canada Health Infoway and a temporary, accelerated capital cost allowance for computer hardware. Transfer of these funds to Infoway is imperative. Together, transferring the funding to Infoway and further improving of the capital cost allowance will ensure these initiatives have the intended effects of improving EMR adoption and stimulating the economy. b. Boosting Health Human Resources: Canada does not have enough physicians, nurses, technicians or other health care professionals to provide the care patients need. Addressing HHR shortages is critical to ensuring sustainable, accessible, responsive and high-quality health care. Recommendation 2: The federal government should expand the 2-year time-limited accelerated Capital Cost Allowance for hardware costs related to health information technologies by extending it to five years; removing the 50% half-year rule on related software; and including electronic tools involved in connecting patient records from physician offices to laboratories and hospitals. Cost: $50 million over four years. Recommendation 3: The federal government should fulfill its 2008 election promise, beginning in 2010, of investing $65 million in health human resources over four years to fund 50 new residencies per year; repatriate Canadian physicians living abroad; and launch pilot projects with nursing organizations to promote recruitment and retention. 1. INTRODUCTION - HEALTHY ECONOMICS: THE FOUNDATION OF FUTURE PROSPERITY The CMA believes that by being innovative in its actions Canada can sustain a publicly funded, universal health care system. In fact, doing so provides Canadian industry with a significant competitive advantage in the global marketplace. Despite having one of the richest health care programs in the industrialized world (eighth among 28 Organization for Economic Co-operation and Development [OECD] countries), international benchmarking studies consistently report that the Canadian program is not performing as well as it should. The Euro-Canada Health Consumer Index ranked Canada 30th out of 30 countries in terms of value for money spent on health care in both 2008 and 2009.The CMA's recent review of several European health systems illustrates that a sustainable, patient-centred approach to health care is possible on a system-wide level without compromising founding principles such as universality, and without causing financial difficulty for the country or its citizens. However, getting there will require transformational change to refocus our system. The Canadian Medical Association's 2010 pre-budget submission puts forward three recommendations in the areas of health care infrastructure, health human resources (HHR) and electronic medical records (EMRs).1 These three affordable, strategic initiatives fall within the jurisdiction of the federal government and recognize both the ongoing and promising economic recovery and the current fiscal capacity of the federal government. CMA's recommendations help to chart a course toward a prosperous, and sustainable economic, social and environmental future for Canada in the short, medium and long terms. These proposals will kickstart a transformation of the health care system and create over 17,000 jobs that will ensure a competitive economic foundation for the future. Based on CMA's research, transforming Canada's health care system to better meet the needs of Canadians hinges on five directions for a reorientation of the system: 1. Building a culture of patient-centred care; 2. Incentives for enhancing access and improving quality of care; 3. Enhancing patient access across the continuum of care; 4. Helping providers help patients; 5. Building accountability/responsibility at all levels. While each of the five directions is important to reorienting the system, points 3 and 4 are directly relevant to the Finance Committee's deliberations. 2. ENHANCING PATIENT ACCESS ACROSS THE CONTINUUM OF CARE While all elements of the continuum of care are important, the CMA believes that continuing care (long-term care and home care) and prescription drug coverage need urgent attention. Many Canadians do not have access to as wide a range of insured care as citizens in other highly industrialized countries. In fact, many of these other industrialized countries count access to prescription drugs and home care/long-term care among their basic insured services. a. Continuing care: Augmenting the Building Canada Plan to include health care infrastructure Recommendation 1: The federal government should expand the Building Canadai Plan to include 'shovel-ready' health facility construction projects including ambulatory, acute and continuing care facilities. Cost: $1.5 billion over two years Continuing care in Canada faces three key challenges: capacity and access; informal caregiver support and long-term care funding. At 91%, Canada has the highest hospital occupancy rate in the OECD.ii Roughly 25-30% of hospital acute care beds are occupied by patients who do not require hospital or medical care but rather need 24-hour supervised care. Scarce long-term care facilities and home-care services dictate that patients remain in hospital, delaying hospitals from performing elective surgeries and restricting the movement of other patients from the emergency room to acute care wards. Much of the burden of continuing care falls on informal (unpaid) caregivers who need to be better supported. Statistics Canada reported that in 2007 about 2.7 million Canadians aged 45 and over, or approximately one-fifth of the total in this age group, provided some form of unpaid care to seniors (people 65 years of age or older) who had long-term health problems iiiIt seems unlikely that future requirements for long-term care can be funded on the same "pay-as-you-go" basis as other health expenditures. The seven-year, $33-billion Building Canada Plan announced in Budget 2007 and augmented in Budget 2009, could better support a smart economic recovery and the health needs of Canadians if it were to be expanded to include health facility construction.iv Federal investment in hospital and health facility construction will create 16,500 jobs over a two-year period and 11,000 jobs in 2010 alone. (Appendix: Table 1). Although CMA's $1.5 billion recommendation does not eliminate the entire health-facility infrastructure gap in Canada, estimated at over $20 billionv, it does provide additional stimulus aimed at shovel-ready projects. It also better prepares our health system to deal with the needs of an aging population. Federal government investment in health infrastructure has two important precedents - the first in 1948 (Hospital Construction Grants Program) and the second in 1966 (Health Resources Fund Act). Infrastructure funding should be directed toward projects that deliver long-term value and enhance Canadians' lives. b. Prescription drugs: 3.5 million Canadians underinsured Prescription drugs represent the fastest growing item in the health budget, and the second largest category of health expenditure. More than 3.5 million Canadians have no prescription drug coverage or are underinsured against high prescription drug costs. In 2006 almost one in 10 (8%) of Canadian households spent more than 3% of their after-tax income on prescription drugs; and almost one in 25 (3.8%) spent more than 5%. It is estimated that less than one-half of prescription drug costs were publicly paid for in 2008. Canada must strive for a program of comprehensive pharmaceutical coverage that is universal and effectively pools risks across individuals and public and private plans throughout Canada. 3. HELPING PROVIDERS HELP PATIENTS Canada's health care workforce needs more people and more tools to care for Canadians. a. Accelerating physician EMR adoption Recommendation 2: The federal government should expand the 2-year, time-limited accelerated Capital Cost Allowance for hardware costs related to health information technologies by extending it to 5-years; removing the 50% half-year rule on related software; and including electronic tools involved in connecting patient records from physician offices to laboratories and hospitals. Cost: $50 million over four years. Both national and international studies confirm that Canada lags behind nearly every major industrialized country when it comes to health information technology (see Figure 1 and Figure 22). The impact of this underinvestment is longer wait times, reduced quality, and a severe lack of financial accountability, especially of federal dollars. The Conference Board of Canadavi, the Organization for Economic Co-operation and Development (OECD) vii, the World Health Organizationviii, the Commonwealth Fundix, and the Frontier Centre for Public Policyx all rate Canada's health care system poorly in terms of "value for money" as well as efficiency. The CMA applauds the temporary 100% Capital Cost Allowance (CCA) rate for computer hardware and systems software acquired after January 27, 2009 and before February 1, 2011 that was proposed in Budget 2009. The measure will provide stimulus by helping businesses to increase or accelerate investment in computers. It will also help boost Canada's productivity through the faster adoption of newer technology. However, for this initiative to provide the greatest benefit, the 100% CCA rate should be extended to five years and expanded to include related EMR software. The benefits of EMR investments are clear. International strategy and technology consulting firm Booz Allen Hamilton found the benefits of an interconnected Electronic Health Record (EHR) in Canada could save the health system $6.1 billionxi a year. The CMA's recommendation of delivering incentives through the tax system to adopt EMRs is a bottom-up approach that has gained widespread support. John Halamka, the chief information officer at Harvard Medical School, thinks that reformers need to take a bottom-up approach and listen to both doctors and patients. Studies showxiithat most of the benefits of EMRs flow to the payer. Incentives for hardware, software and as importantly the time that it takes to implement these e-systems must be taken into account and incented. The urgency for e-health is being recognized in the United States and needs to be in Canada. Beyond tax incentives, Budget 2009 also provided Canada Health Infoway (Infoway) with $500 million to support the goal of having 50 % of Canadians with an electronic health record by 2010. As of March 31, 2009, Infoway and its partners had put in place an electronic health record for 17% of the population. Budget 2009 funding will allow Infoway to extend EHRs to 38% of the population by March 31, 2010. xiii This investment will not only enhance the safety, quality and efficiency of the health care system, but will also result in a significant positive contribution to Canada's economy, including the creation of thousands of sustainable, knowledge-based jobs throughout Canadaxiv. Infoway has not yet received this funding and the CMA strongly encourages the federal government to transfer the funds promised in Budget 2009 as soon as possible. b. Boosting Health Human Resources Recommendation 3: The federal government should fulfill its 2008 election promisexv, beginning in 2010, of investing $65 million in health human resources over four years to fund 50 new residencies per year; repatriate Canadian physicians living abroad; and launch pilot projects with nursing organizations to promote recruitment and retention. Canada does not have enough physicians, nurses, technicians or other health care professionals to provide the care patients need. Addressing health workforce shortages is critical to ensuring sustainable, accessible, responsive and high-quality health care across the nation. Canada has suffered from a significant physician shortage since the mid-1990s. Nationally, we rank 26th of 30 OECD member countries in physician-to-population ratio (see Figure 3). The lack of physicians in Canada puts the system under pressure and the impact of this is being felt by patients across the country. Currently, approximately five million Canadians do not have a family physician. In 2008, a study commissioned by the CMA found that the Canadian economy lost $14.8 billion as a result of excessive wait times for just four procedures: joint replacements, MRIs, coronary artery bypass surgery and cataract surgery. As health care reform plans evolve south of our border, Canada should be proactive in order to retain the health professionals we have educated and trained and make it easier for those who have emigrated to return to practice in Canada. In the 2008 federal election, most parties recognized the urgency of HHR shortages and committed to address the situation. The Conservative Party committed to fund additional medical residency positions, create a repatriation fund for Canadian physicians practising abroad and fund nursing recruitment and retention pilot projects. It is thought this repatriation program could bring back as many as 300 Canadian physicians over four years. The federal government should keep this important commitment. Migration to the United States peaked in the late 1990s when Canada lost between 600 and 700 physicians per year. While some physicians returned to Canada each year, our net losses for this period were over 400 per year. Today we are enjoying small net annual gains but this may not last. With predicted shortages in the U.S. of between 80,000 and 100,000 physicians in the years ahead, we can expect U.S. recruiters to ramp up activities in Canada soon. 4. CONCLUSION The emerging economic recovery offers an excellent opportunity for the federal government to create a more patient-focused and sustainable health care system. Enhancing patient access across the continuum of care by bolstering the Building Canada infrastructure plan and helping providers help patients by enhancing EMR tax incentives and addressing health workforce shortages are important first steps in transforming our health care system. Looking ahead, it will be important to continue to honour the financial transfers of the 2004 Health Care Accord, including the annual 6% escalator, through to 2014. Past cuts to health care funding at all levels have had significant negative effects that continue to be felt to this day. Now is the time to begin thinking ahead to the fiscal needs of the health care system in the post-2014 era. Appendix Table 1 [For correct dispaly of table information, see PDF] References 1 A full schedule of the recommended federal investments as well as their job creation potential is included at the end of the document in the Appendix, Table 1. 2 14 functions are: EMR, EMR access, access other doctors, outside office, patient: routine use, electronic ordering tests, prescriptions, access test results, access hospital records, computer for reminders, Rx alerts, prompt test results; easy to list diagnosis, medications, patients due for care. i Building Canada Plan., Announced in Budget 2007, the seven-year, $33-billion Building Canada plan consists of a suite of programs to meet the varying needs of infrastructure projects across Canada. See page 142 of the 2009 Federal Budget. www.budget.gc.ca/2009/pdf/budget-planbugetaire-eng.pdf ii Hospital Occupancy Rates. Organization for Economic Co-operation and Development [OECD] (2008). OECD Health. Data 2007. Version 07/18/2007. CD-ROM. Paris: OECD. iii.Cranswick, Kelly, Donna Dosman. "Eldercare: What we Know Today" Canadian Social Trends.No. 86. Statistics Canada iv Building Canada Plan, Federal Budget 2009 page 142. . www.budget.gc.ca/2009/pdf/budget-planbugetaire-eng.pdf v This estimate is based on survey work in a forthcoming publication commissioned by the Association of Canadian Academic Healthcare Organizations. vi How Canada Performs 2008: A Report Card on Canada, The Conference Board of Canada see: http://sso.conferenceboard.ca/HCP/overview/health-overview.aspx vii Organization for Economic Co-operation and Development [OECD] (2007). OECD Health Data 2007. Version 07/18/2007. CD-ROM. Paris: OECD. viii World Health Organization [WHO] (2007). World Health Statistics 2007. see: http://www.who. ix 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 x Euro-Canada Health Consumer Index 2008, Health Consumer Powerhouse, Frontier Centre for Public Policy, FC Policy Series No. 38 see:www.fcpp.org/pdf/ECHCI2008finalJanuary202008.pdf xi Booz, Allan, Hamilton Study, Pan-Canadian Electronic Health Record, Canada's Health Infoway's 10-Year Investment Strategy, March 2005-09-06. xii Although the savings would accrue to different stakeholders, in the long run they should accrue to payers. If we allocate the savings using the current level of spending from the National Health Accounts (kept by the Centers for Medicare and Medicaid Services), Medicare would receive about $23 billion of the potential savings per year, and private payers would receive $31 billion per year. Thus, both have a strong incentive to encourage the adoption of EMR systems. Providers face limited incentives to purchase EMRs because their investment typically translates into revenue losses for them and health care spending savings for payers. From: Can Electronic Medical Record Systems Transform Health Care? Potential Health Benefits, Savings, And Costs, by Richard Hillestad, James Bigelow, Anthony Bower, Federico Girosi, Robin Meili, Richard Scoville and Roger Taylor, Health Affairs, 24, no. 5 (2005): 1103-1117 http://content.healthaffairs.org/cgi/content/full/24/5/1103#R14 xiii Corporate Business Plan 2009/2010, Canada Health Infoway, "Anticipated Progress to March 31, 2010" page 7 see:www2.infoway-inforoute.ca/Documents/bp/Business_Plan_2009-2010_en.pdf xiv Federal Budget 2009 page 152. see: www.budget.gc.ca/2009/pdf/budget-planbugetaire-eng.pdf xv Health Care Certainty for Canadian Families, the Conservative Party of Canada, backgrounder 10/08/08. See: http://www.conservative.ca/?section_id=1091&section_copy_id=107023&language_id=0
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