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Brief to the House of Commons Standing Committee on Finance 1995 Pre-Budget Consultation

https://policybase.cma.ca/en/permalink/policy1994
Last Reviewed
2019-03-03
Date
1994-11-18
Topics
Health systems, system funding and performance
  1 document  
Policy Type
Parliamentary submission
Last Reviewed
2019-03-03
Date
1994-11-18
Topics
Health systems, system funding and performance
Text
I. PURPOSE While Canada is undergoing significant social, political and economic change, the Canadian Medical Association (CMA) remains committed to the delivery of high quality health care and to safeguarding the national integrity of the health system. However, given the need for the federal government to gain control over our deficit and national debt, it seems clear that putting Canada's fiscal house in order remains a high priority. In this regard, CMA appreciates the invitation to submit its views on the 1995 pre-budget consultations that are underway. One overriding objective of the brief is to provide the Committee with a better understanding of the current pressures on physicians across Canada that have arisen as a direct result of past government decisions in this area. It is our firmly-held position that the health care system in general, and the medical profession in particular, have paid more than their fair share in terms of contributing to debt management. This brief focusses on five somewhat distinct areas of concern to Canadian physicians: (1) federal health transfers to the provinces; (2) taxable health benefits; (3) the goods and services tax (GST); (4) Registered Retirement Savings Plan (RRSP) contributions, and (5) the Lifetime Capital Gains Exemption (LCGE) for Small Businesses. In each case, the brief contains specific recommendations as to what the government should do, and more importantly what the government should not do, to balance its short-term deficit reduction targets against longer-term Canadian values. To summarize, good health policy and prudent economic policy go hand-in-hand provided the principles of fairness and good management practices are observed. If change is to come within an overall policy framework that is strategic, coordinated and fair and which preserves (or augments) the integrity of Canada's health care system, it behooves us to avoid short-term, stop-gap initiatives. As the government's 1994 Throne Speech put it "...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, change must take place within the context of a longer-term integrated view. II. BACKGROUND...."Medicare Is A Shared Value" Canada's system of universal health insurance is still one of the best in the world. Experts from around the world travel many thousands of miles to study and, in some cases, emulate our system. For most Canadians, medicare is a highly cherished, integral component of our social fabric. While Medicare's popularity has not diminished over the past 30 years, it is sometimes taken for granted in these difficult economic times. Recent public opinion surveys indicate that 84% of Canadians (with the highest response in Quebec) see medicare as a defining characteristic of being Canadian. Furthermore, 84% of Canadians are of the opinion that the system provides high quality care. 1 At the same time, 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 and they are right. As much loved as the Canadian medicare system is, there is a large and growing consensus that we need to make changes. This brief is not about maintaining the status quo. Rather, it is about managing the changes required in the long-term best interests of all Canadians and of the physicians who are ultimately responsible for serving those interests, subject to the fiscal realities confronting government. III. CONSIDERATIONS CMA acknowledges that there is a pressing need, now more than ever, for the federal government to balance a number of competing social and economic policy challenges. In a time when deficit reduction measures are required, all segments of society are being asked to do more with the same or less. Health care is no exception, having done so for quite some time. At the same time, we must re-evaluate the variety of services provided or paid for by government. Deficit Management, but at what Costs? As of 1993/94, Canada's net public debt stood at $508.2 billion, or $17,484 for every Canadian. Combined with the debts of the provinces and territories, our national debt is in excess of $700 billion. Not to understate the case, currently one-third of each revenue dollar the government collects is allocated to debt service payments on the federal debt. 3 CMA believes enough is enough: we must not pass this burden on to future generations of Canadians. The federal government has managed to run operating surpluses for five of the past seven years. 4 While this is necessary it is no longer sufficient to meet our fiscal challenges. Maintaining the status quo would mean that debt service payments would further crowd out government expenditures at an accelerated rate. While the government's first priority should be to get us "out of hock", there is an equally- compelling need to respect the longstanding and fundamental principle of fairness/equity that help define Canadian society. One step toward meeting these twin objectives is to consider all possible methods of repatriating that portion of the national debt held by the international lending community. Some experts have argued that Canada, as a country, can no longer afford to have "massive leakages" in interest payments to individuals/countries abroad. 5 In so doing, we would also repatriate our ability as a sovereign nation to set and maintain social policy objectives. This involves guarding against the persistent "tyranny of the deficit" and the influence that international bond rating agencies can exert on the economy. Facts and Fallacies about Health Spending In reviewing expenditures in the public sector, some would suggest that health and health care spending are "out of control". This is a myth. While it is true that Canada spends 10.0% (1993) of Gross Domestic Product (GDP) on health care (second highest among OECD countries), the reality is that the public sector share of total health care expenditures has fallen from 76.4% in 1975 to approximately 71.9% in 1993 6 (falling to the lowest third of OECD countries). This process of reducing real public sector expenditures, in the absence of a well-coordinated and planned framework, has not always been in the best interests of health and health care. Specifically, federal offloading in terms of unilateral reductions in health cash transfers to the provinces have been followed by: * the elimination of entire programs, such as dental insurance programs for children and universal drug insurance programs; * hospital closures (e.g., 52 hospitals in Saskatchewan); * massive regionalization of health programs and the attendant disempowerment of community hospital boards; * the reduction of total bed capacity by as much as 20% in some provinces; * the reduction in medical school enrolment by 10% and a planned 10% reduction in post-MD residency slots; * global medical care expenditure caps in virtually every province in Canada; * individual physician income thresholds in at least five provinces; * a moratorium on interprovincial mobility of physicians; * legislative overrides of duly-negotiated contracts for health care providers; * widespread restrictions on the operation of high technology equipment; and * the de facto "expropriation" of physician business practices without compensation (e.g., Saskatchewan pathologists). These repercussions also serve to underline the fact that change is the only constant in the health care system. Many physicians across the country have expressed concerns that such changes or "threats" to our health care system are already beginning to have serious consequences for individual patients in terms of access to needed medical facilities. If the national integrity of medicare is to survive, federal fiscal policy changes must be assessed within a larger and longer-term framework; one that respects the need for innovation and professionalism in the health care system. Physicians as Responsible Professionals Some mistakenly argue that physician expenditures are responsible for the increasing costs to the health care system. The reality is that physician expenditures as a proportion of total health care expenditures in Canada have declined from 15.7% in 1975 to 15.1 in 1991. 7 Furthermore, physician expenditures constitute a declining share of GDP. Given the recent round of unilateral reductions in medical care spending in many jurisdictions, this percentage share will continue to drop significantly as more recent data become available. As health care resources have become increasingly constrained, physicians have taken on added responsibilities at the macro, meso and micro levels to better manage our health resources. * At the "macro" level, within the provinces and territories, the medical profession has been engaged in formalized consultation structures known as "Joint Management Committees" or "Administrative Councils" with government and other stakeholders to ensure value for money within a diminishing "real" globe of publicly-available resources for health care. * At the "meso" or institutional level, physicians are working hand-in-hand with health care administrators and other community stakeholders to "rationalize" services so as to provide the best value for money in all areas. In addition, to give a greater voice for choice and improve overall accountabilities in the system, physicians are providing formal input to governments that are looking to regionalize health system operations. * At the "micro" or clinical level, physicians have been taking the lead in developing and disseminating clinical practice guidelines (CPGs) to ensure that the care provided is both appropriate and cost-effective. More can and is being done, in collaboration with government, to ensure responsible use of the taxpayer's dollar while meeting the needs of individual patients. At all levels, physicians will continue to involve themselves as capable and responsible professionals. As the health policy agenda continues its rapid pace, physicians and the organizations that represent them should be viewed as "agents" for, rather than "objects" of, change. Good Health Policy Means Good Economic Policy Agencies such as the World Economic Forum, 8 tell us that our system of financing health care is one of Canada's greatest assets in competing in the new world economic order. We should heed this advice, as the Prime Minister recently observed. Compared to the United States, this economic advantage takes the form of 30 percent lower health spending (measured as a percent of GDP or in per capita expenditures) while providing for universal medical benefits and high quality care. 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 should be mutually reinforcing. Aside from the complementary nature of the relationship between health and the economy, this fundamental concept also suggests that we need to take a longer-term, more integrated and more strategic approach to managing our collective debt and debt-servicing challenges. The federal government can no longer simply shift its financial obligations onto the backs of lower levels of government or individual Canadians without consultation or advance notice. We need to re-evaluate the full range of government- provided or -funded services. Again, however, if federal fiscal reductions are to take place, the principles of fairness and equity must begin to guide the development of sustainable economic and health policies. While there are no doubt trade-offs that can and must be made, if the price of getting our fiscal house in order is losing a national treasure - i.e., our health care system, it is a price too high to be paid. To summarize, we have set out a series of principles that should serve to guide the Committee in its decision-making, they are: * take the longer-term view; * adopt a system-wide, integrated approach for fiscal management; * strive for a strategic approach that mutually reinforces health and economic policies; and * strengthen the fundamental foundation of fairness and equity. These four principles form the building blocks of the remainder of CMA's submission. IV. ISSUES Canada is at a social, political and economic crossroad. The challenge to this Committee and to this Government is to balance short-term fiscal pressures against the longer-term need to re-position Canada to take advantage of economic opportunity while preserving that which is of fundamental importance to Canadian society as a whole. As the Committee looks to striking the right balance, there are five specific areas of concern that the CMA wishes to bring to your attention on behalf of the Canadian medical profession. The Temptation to Reduce Federal Health Transfers CMA commends this Government for exempting EPF health transfers from the extended freeze that was applied to other provincial transfer programs in its spring 1994 budget. We would have been surprised had this Government done anything else, given that medicare is the "Liberal legacy" of the 1960s and given the Liberal Party's consistent opposition to the previous government's "policy by stealth" (i.e., Bill C-69; Bill C-96). The fact is that medicare's contribution to getting our "fiscal house in order" is already large and continues to grow. In specific terms, the Committee will know that over the 1986/87 to 1995/96 fiscal period, it is estimated that $42.108 billion will have been removed via reductions in Established Program Financing for health and post-secondary education. For health alone, over $30 billion will have been removed from the system by fiscal year 1995/96. 9 Even with a resumption of GNP minus three percent growth formula in per capita EPF entitlements for health, beginning next spring, reduced cash contributions to medicare programs will continue to contribute to the attainment of the government's fiscal targets. Given the unprecedented health reforms taking place across the country, Canadians and the health care system can ill afford another federal fiscal shock. The system is already balkanizing, with poorer regions not being able to fiscally sustain some basic health care benefits. Any further acceleration in the rate of reduction in federal cash transfers will all but assure the demise of the national integrity of medicare programs. Moreover, any further reductions in federal health-related cash transfers will: (1) significantly hamper or stall the work of the newly-created National Health Forum; (2) further reduce the capacity for enforcement of national health principles under federal law; (3) exacerbate health-related problems of dealing with child poverty and problems of reducing health inequalities by socio-economic class; and (4) increase other areas of federal direct program expenditures in the context of renewed efforts to provincial program "uploading" (e.g., Canada Pension Plan Disability Program). A propos of health and economy going hand-in hand, it is useful to remind ourselves of the importance of maintaining the comparability of health benefits across Canada in terms of promoting regional development, shared opportunity and efficient resource allocation. Poor regions of this country are already finding it difficult to compete for scarce new business investment capital. The implications of competing from a more uneven playing field in terms of being able to offer only "bare bones" publicly-financed health benefits will further widen the gap between the "have" and "have not" provinces. It is for these reasons that the CMA joins with other national health organizations 10 in recommending the following: 1. THAT THE FEDERAL GOVERNMENT AVOID FURTHER CUTS TO THE EPF HEALTH TRANSFER AND LOCK IN THE CASH PORTION; 2. THAT THE FEDERAL GOVERNMENT NEGOTIATE A STABLE FIVE-YEAR FUNDING ARRANGEMENT WITH THE PROVINCES/TERRITORIES; 3. THAT THE FEDERAL GOVERNMENT MUST ENSURE THAT ACCOUNTABILITY OF THE HEALTH TRANSFER BE SEPARATE AND EXPLICIT. Taxable Health Benefits Canadians have already been dealt one blow with the increasing de-insurance of health care services (e.g., reduction of out-of-country benefits to an unfair and dangerous level, elimination or reduction in drug benefit programs). In the context of funding those services that remain public benefits, only the cruellest government would strike yet another blow to individual Canadians and to Canadian business by taxing the very benefits that taxes were raised to pay. If implemented, this proposal would be tantamount to nothing less than double taxation. Fairness and equity would suggest that the government should be doing more, not less at the legislative and regulatory levels to promote the availability of private health insurance benefits in areas increasingly vacated by government cutbacks. This is why CMA makes the following recommendation: 4. THAT THE CURRENT FEDERAL GOVERNMENT POLICY WITH RESPECT TO NON-TAXABLE HEALTH BENEFITS BE MAINTAINED; Goods and Services Tax (GST) When the GST was introduced in 1991, preoccupation with implementation issues resulted in a number of fundamental injustices at the micro level. One such injustice was dealt to the medical profession. Physicians, like other Canadians, expect to pay their fair share of taxes. We do not however, accept what essentially amounts to double taxation. Physicians in practice in Canada are in the unique, unenviable and unfair position of being forced to absorb all the GST on business inputs. Unlike all other professions, physicians are precluded from being able to pass on the tax to consumers (with provincial health insurance plans as payment in full) or from claiming input tax credits (ITCs) since insured medical services are deemed to be "tax exempt". Unlike other professions, physicians cannot claim input credits for the imputed taxes associated with providing needed medical care. In fact, all of the following health professionals are capable of recouping from patients the GST paid on inputs because their revenues are not restricted by government: dentists; optometrists; chiropractors; physiotherapists; chiropodists; osteopaths; audiologists; speech therapists; occupational therapists and psychologists. Physicians are still angrily awaiting remedial steps to correct this injustice. To be clear, CMA is not asking for preferential treatment for Canadian physicians. What we want is the same fair and equitable treatment from the federal government accorded to other self-employed professional groups. Like physicians, other professions are purchasing inputs and paying GST; but unlike physicians, they are able to recoup the GST. Given this oversight in the legislation and regulations, physicians have already been asked to pay (over and above the GST paid by other professional groups) a cumulative total of $250 million since its introduction of the tax in 1991. The magnitude of this tax paid is not in dispute (as a result of a study prepared by KPMG). 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 in Canada employ up to 100,000 Canadians. Given the disproportionate effects of the GST on the medical profession as employers, the employment dampening could be at least as high as 1,000 full-time jobs lost. In addition, the tax-induced distorting effects in terms of efficient resource allocation in the health care system cannot be measured, but are thought to be significant. A goal of health reform in many parts of the country is to move care services out of institutions and into the community. Current federal GST policy, by taxing supplies in a clinical practice setting but not in a hospital setting, acts to discourage this shift in emphasis. No other issue in recent years has raised the ire of individual practitioners as much as the imposition of this most unfair and inequitable tax on business inputs. Understanding that the Minister of Finance is in the process of consulting with the provinces as to the nature of a replacement tax for the GST, we are confident that this oversight will be remedied. In the interests of fundamental fairness/equity and allocative efficiency, CMA respectfully recommends the following: 5. THAT THE COMMITTEE WORK TO ENSURE THAT CANADIAN PHYSICIANS, AS SMALL BUSINESSES, PAY NO MORE THAN OTHER PROFESSIONS UNDER ANY REPLACEMENT TAX FOR THE GST; 6. THAT ALL TAXES ON BUSINESS EXPENSES BE FAIRLY AND FULLY REMOVED UNDER ANY REPLACEMENT TAX FOR THE GST; 7. THAT IF ANY REMEDIAL STEPS ARE TAKEN TO ENSURE NO TAXES ARE LEVIED ON BUSINESS INPUTS, THESE BE APPLIED UNIFORMLY ACROSS ALL EXEMPT SERVICES. Registered Retirement Savings Plan (RRSP) Canadian physicians, while receiving a large proportion of their professional earnings from the public sector (94%), do not benefit as self-employed individuals from defined benefit plans or from publicly-financed pension benefits that accrue to employed professionals. They, like other self-employed individuals, must plan and fund their own retirement. Fairness/equity once again demands that there be symmetry between money-purchase (MP) and defined-benefit (DB) retirement plans. This is all the more important for physicians because of their compressed period of lifetime earnings in relation to other groups. This Committee will have heard various calls for either reducing the annual contribution limit or taxing assets within RRSPs. Such arguments are both specious and patently unfair. Both propositions potentially involve double taxation. Experts both within and outside government argue, quite correctly, that the current policy be maintained, and that equity between employees and the self-employed before the taxman be assured. It is for these reasons, that CMA has led an unprecedented alliance for the preservation of retirement savings, and recommends the following: 8. THAT THE FEDERAL GOVERNMENT CONSIDER THE TOTAL COST OF THE RETIREMENT SAVINGS SYSTEM BEFORE MAKING ANY CHANGES TO THE INCOME TAX ACT; 9. THAT THE EQUITY ESTABLISHED DURING PENSION REFORM NOT BE DISTURBED BY DISCRIMINATORY CHANGES AND THAT ANY FUNDAMENTAL CHANGES TO THE SYSTEM INVOLVE A PROCESS OF INFORMED AND THOUGHTFUL INQUIRY AND DEBATE; 10. THAT THE FEDERAL GOVERNMENT FOSTER ECONOMIC DEVELOPMENT BY TREATING RRSP CONTRIBUTIONS AS ASSETS RATHER THAN LIABILITIES AND BY EXPLORING THE REGULATORY CHANGES NECESSARY TO ENSURE INCREASED ACCESS TO SUCH FUNDS BY SMALL AND MEDIUM-SIZED BUSINESSES. Lifetime Capital Gains Exemption (LCGE) for Small Businesses Most Canadian physicians are independent, self-employed practitioners. As such, they have the ability if they are incorporated to claim the LCGE when they sell their practices. Over time, several provinces have accorded physicians the right to incorporate (e.g., Prince Edward Island, New Brunswick, Alberta, British Columbia, and the Yukon Territory), in other jurisdictions, physician incorporation is under active review (e.g., Nova Scotia, Quebec, Ontario and the Northwest Territories). While physicians have benefited from incorporation on a limited basis, this issue takes on added importance when one considers the "national" move towards incorporation allowing a greater number of eligible physicians to claim the LCGE. Recent health reforms have also underscored the importance of maintaining the current policy. Previously, physicians were free to move their practices from one location to another to meet the changing health needs of Canadians. Over the past two years, provincial governments have moved to restrict inter-provincial mobility of physicians and indeed mobility within any given province or territory. These "barriers" not only restrict the number of new entrants into the system in addition to those who wish to move to other areas of the country, but also can be thought of as increasing the capitalized value of established practices. Indeed, with the advent of regional physician resource plans across Canada, the cost of establishing a new practice can be expected to continue to grow at an unprecedented rate. So while some physicians have yet to claim the LCGE, it is reasonable to think that they will some time in the future. As the health needs of Canadians change, and as people move, medical care services will have to respond accordingly. The elimination of the LCGE, by significantly increasing the purchase price of a new medical practice, unnecessarily and unfairly raises additional economic barriers to shifting practices in response to changing community health needs. CMA therefore recommends: 11. THAT THE FEDERAL GOVERNMENT MAINTAIN THE CURRENT POLICY FOR THE LIFETIME CAPITAL GAINS EXEMPTION FOR SMALL BUSINESSES. V. TRADE-OFFS To summarize: in broad terms the health care sector has already paid its fair (and to a larger extent unfair) share. Everyone who has appeared before this Committee will argue that cuts should not occur in their backyard. They can't all be right! The government of Canada must decide where its priorities lie over the longer-term. Deficit reduction targets can no longer be met by simply chipping away at the full range of federally-sponsored programs. The national integrity of national health insurance programs, given their importance to Canada's economic, social and political future must be on the short list of safeguarded social programs. If further reductions in federal health transfers are deemed appropriate, the Committee should be prepared to publicly acknowledge that the principles of universality or comprehensiveness (i.e., the choice between covering everyone versus everything) will have to be fundamentally re-examined. Given the degree of support for the universality principle, if the federal government is serious about further reducing its direct or indirect contributions to health, then it must reconsider the range of core benefits that will be made available to Canadians. In fact, we may now have reached the point where we need to get back to basics; reminding ourselves of the original medicare promise, which was to protect Canadians from the spectre of personal bankruptcy associated with large and unexpected health care bills. Not to pay the day-to-day ("grocery") bill of health care. The recently-announced National Health Forum, chaired by the Prime Minister, will provide an important opportunity to assess the breadth and depth of publicly-financed health care. The contribution of medicine to the health of Canadians and to the economy is just too important to be traded off. Physicians are still feeling the "aftershocks" of recent federal fiscal decisions. They have also had to absorb sharp unilateral reductions at the provincial level. The provinces of Nova Scotia, Prince Edward Island and Alberta - to name only three - have disproportionately singled out the medical profession on a net earnings basis in decreasing health funding. Taken together, these fiscal forces could trigger an unprecedented exodus of physicians from Canada. As governments move to restrict the ability of physicians to provide needed medical care, CMA is increasingly concerned about the growing number of physicians who are being actively recruited by the United States, and those who feel they have no alternative but to leave the country. At a macro level, we as a society, must recognize that we are in a North American labour market, and as such, each physician heading south represents both a short-term pain and long-term pain. VI. SUMMARY OF RECOMMENDATIONS The CMA offers the following recommendations to the Committee in its deliberations: 1. THAT THE FEDERAL GOVERNMENT AVOID FURTHER CUTS TO THE EPF HEALTH TRANSFER AND LOCK IN THE CASH PORTION; 2. THAT THE FEDERAL GOVERNMENT NEGOTIATE A STABLE FIVE-YEAR FUNDING ARRANGEMENT WITH THE PROVINCES/TERRITORIES; 3. THAT THE FEDERAL GOVERNMENT MUST ENSURE THAT ACCOUNTABILITY OF THE HEALTH TRANSFER BE SEPARATE AND EXPLICIT. 4. THAT THE CURRENT FEDERAL GOVERNMENT POLICY WITH RESPECT TO NON-TAXABLE HEALTH BENEFITS BE MAINTAINED; 5. THAT THE COMMITTEE WORK TO ENSURE THAT CANADIAN PHYSICIANS, AS SMALL BUSINESSES, PAY NO MORE THAN OTHER PROFESSIONS UNDER ANY REPLACEMENT TAX FOR THE GST; 6. THAT ALL TAXES ON BUSINESS EXPENSES BE FAIRLY AND FULLY REMOVED UNDER ANY REPLACEMENT TAX FOR THE GST; 7. THAT IF ANY REMEDIAL STEPS ARE TAKEN TO ENSURE NO TAXES ARE LEVIED ON BUSINESS INPUTS, THESE BE APPLIED UNIFORMLY ACROSS ALL EXEMPT SERVICES. 8. THAT THE FEDERAL GOVERNMENT CONSIDER THE TOTAL COST OF THE RETIREMENT SAVINGS SYSTEM BEFORE MAKING ANY CHANGES TO THE INCOME TAX ACT; 9. THAT THE EQUITY ESTABLISHED DURING PENSION REFORM NOT BE DISTURBED BY DISCRIMINATORY CHANGES AND THAT ANY FUNDAMENTAL CHANGES TO THE SYSTEM INVOLVE A PROCESS OF INFORMED AND THOUGHTFUL INQUIRY AND DEBATE; 10. THAT THE FEDERAL GOVERNMENT FOSTER ECONOMIC DEVELOPMENT BY TREATING RRSP CONTRIBUTIONS AS ASSETS RATHER THAN LIABILITIES AND BY EXPLORING THE REGULATORY CHANGES NECESSARY TO ENSURE INCREASED ACCESS TO SUCH FUNDS BY SMALL AND MEDIUM-SIZED BUSINESSES. 11. THAT THE FEDERAL GOVERNMENT MAINTAIN THE CURRENT POLICY FOR THE LIFETIME CAPITAL GAINS EXEMPTION FOR SMALL BUSINESSES. _______________ 1 The Angus Reid Group, The Reid Report. Vol. 8, No. 7, July/August, 1993 and Vol. 8, No. 8, September, 1993. 2 Ibid. 3 Agenda: Jobs and Growth: Creating A Healthy Fiscal Climate (The Economic and Fiscal Climate), Department of Finance, October 1994. 4 Economic and Fiscal Reference Tables, Department of Finance, September 1994; Annual Financial Report of the Government of Canada, Fiscal Year, 1993/94. 5 Valaskakis K.: The Debt Monster, Montreal Gazette, November 5, 1994. 6 National Health Expenditures in Canada, 1975-1993. Health Canada. 7 Ibid. 8 World Economic Forum 1991: The World Competitiveness report 1990, Institut pour l'étude des méthodes de direction de l'entreprise, Lausanne, Switzerland. 9 Thomson A 1991: Federal Support for Health Care: A Background Paper. Health Action Lobby, Ottawa, June 1991. 10 See the 1995/96 Pre-Budget Submission to the Standing Committee on Finance by the Health Action Lobby (HEAL), November 15, 1994.
Documents
Less detail

CMA Submission: The need for health infrastructure in Canada

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

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

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