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A Healthy Population for a Stronger Economy: CMA pre-budget consultation submission to the Standing Committee on Finance

https://policybase.cma.ca/en/permalink/policy10224
Date
2011-08-12
Topics
Population health/ health equity/ public health
Health systems, system funding and performance
  1 document  
Policy Type
Parliamentary submission
Date
2011-08-12
Topics
Population health/ health equity/ public health
Health systems, system funding and performance
Text
The Canadian Medical Association (CMA) submission to the House of Commons Standing Committee on Finance examines how increasing retirement income saving options, improving access to prescription drugs, and planning for a Canadian Health Quality Alliance to promote innovation in the delivery of high quality health care can enhance our health care system and, in turn, make our economy more productive. Higher quality health care and expanded options for meeting the needs of retired and elderly Canadians will contribute to the ultimate goals of better patient care, improved population health and help our country reach its full potential. Polls show that Canadians are becoming increasingly concerned about the future of their health care system, particularly in terms of their ability to access essential care. The CMA's 2011 pre-budget submission responds to these concerns and supports a healthy population, a healthy medical profession and a healthy economic recovery. Our recommendations are as follows: Recommendation # 1 The federal government should study options to expand the current PRPP definition beyond defined contribution pension plans. Also, the federal government should expand the definition of eligible administrators of PRPPs beyond financial institutions to include organizations such as professional associations. Recommendation # 2 Governments, in consultation with the life and health insurance industry and the public, should 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 # 3 The federal government should convene a time-limited national steering committee that would engage key stakeholders in developing a proposal for a pan-Canadian Health Quality Alliance with a mandate to work collaboratively towards integrated approaches for a sustainable health care system through innovative practices in the delivery of high quality health care. Introduction Over the past year, the CMA has engaged Canadians across the country in a broad-based public consultation on health care and heard about their concerns and experiences with the system. This exercise was undertaken as part of the CMA's Health Care Transformation (HCT) initiative, a roadmap for modernizing Canada's health care systemi so that it puts patients first and provides Canadians with better value for money. We have heard through these consultations that Canadians do not believe they are currently getting good value from their health care system, a feeling borne out by studies comparing Canada's health care system to those in leading countries in Europe. We also heard that Canadians are concerned about inequities in access to care beyond the basic medicare basket, particularly in the area of access to prescription drugs. While all levels of government need to be involved, it is the federal government that must lead the transformation of our most cherished social program. 1. Retirement Income Improvement Issue: Increasing retirement savings options for Canadians with a focus on improving their ability to look after their long-term care needs. Background The CMA remains concerned about the status of Canada's retirement income system and the future ability of Canada's seniors to adequately fund their long-term and supportive care needs. The proportion of Canadian seniors (65+) is expected to almost double from its present level of 13% to almost 25% by 2036. Statistics Canada projections show that between 2015 and 2021 the number of seniors will, for the first time, surpass the number of children under 14 years of age.ii The CMA has been working proactively on this issue in several ways, including through the recently created Retirement Income Improvement Coalition (RIIC), a broad-based coalition of 11 organizations representing over one million self-employed professionals. The coalition has previously recommended to the federal government the following actions: * increased retirement saving options for all Canadians, particularly the self-employed; * changes to the Income Tax Act, Income Tax Regulations and the Employment Standards Act to enable the self-employed to participate in pension plans; * the approval of Pooled Retirement Pension Plans (PRPP) as a retirement savings program for the self-employed; * changes to the current tax-deferred income saving options (increase the percentage of earned income or the maximum-dollar amount contribution limit for RRSPs); * a requirement that registration to all retirement saving options be voluntary (optional); and * opportunities for Canadians to become better educated about retirement saving options (financial literacy).iii The CMA appreciates that federal, provincial and territorial finance ministers are moving ahead with the introduction of Pooled Registered Retirement Plans (PRPPs). The CMA, as part of the RIIC, has been providing input into the consultation process. However, PRPPs represent only one piece of a more comprehensive retirement savings structure. Recommendation # 1 The federal government should study options that would not limit PRPPs to defined contribution pension plans. Target benefit plans should be permitted and encouraged. Target benefit plans allow risk to be pooled among the plan members, providing a more secure vehicle than defined contribution plans. Also, the administrators of PRPPs should not be limited to financial institutions. Well-governed organizations that represent a particular membership should be able to sponsor and administer RPPs and PRPPs for their own members, including self-employed members. The CMA also continues to be concerned about the ability of Canadians to save for their long-term health care needs. The Wait Time Alliance - a coalition of 14 national medical organizations whose members provide specialty care to patients - reported recently that many patients, particularly the elderly, are in hospital while waiting for more suitable and appropriate care arrangements. Mostly in need of support rather than medical care, these patients are hindered by the lack of options available to them, often due to limited personal income. The CMA has previously recommended that the federal government should study options for pre-funding long-term care, including private insurance, tax-deferred and tax-prepaid savings approaches, and contribution-based social insurance. This remains pertinent. 2. Universal access to prescription drugs Issue: Ensuring all Canadians have access to a basic level of prescription drugs. Background Universal access to prescription drugs is widely acknowledged as part of the "unfinished business" of medicare in Canada. In 1964 the Hall Commission recommended that the federal government contribute 50% of the cost of a Prescription Drug Benefit within the Health Services Program. It also recommended a $1.00 contributory payment by the purchaser for each prescription. This has never been implemented.iv What has emerged since then is a public-private mix of funding for prescription drugs. The Canadian Institute for Health Information (CIHI) has estimated that, as of 2010, 46% of prescription drug expenditures were public, 36% were paid for by private insurance and 18% were paid for out-of-pocket.v Nationally there is evidence of wide variability in levels of drug coverage. According to Statistics Canada, 3% of households spent greater than 5% of after-tax income on prescription drugs in 2008. Across provinces this ranged from 2.2% in Ontario and Alberta, to 5.8% in P.E.I. and 5.9% in Saskatchewan.vi Moreover, there is significant variation between the coverage levels of the various provincial plans across Canada. For example, the Manitoba Pharmacare Program is based on total income, with adjustment for spouse and dependents under 18, while in Newfoundland and Labrador, the plan is based on net family income.vii,viii The Commonwealth Fund's 2010 International Health Policy Survey found that 10% of Canadian respondents said they had either not filled a prescription or skipped doses because of cost issues.ix Moreover, there have been numerous media stories about inequities in access across provinces to cancer drugs and expensive drugs for rare diseases. The high cost of prescription drugs was frequently raised during our public consultations this year. The need for a national drug strategy or pharmacare plan was mentioned by an overwhelming number of respondents, many of whom detailed how they had been affected by the high cost of drugs. The cost to the federal government of a program that would ensure universal access to prescription drugs would depend on the threshold of out-of-pocket contribution and the proportion of expenses that it would be willing to share with private and provincial/territorial public plans. Estimates have ranged from $500 millionx, and $1 billionxi, to the most recent estimate from the provincial-territorial health ministers of $2.5 billion (2006).xii Recommendation # 2 Governments, in consultation with the life and health insurance industry and the public, should 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. Such a program should include: * a mandate for all Canadians to have either private or public coverage for prescription drugs; * a uniform income-based ceiling (between public and private plans and across provinces/territories) on out-of-pocket expenditures, on drug plan premiums and/or prescription drugs; * federal/provincial/territorial cost-sharing of prescription drug expenditures above a household income ceiling, subject to capping the total federal and/or provincial/territorial contributions either by adjusting the federal/provincial/territorial sharing of reimbursement or by scaling the household income ceiling or both; * a requirement for group insurance plans and administrators of employee benefit plans to pool risk above a threshold linked to group size; and * a continued strong role for private supplementary insurance plans and public drug plans on a level playing field (i.e., premiums and co-payments to cover plan costs). 3. Innovation for Quality in Canadian Health Care Issue: Development of a proposal to establish a Canadian Health Quality Alliance to promote innovation in the delivery of high-quality health care in Canada. Background There is general agreement that Canada's health care system is no longer a strong performer compared to similar nations. Clearly, we can do better. However, progress has been slow on a comprehensive quality agenda for our health care system. At the national level, there is no coordination or body with a mandate to promote a comprehensive approach to quality improvement. Over the past two decades, health care stakeholders in Canada have gradually come to embrace a multi-dimensional concept of quality in health care encompassing safety, appropriateness, effectiveness, accessibility, competency and efficiency. The unilateral federal funding cuts to health transfers that took effect in 1996 precipitated a long preoccupation with the accessibility dimension that was finally acknowledged with the Wait Time Reduction Fund in the 2004 First Ministers Accord. The safety dimension was recognized with the establishment of the Canadian Patient Safety Institute (CPSI) in 2003. Competence has been recognized by health professional organizations and regulatory bodies through the development of peer-review programs and mandated career-long professional development. While six provinces have established some form of health quality council (B.C., Alta., Sask., Ont., Que., N.B.), there is no national approach to quality improvement beyond safety. Given that health care stands as Canadians' top national priority and that it represents a very large expenditure item for all levels of government, the lack of a national approach to quality improvement is a major shortcoming. In the U.S., the Institute for Healthcare Improvement is dedicated to developing and promulgating methods and processes for improving the delivery of care throughout the world.xiii England's National Health Service (NHS) has also created focal points over the past decade to accelerate innovation and improvement throughout their health system. Canadian advancements in the health field have occurred when the expertise and perspective of a range of stakeholders have come together. The CPSI, for example, was established following the deliberations and report of the National Steering Committee on Patient Safety.xiv It is estimated that it would cost less than $500,000 for a multi-stakeholder committee to develop a proposal for a national alliance for quality improvement, including the cost of any commissioned research. Recommendation # 3 The federal government should convene a time-limited national steering committee that would engage key stakeholders in developing a proposal for a pan-Canadian Health Quality Alliance with a mandate to work collaboratively towards integrated approaches for a sustainable health care system through innovative practices in the delivery of high quality health care. This alliance would be expected to achieve the following in order to modernize health care services: * Promote a comprehensive approach to quality improvement in health care; * Promote pan-Canadian sharing of innovative and best practices; * Develop and disseminate methods of engaging frontline clinicians in quality improvement processes; and * Establish international partnerships for the exchange of innovative practices. Such an alliance could be established in a variety of ways: * Virtually, using the Networks of Centres of Excellencexv approach; * By expanding the mandate of an existing body; or * Through the creation of a new body. REFERENCES i Canadian Medical Association. Health Care Transformation in Canada. Change that Works. Care that Lasts. http://www.cma.ca/multimedia/CMA/Content_Images/Inside_cma/Advocacy/HCT/HCT-2010report_en.pdf Accessed 13/07/11. ii Statistics Canada. Population Projections for Canada, Provinces and Territories. http://www.statcan.gc.ca/pub/91-520-x/2010001/aftertoc-aprestdm1-eng.htm. Accessed 13/07/11. iii Retirement Income Improvement Coalition. Letter to the federal Minister of Finance and the Minister of State (Finance). March 17, 2011. ivHall, E. Royal Commission on Health Services. Volume 1. Ottawa: Queen's Printer, 1964. vCanadian Institute for Health Information. Drug Expenditure in Canada, 1985 to 2010. Ottawa, 2010. viStatistics Canada. CANSIM Table 109-5012 Household spending on prescription drugs as a percentage of after-tax income, Canada and provinces, annual (percent). http://www5.statcan.gc.ca/cansim/pick-choisir?lang=eng&searchTypeByValue=1&id=1095012. Accessed 05/29/11. vii Manitoba Health. Pharmacare deductible estimator. http://www.gov.mb.ca/health/pharmacare/estimator.html. Accessed 07/28/11. viii Newfoundland Department of Health and Community Services. Newfoundland and Labrador Prescription Drug Program (NLPDP). http://www.health.gov.nl.ca/health/prescription/nlpdp_application_form.pdf. Accessed 07/29/11. ixCommonwealth Fund. International health policy survey in eleven countries. http://www.commonwealthfund.org/~/media/Files/Publications/Chartbook/2010/PDF_2010_IHP_Survey_Chartpack_FULL_12022010.pdf. Accessed 05/29/11. x Senate Standing Committee on Social Affairs, Science and Technology. The health of Canadians - the federal role. Volume six: recommendations for reform. Ottawa, 2002. xi Commission on the Future of Health Care in Canada. Building on values: the future of health care in Canada. Ottawa, 2002. xii Canadian Intergovernmental Conference Secretariat. Backgrounder: National Pharmaceutical Strategy decision points. http://www.scics.gc.ca/english/conferences.asp?a=viewdocument&id=112. Accessed 23/07/11. xiii http://www.ihi.org. Accessed 29/07/10. xiv National Steering Committee on Patient Safety. Building a safer system: a national integrated strategy for improving patient safety in Canadian health care. http://rcpsc.medical.org/publications/building_a_safer_system_e.pdf. Accessed 23/07/11. xv http://www.nce-rce.gc.ca/index_eng.asp. Accessed 29/07/10.
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A Healthy Population for a Stronger Economy: The Canadian Medical Association's Presentation to the Standing Committee on Finance's pre-budget consultations

https://policybase.cma.ca/en/permalink/policy10228
Date
2011-10-18
Topics
Health systems, system funding and performance
Population health/ health equity/ public health
  1 document  
Policy Type
Parliamentary submission
Date
2011-10-18
Topics
Health systems, system funding and performance
Population health/ health equity/ public health
Text
Thank you for the opportunity to appear before this committee. Over the past year, the Canadian Medical Association has engaged in a wide-ranging public consultation on health care and heard from thousands of Canadians about their concerns and experiences with the system. This exercise was undertaken as part of the CMA's Health Care Transformation initiative, a roadmap for modernizing our country's health care system so that it puts patients first and provides Canadians with better value for money. The CMA found there is a groundswell of support for change among other health care providers, stakeholders and countless Canadians who share our view that the best catalyst for transformation is the next accord on federal transfers to provinces for health care. That said, while looking ahead to what we would like to see in the next health care accord, we have identified immediate opportunities for federal leadership in making achievable, positive changes to our health care system that would help Canadians be healthier and more secure and help ensure the prudent use of their health care dollars. During our consultation, we heard repeated concerns that Canada's medicare system is a shadow of its former self. Once a world leader, Canada now lags behind comparable nations in providing high quality health care. Improving the quality of health care services is key if Canada is ever going to have a high performing health system. The key dimensions of quality, and by extension, the areas that need attention are: Safety, Effectiveness, Patient-Centeredness, Efficiency, Timeliness, Equitability and Appropriateness. Excellence in quality improvement in these areas will be a crucial step towards sustainability. To date, six provinces have instituted health quality councils. Their mandates and their effectiveness in actually achieving lasting system wide improvements vary by province. What is missing, and urgently needed, is an integrated, Pan-Canadian approach to quality improvement in health care in Canada that can begin to chart a course that will ensure that Canadians ultimately have the best health and health care in the world. Canadians deserve no less and, with the resources at our disposal, there is no reason why this should not be achievable. The CMA recommends that the Federal Government funds the establishment, and adequately resources the operations, of an arms length Canadian Health Quality Council with the mandate to be a catalyst for change, a spark for innovation and a facilitator to disseminate evidence based quality improvement initiatives so that they become embedded in the fabric of our health systems from coast to coast to coast. Canadians are increasingly questioning whether they are getting value for the $190 billion a year that go into our country's health care system... with good reason as international studies indicate they are not getting good value for money. Defining, promoting and measuring quality care are not only essential to obtaining better health outcomes, they are crucial to building the accountability to Canadians that they deserve as consumers and funders of the system. We also heard during our consultation that Canadians worry about inequities in access to care beyond the hospital and doctor services covered within medicare, particularly when it comes to the high cost of prescription drugs. Almost 50 years ago, the Hall Commission recommended that all Canadians have access to a basic level of prescription drug coverage, yet what we have now is a jumble of public and private funding for prescription drugs that varies widely across the country. Last year, one in 10 Canadians either failed to fill a prescription or skipped a dose because they couldn't afford it. Universal access to prescription drugs is widely acknowledged to be part of the unfinished business of medicare in Canada. Our second recommendation, therefore, is that governments 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. This should be done in consultation with the life and health insurance industry and the public. In the 21st century, no Canadian should be denied access to medically necessary prescription drugs because of an inability to pay for them. Our third and final recommendation relates to our aging population and the concerns Canadians share about their ability to save for their future needs. We recommend that the federal government study options that would not limit PRPPs to defined contribution pension plans. Target benefit plans should be permitted and encouraged as they allow risk to be pooled among the plan members, providing a more secure vehicle than defined contribution plans. As well, the administrators of PRPPs should not be limited to financial institutions. Well-governed organizations that represent a particular membership should be able to sponsor and administer RPPs and PRPPs for their own members, including self-employed members. The CMA appreciates that governments are moving ahead with the introduction of Pooled Registered Retirement Plans. However, we note that PRPPs represent only one piece of a more comprehensive saving structure. We also continue to be concerned about the ability of Canadians to save for their long-term health care needs. Many patients, particularly the elderly, are in hospital waiting for more suitable care arrangement. These patients are hindered by a lack of available options, often because they lack the means to pay for long-term care. They and their families suffer as a result, and so, too, does our health care system. While not in this pre-budget brief, the CMA holds to recommendations we have made in previous years that the federal government study options to help Canadians pre-fund long-term care. In closing, let me simply say that carrying out these recommendations would make a huge and positive impact, soon and over the long term, in the lives of literally millions of Canadians from every walk of life. Thank you for your time. I would be happy to answer your questions.
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Improving Accountability in Canada's Health Care System: The Canadian Medical Association's Presentation to the Senate Standing Committee on Social Affairs, Science and Technology

https://policybase.cma.ca/en/permalink/policy10230
Date
2011-10-19
Topics
Health care and patient safety
Health systems, system funding and performance
  1 document  
Policy Type
Parliamentary submission
Date
2011-10-19
Topics
Health care and patient safety
Health systems, system funding and performance
Text
The CMA appreciates the opportunity to appear before this committee as part of your review of the 10-Year Plan to Strengthen Health Care. An understanding of what has worked and what hasn't since 2004 is critical to ensuring the next accord brings about necessary change to the system. Overview of 2004 Accord On the positive side of the ledger, the 2004 accord provided the health care system with stable, predictable funding for a decade - something that had been sorely lacking. It also showed that a focused commitment, in this case on wait times, can lead to improvements. However, little has been done on several other important commitments in the Accord, such as the pledge that was also made in 2003 to address the significant inequity among Canadians in accessing prescription drugs. Along with the lack of long-term, community and home-based care services, this accounts for a major gap in patient access along the continuum of care. We also know that accountability provisions in past accords have been lacking in several ways. For instance, there has been little progress in developing common performance indicators set out in previous accord. i The 2004 accord has no clear terms of reference on accountability for overseeing its provisions. Vision and principles for 2014 What the 2004 accord lacked was a clear vision. Without a destination, and a commitment to getting there, our health care system cannot be transformed and will never become a truly integrated, high performing health system. The 2014 Accord is the perfect opportunity to begin this journey, if it is set up in a way that fosters the innovation and improvements that are necessary. By clearly defining the objectives and securing stable, incremental funding, we will know what changes we need to get us there. Now is the time to articulate the vision- to say loudly and clearly that at the end of the 10-year funding arrangement, by 2025, Canadians will have the best health and health care in the world. With a clear commitment from providers, administrators and governments, this vision can become our destination. As a first step to begin this long and difficult journey, the CMA has partnered with the Canadian Nurses Association, and together we have solicited support from over 60 health care organizations for a series of "Principles to Guide Health Care Transformation in Canada." These principles define a system that would provide equitable access to health care based on clinical need; care that is high quality and patient-centred; and that focuses on empowering patients to attain and maintain wellness. They call for a system that provides accountability to those who use it and those who fund it; and that is sustainable - by which I mean adequately resourced in terms of financing, infrastructure and human resources, and measured against other high-performing systems, with cost linked to outcomes. Based on our experience working within the provisions of the 2004 accord, we would like to suggest three strategies to ensure the next accord leads to a sustainable, high-performing health care system. They are: a focus on quality; support for system innovation; and the establishment of an accountability framework and I will touch briefly on each one. Focus on quality First, the crucial need to focus on improving the quality of health care services. The key dimensions of quality, and by extension, the areas that need attention are: safety, effectiveness, patient-centredness, efficiency, timeliness, equitability and appropriateness. Excellence in quality improvement in these areas will be a crucial step towards sustainability. To date, six provinces have instituted health quality councils. Their mandates and their effectiveness in actually achieving lasting system-wide improvements vary. What is missing and urgently needed is an integrated, pan-Canadian approach to quality improvement in health care that can begin to chart a course to ensure Canadians ultimately have the best health and health care in the world. Canadians deserve no less and, with the resources at our disposal, there is no reason why this should not be achievable. The CMA recommends that the federal government fund the establishment and resource the operations of an arms-length Canadian Health Quality Council, with the mandate to be a catalyst for change, a spark for innovation and a facilitator to disseminate evidence-based quality improvement initiatives so that they become embedded in the fabric of our health systems from coast to coast to coast. To help expand quality improvement across the country, the Institute for Healthcare Improvement's Triple Aim provides the solid framework. Our health care systems will benefit inordinately from a simultaneous focus on providing better care to individuals and better health to populations, while reducing the per-capita cost. There is ample evidence that quality care is cost effective care. This approach, when adopted and applied as the pan-Canadian framework for any and all structural changes and quality improvement initiatives, will not only serve patients well, but will also enhance the experience of health care providers on the front lines. System innovation The second strategy revolves around system innovation. Innovation and quality improvement initiatives are infinitely more likely to be successful and sustained if they arise out of a commitment by frontline providers and administrators to the achievement of a common goal. We need to shift away from compliance models with negative consequences that have little evidence to support their sustainability. Innovative improvements in health care in Canada are inadequately supported, poorly recognized, and constrained from being shared and put into use more widely. This needs to change. The 2014 accord, with a focus on improving Canadians' health and health care, can facilitate the transformation we all seek. Building on the success of the 2004 Wait Times Reduction Fund and the 2000 Health Accord Primary Health Care Transition Fund, the CMA proposes the creation of a Canada Health Innovation Fund that would broadly support the uptake of health system innovation initiatives across the country. A Working Accountability Framework And, third, there needs to be a working accountability framework. This would work three ways. To provide accountability to patients - the system will be patient-centred and, along with its providers, will be accountable for the quality of care and the care experience. To provide accountability to citizens - the system will provide and, along with its administrators and managers, will be accountable for delivering high quality, integrated services across the full continuum of care. And to provide accountability to taxpayers - the system will optimize its per-capita costs, and along with those providing public funding and financing, will be accountable for the value derived from the money being spent. We have done all of this because of our profound belief that meaningful change to our health care system is of the essence, and that such change can and must come about through the next health accord. Therefore I thank this committee for your efforts on this important area. I would be happy to answer your questions. Appendix A Issues identified in 2004 Accord and Current Status [NOTE: see PDF for correct dispaly of table] Issue Current Status Annual 6% escalator in the CHT to March 31, 2014 Has provided health care system with stable, predictable funding for a decade. Adoption of wait-time benchmarks by December 2005 for five procedural areas Largely fulfilled. However, no benchmarks were set for diagnostic imaging. The Wait Time Alliance is calling for benchmarks for all specialty care. Release of health human resource (HHR) action plans by December 2005 Partially fulfilled. Most jurisdictions issued rudimentary HHR plans by the end of 2005; F/P/T Advisory Committee on Health Delivery and Human Resources issued a paper on a pan-Canadian planning HHR framework in September 2005. First-dollar coverage for home care by 2006 Most provinces offer first-dollar coverage for post-acute home care but service varies across the country for mental health and palliative home care needs. An objective of 50% of Canadians having 24/7 access to multidisciplinary primary care teams by 2011 Unfulfilled: Health Council of Canada reported in 2009 that only 32 per cent of Canadians had access to more than one primary health care provider. A 5-year $150 million Territorial Health Access Fund Fulfilled: Territorial Health System Sustainability Initiative (THSSI) funding extended until March 31, 2014. A 9-point National Pharmaceuticals Strategy (NPS) Largely unfulfilled: A progress report on the NPS was released in 2006 but nothing has been implemented. Accelerated work on a pan-Canadian Public Health Strategy including goals and targets F/P/T health ministers (except Quebec) put forward five high-level health goals for Canada in 2005, although they were not accompanied by operational definitions that would lend themselves to setting targets. Continued federal investments in health innovation Unknown-no specificity in the 2004 Accord. Reporting to residents on health system performance and elements of the Accord P/T governments ceased their public reporting after 2004, and only the federal government has kept its commitment (at least to 2008). Formalization of the dispute advance/resolution mechanism on the CHA Done but not yet tested. i P/T governments ceased their public reporting after 2004, and only the federal government has kept its commitment (at least to 2008).Government of Canada. Healthy Canadians: a federal report on comparable health indicators 2008. http://www.hc-sc.gc.ca/hcs-sss/alt_formats/hpb-dgps/pdf/pubs/system-regime/2008-fed-comp-indicat/index-eng.pdf. Accessed 06/21/11.
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Maintaining Ontario’s leadership on prohibiting the use of sick notes for short medical leaves

https://policybase.cma.ca/en/permalink/policy13934
Date
2018-11-15
Topics
Physician practice/ compensation/ forms
Health systems, system funding and performance
  1 document  
Policy Type
Parliamentary submission
Date
2018-11-15
Topics
Physician practice/ compensation/ forms
Health systems, system funding and performance
Text
The Canadian Medical Association (CMA) submits this brief to the Standing Committee on Finance and Economic Affairs for consideration as part of its study on Bill 47, Making Ontario Open for Business Act, 2018. The CMA unites physicians on national, pan-Canadian health and medical matters. As the national advocacy organization representing physicians and the medical profession, the CMA engages with provincial/territorial governments on pan-Canadian health and health care priorities. As outlined in this submission, the CMA supports the position of the Ontario Medical Association (OMA) in recommending that Schedule 1 of Bill 47 be amended to strike down the proposed new Section 50(6) of the Employment Standards Act, 2000. This section proposes to reinstate an employer’s ability to require an employee to provide a sick note for short leaves of absence because of personal illness, injury or medical emergency. Ontario is currently a national leader on sick notes In 2018, Ontario became the first jurisdiction in Canada to withdraw the ability of employers to require employees to provide sick notes for short medical leaves because of illnesses such as a cold or flu. This legislative change aligned with the CMA’s policy position1 and was strongly supported by the medical and health policy community. An emerging pan-Canadian concern about the use of sick notes As health systems across Canada continue to grapple with the need to be more efficient, the use of sick notes for short leaves as a human resources tool to manage employee absenteeism has drawn increasing criticism in recent years. In addition to Ontario’s leadership, here are a few recent cases that demonstrate the emerging concern about the use of sick notes for short leaves:
In 2016, proposed legislation to end the practice was tabled in the Manitoba legislature.2
The Newfoundland and Labrador Medical Association and Doctors Nova Scotia have been vocal opponents of sick notes for short leaves, characterizing them as a strain on the health care system.3,4
The University of Alberta and Queen’s University have both formally adopted “no sick note” policies for exams.5,6
The report of Ontario’s Changing Workplaces Review summarized stakeholder comments about sick notes, describing them as “costly, very often result from a telephone consultation and repeat what the physician is told by the patient, and which are of very little value to the employer.”7 Ontario’s action in 2018 to remove the ability of employers to require sick notes, in response to the real challenges posed by this practice, was meaningful and demonstrated leadership in the national context. The requirement to obtain sick notes negatively affects patients and the public By walking back this advancement, Ontario risks reintroducing a needless inefficiency and strain on the health system, health care providers, their patients and families. For patients, having to produce a sick note for an 4 employer following a short illness-related leave could represent an unfair economic impact. Individuals who do not receive paid sick days may face the added burden of covering the cost of obtaining a sick note as well as related transportation fees in addition to losing their daily wage. This scenario illustrates an unfair socioeconomic impact of the proposal to reinstate employers’ ability to require sick notes. In representing the voice of Canada’s doctors, the CMA would be remiss not to mention the need for individuals who are ill to stay home, rest and recover. In addition to adding a physical strain on patients who are ill, the requirement for employees who are ill to get a sick note, may also contribute to the spread of viruses and infection. Allowing employers to require sick notes may also contribute to the spread of illness as employees may choose to forego the personal financial impact, and difficulty to secure an appointment, and simply go to work sick. Reinstating sick notes contradicts the government’s commitment to end hallway medicine It is important to consider these potential negative consequences in the context of the government’s commitment to “end hallway medicine.” If the proposal to reintroduce the ability of employers to require sick notes for short medical leaves is adopted, the government will be introducing an impediment to meeting its core health care commitment. Reinstating sick notes would increase the administrative burden on physicians Finally, as the national organization representing the medical profession in Canada, the CMA is concerned about how this proposal, if implemented, may negatively affect physician health and wellness. The CMA recently released a new baseline survey, CMA National Physician Health Survey: A National Snapshot, that reveals physician health is a growing concern.8 While the survey found that 82% of physicians and residents reported high resilience, a concerning one in four respondents reported experiencing high levels of burnout. How are these findings relevant to the proposed new Section 50(6) of the Employment Standards Act, 2000? Paperwork and administrative burden are routinely found to rank as a key contributor to physician burnout.9 While a certain level of paperwork and administrative responsibility is to be expected, health system and policy decision-makers must avoid introducing an unnecessary burden in our health care system. Conclusion: Remove Section 50(6) from Schedule 1 of Bill 47 The CMA appreciates the opportunity to provide this submission for consideration by the committee in its study of Bill 47. The committee has an important opportunity to respond to the real challenges associated with sick notes for short medical leaves by ensuring that Section 50(6) in Schedule 1 is not implemented as part of Bill 47. 5 1 Canadian Medical Association (CMA). Third-Party Forms (Update 2017). Ottawa: The Association; 2017. Available: http://policybase.cma.ca/dbtw-wpd/Policypdf/PD17-02.pdf (accessed 2019 Nov 13). 2 Bill 202. The Employment Standards Code Amendment Act (Sick Notes). Winnipeg: Queen’s Printer for the Province of Manitoba; 2016. Available: https://web2.gov.mb.ca/bills/40-5/pdf/b202.pdf (accessed 2019 Nov 13). 3 CBC News. Sick notes required by employers a strain on system, says NLMA. 2018 May 30. Available: www.cbc.ca/news/canada/newfoundland-labrador/employer-required-sick-notes-unnecessary-says-nlma-1.4682899 4 CBC News. No more sick notes from workers, pleads Doctors Nova Scotia. 2014 Jan 10. Available: www.cbc.ca/news/canada/nova-scotia/no-more-sick-notes-from-workers-pleads-doctors-nova-scotia-1.2491526 (accessed 2019 Nov 13). 5 University of Alberta University Health Centre. Exam deferrals. Edmonton: University of Alberta; 2018. Available: www.ualberta.ca/services/health-centre/exam-deferrals (accessed 2019 Nov 13). 6 Queen’s University Student Wellness Services. Sick notes. Kingston: Queen’s University; 2018. Available: www.queensu.ca/studentwellness/health-services/services-offered/sick-notes (accessed 2019 Nov 13). 7 Ministry of Labour. The Changing Workplaces Review: An Agenda for Workplace Rights. Final Report. Toronto: Ministry of Labour; 2017 May. Available: https://files.ontario.ca/books/mol_changing_workplace_report_eng_2_0.pdf (accessed 2019 Nov 13). 8 Canadian Medical Association (CMA). One in four Canadian physicians report burnout [media release]. Ottawa: The Association; 2018 Oct 10. Available: www.cma.ca/En/Pages/One-in-four-Canadian-physicians-report-burnout-.aspx (accessed 2019 Nov 13). 9 Leslie C. The burden of paperwork. Med Post 2018 Apr.
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Restoring access to quality health care : Brief Submitted to the House of Commons Standing Committee on Finance 1998 pre-budget consultations

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