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In Canada, today has been declared a Day of Action for a 2014 Health Accord.

For decades, Canadians have enjoyed a health care system that includes a publicly funded health insurance plan for all citizens, widely referred to as medicare. In the 21st century, shifting forces within the political economy of Canada threaten to cause unprecedented modifications to the health care system that could have dramatic and long-lasting consequences. Some of the potential transformation involves adjustments to the financing of health care and the funding arrangements that exist between the federal government and the country’s provinces and territories. Proposed changes related to the transfer of funds for health care from the federal government to the provinces will adversely impact the core principles of the Canada Health Act (CHA) and ultimately place at risk the very survival of Canadian medicare.

The five fundamental principles of the Canadian health care system are public administration, comprehensiveness, universality, portability and accessibility. These essential tenets have been derived on the basis of the country’s longstanding commitment to a beneficent and fairly governed welfare state. In practice, the ability to uphold these principles relies not only on sufficient and sustained public funding, but also on regulations to ensure that the money is justly distributed and administered. Recent changes proposed by the current federal government to the funding formula are based on a particular political economy and as such, these changes will have a negative impact on the core principles for the delivery of care within a publicly-supported health system.

In a series of recent announcements the current federal government has declared that there will be a number of significant changes to the CHT. On December 19, 2011, the federal Minister of Health, Leona Aglukkuq, made an important statement heralding the altered approach. The first notable adjustment to the Canada Health Transfer (CHT) was in terms of how much it will increase over time. Since the 2004 Health Accord, the transfers have increased by six percent each year. This is scheduled to continue until 2016. Then starting in 2017 the CHT will grow more slowly in line with a moving average of nominal GDP growth for the next decade. It is expected that the amount of increase will be in the order of three or four percent per year.

Another announced change raises particular concerns in terms of its potential impact on equity and the ability to offer fair access to essential services across the country. The significant change that has been proposed is that the equalization formula will be abolished so that transfers will be made on a per-capita basis without consideration of the demographics or economic status of the provinces. Until now, the equalization formula has been in place to ensure a reasonably comparable level of services to each region.

However, the most noteworthy change is that the conditions associated with the CHT will be removed. The new “no strings attached” policy means that funding will be transferred without stipulation that the provinces uphold the historic principles of the CHA. Concern about this change has been expressed by many including the March 2012 report of the Senate Committee on Social Affairs, Science and Technology. The Senate Committee report reviewed the 2004 Health Accord and recommended that the accountability measures built into the CHT agreement should be sustained. In fact the report recommends that the CHT should increasingly be used to create incentives for transformation of the health care system that include a strengthened scheme of quantifiable goals and associated timetables. Virtually all of the 46 recommendations included in the report call for an even stronger role for the federal government in directing the objectives and priorities for health care delivery as opposed to the “hands-off” approach to the transfer of funds which has been presented by the current government.

Changes to the CHT being implemented under the current federal administration will adversely impact the five core principles of the CHA. In essence it will be an outright abolition of some of these principles. Without explicit federal commitment to sustain and monitor the particular conditions that have been tied to the transfer of funds to the provinces, the circumstances will be set for a dramatic dismantling of medicare and the services it supports.

One can imagine the consequences if the conditions were lifted from the CHT leaving the strong possibility that some of the core principles would be challenged. While medicare enjoys steadfast support among the Canadian public, there is good reason to suspect that the business community would quickly take the opportunity to offer private health care services if current restrictions were abolished. Health care providers themselves would be liberated to offer their services on the open market. Perhaps the principle most at risk of being affected would be that of “accessibility”. The CHA states that insured persons must have “reasonable access” to insured services “on uniform terms and conditions and on a basis that does not impede or preclude, either directly or indirectly whether by charges made to insured persons or otherwise.” The abandonment of this condition releases private businesses and health care providers from any obligation to be concerned about protecting access to essential services. It is not difficult to imagine how some parts of society could suffer as a result.

Canadian political leaders at the federal level have revealed changes that could be perceived as an abdication of responsibility for the equitable provision of health services. The government has announced modifications to the Canada Health Transfer. The most disturbing aspect of this proposal is the removal of the “strings attached”. I believe that these conditions are indispensible. The core principles of the Canada Health Act are in fact the glue that holds together the very system of Canadian medicare. Without conditions, equitable access to essential services can no longer be guaranteed. Canadian health care services will be released to the open market. This may be desirable for those who can afford such services or those with services to sell. But it will almost certainly add to the burden of those who are poor and otherwise disadvantaged. In the current political economy of Canada, the future of medicare and its beneficiaries is uncertain at best.

Acknowledgement: This post is an excerpt and adaptation of a paper I wrote for a University of Toronto course taught by Dr. Peggy McDonough called “Social and Political Forces in Health Care”. I am grateful to Peggy for the insights and guidance that she provided on these issues and for introducing me to a treasure trove of literature about the political economy of health care.

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