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Fraser Institute

Dearth of medical resources harms Canadian patients

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From the Fraser Institute

By Mackenzie Moir

The imbalance between high spending and poor access to doctors, hospital beds and vital imaging technology, coupled with untimely access to services, can, and does, have a detrimental impact on patients.

Whether it’s a lack of family physicians or other health-care workers, Canadians know we have a serious health-care labour shortage on our hands. The implications of this shortage aren’t lost on patients (including Ellie O’Brien) who’ve possibly faced delays in accessing organ transplants because potential donors need a regular family doctor to screen them to begin the transplant process.

Given these access issues, coupled with some of the longest recorded wait times for medical procedures on record, is it any wonder that Canadians are dissatisfied with how their provincial governments handle health care?

While one instinct might be to demand governments spend more on health care, it’s not clear we’re getting good value in return for what’s already being spent. In fact, compared to 29 other high-income countries with universal health care, Canada spent the most on health care as a share of the economy at 12.6 per cent in 2021, the latest year of available comparable data (after adjusting for differences in the age structure of each country’s population).

But what do we get in return for this spending?

As far as medical resources go, not a whole lot. In 2021, Canadians had some of the fewest medical resources in the developed world. Out of 30 high-income countries with universal health care, Canada ranked 28th on physician availability at 2.8 per 1,000 people, far behind countries such as seventh-ranked Switzerland (4.5 physicians per 1,000) and tenth-ranked Australia (at 4.3 physicians per 1,000).

But doctors are just one part of the puzzle. Canada also ranked low on available hospital beds (23rd of 29 countries), meaning patients often face delays for hospital care. It can also mean that patients end up being treated for their illness outside a traditional patient room—such as a hospital hallway, a phenomenon that has spread to many provinces.

We also see a low availability of other key medical resources including diagnostic equipment. In 2019, Canada ranked 25th of 29 comparable countries with universal health care on the number of MRIs (10.3 units per million people) compared to top-ranked Japan, which had four times as many MRIs as Canada. And we ranked 26th out of 30 countries on CT scanners (14.9 scanners per million people) compared to second-ranked Australia, which had five times as many CT scanners. It’s also worth noting that a large a portion of Canada’s diagnostic machines are remarkably old.

It’s no accident that countries such as Australia, which actually spend less of its economy on health care compared to Canada, perform better than Canada on measures of resource availability and timeliness of care. Unlike Canada, Australia embraces its private sector as an integral part of its universal health-care system. With 41 per cent of all hospital care in Australia occurring in private hospitals in 2021/22, private hospitals can act as a pressure valve for the entire system, particularly in times of crisis. Indeed, the country outperforms Canada on measures of timely access to family doctor appointments, specialist care and non-emergency surgery, and has done so regularly for years.

The imbalance between high spending and poor access to doctors, hospital beds and vital imaging technology, coupled with untimely access to services, can, and does, have a detrimental impact on patients. For some, this problem can be life threatening. Without genuine reform based on real world lessons from higher performing universal health-care countries including Australia, it’s impossible to reasonably expect our health-care system to improve despite its hefty price tag.

Business

Carney’s new agenda faces old Canadian problems

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From the Fraser Institute

By John Ibbitson

In his June speech announcing a major buildup of Canada’s military, Prime Minister Mark Carney repeated his belief that this country faces a “hinge moment” of the sort the allied countries confronted after the Second World War.

A better comparison might be with the beginning of the war itself.

Then, the Allies found themselves at war with an autocratic state bent on their defeat and possible destruction. Now, Carney faces an antagonistic American president bent on annexing Canada through economic warfare.

Then, Canada rose to the challenge, creating the world’s third-largest navy and landing an army at Normandy on D-Day. Now, Carney has announced the most aggressive reorienting of Canada’s economic, foreign and defence policies in generations.

Polls show strong support among Canadians for this new agenda. But the old Canada is still there. It will fight back. It may yet win.

The situation certainly would have been more encouraging had Carney not inherited Justin Trudeau’s legacy of severe economic and environmental restrictions—picking economic winners and losers rather than letting the market decide—and chronic deficits. The new prime minister would do well to dismantle as much of that legacy as he can.

Some advocate a return to the more laissez-faire approach of Stephen Harper’s government. But Harper didn’t confront a belligerent president hoping to annex Canada through the “economic force” of tariff walls.

The prime minister succeeded in getting Bill C-5, which is intended to weaken at least some of the restrictions on resource development and infrastructure, passed into law. He and the premiers pledge to finally dismantle generations of internal trade and labour mobility barriers. If we must trade less with the Americans, we can at least learn to trade with ourselves.

And the prime minister deserves high praise for reversing decades of military decline through increased spending and efforts to improve procurement. If Carney accomplishes nothing more than restoring Canada’s defences, especially in the Arctic, he will be well remembered.

That said, major challenges confront the Carney agenda.

There’s much talk about a new national energy corridor. But what does that mean? One KPMG executive defined it as a “dedicated, streamlined pathway for the energy, electricity, decarbonization, transportation and digital infrastructure.”

Yes, but what does that mean?

Whatever it means, some First Nations will oppose it tooth-and-nail. Not all of them, mind you. The First Nations Major Project Coalition is dedicated to assisting First Nations in working with government and the private sector for the benefit of all. But many First Nations people consider resource development further exploitation of their ancestral lands by a colonizing power. At the first major proposal to which they do not buy in, they will take the government to court.

What investor will be willing to commit to a project that could be blocked for years as First Nations and Ottawa fight it out all the way to the Supreme Court?

The prime minister, formerly a fervent advocate of combatting climate change, now talks about developing “conventional energy,” which means oil and gas pipelines. But environmental activists will fiercely oppose those pipelines.

There is so much that could go wrong. Sweep away those internal trade barriers? Some premiers will resist. Accelerate housing development? Some mayors will resist. Expand exports to Europe and Asia? Some businesses and entrepreneurs will say it’s not worth the risk.

As for the massive increase in defence spending, where will the money come from? What will be next year’s deficit? What will be the deficit’s impact on inflation, interest rates and sovereign creditworthiness? The obstacles are high enough to make anyone wonder how much, if any, of the government’s platform will be realized. But other factors are at work as well, factors that were also present in 1939.

To execute his mandate, Carney is surrounding himself with what, back in the Second World War, were called “dollar a year men”—executives who came to Ottawa from the private sector to mobilize the economy for wartime.

In Carney’s case he has brought in Marc-André Blanchard as chief of staff and Michael Sabia as clerk of the privy council. Both are highly experienced in government and the private sector. Both are taking very large pay cuts because, presumably, they understand the gravity of the times and believe in the prime minister’s plans.

Most important, Carney’s agenda has broad support from a public that fears for the country’s future and will have little patience toward any group seeking to block the prime minister’s agenda.

Millions of Canadians want this government’s reform efforts to succeed. Those who would put it at risk of failing will have to contend with public anger. That gives Carney a shot at making real change.

John Ibbitson

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Business

National dental program likely more costly than advertised

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From the Fraser Institute

By Matthew Lau

At the beginning of June, the Canadian Dental Care Plan expanded to include all eligible adults. To be eligible, you must: not have access to dental insurance, have filed your 2024 tax return in Canada, have an adjusted family net income under $90,000, and be a Canadian resident for tax purposes.

As a result, millions more Canadians will be able to access certain dental services at reduced—or no—out-of-pocket costs, as government shoves the costs onto the backs of taxpayers. The first half of the proposition, accessing services at reduced or no out-of-pocket costs, is always popular; the second half, paying higher taxes, is less so.

A Leger poll conducted in 2022 found 72 per cent of Canadians supported a national dental program for Canadians with family incomes up to $90,000—but when asked whether they would support the program if it’s paid for by an increase in the sales tax, support fell to 42 per cent. The taxpayer burden is considerable; when first announced two years ago, the estimated price tag was $13 billion over five years, and then $4.4 billion ongoing.

Already, there are signs the final cost to taxpayers will far exceed these estimates. Dr. Maneesh Jain, the immediate past-president of the Ontario Dental Association, has pointed out that according to Health Canada the average patient saved more than $850 in out-of-pocket costs in the program’s first year. However, the Trudeau government’s initial projections in the 2023 federal budget amounted to $280 per eligible Canadian per year.

Not all eligible Canadians will necessarily access dental services every year, but the massive gap between $850 and $280 suggests the initial price tag may well have understated taxpayer costs—a habit of the federal government, which over the past decade has routinely spent above its initial projections and consistently revises its spending estimates higher with each fiscal update.

To make matters worse there are also significant administrative costs. According to a story in Canadian Affairs, “Dental associations across Canada are flagging concerns with the plan’s structure and sustainability. They say the Canadian Dental Care Plan imposes significant administrative burdens on dentists, and that the majority of eligible patients are being denied care for complex dental treatments.”

Determining eligibility and coverage is a huge burden. Canadians must first apply through the government portal, then wait weeks for Sun Life (the insurer selected by the federal government) to confirm their eligibility and coverage. Unless dentists refuse to provide treatment until they have that confirmation, they or their staff must sometimes chase down patients after the fact for any co-pay or fees not covered.

Moreover, family income determines coverage eligibility, but even if patients are enrolled in the government program, dentists may not be able to access this information quickly. This leaves dentists in what Dr. Hans Herchen, president of the Alberta Dental Association, describes as the “very awkward spot” of having to verify their patients’ family income.

Dentists must also try to explain the program, which features high rejection rates, to patients. According to Dr. Anita Gartner, president of the British Columbia Dental Association, more than half of applications for complex treatment are rejected without explanation. This reduces trust in the government program.

Finally, the program creates “moral hazard” where people are encouraged to take riskier behaviour because they do not bear the full costs. For example, while we can significantly curtail tooth decay by diligent toothbrushing and flossing, people might be encouraged to neglect these activities if their dental services are paid by taxpayers instead of out-of-pocket. It’s a principle of basic economics that socializing costs will encourage people to incur higher costs than is really appropriate (see Canada’s health-care system).

At a projected ongoing cost of $4.4 billion to taxpayers, the newly expanded national dental program is already not cheap. Alas, not only may the true taxpayer cost be much higher than this initial projection, but like many other government initiatives, the dental program already seems to be more costly than initially advertised.

Matthew Lau

Adjunct Scholar, Fraser Institute
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