Bureaucratic shuffle not enough to fix health care in Alberta

Alberta Premier Danielle Smith spent a good portion of her yearend interviews discussing upcoming changes to the province’s health-care system including the shift from the single Alberta Health Services to multiple authorities each tasked with overseeing one area of the health-care system. But will the government pair this bureaucratic shuffle with reforms that will actually improve matters for Albertans?

Indeed, Albertans shouldn’t get too excited about reforms to the health-care system’s administrative structure. Back in 2008, Alberta Health Services replaced nine regional health boards, which themselves were amalgamated from 17 authorities created in 1994. Yet wait lists grew continuously over the entire period up to new record highs in 2023.

In 1993, a typical Albertan could expect to wait 10.5 weeks between GP referral and treatment by a medical specialist. By 2008, that wait time had increased to 18.5 weeks and now stands at a remarkable 33.5 weeks (longer than the national median wait of 27.7 weeks).

A lack of money is absolutely not to blame. On the contrary, Alberta’s provincial health-care spending ranked second-highest per person (after adjusting for age and sex) in 2021, while Canada nationally is a relatively high spender among universal health-care countries. At the same time, Canada ranks near the bottom for the availability of medical professionals, medical technologies and hospital resources. And Canadian patients suffer some of the longest delays for access to care in the developed world.

In other words, there’s much more wrong with health care in Alberta than the number of authorities overseeing the governmental system.

So what’s the solution?

Simply put, Alberta should learn from other countries that deliver more timely universal care with comparable spending such as Switzerland, Australia and Germany. For example, in 2020 (the latest year of available data) only 62 per cent of patients in Canada received elective care within four months compared to 72 per cent in Australia, 94 per cent in Switzerland and 99 per cent in Germany.

What do these countries do differently? They all have private competitive providers delivering universally accessible services within the public system, and payment for such care is based on actual delivery of services, known as “activity-based” funding.

Based on details released so far, the Smith government’s bureaucratic shuffle appears to bear little resemblance to these higher-performing approaches pursued abroad. In fact, it looks a lot like the provincial government working from the same old playbook, with another costly exercise to distract Albertans from the real problems in their health-care system. If that’s all this reform amounts to, then we can expect no real improvement for Albertans in need of care or the taxpayers who fund it.

On the bright side, there’s some hope that the Smith government is setting the stage for more meaningful reform. To move toward a higher-performing model with competitive patient-focused delivery, the government must first separate and clearly define the roles of the purchaser of health care and the providers of that care. If moving from one large health authority to multiple authorities is about more clearly defining government’s role as the purchaser and oversight authority for universal health care, with authorities and providers being transparently accountable for delivering timely quality care to patients, then Albertans may be on the road to shorter wait times and higher-quality health care.

But we’ll have to wait and see.

Author:

Nadeem Esmail

Senior Fellow, Fraser Institute

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Alberta

Federal taxes increasing for Albertans in 2025: Report

Published on December 23, 2024

Todayville

From the Canadian Taxpayers Federation

By Kris Sims

The Canadian Taxpayers Federation released its annual New Year’s Tax Changes report today to highlight major tax changes in 2025.

The key provincial tax change expected for Alberta is a reduction in the income tax rate.

“The Alberta government promised to reduce our lowest income tax bracket from 10 down to eight per cent and we expect the government to keep that promise in the new year,” said Kris Sims, CTF Alberta Director. “The United Conservatives said this provincial income tax cut would save families about $1,500 each and Alberta families need that kind of tax relief right now.

“Premier Danielle Smith promised to cut taxes and Albertans expect her to deliver.”

Albertans will see several federal tax hikes coming from Ottawa in 2025.

Payroll taxes: The federal government is raising the mandatory Canada Pension Plan and Employment Insurance contributions in 2025. These payroll tax increases will cost a worker up to an additional $403 next year.

Federal payroll taxes (CPP and EI tax) will cost a worker making $81,200 or more $5,507 in 2025. Their employer will also be forced to pay $5,938.

Carbon tax: The federal carbon tax is increasing to about 21 cents per litre of gasoline, 25 cents per litre of diesel and 18 cents per cubic metre of natural gas on April 1. The carbon tax will cost the average household between $133 and $477 in 2025-26, even after the rebates, according to the Parliamentary Budget Officer.

Alcohol taxes: Federal alcohol taxes will increase by two per cent on April 1. This alcohol tax hike will cost taxpayers $40.9 million in 2025-26, according to Beer Canada.

Following Budget 2024, the federal government also increased capital gains taxes and imposed a digital services tax and an online streaming tax.

Temporary Sales Tax Holiday: The federal government announced a two month sales tax holiday on certain items like pre-made groceries, children’s clothing, drinks and snacks. The holiday will last until Feb. 15, 2025, and could save taxpayers $2.7 billion.

“In 2025, the Trudeau government will yet again take more money out of Canadians’ pockets with payroll tax hikes and will make life more expensive by raising carbon taxes and alcohol taxes,” said Franco Terrazzano, CTF Federal Director. “Prime Minister Justin Trudeau should drop his plans to take more money out of Canadians’ pockets and deliver serious tax relief.”

You can find the CTF’s New Year’s Tax Changes report HERE.

Alberta

Fraser Institute: Time to fix health care in Alberta

Published on December 22, 2024

Todayville

From the Fraser Institute

By Bacchus Barua and Tegan Hill

Shortly after Danielle Smith was sworn in as premier, she warned Albertans that it would “be a bit bumpy for the next 90 days” on the road to health-care reform. Now, more than two years into her premiership, the province’s health-care system remains in shambles.

According to a new report, this year patients in Alberta faced a median wait of 38.4 weeks between seeing a general practitioner and receiving medically necessary treatment. That’s more than eight weeks longer than the Canadian average (30.0 weeks) and more than triple the 10.5 weeks Albertans waited in 1993 when the Fraser Institute first published nationwide estimates.

In fact, since Premier Smith took office in 2022, wait times have actually increased 15.3 per cent.

To be fair, Premier Smith has made good on her commitment to expand collaboration with the private sector for the delivery of some public surgeries, and focused spending in critical areas such as emergency services and increased staffing. She also divided Alberta Health Services, arguing it currently operates as a monopoly and monopolies don’t face the consequences when delivering poor service.

While the impact of these reforms remain largely unknown, one thing is clear: the province requires immediate and bold health-care reforms based on proven lessons from other countries (e.g. Australia and the Netherlands) and other provinces (e.g. Saskatchewan and Quebec).

These reforms include a rapid expansion of contracts with private clinics to deliver more publicly funded services. The premier should also consider a central referral system to connect patients to physicians with the shortest wait time in their area in public or private clinics (while patients retain the right to wait longer for the physician of their choice). This could be integrated into the province’s Connect Care system for electronic patient records.

Saskatchewan did just this in the early 2010s and moved from the longest wait times in Canada to the second shortest in just four years. (Since then, wait times have crept back up with little to no expansion in the contracts with private clinics, which was so successful in the past. This highlights a key lesson for Alberta—these reforms are only a first step.)

Premier Smith should also change the way hospitals are paid to encourage more care and a more patient-focused approach. Why?

Because Alberta still generally follows an outdated approach to hospital funding where hospitals receive a pre-set budget annually. As a result, patients are seen as “costs” that eat into the hospital budget, and hospitals are not financially incentivized to treat more patients or provide more rapid access to care (in fact, doing so drains the budget more rapidly). By contrast, more successful universal health-care countries around the world pay hospitals for the services they provide. In other words, by making treatment the source of hospital revenue, hospitals provide more care more rapidly to patients and improve the quality of services overall. Quebec is already moving in this direction, with other provinces also experimenting.

The promise of a “new day” for health care in Alberta is increasingly looking like a pipe dream, but there’s still time to meaningfully improve health care for Albertans. To finally provide relief for patients and their families, Premier Smith should increase private-sector collaboration, create a central referral system, and change the way hospitals are funded.