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Fraser Institute

Enough talk, we need to actually do something about Canadian health care

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12 minute read

From the Macdonald Laurier Institute

By J. Edward Les for Inside Policy

Canada spends more on health care as a percentage of GDP than almost all other OECD countries, yet we rank behind most of them when it comes to outcomes that matter.

I drove a stretch of road near Calgary’s South Health Campus the other day, a section with a series of three intersections in a span of less than a few hundred metres. That is, I tried to drive it – but spent far more time idling than moving.

At each intersection, after an interminable wait, the light turned green just as the next one flipped to red, grinding traffic to a halt just after it got rolling. It was excruciating; I’m quite sure I spied a snail on crutches racing by – no doubt making a beeline (snail-line?) for the ER a stone’s throw away.

The street’s sluggishness is perhaps reflective of the hospital next to it, given that our once-cherished universal health care system has crumbled into a universal waiting system – a system seemingly crafted (like that road) to obstruct flow rather than enable it. In fact, the pace of medical care delivery in this country has become so glacial that even a parking lot by comparison feels like the Indianapolis Speedway.

The health care crisis grows more dire by the day. Reforms are long overdue. Canada spends more on health care as a percentage of GDP than almost all other OECD countries, yet we rank behind most of them when it comes to outcomes that matter.

And we’re paying with our lives: according to the Canadian Institute for Health Information, thousands of Canadians die each and every year because of the inefficiencies of our system.

Yet for all that we are paralyzed by the enormity and complexity of the mushrooming disaster. We talk about solutions – and then we talk and talk some more. But for all the talking, precious little action is taken.

I’m reminded of an Anne Lamotte vignette, related in her bestselling book Bird By Bird:

Thirty years ago my older brother, who was ten years old at the time, was trying to get a report written on birds that he’d had three months to write, which was due the next day. We were out at our family cabin in Bolinas, and he was at the kitchen table close to tears, surrounded by binder paper and pencils and unopened books about birds, immobilized by the hugeness of the task ahead. Then my father sat down beside him, put his arm around my brother’s shoulder, and said, “Bird by bird, buddy. Just take it bird by bird.”

So it is with Canadian health care: we’ve wasted years wringing our hands about the woeful state of affairs, while doing precious little about it.

Enough procrastinating. It’s time to tackle the crisis, bird by bird.

One thing we can do is to let doctors be doctors.  A few weeks ago, in a piece titled “Should Doctors Mind Their Own Business?”, I questioned the customary habit of doctors hanging out their shingles in small independent community practices. Physicians spend long years of training to master their craft, years during which they receive no training in business methods whatsoever, and then we expect them to master those skills off to the side of their exam rooms. Some do it well, but many do not – and it detracts from their attention to patients.

We don’t install newly minted teachers in classrooms and at the same time task them with the keeping the lights on, managing the supply chain, overseeing staffing and payroll, and all the other mechanics of running schools. Why do we expect that of doctors?

Keeping doctors embedded within large, expensive, inefficient, bureaucracy-choked hospitals isn’t the solution, either.

There’s a better way, I argued in my essay: regional medical centres – centres built and administered in partnership with the private sector.

Such centres would allow practitioners currently practicing in the community to ply their trade unencumbered by the nuts and bolts of running a business; and they would allow us to decant a host of services from hospitals, which should be reserved for what only hospitals can do: emergency services, inpatient care, surgeries, and the like.

In short, we should let doctors be doctors, and hospitals be hospitals.

To garner feedback, I dumped my musings into a couple of online physician forums to which I belong, tagged with the query: “Food for thought, or fodder for the compost bin?”

The verdict? Hands down, the compost bin.

I was a bit taken aback, initially. Offended, even – because who among us isn’t in love with their own ideas?

But it quickly became evident from my peers’ comments that I’d been misunderstood. Not because my doctor friends are dim, but because I hadn’t been clear.

When I proposed in my essay that we “leave the administration and day-to-day tasks of running those centres to business folks who know what they’re doing,” my colleagues took that to mean that doctors would be serving at the beck and call of a tranche of ill-informed government-enabled administrators – and they reacted to the notion with anaphylactic derision. And understandably so: too many of us have long and painful experience with thick layers of health care bureaucracy seemingly organized according to the Peter Principle, with people promoted to – and permanently stuck at – the level of their incompetence.

But I didn’t mean to suggest – not for a minute – that doctors shouldn’t be engaged in running these centres. I also wrote: “None of which is to suggest that doctors shouldn’t be involved, by aptitude and inclination, in influencing the set-up and management of regional centres – of course, they should.”

Of course they should. There are plenty of physicians equipped with both the skills and interest needed to administer these centres; and they should absolutely be front and centre in leading them.

But more than that: everyone should have skin in the game. All workers have the right to share in the success of an enterprise; and when they do, everybody wins.  When everyone is pulling in the same direction because everyone shares in the wins, waste and inefficiencies are rooted out like magic.

Contrast that to how hospitals are run, with scarcely anyone aware of the actual cost of the blood tests or CT scans they order or the packets of suture and gauze they rip open, and with the motivations of administrative staff, nurses, doctors, and other personnel running off in more directions than a flock of headless chickens. The capacity for waste and inefficiencies is almost limitless.

I don’t mean to suggest that the goal of regional medical centres should be to turn a profit; but fiscal prudence and economic accountability are to be celebrated, because money not wasted is money that can be allocated to enhancing patient care.

Nor do I mean to intimate that sensible resource management should be the only parameter tracked; patient outcomes and patient satisfaction are paramount.

What should government’s role be in all this? Initially, to incentivize the creation of these centres via public-private partnerships; and then, crucially, to encourage competition among them and to reward innovation and performance, with optimization of the three key metrics – patient outcomes, patient satisfaction, and economic accountability – always in focus.

No one should be mandated to work in non-hospital regional medical centres. It’s a free country (or it should be): doctors should be free to hang out their own community shingles if they wish. But if we build the model correctly, my contention is that most medical professionals will prefer to work collaboratively under one roof with a diverse group of colleagues, unencumbered by the mundanities of running a business, but also free of choking hospital bureaucracy.

I connected a couple weeks ago with the always insightful economist Jack Mintz (who is also a distinguished fellow at the Macdonald-Laurier Institute). Mintz sits on the board of a Toronto-area hospital and sees first-hand “the problems with the lack of supply, population growth, long wait times between admission and getting a bed, emergency room overuse,” and so on.

“Something has to give,” he said. “Probably more resources but better managed. We really need major reform.”

On that we can all agree. We can’t carry on this way.

So, let’s stop idling; and let’s green-light some fixes.

As Samwise Gamgee said in The Lord of the Rings, “It’s the job that’s never started as takes longest to finish.”


Dr. J. Edward Les is a pediatrician in Calgary who writes on politics, social issues, and other matters.

Business

Trump, taunts and trade—Canada’s response is a decade out of date

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From the Fraser Institute

By Ross McKitrick

Canadian federal politicians are floundering in their responses to Donald Trump’s tariff and annexation threats. Unfortunately, they’re stuck in a 2016 mindset, still thinking Trump is a temporary aberration who should be disdained and ignored by the global community. But a lot has changed. Anyone wanting to understand Trump’s current priorities should spend less time looking at trade statistics and more time understanding the details of the lawfare campaigns against him. Canadian officials who had to look up who Kash Patel is, or who don’t know why Nathan Wade’s girlfriend finds herself in legal jeopardy, will find the next four years bewildering.

Three years ago, Trump was on the ropes. His first term had been derailed by phony accusations of Russian collusion and a Ukrainian quid pro quo. After 2020, the Biden Justice Department and numerous Democrat prosecutors devised implausible legal theories to launch multiple criminal cases against him and people who worked in his administration. In summer 2022, the FBI raided Mar-a-Lago and leaked to the press rumours of stolen nuclear codes and theft of government secrets. After Trump announced his candidacy in 2022, he was hit by wave after wave of indictments and civil suits strategically filed in deep blue districts. His legal bills soared while his lawyers past and present battled well-funded disbarment campaigns aimed at making it impossible for him to obtain counsel. He was assessed hundreds of millions of dollars in civil penalties and faced life in prison if convicted.

This would have broken many men. But when he was mug-shotted in Georgia on Aug. 24, 2023, his scowl signalled he was not giving in. In the 11 months from that day to his fist pump in Butler, Pennsylvania, Trump managed to defeat and discredit the lawfare attacks, assemble and lead a highly effective campaign team, knock Joe Biden off the Democratic ticket, run a series of near daily (and sometimes twice daily) rallies, win over top business leaders in Silicon Valley, open up a commanding lead in the polls and not only survive an assassination attempt but turn it into an image of triumph. On election day, he won the popular vote and carried the White House and both Houses of Congress.

It’s Trump’s world now, and Canadians should understand two things about it. First, he feels no loyalty to domestic and multilateral institutions that have governed the world for the past half century. Most of them opposed him last time and many were actively weaponized against him. In his mind, and in the thinking of his supporters, he didn’t just defeat the Democrats, he defeated the Republican establishment, most of Washington including the intelligence agencies, the entire corporate media, the courts, woke corporations, the United Nations and its derivatives, universities and academic authorities, and any foreign governments in league with the World Economic Forum. And it isn’t paranoia; they all had some role in trying to bring him down. Gaining credibility with the new Trump team will require showing how you have also fought against at least some of these groups.

Second, Trump has earned the right to govern in his own style, including saying whatever he wants. He’s a negotiator who likes trash-talking, so get used to it and learn to decode his messages.

When Trump first threatened tariffs, he linked it to two demands: stop the fentanyl going into the United States from Canada and meet our NATO spending targets. We should have done both long ago. In response, Trudeau should have launched an immediate national action plan on military readiness, border security and crackdowns on fentanyl labs. His failure to do so invited escalation. Which, luckily, only consisted of taunts about annexation. Rather than getting whiny and defensive, the best response (in addition to dealing with the border and defence issues) would have been to troll back by saying that Canada would fight any attempt to bring our people under the jurisdiction of the corrupt U.S. Department of Justice, and we will never form a union with a country that refuses to require every state to mandate photo I.D. to vote and has so many election problems as a result.

As to Trump’s complaints about the U.S. trade deficit with Canada, this is a made-in-Washington problem. The U.S. currently imports $4 trillion in goods and services from the rest of the world but only sells $3 trillion back in exports. Trump looks at that and says we’re ripping them off. But that trillion-dollar difference shows up in the U.S. National Income and Product Accounts as the capital account balance. The rest of the world buys that much in U.S. financial instruments each year, including treasury bills that keep Washington functioning. The U.S. savings rate is not high enough to cover the federal government deficit and all the other domestic borrowing needs. So the Americans look to other countries to cover the difference. Canada’s persistent trade surplus with the U.S. ($108 billion in 2023) partly funds that need. Money that goes to buying financial instruments can’t be spent on goods and services.

So the other response to the annexation taunts should be to remind Trump that all the tariffs in the world won’t shrink the trade deficit as long as Congress needs to borrow so much money each year. Eliminate the budget deficit and the trade deficit will disappear, too. And then there will be less money in D.C. to fund lawfare and corruption. Win-win.

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Business

Trade retaliation might feel good—but it will hurt Canada’s economy

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From the Fraser Institute

By Steven Globerman

To state the obvious, president-elect Donald Trump’s threat to impose an across-the-board 25 per cent tariff on Canadian exports to the United States has gotten the attention of Canadian policymakers who are considering ways to retaliate.

Reportedly, if Trump makes good on his tariff threat, the federal government may levy retaliatory tariffs on a wide range of American-made goods including orange juice, ceramic products such as sinks and toilets, and some steel products. And NDP Leader Jagmeet Singh said he wants Canada to block exports of critical minerals such as aluminum, lithium and potash to the United States, saying that if Trump “wants to pick a fight with Canada, we have to make sure it’s clear that it’s going to hurt Americans as well.”

Indeed, the ostensible goal of tariff retaliation is to inflict economic damage on producers and workers in key U.S. jurisdictions while minimizing harm to Canadian consumers of products imported from the U.S. The hope is that there will be sufficient political blowback from Canada’s retaliation that Republican members of Congress will eventually view Trump’s tariffs as an unacceptable risk to their re-election and pressure him to roll them back.

But while Canadians might feel good about tit-for-tat retaliation against Trump’s trade bullying and taunting, it might well make things worse for the Canadian economy. For example, even selective tariffs will increase the cost of living for Canadians as importers of tariffed U.S. goods pass the tax along to domestic consumers. Retaliatory tariffs might also harm productivity growth in Canada by encouraging increased domestic production of goods that are produced relatively inefficiently here at home compared to in the U.S. Make no mistake—once trade protections are put in place, the beneficiaries have a strong vested interest in having the protections maintained indefinitely. While Trump will be gone in four years, tariffs imposed by Ottawa to retaliate against his actions will likely remain in place for longer.

The U.S. president has substantial leeway under existing legislation to implement trade measures such as tariffs. While Trump has several legislative options to impose new tariffs against Canada and Mexico, he’ll likely use the International Emergency Powers Act (IEEPA), which grants the president power to regulate imports and impose duties in response to an emergency involving any unusual and extraordinary threat to national security, foreign policy or the economy. According to Trump’s rhetoric, the emergency is illegal immigration and drug traffic originating in Canada and Mexico.

However risible Trump’s emergency claim might be when applied to Canada, overturning any action under the IEEPA, or some other enabling legislation, would require a legal challenge. And in fact, because no president has yet used the IEEPA to impose tariffs, the legality of Trump’s actions remains in doubt. In this context, a group of governors sympathetic to Canada’s position (and their own political fortunes) might spearhead a legal challenge to Trump’s tariffs with encouragement and support from the Canadian government.

To be sure, any legal challenge would take time to work its way through the U.S. court system. But it will likely also take time for domestic opposition to Trump’s tariffs to gain sufficient political momentum to effect any change. Indeed, given the current composition of Congress, it’s far from clear that a Team Canada effort to rally broad anti-tariff support among U.S. politicians and business leaders would bear fruit while Trump is in office.

While direct retaliation might be emotionally satisfying to Canadians, it would likely do more economic harm than good. And while a legal challenge will not obviate the immediate economic harm Canada will suffer from Trump’s tariffs, it might help limit the ability of Trump (and any future president) to use trade policy for political leverage in our bilateral relationship. After all, there’s no guarantee that the next president will not be a Trump acolyte.

Steven Globerman

Senior Fellow and Addington Chair in Measurement, Fraser Institute
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