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

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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 Calgaryā€™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, IĀ triedĀ to drive it ā€“ 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; Iā€™m quite sure I spied a snail on crutches racing by ā€“ no doubt making a beeline (snail-line?) for the ER a stoneā€™s throw away.

The streetā€™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 ā€“ 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.

TheĀ health care crisisĀ grows more dire by the day.Ā Reforms are long overdue. Canada spendsĀ more on health careĀ 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 weā€™re paying with our lives: according to theĀ 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 ā€“ and then we talk and talk some more. But for all the talking, precious little action is taken.

Iā€™m reminded of an Anne Lamotte vignette, related in her bestselling bookĀ 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 heā€™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 brotherā€™s shoulder, and said, ā€œBird by bird, buddy. Just take it bird by bird.ā€

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

Enough procrastinating. Itā€™s time to tackle the crisis, bird by bird.

One thing we can do is to let doctors be doctors.Ā  A few weeks ago, in a piece titled ā€œShould Doctors Mind Their Own Business?ā€, 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 ā€“ and it detracts from their attention to patients.

We donā€™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 isnā€™t the solution, either.

Thereā€™s a better way, I argued in my essay: regional medical centres ā€“ 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: ā€œFood for thought, or fodder for the compost bin?ā€

The verdict? Hands down, the compost bin.

I was a bit taken aback, initially. Offended, even ā€“ because who among us isnā€™t in love with their own ideas?

But it quickly became evident from my peersā€™ comments that Iā€™d been misunderstood. Not because my doctor friends are dim, but because I hadnā€™t been clear.

When I proposed in my essay that we ā€œleave the administration and day-to-day tasks of running those centres to business folks who know what theyā€™re doing,ā€ 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 ā€“ 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 theĀ Peter Principle, with people promoted to ā€“ and permanently stuck at ā€“ the level of their incompetence.

But I didnā€™t mean to suggest ā€“ not for a minute ā€“ that doctors shouldnā€™t be engaged in running these centres. I also wrote: ā€œNone of which is to suggest that doctors shouldnā€™t be involved, by aptitude and inclination, in influencing the set-up and management of regional centres ā€“ of course, they should.ā€

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: everyoneĀ should have skin in the game. All workers have the right to share in the success of an enterprise; and when they do,Ā everybody wins.Ā  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 donā€™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 governmentā€™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 ā€“ patient outcomes, patient satisfaction, and economic accountability ā€“ always in focus.

No one should be mandated to work in non-hospital regional medical centres. Itā€™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 ā€œthe problems with the lack of supply, population growth, long wait times between admission and getting a bed, emergency room overuse,ā€ and so on.

ā€œSomething has to give,ā€ he said. ā€œProbably more resources but better managed. We really need major reform.ā€

On that we can all agree. We canā€™t carry on this way.

So, letā€™s stop idling; and letā€™s green-light some fixes.

As Samwise Gamgee said inĀ The Lord of the Rings, ā€œItā€™s the job thatā€™s never started as takes longest to finish.ā€


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

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Business

Worst kept secretā€”red tape strangling Canadaā€™s economy

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From the Fraser Institute

By Matthew Lau

In the past nine years, business investment in Canada has fallenĀ while increasing more than 30 per cent in the U.S. on a real per-person basis. Workers in Canada now receiveĀ barely halfĀ as much new capital per worker than in the U.S.

According to a new Statistics CanadaĀ report, government regulation has grown over the years and itā€™s hurting Canadaā€™s economy. The report, which uses a regulatory burden measure devised by KPMG and Transport Canada, shows government regulatory requirements increased 2.1 per cent annually from 2006 to 2021, with the effect of reducing the business sectorā€™s GDP, employment, labour productivity and investment.

Specifically, the growth in regulation over these years cut business-sector investment by an estimated nine per cent and ā€œreduced business start-ups and business dynamism,ā€ cut GDP in the business sector by 1.7 percentage points, cut employment growth by 1.3 percentage points, and labour productivity by 0.4 percentage points.

While the report only covered regulatory growth through 2021, in the past four years an avalanche of new regulations has made the already existing problem of overregulation worse.

The Trudeau government in particular hasĀ intensified its regulatory assaultĀ on the extraction sector with a greenhouse gas emissions cap, new fuel regulations and new methane emissions regulations. In the last few years, federal diktats and expansions of bureaucratic control have swept theĀ auto industry,Ā child care,Ā supermarketsĀ and manyĀ other sectors.

Again, the negative results are evident. Over the pastĀ nine years, Canadaā€™s cumulative real growth in per-person GDP (an indicator of incomes and living standards) has been a paltry 1.7 per cent and trending downward, compared to 18.6 per cent and trending upward in the United States. Put differently, if the Canadian economy had tracked with the U.S. economy over the past nine years, average incomes in Canada would be much higher today.

Also in the past nine years, business investment in Canada hasĀ fallenĀ while increasing more than 30 per cent in the U.S. on a real per-person basis. Workers in Canada now receiveĀ barely halfĀ as much new capital per worker than in the U.S., and only about two-thirds as much new capital (on average) as workers in other developed countries.

Consequently, Canada is mired in anĀ economic growth crisisā€”a fact that even the Trudeau government does not deny. ā€œWe have more work to do,ā€Ā saidĀ Anita Anand, then-president of the Treasury Board, last August, ā€œto examine the causes of low productivity levels.ā€ The Statistics Canada report, if nothing else, confirms what economists and the business community alreadyĀ knewā€”the regulatory burden is much of the problem.

Of course, regulation is not the only factor hurting Canadaā€™s economy. Higher federalĀ carbon taxes, higherĀ payroll taxesĀ and higherĀ top marginal income tax ratesĀ are also weakening Canadaā€™s productivity, GDP, business investment and entrepreneurship.

Finally, while the Statistics Canada report shows significant economic costs of regulation, the authors note that their estimate of the effect of regulatory accumulation on GDP is ā€œmuch smallerā€ than the effect estimated in an AmericanĀ studyĀ published several years ago in theĀ Review of Economic Dynamics. In other words, the negative effects of regulation in Canada may be even higher than StatsCan suggests.

Whether Statistics Canada has underestimated the economic costs of regulation or not, one thing is clear: reducing regulation and reversing the policy course of recent years would help get Canada out of its current economic rut. The country isĀ effectively in a recessionĀ even if, as a result of rapid population growth fuelled by record levels of immigration, the GDP statistics do not meet the technical definition of a recession.

With dismal GDP and business investment numbers, a turnaroundā€”both in policy and outcomesā€”canā€™t come quickly enough for Canadians.

Matthew Lau

Adjunct Scholar, Fraser Institute
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Business

New climate plan simply hides the costs to Canadians

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From the Fraser Institute

By Kenneth P. Green

Mark Carney, who wants to be your next prime minister, recently released hisĀ planĀ for Canadaā€™s climate policies through 2035. Itā€™s a sprawling plan (climate plans always are), encompassing industrial and manufacturing emissions, vehicle emissions, building emissions, appliance emissions, cross-border emissions, more ā€œgreenā€ energy, more ā€œheat pumpsā€ replacing HVAC, more electric vehicle (EV) subsidies, more subsidies to consumers, more subsidies to companies, and more charging stations for the EV revolution that does not seem to be happening. And while the plan seeks to eliminate the ā€œconsumer carbon taxā€ on ā€œfuels, such as gasoline, natural gas, diesel, home heating oil, etc.ā€ itā€™s basically Trudeauā€™s climate plans on steroids.

Consider this. Instead of paying the ā€œconsumer carbon taxā€ directly, under the Carney plan Canadians will pay moreā€”but less visibly. The plan would ā€œtightenā€ (i.e. raise) the carbon tax on ā€œlarge industrial emittersā€ (you know, the people who make the stuff you buy) who will undoubtedly pass some or all of that cost to consumers. Second, the plan wants to force those same large emitters to somehow fund subsidy programs for consumer purchases to offset the losses to Canadians currently profiting from consumer carbon tax rebates. No doubt the costs of those subsidy programs will also be folded into the costs of the products that flow from Canadaā€™s ā€œlarge industrial emitters,ā€ but the cause of rising prices will be less visible to the general public. And the plan wants more consumer home energy audits and retrofit programs, some of theĀ most notoriously wasteful climate policies ever developed.

But the ironic icing on this planā€™s climate cake is the desire to implement tariffs (excuse me, a ā€œcarbon border adjustment mechanismā€) on U.S. products in association with ā€œkey stakeholders and international partners to ensure fairness for Canadian industries.ā€ Yes, you read that right, the plan seeks to kick off a carbon-emission tariff war with the United States, not only for Canadaā€™s trade, but to bring in European allies to pile on. And this, all while posturing in high dudgeon over Donald Trumpā€™s plans to impose tariffs on Canadian products based on perceived injustices in the U.S./Canada trade relationship.

To recap, while grudgingly admitting that the ā€œconsumer carbon taxā€ is wildly unpopular, poorly designed and easily dispensable in Canadaā€™s greenhouse gas reduction efforts, the Carney plan intends to double down on all of the economically damaging climate policies of the last 10 years.

But that doubling down will be more out of sight and out of mind to Canadians. Instead of directly seeing how they pay for Canadaā€™s climate crusade, Canadians will see prices rise for goods and services as government stamps climate mandates on Canadaā€™s largest manufacturers and producers, and those costs trickle down onto consumer pocketbooks.

In this regard, the plan is truly old schoolā€”historically, governments and bureaucrats preferred to hide their taxes inside of obscure regulations and programs invisible to theĀ public. Canadians will also see prices rise as tariffs imposed on imported American goods (and potentially services) force American businesses to raise prices on goods that Canadians purchase.

The Carney climate plan is a return to the hidden European-style technocratic/bureaucratic/administrative mindset that has led Canadaā€™s economy into record underperformance. Hopefully, whether Carney becomes our next prime minister or not, this plan becomes another dead letter pack of political promises.

Kenneth P. Green

Senior Fellow, Fraser Institute
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