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  1. The first reform is to stay healthy.
  2. It’s time to put the “customer” first.
  3. Redefine what we mean by “Comprehensiveness.”
  4. Invest in technology and establish an electronic health record
  5. Re-configure the health system and encourage more choice, more competition, and more accountability.
  6. Diversify the revenue stream
  7. Put better incentives in place for attracting, retaining and making the best use of health care providers
  8. Make quality the top priority
  9. Recognize and promote Alberta’s health sector as a dynamic, powerful asset to the provincial economy.
  10. Establish a clear transition plan

The first reform is to stay healthy

Fundamentally this is a motherhood statement which few would disagree with on the surface. While they acknowledge the role of education, income and housing in health (and particularly for children’s health,) they provide precious few specifics on how to achieve the goal of staying healthy.

What’s really inside?

The Council recommends that people need better incentives to stay healthy. They suggest that Medical Savings Accounts would make people more responsible for their health care expenditures (thus dampening demand) and they would be able to use whatever portion of the MSA that was not used for health care to invest in health promotion and wellness activities.

MSAs are not known for their effectiveness in encouraging health promotion and prevention. Rather, it is known that they drive costs down to the individual and they force individuals to make tough decisions on the health services they do want to receive. These choices may actually work against health promotion and prevention e.g., when someone delays seeking medical attention for cost reasons.

It’s time to put the “customer” first.

The Council uses the language of business and the concept of health care as a business to make recommendations that Regional Health Authorities should guarantee services e.g., a recommendation for a 90 day guarantee of diagnosis and recommendation from their physician.

What’s really inside?

If Regional Health Authorities are unable to meet the 90-day guarantee, then they would be required to consider other options to provide the service. While the Council says that the options could include both public and private providers, the reality is that with most public providers already stretched to the limit as a result of under funding, the pressure to contract public health services to the private sector will be considerable. In fact it is a good bet that the private sector will benefit the most from this directive.

The Council also notes that Albertans should be given more choice to decide what services they want to receive and where they want to receive them. Not surprisingly Medical Savings Accounts are again raised as a way to keep “customers” satisfied.

The Council would also like to “unbundle” health care services. The result would be that services are separated into specialized areas that can be easily contracted to private for-profit providers, undoing the effectiveness of more centralized public sector provision.

Redefine what we mean by “Comprehensiveness.”

The Advisory Council accepts the assumption that comprehensiveness is now interpreted too broadly and must be restricted in the interests of constraining costs. The Council proposes that an “expert panel” be established to make decisions on which of the current health services should be publicly funded and which new diagnostic treatment, service or drug should be covered.

What’s really inside?

The heart of the Canada Health Act is under attack here. What should be covered by public health care and what will not be?

However, following the mantra that the health care system is not sustainable the Council makes it clear that for treatments to be publicly covered, the government must have the money to do so. If the government decides to restrain budgets for health care then some other treatment or service must fall off the list in order to ensure that the system is sustainable.

In effect, the Council is recommending a public system that by definition cannot expand to meet growing needs. It can only make choices between treatments, services or drugs. Contrary to what Mazankowski and others think, funding support for social programs are not scientifically determined or even determined by the market. Funding for health care is in the end a political decision. Governments that spend money by offering tax cuts cannot make money available for health care. So, instead they will “re-define comprehensiveness” and the inevitable result will be de-listing or refusals to cover new therapies, treatments and services. This approach leaves those services open to be delivered privately to those who can afford to pay for them.

Invest in technology and establish an electronic health record

The Council proposes that an electronic health care record be developed for each Albertan. This card would contain all aspects of a person’s health record (treatments, medications, tests, costs). The theory is that it would act as a kind of debit card through which each Albertan could see the costs of their health care. This in turn would encourage them to take responsibility for their use of the health care system.

What’s really inside?

The debit card on the surface seems fairly innocuous. However, the debit card can easily be converted into a Medical Savings Account (a totally different idea from an “electronic health record.”) The Medical Savings Account will shift costs to the individual for certain health care services and create a disincentive to access the health care system for those who cannot afford to pay.

Moreover, the up front capital cost of implementing an electronic health record is considerable and the administrative cost of implementation and on-going operational maintenance is high. So, in effect the Advisory Council’s recommendation sets the stage for electronic health records to be converted into Medical Savings Accounts, and the government will pay the bulk of the up front implementation and on-going maintenance costs.

Re-configure the health system and encourage more choice, more competition, and more accountability.

The Advisory Council asserts that the public health care system operates as an “unregulated monopoly” and they would like to see it changed so that there is competition and choice in the system. In other words, they want to “unbundle” services so that there is not a single provider of health services. They want to “expand the range and number of suppliers delivering health care services and give individuals more choice in the health services they receive.”

In order to do this the Council recommends devolving more responsibility to the Regional Health Authorities. These responsibilities include establishing service agreements with physicians, labs, private surgical facilities, and all manner of other private and not-for-profit health care providers.

The Council recommends new models of care and (surprise, surprise) the funding approach that would give people more choice and control over where they seek that care is Medical Savings Accounts.

The Council says that any new reform should “encourage an innovative blend of public, private and not-for-profit organizations and facilities to deliver health care services.” They claim that as long as services are publicly funded there is no reason to question where the services are delivered.

The Council recommends that physicians should be able to work in both the public and private systems. Further, they encourage groups of care providers to form “care groups.”

What’s really inside?

The privatization angle here is not only that Regional Health Authorities will be tasked with these responsibilities (among others), but they will be encouraged to contract with a wide variety of providers in the private and not-for-profit sectors.

The experience of such encouragement in the Ontario home care sector with compulsory competitive bidding has been an unmitigated disaster. Funding cuts combined with competitive bidding have severely eroded the continuity and quality of care for home care recipients. It is likely that any Alberta experiment with increasing competition will have a much wider scope with more serious consequences for the entire system.

Medical Savings Accounts are once again recommended as an underpinning for the new models of care. Individuals will be expected to shop around for care among a variety of providers and make decisions as to whether they should actually seek care at all.

The ”innovative blend” of public and private services is essentially an open door to privatization. The only thing innovative about it will be that the private sector gets to provide more of the most lucrative services. Mazankowski does not define what the innovative blend really means for good reason – innovation can only mean more private sector involvement as the ideological underpinnings of the Council membership is highly unlikely to consider increased public sector delivery as innovative. (see Appendix B for more detail on the predispositions of Council members.)

Giving physicians the option to work in both the public and private sectors means that the public sector will be given short shrift. The incentive will be for physicians to work in the private sector more as the cases will be less complex and more lucrative because there will be a routine established. More difficult and less lucrative cases will be referred to the public sector and may or may not be seen by the same physician. In Manitoba waiting lists for cataract surgery were longer for those physicians who work in both the public and private sector. It is hard to see how this squares with the objectives the Council has set for reducing waiting list times.

The formation of “care groups” is particularly worrying as the potential for these “care groups” to operate in a manner similar to Health Maintenance Organizations (HMOs) in the United States is great. Private “care groups” may screen clients and ration care in order to maximize profits and ultimately to limit the choice of the “consumer.”

Diversify the revenue stream

In this rather lengthy section of the report the Council reviews many options for additional revenues sources to fund health care.

The following options were examined:

  • increase premiums
  • impose user fees
  • treat health care as a taxable benefit
  • impose a health tax
  • private funding and delivery of health services
  • supplementary insurance
  • Medical Savings Accounts
  • variable premium accounts

In the end the Council recommended:

  • to increase health care premiums and tie them to the overall costs of the health system and the scope of insured services. In other words, health premiums should be increased to make up 20% of the overall costs of insured services. This increase is almost a doubling of the current premium cost at 11% of the total cost.
  • that Medical Savings Accounts and variable premiums be given further study.
  • that Alberta continue to work with other provinces to develop joint purchasing schemes or a national formulary to control drug costs.
  • that Regional Health Authorities be allowed to raise revenues on their own. These revenues could come from charging fees for long term care, implementing co-payments for home care, and charging fees for restaurant inspections, environmental assessments and public health education programs.

What’s really inside?

Revenue diversification really means that government wants to control the amount of money that it transfers to health care from its general tax base. So, others will have to pay – out of their own pockets.

Increased premiums add an additional burden to individuals and families. Individuals in Alberta currently pay $408 per year while families pay $816 per year. These premiums would be increased to approximately $816 per year for an individual and $1632 per year for families if the recommended formula were followed. More importantly, the premiums are indexed to health care inflation. So as the costs of health care increase, under the Council’s proposal premiums would rise automatically to ensure that they cover the full 20% of health care costs. Albertans would have no protection against health care premium increases in the future.

The fact that Medical Savings Accounts are singled out for further study is hardly surprising given that they are associated with at least six of the other areas of reform. A lot seems to hinge on MSAs being accepted as part of the funding mechanism for health care. MSAs are widely recognized as a method to shift costs to individuals (see Appendix A).

Variable premiums are very similar to the MSA model. Premiums for each Albertan would be deposited into a personal health account and then used as co-payments for health services. The co-payments would be set as a fixed percentage of the health care cost (say 20% to keep in line with the percentage of the cost that premiums are supposed to cover). Coincidentally, if a debit card were in place the accounts could be debited at the very time they access health services.

If the premium co-payment was used up i.e., there is no more money in your individual account, you would be charged a “premium supplement” equivalent to some fixed percentage of your taxable income.

In short, variable premiums are another way to lever more payments from individuals for their own health care costs – forcing the burden to health care costs to the individual rather than the collective level. Individuals become responsible for their own health care costs ignoring societal values where health care is a basic human right rather than a privilege.

Put better incentives in place for attracting, retaining and making the best use of health care providers

The Council tries to address the recruitment and retention issues that are currently hindering the provision of quality health care. The Council does recognize that workloads, morale and compensation issues are central to the solution. They also recognize that scope of practice issues need to be addressed in a systematic way.

The recommendations focus on finding a different way to compensate physicians. The options include: capitation and rostering, population funding for treatment specialties, salaries, fee-for-service, a blend of fee-for-service and rostering, and contracting with Regional Health Authorities. The Council concludes that no one model is appropriate and that some “blended approach” should be adopted.

What’s really inside?

The Advisory Council’s recommendations are limited to options for the payment of physicians. Nurses, technologists, technicians, therapists, emergency medical services personnel, institutional health support workers and all other caregivers are totally ignored. Mazankowski has fallen into the trap of assuming that all we have to do is make the doctors happy and the system will be okay. We already know that any system that caters to the demands of doctors will not be responsive to the demands of other health personnel. So, in spite of rhetoric in other parts of the report, health human resources will be doctor centred and the shortages, morale and retention problems in other areas will persist.

It is true that the compensation system for doctors needs to be revisited. But offering up a smorgasbord of options from which physicians can choose merely adds an additional level of complexity and administrative cost to the health care system.

Changing the primary care model to a community centre model with multi-disciplinary teams of workers with physicians on salary would be a major, and radical, step in the right direction. Yet, such an option is nowhere on Mazankowski’s radar screen.

Make quality the top priority

In keeping with a world-wide fascination with measuring health outcomes, the Advisory Council recommends the creation of an independent, arms length Outcomes Commission. The Commission would be responsible for establishing measures and monitoring outcomes and quality in the system. It would receive reports from Regional Health Authorities and issue reports and recommendations to the Minister of Health.

On the surface, this seems reasonable.

What’s really inside?

The Council presents the Outcomes Commission as totally unconnected to the Expert Panel, which will make decisions on what is covered or not covered by the provincial public health plan. It is hard to believe that this would be the case. In effect, the Outcomes Commission will undoubtedly be working closely with the expert panel to provide justification for de-listing of procedures.

It is also likely that the Commission will work closely with the Regional Health Authorities to provide justification for the need to expand into the private sector e.g., by monitoring their performance on meeting pre-set targets and the costs of doing so. The Commission will recommend “best practices” which will fit nicely with the Council’s already stated goals of encouraging the Regional Health Authorities to increase competitiveness in delivery and to expand the role of the private sector in health service delivery.

Recognize and promote Alberta’s health sector as a dynamic, powerful asset to the provincial economy.

Conveniently, now that the private sector is being recommended to play an increased role in health care services and research, health economists have suddenly awakened to the fact that health care is a major contributor to economic growth. This, of course comes after years of denigrating public health care as a drag on the provincial coffers and as a major cost centre.

The Council recommends that public private partnerships be developed to expand research capacity. They also recommend the increased commercialization of products developed through health research initiatives.

What’s really inside?

Public private partnerships (PPPs) in health research will suffer from the same shortcomings as all PPPs. The private sector will reap the profits while the public sector accepts the risk and pays the long term costs of development.

Along with increased commercialization there will be increased pressure to bring products to market quickly. Corporations already place incredible pressure on Health Canada to speed up the process for approvals of new technologies, drugs and medical devices. PPPs will mean that provincial governments will now join the demand to have products reach the market quickly, perhaps at greater risk to the public.

Interestingly, success in this area for the provincial governments means that new drugs and devices may come on to the market and into the scope of the comprehensiveness provisions of their health plans, increasing costs. It is not far fetched to think that the province could push for a product to reach the market more quickly, while at the same time an “Expert Panel” on comprehensiveness may be reticent to include the item in the list of covered medical procedures.

Establish a clear transition plan

The final recommendations deal with how to put the plan in motion. The Council recommends that an individual be appointed to oversee the transition. And the transition should have specific timelines with particular goals.

The individual would have responsibility for all aspects of detailed transition plan including managing public expectations and identifying barriers to change.

What’s really inside?

The recommendation leaves the door wide open for an individual, appointed by the government, to take on responsibility for the implementation of a program that would severely circumscribe the public health care system. Further, that individual would be tasked with implementing a private health care system, alongside or in competition with the public system. The appointment of such an individual provides a buffer for the government leaving them “off the hook” for some unpopular decisions.

The process will involve a wide-ranging review of all legislation, policies and agreements that will need to be harmonized or changed to ensure implementation. The Council is clear that all barriers to implementation will be addressed “including legislation and regulations, labour codes and professional legislation, union agreements and conflicting policies among ministries.”

This means that there will likely be an all out attack on labour agreements that protect and ensure rights and benefits of health care workers. We might anticipate that the government will seek to re-open collective agreements to address monetary issues which they would claim are impediments to ensuring “sustainability” of a new approach. Similarly, job security provisions are likely to be attacked. The result will be considerable labour unrest during a legislatively imposed process.