JEFFREY SIMPSON
The Globe and Mail, Oct. 19, 2002
Sniff the political air. There's a tax increase in the wind. And the wind is blowing from health-care commissioner Roy Romanow. It's a faint breeze for now, but, when Mr. Romanow releases his report next month, it could become a gale.
Mr. Romanow left politics as premier of Saskatchewan, but that exit did not mean politics could be taken from him. He had already smashed the Canadian record for speeches by a royal commissioner before the release of a report, but, this week, he unburdened himself of yet another one, in Boston. In neither the speech nor his subsequent interviews did Mr. Romanow propose a tax increase, but the logic of one was implicit in his remarks. Here's why.
Medicare is full of holes, and Canadians know it. The waiting lists are too long; access to doctors is often too difficult. Worse, the Canada Health Act covers only "medically necessary services" delivered by doctors in hospitals or clinics. Drug expenses -- the fastest-growing part of the health-care system -- are covered by a patchwork of public programs. So is home care, an increasingly necessary service as hospitals process patients faster.
Financing the existing system with all its holes is already straining government budgets. Health-care costs, the largest item by far in every provincial budget, are rising faster than government revenues. Health-care increases are crowding out spending on other government services. And every province knows it.
Their answer: Pressing Ottawa for more cash, including through useless newspaper advertisements. Ottawa, however, is already forking over an additional $23-billion for health care over four years, following a pre-election accord in 2000. It could transfer additional cash when this agreement expires, but what of the other priorities (cities, child poverty, aboriginals) identified in the Throne Speech?
Even if Ottawa continued to increase transfers, would that be enough to plug the holes? Probably not. So what to do?
One option would be to get more private money into the system. Europe and Australasia are awash with these mixed models. But Mr. Romanow, a social democrat, has said he opposes opening medicare to more private money.
He rejects user fees, or point-of-service payments. He seems to dislike private hospitals. He certainly doesn't agree with medical savings accounts. He's against the European and Australasian models. So no more private money, or at least only a trickle of it.
That means he's down to two other options. The first is beguiling, necessary and illusory. It insists that the existing delivery systems should be streamlined. Savings, in turn, can be used to plug medicare's holes.
Improve technology so doctors can monitor and implement "best practices." Cluster doctors, nurses, paramedics and pharmacists in clinics with 24-hour telephone service -- so-called primary-care reform. Let nurses do some work now performed by doctors; let para-nurses do some tasks now performed by nurses. Focus on "wellness," a cherished Romanow idea that means persuading the public to live healthier lives.
It's a sensible option, except that the savings will be largely illusory. Some reforms will cost more money, not less.
Which brings us to a tax increase, the wrong option, but the only one left if the others are rejected or illusory. If there's to be no more private money, and if savings from administrative changes won't happen, the logic of a tax increase grows.
Mr. Romanow was profoundly influenced by a report from the Canadian Policy Research Networks, probably because he agreed with the findings. CPRN found that Canadians, if given the chance to think through health-care options, would reluctantly accept a tax increase for health with one huge proviso. They would say yes to the increase provided the delivery system changed and the entire increase went to health care.
Some form of dedicated tax meets that test. The tax must be labelled "health care." The money must go into a fund called "health care," and must be distributed to institutions and personnel delivering "health care." No monkey business, please. No siphoning of money into general revenues, where it disappears into the maw of government spending.
How to frame the tax? Put a surcharge on income? Raise the GST by one point? Slap a higher excise tax on a popular product such as gasoline? Whatever the method, the CPRN bet, accepted by Mr. Romanow, is that Canadians will accept a tax dedicated solely for health care.
The Romanow report will thus prescribe ways to make Canadians believe that the tax is being spent on health care and that the spending is effective. Get ready for annual checkups on the system from independent auditors.
Will Prime Minister Jean Chrétien buy a tax increase? His Finance Department hates dedicated taxes. Canadians in general don't want higher taxes. But there is this legacy business.
You can see it now: Mr. Chrétien, the saviour of medicare, accusing all who oppose the tax of wanting to destroy this national icon. It will be a crude, rude argument, but that's how he'll try to sell it.
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