The good news for health care in Thursday’s federal budget was that transfer payments, as previously promised, will not be touched in the government’s drive to whittle down its massive $54 billion deficit to a mere $1.8 billion by 2014-15.
“We will not balance the budget by cutting transfer payments for health care and education or by raising taxes on hard-working Canadians,” Finance Minister Jim Flaherty said in his budget speech.
The government had been counselled by some experts to cut transfers as a way to deal with the deficit, as had been done in 1995, but an opinion poll for the Canadian Medical Association this week showed the public thought otherwise.
The Ipsos-Reid survey found that while two-thirds of Canadians supported the idea of reduced spending on government programs to deal with the deficit, only 16 per cent approved of extending this to health care.
Equalization payments to the have-not provinces, which are another source of revenue for health care, were also left untouched in Thursday’s budget.
But there was little else in the budget in terms of additional funding for health care. The $612 million Patient Wait Times Guarantee Trust, helping the provinces and territories set a guaranteed maximum wait time for at least one priority procedure, lapses at the end of this month. It is not being renewed.
First Nations will be pleased that the government is providing $285 million over two years to renew five aboriginal health programs, including the Aboriginal Diabetes Initiative.
The three territories will also be relieved that the government is continuing the Territorial Health System Sustainability Initiative, at least for now. The budget provides $60 million to extend the pact for another two years.
There was also money in the budget for research and development, including $10 million to support clinical trials on the use of medical isotopes in clinical practice.
Last year’s budget had provided Canada Health Infoway with $500 million to continue its work on electronic health records. This money got held up by “due diligence” activities, and there were fears that it would be another budget casualty. However, the new budget said this money will be forthcoming, and is being booked in the 2009-10 fiscal year. HE
A Speech from the Throne will be read in the Ontario legislature Monday, the first in over two years, and health care is likely to be front-and-centre.
Canadian Press reported this week that the McGuinty government wants to start a conversation on health with Ontarians, much like British Columbia did almost four years ago. The topic will be how to make the health system financially sustainable.
Finance Minister Dwight Duncan, who will be presenting his new budget later this month, told the Toronto Sun that the government is not looking at specific cost-cutting measures to make the health system affordable.
On the other hand, it would appear that the government is not considering any revenue moves either. Premier McGuinty told Canadian Press that he will not be copying B.C.’s move to use all revenues from the new Harmonized Sales Tax for health care.
One new approach that is on the table, according to a front-page story in the Toronto Star Thursday, is introducing activity-based funding for hospitals. This pays them a certain price for actual services delivered and embodies the principle of “the money following the patient.” The idea is that there will be healthy competition between facilities to offer the best results and lowest wait times to get the patient business and the funding.
The Star says the government believes it can save 10 to 20 per cent of its hospital budget using this model, or somewhere between $1.8 billion and $3.6 billion.
Alberta plans to bring in activity-based funding for seniors’ care on April 1, at the start of the 2010-11 fiscal year, and apply it to all acute-care patients next year. A recent report by three economists advising Quebec’s finance minister on the new budget also suggested that this model was worth a look. HE
