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Proceedings of the Standing Senate Committee on
Social Affairs, Science and Technology

Issue 48 - Evidence

OTTAWA, Thursday, February 21, 2002

The Standing Senate Committee on Social Affairs, Science and Technology met this day at 11:09 a.m. to examine the state of the health care system in Canada

Senator Marjory LeBreton (Deputy Chairman) in the Chair.


The Deputy Chairman: Senators, this morning we have two panels of witnesses to continue on our study of the health care system in Canada. We have representatives from the Canadian Federation of Nurses Union and The Canadian Health Coalition.

Ms Kathleen Connors, President, Canadian Federation of Nurses Union: When I was here in May, we had a rather lively discussion on health human resource issues. I asked that nurses be invited back to provide a broader perspective on important issues that relate to health care.

More than any other tangible thing, whether it is in the public or the private sector, Canada's system of medicare is an expression of Canadian's values. Our public health care system expresses for Canadians their highest personal and community values: caring for themselves, their own bodies, caring for their children, their partners and their elderly parents. Our health care system represents caring for individuals and families in villages, towns and cities across Canada.

To the hard-headed captains of industry and to all those analysts and policy jockeys in government who identify with them these sentiments may make us sound like boy scouts. To them, the need for health care is an opportunity to be exploited, and anyone who does not is soft-headed and a fool. Their narrow self-interest may work in the marketplace, but fails as a form of public policy. As these industry captains pass from their post to retirement and into history, their pages are blank; their companies are gobbled up, and the workforces for which they displayed little loyalty are often scattered. Those in government that carried their water do not even make the footnotes. Their advice leads to historical obscurity.

Tommy Douglas, John Diefenbaker and Lester Pearson left a legacy no Bay Street mogul can rival. Today, their gift heals the sick and gives help and hope to the afflicted without charge and without prejudice.

Health care in Canada is synonymous with collective caring. It is not a privilege conferred by accident of birth or by success in the marketplace. Health care for everyone, without charge, without prejudice, speaks volumes about this country's commitment to its people and to the quality of our democracy. It also speaks about the quality of our leaders and their leadership at the time when this gift was created, recreated, and revitalized.

Our health care system is the visible hand of our nation extended in caring to everyone who is Canadian. We elect the government, and we fund it. Our government provides no-fee, universal, publicly administered health care. Why? The answer is because we are Canadian.

In the 1980s and 1990s, Chrysler chairperson Lee Iacocca railed against the cost of private health care to business, in the United States. ``It costs Chrysler more than steel,'' he said. He also remarked that Chrysler had no such burden in Canada.

We believe that major corporations in Canada, with the exception of those in the health care field, are behaving irresponsibly towards medicare. No, this is no do-gooder objection. It is obvious that these companies are being irresponsible to their own shareholders.

There has been no corporate lobby campaign to protect what, in effect, saves corporations in Canada billions of dollars per year. If medicare is privatized over the next decade, who will pick up the cost of providing health care to the employees of big business in this country?

Do the captains of industry actually believe that they will avoid shelling out hundreds if not thousands of dollars in health care benefits per employee? High-tech companies will not get away with it either. They will need to offer competitive health care packages in order to attract and retain employees.

If medicare is privatized in whole or in part, how much will these new costs cut into the productivity of business? How will it affect our economy? If medicare is privatized, the costs will not likely be reduced for government either.

That is why we believe that stockholders should be asking these questions while they quote Mr. Iaococca at their annual meetings. Tax lawyers and accountants will get rich on the cutback or elimination of medicare, but once the public and the private bills are totalled, the costs for health care will not shrink, they will grow.

In a report done for the Kaiser Family Foundation in June of last year, Georgetown University's Institute for Health Care Research and Policy found that:

the individual health insurance market is: unpredictable, inconsistent and expensive.

How expensive? A completely healthy insurance applicant would be charged on average about $3,000 a year.

Ms Chairman and members of the committee, is this our future with the private health care option? If it is, then I think the committee is obliged to warn the people of Canada about the possibility of huge private medical bills.

Let us protect, improve and expand medicare. What nurses want is really quite simple. We believe that the evidence shows that a single payer, publicly delivered, not-for-profit health care system is fairest and most efficient system of all. Our advice to you is, follow the evidence.

Nurses, therefore, are recommending a number of solutions to sustain medicare and to stop privatization of health care in Canada. We recommend that you fully restore public health care spending on public health care and spend the money accountably. Governments should attach strings to any money provided to the provinces from the federal government. Certainly our top priority should be to hire health care professionals and other peoples in adequate numbers to do the job properly. We recommend that medicare be expanded to include home care, long-term care, and pharmacare. We do not want any more Mike-Harris-meets-Chicken-Little talk. Public spending on public health care as a percentage of our GDP of our economy is not even up, let alone spiraling out of control. We must re-establish the national standards that honour the principles of the Canada Health Act.

Canadians fought to make our country healthier through medicare and through other social, environmental and government-initiated programs. Now we need to restore and improve those programs. The founders of medicare merit the tribute, and our parents and our children deserve no less.

Mr. Michael McBane, National Coordinator, Canadian Health Coalition: We welcome this opportunity to comment on the policy options developed by your committee in volume four of the interim report ``Issues and Options.''

The Canadian Health Coalition is a not-for-profit public advocacy organization founded in 1979 at the SOS Medicare Conference attended by Tommy Douglas, Justice Emmett Hall and Monique Bégin. Membership consists of churches, seniors, students, nurses, anti-poverty and labour organizations. Our mission is to defend and improve Canada's public health care system.

We have found that the ``Issues and Options'' report presented unbalanced options that are not evidence-based and that favour a greater involvement of for-profit health care. We address the issue of for-profit delivery of health care by examining the nursing home industry as an example.

We found that for-profit health care is of inferior quality and more expensive.

We believe that the moral foundation of medicare is the principle that health care is a public good, not a private commodity and we stand by the issues raised in our submission.

Today we want to focus on the U.S. experience with for-profit health care. We are honoured to have the distinguished Dr. Arnold Relman with us today. Dr. Relman has studied the results of for-profit health care for over 20 years and has published over 300 articles in scientific journals.

Dr. Relman's writings have addressed various issues including: fraud in science, conflict of interest, and the impact of the profit motive on the medical profession.

Dr. Relman's message to this committee is simple: More for-profit health care will not solve Canada's problems; they will make them worse.

Dr. Arnold Relman, Professor Emeritus of Medicine and of Social Medicine, Harvard Medical School; Former Editor- in-Chief of The New England Journal of Medicine; Canadian Health Coalition: I have been asked by the Canadian Health Coalition to appear before you today to testify about the U.S. experience with private, for-profit health care.

I have been studying and writing about this subject for over two decades. In 1985-86 I served on a committee established by the National Academy of Sciences to report on for-profit enterprise in health care. During my editorship and afterwards, The New England Journal of Medicine published many articles in this field and, since I retired from that post, my own writings have continued to focus on this topic. I am now at work on a book that surveys the present unhappy condition of the U.S. health care system, with particular attention to the role of private enterprise.

My conclusion from all of this study is that most, not all of the current problems of the U.S. health care system, and they are numerous, result from the growing encroachment of private for-profit ownership and competitive markets on a sector of our national life that properly belongs in the public domain. It is no coincidence that no health care system in the industrialized world is as heavily commercialized as ours, and none is as expensive, inefficient, inequitable, or as unpopular. Indeed, just about the only people happy with our current market-driven health care system in the U.S. are the owners and investors in the for-profit industries now living off the system.

The U.S. may be a world leader in medical science and technology and its major medical centres may provide some of the best and most sophisticated care available anywhere, but taken as a whole, our health care system is failing and will need major reform very soon.

We have tried private for-profit markets in a big way, ''big time,'' as our vice-president would say. We have tried for- profit hospitals, ambulatory care facilities and services, nursing homes, and recently, in the ownership of insurance plans. The experiment has failed. Private health care businesses have not achieved the benefits for society touted by their advocates.

There is now evidence indicating that private businesses delivering health care for profit in the United States have greatly increased the total cost of health care and have damaged the non-profit institutions that any health care system requires.

Any good modern health care system requires an enormous infrastructure that includes education, technology and public services. The system cannot survive without this infrastructure. The U.S. for-profit health care system contributes to none of that. It exploits it, and it has made the problems of the non-profit part of our health care system much worse.

The U.S. experience enables students of health care policy to compare the costs and quality of non-profit and for- profit facilities as well as the comparative performance of public and private insurance systems. The results are very instructive. For-profit hospitals were much more expensive than comparable non-profit hospitals when public and private insurers simply reimbursed charges. Those were in the good old days before the cost explosion. That cost difference began to disappear when the payers, government and private insurers, began to negotiate fixed prices, but there never has been any evidence that for-profit hospitals could provide similar services at lower prices than their non- profit counterparts. There is simply no evidence.

A recent study of regional Medicare per capita expenditures for the elderly for health services including hospital care found that they were much higher in regions that have been served exclusively by for-profit hospitals than in regions where there were no for-profit hospitals. The data are unequivocal.

Turning to comparisons of quality of care, there is no good evidence about the relative quality of general hospital services per se in similar types of for-profit and non-profit facilities, because such studies are difficult to do with any scientific validity. However, quality is easy to measure in nursing homes and kidney dialysis centres. They are largely paid through fixed, negotiated prices by public insurance; price is held constant. Their products and what they are expected to do are delimited and defined. Studies of the objective measures of quality in these services show that public and private non-profit nursing and dialysis facilities provide significantly better and safer care to patients than their for-profit counterparts.

In other words, this shows that when you fix the price and focus on a specific service, non-profits clearly outperform for-profit facilities. Some of the differences that have been documented are scary and dangerous in terms of patient care safety.

Let us look at comparisons of insurance systems. A little over a decade ago when the price explosion in the American health care system drove employers to insist on some other form of private insurance, investor-owned businesses took over the private insurance field. Now they provide coverage to more than one-half of our people, mainly through employment benefits.

One-third of our population is covered by Medicare and Medicaid, both which are largely financed by government. Comparisons of these two systems, the one private and mostly for-profit and the other public, are very instructive.

The Medicare system has administrative costs of less than three per cent, with all the remainder of Medicare expenditures going to pay physicians, hospitals and other providers to take care of patients. The private insurers, on the other hand, have corporate and administrative costs to start out with of 15 per cent to 30 per cent. This figure is not debated. In addition, they have to spend a lot to outsource many other services.

As a result, it can be estimated that only 50 per cent to 60 per cent of the premium dollar paid for private insurance remains to pay for the care of patients by the providers. Then, the providers themselves must pay extra administrative costs to deal with the complex regulations that have developed over the years because multiple different competing private insurers impose their regulations on the system.

The irony is that while at first the private insurers were able to hold down premium prices by drastically cutting utilization, they have now run out of cost-cutting options and are meeting increasing resistance from providers and the public. After that, the private payers had to come to face the fact that our system with its technology, high utilization of resources, expensive drugs, new tests, many more doctors and specialists has relentlessly increased the costs of health care.

Now the premium prices of private-for-profit insurers have again begun to increase at double-digit rates. In the United States, some of the biggest private insurance companies say they cannot survive with less than a 10 per cent increase, and in some instances a 20 per cent annual increase in the insurance rate. This is much more rapid than the rate at which the costs of Medicare and Medicaid are increasing.

A remarkable demonstration of the failure of the commercial, private HMO-based insurance system was seen a few years ago when, in an effort to save costs, senior citizens previously covered by Medicare were encouraged by the government to obtain their care through private, for-profit HMO insurance plans that would be paid for by the government. It soon became obvious that the costs of care under the private system were higher, not lower, and that senior citizens were increasingly dissatisfied with the care they received.

Bear in mind that studies of the satisfaction of patients with different systems have to compare sick people with sick people, not well people with sick people. When you ask the sick elders who had to be hospitalized or who had major illnesses whether they liked the for-profit HMO system that the government was buying for them, they said, ``no.'' There was a wholesale exit of senior citizens from the private system. They were voting with their feet for the public system.

In short, the U.S. experience has shown that private markets and commercial competition have made things worse, not better, for our health care system. That might have been predicted because health care is clearly a public concern, and it is a personal right of all citizens. By its very nature, it is fundamentally different from most other goods and services distributed in commercial markets.

I believe in the capitalist system. I believe that free markets are a marvellous mechanism for most commercial goods and services to be distributed according to consumer wants and consumer willingness to pay. It is a good system for the most part, but markets are simply not designed to deal effectively with the delivery of medical care, which is a social function that needs to be addressed in the public sector.

We in the United States are belatedly learning this lesson, and soon, I believe, we may be ready to try other options that will depend more on public action. Many Americans have always believed that Canadians had the right idea in deciding that the financing of health care is primarily a public responsibility. We still think you are right, and that we ought to emulate you, rather than vice versa. I am surprised and disappointed by your committee's interim report, which seems to be favouring policy options that increase private market involvement in Canadian health care.

Before you make your final recommendations, I earnestly and respectfully beseech you to look more closely at the U.S. experience. It should convince any evidence-driven observer that private markets are unable do the job. They make health care more expensive and worse.

To make a publicly financed system work effectively, I believe that both our countries need to begin reforming the medical care delivery system. That is where we ought to be looking for ways to optimize our use of resources to improve the quality of our health care. I believe that is the great new frontier for improving the efficiency, effectiveness and quality of health care. The delivery system must be improved.

There has been a great deal of discussion in both countries it might be changed.. One suggestion is that the delivery system ought to be splintered into many different, highly specialized facilities. I believe that to be an unsound option. A much better approach would be to reorganize how physicians work together.

Canada and the U. S. currently depend largely on independent, solo medical practitioners to provide ambulatory and hospital services on a fee-for-service basis. We should begin to encourage physicians and other health care professionals to organize themselves into self-governing, multi-specialty and multi-disciplinary teams to deliver comprehensive care at prepaid, capitated rates in a not-for-profit delivery system.

I have taught medicine for over 50 years and I have spent an enormous amount of time training practitioners. I am convinced that physicians provide the best care when they work in teams, not as competitors. Furthermore, to foster cooperation and discourage over-service, they should be paid primarily for their time and not on a piece-work basis. That would certainly reduce billing fraud and all the resources wasted on the processing of claims. Fraud, I might say parenthetically, has been a huge problem in the United States, particularly with medicare billing practices of the big for-profit hospital chains. If you want to hear a story about for-profit systems running rampant please ask about me.

I want to say just a word about consumer choice, which is being touted by believers in the magic of the market as a mechanism for controlling costs and improving the quality of services. There is much to be said for making more information available to people about their health care and enabling them to participate more in the decisions that they need to make.

However, it is a fundamental misconception to imagine that sick patients can or should behave like ordinary consumers involved in commercial transactions. Health care is totally different from the goods and services that are in most commercial markets. That is why you need a medical insurance system and that is why sick people need the professional and altruistic services of physicians and nurses.

I have spent years taking care of desperately ill patients in intensive care units in hospitals. I never saw one consumer; I only saw sick patients who desperately needed to know that they were receiving the best available care on an altruistic and professional basis from people who were interested in their welfare.

I suspect most Canadians understand why health care is special and why it needs to be insured by a public system like the one you now have. I would be surprised to know that they want the fundamental fairness of their medicare system to be changed by the introduction of market forces.

If there are any here in Canada who are tempted by that idea, which is totally spurious, they have only to look at what commercial markets have done to U.S. health care. It is not an example that any advanced, civilized nation would want to follow.

The Deputy Chairman: Thank you, Dr. Relman, for your compelling presentation.

Senator Morin: Dr. Relman has for many years been the editor of the leading medical journal in the world, The New England Journal of Medicine, which I still read in spite of the fact that I have been retired from clinical practice for many years. I started reading The New England Journal of Medicine when I was a junior intern. I quickly realized that if I left let my journals pile up, I would not read them. As a result, I adopted the practice of reading the journal the day it arrived.

I was telling Dr. Relman that in my years teaching we conducted a one-on-one evaluation with the junior interns and residents. I always completed my evaluation by saying, ``I will give you one piece of advice I would like you to follow for the rest of your life: Read The New England Journal of Medicine every week.'' This was in French Canada when many students were not fluent in English. That is to show you how important I think this journal has been. Dr. Relman, how many years were you editor?

Dr. Relman: Fourteen.

Senator Morin: Under his direction, the journal has flourished. I am sorry to say that since Dr. Relman left, the changes that have been made have not been for the better. That being said, you will appreciate how attentive I was to his brief.

I think there is a distinction to be made between multiple insured and single insured, whether they are public or private. If you have a large single insurer, there are many advantages, and one of the advantages of medicare is that we have one single insurer for the country. I believe there are many advantages to that, for example, for risks, as opposed to the dangers of having multiple insurers cutting up the market. There is no doubt about that.

I do not think the debate should be whether it is private or public. It is public and we should not change it. It is unique for 32 million Canadians and I think it is an advantage. I do not think we should debate that.

Where the debate is more difficult and ambiguous is on the matter of for-profit providers. It has always been a difficult subject. For many years we have had a large number of for-profit providers. Medical doctors are for-profit. When doctors practice in a group setting many of the clinics have profits at the end of the year. They are incorporated and pay income tax on the profit at the end of the year on earnings. That is quite normal. There are also dental clinics and imaging clinics. Some of them have major capital investment, they make a profit at the end of the year, and they pay income tax on the profit. That is perfectly legal.

There are also a small number of very specialized clinics that have been set up in Alberta and elsewhere which are still under the single public payer system. These clinics perform specialized procedures; for example, joint surgery. This is not contrary to the principles of the Canada Health Act.

In addition to that most OECD countries have private providers. France has an extensive network of private clinics that are not really in competition with the major teaching hospitals. The clinics provide care, for example, in obstetrics, but they are certainly not in competition with the major teaching hospitals. For two consecutive years, the World Health Organization has considered that France has the best health care delivery system in the world.

The U.K. has a number of private hospitals that are apparently of very good quality. I have a son living there. They are very satisfied with the care they receive. Sweden has embarked on a system where they have private providers as well.

I am not in any way promoting private providers and I am not saying they are better. The answer is regulation and control and evaluation, if any of the horror stories we hear south of the border are to be believed. Many of the problems of the for-profit hospitals in the U.S. have resulted because they were bought from institutions that were not- for-profit and in very difficult financial situations.

Dr. Relman if you had the opportunity, would you eliminate all for-private providers or do you think it would be acceptable to have some for-profit providers?

The Kaiser Permanente HMOs have been compared to, for example, the National Health Service in the U.K., showing that it is provides more effective care and more patient satisfaction. The U.K. system is the cheapest in the world right now. Now the Kaiser Permanente is being compared to other systems in the world, and it always comes out first.

I realize you may not have been prepared for that question, but what is your impression of that system?

It is an HMO that has been in existence since 1945. It offers coverage to 8 million Americans. It offers complete coverage of all health care, drugs, home care, hospitals, physician services and preventive services. As I said, costs are way below any OECD country.

Dr. Relman: Thank you, Senator Morin, for the kind words about The New England Journal of Medicine.

You said there are many advantages to having a single over a multiple system regardless of the for-profit/not-for- profit issue. I agree with the first half of that statement, but I cannot imagine how any country would choose to put its entire health insurance system under one for-profit company. That seems to me to be unthinkable, and it would open up the possibility of exploitation and abuse. If you favour a single insurance system, as I do, and as Canada largely seems to have done over the years, it has to be public.

You make the valid point that, from the point of view of profit making, many elements of the American and the Canadian health care systems are for-profit, that is to say, there has to be profit defined as excess of income over expense. Otherwise it could only function with tax revenues or with charity. A profit is necessary. It is not for-profit that concerns me; it is investor-owned that goes along with the for-profit. If you have a professional who makes his or her livelihood from providing professional services to patients and has to take home a net surplus, a profit, or else they cannot continue to exist, I find that much less concerning than if the professional services or the facilities are owned by an anonymous corporation that talks to Wall Street and Wall Street analysts and is interested only in profits and in share prices. That is the problem. It is not for-profit versus not-for-profit that I am concerned with; it is investor ownership.

You asked if I would favour elimination of all for-profit facilities and health care businesses. Yes, over the long run. I am an evidence-driven person. I have lived my whole career asking: What is the evidence? Where are the data? Where are the facts? What are the facts? The facts are that no one has ever shown, in fair, accurate comparisons, that for- profit makes for greater efficiency or better quality, and certainly have never shown that it serves the public interest any better. Never. As far as I can see, the only advantage of for-profit over not-for-profit is that they provide capital, which they get from investors. They provide the capital that often the not-for-profit system does not have or is unwilling to provide.

However, in order to justify providing that capital, they have to extract from the system not only the costs of their amortization but their profits. Otherwise, they cannot do it. Why would they provide capital if, on balance, they did not take more out of the system than they put in?

In the beginning a community or a hospital that is starved for money will welcome the for-profits coming in. A hospital corporation is able to build a new hospital that the community is unable to afford. However, you the community will pay for that in the long run because the corporation is not in the business of running a charity. They are in it to make a profit, and they will take the profit out of the community. Ultimately they will take more out of the community than they put in. They have to take out more than they put in order to make a profit.

Your other question was about Kaiser. Kaiser is terrific and is one of the models we should emulate. Keep in mind that Kaiser is a not-for-profit organization; there are no investors.

I believe that the ideal system would combine a unified public insurance system with private not-for-profit providers, held accountable, kept within a budget, made accountable for their efficiency and so on. I believe that there should be a public/private mix in health care; public funding, private delivery. I do not want doctors to work for the government unless they choose to join the VA or the military or public health service. I think the delivery system ought to be in the private sector but held accountable by budgets and quality controls for how they perform. Kaiser is a terrific example of that.

Senator Morin: This is a very important issue. What you are saying is not so much not-for-profit as compared to investor owned. As an example, St. Gorans hospital in Sweden is the property of the providers, the physicians, nurses and the other personnel. Many private clinics in France are physician owned, but I think St. Gorans is an example that would please Ms Connors because the nurses and the other employees own the hospital as well as the physicians. If there are profits at the end of the fiscal year they reinvest some of it and take some of it. The profits are divided equally amongst all employees, not more to doctors, but equally. That is the system they have in St. Gorans. Maybe you would find this system more acceptable.

Dr. Relman: Yes, I would. In the United States, you see examples of both kinds of private, for-profit, net income dependent, delivery systems. You see the Kaiser system where they depend on their profit to make the system better. Nobody gets richer at Kaiser because they have a profit at the end of the year. They reinvest the profits. There may be some slight bonus incentive, but it is very modest. They pay themselves a salary that is a matter of public information, and all their profits go to improving the system.

Then there is the other kind of private, provider-owned system in which the doctors actually are shareholders in a private, limited corporation. They are the only investors. In other words, it is a privately held corporation. They get paid not only for their time and effort as health care professional providers but they get paid from the profits of the institution. I think that system is unethical. It is contrary to the basic principles of the profession that you and I swore an oath to uphold, and I oppose it, whether it is in the United States, Canada or in Europe.

Senator Morin: Thank you very much. This was the pleasant part. We really appreciate the help you gave us, Dr. Relman.

The more unpleasant part, Madam Chair, is to deal with the written and now public presentation from the Canadian Health Coalition. I will have to deal with the document. As this is now a public document, I personally cannot let this go as it is, and I will have to deal with it page by page.

Do you have your document, Mr. McBane? It is also available on the Web. There is a statement made on page three that intrigues me:

Another member, Senator Yves Morin, is currently mandated by the federal Minister of Health to facilitate the commercialization of health research in Canada, a mandate that is consistent with the fundamental conclusion of the report.

Where did you obtain that information?

Mr. McBane: Your mandate is on the Web site of the Government of Canada.

Senator Morin: I have it here. I will be very happy to read it.

Mr. McBane: The other reason why we wrote that is that it is the published policy objective of the Government of Canada to commercialize research.

Senator Morin: I am very pleased to see I am suddenly the Government of Canada. That is not what the statement says. Let me repeat it. I am mandated, and my mandate is on the Web. I would be very happy to read it:

Senator Morin will advise the Minister and the department on strategic approaches to enhance health research in Canada. Working with Health Canada's Chief Scientist, Senator Morin will contribute to improving communications with researchers in Canada and internationally to raise the profile of health research.

The rest of it notes that I was Dean of Medicine and had a distinguished career. You might disagree with the second part of the mandate.

I see nothing here about this. I am amazed at this.

This is false and unsubstantiated. You could have submitted it to us in a question but you transmitted personal false unsubstantiated information to the media.

This is nonsense. I never had anything to do with commercialization. On the contrary, my wife thinks I should be more involved in it; maybe our personal finances would be better.

Some people do that but I have never been at that end of it. I have always done clinical research and administration. I am flabbergasted. Where did you get that information?

Mr. McBane: If I may, senator, I am not referring to your personal involvement in commercial ventures. I am referring to the federal government's strategic approach, referred to in your mandate, to research in commercialization. I am inferring that is part of your role.

Senator Morin: There are 2,000 researchers right now that are supported by the federal government. Let me tell you very specifically that you have not checked your information and are completely out of the picture. All health research supported by the federal government is supported by CIHR. If you look at the legislation of CIHR you will see that there was a lot of debate on this issue. The major objective of health research supported by the federal government is to enhance the health of Canadians and to improve Canadian health care delivery system.

There was some debate as to whether we should put as an objective the economic development of Canadians. We had much pressure from other individuals, but it was decided not to include that.

Health research supported by the federal government does not have commercialization as an objective, and it is very clear in the legislation if you look it up.

This is completely untrue and I strongly object to this. I am sure Dr. Relman would never have agreed to this had he known. You are actually doing a disservice to the cause you claim to support.

Canada has a strong tradition of left-of-centre activists in the field of health care. You mentioned people like Tommy Douglas and Mr. Broadbent. There are a number of people who were left-of-centre activists in all fields, including health care. They have been extremely profitable for Canada. They would never have reverted to tactics such as this one. I will not write to all the organizations that support you, but I am sure they would never support a thing like this.

I would like to move to another issue. Senator Keon is chair of the Clinical Advisory Board of the WorldHeart Corporation. For Mr. Relman's benefit, Dr. Keon is one of the worlds leading heart surgeons. He is head of the Ottawa Heart Institute; his record as a heart surgeon is outstanding. Comparisons that have made between the various institutions performing cardiac surgery in Ontario have shown that the Ottawa Heart Institute has been way ahead of the other institutions.

Dr. Keon served with great distinction in all the major scientific organizations in this country: the Canadian Cardiovascular Society, which he chaired and also the Royal College. There are great many more. His career is comparable to yours, Dr. Relman. He is also an outstanding investigator. His team of engineers, cardiologists and basic investigators, has led to the discovery of an artificial heart that will save lives as it will bridge the patients waiting for transplant. It is a major discovery. It has not yet been used clinically but the important decision is to have a board that will decide at what point the first patient will receive this artificial heart.

There is a distinguished list of scientists who are part of this clinical advisory board. There are some from other parts of the world, but I will name the Americans. I am sure that you know many of them. There is Dr. Kenneth Franco from the University of Nebraska, Dr. Fraser director of the Texas Heart Institute, Dr. Hunt who is leading of the division of cardiology at Stanford University, Dr. Kormas of the University of Pittsburgh, which is the leading centre in the world for transplantation and artificial hearts. There is a distinguished list. Dr. Young is medical director of the Heart Failure Centre at the Cleveland Clinic and so forth. There are 20 of them.

Dr. Keon chairs this advisory board, which serves an extremely important function of identifying at what point and under what circumstances this first artificial heart should be implanted.

I would like to ask Mr. McBane, in what way this is complimentary to Senator Keon. Did you have another idea in mind?

Mr. McBane: The purpose of the reference to Dr. Keon's involvement with the WorldHeart Corporation is to raise the issue of public versus private in health care. Canadians should have the facts on the table when physicians are involved in certain private market enterprise endeavours. It is basically a statement of fact.

The tone of our brief was motivated, quite frankly, was the tone of your interim report, which was completely—

Senator Morin: Could we move to that matter? I would like you to deal with Senator Keon, please. Do you think that he should not have accepted the position of chair of the Clinical Advisory Board?

Mr. McBane: I am simply stating a fact.

Senator Morin: It is favourable? It is to compliment Senator Keon on being a chair?

Mr. McBane: Some people see is as very favourable. Others are worried about the implications.

Senator Morin: Do you think Dr. Keon is profiting financially from being on that board?

Mr. McBane: I do not know, and in Canada we will never know because there is no financial disclosure.

Senator Morin: Perhaps we can ask.

Mr. McBane: That is not the point that I am raising here.

Senator Morin: It is the point. In a way, this is another private insinuation that Dr. Keon is somehow profiting from being on this advisory board, and he also is facilitating commercialization as I am. In this respect, he should not be part of the committee because he is part of the advisory board.

I would like to move to the tone of your report.

Senator Keon: Madam Chair, could I interrupt for a minute? I did call the editor of the Winnipeg Free Press when this came out. I would like to go on record that I hold no shares in WorldHeart Corporation. I am not paid by WorldHeart. When we presented the program to the Ethics Committee I surrendered the patents that I held as an investigator to the principal investigator. I have no financial interest in World Heart Corporation. I have an interest in chairing the advisory committee to protect the interests of the Ottawa Heart Institute for ethical and quality assurance reasons because it is likely that the first implant of this device will occur at the Ottawa Heart Institute.

Senator Morin: I would like to move to the substance of the report. These are important issues.

We are criticized because we have a list of options. They are possibilities, not probabilities. The last report of Mr. Romanow, which was approved by the coalition, has the same options. You approved of these publicly in the press.

On page 11:

A better solution is to have more resources to deal with the current problems, not by increasing public spending, but by asking individual Canadians to bear greater responsibility for the costs of health care services through options such as co-payments, user fees, taxable benefits or private insurance.

I am not saying that because Mr. Romanow makes out he is in favour of it. We did nothing else, and if you read between the lines that we are favouring one option more than the other, I think you are completely wrong.

My final comment deals with this long dissertation concerning the American nursing situation. There is no doubt that U.S. nursing home situation is abysmal. The quality of care is bad, mainly because the regulation of U.S. nursing homes is terrible, much worse than any other country. I am referencing the last issue of Health Affairs, which is an American journal.

I am surprised we have not addressed the Canadian situation, Mr. McBane. A study from the Canadian Medical Association Journal on May 18, 1999, compares private and publicly owned nursing homes in Canada. They say most of the private and public homes for the aged that were studied delegated care of good quality. There was no difference between those of private and publicly owned nursing homes.

This is a Canadian study.

Dr. Relman: Where was that published?

Senator Morin: I knew you would be here, Dr. Relman.

Dr. Relman: I would like to see the numbers.

Senator Morin: This is in a Canadian context. If you are interested in that, we have a Canadian expert here, Dr. Réjean Hebert, who is head of the National Institute on Aging. He says the situation of nursing homes in Canada is far better than it is in the U.S. In Canada, approximately 50 per cent are publicly owned, while 50 per cent are privately owned. Our regulatory process is very strict, and this is true throughout most provinces.

It is quite different in the U.S. This article points out that the regulatory process in the U.S. is different than in other countries; it is adversarial and so forth and varies from state to state.

I think we should address the Canadian system rather than the system in the U.S. We are obsessed with the U.S. Every time we talk about health care here we cannot have a discussion without mentioning the U.S. We can think for ourselves. I think studying the nursing home situation in the U.S. is irrelevant to this country. We should study the Canadian system.

I cannot understand why we are spending so much time on the U.S. situation, which is completely different to ours. There are a number of experts we can bring here. For example, Dr. Hébert and others from the Institute on Aging and CHIR, who have studied the nursing home situation at great length could advise us on the state of Canadian nursing homes. I am surprised we have not addressed this. I am extremely disappointed.

This is a good morning. We had Dr. Relman come in, which was wonderful, but the rest has been a catastrophe. The worst part is this has become public. It has been in the Winnipeg Free Press and on their Web site for weeks. I strongly object to that.

The Deputy Chairman: Dr. Morin, I would like to comment before the witnesses respond. You are suggesting that persons on this committee have undue influence on the others. If you look at the backgrounds of most of the senators on this committee, we do not fall within the category of sheep following along on the views of others.

This committee is comprised of a wonderful cross-section of society, the exact kind of people who should be addressing the health care study. We have Senator Cook who has worked in hospital administration in Newfoundland and Labrador; Senator Pépin, who is a nurse; Senator Robertson, who was a former Minister of Health in the province of New Brunswick and Senator Callbeck who was the premier and also Minister of Health in Prince Edward Island.

There are senators like myself who do not have any particular background in the medical field but come at it from the viewpoint of a user of the system.

I take great offence when it is suggested that any member of the committee in some way influences the thinking of this committee or any report we put out. Anyone that knows us personally would not ever put us in that category.

Dr. Relman, you wanted to respond to Dr. Senator Morin, so please proceed.

Dr. Relman: Dr. Morin, as usual, is correct when he looks at the American health care system and says many of the problems in quality that a for-profit system has can be attributed, not exclusively but largely, to inadequate regulation.

However, I ask you to take a broader view and go beyond the fact that there is weak regulation and ask, why is there weak regulation. Throughout the American health care system there is inadequate regulation of private, for-profit health care, as well as private not-for-profit health care. In the for-profit system, there is so much money in for-profit nursing, hospital care, ambulatory services, and pharmaceutical services that the regulatory agencies have been co- opted, at times you might say intimidated, by the political and financial influence of the owners.

That is a fact. I do not think you can avoid it in the United States. Remember what ``deep throat'' said to the investigators of the Watergate scandal.

He said, ``Follow the money.''

In the United States, there is a huge amount of money involved in providing for-profit health care. That money in part is used to ensure that regulation is weak. It applies to the Food and Drug Administration. It applies to all sorts of regulatory agencies. I served for six years on a state agency studying the quality of care in Massachusetts hospitals. It is very clear to me that financial concerns play a major role.

Senator Morin, I agree with you. If we did have good, aggressive, unbiased regulation, many of the problems I have talked about in terms of quality would be solved. However, we do not.

Ms Connors: Senator Morin, what I heard you say with respect to the Canadian long-term care situation is that in most cases it is regulated.

Talking to long-term care nurses working in the Province of Ontario, where there has been a deregulation of long- term care, and at the same time a proliferation of building of all new long-term care primarily by the for-profit sector, there are huge issues that are bubbling up. Elimination of minimum required amounts of time for care have been wiped out. The nurses in long-term care facilities, working with nurses' aides and registered practical nurses, are now faced with delivering care to elderly patients with huge and increasing complexity of health care needs, with no regulated minimum requirements of hours in any legislation. The Ontario government wiped that out.

Fortunately, in some provinces that has not happened. However, the issue from a care provider perspective, and I think most important to the person who is needing and receiving that care, is that the regulations are being eliminated. We need to look at the experience of the U.S., because I am afraid we are heading down that track.

We need a strong regulatory framework for not only our hospitals and physician services as covered currently by the Canada Health Act, but when we move on to look at long-term care and home care, which are the future of health care delivery in this country, the regulatory framework must be there. We must look at the experiences of countries where it has not been. That is where our fixation comes from around this issue.

Ultimately, I represent people in the system providing care, struggling with the realities of the regulatory frameworks in which we work. If you have to wrench out a portion of your investment for the profit margin of shareholders, it will mean that there will be less time for care. That is what it has meant in Ontario nursing homes. You can talk to any aide or RPN or registered nurse working in the system and you will hear, time and time again, that this is what is happening.

Mr. McBane: I have a brief response to two points that Senator Morin raised, one of them around nursing homes.

It is true that our brief is inadequate. There are references that should be in there. We have updated some of them on our Web site. There is an extremely important study, much more recent than the one Dr. Morin just provided us, done in 2001 on behalf of a large management consultant firm who did the study; Price Waterhouse. It is on the Web site of the Ontario Association of Non-Profit Homes. It is a very credible study that compared Canada in terms of some of our provinces, including Ontario, with several United States jurisdictions and other countries.

I challenge Dr. Morin's assertion that Canada has better regulation than the United States. The reason we know about abuse in nursing homes in the United States is because in fact they have a better inspection system. We cannot assume those abuses are not going on in our for-profit homes. We are just not looking.

In Ontario, as Ms Connors just mentioned, the Harris government abolished the minimum nursing care regulation for residents. The United States government asked for two hours per resident per day. That is the United States regulation, which Dr. Morin says is very weak. Ontario has no minimum requirement. The Price Waterhouse study found that the average nursing care per resident per day in Ontario, where Extendicare and other companies are providing the services, is 15 minutes.

The Ottawa Citizen of February 20 has a story called ``Long-term care falling apart. Situation becoming critical for elderly in homes.''

We will update our references. It is true that we need to deal more with the Canadian situation. I would encourage your committee to look more at the long-term care situation.

Finally, I have a few words about the options laid out by your committee's report. Do not look at my reaction. I saw the reaction that you received from across the country. I read some of the correspondence you have received from mainstream health research organizations that found that your presentation of the options was biased. They have not said the same about Commissioner Romanow.

The Deputy Chairman: I would be very interested to see what Commissioner Romanow said, in any event, because he did not seem to say much about anything. We are trying to put all the options across for a good cross-section debate on this.

We will make note of the references you made in Ontario. We cannot get hung up on the situation in Ontario. Ultimately, we are trying to deal with this whole issue from a federal perspective. However, those references you made specifically about Ontario are very helpful to us.

Senator Keon: I would like to take advantage of the enormous intellectual wealth of Dr. Relman. I could just repeat everything that Dr. Morin said. I also read every issue of The New England Journal of Medicine for the last 30 years. Dr. Relman, I think I have read most of what you have written. I truly admire what you have to say.

Let me give you a structural framework for your answer. Canada has a health care system that has become a national icon. I think the population at large is absolutely terrified of anyone mucking with it and changing anything. The majority of Canadians feel that way. Paradoxically, we have provincial premiers from Vancouver to Nova Scotia screaming that they are going bankrupt.

We have a tremendous number of services that are not insured and people have to pay for them privately. For those of us involved in health care, we hear individuals who want to get out of having to pay for their sophisticated drugs, for home care that is not covered, for physiotherapy, et cetera.

Here we are at this crossroads where we are pretty well covered for hospital and physician services, although I must say our hospitals depend a great deal on income generation from our rich patients, in other words, from private and semi-private accommodations. All medical services are not covered either. There are some 25 or so services that have been delisted over the past few years.

We have the problem of how to deal with the drugs that are not covered and with people who cannot afford private and semi-private coverage, but who want it for some reason. I must say these are usually covered on a compassionate basis, but the situation is becoming a big problem.

The prevention programs are not covered. Particularly, in cardiovascular disease, it is a tremendous hole in our system now.

We cannot organize primary care because our physician remuneration system does not fit with an integrated team of health professionals; regional clinics; problems with homecare; and, of course, the private clinics that are springing up.

We are just north of the U.S. and rich people who become fed up with the queues in health care services simply go south. They think the system is great because they can receive same-day treatment. They find the American system to be just great. I am told that all the time. On the other side of the ocean, we have the various European systems that are hybrids of the Canadian and the American systems. Most of them work quite well.

It does not seem to be saleable to our federal and provincial governments at this time to come out and say that they have to cover all the costs. Governments believe that would bankrupt the country. Yet, there is tremendous concern, as you have heard from colleagues on both sides this morning, about creeping privatization.

If you were brought in as the ``great consultant'' to tell our federal and provincial ministers of health about how to proceed from this point, what would you recommend?

Dr. Relman: Senator Keon displays the characteristics of a fine doctor; he gets right to the core. He wants to know the problem and how to solve it. That is the way to approach it.

If I had hours rather than a minute or two, I still could not satisfy all the questions that you raise. I can only indicate to you a process by which Canada or any other country in Canada's position might begin to look at the problem.

Everything comes down to money and the services that you believe your citizens must have. The question is: How much money can the nation afford to spend to provide those services that all citizens of Canada ought to have? How much money can we spend? How can we devise a system that provides it as efficiently, as competently and as compassionately as possible?

That will require you to think about overall public finance problems, insurance problems, coverage problems and how much you want to spend. It will also require you, as it will require us in the States, to take a hard look for the first time at the delivery system.

Senator Keon, you and I grew up in a system in which a hard working doctor, who was competent and knew well his or her craft, could go out there as an individual practitioner and only worry about the quality of his or her work knowing that he or she would earn a fair living and the respect and admiration of his or her patients. There was no problem, if you were good, honest and took good care of your patients.

In the United States those days are gone forever. That is why I said: ``I grew up in that good old-fashioned system.'' When people could not afford to pay, you would give it to them for free. Why? Because you did not worry about your income; you had the time and resources to do it; and you knew that you were not about to be killed by the economy that was closing in around you. It was an open economy. That no longer exists.

The only way that good doctoring and compassionate patient care can survive in the new economic climate is by teamwork and by removing all the economic incentives that all providers might have, to provide more than is essential, more than is right and good medically, or less. Remove all the economic assistants and pay good doctors and good nurses for being good professionals. Pay for their time; expect them to deliver a high quality product that meets the highest possible standards; and do not treat their profession any longer as a business. You are right, Senator Morin, at one time it was an honourable, small business. It cannot work that way today because of the limitation of resources and the enormous costs of providing really good care.

We must be extremely wary of outsiders who do not know the health care system and who do not have the overriding professional commitment that professional providers have. We must be careful not to allow those outsiders, who may be investors and honest but aggressive businessmen, exploit the system. I have nothing against businessmen, and if I had the money, I would invest in American business. I do not oppose the business approach, but in health care, I do not see that the purely business approach of investing adds anything.

We have to devise a system that is economical and makes good business sense, but is basically not-for-profit; it is for the people. Doctors and nurses ought to be paid well and receive the respect that they deserve, but they ought to be paid for their effort and not paid on a piecework basis. That is where the future is.

Senator Cordy: I, too, find the document by the Canadian Health Coalition offensive. I do not have a medical background, but I want to let you know that the whole tone of the proposal undermines the hard work of the committee. Indeed, we have worked truly as a committee. I do not think any one would suggest that we are sheep. We have all contributed to every volume of the document that we have been working on.

Ms Connors in your presentation on page six one of your recommendations is to

Spend the money accountably. Attach strings to any money provided to the provinces.

That sounds good in theory, but I am sure you are aware that the provinces hold dearly to the fact that they are in control of health care in the provinces, and they do not like to be told how to spend the federal transfer money.

Could you expand on how that would work, because we should always strive for accountability?

Ms Connors: I have been a nurse for 30 years. When I graduated from nursing, I believed that we needed primary health care reform. Thirty years later I am still here telling committees that we still need primary health care reform. People who care about health care ask why it is not happening. People who have worked in the system have called for this reform.

There are blockages somewhere. There is a lack of political will in taking on power brokers in the system and in multidisciplinary practices and those types of issues.

On the issue of primary health care reform, the federal government put strings on the money and told the provinces if that they did primary health care reform, the money had to be used on primary health care reform and pilot projects had to be put in place. The provinces came forward. Saskatchewan had numbers of pilot projects, which showed unequivocally that this is the way of the future for delivering health care services, not only there but elsewhere in the country. There were strings attached there.

With respect to acquisition of new technology, the federal government put strings on the money by stating the amount of dollars available in a budget line and the provinces could use that money to acquire technology. This has existed.

The provinces are reluctant. We know that provinces take that money and squander it. The first thing that the new B.C. government did in power was give a tax cut to people who probably least require a tax cut. Business and the richer people benefited most from that tax cut. Were they spending the money on new technology?

Strings being attached is the issue. There should be a political will to say that home care programs are a priority. Senator Keon has stepped out to talk about an issue of prime importance. Strings for palliative care could improve how we, as a country, provide care for people who are dying. That kind of leadership could be in place if there were strings on federal dollars flowing to the provinces.

We must go back and consider how we got hospitals in this country. It was because of strings. Every dollar that a province spent on building a hospital was matched with a dollar from the federal government.

As nurses, we have said, from our organization's perspective, for as long as I have been president, which is some 12 years, that sort of program should be in place for long term care and for home care in order to build the infrastructure that is necessary to move beyond the walls of hospitals and to make health care truly seamless. There are ways of getting at it.

The issue of health human resources is primary. There should be strings from the federal government to the provincial governments around available dollars to assist the province in enhancing the need for family physicians, sufficient numbers of nurses and radiation therapists and all the people who are absolutely essential to providing care to Canadians.

The Deputy Chairman: That was a very spirited answer, and a fine president you have been too. I guess you will continue, Ms Connors.

Ms Connors: It is a political issue. It is all related to elections.

The Deputy Chairman: You have the secret, obviously. On behalf of the committee, I thank the witnesses very sincerely.

We will spend the next three-quarters of an hour with the next witnesses from the Federal Superannuates National Association, FSNA. The last time these witnesses appeared was when we were running behind schedule in Fredericton in the middle of a storm with high winds. The association gave us its brief, but, because of time, it was not able to properly verbalize it and now will pick up from there.

I would like to welcome Mr. Heath and Mr. Guy from the FSNA. Thank you for appearing before our committee and giving us a second chance.

Mr. Rex G. Guy, National President, Federal Superannuates National Association: Thank you for giving us a second chance, Madam Chairman. We are grateful for the opportunity to appear before you again.

At the outset I will say that this morning was a very rewarding experience for us. I am glad that we were able to sit through the previous proceedings.

On the discourse between professionalism and medical professionalism, I would like to note that I am here simply because of the medical professionalism of those like Senator Keon, who, two years ago, gave me an aortic implant that saved me from not being able to be here today.

Those honourable senators present at the consultation meeting in Fredericton on November 8, 2002 will recall that for logistic reasons we were not able to make our presentation, although we did table it for your consideration. It is not my intention to repeat what was contained in that presentation. I will, however, expand on points raised in that document and discuss other points. We will be pleased to respond to questions at the conclusion of our brief presentation.

With me is Mr. Roger Heath, a research officer with our association. He has been analyzing the entire debate on the future of our health care system. I am also supported by the association's executive director, Mr. Jean-Guy Soulière and the deputy executive director, Mr. Keith Patterson.

As you already have the background on our association and whom it represents, I will move on.

The majority of our members lived in Canada before the introduction of medicare some 40 years ago. They know and understand the hardships that many Canadians and Canadian families faced.

Many of the individuals who are now crying for drastic changes to the system were born after medicare was introduced. Many of them do not understand the consequences of destroying our system. It is paramount that a comprehensive, efficient and effective public health care system be available to all Canadians now and in the future.

To ensure that we implement a fair, equitable, efficient and effective health care system resulting from the ongoing review, there must be the political will to make it happen. The continuing useless, meaningless and dangerous bickering between federal and provincial politicians must stop. We urge our politicians to rise above who is right, and do what is right.

We have followed the debate on the future of our health care system carefully. We have conducted research in many areas. We have consulted our more than 120,000 members in the 80 branches across the country and we have discussed the issues with the 11 other seniors groups that form the Congress of National Seniors Organizations. The 12 members of the Congress represent approximately 2 million older Canadians.

Based on this, FSNA makes the following recommendations. They are recommendations that will not reorganize the Canadian health system. They are recommendations that are of primary interest to our members. The concerns that our members have expressed to us are represented in the recommendations that we are proposing to you.

The first recommendation is that the five principles of the Canada Health Act be reaffirmed. Those five principles are objectives and, as such, do not prevent innovation or reform, as many have complained. The five principles are to be considered as the basis for policy. They must be uniformly understood across the country and uniformly applied to eliminate what now exists across this country, which is a different medicare system in each province and territory.

There is no doubt that the principles need redefinition to reflect today's context and environment. For example, the term ``medically necessary'' has different meaning in different provinces. This alone prevents a consistent approach to uniform services across the country.

We recommend that more funding be provided to health care. It is our conclusion that Canadians are willing to pay more to ensure a quality health care system. That the funding comes from federal taxes, provincial taxes or directly from individuals is of little consequence. The taxpayer pays for everything. The money comes from your wallet and mine.

However, the money must go to health care, and we must ensure all necessary changes are made to the existing health care system. There are many changes that can be made to ensure savings and efficiencies. I will make a few recommendations on how the system can be made more efficient and how savings can be realized.

We recommend that a universal pharmacare program for all Canadians be implemented. It is our view that the implementation of such a system would save money. It is evident that there could be an increase in government's cost, but the overall cost to those who pay — you and me — we estimate, would be less.

Why is that? If the whole country buys most of its drugs in a coordinated way, very significant discounts could be achieved. The program could encourage practices that would economize, such as reference drug prescribing. Moreover, effective drug use reduces the demand on other parts of the system.

Furthermore, as your committee has pointed out, we have a problem because Canadian governments have little experience with user fees and mechanisms that truly integrate public and private insurance. Private insurance and user fees for drugs are common in Canada. A national pharmacare program could give us experience in such arrangements.

We recommend that home care be made a part of the Canada Health Act. Like pharmacare, some provinces provide home care to some people, and some provinces do not. Again, this illustrates how the current principles of the Canada Health Act are interpreted differently and raises the issue of equitable services for all Canadians.

The restructuring of health care in the 1990s and the ever-growing practice of early discharge from acute care hospitals has resulted in an increased demand for home care. In spite of this, home care has not received sufficient funds to keep up with the hospital discharges. The current investment in home care is woefully inadequate.

Government funding for home care would be seen by many as replacing private funding, and this is a consideration. Let me quote from a recent presentation made by the Congress of National Senior's Organizations, of which, as mentioned earlier, we are a member.

The Congress of National Senior's Organizations a couple of weeks ago told the Romanow Commission that:

Home care and home support services help seniors maintain their independence. These services delay and even prevent institutionalization while promoting the social integration of seniors. Home care can contribute to lower costs for the health care system by reducing pressure on acute care beds for convalescent patients by reducing the demand for long term institutional care by allowing some aging Canadians to maintain independence and dignity in their own homes, and by allowing palliative care patients to spend their final days in the comfort of familiar surroundings.

We recommend that as much emphasis be given to healthiness as is given to health care. Healthiness, as your reports demonstrate, requires more than a well run health sector and involves more ministries than that of health. Education can impart valuable life skills that will support individuals for decades. Community programs for elders can prolong independent living.

Even in its narrow definition, health care is linked to decisions that are sometimes beyond the control of the health sector. For instance, easing of drug advertising rules now under consideration by the federal government could have a very significant impact on drug costs, especially for out-of-pocket household expenses.

Were health care imperatives properly coordinated in the system, rules that limit the advertising of prescription drugs in Canada would not be eased, and American advertisements would be blocked from Canadian cable television. FSNA strongly supports the committee's comments on the need for better coordination among departments and the public on health care issues.

In conclusion, health care is currently a topic of discussion in almost every household in Canada. We are subject to daily bombardment by news media reports predicting the end of the health care system. These reports claim, on one hand, that the system is in crisis, and on the other hand, that it is not. The reports claim that the provinces will go on their own and that we cannot afford the health care system. All these are, to say the least, confusing and terrifying to most Canadians.

There is need for order and objectively in the debate. Your committee has tried to achieve this and we are grateful for that. Canadians must receive correct information if they are to participate actively and purposefully in the debate.

Again, I thank the committee for inviting us to be here today. I would like to add one last thought.

Everyone who has followed the work of this committee must be impressed by the quality of most of the submissions that were made. There is a great deal of commitment, understanding and common sense outside the health sector. Moreover, the committee's pessimism about the prospect of achieving significant efficiency gains stems not from its impracticality but, in part, from the attitude and behaviour of those with vested interests in the health care system.

The Federal Superannuates National Association strongly urges this committee to recommend mechanisms for continued public involvement in health care policy. Giving people the opportunity to defend their interests may be the only way to break the present impasse.

We are ready for questions.

Senator Morin: I have two questions. You recommend, as have many other organizations, that we should have a national pharmacare program and a home care program. I understand that you also recommend that we abolish user fees in those areas. This would mean that we would have first-dollar coverage in both. We have first-dollar coverage now for hospital care and physician services. We would then have first-dollar coverage in two additional areas that are not covered by medicare: pharmacare and home care. We would have first-dollar coverage for the entire spectrum of the health care delivery system. No other country in the world has done that.

There is nothing wrong with that, but our current spending for our health care delivery system is such that approximately70 per cent comes from public funding and approximately 30 per cent is from private funding. The highest percentage spent from public funding is found in Sweden, at about85 per cent. If we adopted such a system, we would have100 per cent public funding, which would be an extra $30 billion dollars per year. Did you consider the increase in taxes if there were to be a sudden jump in expenditures of $30 billion per year? That would be the difference between 70 per cent and 100 per cent public funding.

You said, with reason, that we have a mosaic of health care systems that varies from province to province. The coverage is different in each province, and we do not have portability. What is your answer to that? Do you believe that the federal government should have an increased role to play in our health care system? The federal government currently influences through its funding to the provinces. Do you believe that it should have a different role to ensure that the health care system is similar and portable from one part of the country to the other?

Mr. Roger Heath, Research and Communications Officer, Federal Superannuates National Association: The first question concerns user fees for pharmacare and home care. We consider that users currently pay for pharmacare and many of them have private insurance. For example, many of our members belong to the Public Service Health Care Plan, PSHCP, and receive their insurance for drugs through that plan.

We consider this an opportunity for Canada to experiment with mixed funding. There is an axiom in medicine, ``do no harm.'' If we increase public support but do not diminish user fees for some of the people, then we have done no harm because some people are better off. The main reason we are focusing on pharmacare and home care is that we believe a properly organized system would cost the country less and would deliver better pharmacare and better home care at less cost. Again, there is an elementary principle in public policy: If you have an alternative that improves the situation and costs less, those are strong arguments. I believe there were comments in your fourth report that indicated public systems do cost less, in general. If you want, I can speak to our analysis that shows both of these programs would clearly cost less and yet deliver better medical care.

On the provincial mosaic, we strongly believe in the five principles. One of those is universality. Canadians do not now enjoy the same health care in every province. In fact, one of the major determinants of pharmacare coverage is what province you live in. That is the same with home care. We feel that only by putting these spheres under the Canada Health Act can there be equal access and equality throughout Canada.

Yesterday, Ms Monique Bégin, former Minister of Health, pointed out that federal leadership in terms of increased funding is necessary for the health care system. I would argue that this federal money, as the nurses pointed out previously, could be tied. It is acceptable to the provinces that money be tied. It could make national pharmacare and national home care possible in a national way, not necessarily a federally dictated way, to define what is medically necessary. The three elements covering the most important elements of modern medicine and defining ``medically necessary'' and ensuring it is delivered, perhaps with time standards in some cases, would bring about the kind of health system that Canadians want.

The Deputy Chairman: Would you support that strings be attached to some of the programs?

Mr. Heath: Yes, most definitely.

Senator Fairbairn: In your short and to the point brief, you have probably touched the essential elements of our efforts better than many others have done. I think it is because you are so connected with the people you represent, and they are so single-minded and persuasive in what they have telling you.

I would like, for a moment, to touch on your comments on health care. As the Deputy Chairman said, some committee members do not have medical backgrounds. However, in the case of all members, we are users of the system or in a position to be assisting others who are users. My own case includes a relative who is 91 and is still quite keen on playing the best role and having the best life that she can, which requires some of the extended health care that you talked about. Home care is currently one of the more difficult issues, and yet one of the areas that presents the biggest opportunities for helping people.

We talk in terms of more funding and that is obvious, in whatever way that occurs. I would like your view on something that I have observed in trying to assist my aunt to access home care. In many ways, it is not a case of its not being there. The difficulty is in accessing what is available.

There always has been home care of some sort. However, now it is a vitally important part of the health care system due to the changing role of hospitals and doctors and the greater focus being placed on active care in the home. My experience has been that the system that is being developed is not integrated. There is a lack of communications between the various levels of those who trigger home care into happening, from the hospital to the doctors, the assessors and the people who actually come in and do the job. That is one of the key things that is impeding older Canadians from accessing the system even though the components are there and people are willing to do the work. Very often a lack of communications at the various levels is making it exceedingly difficult to get to the point where someone actually comes in and helps.

Is this something that is being reflected to you from some of the people whom you represent?

Mr. Guy: It is very much a concern. May I thank you for your kind remarks at the opening. We do indeed stay in touch with our people across the country. We have 80 branches that hold regular meetings and these topics are very much discussed there, as well as in Ottawa at our annual convention.

As your deputy chairman will attest, there was a great emphasis on health care at our convention in August. We are still getting complimentary reaction to the presentation that the deputy chairman made to that convention.

The Deputy Chairman: Thank you very much.

Mr. Guy: Going on to the matter of home care, I am from Nova Scotia and that is a burning question there, as are other things.

As an aside, the pharmacare system in Nova Scotia was tinkered with just two days ago by changing some of the qualifications and putting up the price that the individual senior has to pay to be part of it.

We belong to a private medical insurance, albeit the Public Service Health Care Plan. We are part of the governance of that plan. There are three parties that govern it and we are one of the parties. I think I am safe in saying it is one of the largest plans in the country. Because we have that in Nova Scotia, we are precluded from any participation in pharmacare. We were thrown out a couple of years ago because we have private insurance that includes a drug benefit and so the seniors pharmacare is no longer accessible to us. That has nothing to do with the question you asked.

Senator Fairbairn: It is interesting.

Mr. Guy: The matter of home care in Nova Scotia is very complex and complicated. I think I had the same experience as you in trying to get it for a member of our family. My father-in-law needed it a few years ago and my wife was an organizer for this, being the eldest of the family. There are tremendous contortions you must endure in order to get any home care, even to the extent of giving up ownership of your home to pay part of the costs. It is a very complex situation in Nova Scotia as, I suppose, it is in every other province.

Senator Fairbairn: There is one comment I would like to make which may resonate with you. In the maze of trying to find your way to access, the one thing that I did discover was that the telephone book does not help much any more. People who have grown up with the notion that it was a complete guide from A to Z now find there are purple or green pages that tell you where home care is, except it is not called that. You almost have to be psychic to find your way through to assist your family.

Mr. Guy: Another great concern about home care to those in Nova Scotia is that when it is decided home care will be provided, you can be sent 300 miles away for that home care and you are isolated from those who you need to support you.

Mr. Heath: FSNA has organized a home care/facility care insurance for its members. This was the first such insurance offered in Canada. Fifty per cent of our 120,000 members asked for detailed information. This shows that it is a burning issue among retirees, not just seniors. Five per cent have applied and about half of those are now insured. The insurance for different prices covers home care only, home care and facility care, or facility care only. The home care options are by far the most sought after by our members.

About the complexity, the insurance company does not want to pay on the member's behalf for services that governments will provide. When a member is being assessed to benefit from the insurance, the company assigns a local nurse agent to untangle the web of available assistance.

Some of our members have commented that two things have opened their eyes about the insurance. One is attending meetings to really understand current information on home care and institutional care in their province. The second is to see the difficulties and need for expertise in accessing what is actually available. As you pointed out, it is not easy. I do know that some provinces are making moves to try to improve access, but, again, it is not uniform. A national program, with well understood principles expressed in a set of understandable rules, would do much to ensure Canadians could access the home care their taxes are paying for.

Senator Fairbairn: That certainly does not answer the ultimate question. However, it is an area where our final report could be very helpful. Even if we do not have the answers, at least we could try to promote some guidelines because the situation is so uneven across the country.

Even within the areas where people may have the systems and may have more financial advantages than others, it becomes moot if you cannot follow the path to get where you want to be. It is a major concern and a frustration that there is something there to benefit your family member or yourself, as the case may be, but you cannot find it easily. That, to me, is very frustrating in a national health care imperative.

Mr. Heath: Yes.

Senator Cook: I was in your province and was sorry that we did not hear you, but I did read your brief. I am pleased to see you here today.

On the bottom line of page 4 in your brief you mention that home care should be made part of the Canada Health Act. What about nursing homes in that context, or are you including nursing homes when you say home care?

Mr. Heath: The recommendation is really for home care. That is where our members expressed most interest. That is about as much as we thought we would get, so that is where we went.

Senator Cook: Do you have an opinion as to where nursing home care might fall into those principles, given that we are an aging population and are living longer? Statistics tell us that we will become elderly and then frail elderly.

Mr. Heath: Our position reflects two things. It reflects the focus on home care of our members. There is an outdated picture of a senior as being a frail, elderly person who cannot manage for himself or herself. Our members are not that way.

In fact, you can consider the whole idea of a healthiness push in terms of treating chronic conditions so that they do not result in disability and enfeeblement and eventually institutional care. Most seniors and most of our members are interested in maintaining their health and maintaining their independence. That means staying at home. That is why we emphasize things that way.

As to the other part of your question, if pushed, yes, we believe in equality of treatment. We think that this can only be achieved by including all necessary parts of health care under the Canada Health Act so that there are principles and mechanisms to achieve those principles.

Senator Cook: Conceivably one would progress from home care to nursing home care —

Mr. Heath: — and then to institutional care, yes.

Mr. Guy: As a an addition to what Mr. Heath said about the present day senior being a vibrant, energetic individual, I would like to repeat something we frequently say during discussions such as this. The day is rapidly approaching when every senior in this country will be computer-literate.

The Deputy Chairman: It is important to continue the quality of life as well.

Honourable senators, on behalf of all of us, I would very much like to thank Mr. Guy and Mr. Heath. We appreciate their return to the committee to not only be seen, but to be heard.

The committee adjourned.

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