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Speaking Notes

for the
Honourable Senator Michael Kirby, Chair
Honourable Senator Marjory LeBreton, Deputy Chair
Honourable Senator Wilbert Keon
Honourable Senator Yves Morin

Release of Volume Six of  

The Health of Canadians – The Federal Role: Recommendations for Reform

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

October 25, 2002

Check against delivery

Good morning everyone and thank you for joining us.

Let me begin by introducing my colleagues, all of whom were very actively involved in developing the Recommendations for Reform document we are releasing today: 

We will each deliver brief opening remarks.  Then, we will open the floor to your questions. 


            The report we are releasing today is the culmination of two and a half years of study by our Committee.   We have heard from more than 400 witnesses. We have seriously considered their views and we thank these witnesses for helping us in our work.


      The recommendations in this report reflect the unanimous  opinion of the eleven Senators on the Committee:  seven Liberals, three Progressive Conservatives and one Independent.  Collectively, Committee members bring tremendous depth and breadth of experience in both public policy and health care.  I want to acknowledge the valuable contribution made by all members of the Committee.


      Six months ago, in Volume Five, the Committee gave its diagnosis of the state of health care in Canada.  We listed twenty principles for renewing the Medicare system that Canadians tell us they cherish. These principles are reflected in the recommendations we are releasing today. 


In Volume Five we also stated that Canada’s public health care insurance system is not  fiscally sustainable as it is presently structured.  We said therefore that ultimately, Canadians will need to balance their desire for more and better health care services against their willingness to pay for them. 


      Our opinion has not changed.  Medicare needs to be restructured to make it more efficient and effective. But restructuring costs money.  Hence, any new money for heath care cannot, and must not, be used to fund the system in its present form. 


      New federal funding  must buy change.


      Today, we are here to tell Canadians how the health care system should be reformed, how coverage should be expanded, what reform of the system will cost them, how we believe the money should be raised, and what the consequences of inaction will be.


      First, the cost.  The Committee estimates that Canadians need to contribute an additional $5 billion per year to health care in order to make the publicly funded system  fiscally sustainable well into the future. 


We explored a large number of different methods for raising the extra revenue. We are recommending a National Health Care Insurance Premium that varies according to an individual’s taxable income bracket.  In dollars and cents, the premium would amount to 50 cents a day for taxpayers in the lowest income bracket.  People whose taxable income is more than $103,000 would pay about $4 a day.


      Some will call this another tax.  We see it differently.  We look at it as a much-needed investment that will breathe new life into a public health system that is straining to keep up with increasing demands and, as a result, is not providing timely patient service.


      Let us be clear – these new revenues will be earmarked and dedicated.  The money will be spent on the health care of Canadians and health care only.  And under our proposal, the Auditor General would report annually to Canadians on how their health care dollars are being spent.  This will make the process transparent and accountable.


      Among other things, the recommended new money will permit governments to finally address the waiting time crisis in health care.  Canadians should not have to wait excessive periods of time to receive medically necessary services.  But they do, and sometimes, with tragic results.


      We recommend a practical solution – a Health Care Guarantee.  If you cannot receive proper medical care within a clearly-specified, clinically determined waiting time, government should pay for you to immediately receive the procedure or treatment in another province or even in the United States. 


      I will now turn to my colleagues to highlight some of the other significant reforms in our package.




            Thank you Senator Kirby. 


            Along with timely access to quality health care, another cornerstone of Canada’s Medicare system is the principle that no Canadian should suffer undue financial hardship because they have to pay health care bills.  It is a principle that our Committee holds dear and that virtually every Canadian considers part of his or her birth right.  Yet, for far too many people in this country, this fundamental principle rings hollow.  The gaps in Canada’s publicly funded health care safety net are growing wider and an increasing number of Canadians are slipping through them.


            Runaway prescription drug expenses pose one of the greatest threats.  Right now in Canada, there are roughly 600,000 people who have no protection against so-called catastrophic prescription drug costs: cases in which the total cost of an individual’s prescription drugs exceeds $5000 per year.    


            One of the most heart-wrenching stories we heard was about a resident of Atlantic Canada who is in a life-and-death struggle against pulmonary hypertension and needs a drug called Flolan to stay alive.  Flolan does not come cheap.  The medication – along with the peripherals needed to administer it, other necessary drugs and oxygen tanks – costs more than $100,000 a year. 


The patient and her family are currently paying $55,000 – more than one-half of the total bill.  Her dosage is expected to be increased in the next year and that will spike the family’s share of the drug bill to more than $60,000 a year. 


You can see what we mean by “catastrophic” drug expenses.  The biggest injustice in all of this is that this family can not receive government help until every last penny of their life savings has been used up, including RRSPs.


            It is wrong that any Canadian should have to sacrifice their entire nest egg just so they can purchase the medicine they need to stay healthy and, in some cases, to stay alive. 


To reduce this gap in the safety net, we recommend that an individual’s out-of-pocket expenses for prescription drugs should be capped at 3% of his or her family income. And that the federal government should cover the lion’s share of drug costs  in catastrophic cases.


            We also believe that our public health insurance system should be expanded to cover post-acute,or post-hospital home care.  Home care costs that are incurred as a direct result of hospital treatment should be publicly funded under Medicare the same as they are during an individual’s stay in hospital. 


The Committee recommends that Ottawa and the provinces establish a National Post-Acute Home Care Program and finance the cost on a 50-50 basis.


In addition to being good for patients, this program will make the hospital system more efficient, as it will encourage the movement of patients out of expensive hospital beds into less costly home care.


            We believe that much more needs to be done to care for people at the end of their lives.  According to recent studies, the overwhelming majority of Canadians would prefer to spend the last days of their lives at home, surrounded by loved ones.  Unfortunately, more than four out of five Canadians die in hospital. 


We recommend that the federal government make a substantial contribution to ensure that proper palliative home care is available to all Canadians so that they may spend their final days at home in comfort and with dignity, if they want to.  Once again, the Committee recommends that this expanded coverage be funded jointly by the federal government and the provinces on a 50-50 basis.





Thank you, Sen. LeBreton.


            As we stated in Volume Five, an efficient health care delivery system rests, above all, on an infrastructure that is consistent with technological progress, and that, at the same time, responds to the needs of the population.  We know that Canada is experiencing critical needs in this area.


The Committee believes that the federal government must play the major role in maintaining Canada’s health care infrastructure.


            At the center of this infrastructure are the Academic Health Sciences Centres, the national network of 16 medical schools and their associated teaching hospitals.  They are a key part of this country’s health care delivery system. As such, they should be regarded as a national resource. 


Sadly, however, for too long, these facilities have been saddled with outdated facilities and equipment.  They need modern, leading-edge technology and, in many cases, they need new facilities.


The Committee therefore recommends that the federal government devote
$2 billion over 5 years for the financing of technologies for Academic Health Sciences Centres and $4 billion over 10 years for capital investment in these centres.


            But the latest in equipment addresses only part of the health care infrastructure “deficit.”  Canada needs to develop vastly improved health care information systems and its major building block, the Electronic Health Record.   


The Committee recommends that the federal government commit an additional
$2 billion over five years to the development of a national system of patient Electronic Health Records and health care managements information systems.


Our health care system is lacking for doctors, nurses and other health care professionals.  Canada needs a national strategy to make our country self-sufficient in health human resources.   To this effect, the Committee recommends that the federal government allocate over $250 million each year.


            A sustainable health care system is about more than what happens in the doctor’s office.  It’s also about the benefits of healthy living and minimizing the need to use the health care system.  The federal government can and must play a leadership role in fostering a wellness policy.  We recommend that the government should provide additional funding for health promotion and health protection and to prevent chronic disease and injuries.





            Thank you Sen. Morin.


            As Sen. Kirby stated at the outset, new federal money given to the provinces and territories must buy change or reform; it must not be used to support the publicly funded health care system as it is now structured. 


Medicare needs an overhaul.   Just throwing in more money will not solve the problem.  The status quo must not be an option.


            Our report calls for major changes to Canada’s hospital and doctor system – from the way it is funded and structured to the way it operates.  We believe that incentives must be created for everyone in the health care community – hospital administrators, health care providers, governments and yes, patients – to operate and use the system more efficiently and effectively. 


            One essential reform is a shift away from the current lump sum or global funding method for hospitals to a service-based model.  Service-based funding would deliver several benefits including:



·        A sharper focus to the delivery of patient services

·        Incentives for institutions to improve efficiency and performance

·        Healthy competition between institutions to provide the best services

·        The establishment of “centers of excellence”, to name a few.

            The reform of primary health care delivery must include the creation of primary health care teams.  These primary care groups would operate 24/7; they would be multi-disciplinary in character and would provide a range of medical services; primary care physicians would be paid primarily on a capitation basis (a fixed annual amount for looking after a given patient), rather than by the current fee-for-service method. 


We believe that patients and their health care providers both stand to benefit from the introduction of primary care teams.  Patients will enjoy continuity of health care, a kind of “one-stop” shopping for all their primary health care needs.  Doctors, nurses and other members of the team will be able to use the full range of skills for which they have been trained.


            The Committee also believes it is time to end the “command-and-control”, top-down approach to health care decision-making.  It is time to give regional health authorities more responsibility and authority for the full range of health care spending in their regions. 


            Finally, how will Canadians know if reform is working; if the system is more efficient; and if we are getting the medical care when we need it? 


            We believe that someone totally independent, outside of government should be given the responsibility of answering these questions for Canadians on an annual basis. It is the only way to ensure that the system is truly accountable and that the evaluation of the performance of the health care system is credible with Canadians. 


The Committee recommends that a Health Care Commissioner be appointed to monitor the progress of health care reform.  This individual must have a national, not federal, mandate and complete independence. Then governments will have to become more accountable for the money they spend on health care and the results they get for the money spent. Increasing accountability and transparency are essential if Canadians confidence in the health care system is to be restored.





            Thank you, Sen. Keon. 


            I would like to conclude these opening remarks by saying that the Committee’s prescription for fixing Medicare opens a real window of opportunity for implementing the kind of reform that will ensure the sustainability of publicly funded health care in Canada over the long term.  As well, all of our recommendations can be implemented without any changes to the Canada Health Act.


            Now, I’m sure some of you are wondering “What if?—what if Canadians take a look at the Committee’s report and decide that they are not prepared to pay the additional $5 billion in federal revenue as we recommend – then what?”


            We regret to say that there will be very serious consequences.  What are they?:



o       public health insurance will not be extended to cover catastrophic drug costs, post-acute home care and palliative home care.


o       the savings from reforms to the hospital and doctor system will not be realized.


o       the needed investments in health care technology, human resources and research will not be made.


o       the Health Care Guarantee will not be put into place.  We will face longer waiting times and more crowded waiting rooms.

            Not  pleasant thoughts.


            In these circumstances, the Committee has concluded that it is highly likely that the courts will decide that, since governments will not ensure that patients get timely access to health care, then Canadians can no longer be denied  the right to purchase private health care insurance to pay for and receive services that ought to be provided in a timely manner by the publicly funded system. 


            In the face of such a court decision, it will be just a short time before a parallel private health care system emerges – a system that neither Canadians nor the Committee want. This is the inevitable consequence of failing to reform the system now. That is why I said at the beginning of my remarks, the time has come where Canadians must balance their desire for more and better health care services against their willingness to pay for them. The choice is theirs.


            Thank you.  We are ready to take questions.

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