Madam Speaker, I would like to thank the leader of the third party for setting forth in his party's motion a proposal which I would qualify as almost perfect, almost perfectly wrong that is. The proposal demonstrates clearly that Reform Party members do not understand how the Canada health system functions, what challenges it faces, what is being done to address those challenges, and what solutions are realistic and make sense to Canadians.
In his medicare proposal and in his pronouncements on the Reform Party's views, the leader of the third party has managed to put together a package that will simultaneously increase bureaucracy, decrease flexibility, maximize federal interference in provincial jurisdiction and most of all, increase the cost of health care in Canada.
How would the Reform Party pay for this? It is simple: It would push people into buying private insurance, if it is available and if they have the money for it, to cover things which are presently covered by medicare. Worst of all, it would tax the sick by permitting and even encouraging user fees.
The Reform Party proposal and pronouncements are not a prescription for a healthy medicare system. They are a prescription for disaster. Before dealing with the specifics of this motion and of Reform's thinking on medicare, let me question the proposals of the Reform Party.
Reform's so-called budget proposed surrendering additional tax points to the provinces for health care. How precisely does this square with its concern about a falling federal share of cash contributions? Certainly not well at all. How would the Reform Party deal with the fact that tax points yield different revenues in each of the provinces? It obviously has not thought of that.
How would that party enforce the conditions and criteria of the Canada Health Act? It certainly appears it would not.
What, if any, evidence do members of the Reform Party have to support their expectations that provinces would agree on a common level of basic or core health services everywhere in Canada as they state they would on page 48 of their so-called budget? Are they not aware that a number of provincial ministers of health have already indicated that such an approach is simplistic and they have no interest in developing a national list?
Which is the federal role? To determine core services, as the motion states, or to have provinces agree on a common level of core services as stated in Reform's so-called taxpayers budget? How would the leader of the third party coerce the provinces?
The Reform Party obviously has no answers for these questions. That is the reason its arguments have no basis in fact and are almost perfectly wrong. It is soapbox rhetoric which could lead to the destruction of medicare, and we are not going to have any of it.
Take this motion, for example. In dealing with federal contributions to provincial health insurance plans, the hon. member mixes apples with oranges. He does it all the time, so this is nothing new.
The federal share of funding for health care was never 50 per cent of total provincial government health expenditures. As a result of cost sharing during the 1960s and early 1970s the federal share nationally accounted for roughly 50 per cent of provincial expenditures for hospital and medical care only. Even then provincial governments were spending on health programs for which the federal government did not share costs.
Let us look at some real numbers, not those fabricated by the Reform Party. In 1975-76 after medicare was introduced the federal contribution nationally amounted to 39 per cent of total provincial health expenditures. In 1992-93 the federal contribution, the sum of the cash in transfers to the provinces for health, represented 32 per cent of total provincial government health expenditures.
Another way to look at the numbers is to examine the federal share of total health expenditures in the country. On this basis the federal share dropped from 31 per cent in 1975-76 to 24 per cent in 1992-93.
Let me repeat it again, so that, hopefully, Reform members will understand eventually. In dealing with federal contributions to provincial health insurance plans, the Reform Party leader is mixing apples with oranges. The federal share of funding for health care was never 50 per cent of total provincial government health expenditures.
As a result of cost sharing agreements reached during the sixties and the early seventies, the federal share nationally accounted for roughly 50 per cent of provincial expenditures for hospital and medical care only. Even then, the provincial governments were spending on health programs for which the federal government did not share costs.
Let us look at the real figures, not those fabricated by the Reform Party. In 1975-76, after medicare was introduced, the federal contribution nationally amounted to 39 per cent of total provincial health expenditures. In 1992-93, the federal contribution, that is the sum of the cash payments and tax transfers to the provinces for health, represented 32 per cent of provincial government health expenditures.
These are all real and public numbers. They should be the Reform's numbers because they are the facts.
Provinces administer the health care system. I want to make it clear and acknowledge in the House what I have said elsewhere. Provinces and territories are doing a good job of containing costs but historically the costs of provincial health plans increased in a less controlled manner. It is in part because of this that the federal share of health expenditures has fallen over time. If health costs had risen at the average rate of OECD countries the federal share would be substantially higher.
Expenditures in the public sector are being controlled. Our cost control problems are now in the private sector. Pray tell, why would we shift more to the private sector so we can have even higher and less control of costs?
In 1993 Canada spent $72 billion on health care. This represented 10 per cent of our gross domestic product. Hon. members are aware that with the exception of the United States, Canada's health expenditures are the highest of any industrialized nation.
There is enough money in the system. It is a question of how better to spend the money we have. Of the $72 billion spent in 1993 approximately $52 billion was spent in support of public health services while the other $20 billion was spent in the private health sector. Lately the public component has been growing at less than 2 per cent. On the other hand, private health spending has been growing by more than three times that rate.
The public sector or single payer system has enabled the provinces and territories to better control the rate of increase in the growth of health expenditures in the public sector. The World Bank's 1993 world development report noted the cost effectiveness and control advantages of public sector involvement in health: "In general the OECD countries that have contained costs better have greater government control of health spending and a larger public sector share of total expenditures".
The OECD review of health reform and development in Canada also recognized the advantage of a significant public sector involvement in health. From the 1993 OECD economic survey of Canada: "The structure of Canada's single payer health system lends itself to effective supply management and control. It seems the problems of the current system are not related to its publicness".
With respect to health expenditures in 1994, preliminary estimates by my officials indicate public health expenditures declined in aggregate by about 1 per cent in 1994, while private expenditures increased at about the same rate as 1993. Under these assumptions total health expenditures in 1994 were approximately $73 billion for an aggregate increase of less than 1 per cent, or about $600 million. Expressed as a percentage of GDP, total health spending probably declined to about 9.7 per cent in 1994.
There are a number of reasons we have been more successful in controlling health costs in the public sector than in the private sector.
We have in each province a structure which provides the same coverage to everyone. It is not necessary, therefore, to assess individual risks. Payments to providers are made in a simple but efficient manner. Financing of the system is simple; everything possible is done to reduce costs. In fact, researchers from Harvard University found that Canada only spends 1.1 per cent of its gross national product on health care management.
If we spent as much as the United States do on that, health care expenditures would increase by $18.5 billion. Americans spend almost two and a half times as much as we do on that. And there is no evidence that spending more would improve the health of Canadians.
The second reason we are in a better position to control costs is that there is only one purchaser in our provincial health insurance plans. Governments have great clout when it comes to negotiating the level of costs of services. They can set overall budgets for hospital and physician services. In fact, they have done so, as indicated by the figures I quoted.
As Minister of Health I want Canadians to continue to have access to high quality health care at a price they can afford. That is why I am working with my provincial and territorial colleagues as well as other stakeholders to address cost drivers in both the public and private health sectors. So much for the first part of Reform's motion.
Let me now deal with the second part which calls for a listing of core services. There is a remarkable degree of congruence between the provinces. Among them there is broad agreement as to what constitutes the core of ensured physician and hospital services. There are some differences from province to province
but these simply demonstrate the flexibility which provinces can and do exercise in providing a range of additional benefits to their residents. That is not wrong. That is a strength of our system; a system characterized by sound consensus on what are core services or medically necessary services.
The list of covered procedures and services of necessity must be flexible. That is because the way we deliver health care and the opportunities which new technologies and procedures create dictate changes need to be incorporated over time. There is almost no service not medically appropriate in some cases.
For example, plastic surgery may be considered medically necessary when it is intended to correct a medical condition. Reconstructing a nose to correct a breathing problem is labelled cosmetic surgery but clearly it is a medically necessary procedure.
Other examples include removal of minor skin lesions when cancer is suspected and tattoo removal in the case of abuse or prisoner of war experiences.
For the most part in Canada we have left the definition of medical necessity to professionals, not bureaucrats. The medical necessity of a service is determined at the point of delivery of the service. That is what the Canada Health Act has allowed. It is based on the medical needs of the patient, not the financial means of the consumer. That is the way it should be; this is simple fairness.
Canadians do not want cash register medicare. This stands in sharp contrast to what is happening with managed care in the U.S. There, third party insurers tell physicians what they cover and what they can or cannot do for their patients. So much for clinical freedom.
This reality is one of the major reasons why a significant portion of doctors who leave Canada to practise in the U.S. do come back home.
The Reform Party says it stands for smaller government, less bureaucracy. Therefore I find it strange it is suggesting a process that would actually increase bureaucracy. Let there be no doubt, producing the list of medically necessary or core services would involve more bureaucracy.
Medical necessity is an integral part of the understanding and operation of the Canada Health Act. It is at the very heart of the principle of comprehensiveness.
In the Canada Health Act the words medically necessary are used in conjunction with other conditions. This ensures that once a service has been determined to be medically necessary and insured by provincial health insurance plans it is accessible in uniform terms and conditions by all residents of the province and available to them when they travel across the country.
In a manner of speaking, these become rights of Canadians. These are rights the Canada Health Act is there to protect. Canadians expect they will have medically necessary services available without point of service charges. They are right in this expectation. This is why facility fees for medically necessary services in private clinics are unacceptable and why I took steps to address this problem in January.
A rigid list of medically necessary services encourages the development of a second tier of health care delivery. It promotes privatization and shifting the burden of costs from society to individuals. These costs would then be borne by patients or by their employers.
Reformers, who profess to know what is good for business, should ask business people what they think about this idea. Let them talk to the owners of small businesses, the independent entrepreneurs who account for so much economic growth in our country, who have tried to buy insurance to cover the health cost of their employees. They know how costly it is already and they appreciate how much more expensive it would be if they had to cover more services and medically necessary services as well.
I ask Reform Party members, in particular the member for Macleod who is a physician, to tell us which services they think are not medically necessary, which services they think should be deinsured and which services they think individual patients should pay for.
Even the premier of Alberta is unable to provide a list of what these should be. The government's agenda is a national one. It is aimed at doing what is necessary to renew our health care system to make it more efficient and effective. It is an agenda based on better health outcomes, not better incomes.
The motion before us urges me to consult with provinces. Since becoming Minister of Health I have made it clear I want to work with provinces and territories and I have. I have met my provincial colleagues. I talk to them on a frequent basis. We have arrived at a consensus about the need to support the principles of the Canada Health Act. Perhaps he should consult with more provinces than he has.
I am prepared to continue this collaboration. Our next regular meeting is scheduled for September, but I have already told the provinces that I am ready to meet with them earlier. There is no lack of willingness by this government and this minister to work with the provinces, the territories and others to ensure that Canadians continue to have the very best health care system in the world.