FEBRUARY 28, 2007


BC health: is the sky really falling?

There's more fiction than fact in ominous predictions

The headlines about British Columbia's healthcare system over the past few weeks have been nothing short alarming: massive budget overruns, a health authority chief fired, another health chief quitting in protest, reports of patients sleeping in closets and nurses' lounges.

Is it as bad as it sounds? Is BC's healthcare system really headed for a financial crash — a jump from the current 41.6% share of the province's budget to a whopping 71.3% portion by 2017-18 — as provincial finance minister Carole Taylor has insisted?

Not everyone agrees with her predictions. "It's nonsense," says David Schreck, former NDP MLA in North Vancouver-Lonsdale and an active political blogger. But Ms Taylor has the cold, hard numbers to back her up, right?

Not so, according to BC political consultant and journalist Will McMartin. Mr McMartin's diligently researched accounts of what he calls "Carole Taylor's false alarm," published in the independent newspaper The Tyee, reveal a surprising and crucial detail about the projected rise in healthcare spending: that 71.3% figure is a proportion of the government's overall spending, which has been decreasing steadily as welfare costs have decreased. That doesn't remotely amount to proof that healthcare costs are spiralling out of control, reports Mr McMartin. In fact, he goes on to cite figures from the province's official record books that show that if you measure health spending as a proportion of gross domestic product (a close approximation in terms of methodology to the "dollars spent per capita" model used by the Canadian Institute for Health Information), BC's healthcare spending growth in recent years and projected several years into the future is well within the normal range established over the past few decades. BC spent an average of 6.6% of its GDP on health over the last 20 or so years; in 2005-06, BC spent about 7% of its GDP on health, and Mr McMartin's projections show that number will fall slightly to 6.9% by 2008-09. His conclusion, after analysing all that data: "Health spending has not exploded, nor is it threatening to do so. There is no looming fiscal crisis."

One of the most frequently cited reasons to worry about the price of healthcare is the aging of the population. The BC Conversation on Health (a series of provincial hearings being held by premier Gordon Campbell to determine citizens' thoughts on the healthcare system's sustainability) website features a message from Mr Campbell that reads: "We need the Conversation on Health because British Columbians can — and must — find ways of making our health system sustainable for the future. We face many challenges as our population ages and new technologies and treatments are introduced."

So, as the thinking goes, more elderly people equals higher costs — sounds reasonable enough and it's not a new idea. Yet for Dr Robert Evans, a health economist at the University of British Columbia Centre for Health Services and Policy Research, this is a dangerous old canard. "The song and dance about the aging population [bankrupting the healthcare system] has been with us for decades," he says, "but every research group says it is not true. It's true that the elderly population will cause a rise in spending, but it is not big and not fast."

And recent data seems to back up Dr Evan's claims. A 2005 CIHI report on health spending addressed the issue of the cost of an aging population: "the aging-specific effect will not contribute more than 1.0% annually to total provincial and territorial government health expenditures between 2002 and 2026."

So what's going on here — why is the Campbell government maintaining that healthcare spending is set to go through the roof, and has in fact begun to do so already in several large health authorities, despite a wealth of evidence that appears to point to the contrary?

"Chicken Little has always been with us," sighs Dr Evans. "The rhetoric of crisis is as old as Medicare." He adds that the sky is "absolutely not falling."

But if there is no serious health spending crisis in BC, why the recent flap over the alleged lack of money for the Vancouver Coastal Health Authority (VCHA) and the Fraser Health Authority budgets? After all, the province fired Trevor Johnstone, the chair of the VCHA, for making cut-backs to try to make up a $40 million deficit. And two days later, Keith Purchase, head of the Fraser Health Authority, resigned in protest and said the promised 7.1% increase in funding from the government will not suffice to cover the region's costs.

Couldn't these incidents be taken as evidence of a larger problem? Mr Schreck doesn't think so. "You can't take one year, that is inconsistent with the last few decades, and say this is a trend," he says. Dr Evans agrees: "It's neither an anomaly nor a sign of out of control costs — just part of the normal back-and-forth between governments and providers. Healthcare in BC, as in the rest of Canada and the industrialized world, is in a constant state of tension between demands for expansion by consumers and efforts at containment by payers."



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