Lessons from Alberta

The Medicare Advantage
March 3, 2006

Alberta Premier Ralph Klein likes to call his contribution to politics the “Alberta Advantage”.

Unfortunately, if he gets his way with Alberta’s health care system, only the financially advantaged will partake in his version of the Alberta Advantage. The rest will be truly disadvantaged.

The Alberta government's latest proposal to allow people to buy private insurance for medically necessary services and let doctors “double-dip” between public and private payment flies in the face of the best evidence available around the world while breaching cherished Canadian values.

It violates the principle that people should access to healthcare based on need, rather than ability to pay; and it ignores the opportunity for true improvements within the public system.

Mr. Klein’s musings on this subject have become almost commonplace. What is odd about these salvos is that they run counter to Alberta’s own history and experience.

In the past and still today, Alberta has been a proven showcase for the Medicare advantage.

Back in 1970, Alberta became the first province to expand the newly minted Medicare principles beyond doctors and hospitals when it introduced Canada’s first publicly-insured drug program for seniors, based on the clear benefits of risk-pooling and a single-payer system. The case was so convincing, other provinces followed suit.

Fast forward to 2005, and again Canada was seeking answers for how to improve Medicare. The Alberta Hip and Knee Replacement Project capitalized on Medicare’s economies of scale, procedural specialization and streamlined information flows to dramatically decrease wait times for joint replacements. The average time from a consultation with a family doctor through to actual surgery fell from 82 weeks to 11. Against the rising voices of the naysayers, the success of this venture happened strictly in the publicly insured system, not by letting people jump the queue.

Looking for other home grown success stories? Strategic chronic disease management techniques at Calgary’s Capital Health Authority have produced faster access to care and better health outcomes for people with diabetes.

So why would Alberta abandon Medicare now?

Clearly the “private insurance” or “two-tier” route chosen by Klein late in his career is one blinded by the glare of ideology, not driven by the engine of pragmatism.

Instead of trying to offer faster services to the small number of people who can afford to pay for them, Klein should focus on continued improvement of the publicly-funded system.

A focus on improving Medicare brings together two fine Canadian traits: fairness and practicality.

Improving publicly-funded services is the right thing to do, because it helps everybody, based on their need, not their ability to pay.

Improving publicly-funded services is the smart thing to do, because the evidence shows that is the most cost-efficient way to run a healthcare system.

Klein and others who favour private insurance have cited the high cost of healthcare as a reason for privatization. He’s right about one thing: healthcare is expensive.

The growth of chronic disease, the aging of the population and soaring drug costs all mean we will be spending more money on health care over the coming decades. This is true in all industrialized countries, no matter what the mix of public and private funding. For any healthcare system to be sustainable, we will need to get better at preventing illness and managing costs.

What the Alberta plan misses is the fact that a system with multiple insurers is more expensive than a single-payer system. Witness the American system, in which 25 cents of every health dollar goes towards administrative costs. Canada’s publicly administered health systems average 2 per cent overhead costs.

To abandon a single-payer system, the most cost-efficient method of insuring citizens in this context makes no sense.

Klein comes from a part of the country that prides itself on its no-nonsense rugged approach to life. He may be reaping the windfall from the advantage God put in Alberta’s ground; but just because he’s sitting on top of a multi-billion annual surplus that is burning holes in his province’s pocket is no reason to make people pay more and jeopardize public health care.

These reforms may prove to be the most dangerous political experiment of Premier Klein’s entire, daring career.

Framed as a “necessary” response to cash-strapped public systems and choice-hungry “consumers” of health care, it won't be long before Canadians begin to realize that putting in place advantages for the already-advantaged doesn't help advance healthcare in the least.

Alberta’s free spirit has helped drive experimentation and seek innovation in health reforms. But Alberta, like all other Canadian jurisdictions, keeps coming back to the Medicare Advantage.

There’s a lot to learn from what’s going on in Alberta, and repercussions for us all. In the end, Klein’s latest experiment is bound to come back to Medicare, based on overwhelming evidence and long-standing Canadian values. Albertans should settle for nothing less.

Armine Yalnizyan is a health economist and Research Associate with the Canadian Centre for Policy Alternatives.

Danielle Martin is a family physician and health policy analyst. She sits on the Health Council of Canada.