Carney government opposes Alberta health-care reforms and embraces failed status quo

The Smith government in Alberta plans to allow patients to purchase non-urgent health-care services privately from doctors who also work in the public system. And many commentators have been wondering when Ottawa will take a position on these reforms. Some opponents have demanded Ottawa oppose them, while some supporters have been hoping the Carney government will allow Alberta flexibility to explore these proven approaches.

The verdict may now be in—the Carney government is “very concerned” and does not see how Alberta’s reforms comply with the Canada Health Act (CHA).

This is perhaps unsurprising. Ottawa has, for decades, opposed allowing Canadians to look after themselves with their own money. Federal health ministers under the Chretien, Martin and Trudeau governments have opined that allowing Canadians to purchase health care outside the government monopoly is anathema to their vision for health care and a violation of the CHA, particularly if that care is purchased from doctors working in both the public and private systems. The Carney government’s position is very much in keeping with Ottawa’s tradition of preferring this uniquely Canadian restriction.

Because health care is constitutionally a provincial responsibility, the Smith government is still able to continue down this positive reform path. But Ottawa’s opposition may put Alberta’s federal health-care cash transfers at risk (an estimated $7 billion this year).

Vitally, provinces must adhere to the federal template for health care outlined in the CHA to receive their full health-care cash transfer. In practice, this means ensuring the federal government approves any policy reforms. If Ottawa doesn’t approve, and a province follows through anyway, the federal government can withhold some or all of that province’s federal health-care dollars.

In other words, Alberta now has the unenviable choice between building a better-performing health-care system for patients—potentially with reduced or even without federal funding or recommitting to the failed (and expensive) status quo.

Let’s be clear. Ottawa’s opposition to Alberta adopting a policy approach found in every other universal health-care country in the developed world does not help Canadian patients languishing in one of the least accessible, yet most expensive, universal health-care systems in the developed world.

Nowhere else in the developed world are patients prisoners of the bureaucratic will, forced to accept the health care the government provides when the government decides to provide it. Rather, patients in every other universal country are free to purchase health care for themselves whenever the government system is unwilling or unable to meet their health-care needs.

As a result, all patients in these countries (both those paying privately and those who continue to rely on the public system) get better access to health-care services. This is because a private alternative improves the performance of the government system by expanding access to services and encouraging higher performance through competition. When the government prevents private providers from potentially delivering timelier and more patient-focused care, there’s little pressure or incentive to do so anywhere else in the system. Further, when government allows physicians to work in both public and private settings, it helps expand the volume of care over and above what’s currently provided in the government system.

It’s not surprising that Canada has both some of the longest wait lists for health care in the developed world and the developed world’s only prohibitions on privately purchased medically-necessary health care.

Rather than opposing sensible provincial attempts to reform health care, the Carney government should take a page out of the Chretien government’s playbook. In the 1990s, in the face of serious debt and deficit problems, the Chretien government reduced federal transfers for welfare and allowed provinces more flexibility with policymaking. The resulting period of provincial policy innovation reduced welfare dependency and government spending on social assistance (which meant savings for taxpayers). When Ottawa stepped back and allowed the provinces to vary policy to their unique circumstances, Canadians got improved outcomes for fewer dollars.

We need that same approach for health care today, and it begins with the federal government reforming the CHA to allow provinces to explore alternate policy approaches. Ottawa should stop pushing provinces to adhere to the failed status quo and get out of the way of provinces trying to fix their health-care systems.