This is alarming but not surprising, given the mindset of our Conservative government. Via CMAJ: Dire prognostication with the death of the Health Accord. Excerpt:
With the 10-year health care funding agreement between the federal, provincial and territorial authorities expiring at the end of March, health authorities and public health advocates are expressing concern about the erosion of national, universal health care as we know it.
The 2004 Health Accord was a formal agreement between the federal and provincial governments, guaranteeing the latter an annual 6% increase in federal health care funding and setting various targets for health system improvements. The Health Accord, the first agreement of its kind in Canada, was a key recommendation in the 2002 Romanow Commission report and a response to years of declining federal funding and leadership.
When the federal government decided in 2011 not to renew the accord, then-finance minister Jim Flaherty explained his government wanted a simplified funding plan that would avoid the long, back-and-forth negotiations required to finalize the Health Accord.
"We want to put the issue of funding behind us to allow us all to focus on the real issue — how to improve the system," he told media.
The Conservative government's new formula will see the Canada Health Transfer increase in tandem with the gross domestic product, with a guaranteed floor of 3% per year. That means the provinces and territories will receive $36 billion less over the next 10 years (based on an annual economic growth projection of 4%), according to research by the Council of the Federation, a body comprising Canada's 13 premiers.
The federal government is balancing its budget "on the backs of the provinces," said Adrienne Silnicki, the health care campaigner for the Council of Canadians, a social justice advocacy group. "It's forcing them to de-list needed services and invite in more private health care providers."
Other advocates, including Colin Busby, a senior policy analyst at CD Howe Institute, a nonpartisan think tank, argue that the transfer is "reasonably generous." The previous 6% escalator was "quite high," he said, and yet "it's very hard to say whether those transfers were able to bring about improved outcomes."
The increased financial load will encourage provinces to be more accountable, said Jason Clemens, executive vice president of the Fraser Institute, a conservative public-policy think tank group. "If the provinces spent less time squabbling about getting money from the federal government and more time looking at reforms, then we'd all be better off."
Alberta the sole gainer
In addition to the reduced increase in federal health funding, the built-in equalization mechanism of the health transfer, which gave "have not" provinces more money than "have" provinces, is being eliminated by 2014/15. Instead, the provinces will receive money on a per capita basis. According to the premiers' Council of the Federation, this means an additional $16.5 million annually in cuts that will affect the poorer provinces.
The CD Howe Institute counters that the federal government's separate equalization program is the best method for subsidizing economically disadvantaged provinces, and the inclusion of equalization into the health transfer didn't adapt well to changing economic conditions.
But the new formula doesn't address the reality that the per capita cost of health care varies among provinces.
Newfoundland and Labrador "has unique geographic, demographic and population health issues that the new funding approach does not take into account," explained Susan Sullivan, the minister of health and community services in an email.
As a result of the new per-capita system, the federal share of health care funding will fluctuate widely across Canada. In Manitoba, the federal share of health costs will decrease from 20% to 11%, while in Alberta, the feds will increase its share from 15% to 20%.
The funding variability across the country undermines the provinces' ability to adhere to the Canada Health Act, said Michael McBane, executive director of the Canadian Health Coalition, an advocacy group aimed at preserving medicare. "You can't have a universal social program unless you have the financial means to have poorer regions subsidized or financially supported."
"The sole gainer in this is Alberta," he added. "Almost everybody else loses."