Thursday, January 30, 2014
Check Against Delivery
Good afternoon everyone. Thank you Craig for your generous introduction.
And thank you to the Economic Club of Canada for the opportunity to speak to your members and guests here today.
Since my appointment six months ago, I've had the pleasures of traveling this great country and meeting with Canadians from all walks of life.
In those travels, I've heard from a wide spectrum of people including family doctors, nurses, researchers, First Nations Chiefs, community leaders and health groups. And from traveling and meeting with these people, I can truly say, as Canadians we have so much to be proud of.
I'd like to begin by translating the title of my speech into plainer language.
Instead of "The Economics of Healthcare and the Need for Innovation," let me put it this way:
The economics of healthcare as currently constituted raises serious questions about the future financial sustainability and quality of healthcare for Canadian consumers.
The need for innovation, therefore, both in terms of medical technologies and healthcare delivery systems, is one of the most pressing public policy challenges of our times.
Now I'm hardly the first to make these observations.
David Dodge, the former governor of the Bank of Canada and federal deputy minister of health, provided an excellent - albeit worrisome - diagnosis and prognosis a couple of years ago in a C.D. Howe Institute paper titled "Chronic Healthcare Spending Disease."
Mr. Dodge, and co-author Richard Dion, called for an "adult conversation" about these challenges and potential solutions.
I couldn't agree more and I want to do whatever I can to stimulate that conversation as federal health minister.
The Dodge-Dion study tracked the rise in total healthcare spending as a share of GDP since 1975.
It increased from 7 percent to 12 percent of the national income, a rise of 70 percent.
There are many complex reasons why spending on healthcare outpaced economic growth.
But ultimately the main drivers were increased demand and higher prices.
And so it remains today.
The authors' base case projection is for health spending to continue rising to nearly 19 percent of GDP by 2031.
Even under their best case scenario, which they describe as "incredibly optimistic," the ratio will exceed 15 percent.
It's important to remember that we're talking about total health spending, of which roughly 70 percent is spent by government, and 30 percent by consumers.
It all comes out of the same pockets, of course.
According to a 2013 Fraser Institute Study, an average Canadian two-parent family with two children currently pays over $11,300 a year in taxes to fund public healthcare.
Add the 30 percent of per capita health spending that consumers pay directly for things like prescription drugs and geriatric care, and the whole idea of "free healthcare" is obviously a myth.
Yet at a Canada-U.S. soccer game in Toronto a couple years ago, thousands of fans taunted the American team by chanting "free healthcare, free healthcare."
I suggest that indicates the need for an "adult conversation," or at least one based in reality, as we discuss the future of Canadian healthcare.
One of the most important takeaways from the Dodge-Dion paper is that, in the longer term, increases in total healthcare spending as a share of GDP are inevitable.
The conversation, then, has to be about how we generate and allocate resources to obtain the best possible health outcomes for Canadians.
Let's be clear that we are starting from an enviable position.
Canadians are currently among the healthiest people in the world.
We are living longer and enjoying more quality years in good health than ever before.
We are also living in a time and place of remarkable progress in medical technology.
Research and development are contributing enormously to faster diagnoses and more effective treatments.
Modern information technologies are improving the health literacy of consumers and enabling timely, effective sharing of medical information among health professionals.
In some health categories, such as wait times and physician access for certain types of treatments, we have been slipping compared to other industrialized countries.
In many others we are world leaders. But there is no room for complacency, given the demographic, financial and economic challenges we face.
By economic, I am referring partly to a healthy workforce, which is obviously critical to economic growth needed to fund healthcare.
But in the globalized economy, state of the art healthcare is also a competitive advantage - which attracts and retains our best and brightest citizens.
This economic connection is important because it speaks to the fact that all sectors, not just government and healthcare, have a stake in the health of Canadians.
The Canadian business community understands this.
It demonstrates it through a strong commitment to occupational health and safety, through generous employee health plans, and through increasing partnerships with the government and healthcare sectors.
At the federal level, for example, we are working with Canadian Tire to promote physical fitness among children through the national Active at School campaign.
Bell Canada's five-year, $50 million commitment to mental health initiatives across Canada through its Let's Talk campaign is another example.
And Canadian pharmacies are actively promoting diabetes prevention within their stores, in partnership with federal public health officials.
Through our Government's funding of the Canadian Foundation for Health Care Improvement we are also improving patient care.
One project in Ontario looked the way to best avoid deterioration in health status for those in long term care. A tool called PREVIEW-ED© helped identify the signs of early decline related to pneumonia, urinary tract infections, dehydration and congestive heart failure.
These four conditions are responsible for 49% of avoidable hospitalisations. In the first three months after implementing this tool there was a 57% drop in hospitalisations related to those conditions. This decrease was maintained for a further three months, and in the following three months there were NO hospitalisations related to those conditions.
Another project in Manitoba discovered that residents in personal home care facilities who rely on the Physical, Intellectual, Emotional, Capabilities, Environment, and Social (PIECES) care model for those with dementia had markedly lower use of antipsychotic drugs.
The PIECES approach encourages staff to treat patients by looking at not only their health files, but also their personal histories, such as their former careers.
Using PIECES, care providers at a test facility reduced by 27 percent the number of residents who relied on antipsychotic medication without causing any increase in behavioural symptoms or rise in the use of physical restraints.
Five years ago, these partnerships were almost non-existent. Now, they form an integral part of how we approach our investments in terms of innovative and lasting partnerships with the private and non-government sectors.
I mention these examples to encourage you, as business leaders, to think about how you might develop health-related partnerships with governments.
I also mention them to get you thinking, as Canadian taxpayers and healthcare consumers, about the way we organize, finance and deliver healthcare.
Because the innovations needed to improve the economics and outcomes of healthcare are at least as likely to come from outside government.
And ultimately, they will need to be ratified by voters.
Let me be clear that our Government remains committed to a universally accessible system.
Even through the recent economic downturn our Government has increased health transfers to the provinces and territories to unprecedented levels.
This funding will continue to grow, reaching $40 billion by the end of the decade. This record investment provides the provinces and territories with the financial predictability and fiscal flexibility needed to address their specific priorities and pressures.
As you know, however, one of the key changes that we introduced was to tie increases in health care transfers to the provinces to GDP growth.
This move acknowledged the observations by David Dodge and others that health expenditures, left unchecked, would continue to escalate well beyond the rate of GDP growth. Clearly, policy makers at all levels of government must acknowledge that simply 'how much' federal tax revenue is spent on health care, has little bearing on whether Canadians are receiving value for their hard earned dollars.
It's pretty obvious where such an unsustainable formula could lead in government, business or a household, and I am sure none of us is willing to go there.
So tying funding to GDP growth is an important step toward fiscally sustainable healthcare.
Moreover, it creates a fiscal framework that will serve as a catalyst for innovation as the health sector strives to meet its benchmarks.
I am confident we will be able to find solutions to improve the health care system within this fiscal context.
At last fall's annual meeting of Canadian Health Ministers, we all agreed to make innovation a priority.
Premiers have been collaborating through the Council of the Federation Healthcare Innovation Working Group.
They are currently focussed on coordinated efforts to reduce drug prices, making sure the care Canadians get is the care they genuinely need, encouraging more team-based care, and bolstering seniors home care as an alternative to long-term institutionalization.
Part of the genius of our federation is the capacity for innovation within the provinces and territories.
They are responsible for healthcare delivery, after all, and they know the health challenges in their jurisdictions better than a central government.
But the confederal system also allows for the development and dissemination of best health practices among the partners.
Unlike some of our predecessors in Ottawa, who often tried to impose rigid bureaucratic healthcare conformity on the provinces, we have respected their constitutional jurisdiction over healthcare and encouraged their innovations.
Our job is to identify best practices and innovations, wherever they occur, and make sure that information is shared with health practitioners and patients from coast to coast.
This was the impetus behind our creation of the Canadian Partnership Against Cancer and its Canadian Strategy for Cancer Control, for example.
The Mental Health Commission of Canada is another initiative by our government that brings together mental health experts, patients and other stakeholders to raise national awareness of mental health issues and share knowledge about best practices.
At the end of the day, our efforts and those of the provinces are aligned on three primary objectives:
- improving patient care;
- improving health outcomes; and
- reducing costs.
All jurisdictions are faced with the challenge of improving the quality and accessibility of healthcare in a period characterized by slower economic growth, an aging population, growing chronic disease burden, and proliferation of new technologies.
Provinces, territories and stakeholders all agree that healthcare innovation can play a critical role in addressing this challenge.
Like them, I'm convinced that through research, technology and new ways of working, we can make better use of our existing resources to achieve greater system efficiency and better patient outcomes.
We know that more money is not always the solution.
Research, for example is a particularly critical catalyst for healthcare innovation. Here too, Canada is well positioned to excel.
A 2012 report by the Council of Canadian Academies showed that Canada is a world leader in the production of scientific knowledge related to health.
With less than .5 percent of the world's population, we produce over four percent of the world's research papers and nearly five percent of the world's most frequently cited papers. We also rank third in the world in terms of research impact in the field of clinical medicine.
That's certainly punching above our weight on the world stage, and frankly, I think we should do more to recognize and celebrate our prodigious record in health research.
Our Government is certainly very proud of this record, and we're committed to building on it.
I mention this to rebut some of the shriller critics of our science policies, who routinely liken us to those who imprisoned Galileo and poisoned Socrates with hemlock.
The truth is, we're investing heavily in scientific and technological research and development, though perhaps not in some of the projects favoured by our critics.
Each year, through the Canadian Institutes of Health Research we invest approximately $1 billion to support Canada's health researchers.
On any given day, thousands of federally funded research projects are underway, involving close to 13,000 Canadian researchers and trainees, through the support of CIHR.
Some of these researchers are developing cutting edge technologies to improve our healthcare system, while others are looking at ways to enhance the quality of care for patients.
And these investments are paying off. When Alain Beaudet, President of CIHR, spoke to the Economic Club last June, he mentioned a recent study co-sponsored by his organization and the Canada Foundation of Innovation.
This study showed that their joint investments in new medical imaging technologies to diagnose strokes have produced a twofold return on investment.
Another notable initiative I'd like to mention is our support of Canada's Strategy for Patient-Oriented Research.
This strategy involves a coalition of federal, provincial, and territorial partners, all dedicated to integrating their research into care and ensuring that the right patient receives the right intervention at the right time. This will absolutely save money and improve health outcomes for Canadians.
Furthermore, in partnership with key stakeholders, our Government is supporting the development of new medical technologies.
Once again, the goal here is not simply to create some wondrously expensive new gadget, but to develop technologies that bring down the overall cost of treatment.
The same imperative drives our new approaches to health data collection and analysis.
As anyone in business - or politics for that matter - knows, data is gold.
Governments have struggled to mine health data effectively, but I believe we're turning the corner.
Our big investments in Canada Health Infoway are starting to pay off in improved patient access to services, better informed diagnosis and treatment, and improved productivity and efficiency of the healthcare system.
As Health Minister, I'm committed to learning more about how we can harness the tremendous potential of innovation on all fronts to improve the quality and cost efficiency of care.
That is why I hosted several roundtable discussions and met with key stakeholders in different parts of the country to hear first-hand about innovations taking place on the frontlines of healthcare, the barriers to further innovation and what we can do to overcome them.
It is time to tap into some of the brilliant Canadian minds and meet the challenge of transforming the health system through innovation.
I will be creating a wise person's panel to examine the state of innovation in Canada's healthcare system, and ensure our federal policies align with our goal of creating a more innovative, effective, and financially sustainable health system.
If there is one thing I have learned after a decade in politics, is that we don't always have the answers.
You can rest assured, however, that every health policy decision we make, every medical research project we fund, and every collaboration we undertake with other stakeholders will be judged through the prism of the economics of healthcare.
Pouring money into the system at a rate that exceeds the capacity of the economy to pay for it is simply not sustainable.
It's just passing the buck to future Canadian healthcare consumers.
And as you may have noticed over the last eight years, that is not the way our government does business.
It is time to get innovative.
Time to change the way we have been thinking and how we have been doing things.
It is time to work collaboratively to make the system more responsive to the needs of Canadians.
The time is now.