The OECD Attack on Medicare

The OECD Economic Survey of Canada (unfortunately only a summary is available on line) was released this week, and its call to impose user fees or deductibles on services covered by Medicare (ie physician and hospital care) received quite a lot of media coverage.  I saw OECD economist Peter Jarrett doing at least two TV interviews here in Canada which strikes me as unusual. Someone seems to have orchestrated quite a media buzz on the user fee issue.

By way of background, OECD country surveys are mainly put together by the OECD Economics Department with major input from the Canadian Department of Finance and the Bank of Canada. There is relatively little input from the social policy directorate at the OECD (DELSA) or social departments here at home.  At the CLC, we are consulted at a very early stage, but never get to see a draft report.

OECD messages tend to hue very closely to the neo liberal economic mainstream, and are tweaked by Finance to build support for desired policy shifts. Sometimes Finance makes sure that their message gets heard even if the political line here at home is different (eg the GST cut.)

I am told by my Paris sources that DELSA at the OECD does not generally advocate user fees or deductibles for essential health care services. The fact that the recommendation is in this report and was highlighted is something of a signal of  where Finance might want to move us.

“Hey provinces, we will cut the transfers for health care as part of balancing the federal books, but, not to worry, you can make up the difference through user fees and deductibles, as recommended by the OECD.”

The OECD Economic Survey (surprise) is very much focused on “fiscal consolidation” and argues that several provinces have unsustainable fiscal positions which need to be addressed by cuts in net spending,  and explicitly calls for cuts in health care (or at least very constrained growth of spending.)

The great majority of Canadians strongly support our public health care system which provides universal access to physician and hospital services at no cost to patients within a predominantly publicly delivered system. Somewhat unusually in the OECD world, not only are user fees and deductibles of any kind not part of the system (this is true of the NHS as well), they are illegal under the Canada Health Act.  
 
Rather than carefully fairly weigh the Canadian evidence, and rather than respect the very politically charged nature of the policy debate in Canada, the OECD weighed in loudly on the side of more fees for patients, and more privatization of service delivery.

With respect to the issue of charging user fees or imposing deductibles for access to Medicare funded services,  the Romanow Royal Commission found that fees would deter access by low income patients, eventually driving up system costs.  The OECD report itself notes (p.137) that the Canadian system is the best in the OECD in terms of providing equitable access to physician and hospital services. The report also notes (Fig. 3.6) that Medicare costs have not grown as a share of GDP since the early 1990s and are well in line with the costs of other national public health care systems.  It shows that it is in the private not the publicly insured part of our system that cost pressures have been greatest.
 
The OECD report similarly endorses more private delivery of hospital services without any serious consideration of the Canadian and international evidence that this would drain staff and other resources from the public system and lead to queue jumping by the affluent at the expense of those in greatest need.  Again, the research of the Romanow Commission is largely ignored.
 
Canadians know and understand that private insurance and private delivery are the hallmarks of the US health care system, which is the most expensive in the OECD and provides the least equitable access to services.
 
To its credit, the OECD report calls for the inclusion of pharmaceutical drugs and home care into the public part of the health care system in order to enhance equality of access to services and to contain costs. Yet, perversely, the authors seem to think that privatization in the public part of the system will lower costs and not damage equal access.

The OECD as a whole will be discredited by this foray into the politically charged issue of  Medicare, and Canadians should be more than a little alarmed by what the economic policy establishment seems to have in mind for us.