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COURTS AS GAME CHANGERSIN HEALTH POLICYColleen M. Flood &
Ryan MacIsaacFaculty of Law, University of TorontoFor Queen’s
International Institute on Social PolicyAugust 20-22, 2012
1. Canada’s Health Care Silos
PUBLIC• Hospitals• Physicians
PRIVATE• Rx Drugs• Dental care• Vision care
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The “not really” “single-payer” system • 70% public, 30%
private• 65% of Canadians hold
private health insurance (PHI)
75.9% 74.5%69.9% 70.3%
24.1% 25.5%30.1% 29.7%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
f
Public Private Source: CIHI
2. Tsunamis, Yo-Yos and Friends for Company
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Spending Tsunami
$-
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
f20
11 f
Per Capita Health Expenditure, Constant (1997) Dollars, Public
vs. Private - 1975-2011
Private
Public
Source: CIHI, National Health Expenditure Trends, 1975 to 2011,
data sets (2011)
The Yo-Yo Effect
-4%
-2%
0%
2%
4%
6%
8%
Per Capita Health Expenditure, Annual Percentage Change In
Excess of Inflation –1975-2011
Source: CIHI, National Health Expenditure Trends, 1975 to 2011,
data sets (2011)
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$-
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
$5,000
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
2008 2009 2010
Health expenditure per capita, PPP (constant 2005 international
$) – 1995-2010
CanadaGermanyFranceUnited KingdomAustraliaJapanNew Zealand
At least we have friends for company…
Source: The World Bank
…But could Canada do more with less?
3844
80.7
68
70
72
74
76
78
80
82
84
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
Life
Exp
ecta
ncy
Tota
l Exp
endi
ture
on
Healt
h pe
r cap
ita
Health Spending and Life Expectancy
Total expenditure on health, per capita, US$ PPP Life
expectancy, Total population at birth, years
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3.1 Private-Sector Spending3. Numbers, Policy and Politics
What Does Canada’s Private Sector Look Like?
Source: CIHI
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What Does Canada’s Private Sector Buy?
$-
$250
$500
$750
$1,000
$1,250
$1,500
1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999
2001 2003 2005 2007 2009 2011 f/ p
Per Capita Private Expenditure by Use of Funds, Constant (2002)
Dollars - 1975-2011
Other Health SpendingHealth
ResearchAdministrationCapitalNon-Prescribed DrugsPrescribed
DrugsOther ProfessionalsVision Care ServicesDental
ServicesPhysiciansOther InstitutionsHospitals
Source: CIHI, StatsCan
Private-Sector Drug Spending
$-
$50
$100
$150
$200
$250
$300
$350
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010(f/p)
2011(f/p)
Per-Capita Private-Sector Expenditure on Prescribed Drugs by
Source of Finance, Constant (2002) Dollars - 1988-2011
Out-of-Pocket
Insurer
Source: CIHI, StatsCan
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3.2 Public-Sector Spending3. Numbers, Policy and Politics
What Does Canada’s Public Sector Buy?
$-
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
Per Capita Public Expenditure by Use of Funds, Constant (2002)
Dollars – 1975-2011
Other Health SpendingHealth ResearchAdministrationPublic
HealthCapitalPrescribed DrugsOther ProfessionalsVision Care
ServicesDental ServicesPhysiciansOther InstitutionsHospitals
Source: CIHI
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The Rising Wave of Public-Sector Drug Spending
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
Prescribed Drugs as Percentage of Total Public-Sector Health
Expenditure - 1975-2011
Source: CIHI
Real Growth in Spending
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
Drugs Hospitals Physicians Public Health Other Institutions
Total (Public+Private Sector) Spending – Average Annual Increase
in Excess of Inflation, 1975-2011
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Feed the Monster vs. Tame the Monster
What Goes Up Must Come Down…?
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The Canada Health Transfer (CHT)Take-it-or-leave-it deal:• 6%
annual growth until 2016-17; after
2016-17, annual increases most likely around 4%• Parliamentary
Budget Officer
predicts this will be “significantly lower” than actual growth
in provincial health spending
• NO STRINGS ATTACHED (provinces will get to govern their own
misery)
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
Total
Per
Cap
ita P
ublic
Hea
lth E
xpen
ditur
e, $ C
AD m
illion
s
Fede
ral T
rans
fer A
moun
ts, $
CAD
milli
ons
Public-Sector Health Expenditure and Federal Health Transfers,
Constant (2002)
Dollars - 1981-2009
Fed-Prov Transfers Public-Sector Health Spending
We’ve got no money, so we’ve got to think.
– New Zealand physicist,Ernest Rutherford who
conducted his research at McGill
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4. Courts as Game Changers
Patient Protection and Affordable Care Act (a.k.a.
Obamacare)
• Individual mandate:• Penalizes Americans who do not
purchase PHI• Upheld by Supreme Court under
Taxing Clause but not Commerce Clause or Necessary & Proper
Clause
• Medicaid expansion:• Threatened to withdraw all federal
funding if states didn’t comply• Overturned as
unconstitutional;
Supreme Court said that it was coercive “economic dragooning” by
the feds
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Ireland’s Risk Equalization Scheme
• In July 2008, the Supreme Court of Ireland overturned a risk
equalization scheme for private health insurers.
• The decision left a potential market failure without
countervailing regulation.
Indian Right to Life Case• In 1996, the Indian
Supreme Court held that the constitutional right to life
includes a positive obligation to provide medical facilities
• Monetary award to a man who was taken to 8 different hospitals
after a head injury
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A Two-Tier Constitution:Chaoulli v. Quebec• 2005 Supreme Court
of
Canada decision that a PHI ban (plus long wait times) violated
the Quebec Charter of Human Rights and Freedoms• Rights to life and
security of the
person violated• Only directly affects Quebec
Chaoulli 2.0:Dr. Brian Day’s Charter Challenge• Chaoulli-like
Charter s. 7
challenge to PHI ban by a doctor who runs a private hospital in
Vancouver
• Also incorporates a far-fetched Charter s. 15 argument
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Chaoulli 3.0• Justice Centre for
Constitutional Freedoms (JCCF) seeking to extend Chaoulli to
Alberta, usingthe Charter
• Similar cases are beforethe courts in Ontario and British
Columbia…
OMA Charter Challenge:A Possible Restriction on Government’s
Ability to Bargain Hard in the Public Interest
• Ontario Medical Association (OMA) Charterchallenge arguing
lack of “good faith” bargaining by the Ontario government with
respect to the physician fee freeze
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International Treaties
• Trans-Pacific Partnership (TPP)
• Comprehensive Economic and Trade Agreement (CETA)
CONCLUSION:• Canada’s commitment to redistribution in health
care is not about to collapse, but it is
being slowly eroded by waves of technological change and an
aging population
• Provincial governments (and private health insurers) need to
tame the monster rather than continue to feed it to expand the
social contract but the incentives for this are not strong
• Courts have the potential to be game changers, delivering an
external shock that could significantly change the balance of
public/private spending and thus the social compact around a
one-tier system
• Provincial governments should vigorously defend court
challenges that would limit their ability to negotiate “tough” and
be alert to the restrictive terms of upcoming free trade
agreements
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