Tuesday, September 26, 2006

Health-care spending scare tactics unfair to public

VICTORIA - Carole Taylor created a pretty big splash with a single PowerPoint slide suggesting that within 11 years health and education could take every penny of government spending.
Too bad it was such a bogus claim. Worse that so many people bought it.
Taylor, the finance minister, tucked the slide into her first quarter financial update this month.
Do you realize, she asked as the slide popped up in the Press Theatre, that by 2017 health care could consume 71 per cent of all government spending? Education would take the rest and everything else would just vanish. It was a pretty dramatic scene setter for the "conversation" on health care that's to kick off this week.
Except it was a fraud. By 2017 my dog Jack could learn to talk. But it's not likely, based on everything I've seen from him so far.
And neither is the health crisis projected by Taylor.
Here's what the finance ministry assumed to reach her worrisome projection. Health ministry costs would increase by eight per cent year after year. Government revenues by three per cent. Education spending by three per cent.
Here's reality. From 1995 to 2005 health ministry spending increased an average 5.5 per cent, not eight per cent.
Education spending over the last five years has increased at 1.3 per cent a year, less than half the rate Taylor projects.
And between 1995 and 2005 government revenues increased by about six per cent a year, not the three per cent the finance minister assumes.
So. Taylor's forecast assumed a 50-per-cent reduction in the growth of government revenue. (That assumes big tax cuts, or a weakening economy.) Education funding would suddenly grow more than twice as fast it has in recent years. And health spending would reach new heights.
Plug in numbers based on reality - the real record from the last decade - and everything changes. The health ministry would then count for about 40 per cent of the total budget by 2017. Just as it does now. The slide looks dramatic; the reality not so much.
The finance ministry now says the graphs were just something worked up in 2004, interesting but not a real projection, they say.
But there were fewer than 20 slides in Taylor's presentation. If one of them shows a crisis barely a decade away, people will pay attention.
Especially as Premier Gordon Campbell kicks off his conversation on health care with British Columbians.
The conversation is a good idea, if done properly. Almost every interest in the health-care world has an advocate - unions, the BC Medical Association, the pharmaceutical companies, the government.
But not the patients or customers or whatever you want to call us.
Taylor's slide - if people took it seriously - would shut down any real conversation. Too many options are eliminated if you think disaster is looming.
It's not. Back in 1985, about one in every three dollars the government took in went to pay for health care. In 1995, the same. And this year, based on the latest financial reports, health will consume less than one-third of provincial revenues.
Look at it another way. In 1985, health spending was about five percent of GDP. By 1995, it was 6.6 per cent. This year it will be about 7.3 per cent. The increase is an issue, but the notion that we can't afford health care - that it's not sustainable - is simply not supported by the facts.
And while we fret about $12 billion in health care costs, we pump $7 billion into slot machines, lotteries and other legalized gambling without any significant public concern.
There are good reasons to manage health-care costs. It's government's biggest budget item and the cost pressures are significant. New technology and drugs are increasingly expensive and as out average age rises we place more demands on the system.
But there's no reason to panic. And a a real health conversation should start with facts, not phony fear-mongering.
Footnote: Taylor also cited warnings from the health authorities that the budget left them without enough money for the coming two years as a sign of pressures in the system In fact, it's a sign of unrealistic budgeting by the province. The current fiscal plan actually calls for a small cut in real per-capita health ministry spending in 2007/8.


Anonymous said...

This is just to soften us up for privitization which big media hosts and reporters keep telling us we need. With the election of Dr. Day even the Drs. see a way to make more money from the public system. Now they are working on moving the poor out before the Olympics.

Anonymous said...

Do we actually think the Gucci lady might be trying to twist the numbers somewhat? What awful folks we are. I suggest you hit Strategic Thoughts site for a analysis of the subject of Taylor's ghost story, or should I say Creative writing exercises. Keep on the subject as things will be getting more weird as we head toward the big games. Oh by the way 9:54, the articles coming out lately about "Dr. Privatize" coming out lately are leaning us all toward his kindler gentle side of support of public medicine. It's BS of course but some folks will buy into it no doubt.

Dawn Steele said...

Thanks for doing this analysis on our behalf as citizen/consumers, Paul.

Like Will McMartin's piece in The Tyee yesterday, this is basic elementary school math. And I think we'd all agree that Ms Taylor & her senior staff are a lot smarter than this (& if not should all be fired!). So this begs the question of Why? Which raises troubling questions of whose interests they are really serving in initiating this conversation.

As you note, all the stakeholders will be trotting out their advocates for the discussion. So as citizen/consumers, we need to be confident that our elected representatives are representing our interests, not someone else's. If a CEO was caught trying to sell such nonsense to her Board of Directors, she'd be out of a job very quickly.

And although this 'sustainability crisis' is clearly fabricated, I would expect some shifting of current trends, with per capita healthcare costs (even in inflation-adjusted dollars) rising over the next decade or two, given aging population & higher costs of life-saving drugs/technology (i.e. to provide more and better care). But we're not going to start putting Granny out in the snow to die, and privatization is no magic bullet, so let's hope we can find the backbone to pay the bills and do it graciously.

Bill Phillips said...

Great column. It reminds me of the old saying: "Figures lie and liars figure." Well done, Paul.

Bill Phillips
Prince George Free Press

wstander said...

Why does everybody, even this article, make this simple proposition so complicated to understand? It's not that complicated. Anytime you hear concerns about the crisis in health care spending supported by a reference to "as a percentage of the provincial budget"- BEWARE. The percentage increase could be as a result of increased health care spending, which would be a legitimate reason to examine health care cost further, or it could be a result of no increase in health care spending, but simply a reduction in the size of the entire provincial budget. In other words, if you want to decrease the percentage of the provincial budget spent on health care, you could do it simply by increasing the over all budget, and not spending one cent more on health. This isn't exactly rocket science.

Dave Macmurchie said...

Well done, wstander! This is a point of basic numeracy that seems to be lost on a lot of journalists. I pointed this out to the CBC some years ago after they breathlessly reported "health care costs spiralling out of control", following a similar "percentage of budget" argument, and got a reply saying, "Wow, we never thought of that ... we'll post your note on the staff bulletin board"

Taylor's flim-flam was particularly egregious, but all of us, not just journalists, need to be alert to the "percentage of budget" line. It may be that there really is a problem, but when you hear that approach being used, there's a good chance we're being conned.

Anonymous said...

I think that what you're all missing is that health care expenditures are increasing at a rate greater than the rate of inflation, and greater than the rate of economic growth in this province. That's going to become a problem one way or another.

Dawn Steele said...

Anon at 12:27, you should also check out the analysis over at Strategic Thoughts.

Yes, healthcare costs are rising, any way we cut it, and we should expect an upswing for the next decade or two, but the point is it's nowhere near the crisis Ms Taylor & co are trying to make it out to be. As Strategic Thoughts points out, average life expectancy has increased 5 years (over 6%) since the early 80s, during which time healthcare costs rose something like 2% as a percentage of GDP. So that suggests we're getting a pretty good bang for the buck.

Sure, we could freeze health care spending and expect our aging parents to die years before they have to, but I suspect that's going to be a hard sell.

And our total (public and private) healthcare spending proportional to GDP is still far below that of the U.S. (while key indicators like infant mortality rate continue to be much better for Canada). So privatization is going to be an equally hard sell.

Also, don't forget that as the Baby Boomer bulge moves along, as the costs of recent new drugs & technology start to come down & we continue to develop innovative models for combatting chronic & preventable illness, we can also expect some good news mixed in to temper these cost pressures.

There are plenty of all-too-real crises and looming crises out there to worry about without manufacturing this one.

Anonymous said...

Hey let's go back to the good old days where everyone had a policy for each province they worked in. Mind you they were all different, some worse than others. But scare the socks off some people and they might stop noticing they can't get into seeing a doctor this month.

Wasn't Ms. Taylor tied to the CBC when they were cutting staff? And she spent some time in Port's Canada when they were getting rid of their Ports Police. Maybe she did her magic there as well. Hey if I'm wrong I'm not as wrong as she was in her presentation

off-the-radar said...

thank goodness for Paul's well-written, thoughtful articles, including this one. There's alos been good pick up on Will McMartin's one on the same topic in the Tyee. And David Schreck wrote on it today too.

now will someone please write about the new government slogan rolling out this month

"BC: The Best Place on Earth"

honestly, who dreams up this stuff?

Anonymous said...

12:25 said."BC: The Best Place on Earth"

honestly, who dreams up this stuff?
Did you catch the premier giving his, here comes the Tsunami speech yesterday. If I didn't believe he was an honest speech reader I would think he was out to lunch. Went right along with Raesides cartoon this morning in the T/C

Anonymous said...

Will McMartin wrote a very well researched piece in The Tyee:



Anonymous said...

The sky is falling, the sky is falling said the chicken in the childs story. Now the child has grown up , became the BC Premier and has found a disciple who is presently the Finance Minister to back up his ideas. I figure Will, David Shreck and you have better handle on the events. so inforamtion from across the political spectrum is of the opion it's all BS Gordon is spreading

Anonymous said...

whatever came of this expensive conversation and the premiers' trips to europe? did they not hear what they wanted to?

sa said...