After draining billions of dollars from Canada's healthcare system for the past six years, the government appears ready to pump some money back into the financially ailing sector.
With its economy bolstered by continuing job creation, record stock prices and low interest rates, Canada is now in a position to undo some of the damage wrought by its budget-slashing ax.
In Ontario, for example, the provincial government announced last week it plans to spend a total of $1.2 billion to revive its overextended hospital system. The government says it will use the money to open 17,000 long-term-care beds and 25,000 home-care spaces for elderly, mental health and rehabilitation patients.
(Editor's note: Dollar figures in this story are Canadian. One U.S. dollar is the equivalent of $1.44 Canadian, as of April 28.)
The new long-term-care funding comes after the Ontario government slashed the province's healthcare funding by $667 million over the past two years but canceled a third year of cuts. From 1990 to 1996, 11,700 public hospital beds in Ontario were closed. The province has 35,000 hospital beds today, according to the Ministry of Health. The government plans to close or merge a total of 30 hospitals in Ontario.
Nationwide, government funding for hospitals, other institutions and physicians' billings more or less stabilized from 1995 to 1997, according to the Ottawa-based Canadian Institute for Health Information. It projects total health spending as a percentage of gross domestic product at 9.2% for 1997, compared with 9.8% in 1995 and 6.4% in 1985.
Meanwhile, total healthcare spending has risen dramatically in the past decade.
Total 1995 national healthcare expenditures have increased 86% to $74.4 billion in 1995 from $40 billion in 1985, according to the institute. Per-capita spending increased 63% to $2,515 in 1995 from $1,544 in 1985, the institute says. It projects 1997 spending of $76.6 billion, or $2,528 per capita.
The resulting funding cutbacks of recent years have taken a dramatic toll on the country's healthcare system.
Hospitals have been merged and/or closed and their operations undermined by massive layoffs; hospital staffs are overworked and demoralized; people have died during unusually long waits in jammed emergency wards; and elective surgeries have been deferred for months.
What was once a widely admired national healthcare system has been left battered and bruised.
For their part, Canadian physicians have responded with a rash of strikes to pressure the government into ending its budget slashing.
In March doctors in British Columbia staged the second of three days of "reduced activity" to protest what they call underfunding of the healthcare system. Two dozen rural doctors in northern British Columbia withdrew their services for six weeks to press for additional pay for on-call services.
In Montreal, Quebec, where seven hospitals have been closed over the past two years, 65 surgeons at a main hospital in March ended a two-day strike sparked by the hospital's decision to cancel elective surgery and postpone nonurgent surgery in an attempt to reduce numbers of patients in emergency wards.
Elsewhere in Quebec, about 100 doctors went on strike that month to protest the transfer of their hospital's orthopedic department to another hospital nearby.
In Edmonton, Alberta, doctors accepted an 8% pay raise over the next three years in late April, after a lengthy dispute over fees. Earlier that month, doctors left their offices for a day in three of Alberta's smaller cities, and doctors in Edmonton had planned to withhold their services in May.
If the settlement hadn't been reached, says Bill Anderson, M.D., president of the Alberta Medical Association, doctors planned to overload hospitals with patients, bill patients directly for insured services, close their offices for half days and reduce elective surgeries.
The strikes are a sobering reminder of the healthcare system's continuing financial problems.
Canadians were jubilant when the government balanced the federal budget for the first time in nearly 30 years. But the balancing act for fiscal 1997-1998, which ended March 31, in part was achieved by slicing $7 billion over the past two years from funding for provincial healthcare, education and social services.
The federal budget also included a pledge to pump an additional $7 billion (or about 10.5% of the total national healthcare bill) into Canada Health and Social Transfer payments to provincial governments during fiscal 1997-1998. That would keep the CHST payments from crashing through a $12.5 billion "floor," or minimum level of transfer payment, that will be offered annually to the provinces through the year 2002 to help cover the costs of healthcare and other social services.
The federal government also has promised to pay more than $25 billion in CHST during the current fiscal year, ending March 31, 1999, and to increase the payment gradually through fiscal 2002-2003, when it would reach more than $28 billion.
Sharon Sholzberg-Gray, president of the Ottawa-based Canadian Healthcare Association, calls the 1997-1998 budget "financial smoke and mirrors." She says the $7 billion the government said it would put in is really the $7 billion it said it was going to take out.
"There is no CHST money for health or other social programs in this budget," she says. "What (Finance Minister Paul Martin) has done is simply reannounce the cancellation of planned cuts to the transfer (CHST) for 1998 and 1999."
As for the new funding for Ontario, David MacKinnon, president of the Toronto-based Ontario Hospital Association, questions the effectiveness of focusing on delivering care at the community level.
"It remains to be seen whether tremendous (hospital restructuring) changes taking place, particularly in Ontario, translate into better care," MacKinnon said during a March speech at York University in Toronto.
There are significant risks associated with those changes, he said, because the government is "proceeding on the basis of (political) ideology rather than policies grounded in fact or evidence. Care and funding are being transferred from the institutional (hospital) sector to the so-called community sector (clinics, home care), without any evidence that it's more cost-effective or leads to improved clinical outcomes or ones desired by consumers."
As for the future of the nation's healthcare system, industry observers wonder what impact the spending changes and facility closures will have on long-term hospital efficiency.
"Lots of people were saying a few years ago that we were spending too much," Sholzberg-Gray says. "It might well be we're now spending too little. . . . We have to reassess whether we've taken away from the flexibility of the system."
Warson is a Toronto-based freelance writer.