Avoiding fundamental reform: current cost containment strategies in Canada

Abstract

Provincial governments in Canada are trying very hard to contain and possibly reduce health care expenditure. The wide ranging effort and frequent announcements of yet another cost cutting measure, including deinsurance, stand in marked contrast to the complacency of earlier periods. This activist and serious effort to reform the system is certainly welcome, yet the reforms are not adequate and ignore some fundamental and structural problems of Canada's health care system. Health care reform must do one or more of three things, i.e., improve efficiency, effectiveness, and/or equity of the system. Many cost-cutting measures in Canada achieve none of these objectives and merely postpone costs to a later time or shift the burden on to the sick. Fundamental health reforms include the incentive systems influencing physician behavior and choices; efficiency gains via manpower substitution; more effective control over the supply and distribution of medical manpower; and changes in the organization and design of health care delivery systems. But these fundamental reforms are not being pursued in Canada even though this is an opportune time for such reforms. Also discussed is the potential for and problems associated with managed and/or public sector competition. This article is essentially a critical review of current cost containment efforts in Canada.