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Taylor Jackson: The single-minded pursuit of single-payer pharmacare puts costly ideology over practical common sense

Commentary

Protestors are seen during a rally to demand Canada’s public health care system be protected and expanded, in Ottawa, Feb. 7, 2023. Spencer Colby/The Canadian Press.

When Dalton McGuinty became Ontario’s premier in 2003, one of his Liberal government’s early priorities was to purchase private MRI clinics already operating in the province. Their “repatriation” was supposed to reduce private health care as a matter of principle but all it did in practice was to reduce health care. In a world of scarcity, the decision left Ontario with fewer MRI machines than would have been the case if the government had used its public resources to expand the overall number. It was a classic case of ideology trumping common sense.

McGuinty’s determination to nationalize private health care wasn’t limited to MRI machines. He was also a big proponent of single-payer public drug coverage. In an August 2004 speech to the Canadian Medical Association’s annual meeting, he argued that pharmacare was needed to put an end to the so-called “patchwork” model of public and private drug coverage and ensure that the system was “equitable.” (His specific case was that a national pharmacare plan ought to be fully funded by the federal government.)

Twenty years since McGuinty’s speech, his arguments are now reflected in the Trudeau government’s pharmacare legislation. Its proposal to establish a “universal, single-payer, public pharmacare” would bring expression to what he then called for—though Ottawa will only pay part of the costs.

The main problem with single-payer pharmacare is the same one as the McGuinty government’s purchase of the MRI machines. It dedicates scarce public resources to “repatriate” well-functioning parts of the health-care system simply because they’re private. The result is to waste public dollars that could be better targeted to improve health outcomes for Canadians—particularly those who need drug insurance.

Presently, more than 60 percent of Canadians have private drug insurance—mostly provided through their employers. Another 20 percent (the majority of whom are seniors) are covered through public plans. These figures aren’t really in dispute. Even the Hoskins Report which endorsed single-payer pharmacare concedes that it’s somewhere between 10 and 20 percent of Canadians that’s uninsured or underinsured.

The Parliamentary Budget Office estimates that a universal, single-payer public pharmacare model as envisioned in the Trudeau government’s legislation would cause Canadian governments to spend roughly $40 billion per year on drugs by 2027-28. That includes about $14 billion in new, incremental public spending in the same year—or roughly 25 percent of the current Canada Health Transfer from Ottawa to the provinces.

Keep in mind that roughly 60 percent of Canadians have private drug insurance. If the goal is to achieve universal drug coverage, why wipe out the pre-existing coverage of this cohort and start over? Why not directly target those who face real financial and other barriers to accessing prescription drug coverage? What’s to be gained from such a transfer from the private sector to the public sector? The answer isn’t much.

Current insurance recipients will be deprived of their likely superior private plans. Unionized workers will lose hard-fought, collectively bargained benefits. Taxpayers will be stuck with a major new, unfunded entitlement program. This is another case of ideology prevailing over evidence and facts.

Think about it this way: if the Trudeau government instead sought to target its efforts on those who are uninsured or underinsured, it could meet this group’s needs at a fraction of the cost. The remaining resources could then be directed to other policy issues. Frankly, they could be used to boost the Canada Health Transfer if policymakers wanted to.

The key point here is that while universal coverage ought to be the government’s overriding goal, it’s foolish to pursue it through the single-payer model. McGuinty’s 2004 speech suggested that it was a mistake to exclude prescription drugs from the original Medicare model in the 1960s. It’s an interesting historical argument that one might agree or disagree with. But we’re not relitigating the Medicare decision here. Policymakers are dealing with the hybrid insurance model that’s been built up over the ensuing five decades or so. They must accept the world as it is rather than the one they wish it was.

A proper pharmacare policy ought to build on the current model. In practice this means that rather than replacing private insurance, it should extend the principle of universal, broad-based coverage to those who presently don’t have insurance or are underinsured. Put more simply: government policy should preserve what’s working for most people and help cover Canadians who need help.

There are various policy options to attain universality. It may come in the form of providing subsidies or incentives for the uninsured or underinsured to purchase private coverage. Alternatively, governments could expand pre-existing public plans to cover this group.

Whatever the approach, it must be underscored that there’s likely little to be gained and a lot to be lost if the Canadian government moves ahead to implement single-payer pharmacare. Fundamentally disrupting drug insurance for the majority of Canadians for whom it’s working in order to help a relatively small share of the population fails a basic common-sense test.

We need more common sense in Canadian public policy. That starts with repealing or repurposing C-64 and pursuing the goal of universality by building on the strengths of our hybrid model of drug coverage.

This article was made possible by the Canadian Life and Health Insurance Association and the generosity of readers like you. Donate today.

Zachary Patterson: Canada must reclaim its wayward universities. Here’s how

Commentary

Pro-Palestinian supporters take part in a sit-in at the University of Ottawa, in Ottawa on Monday, April 29, 2024. Patrick Doyle/The Canadian Press.

The state of Canada’s universities is exasperating to many Canadians. From ongoing encampments promoting distasteful—and even hateful—messages to ever-present EDI mandates to endless examples of extreme leftist ideology supplanting core curricula and infusing every aspect of academia, it seems incontrovertible to many that our post-secondary institutions have lost their way. But all is not lost. There are many avenues by which universities can be reformed to respect academic freedom and honour the foundational truth, knowledge, and merit principles once again. This column is the culmination of three previous columns on professors, universities, and the funding and regulatory landscape surrounding universities.

The different avenues of reform, inspired from many sources, can be aggregated into those acting at the university, provincial, or federal levels. Remedies can also be categorized as prescriptive- or incentive-based, or simple defunding. Given provincial jurisdiction, most avenues are through provincial governments.

Since it is provinces that create universities, they have wide-ranging powers to decide how they are governed, even if traditionally universities have been granted a great deal of autonomy in operation. This has been acknowledged legally when provinces were perceived to have overstepped their authority in legislating fine points of university administration.

That said, provinces create universities and decide at least on university governance structures. As a result, they can set mandates (that enshrine academic freedom and the foundational principles of the university), structure boards of governors, nominate members to them, and ensure that boards of governors can appoint senior management.

That is not to say we should ignore the institutions themselves. University-level, prescriptive actions can be used to a number of effects. The most important is to ensure independence of boards from university operations. Moreover, nominations to boards of governors should include stiff-spined reform-minded members supported by their provincial governments and unafraid of criticism from the university, its faculty, or students.

Courageous and reform-minded boards are necessary for two reasons. The first is to nominate reform-minded senior management. The second is to support senior management in the face of reform-resistant faculty and students, and potentially staff.

Similarly, experiments and proposals are underway to create new institutions within current university structures to reinvigorate them.

Naturally, university-level interventions are limited to the scope of a given university. Multi-university avenues for reform are also available. Some are restricted to provinces, others to provincial or the federal government.

Provincial avenues include prescriptive legislation compelling universities to adhere to academic freedom and the foundational university principles. Similar legislation has been tried in Canada (Ontario, Alberta, and Quebec) to uncertain effect. The main weakness of this type of legislation so far is that it leaves the adoption of principles for the universities themselves to define and/or enforce.

Similarly, legislation could exclude expenditures contrary to the foundational principles of the university such as the merit principle. This would include expenditures on EDI programs or race-based hiring. Much legislation in the U.S. has had this type of focus.

Statutory rules prohibiting the censure of free speech on campus as well as requiring universities to enforce “time, place, and manner rules” while preventing them from imposing security fees on speakers could be passed.

Legislation breaking the monopoly of degree-granting education departments for teachers could go a long way in decreasing their ability to politicize K-12 education. Master’s and PhD-holders could, for example, be considered qualified to teach in primary and secondary school.

If such prescriptive legislation were found to overstep authority, approaches side-stepping these issues could be considered. Funding agencies (federal and provincial) could be reorganized to respect and uphold academic freedom and the foundational principles instead of encouraging and adopting the politicization of universities and research.

Incentive-based funding approaches could also be adopted. That is, funding could be made contingent upon adhering to and respecting academic freedom and the foundational principles.

Provincial and even federal research funding could be distributed contingent upon universities adhering to the freedom and foundational principles. Similarly, student loans (both federal and provincial) could be contingent upon attending universities adhering to them.

Another important avenue is related to tax benefits. Tax benefits to universities (not having to pay taxes) due to their status as public institutions could be contingent.

Such incentive-based approaches would be dependent upon a mechanism for ensuring adherence to the freedom and foundational principles, whether it be at the provincial or federal level.

This could be accomplished with legislation like the U.K. Higher Education Act that created their academic freedom “tsar” to monitor university policies and who can receive complaints about universities. This avoids the problem of legislation where universities police themselves.

Given that the public may have lost patience with handing over enormous amounts of taxpayer money for sinecures of left-wing professors who’ve betrayed their role, there may be an appetite simply for reducing or even defunding universities. This could involve straightforward reductions in provincial operational or research funding.

An additional avenue to consider is student loans. Provincial and federal governments could get out of the business of providing student loans altogether. Instead, they could encourage (allow, if legally necessary) universities to provide student loans themselves.

This would better align university and student interests than the current system which increases the amount of money available to universities but allocates all risk for the investment in tuition to students and the taxpayer. Why not let universities take on the risk?

While the state of universities can be despairing, the situation is not hopeless. There are many avenues through which they can be induced to once again recapture their core mission, respect academic freedom, and recommit to their foundational principles. That so much money is devoted to them and that they have drifted so far from their role not only suggests but obliges our governments to act.