George
Abbott may try to be the Bob Hope of the BC Legislature,
but he'll never come close trying to be its Paul Samuelson.
An economist, he isn't. Speaking in conclusion on second
reading debate for Bill 21, Abbott said: "There
was a fascinating debate between whether we should view
health care costs as a percentage of total gross domestic
product or view it, as I would suggest, as a percentage
of the provincial budget. This is a fascinating debate.
About seven people, in addition to David Schreck, find
this a fascinating debate across the province of British
Columbia."
My
late friend Bruce Erikson always said: "They don't
shoot at dead ducks." In other words, thank you,
George, for acknowledging that you have a problem with
your reasoning.
Try
searching Google or Yahoo on the term "health spending".
You'll find many references to health spending as a
percentage of GDP, but little or nothing with respect
to health spending as a percentage of government budgets.
There is a good reason for that, and it needs to be
understood by everyone, including George Abbott.
According
to BC
Stats, Gross Domestic Product (GDP) is a measure
of value added to the economy. Notwithstanding the philosophical
debate on public vs. private health care, much of health
spending has always been private, including dentistry,
many prescription drugs, medical appliances and home
care. According to the Canadian
Institute for Health Information (CIHI), whose
board includes BC's Deputy Minister of Health :
"Public-sector spending is forecast to reach $113.0
billion in 2007, representing 70.6% of total health
care spending, while private-sector spending (including
privately insured and out-of-pocket expenses) is projected
to reach $47.1 billion this year, a 29.4% share of the
total."
Keep
in mind the 70/30 split between public and private health
spending when you consider Abbott's position that what
counts is public health spending as a percentage of
the provincial budget. According to Abbott's measure
of health costs relative to the total government budget,
eliminating Pharmacare would shift $1.02 billion in
costs from the provincial government to patients who
need pharmaceuticals. Assuming that consumption patterns
wouldn't change as a result (not likely), government
spending on health care would decrease by 7.3% while
private spending on health care would increase by about
17%. Total health spending as a percentage of GDP would
not change, but instead of paying for drugs through
your taxes, you'd pay the full cost when you are sick.
You could do the same exercise for any other component
of health spending, doctors, hospitals, or public health
(restaurant inspections and the like). As long as you
assume that use doesn't change, the result is the same:
spending as a percentage of GDP doesn't change, but
cost shifting decreases government spending.
Of
course the assumption that consumption doesn't change
whether payment is public or private is nonsense. Many
studies support the observation that the lower one's
income the higher the likelihood of almost every type
of disease and disability, and the shorter one's life.
Consequently, shifting health spending from public to
private sources is the ultimate in shifting costs and
taxes from high incomes to low incomes, something the
Campbell government has been doing since its first big
tax cut in 2001 and which it continues to do with its
carbon tax.
Abbott
argued that GDP is an inappropriate measure for heath
spending because we wouldn't want health spending to
be cut simply because GDP declined. Some well-known
political columnists have repeated that line, thereby
showing that the government's spin machine has good
reach. The reason health spending as a proportion of
GDP is an international standard is that it shows the
amount of an economy's capacity that is devoted to providing
health care, whether public or private. No one has suggested
that provincial health spending be tied to GDP, but
it is true that if GDP stagnates or falls, then provincial
revenue is likely to fall and make decisions regarding
spending and taxation more difficult. The Campbell
government has shifted the tax burden to make revenues
less sensitive to GDP, when the economy slows revenues
don't drop as much because of more regressive taxation.
The carbon tax will contribute to that regressive tax
shift. Nevertheless, the importance of the growth in
GDP is illustrated by the space the Ministry of Finance
devotes to discussing it in both the annual budget and
in quarterly budget updates.
Measuring
health spending as a percentage of GDP or of the provincial
budget, is not just an exercise in statistics. It demonstrates
fundamentals about how the economy works, and how incomes
are distributed. When the government cut spending by
30% across all ministries except health and education,
including the Ministry of Children and Families, it
made health and education spending a larger percentage
of total provincial spending. That's an exercise that
could be used in a math class; elementary students would
understand that the size of the health pie doesn't change
just because other services are cut, although its percentage
relative to total provincial spending changes.
Abbott's
refusal to accept the standard of health spending as
a percentage of GDP suggests that he is not being straight
with British Columbians.
Any
serious student of health economics knows that we need
to find strategies to deal with rising health costs.
Since everyone's costs are other people incomes, fights
over health costs are frequently the same as fights
over incomes ; how much doctors and nurses will be paid
often gets translated into issues about quality and
access to health care. It's not easy to separate the
issues, but it is not made any easier when the provincial
government speaks in code rather than being open and
transparent. Instead of trying to disguise attempts
to shift costs from the public to the private sector,
the government should accept responsibility for controlling
costs, and maximizing value for money, whether spending
is publicly or privately incurred. For example, dentists
get away with fixing minimum prices because the provincial
legislation (the Dentists
Act, Section 5(c)) allows their College to provide
fee guides. In other words, even when health costs are
mostly private, the province has a role to play.
There
are many reasons why costs are better controlled, and
access to care is more equitable, when health spending
is entirely through a single-payer public system, but
whether that happens or not, the province has to accept
responsibility for the total level of public and private
health costs, and the quality of health outcomes, rather
than hiding behind cost shifting as if it doesn't matter
when spending is private.
May
7, 2008
Campbell's
Gag-Law
On
November
28, 2007, when speaking about the Electoral Boundaries
Commission and the government's attempt to modify
its terms of reference, Campbell's House Leader, Mike
de Jong, had some interesting thoughts on the concept
of closure. He said:
Hon.
M. de Jong: "I want to say this clearly for
all members. The government will not impose closure
on this bill."
"Bill
39, to my mind, is a unique kind of bill. I thought,
actually, with the limited time available in this sitting,
the members might have some interest
."
"It
is unique, I believe, because it is a bill that provides
- or purports to provide - authority to an independent
commission to assist with the task of reconfiguring
the electoral map. It goes to the heart of the electoral
process in British Columbia."
"I
believe, and the government believes, that the commission
we ask to do that work deserves to know that the will
of parliament has been freely expressed. It would be
improper to impose closure knowing that the mandate
that derives out of that is one that the commission
would be moving forward with in pursuit of the fulfilment
of its duties."
"I
actually do draw a distinction between that type of
bill, which goes to the heart of our electoral process,
and a bill that has been on the order paper for seven
months and that other considerations seem to be at play.
I do make that distinction." (emphasis added)
On
May 6, 2008, de Jong advised the Legislature that the
government would invoke closure on Bills 20, 21, 24, 29,
32, 37, 42 and 43. In addition to controversial gag legislation
during election campaigns (Bill 42), those Bills include
the carbon tax and electronic health records. None
of those Bills have been on the Order paper for seven
months, or anything close to it. The carbon tax has been
on the order paper since April 28th, amendments to the
Election Act since April 30th, just a week prior
to government announcing that closure would be used to
force it into law. What's different between amending the
Election Act with a week's notice and then applying
closure, compared to backing off on closure for electoral
boundaries?
All
of the controversial legislation deserves attention, but
none illustrates the hypocrisy of the Campbell government
as much as its gag-law. In Opposition, the Campbell Liberals
railed against the NDP over the issue of restricting so
called "third-party" advertising during election
campaigns. They promised to end restrictions, and did
so for the 2005 campaign through Bill
59 (2002).
In
2004, two years after BC's elimination of restrictions
on third party advertising, a case Stephen Harper started
against Elections Canada reached a decision in the Supreme
Court of Canada, which ruled against his claim that restricting
third party advertising during election campaigns is unconstitutional.
While Harper lost that challenge, in discussing its reasoning
( 2004
SCC 33) the court said:
"Third
party advertising is unrestricted prior to the commencement
of the election period, and third parties may freely
spend money or advertise to make their views known or
to persuade others. Further, the definition of "election
advertising" in s. 319 only applies to advertising
that is associated with a candidate or party."
The
Campbell government has taken election gag provisions
beyond the 28 day period of the election writ and
beyond advertising that is associated with a candidate
or party.
Bill
42 redefines "election advertising"
as meaning: " the transmission to the public
by any means, during the period beginning 120 days
before a campaign period and ending at the end of
the campaign period, of an advertising message that
promotes or opposes, directly or indirectly, a registered
political party or the election of a candidate, including
an advertising message that takes a position on an
issue with which a registered political party or candidate
is associated".
Under
the Campbell government's restrictions on free speech,
it would be illegal to run an advertisement reacting
to the February 2009 Throne Speech or Budget Speech,
since those are associated with a political party,
even though the election won't be held until May 12,
2009. The formal campaign period beings 28 days prior
to May 12 (April 15), and 120 days prior to that is
December 15th. So it would be illegal to run a radio
ad over the Christmas holidays in 2008 calling on
the Campbell government to do something about poverty
by raising the minimum wage, because his government
is associated with opposing a higher minimum wage.
The
Campbell government may try to defend itself by arguing
that its amendments permit third party election advertising,
but subject to a maximum of $3,000 per constituency
or $150,000 overall. For most individuals those limits
exceed what they'd spend, but for organizations such
as the Canadian Taxpayers Association or the BC Teachers
Federation, that doesn't buy squat by way of a media
campaign. Imagine what would happen if the Campbell
government increased taxes in its February 2009 budget
speech and the Canadian Taxpayers Association wanted
to fight back! Such freedom of speech would be illegal
according to the Campbell government.
It
is inconceivable that Bill 42 will withstand a constitutional
challenge, but as it did with its contract breaking
Bill 29 (2002), the Campbell government appears willing
to ignore the Charter of Rights and Freedoms until
someone goes to the time and expense of taking them
all the way to the Supreme Court of Canada. This time
the government might be stopped by an injunction long
before that final day in the highest court.
One
unintended consequence of the Bill 42 amendments may be
its affect on websites like mine. For the past several
elections I've received nasty letters from the Chief Electoral
Officer saying that I need to register as a third party,
even though I publish my site 365 days a year, election
or no election. I respectfully tell them to bug-off, and
never hear from them again. According to Bill 42, the
penalty for violating the Act and engaging in election
advertising (Section 235.2) is "a penalty of 10 times
the amount by which the value of the election advertising
sponsored by the sponsor exceeds the limit". Since
most blogs cost far less than a dollar a day, the penalty
for free speech over the Internet would be less than the
cost of a cappuccino. That won't stop the bureaucrats
from insisting that anyone who uses the Internet needs
to register with them from December 15, 2008, through
May 12, 2009 in order to express their opinions over the
Net. The Campbell government may generate enough outrage
to make an interesting court case.