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The OECD Attack on Medicare

The OECD Economic Survey of Canada (unfortunately only a summary is available on line) was released this week, and its call to impose user fees or deductibles on services covered by Medicare (ie physician and hospital care) received quite a lot of media coverage.  I saw OECD economist Peter Jarrett doing at least two TV interviews here in Canada which strikes me as unusual. Someone seems to have orchestrated quite a media buzz on the user fee issue.

By way of background, OECD country surveys are mainly put together by the OECD Economics Department with major input from the Canadian Department of Finance and the Bank of Canada. There is relatively little input from the social policy directorate at the OECD (DELSA) or social departments here at home.  At the CLC, we are consulted at a very early stage, but never get to see a draft report.

OECD messages tend to hue very closely to the neo liberal economic mainstream, and are tweaked by Finance to build support for desired policy shifts. Sometimes Finance makes sure that their message gets heard even if the political line here at home is different (eg the GST cut.)

I am told by my Paris sources that DELSA at the OECD does not generally advocate user fees or deductibles for essential health care services. The fact that the recommendation is in this report and was highlighted is something of a signal of  where Finance might want to move us.

“Hey provinces, we will cut the transfers for health care as part of balancing the federal books, but, not to worry, you can make up the difference through user fees and deductibles, as recommended by the OECD.”

The OECD Economic Survey (surprise) is very much focused on “fiscal consolidation” and argues that several provinces have unsustainable fiscal positions which need to be addressed by cuts in net spending,  and explicitly calls for cuts in health care (or at least very constrained growth of spending.)

The great majority of Canadians strongly support our public health care system which provides universal access to physician and hospital services at no cost to patients within a predominantly publicly delivered system. Somewhat unusually in the OECD world, not only are user fees and deductibles of any kind not part of the system (this is true of the NHS as well), they are illegal under the Canada Health Act.  
Rather than carefully fairly weigh the Canadian evidence, and rather than respect the very politically charged nature of the policy debate in Canada, the OECD weighed in loudly on the side of more fees for patients, and more privatization of service delivery.

With respect to the issue of charging user fees or imposing deductibles for access to Medicare funded services,  the Romanow Royal Commission found that fees would deter access by low income patients, eventually driving up system costs.  The OECD report itself notes (p.137) that the Canadian system is the best in the OECD in terms of providing equitable access to physician and hospital services. The report also notes (Fig. 3.6) that Medicare costs have not grown as a share of GDP since the early 1990s and are well in line with the costs of other national public health care systems.  It shows that it is in the private not the publicly insured part of our system that cost pressures have been greatest.
The OECD report similarly endorses more private delivery of hospital services without any serious consideration of the Canadian and international evidence that this would drain staff and other resources from the public system and lead to queue jumping by the affluent at the expense of those in greatest need.  Again, the research of the Romanow Commission is largely ignored.
Canadians know and understand that private insurance and private delivery are the hallmarks of the US health care system, which is the most expensive in the OECD and provides the least equitable access to services.
To its credit, the OECD report calls for the inclusion of pharmaceutical drugs and home care into the public part of the health care system in order to enhance equality of access to services and to contain costs. Yet, perversely, the authors seem to think that privatization in the public part of the system will lower costs and not damage equal access.

The OECD as a whole will be discredited by this foray into the politically charged issue of  Medicare, and Canadians should be more than a little alarmed by what the economic policy establishment seems to have in mind for us.

Enjoy and share:


Comment from Erin Weir
Time: September 16, 2010, 9:00 am

It strikes me that they are trying to exploit the opening created by Quebec’s last budget.

Comment from Paul Tulloch
Time: September 16, 2010, 10:01 am

The OECD has definitely stepped over a boundary with this report and I do hope their reputation takes the hit it needs.

Comment from Travis Fast
Time: September 16, 2010, 10:07 am

And you thought I was too cynical the last time the OECD and country reports came up. Nice that they can just ignore the research on user fees and total cost savings. Neoliberal prosperity was hard enough; neoliberal austerity is going to be something quite phantasmagoric.

Comment from Erin Weir
Time: September 16, 2010, 10:16 am

This baseless attack on medicare comes only six months after the OECD proposed privatizing Canada Post without doing “a study of the postal sector or Canada Post.”

Comment from Paul Tulloch
Time: September 16, 2010, 12:52 pm

Erin, I think you know who to target in your future endeavors- should you choose to accept that mission.

I can let you use my special pen and potentially we can arm you with a new Ipad (they rock!)

This comment will self destruct in 10 seconds!

Comment from Kelsey Kirkland
Time: September 17, 2010, 10:11 am

OECD has no credibilty or is incredible as the case may be. In May 2010, OECD officially granted Israel membership, unprecedented decision for OECD to include a country of that size. I am sure OECD understood making Israel a 31st member of OECD goes well with its aspirations to become EU member.

OECD also knowingly published misleading Israeli statistics just before approving the membership.

Rather than pushing for Medicare to expand to include less invasive therapies and modalities apart from exclusively allopathic treatments only, OECD is advocating fees.

Watch for OECD on its way to act as the IAEA of Economics.

Comment from Brian Dell
Time: October 13, 2010, 11:03 pm

I worked at Finance Canada and I am very curious as to what your sources are for your claims.

Comment from Andrew Jackson
Time: October 14, 2010, 6:55 am

Brian – re Finance and the OECD process see my chapter in this book –

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