To Deliver on Her Campaign Promise on Health Care, Smith Needs Innovative Solutions: Analysts

Alberta Premier Danielle Smith waits for the swearing in of her new cabinet in Edmonton on June 9, 2023. Jason Franson/The Canadian Press

The month after becoming Alberta premier in October 2022, when she won the United Conservative Party (UCP) leadership race, Danielle Smith dismissed the entire Alberta Health Services board and appointed a single administrator to allow health-care reform to be implemented more quickly.

The urgent priorities identified for Dr. John Cowell included improving wait times and consulting with front-line workers and others on long-term reforms.

Ahead of the May 2023 election, Smith’s UCP promised to improve emergency response times and address surgery backlogs.

To deliver on these promises, sweeping changes to the system are needed, says Nadeem Esmail, a senior fellow at the Fraser Institute.

“Tinkering with the number of administrators and spending more money are not the solution,” Esmail told The Epoch Times by email.

He said in keeping with Canada’s universal health-care system, there are other countries that have more successful models which “deliver more timely access ... for similar or less than we spend on health care, by doing health policy differently.”

Those countries, rather than giving hospitals an annual budget, instead provide “activity-based funding“—money for each patient treated—a model that better connects funding with service volume and quality, Esmail said.

He said access to privately paid services in those nations also “play an important role.” 

Colin Craig, president of the SecondStreet.org think thank, also said that to effectively improve health-care delivery, the province needs to be innovative and look outside Alberta and even Canada for good models.

“Partnering with private clinics to try to reduce the surgical backlog, I think that’s a positive step,” Craig told The Epoch Times.

Activity-Based Funding

Esmail said that “in countries such as Switzerland, Germany, France, Japan, and every other developed country with universal health care (except Canada, Iceland, Ireland, Luxembourg and New Zealand), hospitals are paid with ‘activity-based funding,’ where money follows the patient.”

This means hospitals are paid “on a per-case basis (adjusted for medical complexity) with each patient bringing a predetermined amount of money with them based on their particular condition and unique care needs.”

This way, “patients transform from a drain on hospital budgets into a source of additional revenue,” he said. “[This] creates powerful incentives for hospitals to increase activity, improve efficiency, and focus more on patient-centred services.”

Esmail said it also incentivizes hospitals to improve the quality of care, “which produces a positive reputation [and] will attract more patients (and thus more revenue).”

Currently, he said, Canada’s hospitals for the most part receive an annual budget, which incentivizes them to “view patients as costs rather than sources of funding.”

Quebec is introducing activity-based funding and Alberta should follow that lead, Esmail said.

Private Sector

Esmail suggests Alberta’s health-care reforms should also let private hospitals play a large role.

He acknowledged that “the premier has said cost sharing is off the table,” but said that when patients share in the cost of their health care, “with limits and exemptions for lower-income individuals, ... it encourages them to make more informed decisions about when and where to access the health-care system.”

Health-care reform is fundamentally tied to the federal government, which controls the Canada Health Transfer to the provinces and can penalize them by withdrawing funding if they deviate from the schemes Ottawa imposes.

But Craig says that means Canadians will go elsewhere for options.

“Wealthy Canadians are travelling abroad right now, to get surgery, to get it done faster, to ease their pain and suffering,” he says. “They’re spending their dollars supporting other economies.”

He adds that not only the wealthy are leaving their provinces for health care. His think tank has heard from middle-income Canadians who “can’t afford to take a year off work and sit in chronic pain and lose income, so they go abroad and get the surgery they need.”

Craig suggested Smith consider seeking a Supreme Court decision on whether Albertans can pay for surgery in their own province outside of the public system.

Quebecers have had that right for a long time. The Supreme Court ruled 4–3 in 2005 that Quebec’s ban on private health care went against the province’s Charter of Human Rights and Freedoms given the unreasonably long wait times.

The court in April announced it wouldn’t hear a case brought by Vancouver orthopedic surgeon Dr. Brian Day and patient plaintiffs seeking the right to private health care in B.C.

Craig said the court thus created “two-tiered health care by giving Quebec patients more rights ... than the rest of the country.”

He said a premier could potentially “force the Supreme Court to make a decision on the matter. And it would likely be very difficult for the Supreme Court to formally conclude that Quebecers deserve more health-care rights than the rest of the country.”

‘Marginal’ Reforms

According to Jack Mintz, President’s Fellow of the School of Public Policy at the University of Calgary, “Health care is a mess, not just in Alberta, but in most other provinces too.”

In a June 2 commentary in the Financial Post, Mintz said there are too few doctors for a rapidly aging population, too much overuse of emergency care, too little preventive care, and inadequate support for vulnerable populations needing non-medicare services like drugs and home care.

Meanwhile, the changes voters seem willing to accept are “marginal.”

He wrote that “most provinces contract services to organizations that can do them more efficiently and at less cost than high-price hospitals. The Smith government can continue that trend.”

However, without clearer public support, he says Alberta is “not likely to try European-style reforms.”

Esmail says hospital activity-based funding and a larger private-sector role in delivering hospital and surgical care would markedly improve health-care system access and efficiency for Albertans.

“[These policies] have been introduced decades ago in other universal access health care systems with the result of better access to more efficiently delivered universal health care,” he said.

Alberta Health spokesperson Scott Johnston told The Epoch Times on June 6 that he couldn’t share the government’s plans for additional health-care reforms at this time. “We aren’t able to comment on any potential change in policy until those changes can be reviewed by cabinet,” he said.