Warning: Mulroney has another big idea for health care!

Brian Mulroney's big idea is costing our health-care
sytem at least $7.5 Billion more in excessive
drug costs, writes Michael McBane

Former Prime Minister Brian Mulroney recently wrote that he wants Prime Minister Harper to do something big about health care: “We are facing a genuine, genuine problem of quite enormous dimensions… obviously the financing is completely out of whack”.

Mulroney did something big to health care when he was in office. He extended monopoly drug patent protection to twenty years, abolished compulsory licensing for brand-name drugs, and fixed introductory prices for new drugs at artificially high levels. As a result of these Mulroney policies, Canada now pays 30% more for prescription drugs than the OECD average.

This means that Mulroney’s big idea is costing our health care system at least $7.5 billion a year more in excessive drug costs. It takes a lot of gall for him to now claim he is worried about rising health care costs.

Mulroney, like many other elites, is using health care “sustainability” as a code word for extra-billing and ushering in two-tier health care. The elite want to shift public spending on health care, financed by progressive taxation, to private expenditures in the form of user-fees on the sick and private insurance premiums.

What makes this prescription disingenuous is that shifting to more private spending is a way to avoid containing rising costs. You don’t hear Mulroney say, for example, that we need to rein in drug companies like Merck, whose profits in 2009 were $12.9 billion on revenues of $27 billion.

Are we to believe that “unsustainable” public spending is somehow magically sustainable when shifted from taxpayers to patients?

The facts show that public health care spending is sustainable, and that the real cost driver of increases in health care spending comes from private health services not covered by public health insurance, like prescription drugs and dental services.

Spending on the public health care system – hospitals and physician services – is between 4 and 5% of GDP from 1975 to 2010. Total health care spending which includes private spending is rising at a much higher rate and is currently at 12% of GDP. Spending on prescription drugs in Canada between 1999 and 2009, per capita, inflation adjusted, has increased 73.7%.

Interestingly enough, Conrad Black understands the economics of private health care and its perverse incentives. He observed that if the U.S. was to bring costs down to the level of comparable social-service countries such as Canada, it would have to take $4,000 per patient back from the medical and legal professions, and drug, hospital and insurance industries.

Mulroney and other elites have called for ‘an adult conversation’ on the need to change the way health care is financed in Canada. As UBC health economist, Robert Evans said, it is long past time for an ‘adult conversation’ that clearly identifies the winners and losers from eroding or dismantling Medicare. Any opinion leader that avoids this should be shamed.

Michael McBane is national coordinator of the Canadian Health Coalition in Ottawa.

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