Remarks by A. Charles Baillie, Chairman & Chief Executive Officer of Toronto Dominion Bank, to the Vancouver Board of Trade
April 15, 1999
Vancouver, B.C.
You may be relieved to know that I am not here to talk narrowly about banking and the challenges it faces. Rather, I am here to talk more broadly about the country - and one of the central challenges we face. And that is health care - its state and its sustainability into the future. I choose that topic as a citizen who believes that our system of health care helps define the quality and the character of this nation. I do so as a parent who feels we have an obligation to ensure that legacy is passed on to our children. I do so as the son of a small city doctor whose compassion, in the days before medicare, was too often all that stood in the way of the sick having to choose between retaini ng their life savings or recovering their health. And, yes, I do so as well as a banker - as a corporate leader - because I believe it's high time that we in the private sector went on the record to make the case that Canada's health care system is an economic asset, not a burden, one that today, more than ever, our country dare not lose.
As we speak, if there is one priority that brings Canadians together from coast to coast, it is their desire to see our universal system of health care preserved. It is the number one issue for them. All around, they see signs and symptoms of decline. Delays in service. Discouraged doctors and nurses. Costs that seem to be escalating every year. Mounting evidence that the system has developed serious flaws. Now, one way to deal with a flawed system is to throw out the system itself. But it is my belief that this would be a clear case of the cure being much worse than the disease. For our publicly funded universal system is the fai rest, most equitable of all alternatives. It, theoretically at least, is also the lowest cost. It is a contributor to the unity of our country. And for many, many years it has served Canadians well.
The alternative is obvious: a two or multi-tier system. My point is this: while it may come to that - if we fail to act forcefully and with foresight - the positive features of our system are such that I believe we have an obligation to undertake an all-out effort to save it. Now, some might say, despite the problems we face, surely there is no risk that we will lose our health care system. Surely, the danger has passed. After all, aren't health budgets across the country now growing more strongly? Isn't the fiscal mess that threatened funding now, by and large, being cleaned up?
Well, to some extent, this is true. But I am profoundly worried that we have yet to appreciate the full scope of the challenges we still face and the unmet need for dramatic change. And so bef ore us is the opportunity to succeed. But before us as well is the risk we shall fail. How? Fail through reluctance to tackle real reform and the temptation to only tinker. Through the inexorable force of demography and the chronically rising costs of modern technology and treatment. And through an abiding and building fear among the public that the system won't survive, resulting in the loss of an essential underpinning of our system: confidence. All of these factors taken together - each reinforcing the others - contribute to what I believe is a clear danger to our precious health care system.
Now, I am not saying the system might crash today - or tomorrow. It will not. Notwithstanding many surveys that show a belief that the quality of health care is declining, most Canadians actually report satisfaction with their own, most recent experience with the system. And notwithstanding some very real, specific problems, the quality of our facilities and our providers a nd services by and large remains high. My point is this: if we don't develop and pursue now long-range multi-faceted strategies to correct the ills of the current health care system and to prepare for the day that is around the corner - when Canada's population will be older than at any point in our history - we will have made a grave error.
Now, you may say, why would a banker care about any of that. Surely this issue is not really any of my business. Surely I am actually indifferent, as a businessperson, to the outcome. Well, I happen to be someone who believes that a great country is not just an address, some sort of geographic convenience. It is a community. It is not simply a construct of economic value. It should also be about social worth.
We Canadians made a decision a generation ago that gave content to that proposition: that every person in this large community - young and old, rich and poor - has a right, by virtue of our common citizenship an d our common humanity, to equal access to equal health care. That mutual commitment has been a force for national unity - a concrete expression of our common Canadian cause. Stated simply, I believe our national spirit would be diminished were we to let our health care system go.
But there is a further aspect to this issue. Some say that we, as a country, cannot afford medicare any more. That however nice ideally it would be to retain the system, we simply cannot in practice. That it is perhaps time to let medicare operate on free market principles. Let me be as clear as I can be. To set aside our single-payer, publicly funded universal health care system would not simply be a moral error. It would be a grave economic error as well.
The fact is, the free market, efficient and desirable as it is, cannot work in the context of universal health care. While health care could be purchased like any other form of insurance, the real point is that the risk and resource equatio n will always be such that, in some cases, demand will not be matched by supply. In other words, some people will always be left out. The fact is, provided we can make it more efficient and effective, our kind of system is inherently superior to the alternative. The reasons are clear.
The system covers everyone. Therefore, economies of scale are maximized. There is no rating or discrimination. Therefore, large administrative savings occur. The system is financed through general revenues. Therefore, there is no costly stand alone collection system. And payments are provided directly to physicians. Therefore, expensive multi-stage billing is avoided. In other words, not only is our system more fair than the alternative. It is also more affordable.
That is not argument. It is fact. Consider this: before medicare was introduced in this country, Canada and the United States paid about the same, per capita, for health care. Today, Canada spends about 9 per cent of GDP. But the U. S. spends over 14 per cent - and rising. Yet Americans are no healthier than are we. And more than 40 million Americans are not covered. The administrative costs of the U.S. system have been estimated to be about three times ours. Indeed, it has been calculated that if they were to adopt our kind of system, the savings would be so large as to allow them to provide coverage for those 40 million plus citizens.
The fact is, moving away from a single payer publicly funded system might cost government less. But it would cost the country more. It would cost every business, large and small, more if they had to pay for benefits themselves. It would, in a very real sense, constitute a de facto increase in taxation - for employers or for employees or both.
Now, I am not saying the status quo is a solution. Far from it. Indeed, if we are to sustain the principles of the system, we must change the practice - and in ways far more far reaching than we have seen up to now. But w hat I am saying is that in an era of globalization, we need every competitive and comparative advantage we have. And the fundamentals of our health care system are one of those advantages.
Now, some of those who believe we can or should move towards a parallel system of private health care might say, what's all the fuss? After all, don't we already have two-tier medicare in this country. Can't the wealthy get on a plane and go to the Mayo Clinic? Don't the citizens of major cities enjoy better access to care than do residents in rural and remote areas? Isn't it a fact that if you have friends or contacts in the right places, you can move to the front of the line? However valid these points may seem on the surface, they miss the core point.
Yes, the wealthy, if they want, can leave the country and pay to use another nation's system. The fact is, we cannot and would not want to stop people from travelling, and we can't dictate what the U.S. practice is. But I am talking about this nation's system - what is and is not acceptable - for our citizens within our borders.
Next, we know that there are indeed differences in services between urban and non-urban areas. That is, perhaps inevitable, an unfortunate fact of life. That being said, surely we can work to reduce the disparities as much as we can. Differences in service is not a reason to discard the whole system. The issue of influence and favouritism. Perhaps that occurs. Indeed, almost certainly it does. But there is a world of difference between realizing that may go on and openly embracing a system where literally buying your way to the front of the line is not simply an occasional practice, but actually a fundamental principle of the system itself.
Another point. Most Canadians who, quite naturally out of fear for the future, may be mulling over the desirability of private health care probably believe, (a), that they would be eligible and, (b), that they could afford it. But remem ber how a private insurance system works. There is rating. There is discrimination. For those in high risk groups, that means, at best, very high premiums ? or, at worst, no coverage. And if insurance is not the issue, but rather walking off the street and simply paying for a service, I wonder how many middle-class Canadians realize that a cardiac bypass operation would cost them $50,000 to $100,000.
Well, what then is the solution to our nation-wide health care challenge. Is it dollars? Well, it is, in part. Public dollars, not private dollars. Benign neglect from governments will kill public health care as surely as any explicit decision. Good health care cannot live on love.
But let us be very clear. This is a matter of long-term commitment. A budget here, a re-investment there will help but they will not do the job. With an ageing population and the rising costs of technology and treatment, we are in for decades, not years, of rising budgets - that is if we do not want to see the slow motion collapse of the system. Let me recognize that we will not 'fix' universal health care by capping or lowering costs. The forces I have identified mean that health care, no matter what form it takes, will consume an ever-increasing proportion of our GDP. The best we can do is manage the increased costs and ensure that funds are intelligently invested.
And so, the issue is not only how much we spend, but rather how we spend it. Health care is no different than any other activity. There can be waste. There can be inefficiency. There can be misplaced priorities and the poor allocation of resources. And here, I have a great sense of foreboding as I begin to see how and where new resources may be spent now that governments are in a position to increase budgets.
You know, the fiscal crisis of the past decade put decision makers at all levels in a very difficult situation. Very significant savings in health care were demanded in short order. This, almost inevitably, resulted in decisions that were often taken in isolation and taken too quickly. But a bad movie does not become a good one when it is played in reverse. I believe we are in a very real danger of repeating the errors of the past. Of responding only to short-term interest group pressures and electoral timetables. Of trying to rebuild the system of the past ? which we cannot ultimately afford - rather than building a new system - which we can afford. And of failing to respond to the opportunities modern medicine presents - and the challenges an ageing population poses.
In short, I worry that dollars may become an excuse to cancel needed reform, rather than the reason why needed reform can now proceed. I believe we must face some hard truths and make the hard choices - and we must do so now and we must do it right. We got it wrong in the 60s and 70s when we let the system grow like topsy. We did not always get it right in the late 80s and 90s when we c ut or capped funding without any long term and comprehensive strategy.
Well, we can't get it wrong yet again. There is very little time. Money is still very scarce. But most importantly, the confidence of the public is such - their fear so great - that if we don't do it right [this] time, it may be the straw that breaks the camel's back. And so, let me put forward some propositions about the direction of needed change.
First, the debate is often framed in terms of short-term versus long-term needs. The truth of the matter is we must face - and reconcile - both together. If we focus only on the short-term, present problems, we will simply postpone disaster. But if we neglect the short-term in the interest of only building for the long-term, we will simply cause confidence in the quality of our publicly-funded system to corrode to the breaking point. But here's the trick. Decisions made - or not made - today can prejudice the future. For example, if we simply rush to re-open wards or reverse decisions to consolidate institutions, we risk both foreclosing future options and, as importantly, not addressing the real problem but only its symptoms. If the new resources being made available today are solely devoted to increasing salaries or building new medical monuments, we will have done virtually nothing to sustain the system. For example, we must recognize in deed - not only in words - that the solution to many of the pressures we see in acute care hospitals lies outside the hospital. How many beds are occupied by patients who could be - and should be - in long-term care facilities that might cost one third or one quarter the amount? And how many of the people who crowd our ERs could ? and should be - treated in community clinics? As our population ages and as budgets continue to be very tight, we've simply got to get serious about community care and home care. Although some jurisdictions are ahead of ot hers, the fact is, as a nation, we are not serious now. These are not what some have called 'boutique' programs. They are, in a very real sense, the sine qua non of sustainability. Yet we still spend a pittance on them compared to what we should. The result? Over-reliance on hospitals; unacceptable pressures on informal caregivers - usually women; increasing costs for families forced to bear the financial burden themselves; and real inequity between those who can afford to buy care and those who cannot.
Next, as a society we must come to grips with primary care reform. So far, we've tinkered and we've postponed. But we need a system that does a better job at providing incentives to focus on health promotion and the prevention of illness. And we also need to be much more active in encouraging the creation of multi-disciplinary clinics where patients can be seen on a seven day a week basis by a full range of providers. Solo acts do not provide the efficiency and effective ness we need.
A word on research. I do not downplay the importance of world class medical research - both for its own merits and its ability to help keep the best and brightest here. But I am very concerned with how research is being approached.Too often, we seem to be caught up in a keep-up-with-the-Jones' mentality. A view that a province or a hospital is second class if it doesn't have its own 'genome facility' or whatever else is on the hit parade. But surely there could be more of a notion of division of labour - and of comparative advantage. Canada can't - and shouldn't - believe it can do it all. More importantly, are we devoting the resources we should be to the diseases and illnesses that will matter the most in the future? There is a 'beauty pageant' tendency to research. Some ailments seem simply notthat is a real and valid issue. But it goes further. If we don't get the tax burden down, get the debt burden down, and get productivity up on a su stained basis, I fear that governments in the future will not have the room to raise the resources needed for our health care system. That's why the right decisions have to be made today to build a more effective and efficient health care system. And that's why fiscal health is literally about the physical health of Canadians.
One last thought. I believe there is a risk that the baby boom generation ? which has always been the 'more, better, now' generation - will not only present themselves in vast numbers as the elderly - but that their unprecedented expectations may well lead to private health care - and the end of our publicly funded universal system.
They will simply demand the very best - damn the costs or the consequences. If the public system is unable to provide it, they will insist on a private alternative. If you thought the boomers were militant in the '60s, wait until you see them in their 60s. The first wave will hit 60 in five years. And p oliticians will respond. Think about it. One of the baby boom's last and greatest legacies risks being a more expensive and less equitable system of health care - imposed upon overtaxed and overburdened younger generations - a system they will be even less able to afford than are we. If you want one example of profound unfairness between the generations, this is it. This is a real Y2K problem. We must fix it - and fix it now.