Manhattan Institute for Policy Research.
search  
 
Subscribe   Subscribe   MI on Facebook Find us on Twitter Find us on Instagram      
 
 
   
 
     
 

National Post

 

Gammon's Law

May 27, 2004

By David Gratzer

Another election, and and once again politicians are throwing money at health care. With all the spending, why isn't it getting any better?

"Health care is the single most important priority of Canadians. Canadians want renewal for this generation and for generations to come. This sets out an action plan that will ensure all Canadians have timely access to quality health care on the basis of need and not ability to pay. For its part, the Government of Canada is making significant investments ..."

Prime Minister of Canada, announcing new funding

In Groundhog Day, Bill Murray plays a weatherman stuck in time. Each morning he wakes to find himself fated to repeat the same dreary winter's day. With the launch of the election campaign, Canadian must surely wonder if they have been caught in some type of electoral Groundhog Day, fated to hear the same "new" health initiative over and over. On Tuesday, the Liberals made their first major announcement: more money for health care. There is a sense of deja vu -- in recent years, provincial and federal politicians have promised additional health money. Alas, increasing the funding may be good politics but, unfortunately, it will do little to help our health care system.

"This will be our No. 1 priority as a government," Prime Minister Paul Martin declared. He promises more than $11-billion for medicare and the creation of a new national home care program. What to make of the funding pledge? We've been here before. In fact, it was just last year that the leader of the Liberal Party promised a similar "investment." The quotation that opens this article is Jean Chretien's, from last March. Such promises are now part and parcel of Canadian politics. In the 2000 election, Mr. Chretien promised "the largest single investment in health care in our country's history" -- as he had in 1997. Mr. Martin's pledge, thus, must be taken in context: same party, same approach - and the result will be similarly disappointing.

And the home care idea? This, too, is stale. National home care has been a Liberal election pledge for their last three national campaigns. If they are quick to promise and slow to deliver, there's a good reason. Home care programs have existed at the provincial level for more than a quarter-century. A new national home care program may make for flashy press releases, but it would simply add an unneeded layer of bureaucracy to our health care system.

The promise of money and medicare expansion, though, is the flavour of the month. It was just last week the Ontario Liberals released their first budget. In all, they froze spending in 15 ministries -- but still found the money to boost health spending by more than $2.4-billion. They also promised new "health teams" and free immunizations for children. The situation is similar across the country -- health spending is on the rise, often chased with promises of primary care reform, inoculations for kids and the like. Health funding now eats up roughly 50 cents on every dollar spent by the provinces (exempting debt servicing).

What's sparking the sudden multi-partisan desire to throw money at medicare? Canadians are concerned. Indeed, polls suggest that of the issues concerning Canadians, health care is the top priority. This angst is hardly surprising: Study after study suggests Canadian wait too long to get the care they need. Statistics Canada reports more than a million people are waiting for some type of health care.

But public acknowledgment of medicare's deep woes -- waiting lists, inadequate medical technology, a dearth of doctors and nurses -- has not resulted in a meaningful agenda forwarded by our politicians. Health spending across the country has been soaring in recent years, up from $78.5-billion in 1997 to $121.4-billion in 2003. (See table at left.) Health expenditures in Ontario, by the way, rose long before Mr. McGuinty's election, up from $30.7-billion to $48.3-billion over that period. If more money were the cure, wouldn't Ontario's 57% increase over the past seven years have done just that? In fact, it's difficult to argue we've seen any improvement.

Dr. Max Gammon was a British physician who sought to solve a public policy riddle: In the 1960s, the government spent significantly more on health care than it had previously, but the National Health Service didn't seem any better for it. After an extensive study of the British system of socialized medicine, Dr. Gammon formulated his law: "In a bureaucratic system, increase in expenditure will be matched by fall in production."

Dr. Gammon reasoned: "Such systems will act rather like 'black holes,' in the economic universe, simultaneously sucking in resources, and shrinking in terms of 'emitted production.' "

Canada is witnessing its own demonstration of Gammon's Law when it comes to health care. Funding is up, but outcomes aren't. After years of health reforms, ERs are still overcrowd, patients wait months for basic tests, specialty care is difficult to get access to. Undoubtedly, part of the problem is the stresses all Western countries face: an ageing population demanding more health services coupled with the "high-tech, high cost" medical revolution. But neither trend can explain the problems of the past few years -- after all, we aren't significantly older than we were as a nation back in 1997, nor could anyone credibly say that new technology has sucked up 57% of new moneys in Ontario. Gammon's Law is at play.

And, should the Liberals win re-election, little will change except the amount of money spent on medicare. At the end of Groundhog Day, the main character learns to break the pathological pattern and move forward. Will Canadians?

Original Source: http://www.manhattan-institute.org/html/_finpost-gammons_law.htm

 

 
PRINTER FRIENDLY
 
LATEST FROM OUR SCHOLARS

‘Afroducking’ The Law: Deadly Excuses For Endangering Others
Nicole Gelinas, 11-17-14

2014’s Most Encouraging Democratic Victory
Daniel DiSalvo, 11-14-14

Bring Deferred Prosecution Agreements Out Of The Shadows
James R. Copland, 11-12-14

Coal Trumps IPCC, Again
Robert Bryce, 11-12-14

World Leaders, Ignore Obama And Do These Five Things Instead
Diana Furchtgott-Roth, 11-12-14

ACA Architect: ‘The Stupidity Of The American Voter’ Led Us To Hide ACA Costs
Avik Roy, 11-11-14

Cancer Drug Prices: A Convenient Scapegoat for a Complex Problem
Paul Howard, 11-11-14

A Supreme Court Case That Could Upend Obamacare
Diana Furchtgott-Roth, 11-11-14

 
 
 

The Manhattan Institute, a 501(c)(3), is a think tank whose mission is to develop and disseminate new ideas
that foster greater economic choice and individual responsibility.

Copyright © 2014 Manhattan Institute for Policy Research, Inc. All rights reserved.

52 Vanderbilt Avenue, New York, N.Y. 10017
phone (212) 599-7000 / fax (212) 599-3494