Tuesday, 26 March 2013

Chronic disease, bad medicine

In my last blog about the Alberta budget, I mentioned that both Health and Education services should be restructured. Events of the past week have made it more imperative for the government to do so. There is why:

Although Albertans are reasonably pleased with their doctors, they feel that access to services remain a major problem. According to a Health Quality Council of Alberta survey showed that the medical system and little coordination among health care providers are still a problem.

The continued , dispute between the Minister Fred Horne and the Alberta Medical Association shows that a complete restructuring of the health services need to be undertaken, There are several issues to be considered and a focus on doctors’  salaries is not the starting point.

 In Alberta we must understand that doctors are quasi contractors, who get a fee from the province for their services. As contractors, doctors must maintain their offices, pay staff and overheads. While the size and amenities of these offices may depend on the doctors’ choice, the costs are still theirs to pay.

The current dispute resides in the fact that the government in its proposal has frozen the total budget for the doctors’ compensation at $3.4 billion for this year. In addition the Minister has introduced another wrinkle as he requested another $275 million in reductions to pay for 300 new doctors.

With a shortage of doctors and a mediocre service delivery Albertans are faced with more waits for treatment. One aspect of this continued dispute, if not settled amicably and to the satisfaction of both sides, is that doctors may start to leave the province for greener pastures. Depending on how you look at it, Obamacare will have an impact on the supply of doctors in Canada. Under scenario one, if the new law is implemented the United States will need more doctors. If Alberta becomes too onerous to practice, our physicians may decide to leave and thus cause more problems down the road. The second scenario is that Obamacare causes American doctors to close their practice. As a result, Canada may become their choice of destination. This may be a good thing for our system. However if Alberta is seen as a place where it is difficult for doctors to operate, we may miss on an opportunity to attract doctors.

Going after doctors,  in my opinion is not the right way to balance the health care budget. There are other places such as administration, change in the delivery system, and union contracts that could be look at before we alienate doctors. However, how we do this may be part of a larger discussion in another blog.

As a cross-over, Mount Royal University has decided to close its program for the accreditation of foreign nurses. Once again it seems that the education system does not have its priorities right. We continue to educate some people in subjects that may not be required by the market place and yet we cut programs that may provide solutions to an increasing labour shortage in certain industries, The above example , is  but one of the reasons why the Institute opposed the establishment of Mount Royal College into a University.

Then we have a farce in the making. The Minister of Advanced Education has put forward a proposal for teachers’ wages, but the behavior of some school boards is so bizarre that it should make taxpayers cringe. While some school boards have accepted the proposal, others have not. At the same time The Calgary School Board has allocated over $1 million for pay raise for non-unionized administrative officials, while thousands of teachers are being asked to take a salary freeze.

This is the type of decision that shows a complete lack of leadership and causes animosity during contract negotiations. These exempt officials make six figure salaries, and the timing of the decision is absolutely baffling, given the economic times.

Education is supposed to be about children. The costs are rising but the allocation of budgets is being mismanaged. The majority of funding should go to the classroom, not necessarily to teachers, in the form of class room hour’s re-allocation or administrative staff. Instead we should focus on delivery in the classroom and new schools. The whole system needs to be looked at. Why not change the size of classes, pay teachers according to class size, and restructure the delivery system to make school more year round and introduce vouchers for education.

As for the costs of education we need a complete revamp of the funding mechanism. In the first place we must change the way we collect taxes for education. Property taxes have no correlation with education and the means of collection is not only archaic and penalizes many seniors, because of the market value assessment. Many fixed income seniors may pay a higher property tax because of the value of their property, but the increase is not a realized but a paper gain, while at the same time they may no longer have children in the education system..

Advanced Education Minister Thomas Lukaszuk, must be praised for having the courage to look at changing the education structure in Alberta. There are too much duplication while the needs of industries and workforce are not being met. Furthermore too much of the funding allocation goes towards administration rather than education.

The current situation within these two services demand that Albertans and in effect the government of Alberta seriously consider changing how we deliver these services and more specifically how we fund them.

Marcel Latouche

Saturday, 9 March 2013

Alberta Budget:The good, the bad and the ugly

The 2013 budget has many surprises for Albertans; however they are not all good ones.
The Good:
This budget has no increase in taxes, and a promise of a balance budget next year. A cut in the price of generic drugs and the introduction of means testing for supplementary health benefits is a step in the right direction and it will save $270 million a year. While a savings plan is introduced, for the Contingency Account and the Heritage Fund, this budget also proposes to borrow for infrastructure to the tune of $4.3 million. The later policy is cautiously supported by IPSA, because we believe that long term assets should be financed by long term debt. However we believe that the government policy may go south if interest rates go up. Education property taxes are  reduced 1.8%, but that will not be seen by taxpayers as greedy mayors will quickly appropriate it. More importantly we must have a clear definition of ‘infrastructure’ to be included in the borrowing policy. We do not want to see borrowing to cover a professional sport arena for example.

The Bad:
The new three pronged format of the budget makes it very difficult to compare with previous years and the separation into, capital, operating and savings makes it difficult for even seasoned accountants to get to a bottom line deficit. This is a bit of slight of hands. To date the deficit ranges from $2- 6 Billion depending on your point of view.
Senior Property tax Assistance program will be scrapped in 2014. Farmers will be hurt and cuts to certain programs have not been well thought of.

The Ugly:
No increase in spending beyond last year’s $36.4 billion, but there are no cuts above the previously announced 480 managerial jobs. No restructuring of service delivery or privatization. This means that labour cost will continue to grow. The problem is that Alberta will continue under the same model without having the leadership required to reform the delivery of health and education services. The Senior Property tax Assistance program will be scrapped in 2014. It is possible that the debt level may rise to $16 billion within the next 3 years.

In our opinion this budget is a disappointment, because the government had the opportunity to make radical changes but has not done so. As the economy picks up it would have been the appropriate time to make huge cuts in spending, including layoffs. Should the price of crude remain the same Alberta may well continue on its path of yearly deficits: that would be a shame.

Marcel Latouche

Thursday, 7 March 2013

Feeding at the trough

Recently across the country we have been told that senators, elected politicians, members of public sector organizations have been using taxpayers’ money as their private piggy bank.

 Some members of the Senate are under investigation for abusing the housing allowance to the tune of thousands of dollars. Senators Mike Duffy, Patrick Brazeau, and Pamela Wallin, among possibly other Senators, have racked up thousands of dollars in housing allowance while living in Ottawa and claiming that their main place of residence is in the Province they represent.. Under the rules members of the Senate can claim an allowance for transportation and housing expenses for a residence in Ottawa when they are serving the public. However under audit scrutiny these senators have seemingly made large claims for personal expenses, including transportation, food and even travel expenses for family and staff members.

Not to be outdone by members of the upper house, we had former Minister Bev Oda who racked up expenses including luxury hotel rooms as well as the fame $16 glasses of orange juice. Defence Minister Peter MacKay apparently used army helicopters for fishing trips.

In Alberta we have Minister of Tourism Christine Cusanelli claimed expenses for travel to the Olympics for herself and members of her family, albeit she has now reimbursed these costs to the province. The audit in expenses for members of the Alberta Health Services has uncovered millions of dollars for expenses which a reasonable person who not have thought to be part of the expenses associated with the duties of these officials. The claims included expenses for automobile, food and expensive wine.

Furthermore we have the unscrutinized expenses of First Nations Chiefs, who get the funds from the taxpayers. Chief Roger Redman of Standing Buffalo First Nation makes more money than the Prime Minister. How can we forget the well documented ‘hunger strike’ of Chief Spence of the Attawapiskat while her partner and herself were paid thousands of dollars from the public purse.

To top it all, we have the Senate investigating its own members and now a proposed investigation of First Nations’ expenses. What a joke? When are Canadians going to get a full transparent report on these expenses which seem to continuously mount, even during hard economic times? Accountability is clearly missing at all levels of our government institutions. No transparency results in any accountability. We obviously need an independent review of public sector officials’ expenses

Marcel Latouche