The Parkland Institute

For Immediate Release | April 19, 2009

Instead of cuts, Liepert should increase health spending

Delisting services boosts costs for businesses, consumers; threatens economy

by David Eggen, Diana Gibson

Alberta Health Minister Ron Liepert has been very economical with the truth on the health-care budget. He picked one of the few lines in the budget that is up, while the overall budget for Health and Wellness has actually been cut.

Infrastructure spending has been cut by almost $1 billion from what had been budgeted in the capital plan and is down more than $600,000 from last year. The total Health and Wellness budget did not get the 3.7-per-cent increase needed to account for inflation and population growth. And now, delisting insured services has been raised.

While nations around the world are increasing spending to counter the recession, Alberta is cutting. As part of its stimulus plan, China announced it would spend $123 billion by 2011 to establish universal health care for the country’s 1.3 billion people, on the premise that spending would put more money directly in Chinese consumers’ pockets. Even the United States, so infamous for its poor health care, has anted up for increased health spending this year.

Instead of stimulus spending, the Alberta conservative government is kicking the economy into what could be a serious tailspin. And if the budget announcements were not bad enough, Liepert says he plans to delist more services and may cut additional health-care infrastructure spending, including much needed hospitals and long-term care beds.

Last month, Alberta lost more than 14,000 jobs, a trend that is likely to continue. The $913-million cut from the capital budget will put 10,500 construction workers out of work. What better place for them than building health-care facilities that will be much needed as our population ages? Alberta is still recovering from shortages created by the last downturn. The lack of long-term care beds continues to cause backlogs and delays in hospital emergencies which have real costs.

The infrastructure cuts have other costs as well. Currently, infrastructure can be built at bargain prices. Delaying construction may mean that the costs are much higher. Knowing the need is there and having the workers in need of jobs, it is financially prudent to build that infrastructure now and staff it now.

Other jurisdictions are also trying to bolster the economy by putting as much money as possible into the hands of consumers and businesses.

Liepert is doing the opposite, increasing business costs and taking money out of the pockets of consumers. Delisting and de-insuring services amounts to a direct transfer of costs from the province to businesses and individuals.

Any service that is delisted or de-insured will be added to the long growing roster of privately insured services paid for by employers, causing rates to go up. Private insurance costs are already rising at rates in excess of inflation.

It would also take money from consumers. Only about half of Albertans are covered by workplace health benefits. For those who are not covered, costs will also shoot up. The cap will be taken off of what professionals can charge and they will raise fees to cover the loss of patients.

Vision care is one of the services that has already been de-insured. This resulted in a 17-per-cent jump in vision care costs in one year alone.

Transferring costs out of the public health-care budget into private insurance is not a path to sustainability. Australia provides a good lesson on that front. In Australia, the subsidies necessary to get people to enrol in the private health insurance cost more than if those services had been kept in the public system.

This is not the time for Liepert to make his bottom line look better at the cost of Alberta’s employers, especially small business which would be hit hardest. Those already struggling may be forced to lay off workers as costs become prohibitive.

Alberta has choices for public health care. A pointless $4.5 billion in subsidies were announced this year alone for oil and gas drilling, despite the fact the both conventional oil and conventional gas peaked in Alberta years ago. Also, according to government figures, Alberta is forgoing between $10 billion and $18 billion in tax revenues every year compared with other provinces. If there is anything that is not sustainable, it is the tax cuts and drilling subsidies.

Investment in health care and the province’s health-care budget will need to increase as our population grows and ages. Polls show that Albertans want public health care, not tax cuts, but what they get is tax cuts and health-care cuts. A Nanos research poll showed that more than 55 per cent of Western Canadians support deficit financing and two-thirds say it is important “... that the government increase investment in public services like health care, social services, the justice system and education during a downturn.” In addition, 71.1 per cent of participants favoured “government investing in health care, social services and education,” compared with 19.9 per cent who wanted “government financial support for businesses in the automotive, forestry or mining industries.”

David Eggen is executive director of Friends of Medicare and a former NDP MLA for Edmonton-Calder. Diana Gibson is research director of the University of Alberta's Parkland Institute.

Links to Media:

• Edmonton Journal,

Related research:

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