Category Archives: Politics

Music Industry as an Analogy for Public Policy development

What Frank Zappa said about music resonates in other verticals:
Imagine public policy is set in a similar manner to musical tastes in the 1960s. The artist in this case is the sponsor/formulator of the policy and the music executive is the facilitator who oversees the process of implementing, distributing the policy to a jurisdiction. Then they observe objectively the performance of the policy and say, hm, this is working or this is not working. Tons of caveats which I can address when I have more time around (objective accounting for policy performance) but the music industry analogy seem like a worthy one.

The danger is that some know-it-all comes in and guides which policies should be implemented and which should not be implemented. All on deducitve reasoning, ideologically frameworks rather than testing. Management retains their value by controlling the process of formulation more intrinsically. The current model has it set in this manner, the legal elite set the policy deductively and perhaps ideologically. “I know what the kids want these days.” And in the same sense, these know-it-alls have climbed the ranks as career politicians and know how they system works. Then pity those who don’t know how the system works as a power argument. Instead, the facilitators should let the free market of ideas flourish rather then control and horde power. I know, it’s a bit of stretch but Frank Zappa was on to something here.

The Worst Gun Debate Arguments

Preamble: laws work for the most part. The idea that a law shouldn’t be passed because a highly motivated criminal will break it anyway is totally the wrong way to think about laws. A law creates FRICTION, reducing the likelihood of certain behaviour. Laws are there to increase the barrier for activities we as a society believe are counter-productive. Owning a military weapon designed to kill people should be more strictly controlled then a hunting rifle or a handgun for self-protection. There is some flawed logic circulating around gun laws and so with the recent rise in shootings, I wanted to mention my favourite bad arguments in the gun debate to illustrate my point that laws work to make access more difficult… it’s about friction, stupid!

Even if we have more restrictive gun control, you will have mass shootings therefore no point in gun control: awful argument. It’s true that you cannot prevent a specific mass murderer but you can prevent them from having access to the most lethal force. Any law that reduces access to guns is going to have a reductive effect; again we are speaking correlative-ly here. Laws are friction for people who are on the fence of committing a crime; we want to keep them on the right side of that fence. Many people have no interest in guns and so restrictive access doesn’t effect them. Others have their careers in selling guns. Laws aren’t about keeping the most motivated away from gun use. People break the law all the time. Laws are about making the barrier to access higher. Making access much harder through tougher laws reduces the likelihood of events that would have otherwise happened. So states about “black markets emerge anyway” while true, doesn’t mean gun laws do not decrease the likelihood of shootings. Friction reduces likelihood of violence.

Examples where a barrier reduces crime: gated communities have lower crime rates even though they are only slightly more difficult to get into…..

Chicago has the toughest gun laws and yet the most shootings, therefore no point having gun control: terrible argument. Of course, you know the situation in Chicago is very unique and there is no comparable city; there is no A/B test either. There are so many variables at play in Chicago that would intervene in determining whether the gun law is effective or not. You would literally need a parallel universe to argue that the gun laws do not work because Chicago has the most shootings AND they have the most stringent laws. You could have correlative evidence to show the law is effective or not, but it’s so hard if not impossible to conduct the test to show a policy win between two Chicago-s, one with and one without the toughest gun laws in the US. Both sides can claim victory without realizing the above point: the pro-NRA stance would say; see gun control doesn’t work; and the anti-gun lobby would say: it would be much worse without the current laws…

Only full confiscation will solve the problem, only then can everyone be safe: weak argument. This argument is used to justify the current state of 350 million guns in the US, it’s an all-or-nothing argument. The goal is to get the listener to lift up their hands and say “nothing we can do about gun violence.” The argument basically lays out why you can’t have any significant gun control because confiscation effects only the law abiding citizens. The fact is that if you confiscated the deadliest tier of fire arms, which would entail forcing law abiding citizens to give up their guns, through an Australian style buy back scheme, you would likely have a reduction in gun crime. The threshold for a mass murder would be much higher because access would more difficult. Those caught with guns in their possession would be prosecuted: i.e. criminals with guns. We’re assuming police will continue to have firearms after all if by definition only those who illegally posses fire arms have fire arms then they would run around attacking society knowing a deduced deterrent was present. The logistics are expensive for a buy-back scheme. Obviously a buy back scheme would be extremely expensive.  But this argument that it’s either status quo or full confiscation and since full confiscation isn’t possible given the black market, the arguer is justifying the way things are now, and that’s a weak argument because reduced access will reduce incidents of violent crime.

It’s in the US constitution, therefore we need this right: also weak argument. The constitution is meant to be principals for US society, but there are amendments possible for the constitution. The reason behind this gun policy from the founding father’s was that they wanted to be able to have a militia to over throw a dictator president. Seems impacted by recency bias, i,e. the war of independence, but there is a case for factions to violently over throw the US government. Doesn’t seem too plausible, but on a wedge issue unknown to us now, there is a case for rising up against a central government.

So having better laws will reduce violent crime. What’s interesting is that having a precision based model would help reduce the angst around gun laws. If the government were to track your behaviour and give you a score, like a credit rating, then different people should have different thresholds for access. China appears to be trying to do that. Can’t just assume that having a better relationship between you and your government is bad. You have to register taxes so can that same approach help save lives? Explore the idea before you shoot it down!

Wolves in the Sheep’s Pen? Dow AgroScience & Agent Orange: War as Moral Hazard

Agent Orange: Dow AgroSciences as a Partner in the Vietnam War

Matt A. Uday A. Juliana C. Devon W. Leah. X

Part I: The Facts

vietnam-sprayThe spraying of Agent Orange (“AO”), code name Operation Ranch Hand, took place during the Vietnam War from 1962 to 1971. The aim of the spraying campaign, conducted by the US military, was to destroy the foliage that the North Vietnamese “Vietcong” guerrillas were using as cover. There were approximately 6,500 spraying missions that affected over five million acres of forestry and farmland, which made up approximately 20% of South Vietnam. The most-frequently used chemical during this 10-year span was called Agent Orange, which was designed as a common herbicide for defoliation. However, one of the chemicals in Agent Orange, dioxin, was highly toxic. The half-life of dioxin found in humans is 11-15 years and under certain conditions this half-life can increase to over 100 years.

When you search for “Vietnam victims of Agent Orange”, most of the images are too graphic to share here.horror-of-agent-orange

dow-agroscienceDow AgroSciences (“Dow”), which has since been acquired by Monsanto, was one of the biggest manufacturers of Agent Orange during the Vietnam War and made revenue of approximately $728 million (in terms of today’s dollar value). A key fact in this case is that Dow management knew that dioxin was toxic, but despite their warnings, the US military mixed the chemical to be between six and 25 times stronger than the recommended dosage. As a result, the four million US and Vietnamese soldiers and civilians exposed to this toxic herbicide suffered serious health issues, including skin cancer and loss of vision. Also, due to the long half-life, many decedents of those affected have been born with debilitating congenital diseases.

the-fog-of-warA key theme that will be explored throughout this article is that war creates a kind of ethical fog that works to obscure ethical considerations. War was also a shield for IG Farben, a powerful conglomerate of pharmaceutical and chemical companies, which profited from unethical decisions made during World War II. The fact that the production of Agent Orange took place during wartime provided Dow similar cover.

Part II: Identification of Ethical Issues

The Ethical IssueWe believe that Dow is socially responsible for the damage caused by Agent Orange, but not legally accountable. What we mean by this is that Dow is partially to blame because they should have better foreseen the consequences of selling AO, but ultimately the US military is the guilty active agent because they made the conscious choice to spray the harmful herbicide and totally disregard the dosage limits, leading to the terrible consequences that are seen today. However, one question we will aim to answer is: Should Dow have agreed to supply Agent Orange to the US military? We know Dow had a massive monetary incentive. We suspect that Dow likely estimated the number of casualties and potential legal costs (as was done in the Ford Pinto case), and compared this with the direct pay-offs. This process will be explored in greater detail below.

Part III: Analysis of Ethical Issues

skull-agent-orangeskull-agent-orangeskull-agent-orangeskull-agent-orange

We have chosen to evaluate Dow’s actions using various ethical frameworks in order to determine if there are ways of thinking about ethics that may lead to contrary conclusions. On the one hand, the fact that Agent Orange has done much more damage globally than any benefit that may have been derived suggests that Dow made the wrong decision.

A Rawlsian liberalist would surely argue that Dow management chose incorrectly as well. On the other hand, the fact that Dow was never found legally liable by a court of law makes it more difficult to say that what they did was outright “wrong”. In addition, from a consequentialist perspective, whether Dow had produced Agent Orange or not would not have had any impact on the final outcome – the US military had many other sources for the herbicide and would have sprayed it regardless. Ultimately, we believe that Dow should be held socially responsible for the damage caused by the spraying of Agent Orange during the Vietnam War. Having said that, we are also of the opinion that this responsibility should be partial, largely due to actions taken by the US military.

Dow Was Never Found Legally Responsible

vvalgStarting on the left-most side of the legal-social spectrum, Dow was never found legally responsible for their actions by a court of law. The Veterans Association of America took the company to court, but the suit concluded in an out-of-court settlement. The largest compensation a US veteran could receive was $12,000 spread over a 10-year span, and widows of deceased veterans received only $3,700 – paltry figures compared to the damage done. Dow was also taken to court by the Vietnam Association of Victims of Agent Orange. In this case, after many appeals, the courts “ultimately determined that the plaintiffs had failed to allege a violation of international law because Agent Orange was used to protect United States troops against ambush and not as a weapon of war against human populations.” In this decision, we use utilitarian reasoning, as it seems that the courts may have weighed the benefit of protecting US troops against the damage caused by Agent Orange. The courts are also relying on a tenet of consequentialism when they say that Agent Orange was never meant to be used as a weapon of war against humans. Consequentialism is a useful ethical framework that will be further analyzed below.

Dow’s Decision Had No Impact on the Final Consequences

dioxinFrom a consequentialist perspective, whether or not Dow had produced Agent Orange would have had no effect on whether or not the herbicide was sprayed by the US military. Although Dow was the largest supplier, there were eight other companies supplying the US military with Agent Orange; also, the US military is a powerful and highly influential entity. Had Dow not produced Agent Orange, it is undeniable that the military would still have sprayed the herbicide to achieve their militaristic goals. Therefore, Dow is only an active agent when it comes to production of the herbicide, not when it comes to the actual usage, which is ultimately what caused the harm. From a purely consequentialist perspective, Dow either receives $728 million or receives nothing – this is the only outcome that they had control over.

value-of-a-human-life-for-dow-agroscience-sale-of-agent-orange

Domestic and Global Utilitarian Analyses

utilitarianUtilitarianism requires an active agent to engage in a rational calculation of the costs versus the benefits of their choices, asking: does my choice maximize the benefits for the most number of people? We have chosen to conduct two separate utilitarian analyses to more accurately model how Dow may have reached a decision. The first analysis will work with the assumption that Dow wished to maximize utility for itself and for US citizens; the second analysis will work to maximize global utility.

Dow benefited from their contract with the US military, receiving revenues totalling $728 million over the 1962-1971 period during which Agent Orange was used. From the perspective of the US military, Agent Orange reduced the thick foliage in the Vietnam jungles where communist guerrillas were thwarting US military offensives. Using this utilitarian logic, Dow could argue that it was doing its ethical duty by helping to save the lives of US soldiers.

skull-agent-orangeFrom a global utilitarian perspective, we surmise that the benefits need to be balanced against the harmful effects of exposure to Agent Orange in the US and Vietnam. Namely, the unintended long-term consequences of 150,000 Vietnamese birth defects and over one million people suffering from ailments linked to Agent Orange exposure. For US soldiers and Vietnamese alike, the genetic-level harm has been passed down generationally from those who were in direct contact with high concentrations of dioxin to future generations whose pain and debilitation continue to manifest 46 years after spraying ceased. Even the act of procreation has become a potentially horrifying game of chance in which deformities and other ailments await newborns who are far removed from the original spraying. The devastation is tragic, suggesting the social responsibility hangs over Dow AgroSciences.

Rawlsian Liberalism

john-rawlsAnother ethical model we employed is based on John Rawls’ “veil of ignorance”, which requires active agents to imagine living with the direct consequences of their choices. Specifically, if Dow management were randomly reborn with the possibility of being affected by the congenital diseases caused by dioxin exposure, it is unlikely they would have supplied Agent Orange to the US government. Dow management can reasonably be expected to have known that dioxin was toxic, seeing as they provided suggested maximum dosage limits. What they could not have known was the long-term effects on humans, yet speculation may have existed. From a Rawlsian perspective, protecting oneself as if you might be sprayed would have necessitated more testing, although testing would have meant more costly delays in production. There were other alternatives that Dow could have considered, for example, perhaps a means of reducing the toxicity of dioxin could have been discovered.

dioxinWhile Dow management breached their social responsibility and most certainly would not have allowed the same actions to be perpetrated against themselves, they do not have the benefit of over 55 years of hindsight. After all, the dire consequences of Agent Orange did not manifest themselves in the lifetime of decision makers involved in the initial 1962 contract. Once sold, the herbicide was no longer Dow’s responsibility. When a soldier uses a rifle, it is not the manufacturer that is held responsible for the shooting.
profit-motivated-monsanto-as-wolves-and-customers-as-sheep

The complex intermingling of government and commercial active agents has allowed Dow AgroSciences to escape direct consequences for the sale of Agent Orange. Profit motivations are not in themselves unethical, of course, but profit without mitigating potential and reasonably anticipated harm is like allowing wolves into a sheep’s pen without supervision….okay, well wolves probably shouldn’t be allowed in a sheep’s pen to start with but you get the picture. Without direct legal consequences, the lessons that should have been learned from the usage of Agent Orange are not being heeded. There is limited available evidence that the lessons are being embedded in the corporate values of major chemical manufacturers, instead those lessons are rejected from a defensive posture designed to fend off criticism of business as usual. As further evidence, Monsanto continues to engage in spraying practices that cause harm to civilians and the environment.

Part IV: Examination of Other Cases – Plan Colombia

columbian-drug-warThe following case is relevant because it shows that Dow AgroSciences, which has since been acquired by Monsanto, continues to engage in practices consistent with those during the Vietnam War, except now in Colombia, a country which one of our group members comes home. Plan Colombia is the name given to a US military and diplomatic aid initiative aimed at combating Colombian drug cartels. One of the tactics used to wipe out drug production at its source is to destroy coca and poppy crops by aerially spraying a broad-spectrum herbicide product called Roundup Ultra. The Colombian Government has used similar tactics before, but the intensity of aerial spraying greatly increased after receiving $1.3 billion in aid from the US government. As a result, over 40,000 hectares of land have been sprayed in Colombia’s southern region of Putumayo since December 2000.

Monsanto manufactures Roundup Ultra. Almost 70,000 gallons of the herbicide were sprayed in Colombia in the first months of 2001, following roughly 145,750 gallons in 2000. With a retail price of $33 to $45 per gallon, this represents a price of around $4.8 to $6.6 million – paid to Monsanto by US taxpayers.

colombian-farmersThe US State Department and Colombian authorities claim that herbicide application is precision-targeted at coca crops using satellite imagery to guide the crop-dusting planes. However, according to the biologist and researcher Elsa Nivia, it is impossible for even experienced pilots to avoid spray drifting onto the communities living in these semi-jungle areas, and there have been cases of herbicide fall-out on homes, schools, and directly onto adults and children. This drift effect was also seen with the usage of Agent Orange during the Vietnam War, and is one reason for the wide-reaching effects of the herbicide. This shows that despite the best intentions of active agents spraying herbicide, there are sure to be unintended consequences. Local Colombian authorities reported 4,289 cases of skin or gastric disorders in the first two months of 2001, and the deaths of 178,377 livestock.

roundupOther findings suggest that another additive called Cosmo-Flux 411 F was being added to increase the toxicity of Roundup Ultra. The mixture can increase the herbicide’s biological action four-fold, producing relative exposure levels that are 104 times higher than the recommended doses for normal agricultural applications in the United States; doses that can intoxicate and even kill ruminants and that are five times more toxic in terms of oral exposure. Again, this disregard for the recommended dosage was seen in the Vietnam War, when the US military exceeded the recommended dosage of Agent Orange by 2500%; we believe this fact partially alleviates Dow’s responsibility for the damages.

plan-ColombiaOfficials from the US government have said that their relationship with Monsanto “is proprietary information between us and our supplier” and Monsanto has said they “don’t divulge information about who we sell our product to…I will not confirm that it is our product that is being used in Colombia.” This close collaboration and veil of secrecy is reminiscent of the relationship between Dow and the US military during the Vietnam War.

This is not the first time Monsanto (i.e. Dow) has been accused of ecological damage and harm to humans, and we think there is a similar ethical dilemma here as there is in the Agent Orange case: Is the company responsible for the harm done and should they compensate those affected? We agree that Monsanto is partially responsible for their products and therefore believe that because Monsanto was part of the problem, they should also be part of the solution. They should work to diminish the impact of the herbicide on the people and the environment in Colombia and Vietnam.

Part V: Decision

decision-tree-for-agent-orange-sales-by-dow-agroscience
Dow AgroSciences’ actions in Vietnam were not illegal, but there is still a question of social responsibility. We believe that if a firm cannot reliably predict the long-term consequences of their products, they should be compelled to restrict sales and modify the product. We do not believe guilt alone will cause Monsanto to change their approach; legislation is required.

LEGISLATION: Be It Resolved….
bill-legislation-reguired-against-monsanto-and-bayerRegulation (while not always the answer) should be enacted in the following way. First, a health test committee comprised of independent scientists (under a non-disclosure agreement) should evaluate sales of dangerous substances to civilian or military customers. Second, the test committee should be triggered where reasons to suspect misuse of substance (dosage) and long-term consequences can be deduced. Third, should the substance be deemed dangerous at a dosage threshold that could be reasonably expected, DowAgorScience / Monsanto / Bayer, or the firm in question, must remove harmful compounds at cost and resubmit to the committee.

monsanto-and-bayerMonsanto has a history of involvement in war. If the right precedent is not set for such large organizations, then this poses a potential risk to the health and safety of society, especially in developing countries. The fact that Plan Colombia is in operation is clear evidence of what can happen when perpetrators are not penalised appropriately for Agent Orange. We should be worried that in future wars, similar sales will occur.


chemical-warfare-contracts-for-bayer-and-monsantochemical-warfare-contracts-for-bayer-and-monsantochemical-warfare-contracts-for-bayer-and-monsantochemical-warfare-contracts-for-bayer-and-monsantochemical-warfare-contracts-for-bayer-and-monsanto

 

>> FUTURE CONSEQUENCES OF INACTION>>

We as western democrats should take action to preempt ethical lapses committed by major conglomerates by imposing legal restrictions NOW before it is too late. We, as an increasingly interlinked global society, have let wolves into the sheep’s pen too frequently without regulations preventing unethical sales, and if we do not act through legislation, we can expect more horrors but in higher orders of magnitude.
futuristic-wars-supported by Monsanto-Bayer

BIBLIOGRAPHY

  • http://news.bbc.co.uk/2/hi/health/3798581.stm
  • AM Aishah et. al., Oral and intratrachael toxicities of Roundup and its components to rats, Veterinary & Human Toxicology, 1997(3):147-151.
  • Chambers, John Whiteclay; Anderson, Fred, eds. (1999). “Toxic Agents: Agent Orange Exposure”. The Oxford companion to American military history. Oxford University Press. p. 725.
  • Furukawa, Hisao (2004). Ecological destruction, health, and development: advancing Asian paradigms. Trans Pacific Press. p. 143. ISBN 978-1-920901-01-1.
  • The Air Force and Herbicide in Southeast Asia 1961-1971, William A. Beckingham Jr. Retrieved September, 2016, from http://www.afhso.af.mil/shared/media/document/AFD-100928-054.pdf
  • Agent Orange. Retrieved September, 2016, from http://www.history.com/topics/vietnam-war/agent-orange
  • Agent Orange Records. Retrieved September, 2016, from http://www.agentorangerecord.com/information/what_is_dioxin/
  • Vietnam Veterans Battle Sarcoma Caused by Agent Orange The War that May Never End, Jennifer Bailey. Retrieved September, 2016, from http://sarcomaalliance.org/news/papers/vietnam-veterans-battle-sarcoma/
  • Arthur Galston. Retrieved September, 2016, from http://www.economist.com/node/11613789
  • Horror of horrors. Retrieved September, 2016, from http://www.economist.com/node/2384047
  • Plan Colombia. (2016, August). Retrieved September 11, 2016, from https://en.wikipedia.org/wiki/Plan_Colombia
  • Drug War in Colombia. (2001, December). Retrieved September 20, 2016, from http://www.thirdworldtraveler.com/Drug_War/Monsanto_DrugWar.html Bigwood is an investigative reporter based in Washington, DC. Published with the permission of CorpWatch [PO Box 29344, San Francisco, CA 94129, www.corpwatch.org]
  • Pesticides and Drug War. (2001, May). Retrieved September 10, 2016, from http://www.pan-uk.org/pestnews/Issue/pn53/pn53p9.htm

Canadian Health Care – Jeffrey Simpson’s Chronic Condition

Healthcare in Canada: Jeffrey Simpson says it’s never easy to change a complex institution because there are:

  • a) strong interest groups,
  • b) change is hard and costly,
  • c) there are no dominant decision-making force/fragmented decision making,
  • d) Incremental changes are needed. They can’t really make significant changes in one go,
  • e) a lack of data based analysis and no tradition of A/B testing

What’s the system for? Ideology or Patients?

Simpson’s main message is that improving Canadian healthcare rests on de-politicization, removing ideological models that cloud and obstruct meaningful progress. After all, patient outcomes are the priority. The reoccuring trap is to project onto the person speaking, judgements about their intensions. Focus rather on patient outcomes, says Simpson.

Speaking Ill of Canadian Healthcare…is still sensitive: for decades, healthcare experts were talking about healthcare as part of a political dialogue. For example, Healthcare ministers were hesitant to tell the truth about how Canadian healthcare is performing in reality and with third party observers. The Canadian healthcare system is not ranked particularly well despite the spending in the top 5 in terms of universal models. Healthcare systems around the world were trying to compare countries in terms of performance. The OECD published healthcare statistics and comparisons. Canada spends the top 5 on health care and yet we were getting mediocre results. For the longest time, ministers couldn’t say that the Canadian healthcare system is not doing well in ANY respect. There are three reasons that any sweeping statement would be misconstrued.

  • First, criticism was seen as the foot in the doorway for justifying an American style system.
  • Secondly, attacking healthcare is like attacking Canadian identity since it is more valued than any other institution.
  • Thirdly, criticisms by individuals means that person does not really share Canadian values.

Spending:

  • 1960s 7% of GDP
  • 2015 11.7% of GDP = $200 Billion
  • 2030 18.75% of GDP

 

The Romanow 2002 Healthcare Proposal wanted to buy change in the system. Paul Martin and the premiers put together a spending strategy of 6% spending increase per year in order to improve Canadian healthcare. Unfortunately, Simpson says that spending more money into the system did not lead to the system getting materially better. Ontario increased the healthcare budget by 7% in the 2002 and then down to 2% by 2014. Alberta was at 9.5% in 2002 because there were high demands with new Canadians and migration to Calgary and Edmonton. Paul Martin believes that the Conservatives didn’t provide support on an annual basis with accountability amongst premiers but Simpson argues something else was at play….

Where did the funding go? In any public sector enterprise, the groups that are the most mobilized will take a disproportionate about of the funds in order to justify reallocation of resources for themselves. And they will do so by providing data from other jurisdictions like Germany etc. Scandinavian doctors get paid half what Canadian doctors get paid on average so that’s not helpful to the cause. As a result of careful selection bias by advocated, the increased funding went to the most expensive parts of the system; the employees themselves. The funds did not go to better patient care per say. The system became less productive in fact because doctor and nurses were getting paid more. Canadian Institute of Health Information shows that physician spending compensation is growing fast. Physician income was going up incrementally year on year during this time frame. From 13 to 14.5% increases. Doctors fees and compensation went up 3x, Nurses were paid 2x.

A counter-argument might be that doctors in other jurisdictions were also getting pay raises therefore there was the risk of losing talent in Canada….

Governments frequently like to have peace by paying doctors and nurses more. Strike actions are very unpopular and can unseat politicians if timed correctly. Simpsons says, we need to make changes but need to think about changing the system. The community care budget is going up by 4% for example. We want to take the power our of the hospitals according to Simpson. It takes time to get the governance structure changed but hospitals have a disproportionate power in Ontario. Saskatchewan has health regions, it means there is better integration between the hospitals, in community and other levels of the healthcare system. Diffusing power across organizations means a web of care for patients rather than a hierarchical doctor led model.

The Trends:

Reduction in the Transfers from the Federal Government to Provinces: You want a vertical integration within the system at the provincial level. However Ottawa is going to be spending less on healthcare. Ontario with the LHIN (Local health Integrative Network) has competing political centres of authority. Have we settled where our healthcare spending is going to go i.e. around 2% but will there be pent up demand from doctors and nurses? At the Federal level of spending, there is expected to be stability. There is a political decision around reducing the 6% transfer to the provinces. The Federal government will always play off the provinces and vice versa. There is a fiscal sustainability at the Federal level but anticipated unsustainable spending situation at the Provincial level.

Aging of the Population: The cost of healthcare is being shifted to younger generations as the babyboomers retire and leave the productive work force; leading to potential gaps in productivity. This will not be Tsunami of growth in healthcare spending, it will increase 1% or 2% in healthcare. In the 1960s, the average Canadian was 27 years old and now 2016, the average Canadian was 47 years old. We spend $210 billion on healthcare; 70% of which is public and 30% of which is private. $150 billion is public with a 1% increase, it’s not great tsunami. So if we can deal with community care, we have fighting chance of controlling costs. 14% is over 65 and they take 45% of healthcare spending. But by 2030, 26% of the population is going to be 65 years old. The actuaries are revising the tables because more people are living past 85 years old. If you have fewer people earning money in the +65 year old age range, we have a GDP drop according to Simpson. So the challenge is that the pool of taxable productive Canadians is going to shrink in the coming years. While is seem logical that the revenue pool will shrink as the productive population ages, it is also the case that we have increased immigration of 1% up to 3% (and have that immigration distributed across Canada rather then centralized in urban centres of the M.T.V. Montreal, Toronto, Vancouver).

Technology in Healthcare: technology can cost you money. A new cancer pharmaceutical drug comes on the market that only extends life by a few more weeks and is not a cost-effective addition. BUT you still have the opposition parties attacking the minister for being cruel and then the minister reliably caves to the pressure.

The Mixed Results:

Acute Care in the Hospitals: citizens go to hospital for cuts and bruises rather than to their local clinic because the hospital is “free”. There is strong evidence to show that patients are abusing the system as a free take-it-or-leave-it system. Hospitals are rewarded for the number of people going in. The hospitals are the centre of the system: it’s hard to close a hospital; so efforts should be made to get tougher on hospital spending.

Doctors Costs: the costs for medical personnel is in the top three countries in OECD. We have fewer physicians per capita; we are way above average cost. The reason being that physicians are given a premium to relocate to rural areas in Canada; and health authorities have to compete for competent clinicians. A family physicians costs $250K per year for example in Ontario. They are civil servants but act like bankers according to Simpson.

Pharmaceuticals Costs | Ego in the System: the costs are high. Canadians are big drug users. We use drugs a lot. Drugs can save money by preventing costs at the hospital. The provinces are in charge of drugs and they have a formulary to the pharmaceuticals. We have ten negotiating parties with the pharmaceuticals. one per province. Provinces should be allocating a negotiator. However, the fragmentation is indicative of the power structures embedded in the system. We need bulk buying according to Simpson. Of course, each province has different needs demographically speaking and coordinating might be a challenge but it’s worth considering a joint effort.

Core problem is “where is the stick: what happens if the system under performs?” So what if Canada spends more and gets less than Germany etc? What is any individual going to do about that? That seems to be the challenge.