In the annals of the development of health care in Canada, there are few people less alike than Tommy Douglas, the provincial premier revered as the father of Saskatchewan medicare, and Claude Castonguay, the man behind Quebec’s health card, known as la castonguette. Although he was respon- sible for introducing Quebec’s first health insurance plan in 1970, no one would mistake Castonguay for a passionate politician in the mould of Tommy Douglas. In fact, Castonguay is a practical actuary by training and tempera- ment, and is still bound by his belief in rational analysis. In the 1960s, for example, when he prepared the background for Quebec’s original health insurance laws, Castonguay travelled the province and identified a real need to improve access and to find a more equitable way to finance health care. He felt that harnessing the power of the state would provide an effective capacity for the collective pooling of risk and financing through public health insurance. In Castonguay’s mind, he was proposing logical solutions to pressing social needs, not flogging ideological tenets for partisan uses.

Nevertheless, 40 years later, the father of Quebec medicare is being accused of just that. As lead author of the report of the government-appointed Task Force on the Funding of the Health System, Castonguay recommends important changes in the organization of the health care system and even more striking change in its financing. Of all the health reports in all of the provinces over the past decade, this one " entitled Getting Our Money’s Worth " is the strongest call for radical change " and by far.

Coming on the heels of the 2005 Supreme Court decision in Chaoulli v. Quebec, which struck down Quebec’s health insur- ance laws, and Bill 33, which opens the door to private insurance for specific surgical procedures, it is little wonder Quebec media headlines were screaming, ”œA Bombshell Lands in the Health Care system” and ”œThe End of Free Health Care in Quebec.”

Claude Castonguay brings to mind the very essence of the ”œtechnocrats” responsible for the rapid modernization of the Quebec state during the Quiet Revolution. In fact, Castonguay’s fin- gerprints are all over one of the main social reforms of that era, the Quebec Pension Plan of 1965. Castonguay was part of the team that Premier Jean Lesage took with him to Ottawa, and alongside Claude Morin, he helped to hammer out the historic QPP/CPP com- promise with Tom Kent and Maurice Sauvé in a remarkable tour de force of cooperative federalism.

Castonguay was also very much pres- ent at the creation of the Quebec Health and Social Services Act. As early as the fall of 1965, Lesage appointed Castonguay to head a research committee to develop a medical insurance plan for Quebec, part- ly in order to avoid the financial headaches of the existing hospital insur- ance plan. The following year, Premier Daniel Johnson appointed Castonguay again, this time to head a public commis- sion of inquiry on health and social serv- ices. By the time he reported, Castonguay had become convinced of two essential points: that the best way to improve access and to find a more equitable way to finance health care in Quebec would be through the collective pooling of risk and financing through public health insur- ance; and that any new medical insur- ance plan had to be developed with Quebec’s particular context and needs in mind. As with pension reform, he was wary of the problems of chevauchement (overlapping jurisdiction) between the federal and provincial governments, and of any ”œconditions” that would imposed by Ottawa. In short, Castonguay was of the opinion that asymmetry was both necessary and desirable when it came to social programs for Quebec.

In 1970, Castonguay was tapped by Robert Bourassa to develop and implement his own recommendations, as the new minister of health and social ser- vices. Despite his decidedly un-folksy demeanour, Castonguay became the public relations campaigner for the medical insurance plan, and despite his placid appearance, he turned out to be a formidable foe in difficult negotia- tions with physician groups as well.

The Quebec legislation differed sig- nificantly from other provincial initiatives in that it limited the opting- out provisions for physicians and pro- hibited extra-billing altogether. It also created a distinctive health care system in Quebec, based on the integration of health and social services, the creation of CLSCs (local community service centres), public health departments and regional health boards.

Having accomplished what he set out to do, Castonguay left politics to take up a successful and lucrative career as an insurance executive in Quebec. He was not forgotten, howev- er, as for years Quebecers would fond- ly refer to their health care card as la castonguette. From this vantage point, it is not surprising, then, that Castonguay would now be coaxed out of retirement to once again study the Quebec health care system and make recommendations for a reform agenda.

Except that the context had changed mightily, and so had Castonguay. In March 2007, the Quebec Liberal Party had been stunned to find itself reduced to a minority government situation, faced with the right-wing Action démo- cratique du Québec as the official opposi- tion in the National Assembly. With health care high on the agenda, and the ADQ getting ready to flex its political muscle, Premier Jean Charest found his perfect antidote. In presenting the May budget, Finance Minister Monique Jérôme-Forget announced that Claude

Castonguay, the former minister of health who designed Quebec’s original public health insurance plan, would lead a task force to find new ways to finance health care and reassess the role of the private sector. He was to be joined by two other members appointed by the opposi- tion parties, well-known journalist Michel Venne for the Parti Québécois, and Joanne Marcotte for the ADQ.

To ask the ”œfather” of Quebec medicare to suggest ways to move the system into the future without ”œnostal- gia” for the past was seen by many as a strategic political move. For others, it was seen as a disingenuous ploy on the part of the Charest government to impose private-sector solutions on the public system. For years, in fact, Castonguay had been a regu- lar fixture on the conserva- tive speaking circuit as an outspoken critic of the pub- lic health care system and an advocate of private financing and insurance.

In his Memoirs of a Quiet Revolutionary, Castonguay had sharply criticized the inefficiency of Quebec’s health care system and underlined the need for increased private investment in infra- structure and technology. He also defended user fees at hearings in the National Assembly, even though such fees clearly contravene the Canada Health Act. In fact, Castonguay had been more than willing to criticize the Canada Health Act publicly and, taking a leaf from the Chaoulli decision, claimed that the ban on private health care puts individual rights and freedom of choice in danger. He had even taken the 2002 Romanow report’s defence of the public system to task for ”œdemagogy and foolish comment.”

Many of the most interesting observations of the report of the Task Force on the Funding of the Health System had to do with organizational reform of the sys- tem. For example, Castonguay’s group suggests that the health care system needs better continuity of care and more investment in primary care and home care, particularly in the context of an aging population. Indeed, as in most other provinces, Quebec is already in the throes of major primary care reform. It has proven to be a difficult transition, particularly for health care professionals.

The Castonguay group’s report acknowledges the two basic concerns at the heart of primary care reform: how to ensure the ”œsmooth operation” of the system through appropriate treat- ment and setting; and how to provide continuity of care. Even though Castonguay’s original vision of the Quebec health care system in the 1970s was based on a vision of integrated care, in practice, Quebecers have come to rely on specialists, walk-in clinics and emergency rooms for the kind of care that could be provided much more cost-effectively in other settings.

The report also tackles matters of governance and the allocation of resources in the health care system, sizing up the top-down and overly bureaucratized approach to health care organization in Quebec that needs to change. It recommends that min-
istry and regional agencies be kept at arm’s length from health care institutions to allow for a maximum of autonomy and accountability in providing care. As for the allocation of resources, Castonguay borrows from recent British reforms, suggesting that money should ”œfollow the patient” through the system instead of being allocated to health care establishments on the basis of rote budgeting. This means that performance of different health care settings " hospi- tals, clinics and the like " would matter, as money would flow where patients choose to go. It also means that even hos- pitals could be financed along perform- ance criteria, and be allowed to have more leeway in purchasing services as a way of injecting new measures of competitive- ness into the health care system.

In the main, these recommenda- tions are interesting, and even the Minister of Health, Philippe Couillard, was able to find some good in them, agreeing that the system could better maximize productivity and improve its performance. Even the left-leaning Michel Venne stood behind these organizational recommendations that went beyond the working group’s mandate on financing.

It is, in fact, the recommendations devoted to health care financing that have stirred up a storm of controversy in Quebec. Castonguay’s main preoccupa- tion is how to control what he and the Charest government consider to be the unsustainable rate of growth in public health expenditures. The report makes much of the fact that health care spend- ing has been outstripping the rate of eco- nomic growth in Quebec over the past decade, and of the steady encroachment of health spending in Quebec’s program budgets. The remedy is to slow the rate of spending and reduce pressure on pub- lic finances by finding alternative sources of financing, i.e., in the private sector. Of course, this argument remains convoluted in the sense that the funda- mental issue in health economics is the rate of overall health spending. Bringing the private sector into the mix does not necessarily alleviate that problem; more often than not, it exacerbates it.

In true technocrat fashion, Castonguay’s report focuses on setting limits on the public system; he is con- vinced there is an ”œimbalance” in public financing that needs to be corrected by both qualitative and quantitative solutions. The report zeroes in on the demand for health care services, emphasizing that the public system cannot cover everything.

This is a long-standing debate in many health care systems, derived from the insurance notion that itemizes what is covered and excludes what is not, rather than the comprehensiveness prin- ciple which suggests what is necessary should be covered on the basis of actual health need. Despite Castonguay’s emphasis on European examples, this is more often a recurring debate in the United States over Medicaid and private insurance reform. The other echo is the report’s suggestion that demand for health services can be reduced if individuals become more engaged in ”œhealthy living and prevention,” a prevalent theme for organized care compa- nies trying to reduce costs, and in the promotion of health savings accounts. The report also raises the idea of a voluntary ”œannual contribution” by users to their primary health clinics; some- thing akin to the oxymoron of a charitable fee.

The emphasis on individual responsibility comes up again on the revenue side. Here, the report recommends stabilizing funding and ”œdiversifying” the financing of health care. The Quebec government would cover health care spending only up to an automatic cut-off point based on the rate of economic growth. After that, other revenue sources in a dedicat- ed health stabilization fund would be used. The fund would be sourced from an increase in the provincial sales tax; indeed the reduction in the federal GST has opened up tax room, although con- sumption taxes are not the most progres- sive of financing mechanisms. Next would be to tax not only general con- sumption, but more particularly the con- sumption of health care services. Rejecting the terms ”œuser fee” and ”œhealth premium,” the report suggests that individuals should be responsible for a ”œdeductible” that would ”œguide” their use of medical services. Again, Castonguay invokes his confidence in the insurance principles at work here. Unfortunately, for health care con- sumers, it amounts to another principle: the more you use, the more you lose.

Of course, fees, deductibles or co- payments are not only problematic from a health standpoint (in fact, they tend to skew the distribution of health services toward the less sick and the more wealthy); they are also explicitly prohibited because of the Canada Health Act. In order to qualify for federal fund- ing, provincial health systems cannot impose any financial impediments to access to care; in other words, need should trump all other factors. Cas- tonguay’s recommendation is that the ”œdysfunctional” CHA be ”œadapted to current realities”; i.e., allow provinces to move ahead with ”œdefining” their own health systems. You can almost hear the roar of the quiet revolutionary of the 1960s who insisted on asymmetry in social programs for Quebec.

Finally, there is the even more incendiary issue of creating the condi- tions for a parallel private market for health care in Quebec. The Chaoulli v. Quebec decision already forced the Quebec government to revise its health care laws to allow for private insurance for cataract, hip and knee surgery. The Castonguay report goes further, recommending the insurance industry be able to cover a larger range of services for those not willing to wait but able to pay. And, as the coup de grâce, Castonguay suggests that the ”œwall” between public and private medicine should definitely come down, allowing physicians the ability to practise both in the public system and in the private market.

At this point in the report, the PQ’s appointee, Michel Venne, parted ways with Castonguay. And so, too, did the Liberal government. Within hours of the report’s release, Health Minister Couillard announced that the government had no intention of revis- ing the private-public mix of funding in the health care system at this time. Finance Minister Jérôme-Forget insist- ed that raising the provincial tax was an absolute non-starter. Even Premier Jean Charest flinched at the prospect of trying to convince taxpayers to pay more for health care.

For the past several months, the government had faced a relentless bar- rage of criticism about the lack of pri- mary care physicians, the creation of public-private partnerships in health care clinics and the rise of health care ”œbrokers” charging ”œfinder’s fees” to patients looking to access a doctor or diagnostic tests. In the minority situa- tion in the National Assembly, the last thing the Liberal government needs is a fight over private health care within Quebec, not to mention a battle with Ottawa over the Canada Health Act.

Political analysts noted that they had rarely seen a government-commis- sioned report sink like a stone so rapidly. Although the Health Minister tried " belatedly " to discuss some of the posi- tive organizational recommendations in the report, its DOA status was all but confirmed with the release of the provin- cial budget last month. The Task Force on the Funding of the Health System had been announced by the finance minister with the 2007 budget, but its recommendations, ostensibly timed to inform the 2008 budget, were nowhere to be seen. Although the ADQ talked tough about the need for major health reform along the lines of Castonguay’s recommendations, it decided not to press the issue and, given its steady sink- ing in the polls, risk political suicide in a precipitated election campaign.

Since that frosty reception from the Liberal government, Claude Castonguay has lamented the way in which the media and interest groups have interpret- ed his recommendations. He is especially nonplussed at what he sees as a resistance to innovative change in Quebec. And yet, the report is, on the whole, not particu- larly innovative. Some of the recommendations for organi- zational change, such as investment in health infor- mation systems, the need for primary care reform and home care, and even the new forms of hospital budgeting, are familiar to health reformers across Canada and are widely regarded as useful measures in many industrialized countries. They show that there is plenty of scope " and hope " for reform of the public system without dismantling it altogether.

But the recommendations on the financing side are far from inspired. Decreasing the burden of health care spending on the public purse by increas- ing the burden on individuals through new taxes and ”œdeductibles” is a hard sell for overburdened Quebec taxpayers. Consumption taxes are the least pro- gressive way of dealing with health care financing, and imposing costs on access to care is the most unlikely way to improve people’s health outcomes.

Likewise, the call to ”œdiversify” rev- enue sources by allowing more exten- sive private insurance and markets is also misleading. Upon further examina- tion, the diversity is limited to the same payer: namely, the consumer/taxpayer. Allowing private markets to absorb " or, as is often the case, create " excess demand does not reduce overall costs and in fact increases costs for individu- als. Who wants to pay twice? Once through hefty income and sales taxes, and again through private insurance premiums, and potentially even more as private market competition drives up the cost of health care services and the increases the scarcity of health care resources. The introduction of a private sector may well provide more services to people who can pay for them, but in no way does this help control costs, improve the distribution of physicians and other health care professionals or improve overall access to care.

Health care reform in Quebec is a conundrum, no doubt about it. And Claude Castonguay has to be com- mended for taking on the thankless job of trying to make sense of its challenges. His gravity about the deficiencies of the system and his belief in a parallel private system are blunt and forthright. Although Castonguay does not seem to be particularly interested in the larger political stakes at play, in Getting Our Money’s Worth, the Liberal government may have received more than it bar- gained for politically. The real mystery is why the report was commissioned in the first place, when the government knew full well what Castonguay’s think- ing on the subject was. Many health policy observers would have been able to predict his recommendations on the day he was appointed. Why then did the government hang him out to dry?

Perhaps, by allowing the father of Quebec medicare to float private sector panaceas to health care reform, Jean Charest was trying to beat the right-wing ADQ opposition at its own game. But this game is risky as it leaves the centre and left wide open for the Parti Québécois to appoint itself as the defender of the pub- lic system. The irony could not be more apt if the sovereignist party in Quebec ends up defending the principles that underpin the Canada Health Act.

But the sombre fate of the report shows the political stakes around deepening the tax burden and privatiza- tion. Perhaps, by allowing Castonguay to float private sector panaceas to health care reform, Jean Charest was trying to prime the electorate for future change, or maybe even beat the right-wing ADQ opposition at its own game. More likely, the report has shown that Quebecers are still not yet ready to swallow such drastic medicine. Like the ”œthird way” in Alberta, appeals for more private sector involvement for physicians and insurers are political non-starters. And while pub- lic opinion polls may show that Quebecers are open in theory to the idea of private markets, user fees and the like, the actual bill for these initiatives, cour- tesy of Castonguay’s precise ledger, has been met with vociferous opposition.

Still, while Castonguay’s report has been shelved, the diagnosis and pre- scription are unlikely to fade from pub- lic debate. Quebec’s health-care reform dilemma is one that resonates in every province. As with the Chaoulli court case, Castonguay’s report will have lasting impact on the debate over health care reform in Canada. Not only does it add fuel to that combustible fire by providing heavy artillery to propo- nents of privatization, it also throws down the gauntlet to the federal gov- ernment over the worthiness of the Canada Health Act.