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April 25, 2008
An Alberta Mini-Policy Blueprint
If Minister of Health Ron Liepert is serious about lifting ideas from the 2002 Mazankowski Report, such changes to Alberta’s health care system have a chance at being systemic and positive. Former federal cabinet minister Don Mazankowski’s study was a useful provincial antidote to the federal Roy Romanow report put the same year. Romanow prescribed more of the same; Mazankowski prescribed choice and also Medical Savings Accounts, a sort of RRSP for health care.
But with provincial government spending up 12% this year and last, and due not only to health care, the province must also move aggressively on other policy fronts. If Premier Ed Stelmach needs to, he can remind critics of reform (and Calgary Mayor Dave Bronconnier who always demands more cash but never looks at efficient service delivery,) of where they live.
Look at any Alberta government seal, shield or banner and you’ll find Alberta’s provincial motto, fortis et liber (strong and free). It’s an apt creed for Alberta. With few exceptions in provincial history (city ownership of utilities, a provincial airline, or the bizarre ownership of a bank) government ownership and intervention is not the rule. For much of our history and relative to other provinces, Albertans used the private and non-profit sectors – not government, to solve problems.
It’s time for that approach to be extended to provincial departments, agencies, health authorities, municipalities, and even schools. They should be transformed into business units with the freedom to buy services from the marketplace and not the government’s own supply chain. This would imitate the best practices from other jurisdictions that long ago moved away from such inefficient models.
For example, in health care, a recent study from the European Health Consumer Powerhouse found that the top six providers of health care in Europe – Austria, the Netherlands, France, Switzerland, Germany, and Sweden –all have purchaser-provider splits.
That means in the case of Spain’s Catalonia region, health care is split into three basic nodes. The Ministry of Health pays the bills and sets the standards; a separate agency, the Health Service, monitors the performance of the third group – the providers, the majority of whom are contracted. About 70% of health facilities are privately owned so in Catalonia the government rarely buys services from itself, a conflict of interest. The beauty of the system is that in Spain, as with the other European nations, health care is universal.
On education, the Alberta government should build on its existing choice-based approach and let full funding follow the student to any school chosen by parents.
Over in Europe, this is normal and non-controversial. By law, Swedish municipalities (which run the schools) must give equal funding to independent schools after accounting for municipal overhead costs.
In the Netherlands, freedom of parental choice has been in operation for 91 years and 70 per cent of Holland children attend fully-funded private schools. It is a right enshrined in the country’s constitution.
In Denmark, parents also have a constitutional right to funding for the school of their choice, thanks to the Free School Act of 1855. All approved private schools are entitled to receive state subsidies that cover about 80 per cent of their operational expenditures plus a capital allowance and other grants.
Then there is the need for municipal reform. Alberta’s cities continue to engage in costly uncompetitive practices. The best example is here in Calgary, where city council just delivered the new recycling program to one entity – the city’s own sanitation department, rather than divide up neighbourhoods between private and government recycling contractors.
To end such featherbedding, the Alberta government should rewrite the Municipal Act and require municipalities to reorganize their departments into business units.
Such legal reform is exactly what New Zealand’s then left-wing Labour government did in 1989. The result was local flexibility and innovation, an example of which showed up in the capital city, Wellington, which replaced eight administration-intensive departments with three business units.
In Wellington, the first business unit focuses on strategy and long-term planning and takes a system-wide overview of finances, communications, marketing, and risk management; the second unit creates the specific terms for how services are to be bought from in-house business units or external contractors; the third business group is tasked to fulfill customer needs in the most efficient and effective way. That change in Wellington meant an end to monopoly service delivery of the sort that takes place in our city.
But whether in city hall, health care or schools, it’s long overdue for Alberta’s historic creed to be put into practice.
Mark Milke, Alberta Senior Fellow
is a lecturer in political philosophy and international relations at the University of Calgary, a doctoral candidate in Political Science, policy analyst, and author of three books on Canadian politics, including the 2006 A Nation of Serfs? How Canada’s Political Culture Corrupts Canadian Values from John Wiley & Sons. He is a former director (first in Alberta and then British Columbia) with the Canadian Taxpayers Federation 1997-2002. Since 2002, among other work, Mark has written policy papers on the Canada Pension Plan, Alberta’s Heritage Fund, automobile insurance, corporate welfare and the flat tax. He is writing his PhD dissertation on the effects of anti-Americanism on deliberative democracy in Canada and is a Sunday columnist for the Calgary Herald. In addition, his columns on politics, hiking, nature and architecture have been published across Canada including in the National Post, Globe and Mail, Reader’s Digest, The Western Standard, Vancouver Sun, and Victoria Times Colonist and the Washington DC magazine on politics, The Weekly Standard.