A Federalist Path to Long-Term Care

Reform?

Carolyn Hughes Tuohy, PhD, FRSC

IRPP Webinar
May 20, 2021
 Source: Comas-
Herrera et al.
2021

Deaths
relative to
population,
in
community
and in long-
term care:
a middling
experience
(to January
2021)
 Deaths of LTC Residents as % Total COVID-19 Deaths, for Periods Ending June
26, 2020, October 14, 2020, February 1, 2021

Large share
of COVID-19
deaths
occurred
among LTC
residents,
especially in
first and
second
waves

Source: Comas-
Herrera et al.
2021
 COVID-19 cases and deaths among residents in long-term care facilities in Ontario and British
Columbia
(to Sept. 10, 2020).

Variation
across
provinces

Michael Liu et al. CMAJ 2020;192:E1540-E1546

©2020 by Canadian Medical Association

 Media coverage of long-term care and pharmacare, Canadian newspapers,*
2000-2020

Galvanized 6000

public 5000
LTC Pharmacare

attention Number of articles 4000

3000

2000

1000

0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

LTC = long-term care + government. Pharmacare = either pharmacare or universal drug coverage.
*Daily newspapers in Canada, in English, with weekly circulation >40,000, with continuous coverage in
the Canadian Newsstream database, to September 20, 2020.
 Conference Board of Canada (Gibbard 2017) estimates:
• additional 199,000 long-term care beds needed by 2035,
nearly doubling current long-term care capacity.
The Fiscal • $64 billion in additional capital spending between 2018
Challenge and 2035 and $14.4 billion in additional annual
operating spending by 2035 (all figures in 2017 dollars).

Macdonald, Wolfson and Hirdes (NIA 2019) estimates:

• cost of public care in nursing homes and private homes of
$71 billion annually (in constant 2019 dollars) by 2050 –
roughly double relative to the macroeconomy.
• Plus $27 billion in unpaid hours of care inside the home.

Above assume current patterns of utilization, which

Funding is in top third of OECD, but more is required
as leverage on reform
Spending on LTC as % GDP, 2018
3.5

3.0

2.5

2.0

1.5

1.0

0.5

0.0

Total Public/Compulsory
 Insufficient quality control:
The
Regulatory A problematic segment: in Ontario, 90 percent
Challenge of deaths occurred in 15 percent of facilities by
mid-November 2020:
“grandfathered” facilities
Insufficient enforcement – tight regulation of
budgets, looser enforcement of quality standards
Accreditation is voluntary; some evidence that
effectiveness is limited
How Can Unrealized opportunities in Canadian federalism
Federalism Pan-Canadian risk pool
Help?
Potential for large-scale data collection and analysis
Diffusion of best practice
Delivery tailored to local circumstances and
preferences
 Problems:
Canada
Health Act Need to accommodate private charges, given
model? lifestyle implications
No counterpart to medical profession to set and
enforce quality standards and harmonize across
provinces
LTC is likely to lose in budgetary competition with
physicians and hospitals
 Seize the potential of areas of concurrent jurisdiction (old
age security and immigration) to bring provincial and
An federal governments together in a “joint-decision” model
Alternative Focus here on LTCI as a supplemental benefit alongside
Approach: the CPP/QPP
Long-term Retirement benefit model is better suited to LTC: people
over 65 account for about 44% of overall government
Care health spending in Canada, but more than 90% of
Insurance residents in long-term care facilities and more than 60%
of users of home care
Like the CPP/QPP, funded through employer and employee
contributions.
Supplemented from general revenue at least on a
 1. administered by federal government; accountable
to Parliament and provincial ministers
2. benefit would be paid as a flat cash transfer based
on level of need for care, assessed through existing
Administering Proposal:
provincial mechanisms.
LTCI Long-term
3. assignable to a qualifying provider of institutional
Care
or home care.
Insurance
4. determination of qualifying providers provides a
(LTCI)
mechanism for developing “national standards.”
5. standards to be harmonized over time as
administrative data are gathered and analyzed
under aegis of an arm’s-length body:
e.g. a Long-term Care Insurance Council – analogous
to CPPIB: appointed by federal minister from list of
provincial nominees
 Dedicated source of revenue
Geared to demographic change
Provides mechanism of cross-provincial
Advantages harmonization through designation of
of LTCI “qualified providers”
Administrative data could provide basis
Advantages
for
of LTCIanalysis to inform standard-setting
Over time, could provide common
platform of funding for a range of LTC
services and facilities, vs current siloes
Models exist in Germany, Japan and the
Netherlands
 Integration with existing provincial
Design programs and funding
Devils One option: additional per diems equal to
LTCI benefit
Advantages
Taxation issues:
of LTCI
Should contribution be eligible for tax
credit/deduction?
Should benefits be taxable?
 $3 billion over five years (incremental
to $10 billion over 3 years in FES
Federal Budget
2020)
Budget 2021: 2021: a
Signaled intent to work with provinces
missed
toward national standards – but no
opportunity
mechanism
A Missed in LTC?
One-time payment of $500 in August
Opportunity?
2021 to OAS pensioners 75+ as of
June 2022, then ongoing 10% increase
in regular OAS payments for
pensioners 75+.
 Treat LTC as bookend to child care – both ends
of life cycle
$3 billion as down payment – directed to
Federal infrastructure to replace and upgrade outdated
Budget
Budget 2021 2021:facilities
a
missed
Announcement of process toward national
- Follow-up?
opportunity
strategy – Royal Commission (cf. Australian RC
on Aged Care March 2021)?
in LTC?
Process: Appointed by federal minister from
list provided by federal-provincial nominating
committee
Substance: Mandate to review state-of-the-art
knowledge and recommend policy response.
 Federalism as a
strength: a path
For more …. toward ending the
crisis in long
term care
For
More ….
Carolyn Hughes Tuohy,
Institute for Research
on Public Policy,
February 2021
Federalism as a Strength:
A Response
Daniel Béland
Director, McGill Institute for the Study of Canada
Tuohy’s Model
• According to Carolyn Tuohy (2021: 16), “a ready-made model” for long-
term care insurance in Canada” exists in one of the federation’s social
policy success stories in an area of concurrent jurisdiction. Public pensions
are covered by the federal-provincial Canada Pension Plan/Quebec Pension
Plan (CPP/QPP), and buttressed by the federal government’s universal Old
Age Security (OAS) and the income-scaled Guaranteed Income Supplement
(GIS) programs.”
• The CPP-like long-term care insurance she proposes “could be designed to
be self-sustaining so that contribution rates can be adjusted according to
actuarial projections, unless federal and provincial governments agree to
intervene. It would thus establish a dedicated funding stream in perpetuity
that would be sensitive to demographic change.” (Tuohy, 2021: 16)
A Paradoxical Proposal?
• First, as Banting (2005) explains when he depicts CPP as an example
of “joint decision federalism,” would provinces have a collective veto
point over not only the adoption but the reform of a “national” long-
term care insurance system?
• Second, using CPP/QPP as a model for a “national” long-term care
system seems paradoxical because we talk about two distinct
programs, one of which is purely provincial, QPP. This immediately
raises the issue of provinces like Quebec but also Alberta “opting out”
of the proposed long-term care insurance program, something they
would likely do. Would this not define the purpose of a “national”
program?
Political Obstacles
• These remarks raise the issue of the political feasibility of a “national” long-
term care insurance program in the current political and electoral
environment. In addition to the presence of a minority government in
Ottawa, a key factor is the presence of many right-of-centre governments
in the provinces. Beyond Alberta, where the Fair Deal Panel recommended
just last year that the province opts out of CPP, it is unlikely that provinces
like Ontario or Saskatchewan, under their current premiers, would support
the creation of a pan-Canadian long-term care insurance program.
• Here the politics of CPP is useful, as the ongoing expansion of the program
agreed upon with provinces back in 2016 only became possible because of
the presence of a Liberal government in Ontario, and of an NDP
government in Alberta (Béland and Weaver, 2019).
Federalism as a Strength and/or a Weakness?
• In this context, even if it’s not discussed in the Tuohy’s paper, I understand why
the author would prefer to see the creation of a federal commission on long-term
care in Canada.
• Yet, launching a commission could delay urgent action on long-term care and it
could also exacerbate tensions between Ottawa and the provinces.
• Direct negotiation between Ottawa and the provinces is how CPP happened in
the first place, and how a “national” long-term care program could emerge in
Canada.
• However, the political obstacles to the creation of such a program are so strong
right now that the federal government could try to help the provinces finance
long-term care insurance on their own, if they decided to create their own
provincial program. This is not like CPP but more like QPP, but it would be more
likely to happen anytime soon than what Tuohy (2021) recommends. Yet, the
existence of such provincial plans would create key economic and demographic
problems of their own.
Discussion of Federalism as a strength

Michel Grignon 1

1 McMaster University, Canada

IRPP, 20 May, 2021

Michel Grignon Discussion

Outline

1 Three supplementary arguments for the plan:

1 A national plan is more equitable
2 A plan has explicit standards
3 A LTC plan would include home care and give choice
2 Two issues to establish such a plan
1 What if strong differences across provincial values? BC
versus ON
2 How do we cover stay-at-home moms/dads?

Michel Grignon Discussion

Equity

Share of population of Nova Scotia 70 and older is close to

15%, versus 9% only in Alberta. For 80 and older, shares
are 4.8% versus 3.2% (more than one half higher).
Either elderly dependent are poorly treated in NS or
taxpayers in that province are unfairly treated relative to
those in AB.
Migrations?

Michel Grignon Discussion

Standards

An insurance is a right to a product (quid pro quo).

General revenue is a conditional commitment from the
province
Ear-marking makes it easier to sell to taxpayers
Separates assessment of need from provision of services.

Michel Grignon Discussion

Includes home care

Canada has a demand issue: % population 80+ in

institutions is higher than OECD average (12.3 versus 9.9,
n=21).
Canada does not report to the OECD on number of
recipients of home care.
Also, only 63% of residents have dementia
We don’t keep enough individuals at home, because home
care is not well funded.

Michel Grignon Discussion

Issue with the plan

How do we force provinces to agree on the content (coverage)?

Ontario v. British Columbia on Covid-19 (example)

BC did much better in 1st wave
M I O
M M I O R . .
I O R
B = I .O .R .B = B
R

BC did much better in preventing outbreaks and managing

them once they took place, despite having more facilities
How did BC do?
1 BC pays a slightly higher per diem to its operators (+10%)
2 gets substantially more hours of care per resident (+20%)
3 Three quarters of BC residents live in private rooms, versus
one third of Ontario residents only.
4 FP less prevalent in BC (one third versus half)
What if the standard were Ontario, not BC?

Michel Grignon Discussion

CLTCP?

A plan is contributive (CPP).

How do we treat those who did not contribute?
1 Survivor benefits?
2 We create an Old Age Long-Term-Care Security and an
Guaranteed Long-Term-Care Supplement?
But how is that compatible with universal standards of care
and quality?

Michel Grignon Discussion