UPDATED at 10:10 a.m.

The country's premiers say Ottawa's changes to health funding will leave them short $36 billion over 10 years, starting in 2014-15.

Federal transfers to the provinces and territories will continue to grow in that time, but the premiers say that's the extra amount of money provinces would receive if Ottawa stuck to its 2007 plan.

The Council of the Federation released an assessment of the changes Friday morning at its meeting in Halifax.

In December, federal Finance Minister Jim Flaherty said health transfers will increase by six per cent annually until 2017-18. After that, the increases will be tied to growth in gross domestic product, plus inflation.

The premiers' report said Ottawa's 2007 commitment also included a move to give provinces health cash on an equal, per-capita basis.

However, tying increases to economic growth, rather than the current rate of six per cent, and limiting protection to provinces to ensure they're not worse off leads to the estimate of $36 billion less in the Canada Health Transfer.

The premiers' estimate nominal gross domestic product growth will average four per cent nationally from 2014-15 to 2023-24.

The bottom line is less money for services the provinces are in charge of providing, said Manitoba Premier Greg Selinger, who led the working group on fiscal arrangements that was struck at a meeting in January.

"It does have a big impact on Canadians. Those resources will mean less money available for nurses and doctors and health care where people live in their communities all across the country," Selinger said.

The difference between the health transfer arrangements would mean $900 million less for Nova Scotia over the 10 years, according to the report.

Premier Darrell Dexter said the impact would be even greater if equalization was factored in.

"The facts are pretty simple," he said. "Two-thirds of the tax that you pay in your paycheque goes to the federal government and yet the provinces deliver 80 per cent of the services. That, clearly, is an imbalance."

Whether the federal government is listening or not, the provinces will talk about options for transfers again in the fall.

Selinger, AlbertaPremier Alison Redford, and New Brunswick Premier David Alward will chair that meeting of provincial and territorial finance ministers.

On Thursday, the premiers agreed to bulk buy three to five generic drugs in the hopes of saving millions of dollars.

It’s the most concrete step yet towards a national pharmaceutical strategy after many years of inaction.

The premiers would not say how much they expect to save by teaming up on one big order to demand a cheaper price. Saskatchewan Premier Brad Wall estimated his province could shave drug prices by 30 per cent.

“I wish that we would have, as provinces, done this 30, 20, 10 years ago,” said Wall.

“The point is: we’re doing it now.”

Governments have been promising to create a national pharmaceutical strategy for the past decade in the hopes of saving billions of dollars in drug costs. But they’ve failed to agree on what drugs should be covered or to get doctors or insurance companies onside.

“It’s a little more complex than anticipated,” conceded Prince Edward Island Premier Robert Ghiz when asked why premiers are planning to unite on only three to five drug brands.

“We don’t want to promise something that we’re not going to deliver.”

The premiers have agreed to pick the drugs to be shared by this fall and start purchasing by April 1, 2013. Nova Scotia paid out $105 million for generic drugs last year and a further $135 million for brand name drugs.

But the plan has already hit a snag. Quebec says its universal pharmacare program might not mesh with the programs of other provinces. Quebec Premier Jean Charest said his government will do more analysis before agreeing whether to go along with the group purchase.

Bulk buying is one of a dozen recommendations from the health-care innovation group set up by the premiers in January and led by Wall and Ghiz. The premiers discussed their findings at the Council of the Federation premiers’ meeting in Halifax on Thursday.

Most of the recommendations involve working together to share information and strategies. All of them, even the bulk buying of drugs, are voluntary.

A caveat in the report says all provinces and territories will implement the recommendations “as they deem appropriate to their health-care system.”

Nonetheless, the provinces say the report proves they are transforming health care in Canada without the help of the federal government.

Last December, Ottawa unilaterally set federal health transfers for the next decade and declined to tie them to any performance targets. Health care falls under provincial responsibility, but the provinces say the federal government needs to work with them to ensure all Canadians get roughly the same level of care.

Ontario Premier Dalton McGuinty is urging his colleagues to join him in more tackling even more aggressive change.

McGuinty is taking on how doctors are paid in Ontario. He says governments need to overhaul the pay rates for doctors and even stop paying for some outdated procedures.

“It used to take about two hours to perform cataract surgery. Today it takes about 15 minutes to perform cataract surgery. Obviously, this means we should be paying less for cataract surgeries today than we did in the past,” said McGuinty.

The report makes a vague recommendation in that regard in a section on health human resources.

It says future work includes “examining health human resource funding and payment systems,” and that there are “further opportunities to improve the sustainability of health systems by aligning advances in technology and productivity with appropriate funding and payment practices.”

Medicare advocates and activists from other parts of the country are also in Halifax this week, holding events to highlight their call for Ottawa to stay involved in setting health-care standards.

Aboard the The Harbour Queen docked at the Halifax waterfront, the Nova Scotia Health Coalition and Council of Canadians held a news conference warning about Ottawa’s hands-off approach to health care.

“Regardless of what you hear coming from Ottawa, health care is a shared jurisdiction and it will not survive without federal leaderhip. It will splinter into 14 different directions,” said Mike McBane, national co-ordinator of the Canadian Health Coalition.

Maude Barlow, national chairwoman of the Council of Canadians, claimed Prime Minister Stephen Harper’s ultimate goal is to see more privatized health care.

She also said provinces aren’t ready to handle a new trade agreement Ottawa is negotiating with the European Union that could have an impact in areas like home care and long-term care.

As for the premiers’ plan for bulk buying several drugs, McBane and Dr. Bob Woollard, founder of Canadian Doctors for Medicare, called the premiers’ effort “baby steps.”

While the premiers are starting with up to five drugs, Wall said there are 64 Canadian generic prescription drugs that cost 90 per cent more than in the United States.

The potential impact of the bulk-buying program in Nova Scotia isn’t clear. The province spends about $105 million on generic drugs, according to the Health and Wellness Department.

The province has reduced the cost of generic drugs at pharmacies over the past year. The Health Department said Thursday that as of Aug. 1, the price of most generic drugs will be capped at 35 per cent of the price of the equivalent brand name drug, saving the province $7 million a year under the Pharmacare program.

The report also calls for common standards in treating cardiovascular disease and diabetes-related foot ulcers.

The report says there are conflicting guidelines for treating heart disease, while a greater focus on preventive care for people with diabetes can prevent up to 85 per cent of foot amputations.

(pmcleod@herald.ca)
(djackson@herald.ca)