Pandemic to Endemic

Lisa Raitt: Thank you for tuning in to The Raitt Stuff. I’m your host, Lisa Raitt, former Cabinet Minister in Stephen Harper’s government from 2008 to 2015. I’m here now at CIBC Capital Markets, and in this podcast, I’m going to share insights on current hot topics in the areas of public policy, politics and business with some guests along the way. Hi there and welcome back to the Raitt Stuff. Thank you again for joining me. Today we are not talking about the election. I promise you we have finished that part of our cycle and now we are moving on to talk about other matters that are important to public policy. In the coming weeks the prime minister, of course, will be choosing a new cabinet and there’ll be a speech from the throne, and I’m sure I’ll touch upon what are the policy planks that the prime minister is going to be laying down for this new mandate. But in the meantime, I thought we’d talk today about a topic that is getting a lot of ink and a lot of airplay recently, and that has to do with the capacity of our health care system and a serious look at it as we move from pandemic to endemic when it comes to COVID 19. Now this Wednesday, CIBC Market Call is going to be joining us. Dr. Gary Newton, who’s the CEO of Sinai Health, and he’s going to be giving us an insight as to what it looks like. But in the meantime, I have with us Andrew Grantham, who is with CIBC as well, who is a co-author of a paper on that very topic of health capacity and whether or not it’s an economic risk that we are facing here in Canada. It’s a fascinating paper. I urge you to take a long read of it, we’re going to have a quick conversation here in the next five to seven minutes about what Andrew has found and what his observations are. And I want to thank Andrew for joining me today. Thanks, Andrew.

Andrew Grantham: Thank you for having me.

Lisa Raitt: Oh, it’s it’s definitely my pleasure. Now, as I read the newspaper on the weekends, I can see that this topic of health care capacity is coming up more and more. I’m going to give you full credit. I think you guys started the ball rolling because the Globe and Mail has an article on it. National Post has an article on it. There’s lots of people talking on Twitter about it, and they’re beginning to hone in on this notion of health care capacity. In general prior to COVID, what did Canada look like compared to other of their peer groups in terms of the capacity of our health care system?

Andrew Grantham: So, yeah, we took a look at, you know, being economists, we always go back to data, right? So we took a look at the data that we could find. We could find some comparable data from the OECD, and it showed that there were a few ways in which our health care capacity lagged some of our global peers. The first one is that we didn’t have quite as many acute care beds as other countries. We weren’t dramatically lower than some of the other countries we looked at, but we were certainly on the low end of what other OECD countries had. But where we also fell down as well is how we were using those beds. So people were generally staying in those beds for longer. They were taking longer to recover. That meant that those beds were being used to a greater extent. The capacity use was higher at any given time even before the pandemic struck, which meant that when the pandemic did strike, the amount of spare capacity that we had in those beds was actually a lot lower than some of our global peers. And you add on some other things like, you know, the number of doctors we had was quite low relative to the population and nurses, and we really kind of fell quite far down the rankings when it comes to hospital capacity, health care capacity relative to to other countries.

Lisa Raitt: So we have a respectful number of beds available. It’s not terrible. It’s on the low end, but it’s not terrible. However, we keep people in these beds longer than other countries, and we may not have the staff to staff these beds as other countries do. Is that a fair assessment of where we started?

Andrew Grantham: That’s a fair assessment of where we were kind of in 2019 before the pandemic struck in 2020. Exactly.

Lisa Raitt: And what’s interesting is, even before the pandemic started, Canadians were concerned about wait times, either in terms of how long their line-ups were to get into emergency care, then eventually into acute care and how long it took for them to get to see a doctor. For example, in Atlantic Canada, where there’s a great shortage of doctors or how long it took for a surgery that wasn’t necessary, that was an elective surgery. So Canadians were kind of feel the crunch on capacity at that point in time. But then COVID came. And what was the impact of COVID on this already strained issue?

Andrew Grantham: Well, obviously COVID struck and we needed that hospital capacity and provinces different hospitals were able to kind of create a little bit of extra capacity by delaying some things that were were deemed non-essential. But you know, we did see, particularly during the second wave, when we think about, you know, the headlines that were comeing out of Ontario that the hospital capacity was was really stretched and that did have an impact, and that did lead to the decisions when it came to kind of restrictions around what businesses were being allowed to open and which ones were closed. Now the one thing that we should point out and likecoming at this from an economist point of view, we’re talking about the livelihood part of this equation. We’re talking about the GDP part. Haveing the low hospital capacity in provinces that really tested. That capacity was kind of a blessing in disguise in one way, which is that we suffered a much lower death toll from COVID because we had to have those restrictions in place, you know, harsher restrictions and for longer than, for example, some US states. We show in the paper that the US states that had the hospital capacity didn’t actually see any better health results. Actually, they saw worse health results than other states because they were kind of tempted to use that capacity. What becomes different today in this endemic stage that we’re heading into, though, is that more of the people hitting those hospitals, more of those cases are recoverable cases. So you need that hospital capacity, they stay in hospital for longer. And so that’s why it is still a concern from an economic point of view, from a restrictions point of view and obviously from a health care point of view as well.

Lisa Raitt: You know, I thought one of the lines that actually has been quoted by some journalists was we reached capacity at levels that many other countries consider to be acceptable. And that’s the case. Even now in terms of Alberta, as we see the numbers rise, it’s still significantly lower than what other countries would deem as acceptable before they brought in their own measures of lockdowns or or social distancing.

Andrew Grantham: Exactly our peak and hospitalisation in the second third wave, you know, driven a lot by what was going in Ontario and Quebec was around four and five times lower than the peaks in hospitalisations that we’ve seen in the U.S. and the U.K. Now, obviously, the good news is our health outcome is in. The people who died from COVID 19 was a lot lower than those countries as well. There could also be a longer term economic impact. Less people get in long COVID and being sick down the road. But, you know, because the hospitalisation levels or the excess hospitalisation levels that we have are quite low. This is still a concern, even in a scenario where we’ve got a lot of the population vaccinated now and where we’re kind of looking to get back to whatever the new normal will look like as we hopefully head out of this pandemic.

Lisa Raitt: You noted in the paper, Andrew, that you feel that the economic risk is near term. Why do you think the economic risk is near term with this hospital capacity issue?

Andrew Grantham: This is something that could continue to come up like every few months as we get further waves of COVID 19, hopefully lower waves, less deadly waves than we had in the past, but continued waves. So why it’s a near-term risk for our economic assumptions, though, is we’ve assumed that, you know, when it comes to restrictions around businesses, et cetera, that they really go no further than the vaccine passport systems that have been introduced now really across the country. You know, even Alberta’s kind of fallen in line with that vaccine passport kind of scenario. But if we continue to get hospitalisations rise, if we continue to test the capacity of those hospitals, it’s not impossible to think of a scenario, even though we’re a global leader in vaccinations, that it is tested to an extent which is high enough to see restrictions that go beyond those vaccine passport restrictions having to be kind of reimposed in some areas of the country.

Lisa Raitt: Yeah. What some of our listeners may not realise because they haven’t had the pleasure of being part of the hospital care system since COVID is hit. Unfortunately, I have I. I ended up cutting my hand and I needed to get some stitches and I spent seven hours in an emergency room waiting because of the fact that there was no capacity to deal with everybody who was in emergency because there are no beds, because all the beds were occupied. But one of the policy solutions you do point to is that the government has to take a look at investing and building additional capacity. Is it as simple as that that we fix the problem by having more hospitals?

Andrew Grantham: Nothing’s as simple as that really is it? That’s that’s obviously something that will help, you know, building, you know, extra or greater hospital capacity. We’re already seeing provinces take steps in that we point out in the paper, you know, with the capital plan in Ontario, for example, there has been a big pickup in the money the infrastructure spending for hospitals over the next 10 years. The trouble is, you know, obviously that’s not a quick fix. You can’t build a hospital overnight, particularly in a scenario where you’ve got today where you know, construction workers are very hard to come by. They’re all busy building condos or building houses at the moment. So it’s very difficult to source the labour to build those and the materials in some instances as well. But then we also have to think about staffing those hospitals. And you know, again, I mentioned earlier, that’s something that we rank quite low on compared to some other OECD countries is the number of nurses, the number of doctors per one million of the population. So having more money set aside to build more capacity to build more hospitals is a good first step, but it’s definitely not as simple as just building that extra capacity.

Lisa Raitt: Yeah, and certainly the premiers are looking for a first ministers meeting before the end of the year with Prime Minister Trudeau and makes a lot of sense because their health care systems are under fire and they need more investment for sure, and they’ll be asking for money. And I guess it’s up to us to watch to see how they’re going to deploy that into the health care system itself. I’d only add, Andrew, thank you very much, by the way, for for all this information. I think it’s really important for us to to take a look at what happened now as opposed to waiting for the pandemic decease. And then we do a deep dive on how we all handled it. One of the interesting factors for me that you brought up is the average length of stay is well above other countries, and part of the reason for that is what I picked up in another piece this weekend, which is the fact that simply put, people don’t have anywhere to go from these acute care beds. There are no there are not enough rehab hospitals and there aren’t enough long term care facilities in order to care for the people. So they sit in the hospital waiting for a spot to open up, which causes the backlog in emergency, which causes the backlog in everything else along the way. So it’s definitely we have seen the curtain lifted on what the problems are in our system. And the question is how do we go ahead and fix them all? But what you’re saying in the paper is that we should take care of fixing it because not only is it better for our public health, but it’s also an economic risk that we have to factor in compared to other countries.

Andrew Grantham: Absolutely. Yeah, I mean, if we are moving from a pandemic to an endemic stage, we’re living with this virus for quite a while. We need to be able to live with that. So we need to have that extra capacity. We also need to have that extra capacity. If you know there is, you know, some further problems down the line. If we have another pandemic, it’s not quite as easy as just adding a whole bunch of extra capacity because there is a cost to hold in a lot of extra capacity in the health care system. You see that in the U.S., they have plenty of excess capacity in kind of normal, non-pandemic times, but their health care costs are very high. So, you know, there is a balancing act there, but I think we do need to balance a little bit further away from efficiency and towards having a bit more of that capacity that will be economically beneficial, not just in terms of the building and what that adds to GDP directly, but also just meaning that we won’t have to be having these economically damaging restrictions come on. If we do continue to get waves of COVID 19 over the next year or two.

Lisa Raitt: Well, we’ll leave it at that. That’s an excellent way to to conclude where we are today. Thank you so much, Andrew, for joining me today on the Raitt stuff. Very insightful and certainly something to watch in the coming weeks. Thanks again.

Andrew Grantham: Perfect, Thank you.

Lisa Raitt: Thanks so much for tuning in. Now, if you have any questions or comments or even requests on topics to discuss. Drop me a line at [email protected]. Your interactions actually will make this better. I’m your host, Lisa Raitt, and this has been the Raitt Stuff. I’ll talk to you next week.

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