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In the coming months, a pilot project will be conducted involving three private clinics in the Montreal area (Clinique de chirurgie Dix30, Rockland MD and Groupe Opmedic).

At a press conference, Barrette said the new hospital funding system will be implemented gradually.

Despite the use of private clinics, he insisted the pilot project had nothing to do with privatizing health care.

After the reorganization of the health-care network and reviewing doctor remuneration, the transformation of hospital financing methods is the third part of Barrette's health reform initiative.

But Saskatchewan's Health Minister Dustin Duncan seems to believe that a novel feature in their "model" will make it palatable: MRI providers will be required to provide a "public" MRI for each private MRI sold. There is great fog around this stipulation. MRI clinics in Alberta and British Columbia provide a menu of services, just like an auto repair shop. Of course, it is difficult to identify prices for Canadian MRIs because their websites, while advertising "competitive" prices, ask you to contact them. The United States is more "competitive." For example, Ohio law requires hospitals to publish their prices. The website for medcentral.org lists more than 40 items in its MRI price list.

Here is my question: If a Saskatchewan MRI provider does a foot scan for a private patient, does it then have to do a foot scan for a public patient? How will this be monitored? Also, when does the public patient get her foot scan? If a paying patient is standing in the door, does the MRI provider say, "Sorry, you have to wait till we provide the public foot scan that we owe?" How is this monitored? Does the government pay for the patient from the public list? If so, at what price?

Is this simply a revenue guarantee in disguise? Undoubtedly Bill 179 provides for wide ministerial discretion. Can we bank on the minister being discreet? This model is bizarre. If the provincial government is seeking ways to provide more MRIs without having to incur the upfront capital costs and to remove the operating costs from its budget, then just negotiate MRI fees in the physician fee schedule, as currently occurs with other imaging services.

However, it might quickly become obvious that the private modality cannot compete with cost effective public provision. Glen Beck is emeritus professor of health economics at the University of Saskatchewan.

You want to look at companies that are primarily taking costs out of the system, payers rather than providers," he said. "Providers such as hospitals and other facilities aren't necessarily adding to the problem, but they are in the cost bucket that are trying to be taken out of the system in the U.S." Mitchell aims to build concentrated portfolios (35 to 45 names) of high-quality businesses that generate high returns on invested capital, strong recurring free cash flow, have a portfolio of irreplaceable assets, and finance their operations with low leverage.

Valuation itself is not a catalyst," he said. "It makes more sense to buy high-quality business that have generated strong returns historically, and offer enough return for the risk you're taking." For example, Mitchell only buys stocks that offer a total return of 15 per cent of more. Another holding, Medtronic PLC, a medical device company that typically grows its revenues between four and six per cent, appears to fit the bill.

Although its spine business is in a secular decline, the company is innovating and developing new therapies around catheters and drugcoated balloons. As a result, Mitchell expects it will grow its revenue at 10 per cent over the next three to five years. The company is also benefiting from a tax inversion following its purchase of U.K.-domiciled Covidien PLC, which freed up US$9 billion of cash that was outside the U.S. this past quarter. Medtronic thinks it can generate US$40 billion of free cash flow in the next five years, roughly half of which is set to be returned to investors in the form of dividend increases, share buybacks or special dividends.

They can allocate capital to other businesses and grow," Mitchell said. "It's also trading at a discount to its health-care peers, so it offers great upside." The portfolio manager also has a position in Novartis AG, which is still the largest pharma company in the world until the merger between Pfizer Inc. and Allergan PLV is complete. Like many names in the sector, Novartis faces pressure from generic drugs entering the market. That's the case with its cancer drug Gleevec. However,

Mitchell noted that Novartis has taken steps to replace its sales with another drug. But what's most compelling about this story is its pipeline of other drugs, including Entresto, which treats heart conditions and has shown strong efficacy and improvement versus existing drugs. Mitchell noted that it has "blockbuster" potential, with revenue potential of US$5 billion annually at peak. Similarly, Cosentyx, which treats severe cases of psoriasis that can cause arthritis, could be another big winner for Novartis. Mitchell also sees opportunity in Daimler AG, which is held in his global portfolios. While many people point to the auto industry as a sign of strength in the U.S. economy, Mitchell looked to Europe to find a German auto maker that has performed well.

He noted that China, a key market for many luxury auto makers, recently reduced taxes on small and mediumsized businesses, and Daimler has resolved a dispute it had with local dealerships there. "They've also put a number of their vehicles on a common platform with common parts, which brings down costs and boosts margins," Mitchell said. "With a better mix of highermargin, higher-value vehicles, I expect sales to pick up."

yler Anderson, National Post / Portfolio manager Dennis Mitchell sees a steady path to growth in biotech, pharma and other health-care stocks.

The reality is that, when a loved one is in hospital, you cannot schedule your meals at normal hours. You need access to nutritious food, not to mention to the relief from the stress of sitting by the bedside of a loved one who is ill, whenever it is convenient, for example when your ill loved one is being looked after by the medical staff or when they drift off to sleep. It is therefore an important public service to provide the members of the public who have to make use of the hospital with access to good, nutritious food beyond the normal hours when the rest of us have breakfast, lunch, and dinner. These cafeterias are not really "commercial operations" but part of the public service of a hospital; as CUPE local President Norma Robinson pointed out, nutritious food is a necessary part of a patient's recovery. It is also a necessary part of a patient's family members' continuing health.

Alternatively, maybe the smart thing for Horizon Health to do is to accept that food service is part of the public service that our hospitals provide and therefore get on with providing food services to those who use our hospitals as a public service, not as "commercial operations." This means that the health network needs to accept that providing adequate food services, including by investing in new equipment and putting the cafeterias in better locations to increase visitorship, will cost the health network money. The harsh truth is that trying to balance Horizon Health's and the provincial government's books by reducing the hours of cafeterias that, in total, are losing $350,000 a year is the public finance equivalent of trying to get rich by looking for loose change behind your couch cushions.

If the government of New Brunswick wants to have the health care system contribute to reduced government expenditures and a balanced provincial budget, reducing the hours of hospital cafeterias is simply a side-show; it will have no meaningful effect on the provincial budget. If the provincial government wants to reduce expenditures on the health care system in a meaningful way, it and the health networks should engage in real health care reform.

As part of these reforms, they should either close or downgrade a number of hospitals to basic health care and triage centres and build the health-care system around a few full-service, high-quality regional hospitals. If the evidence of other provinces that had a plethora of small rural hospitals but rationalized their health care service delivery as part of a health care reform agenda is anything to go by, these reforms will also have valuable side-effect of providing New Brunswickers with better health care and making them healthier. As well as not saving any significant amount of public money, closing cafeterias in hospitals or substantially reducing their hours, on the other hand, will not do anything to make people healthier, either. If it cannot make a serious contribution to either public sector cost containment or health reform and will harm people in the process, why do it?

an Peach has worked in senior positions in federal, provincial, and territorial governments and at universities across Canada; he also served as vice-president, Policy for the New Brunswick NDP between 2012-15. His expertise is in constitutional law, federalism and intergovernmental relations, Aboriginal law and policy, and the policy-making process.

"In our view, recent proposals for a universal pharmacare plan under which governments would pay essentially all drug costs with only very limited patient charges, are not realistic," Busby and Blomqvist argue. "We believe it is time to start moving toward a model that makes important inroads into the biggest shortcomings of the expensive and flawed system we have today." They point to five critical deficiencies:

Too many low-income people can't afford to fill their prescriptions. All Canadians pay too much for essential medications. The provinces have no common formulary, meaning the list of insured drugs varies across the country. People with rare diseases who need exceptionally expensive drugs have to beg the government or the manufacturer for help.

Fortuitously, the report - written before this week's election - dovetails nicely with the approach of Canada's new Liberal government. Prime minister-designate Justin Trudeau has promised to "improve access to necessary prescription medications" and "work with the provinces and territories to buy drugs in bulk." That isn't quite pharmacare, but it is similar to what Busby and Blomqvist are recommending. Under the C.D. Howe plan, Ottawa would top up health transfers to the provinces allowing them to ensure that drug costs do not exceed 3 per cent of family income anywhere in Canada. (For a single working parent with two children earning $30,000, the ceiling would be $900. For a two-earner family with two children with an income of $115,500 - the national average - the maximum would be $3,450).

There is no mechanism to improve the quality of prescribing by physicians. The key to addressing all these problems, the authors say, is an increased role for the federal government in drug financing. Ottawa wouldn't run the program or deliver the drugs; it would provide the cash and co-ordination to bring the existing provincial programs up to an acceptable national standard.

All of the provinces currently have upper limits but they vary from 3 per cent to 12 per cent of family income. Ontario's is 4 per cent. Ottawa would become a partner in the Pan-Canadian Pharmaceutical Alliance launched by the premiers and territorial leaders in 2010 to bulk-purchase prescription drugs. This would increase its financial muscle - the federal government supplies medications to the prison population, First Nations, soldiers and veterans - when negotiating drug prices. It would also allow the federal government to play a co-ordinating role in creation of a single national drug formulary, based on transparent clinical evidence of cost-effectiveness.

Ottawa would work with the provinces to design a national strategy for rare and high-cost diseases. Similarly it would help them build incentives into their drug plans for doctors to take responsibility for the cost of the prescriptions they write. There would be no fundamental restructuring. A substantial share of drug costs would continue to be privately funded. The disruption would be minimal. Work could begin immediately. Politically the stars are as well-aligned as they are likely to be. The provincial premiers invited Ottawa to join the Pan-Canadian Pharmaceutical Alliance in June. Their health ministers agreed that Ottawa should play a role in improving access to prescription drugs and coverage for low-income Canadians. Trudeau has promised to negotiate a long-term health accord with the premiers and budgeted an additional $415 million for health care next year rising to $1 billion by 2019. And more than 90 per cent of Canadians support universal access to prescription drugs.

"Canadians need improvements to the existing arrangements," Busby and Blomqvist point out. "What we propose would go a long toward achieving the same objectives as those of the federally funded universal drug plan." The question facing Canadians who have waited decades for a national publicly funded pharmacare program is: Do they settle for watered down version or hold out for the gold standard? They could wait a very long time. Carol Goar's column appears Monday, Wednesday and Friday.

$3-billion over four years in home care and palliative care.

Dr. Philpott pointed to an oft-quoted report from the New York-based Commonwealth Fund which ranked Canada 10th out of 11 developed countries on health-care performance – only the U.S. placed lower. The report gave Canada especially poor marks for its efficiency and timeliness of care.