During the summer of 1968, Minister of National Health and Welfare John Munro and his deputy ministers reviewed the economic projections for the costs of hospital and medical services insurance, and discovered that rapidly rising costs would make these programs unsustainable if cost-control measures were not implemented. Using long-established links with provincial administrators as a foundation, Munro was able to get all the provincial health ministers to agree to the creation of a national committee on health care costs that would subdivide the research among seven task force groups. To examine hospital services, task forces on “utilization, operational efficiency, salaries and wages and beds and facilities” were created, while under health services, task forces were set up to examine “methods of delivery of medical care, the price of medical care and the cost of public health services.” Drawing from health departments, universities and government agencies across the country, these teams of experts produced 348 recommendations whose focus was to control or cut costs. But the task forces also argued that health care, as “a labour-intensive industry” in which 70 per cent of costs were due to fees, salaries and wages, desperately needed more efficient distribution and use of medical, nursing and technical staff. They also noted that there was a great deal of “confusion, competition and inefficiency” in the current administrative structure, and recommended regionalization as a solution. In addition, the task forces wanted patients and their health care professionals to devote more attention to understanding the problems and to recognizing that the measures needed to control costs would require a change in attitudes and expectations. But, given the rise in government expenditures from $1.7 billion in 1957 to a projected $6.2 billion in 1972, due to annual 10–14 per cent increases in hospital and medical care costs, the funding problem demanded the attention of Munro and his provincial counterparts alike.
At the federal level, the recommendations of the task forces were appreciated for the snapshot they provided of the current situation and for the suggestions made on how to end traditional practices such as fee-for-service charges and medical domination of patient care. Instead, the task forces suggested experiments with capitation; the creation of community health centres using teams of doctors, nurse practitioners, nutritionists and physiotherapists; and the development of chronic care facilities rather than the expansion of acute care hospitals. In 1970, the Department of National Health and Welfare funded Dr. John Hastings’ study of community health centres, and started to revise the funding formula for both hospital and medical services insurance.