Reforming Canadian Healthcare

The provinces are responsible for administering and delivering healthcare in Canada and while provincial jurisdiction may appear odd, it was not of major concern when the Fathers of Confederation ratified the British North America Act in 1867. Following several years of debate, however, the Judicial Committee of the Privy Council declared the provinces responsible for administering and provisioning healthcare. The federal government is responsible for public health, in addition to providing healthcare to certain groups, including First Nations, Inuit, military personnel, and federal inmates. It does provide funding to the provinces via the Canada Health Transfer, which is supposed to assist them with costs and ensure some degree of equivalency between provincial healthcare systems.

Former Saskatchewan Premier Tommy Douglas, widely recognized to be the “Father of Medicare,” fought ardently for the implementation of a publicly funded healthcare system. In 1962, one year after his departure from provincial politics, Saskatchewan began providing public healthcare and, shortly thereafter, so too did Alberta. Former Prime Minister John Diefenbaker, in 1958, announced the federal government would fund 50 per cent of provincial healthcare, and eight years later, then Prime Minister Lester B. Pearson ratified this motion.

As a result, Ottawa’s role in healthcare funding is controversial and has been a major policy issue in Canada. Indeed, without federal funding, there would be significant disparities among the provinces in terms of quality, yet, despite these concerns, healthcare innovation is provincial jurisdiction.

The debate over federal funding remerged following the expiration of the Canada Health Accord, established in 2004 under Paul Martin’s tenure as Prime Minister of Canada. It guaranteed six per cent annual increases in funding for healthcare and was supposed to help with deficiencies, such as high wait times. Stephen Harper’s government recently committed to a six per cent increase until 2017, after which the government will fund based on inflation-adjusted economic growth (although the level of funding will not fall below 3 per cent). This development has prompted critics to demand the government return to guaranteeing the six per cent increase, arguing that underfunding issues could worsen the system, and more worrying, allow new issues to emerge.

However, despite funding increases, very little has changed in terms of quality. Kelly McParland of the National Post, for instance, notes the lack of progress in reducing wait times. Moreover, citing the Health Council, he noted that homecare services for seniors are inadequate, primary care is insufficient, and prescription drugs are unaffordable. For example, as reported by the National Post, the federal government has given $41 billion in extra healthcare funding since 2004, yet in 2010 Canada ranked last of 11 countries in wait times.

McParland is not the sole critic. Indeed, there are several reports revealing the shortcomings of Canada’s healthcare system given the amount of money spent on it. Funding, therefore, is not necessarily the issue. There needs to be real reform of the Canadian healthcare system: Ottawa should retain its role, however, the provinces must consider new healthcare models as a means of strengthening their programs. Perhaps the first step ought to be reforming the Canada Health Act to be less restrictive in terms of delivery requirements. The Act requires that healthcare be publicly administered, greatly restricting any partnership with private entities. France, on the other hand, embraces a two-tier system, which typically performs highly in comparison to healthcare systems administered by other rich, democratic countries, in terms of both cost and outcome.

Randy Kaye is a 2013-2014 Atlantic Institute for Market Studies’ Student Fellow. The views expressed are the opinion of the author and not necessarily the Institute

Private Health Care, ‘Queue Jumping,’ and Consumer Choice

Twenty years ago, Canada’s first private MRI clinic opened in Calgary (unsure, albeit, of its viability). Fast forward to 2013 and there are dozens of these clinics in Alberta, British Columbia, Nova Scotia, and Quebec. Whereas Medicare provides patients in need with access to diagnostic imaging, the market for private imaging supplies patients with non-urgent conditions.

Medicare’s average wait time for non-urgent MRIs ranges from months to years. As a result, several frustrated patients opt to pay for an MRI instead, although this option is presently in danger.

The Alberta College of Physicians and Surgeons recently suggested a provincial ban on private MRI clinics on the grounds of equity and queue jumping. At this time, however, there is no tabled legislation.

There is a problem in applying the idea of ‘queue jumping’ to this scenario. People opting for private MRIs are not jumping the line. On the contrary, they are leaving it altogether. When an individual leaves the public queue, for instance, it makes room for others who would otherwise have to wait longer. Furthermore, private MRI clinics exist solely because of private payments. In this way, there are no losers.

Furthermore, the critique on equity grounds is weak. Although it is arguably true that inequality of access increases with private clinics, everyone, including those who remain in the public system, receives better access.

Despite the intentions of those who oppose private clinics, I wonder whether they prefer worse access for everyone–so long as it is equally worse access.

The broader issue is comparing perceived problems with private clinics to the status quo. Particularly, when a government controls the distribution of infrastructure, the temptation of politicizing reform, regardless of its necessity, becomes widespread.

In 2010, for instance, New Brunswick Premier Shawn Graham announced a new MRI machine to Miramichi–a provincial swing riding–during his election campaign. This raised questions about whether Graham’s concession to Miramachi reflected his desire to win votes or an evidence-based assessment. When private firms invest, however, there is no such confounding variable. Private MRI clinics, therefore, theoretically align with health resource needs, even if their services are publicly insured.

It will be interesting to see how this debate moves forward.

Possible outcomes, for instance, range from banning private MRI clinics (thus, increasing provincial fiscal responsibility and running contrary to public opinion) to staying the status quo. Furthermore, provincial governments could even extend insurance coverage to include private MRI clinics, leading to a private-public venture.

Nevertheless, access to additional health services, such as private MRI clinics, is essential. If consumers are free to spend their money on cars, vacations, and phones, allowing them to spend their money in pursuit of better healthcare is commonsense.

Mike Craig is a 2013-2014 Atlantic Institute for Market Studies’ Student Fellow. The views expressed are the opinion of the author and not necessarily the Institute

On Health Insurance in Canada

Canada’s healthcare system is a source of pride for many citizens–it forms a strong part of our national identity. Indeed, the universality of health insurance, which provides services free at the point-of-care, seems like a noble goal.

Because Canadians value healthcare so much, it is worth asking what the dangers of the current system are. Frankly, it could save lives.

Currently, as stipulated by the Canada Health Act, each province receives federal funds to run a public health insurance agency: Medicare. These funds can be subject to certain reductions in proportion to the amount of private healthcare activity occurring in a province. Thus, provincial health policy freedom is somewhat fiscally constrained by the federal government.*

Medicare tends to be associated with long waiting lists for healthcare. The Canadian Wait Time Alliance (WTA) tracks wait times in Canada, as do the Canadian Institute for Health Information (CIHI) and the Fraser Institute. These studies all suggest that wait times for medical care, while already substantial, have been slowly increasing. While difficult to objectively measure, it is entirely probable that Canadians suffer, get sicker, or die while waiting for medical care.

In parallel, the labour market for Canadian doctors is sometimes poor. About 16–20% of new medical specialists in Canada, according to the Royal College of Physicians and Surgeons, cannot find work every year.

Herein lays the paradox of Canadian health policy as it exists today. How can there be potentially thousands of unemployed Canadian doctors looking for patients and, at the same time, close to a million patients waiting for medical procedures?

Opponents of a parallel private healthcare system are right to question whether it would reduce waitlists–after all, a private system would pull doctors from the public system. However, the implicit assumption here is that every doctor starts out employed. In the current state of affairs, a modest proposal would be to allow doctors for which there is “no room” to start accepting private health insurance payments. This would not require a cent of government expenditure, and may actually help government balance sheets–the only thing that would be drawn from the public system is patients on waitlists. Additionally, this could increase access to care for those who remain in the public system.

Surely, there are better ways of retaining universal health insurance coverage for all Canadians, while addressing the systematic harms it can produce. That sounds like the kind of Canadian innovation I am proud of.

Mike Craig is a 2013-2014 Atlantic Institute for Market Studies’ Student Fellow. The views expressed are the opinion of the author and not necessarily the Institute

*A previous edition of this piece stated that, in 2014, the Canada Health Act is up for renegotiation, when in fact it is the Canada Health Accord. In addition, the Canada Health Act does not explicitly ban private health insurance at the provincial level, although this is subject to interpretation of Section 12.