Published in The Globe and Mail on February 25, 2015
By: Åke Blomqvist and Colin Busby
Åke Blomqvist is an adjunct research professor at Carleton University and health policy scholar at the C.D. Howe Institute, where Colin Busby is a senior policy analyst.
Canada’s provincial governments should change the rules that currently limit the right of doctors and hospitals to treat patients privately, and that prevent private insurers from offering plans that pay for physician and hospital services outside provincial insurance plans.
Private payment of health-care costs in Canada today is mostly for things like prescription drugs, vision care, long-term care outside hospitals and dentistry, while provincial governments pay for virtually all hospital and physician services. Other countries’ health-care systems typically have more balanced systems that allow a greater role for private provision and funding of these services, but come closer to universal coverage for other items, notably drugs, than Canada does.
Many people support provincial restrictions on private medicine and health insurance on equity grounds. The court ruling in the Chaoulli case in Quebec that weakened them was greeted with howls of outrage. The idea that everyone who is ill should be treated the same way, regardless of ability and willingness to pay, is appealing and simple to understand. But these restrictions have a big downside: They prevent competition for the provincial plans from private alternatives.
The provincial plans in Canada are monopolies in the markets for physician and hospital services. Although patients mostly can choose their providers, they can only receive care on terms that have been negotiated between the providers and the provincial plan. In these negotiations, governments have to contend with powerful provider groups, such as provincial medical associations and unions representing hospital employees.
In these circumstances, it is perhaps not surprising that the public plans have failed to respond effectively to challenges posed by an aging population, for instance, or the emergence of new and expensive medical technology. The resulting cost increases have gobbled up available public funds, leaving little room for programs to improve access to drugs and other forms of care that provincial plans currently do not cover.
Over the years, the list of changes needed to improve our publicly funded system has grown. For example, many have called for reform of primary care, including a move away from the still dominant fee-for-service method of paying providers, and more use of nurse practitioners and other non-physician health professionals. Among health policy analysts, there is broad support for paying a share of hospital budgets with some form of activity-based funding, rather than through negotiated annual budgets.
Over the years, the list of changes needed to improve our publicly funded system has grown. For example, many have called for reform of primary care, including a move away from the still dominant fee-for-service method of paying providers, and more use of nurse practitioners and other non-physician health professionals. Among health policy analysts, there is broad support for paying a share of hospital budgets with some form of activity-based funding, rather than through negotiated annual budgets.
In Canada, frustrated patients cannot show their discontent with the public system by turning to private care. Citizens want provincial plans to be efficiently managed – to control costs and offer care of good quality. But they can only put pressure on the plans through the political process. In that process, they must compete with well-organized lobby groups who benefit from the current monopoly system and who will oppose reforms that they perceive as being against their interests.
Moreover, Canadian health policy is complicated by our system of divided jurisdiction between the federal and provincial levels of government. The resulting political dynamic seems to have produced gridlock – even modest reform efforts are vigorously opposed and typically lead to mere cosmetic change. More competition from private medicine and insurance would change this dynamic, putting more pressure on politicians and system managers to push through reforms that would contain costs and give better value for money in the public plans.
Other countries with universal public health plans, such as Britain and Australia, are well ahead of our provincial health systems when it comes to making important changes, particularly for hospital financing. Although these countries share the commitment to a public system that gives everyone access to needed health care regardless of ability to pay, they allow individuals to seek private alternatives outside the public plan. In both places, political forces appear to have aligned more effectively than in Canada to drive reforms to the public systems.
Views to the contrary notwithstanding, it is possible to allow more room for private medicine and health insurance without violating the principles of the Canada Health Act, and there are plenty of examples of countries that have gone this route without ending up at the bottom of the proverbial “slippery slope” toward “U.S.-style health care.” Further, these changes could free up additional public money for expansion of public coverage in areas such as drugs and other forms of care.
The provinces should better balance their public-private financing model. They should strengthen the public role in coverage for drugs and community-based care, but also allow more choice and competition in the markets for hospital and physician services. Canadians are rightly proud of the fact that we have a health-care system that both is more equitable and more efficient than its U.S. counterpart, but we lag behind counterparts elsewhere by wide – and growing – margins.
