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The Health of Canadians – The Federal Role

Interim Report

Volume Five: Principles and Recommendations for Reform - Part I

The Standing Senate Committee on Social Affairs, Science and Technology

Chair: The Honourable Michael J.L. Kirby
Deputy Chair: The Honourable Marjory LeBreton

April 2002


TABLE OF CONTENTS

ORDER OF REFERENCE

SENATORS

INTRODUCTION

CHAPTER ONE:

A REFORM BASED ON FUNDAMENTAL REALITIES

1.1 Canada's Publicly Funded Health Care System is Not Fiscally Sustainable Given Current Funding Levels
1.2 Canadians Want a Strong Role for the Federal Government in Facilitating Health Care Restructuring and Renewal
1.3 There is a Need to Introduce Incentives for all Participants in the Publicly Funded Hospital and Doctor System - Providers, Institutions, Governments and Patients - to Deliver, Manage and Use Health Services More Efficiently.
1.4 Principles to Guide the Restructuring and Financing of Canada's Health Care System 

CHAPTER TWO:

PRINCIPLES TO GUIDE THE RESTRUCTURING AND FINANCING OF CANADA'S HEALTH CARE SYSTEM

2.1 Financing (or Insuring) Health Care
2.2 Delivering Health Care
2.3 Evaluating Health Care
2.4 Achieving a Patient-Oriented Health Care System
2.5 The Health Care Contract Between Canadians and their Governments
2.6 Concluding Remarks

CHAPTER THREE:

FINANCING AND ASSESSING HEALTH CARE TECHNOLOGY

3.1 Availability of Health Care Technology
3.2 Financing the Acquisition and Upgrading of Health Care Technology
3.3 Investing More in Health Care Technology Assessment

CHAPTER FOUR

DEPLOYING A NATIONAL HEALTH INFOSTRUCTURE

4.1 Establishing a System of Electronic Health Records
4.2 Evaluating Quality, Performance and Outcomes: the Need for Independent Assessment
4.3 Fostering Accountability
4.4 Ensuring Confidentiality and Protection of Personal Health Information
4.5 Investing in Telehealth in Rural and Remote Communities
4.6 Investing in Tele-Homecare
4.7 Investing in Internet-Based Health Information

CHAPTER FIVE 

NURTURING EXCELLENCE IN CANADIAN HEALTH RESEARCH

5.1 Assuming Leadership in Canadian Health Research
5.2 Engaging the Scientific Revolution
5.3 Securing a Predictable Environment for Health Research
    5.3.1 Federal Funding for Health Research
    5.3.2 Federal In-House Health Research
5.4 Enhancing Quality in Health Services and in Health Care Delivery
5.5 Improving the Health Status of Vulnerable Populations
5.6 Commercializing the Outcomes of Health Research
5.7 Applying the Highest Standards of Ethics to Health Research
    5.7.1 Research Involving Human Subjects
    5.7.2 Issues With Respect to Research Involving Human Subjects
    5.7.3 Animals in Research
    5.7.4 Privacy of Personal Health Information
    5.7.5 Genetic Privacy
    5.7.6 Potential Situations of Conflict of Interest

CHAPTER SIX

PLANNING FOR HUMAN RESOURCES IN HEALTH CARE

6.1 Towards a national strategy for attaining self-sufficiency in health human resources
    6.1.1 Shortages of health care professionals
    6.1.2 Towards self-sufficiency in health human resources
    6.1.3 Increasing the supply of health care providers from Canada's Aboriginal peoples
    6.1.4 Dealing with 'The Brain Drain'
    6.1.5 The need for a national health human resources strategy
6.2 Health Human Resources and Primary Care Reform
    6.2.1 Support for Primary Care Reform
    6.2.2 Inter-Disciplinary Education
    6.2.3 What model for primary care reform?

CHAPTER SEVEN

TOWARDS A POPULATION HEALTH STRATEGY

APPENDIX A

LIST OF PRINCIPLES AND RECOMMENDATIONS BY CHAPTER

APPENDIX B

LIST OF WITNESSES


ORDER OF REFERENCE

Extract from the Journals of the Senate of March 1, 2001:

Resuming debate on the motion of the Honourable Senator LeBreton, seconded by the Honourable Senator Kinsella:

That the Standing Senate Committee on Social Affairs, Science and Technology be authorized to examine and report upon the state of the health care system in Canada. In particular, the Committee shall be authorized to examine:

a) The fundamental principles on which Canada’s publicly funded health care system is based;

b)  The historical development of Canada’s health care system;

c) Health care systems in foreign jurisdictions;

d)  The pressures on and constraints of Canada’s health care system; and

e) The role of the federal government in Canada’s health care system;

 

That the papers and evidence received and taken on the subject and the work accomplished during the Second Session of the Thirty-sixth Parliament be referred to the Committee;

That the Committee submit its final report no later than June 30, 2002; and

That the Committee be permitted, notwithstanding usual practices, to deposit any report with the Clerk of the Senate, if the Senate is not then sitting; and that the report be deemed to have been tabled in the Chamber.

After debate,

The question being put on the motion, it was adopted.

* * * *

Extract from the Journals of the Senate of Tuesday, December 11, 2001:

The Honourable Senator Kirby moved, seconded by the Honourable Senator Pépin:

That, notwithstanding the Order of the Senate adopted on March 1, 2001, the Standing Senate Committee on Social Affairs, Science and Technology, which was authorized to examine and report upon the state of the health care system in Canada, be empowered to present its final report no later than
June 30, 2003.

The question being put on the motion, it was adopted.

ATTEST :  

Paul C. Bélisle  
Clerk of the Senate


SENATORS

The following Senators have participated in the study on the state of the health care system of the Standing Senate Committee on Social Affairs, Science and Technology:  

The Honourable Michael J.L. Kirby, Chair of the Committee

The Honourable Marjory LeBreton, Deputy Chair of the Committee

and 

The Honourable Senators:  

Catherine S. Callbeck  
Joan Cook  
Jane Cordy  
Joyce Fairbairn, P.C.  
Wilbert Keon  
Yves Morin  
Lucie Pépin  
Douglas Roche  
Brenda Robertson  

Ex-officio members of the Committee:

The Honourable Senators: Sharon Carstairs P.C. (or Fernand Robichaud, P.C.) and John Lynch-Staunton (or Noel A. Kinsella)  

Other Senators who have participated from time to time on this study:

The Honourable Senators Carney, Cochrane, Lawson, Léger, Maheu, St. Germain, Sibbeston and Stratton.  



INTRODUCTION

In December 1999, during the Second Session of the Thirty-Sixth Parliament, the Standing Senate Committee on Social Affairs, Science and Technology received a mandate from the Senate to study the state of the Canadian health care system and to examine the evolving role of the federal government in health care.  The Senate renewed the mandate of the Committee in the First Session of the Thirty-Seventh Parliament.  The terms of reference adopted for the purpose of this study read as follows:

That the Standing Senate Committee on Social Affairs, Science and Technology be authorized to examine and report upon the state of the health care system in Canada.  In particular, the Committee shall be authorized to examine:

 

(a)                 The fundamental principles on which Canada’s publicly funded health care system is based;

(b)                 The historical development of Canada’s health care system;

(c)                  Publicly-funded health care system in foreign jurisdictions;

(d)                 The pressures on and constraints of Canada’s health care system;

(e)                  The role of the federal government in Canada’s health care system.[1]

In response to this broad and complex mandate, in March 2001, the Committee re-launched its multi-year and multi-faceted study.  Initially, the study was to comprise five major phases.  Given the huge amount of testimony it received and the complexity of many of the issues it confronted, the Committee has decided to add an additional phase to its work plan.  The report of this sixth phase (Volume Six) will present the Committee’s recommendations on the financing and restructuring of health care.  Volume Six will also address issues surrounding the growing gaps in coverage for medically necessary drugs and home care services.

Following completion of Volume Six, the Committee intends to examine several specific health-related issues.  These studies will result in a series of thematic reports.  These thematic reports will deal with: 1) Aboriginal health; 2) women’s health; 3) mental health; 4) rural health; 5) population health; 6) home care and 7) palliative care.  The following table provides information on the individual phases and their respective timeframes:


HEALTH CARE STUDY
INDIVIDUAL PHASES AND PROPOSED TIMEFRAMES

Phases

Content

Timing of Report

One  

Historical Background and Overview

March 2001

Two

Future Trends, Their Causes and Impact on Health Care Costs

January 2002

Three  

Models and Practices in Other Countries

January 2002

Four

Development of Issues and Options Paper

September 2001

Five

 

Principles for Restructuring the Hospital and Doctor System and Recommendations on Several Health Care Issues

April 2002

Six

 

Recommendations with respect to Financing and Restructuring the Hospital and Doctor System and Closing the Gaps in Drug and Home Care Coverage

October 2002

 

Thematic Studies

Aboriginal Health, Women’s Health, Mental Health, Rural Health, Population Health, Home Care and Palliative Care

To be determined

 

 

The first report of the Committee, released in March 2001, recounted the history of how the federal government helped the provinces to fund hospital and physician care. It focused in particular on the initial objectives of the federal government’s involvement in health care and raised some questions about the future role of the federal government in light of the changing health care environment (e.g. increased recourse to drug therapy, hospital out-patient services, home care and community care). This first report also traced the evolution of health care spending and health indicators over the past several decades. Finally, it looked at a number of the myths that are still current concerning the delivery and financing of health care in Canada and clarified the reality surrounding each of these myths. The objective of the first report was to provide factual information as well as to clarify the major current misconceptions that recur in the health care debate in Canada.

The Committee’s second report reviewed the major trends that are having an impact on the cost and the method of delivery of health services, and the implications of these trends for future public funding.  In particular, the report focused on the pressures associated with the changing demographics of the Canadian population, the increasing use and growing cost of drugs and technology, and developments in the delivery of health services (e.g. the increased use of out-patient, home care and telehealth).  The second report also considered issues surrounding health research, health human resource planning (including the shortage of health care providers), rural health, disease trends and the health of Canada’s Aboriginal population.  Finally, it examined how a health info-structure could help improve the delivery of health services in the future.

The third report of the Committee described and compared the way that health care is financed and delivered in several other countries (Australia, Germany, the Netherlands, Sweden, the United Kingdom and the United States), and the objectives of national government health care policy in those countries.  It highlighted those policies and reforms from which Canada could learn.  The third report also examined briefly the operation of medical savings account systems (MSAs) in Singapore, South Africa, the United States and Hong Kong.

The Committee’s fourth report outlined five distinct roles for the federal government in health and health care.  These five roles are: 1) financing, 2) research and evaluation, 3) infrastructure, 4) population health and 5) service delivery.  For each federal role, a list of objectives was enumerated, some constraints were identified and a wide range of potential policy options for reform and renewal were proposed.  The Committee’s fourth report served to launch a public debate on the challenges and options facing Canada’s health care system.

The current report is based on the testimony gathered during hearings held in the fall of 2001, as well as on evidence received during the earlier phases.  In total, nearly 300 individuals and organizations told the Committee which of the options presented in the Phase Four report they liked or disliked, and why. 

This fifth report consists of seven chapters.  Chapter One identifies three fundamental realities in Canada’s health care system.  At the end of Chapter One are listed twenty principles which the Committee believes should guide the restructuring and financing of the health care delivery system.  Chapter Two provides the Committee’s rationale for each of the principles enunciated in Chapter One.  Chapter Three summarizes the findings and gives the recommendations of the Committee with respect to the financing and assessment of health care technology.  Chapter Four presents the views of the Committee regarding health information systems and details its recommendations for deploying a health infostructure in Canada.  Chapter Five provides the perspectives of the Committee with respect to health research.  Chapter Six presents the Committee’s observations and recommendations with respect to the planning of human resources in health care.  Chapter Seven enumerates a number of principles which the Committee believes should apply to the population health role of the federal government, with a particular emphasis on Aboriginal health.

The Committee’s sixth report, to be released in October 2002, will focus primarily on presenting a set of recommendations on how to move from the principles outlined in Chapters One and Two of this report to a concrete plan of action for restructuring the hospital and doctor system. The sixth report will also include a specific proposal for increasing federal revenue, so that it will be possible to finance the increased federal responsibilities recommended in this report and to help fund the restructuring of the hospital and doctor system.


CHAPTER ONE:

A Reform Based on Fundamental Realities

The purpose of this Chapter and Chapter Two is to present a set of principles which will guide the Committee’s recommendations on the restructuring and financing of the health care delivery system[2] and on the role of the federal government in health care renewal.  These recommendations will be presented in October 2002 in Volume Six of the Committee’s study, following hearings during which witnesses will give the Committee their views on how the principles should be applied in practice.

Some of the principles presented in Chapters One and Two serve as the basis for the Committee’s recommendations presented in chapters 3 through 6, which deal respectively with health care technology, health infostructure, health research and human resources planning in health care.

The set of principles reflect key findings from the first three reports of the Committee’s study on health care together with the evidence presented to the Committee during extensive public hearings held across the country in the fall of 2001.  The rationale for each of the principles listed at the end of this chapter is provided in Chapter Two.  It is worthwhile to note that many of these principles bear a strong similarity to some of the observations and recommendations made by recent provincial task forces and commissions on health care.

Overall, the set of principles is based on the recognition of three fundamental realities:

·        Canada’s publicly funded health care system is not fiscally sustainable given current funding levels;

·        Canadians want a strong role for the federal government in facilitating health care restructuring and renewal;

·        There is a need to introduce incentives for all participants in the publicly funded hospital and doctor system – providers, institutions, governments and patients – to deliver, manage and use health care more efficiently.

The Committee hopes that the principles presented in this Chapter and Chapter Two will enhance the public’s ability to understand and give thoughtful consideration to the various challenges faced by Canada’s health care system.  We also hope that the principles will help move us away from the uniquely Canadian debate about the role of the private sector in health care and the appropriate public/private mix.  It is the Committee’s view that the debate is being conducted in a counterproductive fashion, and is often responsible for diverting attempts at reforming the health care system.

Canadians must recognize that every Canadian province and territory has mixed public/private sector involvement in health care, as does every other major industrialized country.  Physicians, for example, are private in the sense that only a tiny minority are employed by government or its agencies.  In addition, most hospitals are owned and governed by boards representing the communities they serve (and some by religious orders) and they operate on a private, not-for-profit, basis.  Moreover, diagnostic laboratories operate in most provinces as private, for-profit, entities delivering their services to the publicly funded system, and the great majority of pharmacies are also privately owned.

The Committee wants to stress, once again, the importance for Canadians to be willing to consider new approaches to delivering health services.  It is only through such consideration that we will be able to develop options that offer opportunities to sustain Canada’s publicly funded health care system.  In his interim report, Roy Romanow stressed this point very well when he stated:

We need to be clear on what values Canadians want their health system to reflect in its policies and programs. In the past, progress on these issues has been extremely difficult with intransigent positions taken at both ends of the spectrum.  This kind of acrimonious debate does nothing to move us forward to a broader consensus on the direction we want to take or the steps needed to put our health care system on a sustainable footing for the future.  We need to be open to new options and ideas, be willing to engage in open and honest debate about the pros and cons of each new idea, then be prepared to act.[3]

We now turn to a discussion of the three fundamental realities listed above.

 

1.1 Canada’s Publicly Funded Health Care System is Not Fiscally Sustainable Given Current Funding Levels

The debate over health care financing in Canada revolves around the issue of sustainability.  This concept has taken on several meanings in health care in recent years.  The Committee wishes to stress that ensuring sustainability does not mean maintaining the status quo in the structure of health care delivery.  Nor does it mean giving every Canadian every health service right when they want it; sustainability does not mean a perfect system.  We believe that a sustainable health care system is one that provides an appropriate level of care in response to population needs today and, in the longer term, it is also one that has the capability to adapt or adjust to new and evolving realities.

Given the current structure of Canada’s publicly funded health care system, questions relating to the sustainability and affordability of the system are closely intertwined.  This means that the central issue is one of fiscal sustainability.  It is the view of the Committee that a fiscally sustainable health care system is a system upon which Canadians can rely both today and in the future, given government fiscal capacity and taxpayers’ willingness to pay. That is, in considering whether the current system is fiscally sustainable, one must take into account two constraints. The first is the willingness of taxpayers to pay for the system. The second is the need for all governments, for economic development purposes, to keep tax rates relatively competitive with the OECD countries, and particularly with the United States.

Is Canada’s publicly funded health care system fiscally sustainable?  To answer this question, it is necessary to assess whether more money is needed, and whether it is possible to raise it from current sources, given the two constraints identified above. To begin, then, we need to examine current and projected trends in health care spending.

According to data from the Canadian Institute for Health Information (CIHI), public and private health care spending in Canada topped $95 billion in 2000, 6.9% more than the previous year.  Even after adjusting for inflation and population growth, there was a 4.1% real increase in spending between 1999 and 2000.

The pace of growth in health care spending is speeding up.  In fact, real spending per capita is rising faster today than at any time since the 1980s.  Moreover, projections suggest that there are real, continuing upward pressures on Canada’s health care costs:

·        Drug Costs: Drug costs currently account for over 15% of total (public and private) health care spending.  They are expected to climb to $14.7 billion in 2000, up 9% from the year before.  The Committee noted in Volume Two that, between 1990 and 2000, drug spending per capita increased by almost 93%, more than twice the average for all health care spending (40%).[4]  Original, effective but very costly drugs will be entering the Canadian market in the next decade (including a possible vaccine against AIDS, a new immunological cure for juvenile diabetes, etc.) exacerbating pressures on overall drug costs.

·        New Technology: Canada needs to invest more in health care technology and health information systems.  The Committee’s Phase Two report indicated that each $1 billion investment in new medical equipment requires an additional $700 million to cover operating and maintenance costs.  In fact, a further $5 billion would be required to bring Canada’s investment in health care technology to a level equivalent to that of other OECD countries.  Similarly, estimates suggest that between $6 and $10 billion would be required to achieve full implementation of a Canadian health-infostructure (or between $1 to $1.25 billion annually).[5]

·        Aging Population: In 1998, 12% of Canadians were 65 or older and more than 43% of what provincial and territorial governments spent on health care went to services for seniors.  According to Statistics Canada, by 2010, seniors will represent 14.6% of the population, a percentage that rises to 23.6% as the peak of the baby boom generation enters retirement by 2031.  Expensive procedures, which were not previously performed on elderly patients, are increasingly being made available to them.[6]  Estimates suggest that the impact of population aging will account for an additional 1% of total health care costs each year.  Although this percentage appears to be quite small, in dollar terms it amounts to approximately $1 billion annually in increased health care costs due to an aging population.

·        Cost of Health Care Human Resources: Labour costs amount to about 75% of spending on health care.  According to the Premier’s Advisory Council on Health in Alberta (usually referred to as “the Mazankowski report”), in 2001-02 over half the budget increase for health care in Alberta went to salary increases.  Competition for scarce human resources in health care is likely to maintain this trend, not only in Alberta but across Canada.

·        Health Research: Unprecedented support for health research will lead to an explosion of new technologies and drugs.  This year, some $US 40 billion will be spent on health research in the G-7 countries leading to effective but costly technologies in the fields of genomics, proteomics,[7] nanotechnology,[8] etc.

·        Growing Public Expectations: Many observers have noted that public demand for health care will have a major impact on future costs.  In his interim report, Roy Romanow made this point clearly: “One of the most significant cost drivers is how our own expectations have grown over the past few decades. We expect the best in terms of technology, treatments, facilities, research and drugs, and as a consequence, we may be placing demands on our governments that are not sustainable over time.”[9] In fact, Canadians appear to be North American and not European in their viewpoints when it comes to public expectations. More precisely, 64% of Canadians are very interested in new medical discoveries, compared to 66% of Americans and 44% of Europeans.

·        Health Care Restructuring: Restructuring and renewing health care will cost a considerable amount of money.  For example, it has been estimated that establishing primary health care teams in Quebec would cost, on average, $1 million per team.

·        Gaps in the Health Care Safety Net: As pointed out in the Committee’s fourth report, there are presently serious gaps in our health care safety net, particularly with respect to drugs and home care.  For example, a number of Canadians are not protected against the consequences of having to pay catastrophic drug costs.  Similarly, a significant number of Canadians have limited access to necessary home care services.  If Canada is to have national standards in health care, and not only in hospital and doctor care as we do now, more money will clearly be required in the form of additional government funding in order to expand public coverage and reduce or close gaps in the health care safety net.

Given the publicly funded nature of Canada’s hospital and doctor system, these multidimensional pressures put considerable strain on governments’ budgets, both in the shorter and in the longer terms.  This reality was well documented by provincial and territorial ministers of health in their 2000 report on cost drivers[10] as well as by many reports tabled with the Committee. 

For example, a report prepared for the Ontario Hospital Association estimated that close to 38% of total provincial program spending went to health care in 2000-01, up from 33% in 1992-93.[11]  For its part, the Canadian Taxpayers Federation projected that this proportion will hit 50% as early as 2007 in British Columbia and New Brunswick.[12]  Similarly, the Conference Board of Canada estimated that over the period from 2000-2020, public per capita spending on health care (adjusted for inflation) will increase by 58%, while public per capita spending on all other government services and programs will increase by only 17% over the forecast period.[13]

The percentage of government spending that is devoted to health care provides the clearest indication of the short-term pressures felt by governments charged with funding health care.  During the Committee’s cross-country hearings, a wide range of witnesses, including health care managers, health care providers and health care consumers, expressed deep concerns about rising health care costs and their impact on governments’ budgets and on patient care.  Based on this testimony as well as on numerous reports, the Committee believes that rising costs strongly suggest that Canada’s publicly funded health care system is not fiscally sustainable given current funding levels.

A number of individuals and organizations have suggested that operating the health care system more efficiently would save enough money so that no new sources of funding are required.  The Committee has repeatedly acknowledged the critical importance of improving effectiveness and efficiency in the management and delivery of health services. In a similar vein, the Fyke Commission in Saskatchewan remarked that “spending more on the current health care system without addressing its underlying problems would be irresponsible.”[14] Indeed, many of the principles presented in the next chapter are designed to achieve a more efficient system than the one we now have.

At the same time, though, we have also argued that there is not convincing evidence to support the hypothesis that efficiency gains will be sufficient to avoid confronting the issue of the need for new funding sources.  The Committee has stated that responsible public policy planning therefore requires the exploration of additional sources of funding for health care.

In the Committee’s view, to do otherwise would be to put all our eggs in one basket.  This would mean betting the future fiscal sustainability of the health care system on making changes when there is not yet evidence to demonstrate that such changes are actually achievable, and there is no reliable indication of the amount of money that can be saved through restructuring and efficiency changes.  In the Committee’s view, to make such a bet would be irresponsible.

We do, however, understand why some people prefer to gamble on efficiency changes being sufficient to make the system fiscally sustainable. Such an assumption evades most of the tough financing questions, and thereby ducks the most controversial health care issues.[15]

In short, prudence, combined with a careful consideration of the evidence, obliges us to confront the most difficult health care issue facing policy makers and indeed all Canadians: how should additional funds for health care be raised?  Should they come from individuals or businesses to government (by way of taxes or health care insurance premiums) or should they come from individuals or businesses directly into the health care sector? The Committee will present its answers to these questions in its October report.

Both the report of the Clair Commission in Quebec and the Mazankowski report insisted that there are limits to government general revenues and that it will be necessary to diversify the revenue stream in order to sustain the health care system and respond to the future health care needs of the population.

The Clair Commission stated:

To ensure the sustainability of our system, it must first of all be accepted that (…) the resources that (…) society can devote to health and social services are limited. This acceptance leads to two indisputable and inextricably linked obligations: the obligation to make choices and to perform.

(…)Leaders must make choices about the limits of financial resources and about medical technologies and insured drugs. Administrators and clinicians must also make choices or, if not, accept the choices made by others. Finally, each citizen must choose between solidarity, equity and the risk inherent in the philosophy of “everyone for himself.”[16]

Similarly, the Mazankowski report stressed:

If we continue to depend only on provincial and federal revenues to support health care, we have few options other than rationing health services.  On the other hand, if we are able to diversify the revenue sources used to support health care, we have the opportunity of improving access, expanding health services, and realizing the potential of new techniques and treatments to improve health.

(…)Rather than rationing health services, we need to look at a variety of options for generating additional revenue and using that revenue to expand opportunities for Albertans to access the health services they want and need on a timely basis.[17]

The Committee wishes to underline the fact that the federal government has significantly increased its financial support to health care in recent years and, consistent with the view expressed by many witnesses, welcomes this new infusion of funds.  However, it is also important to recognize that the health care needs of Canadians are great and that their expectations are continually growing.  In addition, the costs of running the hospital and doctor system will continue to increase for the reasons given earlier.

Given all the competing demands for federal expenditures, the Committee is of the view that any additional funding from federal sources will have to come from “new” money, and not from revenue transferred into the health envelope from existing sources.

Also, in considering how such additional funding ought to be raised, we must keep in mind that Canada’s personal taxes are the highest of the G-7 countries and among the highest in the OECD.[18] This is why the Committee believes that Canadians are confronted with the need to balance their desire for publicly funded health services against both their willingness to pay for them and the need for Canadian tax levels to be reasonably competitive with those of other OECD countries.

Once it is recognized that the publicly funded health care system does not  currently have sufficient resources to respond to all the demands that are being placed upon it, Canadians must decide what trade-offs they find acceptable.  There are three basic options:

·        The continued rationing of publicly funded health services, either by consciously deciding to make some services available and not others (that is, by delisting some services), or by allowing waiting lists to continue to grow;

·        Increasing government revenue, either by raising taxes directly or through other means such as health care insurance premiums, so that the rationing of services can be reduced or eliminated and waiting lines shortened;

·        Making some services available to those who can afford to pay for them by allowing a parallel privately funded tier of health services, while maintaining a publicly funded system for all other Canadians.

The Committee believes that these are the realistic choices facing Canadians.  There are arguments in favour of each option.  And each option evokes an emotional response from various groups and individuals.  Nevertheless, the three options given above must be addressed if Canada is to sustain a health care system of which Canadians can be truly proud. Section 2.5 shows how each of these options is affected by the principles for restructuring and refinancing presented in Chapter Two.

The testimony from witnesses who argued that health care spending is rising much more rapidly than government revenues reinforces the conclusion that Canadians must make choices.  Unless health care spending is to be allowed to crowd out other equally important spending, Canadians must confront, on an ongoing basis, the trade-offs inherent in the three options listed above.  The challenge of sustaining Canada’s health care system thus entails deciding what aspects of health care delivery are to be publicly funded and how funds are to be raised.  In Volume Six, the Committee will present its recommendations with respect to federal funding of health care.

 

1.2 Canadians Want a Strong Role for the Federal Government in Facilitating Health Care Restructuring and Renewal

Many witnesses underlined the fact that the federal government has historically played a major role in financing the health services covered under the Canada Health Act.  The Committee believes that, given the serious challenges facing our health care system, the federal government must play a major role in order to preserve the spirit of the Medicare program that it pioneered several decades ago.  In fact, Canadians overwhelmingly feel that the publicly funded health care system has served them well and they do not want “big bang” or revolutionary changes to the system.  Public attitude surveys repeatedly show that Canadians expect the federal government to continue to be a major player in Canada’s publicly funded health care system.

Although the delivery of health care in Canada is primarily a provincial and territorial responsibility, the Committee believes that the federal government has a critical role to play in facilitating, encouraging and accommodating the provinces and territories in their efforts to restructure and reconfigure their health care systems.  The Committee is convinced that the vast majority of Canadians are looking to the federal government for collaborative support and partnership in effecting needed changes in the health care system.  In fact, there are a number of reasons why the federal government’s role is important.

First, Canadians strongly support national principles in health care, and they look to the federal government to play a strong role in maintaining them.  As it now stands, the capacity of the federal government to enforce acceptable standards and to recommend appropriate policies to provincial and territorial governments depends in large part on the size of its cash contribution.

Second, federal funding for health care is particularly critical during this period of reform and renewal: changes to the way the health care system operates and is structured will likely result in more rather than less money being required, at least in the short term. The Fyke Commission in Saskatchewan made a similar point, noting that “new funding must buy change, not time, and must buy quality not merely more volume.”[19]

Third, and some would say most importantly, only the federal government is in a position to make sure that all provinces and territories, regardless of the size of their economies, have at their disposal the financial resources to meet the health care needs of their citizens.  This redistributive role of the federal government is a fundamental part of what many call “the Canadian way”.

Fourth, if fundamental changes are to be made to the health care system, they should not be made in only one or two provinces.  Inter-provincial harmonization with respect to what services are insured (and ideally with respect to scope of practice rules as well) are important elements of a truly national system.  There is an important federal role in encouraging such harmonization, for example by using financial incentives or penalties to persuade provincial or territorial governments to accept national standards.

Finally, the Committee wants to emphasize its strong belief that the amount of money that the federal government transfers to the provinces for health care ought to ensure that it has a seat at the table when the restructuring of the health care system is discussed. The federal government should not just give money without having a say on how that money is spent.

Canadians also want the federal government to work with the provinces and territories in a spirit of collaboration and partnership in facilitating health care renewal.  They are impatient with blame-laying; they are more interested in positive results and intergovernmental cooperation.  In this perspective, the Committee totally agrees with the observation made in the Romanow report that now is the time for all levels of governments to collaborate in health care restructuring:

(…) Canadians want both levels of governments to stop the corrosive and unproductive long-distance hollering and finger-pointing that currently passes for debate on how to renew the health care system. They see both levels of government as bearing responsibility for the problems affecting the system and for finding solutions to them.[20]

1.3     There is a Need to Introduce Incentives for all Participants in the Publicly Funded Hospital and Doctor System – Providers, Institutions, Governments and Patients – to Deliver, Manage and Use Health Services More Efficiently.

There is a need to introduce incentives for all participants in the publicly funded hospital and doctor system – providers, institutions, governments and patients – to deliver, manage and use health services more efficiently.  The Committee strongly believes that significant change in a system as complex as the hospital and doctor system cannot be achieved through top-down, centralized, micro-management.  The required changes can only be achieved by establishing an appropriate system of incentives which will:

·        Introduce constructive competition among health care institutions;

·        Encourage more effective use of all health care providers;

·        Encourage more appropriate utilization of health care technology;

·        Put in place structures that will result in a better ongoing evaluation of the system as a whole, and of health care outcomes in particular;

·        Ensure that patients receive timely as well as quality care, and

·        Encourage patients to make cost-effective use of publicly funded health services.

It is the view of the Committee that the key to developing an appropriate set of incentives is the separation of the three functions of financing (or insuring), delivering and evaluating health care.  We are convinced that such a split is a necessary condition for being able to introduce the kinds of incentives that will foster a truly patient-oriented health care system – a system in which the patient receives the most appropriate care, in a timely fashion, by a  qualified provider.

Moreover, separating the functions of financing, delivering and evaluating health care will introduce a much greater degree of transparency into the system and enhance the accountability of all parts of the system, including government.  It will also lay the groundwork for greater competition among health care institutions.  The rationale for such a split, which we believe is critical to any meaningful reform of Canada’s health care system, was discussed in the Committee’s hearings as well as in recent reports.

In the Atlantic provinces and Western Canada, as well as in central Canada, the Committee was told that health care in this country operates in many ways as a “monopoly”, with the government acting as the sole funder and the sole provider of many health services, without independent evaluation or competition.  The Right Hon. Don Mazankowski, Chairman of the Premier’s Advisory Council on Health in Alberta, explained:

Alberta’s health care system, like other systems across the country, operates as an unregulated monopoly.  Government…

·          Defines what constitutes “medically necessary services”

·          Pays for all insured services provided

·          Provides public insurance and forbids, by law, the provision of private insurance for these services

·          Prevents, by law, people from obtaining insured services outside the public system except where there are contracts with the public system

·          Directly or indirectly administers and governs care

·          Defines, collects and reviews information on its own performance.[21]

 

The Committee heard that such government control over health care makes for an inefficient system that lacks transparency and accountability:

Governments in Canada are seriously conflicted with respect to health care.  Governments do not only collect health insurance premiums (through taxes or by special premiums), and maintain responsibility for the delivery of health services, but also report to themselves on their own effectiveness and efficiency based on information they have decided to collect.  Furthermore, the same governments then decide what information will be provided to the public.  Governments must also decide on the interpretation of results – so health services organizations may regard 80% satisfaction rates as acceptable, when many industries would fire the management of an organization which regularly reported that 20% of customers were dissatisfied or that over half of the employees believe the organization is not a good place to work.

The conflict can be reduced or eliminated by separating the insurance function from the health care delivery function. (…) Conflict would also be reduced by distinguishing those responsible for health care system evaluation from those responsible for health services delivery, and from those responsible for collecting insurance premiums.

Eliminating the conflict that arises from government acting simultaneously as a regulator, insurer, provider and evaluator will produce an environment which encourages each sector seek appropriate information about health care system performance.[22]

In Volume Three of its study, the Committee reported that many countries faced with costly, inefficient or unresponsive health care systems have already embarked on reforms aimed at getting rid of the monopoly characteristics described above by separating the various health care functions while maintaining universal access to publicly insured health services.  Examples include Sweden, the United Kingdom and the Netherlands.

International evidence suggests that separating the role of the funder from that of the provider can contribute to making the health care system more efficient by:

·        decentralizing the decision-making process;

·        introducing more competition;

·        better integrating health services;

·        making possible more effective use of all health care providers;

·        making possible more appropriate use of health care technology;

·        putting the patient first, since the funding follows the patient;

·        ensuring that patients receive timely as well as quality care.

Moreover, separating the role of the funder from that of the evaluator will help put in place structures that will result in better ongoing evaluation of the system as a whole, and of treatment outcomes in particular.  This will enhance transparency and foster accountability in the use of public funds.

For all these reasons, the Committee believes that the roles of funder (or insurer), provider, and evaluator in the Canadian health care delivery system should be split from one another.  The set of principles developed in this report is premised on such a split. 

The Committee recognizes that a number of these principles will have to be applied differently in various parts of the country in order to take into account important regional variations (such as the size of the population and the number of health care providers and institutions that exist within each region) and that they will have to be applied differently for different types of institutions (e.g. community hospitals and teaching hospitals).  Indeed, much of our next report will focus on how to go from principle to action, and how to take into account such regional and institutional variations.  Nonetheless, the Committee strongly believes that the set of principles, taken as a whole, clearly indicate how the hospital and doctor system ought to be restructured.

It is the view of the Committee that the overall impact of these principles on the health care system will be to effect a two-stage transformation.  More precisely, the first stage of reform would involve the following changes:

1.      Split between the funder (or insurer) and the provider: While government would continue to be the funder/insurer (as it is now), the institutions providing publicly funded health services (hospitals and clinics) would become more independent of government since they would no longer be subjected to the same degree of government control as they are now.  To achieve this, the method for remunerating hospital services would have to be modified: global annual budgets for hospitals, which are currently determined by government, would disappear and institutions would be reimbursed under a service-based funding scheme (which assigns a dollar value to each type of hospital service and reimburses hospitals for the specific number and type of services they provide).

By having government fund hospitals for each service, and by having the amounts paid for each service publicly known, the public would be able to see, for the first time, the direct connection between the level of funding and the number and types of procedures that are performed.  This would allow the consequences of decisions about the level of health care funding to become more open to public scrutiny, as it would become evident what specific services were affected by various levels of government funding.

This has the potential to change the nature of the health care debate dramatically by having it focus on the number of patients served and the number and variety of medical procedures carried out (that is, the outputs and outcomes of the hospital and doctor system), rather than focussing only on dollars (or inputs) as the debate does now.  Thus, the funding debate would be broadened and become patient-focussed and service-focussed, rather than only dollar-focussed as it is now.

2.      Split between the funder/insurer and evaluator: Government would continue to have overall responsibility for the quality of health care delivery, and providers would ultimately be accountable to government, but the evaluator role would be considerably strengthened.  Although it would continue to be funded by government, the evaluator role would be performed at arm’s length from government. Much greater emphasis would be placed on measuring the quality of treatments and services, gauging the health outcomes of various procedures and assessing system and institutional performance.  A system of independent evaluation, performed by agencies working at arm’s length from government, would provide much more accurate and objective evidence-based information about access, outcomes and costs than is currently available.

3.      “Internal market”[23] for hospital services: Once the service-based funding scheme for hospitals and other institutions is well in place and the independent evaluation function is being well performed, regional health authorities would become responsible for the purchasing of services on behalf of their residents by entering into contracts with hospitals and other institutions.  (If a province so wished, regional health authorities could also become responsible for purchasing primary care services).  This type of “internal market” reform, which has already been implemented to varying degrees in a number of countries, including Sweden, was also recently proposed in the Mazankowski report in Alberta[24].  Such an “internal market” would foster competition between institutions for the provision of hospital services and encourage both cost-effectiveness and efficiency in service delivery. The Committee is aware that reforms of this type will have to be adapted to the particular circumstances that prevail in different parts of the country in order to take into account the number of providers that operate in each region, as well as factors such as the urban/rural mix.

The second stage of reform would result in devolution of the purchasing function from regional health authorities (or from government in provinces where there are no such regional entities) to primary health care teams.[25]  This would mean that primary health care teams would assume the responsibility for purchasing health services from institutional providers on behalf of their patients. An “internal market” among institutional providers who would compete to sell their services to the various primary health care teams would thus be established.  This would result in a situation similar to the GP Fundholding scheme in the United Kingdom (for more information, see the Committee’s Volume Three[26]).

In Canada, this form of “internal market” was recommended by the Health Services Restructuring Commission chaired by Duncan Sinclair in Ontario[27], as well as by Jérôme-Forget and Forget[28].  This second stage of reform would also require moving away from the current fee-for-service remuneration method for physicians toward some form of blended remuneration involving capitation as well as fee-for-service.  This would also involve the development of multi-disciplinary group practices and the revision of current scope of practice rules.

Devolving the purchasing function to primary health care teams would also require patients to register on an annual basis with the primary care group of their choice.  A number of studies suggest that, while this could limit somewhat a patient’s freedom to choose a provider (primary care provider or specialist)[29], it would provide for a better integration of health services to the overall benefit of patients.  According to several witnesses, this would lead to a more patient-oriented health care system.

The Committee heard evidence that under “internal market” reforms, the overwhelming majority of institutional providers would continue to be, as they are now, privately-owned, not-for-profit institutions.  However, nothing would prevent for-profit providers from competing to supply services, including hospital services, as long as they were subjected to the same quality control regulations and evaluations as public sector institutions.  Such a structure is entirely consistent with the Canada Health Act (and is discussed more fully under Principle Eight in Chapter Two), which does not prohibit private, for-profit institutions. Having noted this, the Committee wishes to make it perfectly clear that it is not pushing for the creation of private for-profit facilities.

It is important to understand that the first stage of reform (the separation of funder/insurer, provider and evaluator) would have to be done before embarking on the second stage, because the second stage (the separation of purchaser and provider) requires that health care institutions know the cost of providing a given service to a patient.  At present, the information systems that are required to do this are not available in most institutions, and the current practice of global budgeting is a major factor that discourages their development.

The Committee is convinced that the separation of the three functions of financing (or insuring), delivering and evaluating health care is an essential step toward a truly patient-oriented health care system in Canada – a system whereby the patient receives the most appropriate care, in a timely fashion, by a qualified provider.  Such a split will also introduce a much greater degree of transparency and accountability by government.  More importantly, the separation makes it possible for a number of incentives to be introduced into the system – incentives which are intended to improve efficiency in the use, provision and management of health care services. While the Committee has not taken a final position on “internal market” reforms, its current inclination would be to have primary health care teams act as purchasers of all health services on behalf of their patients.  We intend to review this proposal carefully and present our final recommendations in Volume Six.

 

1.4 Principles to Guide the Restructuring and Financing of Canada’s Health Care System

Chapter Two develops the rationale for, and the implications of, the principles for reform supported by the Committee.  These principles, which form an integrated whole, are listed below.

THE INSURER:

1.      There should be a single funder (insurer) – the government either directly or through an arm’s length agency – for hospital and doctor services covered under the Canada Health Act.

2.      There should be stability of, and predictability in, government funding for public health care insurance.

3.      The federal government should play a major role in sustaining a national health care insurance system.

4.      The determination of what should be covered under public health care insurance should be done through an open and transparent process. Health services covered under the Canada Health Act should remain publicly insured.  Other health services should continue to be funded using a mix of public and private sources, as they are now. 

5.      The federal government should contribute on an ongoing basis to fund health care technology.

6.      The federal government should increase its investment in those areas of health and health care for which it already has a major responsibility.

7.      The consequences arising from changes in the level or amount of government funding for hospital and medical care should be clearly understood by government and explained to the public, in as much detail as possible, at the time such changes are made and announced.

THE PROVIDER:

8.      In the first stage of health care reform, the method for remunerating hospitals should be changed from the current annual global budget to service-based funding.

9.      Regional health authorities should have the responsibility for purchasing hospital services provided by institutions within their region.

10.  Primary care renewal should lead to the provision of primary care by group practices, or clinics, which operate twenty-four hours a day, seven days a week.

11.  To facilitate primary care reform, the method of compensating general practitioners should be changed from fee-for-service to some form of blended remuneration combining capitation, fee-for-service and other incentives or rewards.

12.  New scope of practice rules and other measures need to be developed in order to enable all health care providers in the primary care sector to provide the full range of services for which they have been trained.

13.  In the second stage of health care reform, an “internal market” should probably be created in which primary health care teams would purchase health services provided by hospitals and other health care institutions on behalf of their patients.

14.  A national (not exclusively federal) strategy must be developed to achieve both an adequate supply and optimal use of health care providers.

 

THE EVALUATOR:

15.  Accountability and transparency in health care financing and delivery require the deployment of a system of electronic health records (EHR) that can capture and translate information on system performance and outcomes.

16.  Measuring treatment outcomes and system performance must become an essential part of the health information system.  Such monitoring and evaluation of the health care delivery system should be performed independently at the national (not federal) level and be funded by government.

THE PATIENT:

17.  Canada’s publicly funded health care system should be patient-oriented.

18.  Incentives should be developed to encourage patients to use the hospital and doctor system as efficiently as possible.  Such incentives should not include user fees for services that are deemed to be medically necessary.

19.  Programs that enable people to be responsible for their own health and to stay healthy must be given high priority.  The federal government can play a leadership role in this regard.

20.  For each type of major procedure or treatment a maximum waiting time should be established, and made public.  When this maximum time is reached, the insurer (government) shall pay for the patient to receive immediately the procedure or treatment in another jurisdiction including, if necessary, another country.



CHAPTER TWO:

Principles to Guide the Restructuring and Financing of Canada’s Health Care System

2.1 Financing (or Insuring) Health Care

Principle One

There should be a single funder (insurer) – the government directly or through an arm’s length agency – for hospital and doctor services covered under the Canada Health Act.

 

The most compelling argument for a single public funder or insurer is that a publicly funded hospital and doctor system is the essence of the health care system which Canadians strongly support.  The Committee agrees that this central element of our system must be maintained, provided that the system meets appropriate standards for quality services delivered in a timely manner.

That is, the Committee believes that there should be a single funder – the government directly or through an arm’s length agency – for medically necessary hospital and doctor services.  A single-funder system yields considerable efficiencies over any form of multi-funder arrangement, including administrative, economic and informational economies of scale.  Furthermore, since a publicly funded hospital and doctor system has become a fundamental element of Canadian society, the Committee believes that the single funder should be government, either directly or indirectly (e.g. through a third party, such as a regional health authority or other arm’s length agency).  As a corollary, there should not be private insurance for publicly insured hospital and doctor services.

In addition, numerous witnesses told the Committee that by concentrating primary financial responsibility in a single funder, the Canadian health care system would lead to more efficient administration of health care insurance.  They suggested that Canada’s publicly financed single-insurer system for medically necessary services delivered under the Canada Health Act eliminates the costs associated with the marketing of competitive health care insurance policies, billing for and collecting premiums, and evaluating insurance risks.

Lee Soderstrom, professor at the Department of Economics, McGill University, described the advantages of a public, single funder for health care as follows:

Available evidence indicates that the cost of the public insurance would be lower because administrative costs would be lower with that public plan.  These costs would be lower because the public plan would take maximum advantage of the economies of scale possible in plan administration.  There would be no need for advertising costs.

(…)The evidence understates the efficiency gains from having a single payer plan.  With the public plan, users avoid administrative hassles when seeking care.  They also avoid a second major problem all too familiar to Americans with private insurance: the inevitable, countless administrative difficulties involved in obtaining reimbursement for bills they have incurred.[30]

Similarly, a document tabled to the Committee by the Atlantic Institute for Market Studies stated:

Under a private insurance-based model, such as predominates in the USA, the possibility of adverse selection involves high costs that contribute little to the quality of medical care provided.  Pooling all citizens into a universal health insurance plan can dramatically lower such costs.  The per capita cost of insurance overhead under the Canadian system, wherein the provinces operate “single payer” insurance systems, is approximately one-fifth the per capita cost in the United States where private health insurance is the norm.[31]

Another strong argument in favour of public health care insurance is the fact that very few Canadians can afford not to be covered.  It therefore makes sense to have everyone covered by a single plan.  A single-insurer system providing universal coverage also means that no one will deny themselves needed health care because they have a more pressing use for their money (perhaps for food, shelter, clothing, etc.).  Nor will anyone be denied necessary care due to inability to pay.

A single-funder model also implies that there will not be, within Canada, a parallel, private insurance sector that competes with public insurance for the funding of hospital and doctor services covered under the Canada Health Act, at those hospitals and with those doctors that care for publicly funded patients.  The public funding of the Canadian health care system would still be done using revenue raised through general taxes, earmarked taxes or public health care insurance premiums, as is currently the case. Canadians should, however, still be permitted to purchase private insurance for non-publicly insured health services and to buy insurance abroad for services delivered abroad as they do now. Health care institutions would also continue to receive the additional revenue they currently derive from non-insured benefits and services.

Under the current Canadian health care system, a provider can be paid from private sources for the delivery of services that are publicly insured as long as the provider opts out completely from the public system, taking no publicly funded patients.  Research brought to the attention of the Committee shows that allowing doctors to function in both the public and parallel private systems disadvantages patients in the publicly funded system, both in terms of quality and timeliness of care.  Therefore, the Committee feels it is important that the current restrictions which prevent doctors from operating simultaneously in parallel public and private systems be maintained.

Moreover, the Committee agrees with witnesses that no one should face excessive financial hardship or possible bankruptcy because of illness, disease, injury or disability.  Access to timely and medically necessary health services should be available to all, regardless of income.  This does not mean, however, that Canadians should not bear some responsibility to keep healthy or to contribute to the future sustainability of the health care system.  Rather, it means that any funding mechanism or financial involvement by individual Canadians should be equitable and fairly distributed.  Incentives designed to encourage responsible use of the publicly funded health care system by patients are discussed in Section 2.4 below.

Principle Two

There should be stability of, and predictability in, government funding for public health care insurance.

The Committee heard repeatedly that there is a major lack of stability and predictability in the policies and the financing of the Canadian health care system.  For example, Lawrence Nestman, professor at the School of Health Services Administration, Dalhousie University, stated that the high turnover of ministers of health and their deputies, as well as that of senior civil servants, has created an atmosphere of unpredictability in federal and provincial/territorial relationships and in health care policies, particularly with regard to those policies that are related to funding.[32]  This view was echoed by Jeff Lozon, President of St Michael’s Hospital in Toronto and former deputy minister of health in Ontario, who said:

My first point is perhaps my most strongly held.  It is premised on the urgent need for predictability and stability of direction in the health care system, it is driven by the need to shelter the system from the daily parry and thrust of the political fabric.  One of the least desirable, most difficult and important jobs is the leadership of the health care system at a provincial level.  Without more stability and certainty, the best reform policies will fail.  Consider the following.  In Ontario, there have been 7 Ministers of Health in the last 10 years, and 7 Deputy Ministers in that same timeframe.  Based on personal experience, I know that 3 months as Deputy Minister gives you seniority over half you colleagues, and going beyond one year constitutes long service!  The job expectancy of a Minister of Health is 15 months, and a Deputy Minister about the same.  It is impossible to take the system forward with that type of turnover, and long range system planning is impractical.[33]

Both Professor Nestman and Mr. Lozon recommended the creation of provincial non-profit organizations to run the health care system.  In their models, these bodies would consist of a board of directors appointed by the government and supported by a staff of experts.  They would exist at arm’s length from the political process and would replace the current departments of health.  According to Mr. Lozon:

In this way, a sense of stability and direction could emerge distanced from the day-to-day pressures of electoral politics and would continue to be responsible for high level goals established by the legislature.[34]

Similarly, the Committee was told that health care funding is heavily dependent on annual revenues to the government and can fluctuate significantly with changes in the economy.  In his brief to the Committee, Claude Forget stated:

Governments have used the health care sector as their main deficit-fighting tool, and yet the need of those services is not sensitive to economic cycles. (…) It is difficult to manage a budget which changes unpredictably in time, largely beyond the control of managerial intervention.[35]

Witnesses also complained about the lack of strategic and long-term planning to deal with the anticipated and growing health care cost pressures resulting from an aging population, rising expectations and costly technology and drugs (see section 1.1 above).  They stressed that stability and predictability in health care funding, for example in the form of multi-year funding arrangements, is a prerequisite to undertaking any systemic reform and sustaining public confidence.  This observation was also made in the Romanow report:

(…) our health care system has in recent years suffered from inconsistent and erratic funding.  Many key health care decisions – from building new facilities, to creating new capacity and delivering certain types of services to targeted populations – require a long planning cycle.  When health care decision makers are obliged to cope with constantly shifting priorities, or when anticipated resources are reduced or eliminated, great uncertainty is the first result quickly followed by reductions in services.  This lack of stable, long-term, predictable funding is jeopardizing long-term planning and, in turn, eroding public confidence in the system’s future.[36]

Many witnesses underlined the important role the federal government could play in ensuring such stability.  For example, the British Columbia Health Association stressed:

A stable funding contribution from the federal government is essential in order to ensure that our provincial health care systems can function in an environment that is conducive to undertaking fundamental changes and implementing required innovations.[37]

Similarly, Bill Bryant, Chair of the Southwestern regional health authority in Manitoba stated:

Before we can undertake dramatic and sustainable reconfiguration of the system, which we believe is needed, a stable and on-going funding framework must be assured.  Some of the basic infrastructures of our health care system have suffered serious erosion over the past decade as a result of “stop-and-go” funding methodologies by both federal and provincial governments. Therefore, one of the first priorities must be a significant and sustained federal cash commitment to restore stability to the existing health care system and ultimately renew confidence in the health care system.[38]

The Committee concurs with the witnesses that there should be stability of, and predictability in, government funding.  It is our view that no industry can be expected to effectively operate if, from year to year, its revenue is subject to significant fluctuations over which it has no control.  In fact, effective planning, which is an essential element of an efficiently operated industry, is impossible unless stability and predictability of funding is assured.  In other words, multi-year funding is essential to running the publicly funded health care system efficiently.

Stability and predictability require that governments are capable of providing sufficient funding in order to meet health care needs at all times, including times of fiscal restraint.  This is, of course, easier said than done, given that health care needs do not vary with economic cycles as government revenues do.  The challenge, therefore, will be to ensure that spending on health care does not crowd out other vital forms of public spending, including education, infrastructure, security, and various other social services:

Spending on health care cannot be allowed to crowd out other vital forms of public spending, including education, infrastructure and other social services.  Our future prosperity and health depend on all of these, and to the extent that it is crowding out these other forms of spending, tax-financed health care in its current form is not sustainable.[39]

This principle does not, in itself, prescribe what sources of revenue are to be used by government in order to guarantee stability and predictability.  It does, however, raise two important questions:

·        First, should earmarked taxes or health care insurance premiums be used to pay for health care in order to help ensure the predictability and stability of funding?

·        Second, should some form of arm’s length agency, as suggested by several witnesses, including Professor Nestman and Mr. Lozon, be given the responsibility for managing the health care system, in order to shelter the system from the daily parry and thrust of elected politics?

The Committee will seek views on these questions before giving the Committee’s answers to them in our October report.

 

Principle Three

The federal government should play a major role in  sustaining a national health care insurance system.

Many witnesses underlined the crucial role of the federal government in financing the hospital and doctor system and in ensuring stability in funding.  Although the provision of health care is under provincial and territorial responsibility, the federal government has historically played a major role in financing the health services covered under the Canada Health Act.  Witnesses told the Committee that a number of reasons explain why it is important that this major role be continued.  These reasons were explained in Section 1.2.

On a number of occasions, provincial and territorial governments have called on the federal government to increase CHST transfer payments in order to help stabilize and sustain Canada’s health care insurance system.  Increasing the federal contribution to health care would likely require raising the level of federal taxation.  As stated in Chapter One under Section 1.1, this could prove difficult to implement, as Canada’s personal taxes are the highest of the G-7 countries and among the highest in the OECD.[40]  Accordingly, Canadians need to balance their desire for publicly funded health services with their willingness to pay taxes to support the financing of those services.

A major concern that was raised during the Committee’s cross-country hearings was that if we continue to depend solely on the general tax base of provincial/territorial and federal governments to support health care, we may end up having to increase the rationing of publicly funded health care services.  For this reason, a number of witnesses suggested we should diversify the revenue sources used to support health care.  This would serve to improve timely access to health care and/or to expand the basket of publicly insured health services.  A national health care insurance premium would be an example of an earmarked revenue source which could be used to support health care.

A further issue has to do with whether provinces and territories should have to account for their use of new or additional federal funds.  The evidence provided in the Committee’s Phase One report showed that block transfers inhibit government accountability.[41]  For this reason, a number of witnesses suggested that it would be essential to establish a mechanism that would allow federal funding to be targeted to specific purposes, its usefulness and efficacy to be evaluated and those who spend it to be held accountable.  One such mechanism, recommended by Claude Forget, was that a portion of personal income taxes be allocated permanently to health care in order to ensure stability of the financial health care system and that this proportion be integrated into federal-provincial fiscal arrangements.  The Committee’s recommendations on the funding issue will be presented in our October 2002 report.


Principle Four

The determination of what should be covered under public health care insurance should be done through an open and transparent process. Health services covered under the Canada Health Act should remain publicly insured.  Other health services should continue to be funded using a mix of public and private sources, as they are now.

The Committee is of the view that health services covered under the Canada Health Act should remain publicly insured.  Other health services should continue to be funded using a mix of public and private sources, as they are now.

The Committee concurs with the Canadian HealthCare Association that now is the time to examine the public private mix in health care if the federal and provincial governments are to develop sound public policies.  The Association, which represents provincial and territorial hospital and health organizations across Canada, stated:

It is time for governments, managers, trustees, providers, researchers and the public to develop and implement sound public policies to ensure that we achieve the appropriate private-public mix in our health care system.[42]


In this perspective, the Committee agrees with the report of the Clair Commission in Quebec and the Mazankowski report in Alberta that consideration should be given to reviewing the principle of comprehensiveness of the Canada Health Act.  Both reports recommended the establishment of a permanent committee, made up of citizens, ethicists, doctors and scientists, to review and make decisions on services that should be publicly insured.  Such a review would lead to evidence-based decision making for public health care coverage.  Such a review would also set the boundaries between publicly insured and privately funded health services:

On an initial basis, the expert panel should review the broad categories of services currently provided and decide whether all existing services should be “grandfathered” for continued public funding.  Services that are not publicly insured could be provided by the public or private health care provider but would not be paid for by public health care funds.[43]

The Committee agrees with the intent of the above quotation, but disagrees that the panel should be composed only of experts.  We strongly believe that input from those who would be directly affected by the panel’s decisions – namely citizens – is essential if the process is to be truly open and is to have public credibility and acceptability.  Moreover, only such an open process will make possible the essential debate of what health services Canadians are prepared to pay for through their taxes.

Thus, the Committee concurs with the Romanow Commission that the public must be involved in the process for determining publicly funded health services:

Canadians need a greater say in determining what health services should or should not be publicly covered.  Although elected governments must always retain accountability, the ways in which decisions are currently made, and who is making them are difficult to understand and often even more difficult to justify.[44]

Determining which services should be paid for publicly and which ones should not – that is, deciding what services are to be listed and delisted – has always been part of the way that Canadian Medicare has functioned.  That is why there are some differences in what is covered in different provinces/territories.  As indicated in Volume One of the Committee’s study, for example, the removal of warts is no longer covered in Nova Scotia, New Brunswick, Ontario, Manitoba, Alberta, Saskatchewan and British Columbia, but it remains publicly insured in Newfoundland, Quebec and Prince Edward Island.  Similarly, stomach stapling is covered in most provinces, but it is not insured in New Brunswick, Nova Scotia or the Yukon, and patients in these provinces must pay for this procedure.[45]

Revising the comprehensive basket of publicly insured health services is not intended to reduce costs but to improve evidence-based decisions with respect to public funding.  However, it is important to stress that there are limits to what the publicly funded health care system can provide.  To put this simply, public health care insurance cannot do all things for all people.  What is critical, however, is that the determination of what is to be covered publicly should be done through an open and transparent process, rather than the current process in which decisions about what is covered are made in secret by governments with no public input. 

This point was emphasized by the Honourable Monique Bégin, who was the federal Minister of Health at the time the Canada Health Act was enacted, in a recent speech:

…choices are being made every day without citizens knowing…. the de-listing of services, a completely secretive process, must be made explicit as a matter of accountability.[46]

The Committee believes that such an open process would create the possibility for there to be a public debate over whether the population would be prepared to pay more to government in order to have more services covered under the public insurance plan.  We also believe that there should be national standards that define those services which are to be covered publicly in each province/territory.

 

Principle Five

The federal government should contribute on an ongoing basis to fund health care technology.

During Phase Two of its health care study, the Committee was told that although Canada ranks 5th among OECD countries in terms of total spending on health care (as a percentage of GDP), it is generally among the bottom third of OECD countries in the availability of health care technology.  For example, Canada lags behind many other countries in terms of access to CT scanners, MRIs and lithotriptors.[47]

Availability is not the only issue with respect to health care technology.  The “aging” of that technology is also of concern.  For example, information provided to the Committee indicates that between 30% and 63% of imaging technology currently used in Canada is outdated.  The Committee was told that the shortage of new technology and the use of outdated equipment impede accurate diagnoses and limit the quality of treatment that can be provided.[48]

The federal government has responded to the deficit in health care technology.  In September 2000, it announced that it would invest a total of $1 billion in 2000-01 and 2001-02 to assist the provinces and territories in purchasing new medical equipment.  The Committee welcomes this injection of new federal funds as an important step toward the acquisition of needed health care technology.

However, the Committee is concerned that there are apparently no mechanisms for ensuring accountability on the part of the provinces and territories as to exactly where money targeted towards purchasing new equipment is actually spent.  This is why we strongly believe, as stated under Principle Three, that a much better accountability mechanism is needed for targeted federal funds.

Overall, the Committee believes that the federal government should commit to a long-term program of financing for health care technology.  In our view, such a program should incorporate clear accountability mechanisms on the part of the provinces/territories on their use of these targeted federal funds.  Chapter 3 of this report provides our findings and recommendations in this regard.


Principle Six

The federal government should increase its investment in those areas of health and health care for which it already has a major responsibility.

The Committee believes that the federal government should demonstrate its commitment to improving the health of Canadians and provide further investment in those important areas for which it has a major responsibility, such as health promotion, health protection, health research, and health information systems and health care technology assessment.  In Volume Four of its study, the Committee[49] identified a number of objectives for the federal government in these areas that it feels should be actively pursued. These include:

·        Fostering the development of a solid base of innovative health research in Canada that compares favourably with that in other countries;

·        Laying the foundation for evidence-based decision-making in areas that affect both well-being and the delivery of health care, while ensuring the protection of privacy, confidentiality and security of personal health information;

·        With respect to health protection: strengthen our national capacity to identify and reduce risk factors which can cause injury, illness, and disease, and to reduce the economic burden of disease in Canada;

·        With respect to health promotion and disease prevention: develop, implement and assess programs and policies whose specific objective is to encourage Canadians to live a healthier lifestyle;

·        With respect to wellness: encourage population health strategies that work on the full range of health determinants.

Aboriginal health must be a priority for the federal government.  The Committee has already stated unequivocally that the health of Aboriginal Canadians is a national disgrace. The Committee believes that, given its constitutional responsibilities, the federal government must act immediately to attack the poor health and socio-economic conditions that plague many Aboriginal communities.

Specific recommendations on health care technology assessment are presented in Chapter 3.  Our recommendations with respect to health information systems are provided in Chapter 4, while those pertaining to health research are detailed in Chapter 5.  The issues related to Aboriginal health and health promotion are discussed in Chapter 7.


Principle Seven

The consequences arising from changes in the level or amount of government funding for hospital and medical care should be clearly understood by government and explained to the public, in as much detail as possible, at the time such changes are made and announced.

The Committee believes that the consequences arising from changes to government funding for hospital and medical care should be clearly understood by government and explained to the public, in as much detail as possible, at the time such changes are made and announced.  Transparency and accountability in government decision-making require that the implications of funding changes be clearly understood by both decision-makers and the public.  The lack of transparency was also raised in the Romanow report which stated: “There should be more transparency in terms of how much money is being spent, by whom, on what basis and with what results.”[50]

This principle would apply both to increases and to decreases in government funding.  Cuts in government funding translate into the rationing of the supply of hospital and doctor services.  In this case, government must explain what services will be rationed.  In the event that increases in health care spending are necessary, government must clearly indicate how such increases will be funded and what impact these increases will have on the supply of health care services.

Currently, resources appear to be largely allocated by negotiation among various groups working in the health care system. The allocation is not based on systematic knowledge of either the outcomes of care or access to care or testable predictions of the consequences of changes in funding.  Up to now, health care organizations and Departments of Health have been unable to inform Canadians if previous changes in health services delivery have improved, or harmed, access to and quality of health care.  The deployment of an electronic patient record system, discussed in more detail in Section 2.4, is the first step towards an evidence-based decision-making process.

The most important reason for enabling the public to understand the health service consequences of changes in the amount of funding for hospitals and doctors is that it will move the debate away from being based strictly on financial data to a debate about services to be covered, the length of waiting lines, the quality of outcomes, and so on.  This would move the public debate to where it ought to be – a debate about levels and standards of services to patients.  At the present time, such a debate is not possible because there is no way in which the public can translate statements about health care funding into the one thing which really matters to them, namely what is the impact of various levels of funding on the health services the public receives, their quality, and the amount of time they have to wait to receive them.

 

2.2  Delivering Health Care

(Note: Readers will find three diagrams at the end of this chapter that illustrate the reforms discussed by the Committee in Principles Eight through Thirteen.)


Principle Eight

In the first stage of health care reform, the method for remunerating hospitals should be changed from the current annual global budget to service-based funding.

In Canada, the global budget has been the dominant funding mechanism for virtually all acute care hospitals for about 30 years.  There is good reason for this, because global budgets have some attractive features.  They offer simplified accounting for both hospitals and the provincial health departments.  Perhaps more importantly for government, they offer a method of cost control.

Global budgets, however, have a number of disadvantages.  The first one is a progressive and permanent loss of information about what things cost.  The Committee was told that it is shameful that in a system as sophisticated as the health care system, not even senior managers know, for example, what a simple appendectomy costs.

The lack of financial feedback means that there are no yardsticks to compare performance on any basis, financial or otherwise.  This allows those hospitals or regions with less efficient practices to imbed those practices and continue doing what they are doing without any focus on performance.  Second, the Committee heard that global budgets tend to place patients at the bottom of the list of priorities.

Les Vertesi, Chief of the Department of Emergency Medicine at the Royal Columbian Hospital (Vancouver), suggested an alternative to global budgets: the Service Based Funding (SBF).[51]  SBF is a form of activity-based remuneration under which a monetary value is assigned to each type of hospital service and the institution receives payment only once it has actually provided that service.  According to Dr. Vertesi, SBF would have a number of immediate advantages, apparent right away after the new mode of remuneration is implemented:

·        Since it fundamentally changes the incentives, the vicious cycle of cost escalation would stop;

·        It provides a yardstick that would uncover less efficient hospitals and regions, so they can be helped;

·        Health departments could develop standards and monitor hospitals;

·        Waiting lists would decrease;

·        Patient-centred, and patients’ choices carry weight;

·        Hospitals that know how to provide service at a competitive price would see some hope again and be able to offer assistance to others.

The health department or regional health authority would be responsible for setting the value of each hospital service.  The fact that such value determination remains under government control means that government influence over the direction of change would be enhanced, not decreased.  Instead of overall funding ceilings, targeted controls would be possible.  Even small changes in the relative values could have a large impact on the direction and pace of change.  Ultimately, as long as values remain under the control of the government, total funding cannot exceed what government wants to spend.

The Committee heard that such a method for remunerating hospital services would lead to the development of centres of specialization for the provision of certain surgeries or treatment of certain conditions, particularly in large urban centres.  Such a change in the delivery of hospital services should be encouraged because of the efficiencies it brings.  This would also contribute to improving the quality of services.

Hospitals or regions with special expertise should be able to “market” those services to other regions and enter into contracts with other regions to deliver services.  In this way, regions would generate a sufficient volume of services to allow them to achieve better outcomes. 

The advantages of specialization for selected hospital services were acknowledged by Provincial Premiers and Territorial Leaders who agreed, at their January 2002 meeting, to share human resources and equipment by developing “Sites of Excellence” in a number of complex surgical procedures.[52]

The Committee believes that, as much as possible, hospitals should be funded for the specific services they provide (that is, according to service-based funding) rather than on the basis of an annual global budget.  Service-based funding appears to be an appropriate form of remuneration, particularly for community hospitals.  We acknowledge that another form of payment may need to be considered for teaching hospitals where clinical activities are intermingled with teaching and research and services are frequently one-of-a-kind.  We are also aware of the concern that remunerating hospitals for each service performed may lead to over-servicing.  The Committee will discuss these issues in more detail in Volume Six.

It is the view of the Committee that remunerating hospitals according to a pre-established value for each service provided is essential if the government and the public are to understand the implications of funding changes on the numbers and types of services that are feasible under a fixed government health care budget.  It is also an essential first step in moving toward a system in which purchasers and providers are split as described under Principle Thirteen below.

Some might wonder whether it is contradictory for the Committee to recommend shifting to service-based funding for hospitals while at the same time advocating moving away from fee-for-service payments to individual doctors (as we do in Principle 11 below).  In other words, why does the Committee propose the adoption of a form of funding for hospitals that is roughly equivalent to a method of payment for doctors that it feels should be abandoned?

The answer, in the Committee’s view, lies in understanding the impact that a payment system has under various circumstances.  Both fee-for-service and service based funding encourage providers (doctors or hospitals) to increase the volume of services that they deliver.  In the case of doctors, this can lead to placing greater emphasis on numbers of patients seen rather than on the quality of care.  This is why alternate forms of payment must be introduced for primary care physicians. In the case of hospitals, however, an incentive to provide more services is precisely what is needed, given the current waiting lists. Thus, a shift towards service based funding would prove beneficial. Principles 8 and 11 offer a good illustration of the Committee’s efforts to find the appropriate incentives to stimulate the types of behavioural changes that the Committee believes are necessary.

The Committee wishes to stress that service based funding for hospitals, and the separation of the funder function from that of the institutional provider of services, means that ownership of the institutional service provider would not be a matter of concern.  We believe that the patient and the funder will be equally well served no matter what the corporate ownership structure of a health care institution is, as long as the two following conditions are met:

1.      All institutions in a province are paid the same amount of money for performing any given medical procedure or service.

2.      All institutions, no matter what their ownership structure is, are subjected to the same rigorous and independent quality control and evaluation system (see Principles Fifteen and Sixteen).

The first condition ensures that the funder is indifferent to the ownership structure.  The second ensures that the patient is indifferent, since it ensures that no institution can put profit above quality of care.

The Committee wants to make it clear that it is not pushing for the creation of private, for-profit, facilities.  Neither do we believe that they should be prohibited, just as they are not now prohibited under the Canada Health Act.[53]  Moreover, as we said in Chapter One (see Section 1.4), we fully expect that the overwhelming majority of institutional providers would continue to be, as they are now, privately owned, not-for-profit, institutions.

During the cross-country hearings, a number of witnesses raised the concern that introducing private sector participation through contracting out might expose Canada’s publicly funded health care system to trade challenges.  The report of the Romanow Commission also stated that “our ability to reform and innovate within the health care system may be affected by the rules of international trade agreements.”[54]

The Committee requested information from Health Canada and the Department of Foreign Affairs and International Trade on this issue.  Senior departmental personnel informed the Committee that the federal government has always maintained the same position with respect to health care and international trade agreements: Canada’s health care sector is not negotiable.

A provision in the North American Free Trade Agreement (NAFTA) stipulates that Canada preserves its ability to maintain or establish any measures for a public purpose, including health care.  Similarly, under the WTO General Agreement on Trade in Services (GATS), the exclusion of “services supplied in the exercise of governmental authority” from the scope of the Agreement, combined with the absence of commitments by Canada with regards to health services, provides the policy flexibility required to preserve our publicly insured hospital and doctor system.  The same longstanding position is being adopted by Canada in the context of the negotiations under the Free Trade Area of the Americas (FTAA).

Overall, the Committee believes that it has obtained sufficient assurance from both Health Canada and the Department of Foreign Affairs and International Trade and is convinced that international trade agreements do not, and will not, pose a threat to Canada’s publicly funded health care system.


Principle Nine

Regional health authorities should have the responsibility for purchasing hospital services provided by institutions
within their region.

During the last decades, most provinces (other than Ontario) have established regional health authorities.  Regional health authorities are responsible for assessing the needs of the population in a certain geographic area and for setting health care priorities and assigning resources in line with those needs.  Currently, hospitals and many other health care providers are overseen by these regional health authorities.

One important criticism of regional health authorities is that their control over spending is limited.  For the most part, regional health authorities receive a budget from the provincial government which they simply pass to hospitals and other providers of care.  In doing so, they are not able to direct the priorities and spending for which they are, in theory, responsible. Neither are they able to reward efficient providers.  In particular, regional health authorities do not have control over the cost of doctor services, a control that they must have if they are to manage effectively the health services in their region.

The Committee learned that this problem can be corrected by establishing an “internal market” in which the regional health authorities are responsible for purchasing health services on behalf of the residents of their region:

With an “internal market”, regional health authorities hold the purse strings and choose between providers on the basis of quality and cost, rather than simply funding the decisions of those using the resources.[55]

Such a form of “internal market” has the potential to introduce competition based on both cost and quality among hospitals and other institutions.  This also provides the incentives for providers to become more cost conscious and to make decisions about what to provide, to whom, and at what standard.  Furthermore, such reform has the potential to reconfigure services in a way that is more in line with population needs.

The Committee believes that devolution of the purchasing function to regional health authorities is part of the first step in reforming health care in Canada.  In fact, regional health authorities exist in most provinces and a large percentage of health care spending occurs in and around large cities, creating the potential for competition among providers.  At the same time, the Committee is aware that this principle will have to be applied with flexibility so as to take into account the many differences in the size of the regions, as well as the rural/urban mix they contain and the number of health care providers and institutions within their jurisdiction.

We believe, however, that, over time, the purchasing function should be devolved even further – to primary health care teams – as a way of decentralizing decision-making and providing care that is more responsive to patients’ needs (see Principle Thirteen).  This would be part of the second stage of reform, as discussed in Section 1.4.


Principle Ten

Primary care renewal should lead to the provision of primary care by group practices, or clinics, which operate twenty-four hours a day seven days a week.

All recent provincial reports have recommended the creation of a network of primary care groups.  These proposals all share some common features:

·        access 7/24/365 to comprehensive primary care;

·        “rostering” or enrolment of patients in the primary care group of their choice on an annual basis;

·        better utilization of the spectrum of health care providers through interdisciplinary team work;

·        integration and coordination of all health services through the function of “gatekeeping”;

·        potential for expansion of public health care coverage;

·        change in the method of remuneration of physicians (from fee-for-service to either capitation or blended payment).

Consistent with the recommendations of various provincial health care commissions, the Committee believes that primary care reform should lead to comprehensive primary care being provided by group practices, or clinics, which operate twenty-four hours a day, seven days a week.  This will enable patients to have access to primary care always as their initial point of contact with the health care system.  This will permit a more efficient operation of the primary care sector, and will take considerable pressure off hospitals’ emergency rooms.

The recommendations of these provincial reports, however, diverged on the extent to which primary care groups should be responsible for purchasing health services on behalf of their patients.  The Health Services Restructuring Commission in Ontario suggested that, in addition to providing primary care, primary care groups should also assume the responsibility for purchasing a wide range of health services on behalf of their patients including; hospitals, specialists, public health, rehabilitation centres, long-term care facilities, home care, community care.[56]

Although numerous provincial commissions have all recommended reforming primary care, no single model has been proposed that could be universally implemented.  This observation was also made by the Romanow Commission:

There are an endless variety of potential models and approaches [to primary care reform], but a common element in most is that governments would fund these organizations based on some combination of the number of registered patients, population served, and the health outcomes achieved.  While steps have been taken in every province to initiate primary care pilot projects, many argue that, because primary care is the key catalyst to real change in the health care system, it is time to move past the rhetoric and pilot projects and into true action.[57]

Therefore, flexibility will be required in deciding how to apply this principle.  In addition, the experience of a number of provinces and territories has shown that setting up primary care groups is neither easy nor cheap.  Indeed, as explained in Section 1.1, the cost of restructuring is one of the reasons why the Committee has concluded that the current system is not fiscally sustainable.  Other findings with respect to primary care reform are discussed in more detail in Chapter Six of this report.


Principle Eleven

To facilitate primary care reform, the method of compensating general practitioners should be changed from fee-for-service to some form of blended remuneration combining capitation, fee-for-service and other incentives or rewards.

Fee-for-service payment is the dominant form of primary care physician remuneration in Canada.  Almost 90% of family physicians surveyed by the Canadian College of Family Physicians in 2001 said that they received some proportion of their earnings in the form of fee-for-service payments,[58] and that these payments accounted for an average of 88 percent of their total income.[59] Although in 1999-00, over 20% of Canadian physicians received some payments for clinical care through alternate forms of payment, such as salaries or capitation, in most provinces these alternate sources were the main form of remuneration for less than 10% of physicians.[60]

Under a fee-for-service payment scheme, primary care physicians are paid a fee for each service they provide to patients according to a preset schedule of tariffs.  Fee-for-service is a relatively simple and transparent payment method.  It is also fairly easy to administer.  It has the benefit of familiarity in Canada as patients and doctors alike are aware of how it works.

Fee-for-service, however, has a number of drawbacks.  According to many witnesses, fee-for-service provides the wrong signal or incentive to primary care physicians, that of “over-servicing”: the more health services physicians provide, the more income they receive, irrespective of the needs of the patient receiving the service, the outcomes produced or the cost of providing the service.  Moreover, because the remuneration is attached to the service, there is no financial reward for physicians to locate in areas with greater needs as long as they can satisfy their workload and income expectations by serving lesser needs in their preferred locations.

For these reasons, many provincial commissions and task forces have identified fee-for-service as incompatible with promoting the best productive use of the time and skills of primary care physicians.  In addition, provincial reports pointed out that fee-for-service is also incompatible with primary care reform.  Since doctors are paid for every service they provide, they have an incentive to bill for treatments that could be provided more cost-effectively by other health care professionals.  This has effectively discouraged collaborative and multidisciplinary practices.

Health care commissions and task forces at the provincial level, namely the Health Services Restructuring Commission in Ontario, the Clair Commission in Quebec and the Mazankowski report in Alberta, all recommended a system of blended remuneration for primary care physicians incorporating elements of capitation[61], fee-for-service and other rewards.  This recognizes the fact that “one size” does not fit all situations:

Research to date has not identified one funding system as ideal; every model has advantages and disadvantages.  Policy makers need to assess their own situation, understand the risks and benefits of each payment model, and decide for themselves what model best address the needs of the funders, providers, and the community.[62]

The Committee agrees with provincial commissions and task forces that the method of compensating general practitioners should be changed from fee-for-service to some form of blended remuneration combining capitation, fee-for-service and other incentives or rewards.  Blended remuneration provides incentives for general practitioners both to work hard and to care for a large number of patients as they do now (through fee-for-service funding) and to emphasize preventive care and population health (through capitation funding).  However, since physicians are not all alike in their financial expectations or in their reaction to various types of incentive, there must be flexibility in the remuneration system that is used for different group practices. Nonetheless, the Committee acknowledges that, in order to implement primary care reform, a move away from current fee-for-service is essential, otherwise there will be no motivation for family physicians to allow patients to be seen by other clinic staff members. 

Most models of primary care reform require that patients enroll with a specific doctor or group practice for a pre-determined period of time, usually a year.  Implementation of this kind of reform must therefore confront the perceptions that it limits patients’ freedom of choice and, from a doctor’s perspective, that it restricts their freedom to practice medicine as they choose.

Since a patient need only sign up with a family physician for a year (unless the patient moves his/her residence), this is hardly a significant constraint on patients.  Similarly, encouraging doctors to make full use of the skills of all the members of their health care team (e.g. by changing the scope of practice rules so that nurse practitioners can use their full range of skills) is hardly a serious infringement on physicians’ freedom to practise as they choose.

As well, the Committee is aware that the issues of how the specialists and physicians employed in teaching hospitals should be remunerated need to be addressed, and the Committee will do so in Volume 6 of its study.


Principle Twelve

New scope of practice rules and other measures need to be developed in order to enable all health care providers in the primary care sector to provide the full range of services for which they have been trained.

Issues concerning the scope of practice of various health care providers are discussed in Chapter 6.  The Committee believes that new scope of practice rules and other measures need to be developed in order to enable all primary health care providers to deliver the full range of services for which they have been trained.  It is also the Committee’s view that there would be significant advantages to these measures being as standardized as possible across the country. National standards would also help reinforce Canadians’ belief that their health care system is national, not provincial, in character.

In general, the primary care sector would function more efficiently, without loss of medical efficacy, if providers such as nurse practitioners were able to provide the full range of services for which they have been trained.  This would then free up more time for general practitioners to look after those patients who require their particular set of skills, experience and qualifications.

In addition, achieving a better mix of health care providers requires more than just changing the way they currently practice; it may also require changes to the way in which they are trained and educated. 

The Committee understands that changes to the regulatory approach adopted by self-governing professions is essential to implement this principle sucessfully. 


P
rinciple Thirteen

In the second stage of health care reform, an “internal market” should probably be created in which primary health care teams would purchase health services provided by hospitals and other health care institutions on behalf of their patients.

During Phase Three of its study, the Committee learned a great deal about GP fundholding practices in place in the United Kingdom.  In Volume Three, we explained that under such Fundholder practices GPs were given a budget from which to purchase care for their patients, including hospital services, specialist services, and prescription drugs.[63]

The Committee was told that the objective of establishing such an “internal market” in the United Kingdom was to overcome a major disincentive, whereby physicians directed a lot of health care activity and spending but without any financial repercussions for themselves and without any financial incentive to be concerned about the cost their decisions imposed on the health care system as a whole.  It was also believed that general practitioners (GPs) would be more effective purchasers for their patients than a regional health authority:

The GP was closer to patients and thus presumably could effectively meet their needs; the GP was also more able to negotiate with local hospitals.  The theory was that the need for GPs to keep within budget and patients’ ability to change doctors would lead to greater fiscal responsibility and improvement in quality.

(…) Fundholding introduced a financial incentive for those who joined the scheme to be more efficient: they were able to invest any savings from their budgets in improvements in patient care or practice improvement. Fundholders could also move funds between components of the budget, allocating resources as they saw fit.  Any fundholders that repeatedly failed to meet the budget risked losing fundholding status.[64]

The Committee was told that an “internal market” reform along the lines of the GP Fundholding scheme could have great potential for implementation in Canada.  More specifically, in their 1998 book, Jérôme-Forget and Forget proposed the creation of group practices (referred to as “targeted medical agencies” or TMAs), made up of family physicians, specialists and other health care providers, which would be financially responsible for all the health care needs of their patients.  Jérôme-Forget and Forget believe that TMAs as purchaser agents may be more cost-effective and efficient than having this role performed by regional health authorities:

The goal of establishing physicians as the key decision makers in health care delivery is to decentralize medical decisions and financial responsibility to a level much closer to the patient. (…), many internal market reforms fall short of this objective by giving purchasing responsibility to fairly large organizations.  Regional health authorities, (…), are primarily bureaucratic structures whose size makes it difficult to undertake the negotiation of contracts with providers on an individual basis. (…) The [international] experience with large purchasers indicates that they are unable to effectively promote efficient use of resources without resorting to tight regulation of physicians’ behaviour – a technique at odds with Canada’s tradition of physician autonomy.  At the other extreme, a minimum size is necessary to take advantage of professional interaction among physicians as well as defray the additional administrative and management costs.[65]

The Health Services Restructuring Commission in Ontario made a similar recommendation.[66]  In their proposal, interdisciplinary health care teams remunerated mainly through funding by capitation would be given permanent and exclusive responsibility for all the health care needs of a given population.  In addition, in their role as gatekeepers, these teams would establish contracts with other institutional providers in the region.  Eventually, they would be given control over the entire health care budget pertaining to the population on their roster.

It must be acknowledged that, although this network of primary health care teams could be strongly recommended to the population, it would be impossible to force Canadians to adopt it.  The Committee was told that one way to make it worthwhile for patients to agree to signing up with a primary health care team would be to introduce a negative financial incentive that would apply to patients who chose to consult with doctors who were outside the network of their chosen primary health care team.

Overall, the Committee believes that an “internal market” in which financial responsibility rests on primary health care teams should probably be established.  We do, however, understand that some provinces/territories may prefer delegating the purchasing responsibility to regional health authorities.

Once again, the Committee wishes to stress that flexibility will be required in applying this principle so as to take into account differences between the regions in terms of the size of their population, the rural/urban mix they contain and the number of health care providers and institutions within their jurisdiction.  It is our intention to devote more attention to the second stage of reform in Volume Six.


Principle Fourteen

A national (not exclusively federal) strategy must be developed to achieve both an adequate supply and optimal use of health care providers.

All national and provincial/territorial organizations representing health care providers that appeared before the Committee since the beginning of its health care study insisted that what is needed is a country-wide, long-term, made-in-Canada, human resource strategy coordinated by the federal government.  Competition between the different jurisdictions for scarce human resources in health care is detrimental to the country.

It is important to stress that such a strategy must not be exclusively a federal one, with input only, or even primarily, from the federal level of government.  It must involve all stakeholders, recognizing that the education and training of health care providers is a provincial/territorial responsibility.

The Committee welcomes the announcement last fall by the Minister of Human Resources Development about the funding of two important sectoral studies on the precise human resources needs for physicians and nurses.  We believe that this is an important step towards the development of a national approach.  Each of these studies will systematically analyze the labour market and culminate in the elaboration of a strategy designed to ensure an adequate supply of appropriately trained professionals.

The Committee strongly supports the involvement of all the key stakeholders in producing these studies.  In Chapter 6, we present specific recommendations with respect to human resources in health care, including the creation of a permanent national coordinating body on health care human resources.


2.3 Evaluating Health Care

Principle Fifteen

Accountability and transparency in health care financing and delivery require the deployment of a system of electronic health records (EHR) that can capture and translate information on system performance and outcomes.

A system of electronic health records (EHR) is an automated provider-based system within an electronic network that provides complete patients’ health records, including their visits to physicians, hospital stays, prescribed drugs, lab tests, and so on, all collected in accordance with a system of common standards applying to the data.  Many witnesses viewed the EHR system as the cornerstone of an efficient and responsive health care delivery system that is able to improve both quality and accountability.  Such a system is a necessary prerequisite to a truly patient-oriented health care system.  A system of EHR is also essential if primary care reform is to be realized.

The electronic health record (EHR) is the cornerstone of an efficient and responsive health care delivery system, quality improvement and accountability.  Without it, the prospects for a patient-friendly health care system, optimal teamwork, and efficiency are dim.[67]

All levels of government in Canada have recognized the importance of deploying a system of EHR.  In fact, on September 11, 2000, the First Ministers agreed to work together to develop an EHR system over the next three years and to work collaboratively to develop common data standards to ensure compatibility of provincial health information networks and to ensure stringent protection of personal health information.  The full deployment of a system of EHR was also endorsed by various provincial task forces and commissions on health care, including the Health Services Restructuring Commission report in Ontario, the Clair Commission in Quebec, the Fyke Commission in Saskatchewan and the Mazankowski report in Alberta.

In support of the agreement reached by First Ministers, the federal government committed $500 million in 2000-01 to accelerate the adoption of modern information technologies in the health care system.  The Committee was informed that this money has been invested in a not-for-profit corporation, known as Canada Health Infoway Inc., that will work with provinces and territories to create the necessary common components of an EHR over the next three to five years.  We believe that this has the potential to constitute a major step towards the full integration of the various health federal/provincial/territorial infostructures.

Considerable agreement exists among the provinces and territories and other stakeholders that the federal government should foster collaboration in this area.  The Committee welcomes this collaboration between the federal government and the provinces and territories and encourages the federal government to play a leadership role in promoting a system of electronic health records that is consistent across the country, to the benefit of all Canadians.

Generally, patients want to tell their medical history only once, to have their tests and care coordinated and made available to the different health care providers they consult, and to have a more seamless integration of the health services they need.  This can be achieved with an EHR.  However, Canadians need to have confidence that protective mechanisms are in place that give access to patient records only to those people authorized by patients themselves. The EHR system needs to be developed in a manner that balances the needs of patients for privacy with respect to their personal health information against the needs of the system to be able to provide patients with the care that they require.

Perhaps the most important benefit to be gained from the deployment of EHR across the country is access to evidence-based information that will be used to assess quality of care, system performance, treatment outcomes and patient satisfaction.  This will foster accountability and transparency in decision-making regarding health care delivery and policy and promote improvement in the quality of care.

Along with numerous witnesses, the Committee believes that accountability and transparency in health care financing and delivery require the deployment of a system of EHR that will capture and translate information on system performance and outcomes.  It is our view that measuring outcomes must become an essential part of the health information system.  Despite advances in recent years, we still do not have nearly enough knowledge about which procedures and treatments work most effectively, or, indeed, even how best to measure health outcomes. Moving towards a uniform EHR system will facilitate the monitoring and comparison of treatment outcomes across the country.

The Committee acknowledges that national standards are needed, both at the level of information gathering and processing and for guaranteeing confidentiality and privacy of patient health information, and reiterates its belief that the federal government can play a leading role in helping to bring this about.  Our observations and recommendations with respect to health information systems are detailed in Chapter 4.


Principle Sixteen

Measuring treatment outcomes and system performance must become an essential part of the health information system.  Such monitoring and evaluation of the health care delivery system should be performed independently at the national (not federal) level and be funded by government.

As stated above, better information on access to care, quality delivery, system performance and patients’ outcomes cannot be achieved without an expanded, long-term investment in information technology, including an EHR.  During the Committee’s hearings, witnesses stressed that partnerships among the provinces and territories, and the leverage of federal government funding for accelerated development, should be pursued. 

Similarly, a recent report to the British Columbia Legislative Assembly stated:

The federal government should be lobbied for designated funds to deal with this significant, Canada-wide need that if properly addressed will improve the functioning of the whole health care system and the health of all Canadians. The need is urgent.[68]

While witnesses agreed that governments should finance the health information system, many of them were of the view that governments should not be responsible for assessing health data and evaluating quality and outcomes.  They explained that, currently, evaluation is done by the same people responsible for paying for, and for providing, health services.  There is no independent assessment of the outcomes and no external audit of the impact of the results.  In this regard, the Premier’s Advisory Council on Health (Alberta) stated:

Tracking and monitoring outcomes and providing regular reports to the public is an essential way of improving quality in health care. However, when government and health authorities measure and assess their own outcomes and results, it can put them in a conflict of interest.[69]

This Advisory Council recommended the establishment of a permanent, independent “Outcomes Commission” to track results, assess outcomes and report regularly to the population.

Similarly, in Saskatchewan, the Fyke Commission recommended the establishment of a “Quality Council”, an evidence-based organization, working at arm’s length from government.  The mandate of this Quality Council would involve reporting regularly to the provincial legislature, as well as to the public on a variety of issues, including: trends in health status, costs/benefits of health care interventions, clinical practices and clinical errors, evaluation of technology, equipment and drugs, etc.  The Fyke report stressed that:

(…) the Quality Council has the potential to depoliticize decisions, find creative solutions to long-standing problems, free the public from the tyranny of anecdote and ill-informed opinion about the state of care, and reveal where the system provides value for money and where it does not.[70]

The Committee believes that it is essential to greatly improve the evaluation of our health care delivery system in order to provide care that is evidence-based and corresponds to the needs of patients.  We strongly support the view of witnesses and provincial reports that the roles of the funder and provider should be separated from that of the evaluator in order to obtain independent assessment of health care system performance and outcomes.  While such evaluation should be performed at arm’s length from the funder/insurer, it should be financed by public funds.

Moreover, it is the view of the Committee that such independent evaluation should be performed at the national (not federal) level.  This would allow for the pooling of expertise, thereby making the most effective use of the limited human resources that are currently available in Canada, and result in major economies of scale.  In addition, the smaller provinces, which would not otherwise be able to sustain a truly effective monitoring and evaluation system, would clearly benefit from the results of a national evaluation process.

The Committee believes that a national process for evaluating health care system performance and outcomes should be built on those national organizations that are currently devoted to the task of performing independent evaluation.  More precisely, this type of evaluation should be carried out at three levels:

·        First, the role of the Canadian Institute for Health Information should be strengthened.  In addition to its responsibilities in the public health field, it should take the task of reporting – preferably publicly – on the performance of all regions and of all institutional providers.

·        Second, the Canadian Council for Health Services Accreditation would recommend on a regular basis how to correct deficiencies that were identified in institutions delivering health services.  At present, this review is voluntary but it should be made mandatory.

·        Finally, the Citizens’ Council on Health Care Quality would be responsible for advising on the development of quality standards and policy to promote improving the quality of health care institutions.

The extent of the authority devolved to each of the three organizations described above would have to be specified.  For example, does each organization rely exclusively on public pressure and moral suasion, or should they be able to compel providers who do not meet agreed quality standards to implement changes?  There are clearly many jurisdictional issues to be resolved, regardless of the exact mandate of such  national evaluative bodies. But this is an issue that must be tackled – it can no longer be ignored.

 

2.4 Achieving a Patient-Oriented Health Care System

Principle Seventeen

Canada’s publicly funded health care system should be patient-oriented.

In a quality-focussed system, the first priority should be to ensure that individuals get the kind of health care they need and that they be given the tools and support they need to stay healthy.

In Canada currently, the health care system is organized around facilities and providers, not individual Canadians.  People are expected to fit into the system and get service when and where the system can provide it. 

In other countries, changes have been made to put more focus on patients.  This includes introducing health charters or care guarantees to ensure that people get the care they need within a certain period of time and of acceptable quality.  This also includes establishing a system in which funding follows the patient.

It is the view of the Committee that patients, at all times, must be at the centre of the health care system.  Services should be coordinated around their needs for safe, timely and effective care.  Ideally, the goal should be an integrated, cost-effective system characterized by closer working relationships between hospitals, long-term care facilities, primary care, home care, public health, etc.

However, putting patient needs at the centre of the health care system does not mean that anything the patient wants, the patient should get.  Services provided by the health care system must be based on evidence that they are safe, effective, necessary and affordable.

The Committee believes that Canadians are entitled to health care that is safe, effective, patient-oriented, timely, efficient, equitable and affordable.  In our view, the set of principles we have developed will lead to a better integration of the whole range of health services into a continuum of care in which the focus is really on the needs of patients.


Principle Eighteen

Incentives should be developed to encourage patients to use the hospital and doctor system as efficiently as possible.  Such incentives should not include user fees for services that are deemed to be medically necessary.

In Volume Four of its health care study, the Committee recalled that, when a national Medicare program was first debated, there was a suggestion that there should be an element of patient pay in health care.  The term “patient pay” was used to mean that patients ought to pay something somewhere in the system.

Volume Four identified different forms of patient payment including user charges, premiums, medical savings accounts, income tax on health care, etc.[71]  During its cross-country hearings, the Committee heard many concerns about establishing user charges paid at the point of service.  On the one hand, we were told that user charges for publicly insured health care at the point of service reduce demand, and that they do so in a way that disadvantages those with low income. 

On the other hand, witnesses stressed that the most expensive decisions that are made about patient care are those made by physicians, and are therefore not the responsibility of the patient.

In fact, most of the spending in the health care system and most of the waste  in the system are beyond patient control; the major expenses, and the decisions which give rise to these expenses, are incurred by health care providers on behalf of their patients.  These decisions are not made by the patients themselves. 

Finally, witnesses pointed out that implementing modest user charges could incur such administrative costs that these costs would nearly equal the revenue generated from such charges.

The Committee believes that incentives should be developed to encourage patients to use the hospital and doctor system as efficiently as possible. Such incentives should not include user fees that discourage access to medically necessary health services.  Nor should such incentives discourage patients from receiving the treatment that health care providers believe they require.  Access to hospitals and doctors should not depend on the income or wealth of individual Canadians. Studies have shown that the application of universal user fees does this and they should therefore not be used in Canada.

Nevertheless, ways need to be found to encourage patients to use the health care system responsibly.  One such way that has been proposed many times in the past is to provide each Canadian with an annual accounting of the amount of money that has been paid, on their behalf, for the health services they have received during the year.  Other potential incentives need to be explored.

Making the patient aware of the costs of health services or removing the impression that they are all free is the logic behind many proposals.  The philosophical principle behind these proposals is that if patients are knowledgeable about health care costs, they will understand the inherent pressures in the system and access it only when it is genuinely needed.  They will also have a better understanding of the issue of fiscal sustainability in health care.  The Committee believes that the key point in creating a cost-effective, sustainable health care system is not to discourage the use of the system, but to encourage appropriate use and to encourage people to take better care of their health.

 

Principle Nineteen

Programs that enable people to be responsible for their own health and to stay healthy must be given high priority.  The federal government can play a leadership role in this regard.

In 1974, the then federal Minister of Health, Marc Lalonde, released a working document entitled A New Perspective on the Health of Canadians.  This report recognized the impact of individual behaviour on health outcomes, and stressed that individual Canadians should assume greater responsibility for their health. 

Since then, many other reports have underscored the importance of encouraging Canadians to stay healthy.  According to the report by the Premier’s Advisory Council on Health in Alberta, this is the first step towards sustaining Canada’s publicly funded health care system:

It sounds like just good common sense, but perhaps the best way to sustain [the] health care system over the longer term is to take steps to enable people and communities to stay healthy.[72]

During Phase Two of its study, the Committee was informed that the total cost of illness was estimated at $156.4 billion in 1998[73].  Witnesses suggested that the economic burden of illness could be reduced by investing more in health promotion, disease prevention and population health.  They stressed that many diseases, and most injuries, can be prevented. 

However, they pointed out a strong tendency for government to focus on curing diseases, rather than on their prevention.  For example, clinical treatment has been the most common chronic disease strategy and there has been only a limited will on the part of government to expend resources on health promotion and disease prevention.  Outcomes of such programs are generally visible only over the longer term, and are therefore less attractive politically than money invested in health care facilities, such as hospitals.

Witnesses indicated that the federal government’s role with respect to health promotion, disease prevention and population health is a well established one.  Moreover, the federal government has been recognized as a leader worldwide in elaborating the concept of population health.  The role of the federal government in the fields of health promotion, disease prevention and population health is addressed in Chapter 7.


Principle Twenty

For each type of major procedure or treatment, a maximum waiting time should be established, and made public.  When this maximum time is reached, the insurer (government) shall pay for the patient to receive immediately the procedure or treatment in another jurisdiction including, if necessary, another country.

A report tabled with the Committee suggested that a monopolistic, non-competitive environment, combined with no cost of service at the point of service, contributes to growing waiting times for publicly insured health services:

(…) in a system in which health services are free at the point of consumption, queuing is the most common form of rationing scarce health care resources.  And since patient satisfaction plays no part in determining incomes or other economic rewards for health care providers and administrators in the public system, patient’s time is treated as if it has no value.  There are no penalties in the system for making people wait.[74]

The following case was recently brought to the Committee’s attention.  An MRI done on April 19th, 2001, revealed that a patient had two herniated discs in his neck.  As his condition was not improving, on May 24th of the same year he was placed on a waiting list for surgery.  His condition was classified as ‘elective but urgent’, a category that includes most of the hospital’s cancer surgery, with a guideline of surgery within 2 weeks.  As of January 18th, 2002, that is, 8 months after being placed on the waiting list, the patient still had not undergone his surgery, and still does not know when it will be performed.

The Committee was told that this case illustrated what is called a ‘static queue.’  It is a waiting list that does not move because the people who are on it are always being bumped by more urgent cases.  These higher priority cases occur at a faster rate than the queue is able to handle.  The surgeon who was to treat the patient in question had 96 patients on his waiting list (about average for the four neurosurgeons on staff at the hospital), of whom 74 were graded elective but urgent, and could not guarantee a firm date for surgery for any of them.

It appeared that the only way for the patient in question to move to the top of the list was for his condition to deteriorate.  It was not enough for him to be in constant pain and unable to work.  Were he to experience actual paralysis, he could then be admitted through the emergency ward, and have his surgery within a few days.  Otherwise there was no way to accelerate his surgery without denying someone else with an even more urgent case.

In spite of significant investments in the health care system in the past few years by all levels of government, public perception is that waiting times for selected services are continuing to grow. There is sufficient anecdotal evidence in support of that impression to lead to increasing worry on the part of Canadians that the health care system may not be there when they need it.  On many occasions witnesses told the Committee that, if there is one thing Canadians should be able to expect from their publicly funded health care system, it is access to health services when they need them.  Clearly, a truly patient-oriented health care system is one in which needed care is provided in a timely fashion.

In Sweden, the government enacted a “care guarantee” to ensure timely access to necessary health care.  This guarantee established a maximum waiting time for diagnostic tests (90 days), certain types of elective surgery (90 days), and consultations with primary care doctors (8 days) and specialists (90 days).  Sweden has also put in place a system where waiting times for major procedures are posted daily on a website.  People can check the website and choose to go to the hospital with the shortest waiting times as long as they are prepared to travel and to use the next available physician.

Based on a review of the Swedish experience, the report of the Premier’s Advisory Council on Health in Alberta recommended the establishment of a care guarantee of 90 days for selected services.  According to the Advisory Council, this guarantee would provide an incentive for health care providers and regional health authorities to take appropriate action to manage and shorten waiting lists.  Their report stressed that patients may need to give up their preference for a specific physician or hospital if they want to be treated within the 90-day period.  In addition, if regional health authorities are unable to provide service within this period, they would have to consider other options, such as getting the service from another region.  Services could be arranged from either a public or a private provider. 

The Committee was told that the current lack of accurate information on waiting lists is a major impediment to the development of a care guarantee in Canada.  There is, in fact, no standardized data on waiting lists in Canada.  However, the Committee was told about a pilot project funded by Health Canada (through its Health Transition Fund) which, according to many witnesses, provides potential for effective management of waiting lists for elective health care.  This pilot project – called the “Western Canada Waiting List Project” or WCWL – led to significant progress in the development of valid and reliable tools for evaluating and managing waiting lists in five clinical specialty areas: cataract surgery; general surgery (including breast cancer, colorectal cancer, inguinal hernia, and laparascopic cholecystectomy); hip and knee replacement; MRI scanning; and children’s mental health.

The standardized waiting list developed by the WCWL is based on an assessment of a patient’s overall urgency (pain, suffering), clinical findings (x-rays, co-morbidity, psychopathology), as well as on an assessment of the impact of the disease on the patient’s quality of life.  The Committee was told that this approach represents a fair and consistent way to rank-order patients waiting for needed elective care.  It both promotes better use of health care resources and is patient-oriented.

The Cardiac Care Network in Ontario uses a similar methodology in the management of access to cardiac surgery in that province.  The use of such priority scoring systems has the potential to yield a significant improvement to the health care system, as it has with heart patient cases in Ontario.

In the Committee’s view there are two main causes to the growing waiting list problem in Canada. First and foremost are the shortages of all types of human resources as well as of many types of diagnostic equipment. Second, there is a need to improve the management of waiting lists.

With regard to this second cause, it is clear to the Committee that more needs to be done to ensure the effective management of waiting lists. In the same spirit that it supports all efforts to improve the efficiency of the system, the Committee welcomes attempts to find better ways to manage waiting lists so that patients in the greatest need are tended to first and that wherever possible waiting times are kept to a minimum.

However, the Committee feels it is extremely important to recognize that better management of waiting lists will not, on its own, suffice to resolve the waiting line problem. This is because the more significant cause of the problem is a lack of human, technological and infrastructural resources, that has resulted from a series of decisions on the part of governments who have attempted to control costs over the past decade by reducing expenditure in these areas.

Beginning in the early 1990s, funding for the education and training of many categories of health care professionals was cut, as a way of reducing future as well as current health care expenditures. More generally, massive cuts in public spending on health care  were made, especially during the first half of the decade. As a consequence, there is today a severe shortage of both people and equipment to meet the growing health care needs of the population.

One reason that this kind of cost-cutting has been attractive to government, and that they have been able to implement it relatively easily, is that, to date, government has not had to bear the costs that result from its decisions. Instead, these costs have been largely borne by patients who face longer waiting times and by the front-line professionals who have seen their conditions of work deteriorate and their ability to provide care diminish.

The Committee believes that, for each type of major procedure or treatment a maximum waiting time must be established, and made public.  When this maximum time is reached, the insurer (government) shall pay for the patient to immediately receive the procedure or treatment in another jurisdiction including, if necessary, another country (the United States).  The point at which the waiting time guarantee would kick in for each procedure would be based on an assessment of when a patient’s health would deteriorate irreversibly as a result of waiting for the procedure. Waiting times would be established by scientific bodies using evidence-based criteria.

Since government has responsibility for ensuring the adequate supply of the essential service of hospitals and doctors, this responsibility carries with it the obligation to meet reasonable standards of patient service. This is the essence of a patient-oriented system and of the health care contract between Canadians and their governments.[75] A maximum waiting time guarantee of the type described in Principle Twenty would meet this obligation. Were it implemented, this guarantee would mean that government would have to shoulder the responsibility for not delivering needed care in a timely fashion. Increased waiting times would no longer represent a cost-free option for government, since they would be required to pay to have patients be treated in other jurisdictions.

The Committee feels that this would introduce a powerful incentive for government to deal with waiting times that exceed the agreed upon limits. It would also constitute a major step in re-establishing the health care contract between citizens and their government. (The exact nature of this contract is discussed in the next section.)

In closing the discussion of Principle Twenty, it is worth making the observation that using diagnostic and hospital facilities in the United States may be the most economical way of meeting the care guarantee.  To meet maximum waiting times within Canada, it will be necessary for the health care system to have some excess capacity or redundancy in order to cover peak periods of demand for service.  Whether it is cheaper to build such excess capacity in Canada or purchase it from the United States is an issue that will need to be studied if a care guarantee is implemented. 

The Committee acknowledges that a care guarantee can only be implemented and enforced once consensus is reached on the definition, estimation and management of waiting times/lists.  We believe that it is absolutely imperative that Canada move forward immediately with the setting of maximum waiting times for major categories of treatment.  It is the next critical piece of work that needs to be addressed.

The Committee acknowledges that the care guarantee will cost money, particularly if many patients have to be sent to the United States for treatment because they have exceeded the maximum waiting time for the treatment they require. We have already noted in Section 1.1 that the current hospital and doctor system is not fiscally sustainable, and it is clear that it will be even less so when the costs of the care guarantee are added on to existing costs. Nonetheless, The Committee regards the care guarantee as an essential component of the health care contract between Canadians and their governments.

The Committee recognizes, as it has said several times in Chapters 1 and 2, that new sources of federal and provincial/territorial funding will be needed in order to implement the changes the Committee proposes. The Committee will discuss its specific federal funding proposals in its October report.

 

2.5 The Health Care Contract Between Canadians and their Governments

In Volume Four, the “Issues and Options Paper”, the Committee endorsed two major public policy objectives for Canada’s publicly funded hospital and doctor system:

·        To ensure that every Canadian has timely access to all medically necessary services regardless of their ability to pay for those services, and

·        To ensure that no Canadian suffers undue financial hardship as a result of having to pay health care bills.[76]

The pursuit of these objectives has involved a “contract” between Canadians and their governments – federal, provincial and territorial.  The nature of this contract is that Canadians have agreed to pay taxes to their governments who have then used the money to fund a universal, comprehensive, portable and accessible hospital and doctor insurance plan.  Since the funder of the plan is government, the plan is described as being publicly administered.[77] (The principles of universality, comprehensiveness, accessibility, portability and public administration are the five principles of the Canada Health Act.)

The contract requires governments, acting as insurers, to meet the two policy objectives stated above. In particular, the contract requires governments – federal and provincial/territorial – to provide Canadians with access to publicly insured, medically necessary, hospital and doctor services in a timely fashion. 

The problem Canadians face today is that, increasingly, timely access to all medically necessary services is not provided.  Principle Twenty is designed to address this problem by forcing governments to meet reasonable standards of patient (customer) service, either in their own jurisdiction, elsewhere in Canada or, if necessary, in the United States. Meeting reasonable patient service standards is an essential part of the health care contract between Canadians and their governments. It is part of the bargain.

Another possible approach to making governments fulfill their part of the contract would be to use a patient’s charter of rights as the means of enforcing maximum waiting time standards.  Such an approach would be consistent with the Charter of Rights and Freedoms in that it would use the courts to enforce rights, in this case the right to timely treatment.  Such an approach has been used with mixed success in Australia, New Zealand and the United Kingdom (see Section 7.5 of Volume Four of the Committee’s study).

However, the Committee prefers the simpler and less legalistic approach of Principle Twenty.  In choosing this approach, we acknowledge (as indicated in our discussion following Principle Twenty) that this would require that Canadians agree to pay for the improved, and more timely, access to service.  If they so agree, then Canadians would, in effect, be choosing the second of the three options the Committee outlined at the end of Section 1.1.[78]

If, after public discussion, Canadians decide that they are not willing to pay more for hospital and doctor services, or if the insurer (government) decides not to implement the care guarantee as described in Principle Twenty, then the result would be that the first of the three options in Section 1.1[79] would have been selected, with continued rationing of services and continued lengthening of waiting times.

Under this circumstance, where there is no maximum waiting time guaranteed by the public insurer, the question must be asked: should Canadians who may find that their health is deteriorating while waiting for medically necessary care, have the right to buy private health care insurance  to protect themselves against excessive waiting times, and to receive treatment in Canada? That is, should Canadians who can afford to do so have the right to purchase privately a care guarantee for service delivery in Canada? (Canadians already have the option of buying insurance to cover the costs of treatment provided outside Canada, namely in the United States. Such insurance products are now on the market in Canada.) 

While the Committee hopes that this issue will never arise because the insurer will fulfill its part of the health care contract by meeting the policy objective of “timely access to all medically necessary services”, it is important to recognize that the question raised at the start of the preceding paragraph will have to be addressed if Principle Twenty is not fully implemented. If this question is answered in the affirmative, then the third of the options presented in Section 1.1[80] would have been selected.

 

2.6 Concluding Remarks

There are two themes which run through the set of principles presented in this chapter.  The first is the need to restructure hospital and doctor care in order to make it operate more efficiently.  The second is to make information about the system, its costs, its waiting times, its performance and its outcomes, available to the public in order to improve transparency and make decision-makers – funders and providers – more accountable to the public.

Both these themes are designed to re-establish the health care contract between Canadians and their federal, provincial and territorial governments.  This involves, on the one hand, having Canadians understand where their health care dollars are being spent and why more money is needed in order to make the system fiscally sustainable.  On the other hand, it involves pushing government to operate the system more efficiently than it is now and to improve service delivery under the contract by, among other things, putting a cap on the length of waiting time for various procedures.

These themes are driven, in part, by an important observation about Canadians’ attitudes towards the health care system, made by Darrell Bricker and Edward Greenspon in their recent book, Searching for Certainty.[81] Based on extensive public opinion polling by Ipsos-Reid, Bricker and Greenspon conclude that Canadians will not support additional spending to close the gaps in the health care safety net until they see compelling evidence that the current health care contract with their governments is being honoured. In other words, the current system must be perceived by the public to be working reasonably well – that is, public confidence in the system must be restored – before Canadians will support its expansion.

The two themes of improved efficiency and increased transparency and accountability are designed to restore the confidence of Canadians in the health care system. Only once the twenty principles the Committee has outlined in this chapter have been implemented can Canada proceed to expand public coverage of health care services. The Committee believes that any such expansion will have to be done not by launching new universal programs, but by closing the gaps in the safety net, in particular with respect to drug therapy and home care.

The need to close these gaps is clearly illustrated by the fact that hospitals and doctors now account for only 46% of total health care expenditures.[82] Contrary to popular belief, and unfortunately contrary to most political rhetoric, Canada does not have a national health care system. Rather, it has a national hospital and doctor system, which now accounts for less than half of all health care expenditures.

Given the objectives of health care policy, as stated at the beginning of
Section 2.5, the phrase “all medically necessary services” should be applicable to the full range of health care services and not just to hospital and doctor services. This implies that some expansion of coverage – to close gaps in the health care safety net – is required if the objective of Canada’s health care policy is to be met.

The Committee believes that restructuring Canada’s publicly funded health care system in order to make it more efficient is necessary to ensure its long-term fiscal sustainability.  It is our view that the experience of other countries with respect to internal markets in health care can be instructive in deciding what the elements of this restructuring should be.  We believe that restructuring health care in Canada must be based on devising a set of incentives that will lead all participants to change their behaviour in ways which will benefit the system as a whole and patients in particular.  Our list of twenty principles is intended to achieve this.

For example, implementation of Principle Seven[83] would give government an incentive to think carefully about the health care consequences of making changes to budgets for funding hospital and doctor services.  Once Canadians are able to translate budget dollar amounts into service levels and numbers of procedures to be paid for, they will then be able to evaluate more clearly the appropriateness of the size of the health care budget and to engage their government in a meaningful discussion, including a discussion on whether they were willing to pay more taxes (or health care insurance premiums) in order to improve levels of services.  Currently, such a discussion is not possible because Canadians do not have the information that would enable them to translate budget levels into levels of services delivered to patients.

Similarly, Principle Eight[84] gives institutions incentives to operate more efficiently by putting them in competition with one another.  There may be a need to develop a specific set of incentives which are targeted at the managers of health care institutions (and perhaps even at their trustees or directors) and another set of incentives for the health care providers they employ.  These questions will be further explored in the Committee’s October 2002 report.

Principle Eleven[85] introduces incentives for behavioural change on the part of primary care providers that would lead to a more efficient primary care sector.  In fact, experience suggests that when providers/institutions are given responsibility for decisions on health care spending, they tend to provide the right treatment in the most cost-effective manner. 

Finally, Principle Eighteen[86] provides incentives for patients to use the health care system efficiently.  This principle could, for example, require the imposition of a surcharge on patients who choose to seek treatment from providers outside of their chosen primary health care team.

In every part of our system of incentives, there is a critical need for appropriate and timely information.  Principle Fifteen ensures that a system of electronic health records, linking all health care providers, will make the “right information” available in a timely fashion to the appropriate provider and provide a better way of allocating resources to the benefit of patients.

As was stated in the introduction to this section, and as was illustrated above, the theme of providing more information to the public also runs through our twenty principles.  This information is needed for three reasons:

·        first, to make more transparent the processes by which resource allocation decisions – principally with regard to money, but including human resources as well – are made;

·        second, to enhance accountability on the part of the people, institutions and governments who make decisions about what types of services will be covered by public insurance and how much of any service will be provided;

·        third, and perhaps most importantly, to change the public debate from a debate about dollars to a debate about services and service levels.  Canadians have a right to debate the question of whether they are willing to pay more for improved levels of service.  Canadians have a right to understand the linkages between funding levels and service levels.  Changing the nature of the public debate about health care will be a significant step towards gaining public support for restructuring the publicly funded hospital and doctor system. Ultimately, this will lead to restoring public confidence in the system so that we can move on to closing the gaps that remain in the publicly funded health insurance system.

There is also a need for improved accountability throughout the system. Under Principle Thirteen, the introduction of an “internal market” in Canada’s publicly funded health care system would enhance the accountability both of health care providers/institutions and of governments.

Principle Twenty – the care guarantee principle – would make government accountable for meeting the timely access to treatment condition of its health care contract with Canadians.

The Committee has developed its twenty principles in recognition of the fact that Canadians want health care to be delivered equitably to all, based on need, not on income.  In addition, consistent with our patient-oriented view (Principle Seventeen), our list of principles has been designed to address the primary concerns of Canadians with respect to the quality (Principle Sixteen) and timely provision of health services (Principle Twenty).

It is important to stress that the set of principles that the Committee has outlined in this chapter form an integrated whole.  If one of these principles is rejected, then it may make the implementation of other principles in the set impossible.

A clear example is provided by the relationship between the first (single funder) and the last (care guarantee) principles.  Should government refuse to introduce a waiting time guarantee (or should the public not wish to pay the additional funding that would be required to make the care guarantee a reality), it then becomes necessary to ask whether individuals should be allowed to buy private insurance that would enable them to have access to treatment by using a privately funded care guarantee. However, to allow people to purchase private insurance that would be used to pay for medically necessary services once the pre-defined waiting period has been exceeded would contradict Principle One which stipulates that there should be a single funder or insurer for all medically necessary hospital and doctor services. 

The Committee does not advocate the introduction of private insurance and its preferred option is for all its principles to be accepted and applied.  But it is necessary to be aware of the fact that if the set of principles is not embraced as a whole, then the rejection of one principle could very well lead to the undermining of others. In this case, the rejection of Principle Twenty could lead to Principle One being abrogated as well.

The Committee fully recognizes that its set of principles will be subject to close critical scrutiny.  That is entirely understandable in such a value-laden public policy issue as health care. In fact, it is likely that each reader of this report will support his/her own unique subset of the principles.

We ask readers, however, to keep in mind that no major reform of any large system, particularly one as complex and deeply personal as the hospital and doctor system, is ever perfect.  There is no perfect solution.  Everyone involved will have to be prepared to compromise in order to make reform work for the benefit of all Canadians, and reforms will have to be tailored to the specific circumstances that prevail in the different regions of the country.

Insisting on perfection, or attempting to obtain everything one wants, will doom reform to failure.  Similarly, reform will fail if people insist on addressing all health care problems before beginning to make progress on the hospital and doctor system.  These tendencies, along with an excessive focus on self-interest by those employed in the system, explain why reform has failed in the past.

Recognizing the dangers, we have worked hard to develop a set of principles which we believe are pragmatic, middle of the road in ideological terms, workable and that will lead to substantial improvements in the hospital and doctor sectors of the health care system.  We believe that a steady pace of reform is the way to make the restructuring and renewal of Canada’s health care system possible.

We trust that those involved in the sector will consider the principles with the same pragmatic approach as the Committee and that everyone will be prepared to make some sacrifices in order to meet our common goal: having a fiscally sustainable health care system of which Canadians can be truly proud.

Figure 1
Current Structure of Publicly Funded Health Care Insurance*

Figure 2
Phase One Reform – The Introduction of Service Based Funding for Hospitals

Figure 3
Phase Two Reform – Primary Care Groups Purchase Services on Behalf of their Patients


[1] Debates of the Senate (Hansard), 2nd Session, 36th Parliament, Volume 138, Issue 23, 16 December 1999.

[2] While the Committee usually refers to the “health care system”, we acknowledge the fact that Canada currently has 13 similar, but not identical, interconnected systems, one in each province and territory.

[3] Commission on the Future of Health Care in Canada (Roy J. Romanow, Commissioner), Shape the Future of Health Care, Interim Report, February 2002, p. 4.

[4] Volume Two, p. 20.

[5] Volume Two, p. 41 and p. 114.

[6] For example, cardiac procedures (e.g. PTCA) performed on the elderly are increasing by 12% annually; joint surgery (e.g. knee replacement) is increasing at an annual rate of 8%; renal dialysis is increasing by 14% a year (at a cost of $50,000 annually per patient).

[7] Proteomics is the systematic analysis of all protein sequences and protein expression patterns in tissues. Genes encode proteins that perform all of the fundamental activities within cells. Proteins are the molecular machines that carry out genetic instructions. Abnormalities in protein production or function have been connected to many diseases and health conditions.

[8] Nanotechnology is molecular manufacturing or, more simply, building things one atom or molecule at a time. A nanometer is one billionth of a meter (3 - 4 atoms wide). Nanotechnology proposes the construction of novel molecular devices possessing extraordinary properties. The possibilities include microscopic computers, billions of times faster than today’s, that could control machines patrolling our bodies as artificial immune systems, and machines that could repair cells on a molecular scale, perhaps stopping or reversing the aging process.

[9] Commission on the Future of Health Care in Canada (Roy J. Romanow Commissioner), Shape the Future of Health Care, Interim Report, February 2002, p. 25.

[10] Provincial and Territorial Ministers of Health, Understanding Canada’s Health Care Costs – Final Report, August 2000.

[11] TEAQ Associates, Getting the Right Balance : A Review of Federal-Provincial Fiscal Relations and the Funding of Public Services, prepared for the Ontario Hospital Association, December 2001, p. 21.

[12] Walter Robinson, The Patient, The Condition, The Treatment – A CTF Research and Position Paper on Health Care, Canadian Taxpayers Federation, September 2001, p. 59.

[13]Glenn G. Brimacombe, Pedro Antunes and Jane McIntyre, The Future Cost of Health Care in Canada, 2000 to 2020 – Balancing Affordability and Sustainability, The Conference Board of Canada, 2001, p. 21.

[14] Caring For Medicare, p. 73.

[15] Volume Four, pp. 51-52.

[16] Commission d’étude sur les services de santé et les services sociaux (Michel Clair, Commissioner), Emerging Solutions – Report and Recommendations, January 2001, p. v.

[17] Premier’s Advisory Council on Health (Right Hon. Don Mazankowski, Chair), A Framework for Reform, report to the Premier of Alberta, December 2001, pp. 52-53.  This report is also referred to as “the Mazankowski report”.

[18] This fact is well documented in a report by Statistics Canada, “Recent Trends in Taxes Internationally”, in Perspectives on Labour and Income, Catalogue No. 75-001-XIE, Vol. 2, No. 1, January 2001, pp. 36-40.

[19] Caring for Medicare, p. 79.

[20] Shape the Future of Health Care, p. 4.

[21]Premier’s Advisory Council on Health (Alberta), p. 21.

[22] Atlantic Institute for Market Studies, Brief to the Committee, 6 November 2001, p. 5.

[23] The term “internal market” was first used in reference to reforms undertaken in New Zealand and Great Britain during the 1990s that sought to introduce greater competition among health care providers (both public and private) in the context of a system that retained a single insurer.

[24] Premier’s Advisory Council on Health (Alberta), see footnote 1.

[25] A recent review of the various possible types of “internal market” reform can be found in Cam Donaldson, Gillian Currie and Craig Mitton, “Integrating Canada’s Dis-Integrated Health Care System – Lessons from Abroad”, C.D. Howe Institute Commentary, April 2001.

[26] Volume Three, pp. 37-44.

[27] Health Services Restructuring Commission (Duncan Sinclair, Chair), Primary Health Care Strategy – Advice and Recommendations to the Honourable Elizabeth Witmer, Minister of Health, Government of Ontario, December 1999.

[28] Monique Jérôme-Forget and Claude E. Forget, Who is the Master? – A Blueprint for Canadian Health Care Reform, Institute for Research on Public Policy, 1998.

[29] Once enrolled, patients would have to remain with their designated primary health care team for a specific period, usually a year, unless they changed their place of residence. Similarly, enrolled patients do not have direct access to a medical specialist; they must be referred to the specialist (gynaecologists, paediatricians, etc.) participating in the group practice.  The primary care physician or team acts as the gatekeeper to the rest of the system.

[30] Professor Lee Soderstrom, Brief to the Committee, 31 October 2001, p. 4.

[31] Brian Lee Crowley and David Zitner, Operating in the Dark: The Gathering Crisis in Canada’s Public Health Care System, Atlantic Institute for Market Studies, November 1999, p. 9.

[32] Professor Lawrence Nestman, Three Proposals to Improve Federal-Provincial Relations in the Health Services Field, Brief to the Committee, p. 1.

[33]Jeffrey C. Lozon, Brief to the Committee, 29 October 2001, p. 4.

[34] Ibid., p. 5.

[35] Claude Forget, Canadians’ Health: The Role of Government, Brief to the Committee, 31 October 2001, pp. 7-8.

[36] Shape the Future of Health Care, Interim Report, pp. 4-5.

[37] Health Association of British Columbia, Brief to the Committee, October 2001, p. 3.

[38] Bill Bryant, Brief to the Committee, 15 October 2001, p. 1.

[39] Premier Advisory Council on Health (Alberta), p. 31.

[40] Statistics Canada, “Recent Trends in Taxes Internationally”, in Perspectives on Labour and Income, Catalogue No. 75-001-XIE, Vol. 2, No. 1, January 2001, pp. 36-40.

[41] Volume One, pp. 5-30

[42] Canadian Health Care Association, The Private-Public Mix in the Funding and Delivery of Health Services in Canada: Challenges and Opportunities, Policy Brief, 2001, p. 3.

[43] Premier’s Advisory Council on Health (Alberta), p. 45.

[44] Shaping the Future of Health Care, p. 18.

[45] Volume One, pp. 98-99.

[46] The Hon. Monique Bégin, “Revisiting the Canada Health Act (1984): What Are the Impediments to Change?” delivered at The Institute for Research on Public Policy 30th Anniversary Conference, February 20, 2002, p. 6.

[47] Volume Two, p. 38.

[48] Volume Two, p. 39.

[49] See Volume Four, pp. 19-24.

[50] Shape the Future of Health Care, p. 27.

[51] See his Broken Promises:  Why Canadian Medicare is in Trouble and What Can Be Done to Save It (unpublished manuscript).

[52] Specialized hospital services include for example paediatric cardiac surgery and gamma knife neurosurgery.

[53] As the Honourable Monique Bégin and others have pointed out, there are many misconceptions surrounding the ‘public administration’ provision of the Canada Health Act (see footnote 77 below). On this point see as well the Myths and Realities section of Vol. 1 of the Committee’s study, p. 98.

[54] Shape the Future of Health Care, p. 44.

[55] Cam Donaldson, Gillian Currie and Craig Mitton, “Integrating Canada’s Dis-Integrated Health Care System – Lessons from Abroad”, C.D. Howe Institute Commentary, April 2001, p. 8.

[56] The Mazankowski report acknowledged and supported the movement towards primary care reform along with a change to primary care physician remuneration, but was of the view that the purchasing function should remain within regional health authorities.  Accordingly, the report recommended that a portion of the budget for physicians be allocated to regional health authorities which would then contract with them for primary care services.  Similarly, both the Clair Commission in Quebec and the Fyke Commission in Saskatchewan stressed that regional health authorities should organize and manage primary care group practices, contracting with or otherwise employing all providers including physicians

[57] Share the Future of Health Care, p. 34.

[58] Canadian Institute for Health Information (CIHI), Canada’s Health Care Providers, 2001, p. 73.

[59]  Hutchison, Brian and Julia Abelson and John Lavis, “Primary Care in Canada: So Much Innovation, So Little Change,” in Health Affairs, Vol. 20 No. 3, May-June 2001, p. 117.

[60] CIHI, op. cit., p. 74.

[61] Capitation refers to a payment system in which a health care unit receives an annual payment for each individual to whom the unit is responsible for providing service. The amount of the payment may depend on the age and medical history of the individual, but not on the number of service calls the individual makes to the unit during the year.

[62] Canadian Health Services Research Foundation, Integrated Health Systems in Canada: Three Policy Syntheses – Questions and Answers, July 1999, p. 2.

[63] Volume Three, pp. 37-44.

[64] “Integrating Canada’s Dis-Integrated Health Care System”, p. 13.

[65] Who is the Master?, p. 111.

[66] See its report, Primary Health Care Strategy, op. cit., pp. 34-40.

[67] Saskatchewan Commission on Medicare (Kenneth Fyke, commissioner), Caring for Medicare – Sustaining a Quality System, April 2001, p. 68.

[68] Select Standing Committee on Health, Patients First: Renewal and Reform of British Columbia’s Health Care System, Report to the British Columbia Legislative Assembly, December 2001, p. 29.

[69] Premier’s Advisory Council on Health (Alberta), p. 68.

[70] Saskatchewan Commission on Medicare, p. 81.

[71] Volume Four, pp. 61-65.

[72] Premier’s Advisory Council on Health (Alberta), p. 14.

[73] Volume Two, p. 49.

[74] Operating in the Dark, p.8.

[75] See section 2.5, below.

[76] Volume Four, p. 16.

[77] In a recent speech, the Honourable Monique Bégin, who was the federal Minister of Health when the Canada Health Act was introduced, said the following about the public administration conditions of the Canada Health Act: “Public administration” does not mean what the public believes it means. It is most misleading…[I]n Canada, the funding/financing is public but … the delivery of services is private, in that physicians are not civil servants and hospitals have boards, not deputy ministers. The program criterion of the legislation reads as follows: “(…) the health care insurance plan (hospitals and doctors) of a province must be administered and operated on a non-profit basis by a public authority (…) responsible to the provincial government (…)” … Op. cit. p. 6.

[78] At the end of Section 1.1, having established that the current health care system is not fiscally sustainable, this report said that there are three basic options from which Canadians must choose as they deliberate about the future of our health care system. These are: (1) the continued rationing of publicly funded health services, either by consciously deciding to make some services available and not others (that is, by delisting some services), or by allowing waiting lists to continue to grow; (2) increasing government revenue, either by raising taxes directly or through other means such as health care insurance premiums, so that the rationing of services can be reduced and waiting lines shortened; (3) making services available to those who can afford to pay for them by allowing a parallel privately funded tier of health services, while maintaining a publicly funded system for all other Canadians.

[79] See preceding footnote.

[80] See footnote 78.

[81] Searching for Certainty, Inside the New Canadian Mindset, by Darrell Bricker and Edward Greenspon,
Doubleday Canada, 2002.

[82] CIHI, December 2001.

[83] Principle Seven reads: The consequences arising from changes in the level or amount of government funding for hospital and medical care should be clearly understood by government and explained to the public, in as much detail as possible, at the time such changes are made and announced.

[84] Principle Eight reads: In the first stage of health care reform, the method for remunerating hospitals should be changed from the current annual global budget to service based funding.

[85] Principle Eleven reads: To facilitate primary care reform, the method of compensating general practitioners should be changed from fee-for-service to some form of blended remuneration combining capitation, fee-for-service and other incentives or rewards.

[86] Principle Eighteen reads: Incentives should be developed to encourage patients to use the hospital and doctor system as efficiently as possible.  Such incentives should not include user fees for services that are deemed to be medically necessary.


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