The Health of Canadians – The Federal Role

The Health of Canadians – The Federal Role
The Senate
Standing Senate Committee on Social Affairs,
Science and Technology
The Health of
Canadians –
The Federal Role
Final Report on the state of the health care
system in Canada
Chair:
The Honourable Michael J. L. Kirby
Deputy Chair:
The Honourable Marjory LeBreton
October 2002
Volume Six:
Recommendations
for Reform
Ce document est disponible en français.
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Available on the Parliamentary Internet:
www.parl.gc.ca
(Committee Business – Senate – Recent Reports)
37 th Parliament – 2nd Session
The Standing Senate Committee on Social Affairs, Science and Technology
Final Report on
the state of the health care system in Canada
The Health of Canadians - The Federal Role
Volume Six:
Recommendations for Reform
Chair
The Honourable Michael J. L. Kirby
Deputy Chair
The Honourable Marjory LeBreton
OCTOBER 2002
TABLE OF CONTENTS
TABLE OF CONTENTS........................................................................................................ i
ORDER OF REFERENCE..................................................................................................vii
SENATORS.......................................................................................................................... viii
LIST OF ABBREVIATIONS................................................................................................ ix
ACKNOWLEDGEMENTS................................................................................................... xi
FOREWORD........................................................................................................................ xiii
INTRODUCTION..................................................................................................................1
PART I: ACCO UNTABILITY............................................................................ 3
CHAPTER ONE..................................................................................................................... 5
THE NEED FOR AN ANNUAL REPORT ON THE STATE OF THE HEALTH CARE SYSTEM AND THE
HEALTH STATUS OF CANADIANS............................................................................................. 5
1.1
Summary of Some Key Points from Volumes One through Five.......................................................5
1.1.1 The role of the federal government ...............................................................................................................5
1.1.2 Objectives of federal health care policy ..........................................................................................................6
1.1.3 The current system is not fiscally sustainable ..............................................................................................8
1.1.4 A national health care guarantee is critical to successful reform...............................................................10
1.2 Improving Governance – The Need for a National Health Care Commissioner .........................11
1.2.1 Canadian Medical Association (CMA) ...................................................................................................13
1.2.2 Colleen Flood and Sujit Choudry.............................................................................................................14
1.2.3 Tom Kent ..................................................................................................................................................15
1.2.4 Duane Adams ..........................................................................................................................................15
1.2.5 Lawrence Nestman.....................................................................................................................................16
1.3 The Committee’s Proposal............................................................................................................................17
PART II: EFFICIENCY MEASURES ............................................................... 23
CHAPTER TWO .................................................................................................................. 25
HOSPITAL RESTRUCTURING AND FUNDING IN CANADA ....................................................... 25
2.1
Funding Methods for Hospitals in Canada: Advantages and Disadvantages..................................27
2.1.1 Line-by-line.................................................................................................................................................28
2.1.2 Ministerial discretion ..................................................................................................................................29
2.1.3 Population-based.........................................................................................................................................29
2.1.4 Global budget..............................................................................................................................................30
2.1.5 Policy-based.................................................................................................................................................31
2.1.6 Facility-based..............................................................................................................................................32
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2.1.7 Project-based ...............................................................................................................................................32
2.1.8 Service-based ...............................................................................................................................................32
2.2 Service-Based Funding: Review of International Experience..............................................................33
2.2.1 United States..............................................................................................................................................33
2.2.2 United Kingdom .........................................................................................................................................34
2.2.3 France.........................................................................................................................................................34
2.2.4 Denmark....................................................................................................................................................35
2.2.5 Norway.......................................................................................................................................................35
2.2.6 Review of international experience by the Comité Bédard.........................................................................36
2.3 The Rationale for Service-Based Funding in Canada.............................................................................36
2.3.1 Appropriateness of service mix ...................................................................................................................40
2.3.2 Over-servicing and up-coding ......................................................................................................................40
2.3.3 Rates, information and data.......................................................................................................................41
2.3.4 Innovation ...................................................................................................................................................42
2.3.5 Comprehensive health care..........................................................................................................................43
2.3.6 Escalation of costs.......................................................................................................................................43
2.3.7 Lack of simplicity.......................................................................................................................................43
2.3.8 Committee commentary...............................................................................................................................44
2.4 Academic Health Sciences Centres and the Complexity of Teaching Hospitals............................46
2.5 Small and Rural Community Hospitals......................................................................................................48
2.6 Financing the Capital Needs of Canadian Hospitals..............................................................................50
2.7 Public Versus Private Health Care Institutions .......................................................................................53
Appendix 2.1 Academic Health Sciences Centres in Canada and their Affiliated Hospitals and
Regional Health Authorities ........................................................................................................................59
CHAPTER THREE ............................................................................................................. 63
DEVOLVING FURTHER RESPONSIBILITY TO REGIONAL HEALTH AUTHORITIES.................... 63
3.1
3.2
3.3
3.4
3.5
RHAs Across Canada: A Portrait................................................................................................................64
RHAs: Goals and Achievements .................................................................................................................66
Barriers that Prevent RHAs from Functioning to Their Fullest Potential.......................................67
RHAs and the Potential for Internal Markets..........................................................................................70
Committee Commentary ...............................................................................................................................74
CHAPTER FOUR................................................................................................................. 77
PRIMARY HEALTH CARE REFORM ......................................................................................... 77
4.1
4.2
Why is Primary Health Care Reform Needed?........................................................................................77
The Provinces and Primary Care Reform .................................................................................................80
4.2.1 Recent reports..............................................................................................................................................80
4.2.2 The Ontario Family Health Network ......................................................................................................81
4.2.3 Quebec.........................................................................................................................................................85
4.2.4 New Brunswick..........................................................................................................................................85
4.3 Overcoming the Barriers to Change...........................................................................................................86
4.4 The Federal Role..............................................................................................................................................90
Appendix 4.1: GP Fundholding in Great Britain...............................................................................................93
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PART III: THE HEALTH CARE GUARANTEE .............................................. 97
CHAPTER FIVE .................................................................................................................. 99
TIMELY ACCESS TO HEALTH CARE........................................................................................ 99
5.1
5.2
5.3
5.4
The Right to Health Care – Public Perception or Legal Right?....................................................... 100
The Extent to which Publicly Insured Health Services are Available Outside the Publicly
Funded Health Care System..................................................................................................................... 101
Timely Health Care and Section 7 of the Canadian Charter of Rights and Freedoms.............. 102
Committee Commentary ............................................................................................................................ 108
CHAPTER SIX.....................................................................................................................109
THE HEALTH CARE GUARANTEE........................................................................................ 109
6.1
6.2
6.3
The Public Perception of the Problem of Waiting Lists.................................................................... 109
The Reality of the Waiting List Problem................................................................................................ 110
Canadian Experience ................................................................................................................................... 111
6.3.1 Cardiac Care Network of Ontario......................................................................................................... 111
6.3.2 The Western Canada Waiting List Project........................................................................................... 111
6.4 International Experience............................................................................................................................. 113
6.4.1 Sweden ..................................................................................................................................................... 113
6.4.2 Denmark................................................................................................................................................. 114
6.5 Committee Recommendations.................................................................................................................. 116
6.6 The Potential Consequences of Not Implementing a Health Care Guarantee ........................... 119
6.7 Concluding Thoughts on the Health Care Guarantee........................................................................ 120
PART IV: CLO SING THE GAPS
IN THE SAFETY NET.................................... 1 23
CHAPTER SEVEN .............................................................................................................125
E XPANDING COVERAGE TO INCLUDE PROTECTION AGAINST CATASTROPHIC PRESCRIPTION
DRUG COSTS ....................................................................................................................... 125
7.1
7.2
7.3
Trends in Drug Spending ........................................................................................................................... 126
International Comparisons......................................................................................................................... 128
Coverage for Prescription Drugs in Canada.......................................................................................... 130
7.3.1 Public prescription drug insurance plans ................................................................................................. 130
7.3.2 Private prescription drug insurance plans................................................................................................ 131
7.3.3 Plan features and their relation to protection from severe drug expenses ................................................ 132
7.4 An Emerging Issue: Catastrophic Prescription Drug Expenses...................................................... 132
7.5 Protecting Canadians Against Catastrophic Prescription Drug Expenses.................................... 137
7.5.1 How the plan would work....................................................................................................................... 138
7.5.2 The benefits of the plan............................................................................................................................ 140
7.5.3 How much would the plan cost?............................................................................................................ 141
7.5.4 Committee’s Proposal for a Catastrophic Prescription Drug Insurance Plan........................................ 142
7.6 The Need for a National Drug Formulary............................................................................................. 143
CHAPTER EIGHT .............................................................................................................145
E XPANDING COVERAGE TO INCLUDE POST-ACUTE HOME CARE ...................................... 145
8.1
8.2
Brief Review of Key Points about Home Care from Volumes Two and Four........................... 145
Other Options ............................................................................................................................................... 147
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8.3
The Extra-Mural Program in New Brunswick...................................................................................... 148
8.3.1 Building on the New Brunswick example: direct referrals to home care............................................... 150
8.4 Organizing and Delivering Post-Acute Home Care............................................................................ 151
8.4.1 Definition of post-acute home care........................................................................................................... 151
8.4.1.1 When does Post-Acute Home Care (PAHC) servicing start?.............................................................. 151
8.4.1.2 When does PAHC servicing end?.......................................................................................................... 152
8.4.2 Organizational arrangements for PAHC.............................................................................................. 153
8.4.3 Who provides PAHC?........................................................................................................................... 155
8.5 The Cost of a National Post-Acute Home Care Program................................................................. 156
8.5.1 How to calculate the cost of a national PAHC program....................................................................... 156
8.5.2 What about hidden costs?........................................................................................................................ 157
8.5.3 How much will a national PAHC program cost?................................................................................. 158
8.6 Paying for Post-Hospital Home Care...................................................................................................... 158
CHAPTER NINE................................................................................................................163
E XPANDING COVERAGE TO INCLUDE PALLIATIVE HOME CARE......................................... 163
9.1
9.2
9.3
9.4
9.5
The Need for a National Palliative Home Care Program.................................................................. 163
Financial Assistance to Caregivers Providing Palliative Care at Home.......................................... 164
Caregiver Tax Credit.................................................................................................................................... 166
Job Protection................................................................................................................................................ 167
Concluding Remarks.................................................................................................................................... 167
PART V: EXPANDING CAPACITY AND BUILDING INFRASTRUCTURE ...........169
CHAPTER TEN .................................................................................................................. 171
THE FEDERAL ROLE IN HEALTH CARE INFRASTRUCTURE ................................................... 171
10.1
10.2
10.3
10.4
Health Care Technology............................................................................................................................. 171
Electronic Health Records......................................................................................................................... 175
Evaluation of Quality, Performance and Outcomes........................................................................... 177
Protection of Personal Health Information.......................................................................................... 179
CHAPTER ELEVEN ..........................................................................................................185
HEALTH CARE HUMAN RESOURCES.................................................................................... 185
11.1
11.2
11.3
11.4
11.5
11.6
11.7
11.8
11.9
The Extent of Health Human Resource Shortages............................................................................. 185
Health Human Resources: The Need for a National Strategy......................................................... 188
Increasing the Number of Physicians Trained in Canada................................................................ 191
Integrating International Medical Graduates......................................................................................... 193
Alleviating the Shortage of Nurses........................................................................................................... 194
Allied Health Professionals ........................................................................................................................ 197
Funding Post-Graduate Training.............................................................................................................. 198
Health Human Resources: Scope of Practice Rules Review ............................................................. 198
Committee Commentary ............................................................................................................................ 199
CHAPTER TWELVE..........................................................................................................201
NURTURING EXCELLENCE IN CANADIAN HEALTH RESEARCH ........................................... 201
12.1 Assuming Leadership in Canadian Health Research........................................................................... 202
12.2 Engaging the Scientific Revolution......................................................................................................... 205
12.3 Securing a Predictable Environment for Health Research ................................................................ 208
12.3.1 Federal funding for health research......................................................................................................... 209
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12.3.2 Federal in-house health research ............................................................................................................. 212
12.4 Enhancing Quality in Health Services and in Health Care Delivery .............................................. 213
12.5 Improving the Health Status of Vulnerable Populations................................................................... 215
12.6 Commercializing the Outcomes of Health Research.......................................................................... 217
12.7 Applying the Highest Standards of Ethics to Health Research ....................................................... 221
12.7.1 Research involving human subjects ......................................................................................................... 222
12.7.2 Issues with respect to research involving human subjects......................................................................... 224
12.7.3 Animals in research................................................................................................................................ 227
12.7.4 Privacy of personal health information ................................................................................................... 229
12.7.5 Genetic privacy........................................................................................................................................ 234
12.7.6 Potential situations of conflict of interest ................................................................................................. 235
PART VI: HEALTH PRO MOTION AND DISEASE PREVENTION.................... 237
CHAPTER THIRTEEN.................................................................................................... 239
HEALTHY PUBLIC POLICY: HEALTH BEYOND HEALTH CARE ............................................. 239
13.1 Trends in Diseases ........................................................................................................................................ 242
13.1.1 Infectious diseases....................................................................................................................................... 243
13.1.2 Chronic diseases ...................................................................................................................................... 243
13.1.3 Injury....................................................................................................................................................... 244
13.1.4 Mental health.......................................................................................................................................... 244
13.2 The Economic Burden of Illness ............................................................................................................. 245
13.3 The Need for a National Chronic Disease Prevention Strategy...................................................... 246
13.4 Strengthening Public Health and Health Promotion.......................................................................... 249
13.5 Toward Healthy Public Policy: The Need for Population Health Strategies ............................... 250
PART VII: FINANCING REFO RM............................................................... 253
CHAPTER FOURTEEN................................................................................................... 255
HOW THE NEW FEDERAL FUNDING FOR HEALTH CARE SHOULD BE MANAGED .............. 255
14.1 More Money Is Needed for Health Care ............................................................................................... 256
14.2 The Financing Role of the Federal Government................................................................................. 260
14.3 How New Federal Funding for Health Care Should Be Managed ................................................. 262
CHAPTER FIFTEEN........................................................................................................ 265
HOW ADDITIONAL FEDERAL FUNDS FOR HEALTH CARE SHOULD BE RAISED................... 265
15.1 The Amount of Increased Federal Funding Required........................................................................ 267
15.2 Potential Sources of Increased Federal Funding.................................................................................. 270
15.3 General Taxation........................................................................................................................................... 271
15.4 Earmarked Taxation..................................................................................................................................... 275
15.5 Payroll Taxes .................................................................................................................................................. 278
15.6 National Health Care Premiums............................................................................................................... 280
15.7 User Charges.................................................................................................................................................. 282
15.8 Medical Savings Accounts .......................................................................................................................... 284
15.9 Pre-Funding for Health Care..................................................................................................................... 285
15.10 Committee Commentary ............................................................................................................................ 286
15.11 Current Federal Funding for Health Care.............................................................................................. 291
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CHAPTER SIXTEEN ........................................................................................................ 295
THE CONSEQUENCES OF NOT MAKING THE HEALTH CARE SYSTEM FISCALLY
SUSTAINABLE ...................................................................................................................... 295
16.1 Private Health Care Insurance in Canada and Selected OECD Countries................................... 297
16.2 Review of Recent Literature on the Impact of Private Health Care Insurance and Private ForProfit Delivery.............................................................................................................................................. 299
16.3 Committee Commentary ............................................................................................................................ 302
PART VIII: THE CANADA HEALTH ACT ................................................... 305
CHAPTER SEVENTEEN ................................................................................................ 307
THE CANADA HEALTH ACT............................................................................................... 307
17.1
17.2
17.3
17.4
17.5
17.6
Universality..................................................................................................................................................... 308
Comprehensiveness...................................................................................................................................... 309
Accessibility .................................................................................................................................................... 313
Portability ........................................................................................................................................................ 315
Public Administration.................................................................................................................................. 316
Committee Commentary ............................................................................................................................ 319
CONCLUSION....................................................................................................................321
APPENDIX A .......................................................................................................................A-1
LIST OF RECOMMENDATIONS BY CHAPTER......................................................................... A-1
APPENDIX B.....................................................................................................................A-19
LIST OF PRINCIPLES FROM VOLUME FIVE (APRIL 2002)..................................................... A-19
APPENDIX C.................................................................................................................... A-23
LIST OF WITNESSES........................................................................................................... A-23
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ORDER OF REFERENCE
Extract from the Journals of the Senate of Tuesday, October 8, 2002:
Resuming debate on the motion of the Honourable Senator Kirby seconded by the Honourable Senator
Pépin:
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)
b)
c)
d)
e)
The fundamental principles on which Canada’s publicly funded health care system is based;
The historical development of Canada’s health care system;
Health care systems in foreign jurisdictions;
The pressures on and constraints of Canada’s health care system; and
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 and the First Session of the Thirty-seventh Parliament be
referred to the Committee;
That the Committee submit its final report no later than October 31, 2002;
That the committee retain the powers necessary to publicize its findings for distribution of the study
contained in its final report for 60 days after the tabling of that report; 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.
The question being put on the motion, it was adopted.
ATTEST :
Paul C. Bélisle
Clerk of the Senate
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SENATORS
The following Senators have participated in the study on the state of the health care system
undertaken by 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
Brenda Robertson
Douglas Roche
Ex-officio members of the Committee:
The Honourable Senators: Sharon Carstairs, P.C. (or Fernand Robichaud, P.C.) and John LynchStaunton (or Noel A. Kinsella)
Other Senators who have participated from time to time on this study:
The Honourable Senators Atkins, Banks, Beaudoin, Carney, Cochrane, Cohen,* DeWare,*
Ferretti Barth, Grafstein, Graham, P.C., Hubley, Joyal, P.C., Lawson, Léger, Losier-Cool,
Maheu, Mahovlich, Meighen, Milne, Murray, Rompkey, St. Germain, Sibbeston, Stratton,
Tunney*, and Wilson*
* retired
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LIST OF ABBREVIATIONS
ACAHO
AHSC
Association of Canadian Academic
Healthcare Organizations
Association of Canadian Medical
Colleges
Advisory Council on Science and
Technology
Academic Health Sciences Centre
CT
Computed Tomogram (scan)
DND
Department of National Defence
DRG
Diagnostic Related Group
EHR
Electronic Health Record
CAN
Canadian Nurses Association
EI
Employment Insurance
CAPE
Clinicians Assessment and
Professional Enhancement
Canadian Biotechnology Advisory
Committee
Canadian Council on Animal Care
EMP
Extra-Mural Program
EPF
Established Programs Financing
F/P/T
federal/provincial/territorial
FAE
Fetal Alcohol Effects
Canadian Council on Health
Services Accreditation
Cardiac Care Network of Ontario
FAS
Fetal Alcohol Syndrome
FFS
Fee-for-service
FHN
Family Health Networks
FMG
Family Medicine Groups
CFI
Canadian Coordinating Office for
Health Technology Assessment
Chronic Disease Prevention
Alliance of Canada
Canada Foundation for Innovation
GDP
Gross Domestic Product
CHA
Canada Health Act
GP
General Practitioner
CHSRF
Canadian Health Services Research
Foundation
Canada Health and Social Transfer
HRDC
Human Resources Development
Canada
Health Care Technology
Assessment
Health Transition Fund
ACMC
ACST
CBAC
CCAC
CCHSA
CCN
CCOHTA
CDPAC
CHST
CIAR
CMA
Canadian Institute for Advanced
Research
Canadian International
Development Agency
Canadian Institute for Health
Information
Canadian Institutes of Health
Research
Centre local de services communautaires
(community health centre)
Canadian Medical Association
CPP
Canada Pension Plan
CRC
Canada Research Chairs
CSTA
Council of Science and Technology
Advisors
CIDA
CIHI
CIHR
CLSC
HTA
HTF
ICH
IMG
International Conference on
Harmonization
information and communications
technologies
International Development
Research Centre
International Medical Graduates
IT
Information Technology
JPPC
LPN
Joint Policy and Planning
Committee
Licensed Practical Nurse
MEF
Medical Equipment Fund
ICT
IDRC
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MOHLTC
MRI
Ontario Ministry of Health and
Long-Term Care
Medical Research Council of
Canada
Magnetic Resonance Imaging
MSA
Medical Savings Account
NACA
NHS
National Advisory Committee on
Aging
New Brunswick Extra-Mural
Hospital
National Council on Ethics in
Human Research
National Health Expenditure
Database
National Health Research and
Development Program
National Health Service
NRC
National Research Council
NSERC
Natural Sciences and Engineering
Research Council
Ontario Drug Benefit
MRC
NBEMH
NCEHR
NHEX
NHRDP
ODB
OECD
OFHN
Organisation for Economic Cooperation and Development
Ontario Family Health Network
OHA
Ontario Hospital Association
OMA
Ontario Medical Association
PAHC
Post-Acute Home Care
PCG
Primary Care Groups
PCN
Primary Care Network
PCR
Primary Care Reform
PCT
Primary Care Trust
PENCE
Protein Engineering Network of
Centres of Excellence
Positron Emission Tomography
(scan)
Primary Health Care Transition
Fund
Personal Information Protection and
Electronic Documents Act
Programme de Médicalisation du Système
d’Information
PET
PHCTF
PIPEDA
PMSI
PPP
Purchasing Power Parity
PPS
Prospective Payment System
QPP
Quebec Pension Plan
REB
Research Ethics Board
RHA
Regional Health Authority
RHC
Regional Hospital Corporation
RN
Registered Nurse
Rx&D
UBC
Canada’s Research -Based
Pharmaceutical Companies
Social Sciences and Humanities
Research Council
Tri-Council Policy Statement: Ethical
Conduct for Research Involving Humans
University of British Columbia
URS
Urgency Rating Score
WCB
Workers’ Compensation Board
WCWL
Western Canada Waiting List
SSHRC
TCPS
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ACKNOWLEDGEMENTS
The Committee wants to publicly acknowledge the enormous assistance it has received during
the past two years from those who have worked so hard in helping the Committee to produce its
six reports.
The Committee particularly wants to express its deep appreciation to:
•
Odette Madore and Dr. Howard Chodos of the Research Branch of the
Library of Parliament, the full-time research staff of the Committee, who
have been deeply involved in all drafts of the six reports that the Committee
has released during this study. Without their extraordinary help, these reports
would not have been completed in such a short time, nor in such a
competent manner.
•
Catherine Piccinin, the Committee Clerk and her Administrative Assistant,
Debbie Pizzoferrato, who were responsible for organizing all the meetings
the Committee held on the health care issue, including scheduling the
appearances of all the witnesses, for overseeing the translation and printing of
all six reports, and for responding to thousands of requests for information
about the Committee’s work and for copies of the Committee’s reports.
•
Dr. Duncan Sinclair, the former chair of the Health Services Restructuring
Commission of Ontario, who gave so generously of his time and expertise in
reviewing, editing and offering suggestions for improvement in all of the
drafts of the Committee’s reports.
•
The staff of each of the members of the Committee, who have had to endure
a substantially increased work load for the past two years.
To all of these people, we express our heartfelt thanks for a job very well done.
The Committee worked long hours over many months, requiring the services of a large number
of procedural, research and administrative officers, editors, reporters, interpreters, translators,
messengers, publications, broadcasting, printing, technical and logistical staff who ensured the
progress of the work and reports of the Committee. We wish to extend our appreciation for
their efficiency and hard work.
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FOREWORD
This report is the culmination of a two-year study by the Standing Senate
Committee on Social Affairs, Science and Technology. During this period, the Committee has
heard the views of over 400 witnesses. The Committee wishes to express its sincerest thanks for
the effort these witnesses made to give us their advice on what needs to be done to reform
Canada’s health care system and make it fiscally sustainable.
As one would expect, given the complex, ideological and political nature of
health care issues, the advice we received was often conflicting. Nevertheless, the Committee
considered seriously the views of all the witnesses in arriving at our recommendations.
The recommendations in this report reflect the unanimous view of the eleven
Senators on the Committee (seven Liberals, three Progressive Conservatives, and one
Independent). The experience of the eleven Committee members in public policy and healthrelated issues is as deep as it is varied. The Committee includes:
•
two doctors: Yves Morin, a former Dean of Medicine at Laval University,
and Wilbert Keon, the Chief Executive Officer of the Ottawa Heart Institute;
•
two former provincial ministers of health: Brenda Robertson and Catherine
Callbeck, who was also a provincial premier;
•
two former Members of Parliament: Douglas Roche and Lucie Pépin, who
was also a nurse;
•
a former federal cabinet minister and former journalist: Joyce Fairbairn;
•
two community activists: Joan Cook, who served for many years on various
hospital boards, and Jane Cordy, who was also a teacher;
•
two former senior members of a Prime Minister’s office: Marjory LeBreton
and Michael Kirby, who was also a former federal Secretary to the Cabinet
for Federal-Provincial Relations.
The Committee believes that its recommendations meet the four objectives the
Committee set for itself at the outset of its work:
•
To formulate a detailed, concrete plan of action that did not focus heavily on
governance issues or intergovernmental structures;
•
To attach a cost to its recommendations and propose a specific revenue raising
plan. For its report to be truly useful, the Committee felt it could not be vague
on the question of precisely how its recommendations would be funded;
•
To specify clearly the changes that each of the major stakeholders – individual
Canadians, health care professionals, provincial and federal governments, etc.
– would have to make so that the Committee’s reform plan could be
implemented successfully.
xiii
•
To make clear the consequences of not changing, and hence of not reforming, the
health care system.
The Committee feels that there is a real window of opportunity for implementing
the kind of reform that is needed to ensure the long-term sustainability of Canada’s health care
system. The Committee believes it has worked out a detailed, concrete and realistic plan which,
if implemented integrally, would lead to the strengthening of the publicly funded health care
system in Canada and help guarantee its sustainability for the foreseeable future. It looks forward
to pursuing its work in this direction, along with all those who share this objective.
xiv
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The health of the people is really the foundation
upon which all their happiness and
all their powers as a state depend.
Benjamin Disraeli – July 24, 1877
It is to the Canadian people, and their improved health,
that the Committee dedicates this report.
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INTRODUCTION
For the past two years the Standing Senate Committee on Social Affairs, Science
and Technology has been studying the state of the Canadian health care system and the federal
role in that system. The Committee has sat for over 200 hours and held 76 meetings. Most of
these meetings were public sessions during which the Committee heard from over 400
witnesses, many of whom represented organizations that have thousands of members (such as
the Canadian Medical Association and the Canadian Nurses Association).
To date the Committee has published five reports. This sixth report contains the
Committee’s final recommendations for reform and renewal of the Canadian health care system.
These recommendations flow from the principles enunciate in Volume Five.The major topics
covered in the five previous reports, as well as the subjects to be treated in future reports, are
summarized in the following table:
Phases
One
Two
Three
Four
Five
Six
Thematic
Studies
Content
Historical Background and Overview,
Myths and Realities
Future Trends, Their Causes and
Impact on Health Care Costs
Health Care Models and
Practices in Other Countries
Issues and Options
Principles for Restructuring the Hospital and Doctor
System and Recommendations
on Several Health Care Issues
Recommendations with respect to Financing and
Restructuring the Hospital and Doctor System and
Closing the Gaps in Drug and Home Care Coverage
Aboriginal Health, Women’s Health, Mental Health,
Rural Health, Population Health,
Home Care and Palliative Care
Timing of Report
March 2001
January 2002
January 2002
September 2001
April 2002
October 2002
At future dates to be
determined
As the table indicates, following the release of this report, the Committee intends
to examine a number of additional health-related issues. These studies will result in a series of
thematic reports on: 1) Aboriginal health; 2) women’s health; 3) mental health; 4) rural health; 5)
population health, including literacy issues; 6) home care; and 7) palliative care.
In addition, the Committee held public hearings in September 2002 to examine
the document French-Language Healthcare – Improving Access to French-Language Health Services, a study
coordinated by the Fédération des communautés francophones et acadiennes du Canada for the
Consultative Committee for French-Speaking Minority Communities. The Committee will be
1
releasing a report on this issue, and readers of this volume are strongly encouraged to read that
report as well.
categories:
The recommendations contained in Volume Six can be grouped into six
•
recommendations on restructuring the current hospital and doctor system to
make it more efficient and more effective in providing timely and quality
patient care;
•
recommendations on enacting a health care guarantee that would ensure that
patients receive treatment within a specified maximum amount of time for
major hospital or diagnostic procedures; if the waiting time is exceeded, the
health care guarantee would require the insurer/government to pay the cost
of the patient receiving the necessary service in another jurisdiction or
another country;
•
recommendations on expanding public health care insurance to include
coverage for catastrophic prescription drug costs, immediate post-hospital
home care costs, and costs of providing palliative care for patients who
choose to spend the last weeks of their lives at home;
•
recommendations that strengthen the federal contribution to, and role in,
developing health care infrastructure, including health information systems,
health care technology, the evaluation of health care system performance and
outcomes, the supply of health human resources, health research, wellness
promotion and illness prevention, and the nation’s 16 Academic Health
Sciences Centres;
•
recommendations on how additional federal revenue should be raised, and on
how this new revenue should be administered in a transparent and
accountable manner in order to implement the recommendations in this
report;
•
observations on the consequences that would arise if the additional federal
revenues that the Committee recommends be raised are not invested in the
health care system.
As some of these
recommendations will require the
financial participation of the provincial
and territorial governments if they are to
be implemented, the Committee is keenly
aware of the importance of fostering a
spirit of cooperation and collaboration
amongst the various levels of
government in the course of working to
reform and renew Canada’s health care
system.
As some of these recommendations will require
the financial participation of the provincial and
territorial governments if they are to be
implemented, the Committee is keenly aware of
the importance of fostering a spirit of
cooperation and collaboration amongst the
various levels of government in the course of
working to reform and renew Canada’s health
care system.
2
Part I:
Accountability
3
CHAPTER ONE
T HE N EED
FOR AN A NNUAL R EPORT ON
THE S TATE OF THE H EALTH C ARE S YSTEM AND
THE
H EALTH S TATUS
OF
C ANADIANS
To formulate realistic recommendations to improve the provision of health care
services to Canadians, it is necessary first to have a clear view of the health care system now and
an assessment of its strengths and weaknesses. From the outset, the Committee has sought to
portray accurately the reality of Canada’s health care system and to separate myth from fact.1
The Committee believes that an ongoing evaluation of the health care system is
essential, conducted in as objective a fashion as possible. In this chapter the Committee presents
its recommendations for the creation of a new National Health Care Council chaired by a Health
Care Commissioner charged with carrying out this task by producing an annual report on the
state of the health care system and the health status of Canadians.
Before turning to this, however, we begin with a brief review of some key
elements from previous volumes of the Committee’s study. These summarize the basic approach
that the Committee has adopted in the course of its multi-volume study, as well as the objectives
it has sought to achieve in developing its recommendations.
1.1
Summary of Some Key Points from Volumes One through Five
1.1.1 The role of the federal government
The Committee identified the various roles of the federal government in health
and health care; Volume Four set out these roles, together with a set of policy objectives for
each.2 The Committee also affirmed the legitimacy and importance of the federal government’s
roles from a number of perspectives:
1
2
•
First, it is clear that Canadians strongly support national principles in health
care and look to the federal government to play an important role in
maintaining these principles;
•
Second, federal funding for health care is especially critical at this time of
reform and renewal. As the Committee makes clear in the present volume,
making changes in the way the health care system is structured and operates
will require spending more money - money that must be raised primarily by
the federal government;
•
Third, and some would say most important, only the federal government is in
a position to make sure that all provinces and territories, regardless of the size
See Volume One, The Story So Far, Chapter Six, Myths and Realities, pp. 93ff.
See Volume Four, Issues and Options, Chapters Three and Four, pp. 9-26.
5
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 fundamental to what many call “the Canadian way.”
•
Fourth, fundamental changes to the health care system should not be
confined to one or two provinces. Our national system requires interprovincial harmonization in which the federal government has a crucial role
to play, through, for example, its use of financial incentives and/or penalties
to encourage provincial and territorial governments to adopt country-wide
standards.
•
Fifth, the Committee believes It is very clear to the Committee that
strongly that the substantial sums of
Canadians want the provinces, the
money transferred by the federal territories and the federal government to
government to the provinces and
work collaboratively in partnership to
territories for health care should
health
care
renewal.
ensure that the federal government facilitate
has a seat at the table when Canadians are impatient with blamerestructuring of the health care laying; they want intergovernmental
cooperation and positive results.
system is discussed. The principle of
accountability to the taxpayers
requires the federal government to have a say in how that money is spent.
Finally, it is very clear to the Committee that Canadians want the provinces, the
territories and the federal government to work collaboratively in partnership to facilitate health
care renewal. Canadians are impatient with blame-laying; they want intergovernmental
cooperation and positive results.
1.1.2 Objectives of federal health care policy
The Committee has pointed
out that federal policy in health care flows
from two overarching objectives – objectives
that the Committee strongly supports as the
primary goals to be pursued by the federal
government in the field of health care. These
two objectives are:
The Committee believes that federal policy
in health care flows from two objectives:
§ To ensure that all Canadians have
timely access to medically necessary
services regardless of their ability to
pay for these services.
§ To ensure that no Canadian suffers
undue financial hardship as a result
of having to pay health care bills.
•
To ensure that all Canadians have
timely access to medically necessary
health services regardless of their ability
to pay for these services.
•
To ensure that no Canadian suffers undue financial hardship as a result of having to pay
health care bills.
Implicit in these two objectives, particularly the first, is the requirement that the
medically necessary services provided under Medicare be of high quality. Clearly, providing
access to services of inferior quality would defeat the purpose of Canada’s health care system.
6
With respect to the pre-eminent piece of federal legislation in health care, the
Canada Health Act (1984), the Committee has repeatedly expressed its unqualified support for the
four patient-oriented principles in the Canada Health Act. The Committee has also endorsed the
intent of the fifth principle of the CHA, although it is of a different character:
•
The principle of universality, which means that public health care insurance
must be provided to all Canadians;
•
The principle of comprehensiveness, which is meant to guarantee that all
medically necessary hospital and doctor services are covered by public health
care insurance;
•
The principle of accessibility, which means that financial barriers to the
provision of publicly funded health services, such as user charges, are
discouraged, so that needed care is available to all Canadians regardless of
their income;
•
The principle of portability, which means that all Canadians are covered
under public health care insurance, when they travel within Canada or move
from one province to another.
•
The principle of public administration does not focus on the patient but “is
rather the means of achieving the end to which the other four principles are
directed.”3 The public administration condition of the Canada Health Act is
the basis for the single insurer/funder model that the Committee has
endorsed in Volume Five under Principle One.4 This condition of the Act
requires provincial and territorial health care insurance plans to be managed
on a not-for-profit basis by a public agency.
The Committee has also
agreed with the Honourable Monique The principle of public administration has come
Bégin, the federal Minister of Health at
to be misunderstood. The Committee strongly
the time that the Canada Health Act was
supports the single-payer insurance system
passed, that the principle of public whereby the government is the funder of
administration has come to be hospital and doctor services. The public
misunderstood.5 The Committee strongly administration principle refers to the funding
supports the single-payer insurance
of hospital and doctor services, not to the
system whereby the government is the
funder of hospital and doctor services. delivery of those services.
The public administration principle refers to the funding of hospital and doctor services, not to the
delivery of those services.
The misunderstanding of the principle of public administration has arisen out of
the confusion between publicly funded and administered health insurance and the actual delivery
of health care services themselves. Under the Canada Health Act, services do not have to be
Volume One, p. 41.
Volume Five, pp. 23-25.
5 See her testimony before the Committee, May 8, 2002 (54:5).
3
4
7
delivered by public agencies. Indeed, in Canada today the great majority of health care services
are delivered by a variety of private providers and institutions.
The Committee reaffirms its commitment to the principle that every Canadian
should be guaranteed access to medically necessary services by a publicly funded and
administered insurance program, everywhere in Canada. This has been the essence of Canadian
health care policy for over 30 years, and is clearly reflected in the Canada Health Act.
Pursuit of the objectives of Canadian health care policy involves a “contract”
between Canadians and their governments – federal, provincial and territorial. Canadians pay
taxes to their governments, which then use the money (in part) to fund a universal insurance
plan that provides to all Canadians first-dollar coverage for medically necessary services
delivered by hospitals and doctors. These services must be accessible, comprehensive, and
portable among provinces and territories. The “contract” requires governments (federal and
provincial/territorial) as insurers, to use the funds collected from Canadians to meet the two
policy objectives stated above, i.e., to ensure that Canadians are publicly insured and have timely
access to medically necessary hospital and doctor services of high quality.
1.1.3 The current system is not fiscally sustainable
The Committee’s next step was to tackle the question of whether or not the
system, in its current form and given current levels of government funding, was sustainable. In
Volume Five, the Committee defined a fiscally sustainable health care system as one on which
Canadians could rely both today and in the future, given governments’ predicted fiscal capacity
and taxpayers’ willingness to pay.
Two constraints must be taken into account in assessing fiscal sustainability. The
first is the willingness of taxpayers to pay (consent of the governed). The second is the need, for
economic development purposes, for governments to keep tax rates competitive with those in
other OECD countries, and particularly with the United States.
In the Committee’s view, long-term fiscal sustainability depends on the ratio of
public expenditures on health care to other government spending. If this ratio becomes too large
it may indicate that spending on health care is crowding out other necessary government
spending.
The Committee recognizes that
sustainability can also be considered in terms of Regardless of how it is expressed, there
the total share of the Gross Domestic Product
is only one source of funding for health
(GDP) that is devoted to health care, whether
care– the Canadian public – and it has
paid through the public purse or privately. been shown conclusively that the most
However, what that share should be is
cost-effective way of funding health
impossible to say without thorough analysis of
care services is by using a single (in our
the benefits Canadians derive from health care.
publicly
administered
or
Conducting such a cost-benefit analysis is case,
governmental) insurer/payer model.
precluded at present by the system’s lack of the
capacity to capture, record, share, and otherwise
manage health information. So the best the Committee can do is observe that Canada’s spending
8
on health care, expressed as a share of GDP, is roughly comparable to that of other developed
countries apart from the United States, where it is clearly much higher than in any other
industrialized country.
The Committee is keenly aware that shifting more of the cost to individual
patients and their families via private payments, the facile “solution” recommended by many, is
really nothing more than an expensive way of relieving or, at the least, diminishing governments’
problem. Regardless of how it is expressed (as a share of GDP, share of government spending,
etc.), there is only one source of funding for health care – the Canadian public – and it has been
shown conclusively that the most cost-effective way of funding health care is by using a single
(in our case, publicly administered or governmental) insurer/payer model.
The Committee believes strongly that Canada should continue to adhere to this
most efficient and effective model of universal health care insurance, and it is clear to the
Committee that Canadians believe this too. Therefore, in formulating its recommendations, the
Committee has not concentrated on measures of funding related to GDP. Instead, it has sought
to assess how much public spending is necessary to sustain Medicare and, in particular, how
much is needed to accomplish the changes that are essential if this highly popular and largely
publicly funded program is to meet the needs of Canadians into the twenty-first century.
During the Committee’s cross-country hearings, a wide range of witnesses,
including health care managers, providers and consumers, expressed deep concern about rising
health care costs and their impacts both on governments’ budgets and on patient care. Based on
this testimony as well as on numerous reports, the Committee has concluded that rising costs
strongly indicate that Canada’s publicly funded health care system, as it is currently organized
and operated, is not fiscally sustainable given current funding levels.
The lack of sustainability is already
The Committee has concluded that
manifest in the fact that the system does not currently
have sufficient resources to respond to all the rising costs strongly indicate that
Canada’s publicly funded health
demands that are placed upon it. In particular, timely
access to quality health services is increasingly not the
care system, as it is currently
norm. The Committee is aware that no system organized and operated, is not
providing services that are perceived to be “free” can
fiscally sustainable given current
ever fully meet the demands placed on it, and that at
funding levels.
present we are unable to discriminate between the
demand and the genuine need for timely access to
health services of all kinds. Nonetheless, the widespread perception of deterioration in the
quality of service available to Canadians highlights the fact that Canadians must decide what
future course of action they want their governments to take. The Committee stressed that there
are three basic options from which the Canadian public must choose:
•
Growing waiting lists as a result of increased rationing of publicly funded
health services;
•
Increasing government revenue;
•
Making some services available more quickly to those who can afford to pay
privately for them by allowing the development of a parallel privately funded
9
tier of health services, supplementary to the publicly funded system
maintained for all other Canadians.6
As will be evident in the remainder of this report, the Committee fervently hopes
that Canadians will agree with the Committee that the second option is the most desirable
choice. Having unanimously reached this conclusion, the Committee has departed from usual
practice in parliamentary committee reports by specifying in some detail how much additional
public money is required to ensure the long-term fiscal sustainability of the health care system,
recommending where this new money should be spent, and recommending how the increased
government revenue could be raised.
The
Committee
has
Unless changes are made to the structure
concluded that an additional $5 billion is
and functioning of the system, no amount of
needed annually to reform and renew the
health care system. This is the estimated new money will make the current system
annual cost of implementing the sustainable over the long term. This $5
Committee’s
recommendations.
The billion in new federal money must be used to
Committee also stresses, however, that buy change, to reform and renew the system.
unless changes are made to the structure
and functioning of the system, no amount of new money will make the current system
sustainable over the long term. This $5 billion in new federal money must be used to buy
change, to reform and renew the system.
1.1.4 A national health care guarantee is critical to successful reform
In general, the principle that the Committee has followed in working out its
vision for reform of the system has been that incentives for all participants must be introduced
in the publicly funded hospital and doctor system – providers, institutions, governments and
patients – to deliver, manage and use health care more efficiently and effectively. In particular,
although it does not stand entirely on its own, one element that is key to the successful reform
of the system is what the Committee has called the health care guarantee.
This recommendation, described in detail in Chapter Six, is designed to address
the problem of growing waiting times for access to health services by requiring governments to
meet reasonable standards, by ensuring patients have access to services in their own jurisdiction,
elsewhere in Canada or, if necessary, in another country. Meeting reasonable patient service
standards is an essential part of the health care contract between Canadians and their
governments. The Committee believes that by judiciously investing the new money and
legislatively enshrining the principle of the health care guarantee, it will be possible to restore the
Canadians’ confidence that their governments will spend their tax dollars in ways that reinforce
the publicly funded health care system and ensure that the system provides access to medically
necessary services when and where they are needed.
In presenting its proposals, the Committee also believes that it was important to
acknowledge that its preferred option for raising new money, and its plan on how to spend it,
Note that the “delisting” of services means requiring Canadians to pay privately for specific services that once
were paid for under the publicly administered and funded health insurance program (Medicare).
6
10
including implementing the health care guarantee, are not the only options available. If, after
public discussion, governments decide that they are not willing to pay more to fund hospital and
doctor services, or if the insurer (government) decides not to implement the health care
guarantee, then the result would be the continued (and probably increased) rationing of services
and lengthening of waiting times.
Moreover, as the Committee points out in Chapter Five below, allowing waiting
times to grow longer - that is, failing to implement the health care guarantee - could have
significant additional consequences. Such failure is highly likely to lead to the Supreme Court
issuing a judgment that since timely access to needed medical service is not being provided in the
publicly funded system, then government can no longer deny Canadians the right to purchase
private insurance to cover the cost of paying for the provision of service elsewhere, i.e., at
private health care institutions in Canada. Thus, failing to implement the health care guarantee is
likely to move the Canadian health care system in the direction of introducing a second private
tier of services available only to those who can afford to pay for them out-of-pocket or through
supplementary private health care insurance.
When this possibility was raised in previous reports, some commentators felt that
the Committee was in fact advocating greater privatization of the health care system. As this
volume should make abundantly clear, that is not the case.
The Committee has worked out a detailed, concrete and realistic plan that, if
implemented integrally, will lead to strengthening the publicly funded health care system in
Canada and guarantee its sustainability for the foreseeable future. However, this option costs
money, and the great majority of Canadians would be required to contribute additionally in taxes
in order to implement the proposed plan. In the event that governments are unwilling to raise
increased revenue to invest in the publicly funded health care system, it is essential that
Canadians fully understand the implications of such a decision. One such implication is likely to
be not only the continued deterioration of the system, but also judgments by the courts that
hasten the development of a parallel private system of health care in Canada.
1.2
Improving Governance – The Need for a National Health Care
Commissioner
An essential element to enable
The Committee believes that it is
Canadians to make informed choices, now and in the
future, is for the Canadian public to have access to a
essential
to
improve
the
reliable and non-partisan assessment of the true state
governance of Canada’s health
of the health care system. The remainder of this care system.
chapter sets out the Committee’s proposal to create an
institutional structure that would give Canadians such an assessment annually.
It is essential to improve the governance of Canada’s health care system. The
question of governance (which is to say leadership) brings together a number of issues that the
Committee has raised in previous volumes and that witnesses have addressed from a number of
perspectives.
11
One thing is very clear. Canadians are tired of the endless finger-pointing and
blame-shifting that have been recurring features of intergovernmental relations in the health care
field. As the Honourable Monique Bégin has accurately pointed out, the current state of federalprovincial relations is dysfunctional.7 On far too many occasions, each side seems more
interested in attributing blame for the system’s apparent deterioration to the other, rather than
taking the lead to ensure that the health services Canadians need and deserve are there when
they need them.
Fundamentally the underlying issue is one of accountability. In order to establish
who is to be held accountable for the deficiencies (and also the strengths) of the health care
system, the Committee has repeatedly pointed out that detailed and reliable information on the
performance of the system and on health outcomes is essential. This is why the Committee has
placed such importance on the development of a capacity for health information management,
on putting in place a national system of electronic patient records8 and on sustaining and
expanding the health research infrastructure.9 The Committee has drawn attention to the
important contribution that the Canadian Institute for Health Information (CIHI) has already
made to improving our knowledge of the state of the health care system; it is clear that this
positive source of experience must be built upon.
Information must be analyzed and interpreted objectively if it is to serve as a
reliable guide to evidence-based decision-making. In Volume Five, the Committee identified
four fundamental elements that are necessary to create the capacity to evaluate fully and fairly
the performance of the health care system and the health status of the Canadian population, as
well as to hold the appropriate parties accountable:
•
First, such evaluation must be conducted by a body that is independent of
government. The Committee expressed its strong support for “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.”10
Only in this way can actual and perceived conflicts of interest be avoided and
the credibility of evaluation reports with the Canadian public be assured.
•
Second, the Committee affirmed that “such independent evaluation should
be performed at the national (not federal) level.”11 The reality of the Canadian
health care system is that it is a joint responsibility of the provincial/territorial
and federal governments. No body that reports exclusively to, or was created
exclusively by, one level or the other would have the necessary credibility.
•
Third, while the evaluation must be conducted by an independent, armslength agency, it must be funded by government. Moreover, as we will argue
below, leadership in providing the necessary financing for this initiative must
Monique Bégin, “Renewing Medicare,” Canadian Medical Association Journal, July 9, 2002, p. 47.
See Chapter 10.
9 See Chapter 12.
10 Vol. 5, p. 51.
11 Ibid.
7
8
12
be provided by the federal government, despite the “national” (as opposed to
federal) character of the evaluation organization.
•
Finally, as noted above, it is essential that this undertaking build on the
successes of existing organizations, such as the Canadian Institute for Health
Information (CIHI) and the Canadian Council for Health Services
Accreditation (CCHSA). The Committee makes specific recommendations
with regard to these organizations in Chapter Ten.
The Committee believes,
however, that, on their own, existing What is needed is a permanent independent
organizations are not enough. What is body charged with reporting annually to the
needed is a permanent independent body
Canadian public on the state of the nation’s
charged with reporting annually to the health care system and on the health status
Canadian public on the state of the of Canadians. The Committee also believes
nation’s health care system and on the
health status of Canadians. The Committee that this body should be responsible for
also believes that this body should be advising the federal government, on an
responsible for advising the federal annual basis, on how new money raised for
renewing and reforming the health care
government, on an annual basis, on how
new money raised for renewing and system should be allocated.
reforming the health care system should be
allocated. Such a body must have sufficient resources at its disposal, and work with CIHI and
CCHSA (and possibly others), to collect and assess the data and information it requires.
Before setting out the Committee’s own proposal, we review briefly some other
ideas that have been put forward in recent months that describe ways of providing the Canadian
public with annual evaluation reports on the state of the health care system. In the Committee’s
view, the various proposals contain many useful elements, but none fully meets the Committee’s
requirements.
1.2.1 Canadian Medical Association (CMA)
The CMA has proposed a two-pronged approach.12 First, it advocates the
adoption of a Canadian Health Charter with three main parts: a vision statement, a section on
national planning and coordination, and a section on roles, rights and responsibilities. This
Charter would set the parameters for better national planning and coordination, particularly with
respect to reviewing core health care services; developing national benchmarks for the timeliness
and quality of health care; determining resource needs, including health human resources and
information technology; and establishing national goals and targets to improve the health of
Canadians.
The CMA’s proposal also provides for the creation of a Canadian Health
Commission, a permanent, depoliticized forum at the national level for ongoing dialogue and
debate. The commission’s mandate would include the following responsibilities:
•
12
Monitor compliance with the Canadian Health Charter
See its document, A Prescription for Sustainability, June 2002.
13
•
Report annually to Canadians on the performance of the health care system
and the health status of the population
•
Advise the Conference of Federal–Provincial–Territorial Ministers of Health
on critical health-related issues.
The commission proposed by the CMA would be chaired by a Canadian Health
Commissioner, who would be an officer of Parliament (similar to the Auditor General)
appointed for a five-year term by consensus among the federal, provincial and territorial
governments. The commission would operate at arm’s length from governments, yet maintain
close links with government agencies such as the Canadian Institute for Health Information and
the Canadian Institutes of Health Research. Its deliberations would be made public, and its
composition would not be constituency-based but would reflect a broad range of perspectives
and expertise.
1.2.2 Colleen Flood and Sujit Choudry
In a paper prepared for the Romanow Commission,13 Professors Colleen Flood
and Sujit Choudry of the University of Toronto argue that there is a real need for a non-partisan
national body, protected from day-to-day politics, with a longer-term view than is possible for an
elected government. They propose the creation of a Medicare Commission that would be an
expert, independent body, appointed jointly by provincial and federal governments, but funded
by the federal government.
The role of this Medicare Commission would include:
•
determining specific performance indicators to help provinces achieve
national standards set out in the Canada Health Act;
•
publishing (in conjunction with the Canadian Institute for Health
Information) annual reports on the performance of provincial health
insurance systems;
•
providing financial assistance to those provinces that undertake to implement
the processes or programs identified by the Commission.
Funding for the commission would be separate from federal transfers for health
care. It would consist of new federal money, a consolidation of all one-off payment initiatives in
the health care area currently undertaken by the federal government (for example, in primary
care and other areas).
One possible method Flood and Choudry describe for composing the
commission is for each province to appoint 1 commissioner and the federal government to
appoint 5, for a total of 15 full-time commissioners, who would then select a chief commissioner
from among themselves. All decisions would require a two-thirds majority, meaning that federal
commissioners would require support from a majority of provincial commissioners for any
Colleen M. Flood and Sujit Choudry, Strengthening the Foundations: Modernizing the Canada Health Act, Discussion
Paper No.13, released by the Commission on the Future of Health Care, August 2002.
13
14
decision. 14 The commission that they propose would have an expert staff of health service
researchers and would make its reports publicly available, including specific findings on the
compliance of provincial health care plans with national standards.
1.2.3 Tom Kent
Tom Kent was a senior federal public servant at the time Medicare was created,
and is often referred to as a father of Medicare. Her has suggested that Ottawa and the
provinces appoint, by consensus, an advisory council with a wide range of expertise.15 The
purpose is neither to replace provincial management of provincial programs nor to impair
federal accountability for the principles of Medicare. Rather, the council is conceived as a
collaborative mechanism that would be a bridge between the two levels of government, thereby
bringing political reality into harmony with the way most Canadians already see Medicare,
namely, as a joint responsibility within our federal system.
Kent’s council would be funded jointly by the federal and provincial
governments. It would employ an executive director and staff, who would be neither federal nor
provincial officials. It would report to a joint committee of health ministers, for which it would
conduct investigations and make recommendations over the whole range of medicare principles
and practices.
The proposed council would provide a focus for collaboration that would
facilitate innovation and efficiencies, as well as provide a forum for broader consultation on
health policy. Administratively, it could be used to supervise the implementation of agreements
on such matters as electronic health records, health care information, a national drug formulary,
bulk purchasing, facility sharing, etc. Importantly, Kent argues that the agency could foster
public accountability by preparing regular reports for the ministerial committee to issue.
1.2.4 Duane Adams
In his review of proposals for improving the governance of the Canadian health
care system, 16 the late Professor Duane Adams, founding director of the Saskatchewan Institute
of Public Policy, noted that “there may be benefits to the federation and the Canadian people if
an external-to-government health oversight body were added to the Canadian health system’s
governance mechanism.” He points out that even though most governments are very sceptical
and leery of these “arm’s-length” agencies because they have the potential to “deplete the
unilateral power of governments,” “an independent oversight body should be seen as one option
in a range of possibilities, to enhance public participation, transparency, public accountability,
and public confidence.”
It should be noted that is formula would appear to allow the provincial commissioners to band together to make
decisions that were unanimously opposed by the federal commissioners.
15 Tom Kent, Medicare: It’s Decision Time, The Caledon Institute of Social Policy, 2002.
16 Duane Adams, “Conclusions: proposals for advancing federalism, democracy and governance of the Canadian
health system,” in Federalism, Democracy and Health Policy in Canada, ed. Duane Adams, McGill-Queen’s University
Press, 2002.
14
15
One option presented by Adams was a Canadian Health Council that would have
an element of public participation and employ a small number of permanent staff. Its functions
might include:
•
monitoring the Canadian health system, and regularly advising governments
and Canadians about its findings;
•
appraising specific Canada-wide health issues of immediate public concern
and developing practical options to address them;
•
serving as a neutral fact-finding body for intergovernmental disputes
concerning the Canada Health Act and other issues referred to it by
governments, and serving upon request by governments as a
facilitator/mediator in the dispute resolution process;
•
providing an annual report to the public about the performance of the health
system and emerging issues;
•
taking some defined responsibility to test innovative health service delivery
and management concepts of national significance;
•
perhaps serving as one possible vehicle to assemble and disseminate best
practice experiences from the Regional Health Authorities across Canada.
This Council would be part of a network of bodies that would contribute to
improving the governance of the health care system. It could include representatives from the
Canada Health Services Research Foundation, the Canadian Institutes of Health Research, the
Canadian Institute for Health Information, and the Canadian Council on Health Services
Accreditation.
1.2.5 Lawrence Nestman
In his testimony before the Committee,17 Professor Lawrence Nestman from the
School of Health Services Administration at Dalhousie University drew on the experience of the
Dominion Council of Health in the 1960s. This Council was a permanent body where deputies
and ministers liaised with a number of health commissions at both the federal and provincial
levels. It had a permanent secretariat staffed by highly skilled people who related to full-time
public servants in provincial health departments. This arrangement enabled greater continuity in
policy making and more coordination of federal-provincial relationships than is possible today.
Professor Nestman therefore proposed “the concept of a revised Dominion Council of Health
for the federal government as well as some kind of permanent infrastructure in the provinces
[that] would improve federal-provincial relations and provide continuity as well as some arm’s
length input for the day-to-day operations.”18
17
18
May 9, 2002. (Proceedings, Issue 55)
Ibid., 55:13.
16
1.3
The Committee’s Proposal
While each of the above
proposals contains interesting elements The Committee believes that the mandate of
the independent evaluation body should be
and valuable suggestions, none meets fully
the Committee’s view of what is required.
to publish an annual report on the state of
Moreover, they all tend to assign much the health care system, and on the health
broader mandates to the bodies they status of Canadians, as well as whatever
recommend than the Committee feels is other reports it feels are needed to spur
appropriate at this time. The Committee improvements in health outcomes and the
agrees with the many witnesses who
delivery of health care in Canada.
stressed the importance of taking measures
to “depoliticize” the management of the
health care system. However, the Committee feels that this will be a long-term process, and that
it is important to begin with the evaluation function only. Therefore, the Committee believes
that the mandate of the independent evaluation body should be to publish an annual report on
the state of the health care system, and on the health status of Canadians, as well as whatever
other reports it feels are needed to spur improvements in health outcomes and the delivery of
health care in Canada. The Committee believes it would also be appropriate for this independent
evaluation body to advise the federal government on how new money raised to reform and
renew the health care system should be spent (see Chapter Fourteen).
To legitimate such reports with all levels of government, and yet to ensure their
independent production and thereby their credibility with the Canadian public, the Committee
recommends that the following structures and procedures be put in place.
First, a new federal/provincial/territorial (F/P/T) body is required. This
committee must be structured so that neither the federal nor the provincial/territorial
representatives are able to dominate it. It is therefore proposed that the committee be composed
of one provincial/territorial representative from each of the five major regions of the country
(Atlantic, Quebec, Ontario, Prairies, British Columbia), and five representatives from the federal
government. The provincial/territorial representatives would be selected in a manner that
remains to be determined.19
This F/P/T committee, after consulting with a broad range of health care
stakeholders, would appoint a National Health Care Commissioner. It would also select the
members of a National Health Care Council that the Commissioner would chair from among
those nominated by the Commissioner. In making nominations to the Council, the
Commissioner would have the responsibility of ensuring that the membership of the Council is
balanced, and that the public at large is represented. Councillors should be appointed on the
basis of their ability to take a global view of the health care system, and not as representatives of
specific health care constituencies.
This form of provincial/territorial representation is already used in the composition of the Board of Directors of
Canadian Blood Services, whose mission is to manage the blood and blood products supply for Canadians in all
provinces except Quebec. Four of its Directors represent one of each of the following regions: (a) British Columbia
and Yukon, (b) Prairies, Northwest Territories and Nunavut, (c) Ontario, and (d) Atlantic.
19
17
So that the selection of the Commissioner and the members of the Council not
be dominated by either the federal or provincial/territorial representatives, a two-thirds majority
would be required for all appointments. With 10 members on the F/P/T committee, seven
votes would be required to confirm all appointments, meaning that neither the federal nor the
provincial/territorial representatives could succeed on their own. This procedure further
guarantees that the members of the Council would be independent of government (having being
nominated by the Commissioner), yet possessing sufficient legitimacy to lend weight to their
report (having been appointed by the F/P/T committee).
The Commissioner should be appointed for a five-year term, with the possibility
of a single renewal. Council members should be appointed for three-year terms, with the
possibility of a single renewal. Half the council would be up for renewal every three years. Eight
is a reasonable number of councillors, a total of nine including the Commissioner. They should
be adequately compensated for their work with the Council, but would not be full-time
employees. A full-time staff would report to the Commissioner.
The Council would have ultimate responsibility for the publication of the annual
report and would present it to each Ministry of Health with a request that it be tabled with all
federal, provincial and territorial legislatures. The Committee recommends that all F/P/T
Ministers of Health respond formally within six months to the annual report that the National
Health Care Council would produce. While the Committee recognizes that it would not be
possible to require legally that the F/P/T Ministers of Health respond to the annual report, it
believes that the Ministers should accept responsibility for issuing a formal response within a sixmonth period. This would be much like the current requirement for the federal government to
respond within a specified time frame to the recommendations made by House of Commons
committees. It would ensure that serious consideration is given to the Council’s annual report.
Furthermore, since the Council’s annual report would simultaneously be made public, there
would be additional public pressure on all governments to consider carefully and respond to the
report and its recommendations.
The Committee believes that the federal government should show leadership by
providing the funding for the work of the Commissioner and the Council. This funding should
come from the new money that the Committee recommends be raised in Chapter Fifteen.
Should the Commissioner and the Council see the need to broaden the scope of
their work, or should the federal and provincial governments initiate such expansion, the
provision of any additional funding should be the responsibility of governments on a 50/50
federal/provincial basis, and not necessarily fall exclusively on the shoulders of the federal
government.
The Commissioner would be responsible for hiring the necessary professional
and technical staff to carry out the Council’s mandate. In this regard, however, the
Commissioner should not attempt to duplicate the work of existing organizations. Rather, the
Commissioner would cooperate with CIHI and CCHSA, and other concerned federal and
provincial organizations, to ensure application of the most efficient methods possible to gather
the data and information required to produce the annual report (see Chapter Ten).
18
The Committee believes that, structured in this way, the National Health Care
Council chaired by an independent Health Care Commissioner meets the four conditions
described earlier:
•
The process has a national and not purely federal character;
•
The Commissioner and the Council are independent of government, yet have
the legitimacy of having been appointed by government representatives;
•
The production of an annual report is funded by government;
•
The work of the Commissioner and the Council builds on existing
organizations.
In summary, then, the Committee recommends that:
New federal/provincial/territorial committee made up of
five provincial/territorial and five federal representatives be
struck. Its mandate would be to appoint a National Health
Care Commissioner and the other eight members of a
National Health Care Council from among the
Commissioner’s nominees;
The National Health Care Commissioner be charged with
the following responsibilities:
§
To put nominations for members to a National
Health Care Council before the F/P/T committee
and to chair the Council once the nominees have
been ratified;
§
To oversee the production of an annual report on the
state of the health care system and the health status
of Canadians. The report would include findings and
recommendations on improving health care delivery
and health outcomes in Canada, as well as on how
the federal government should allocate new money
raised to reform and renew the health care system;
§
To work with the National Health Care Council to
advise the federal government on how it should
allocate new money raised to reform and renew the
health care system in the ways recommended in this
report;
§
To hire such staff as is necessary to accomplish this
objective and to work closely with existing
19
independent bodies to minimize duplication of
functions.
The federal government provide $10 million annually for the
work of the National Health Care Commissioner and the
National Health Care Council that relates to producing an
annual report on the state of the health care system and the
health status of Canadians, and to advising the federal
government on the allocation of new money raised to reform
and renew the health care system.
20
Figure 1.1
Proposal For A National Health Care Commissioner
and A National Health Care Council
Federal/provincial/territorial committee
10 members (5 federal, 5 provincial/territorial)
Appoints
National Health Care
Commissioner
Confirms
Nominates
and chairs
National Health
Care Council
Issues
Annual Report
Presented to
Hires
Staff
Liaises with
CIHI and CCHSA
21
Ministries of Health with
a request to table with all
federal, provincial and
territorial legislatures
Part II:
Efficiency Measures
23
CHAPTER TWO
H OSPITAL RESTRUCTURING
AND
F UNDING
IN
C ANADA
With few exceptions, Canadian hospitals exist as not-for-profit entities. 20
Ownership usually resides with community-based not-for-profit corporations, religious
organizations, or (rarely) with municipal governments or universities. Apart from psychiatric
hospitals, provincial/territorial governments rarely own hospitals. In all cases, however, the vast
majority of hospital revenues come from a single funder – the provincial/territorial department
of health.
TABLE 2.1
HOSPITAL SPENDING IN CANADA, 1986 TO 2001
(AS A PERCENTAGE OF TOTAL HEALTH CARE EXPENDITURES)
British Columbia
Alberta
Saskatchewan
Manitoba
Ontario
Quebec
New Brunswick
Nova Scotia
Prince Edward Island
Newfoundland
Average Canada
1986
37.0
39.8
34.3
39.3
37.9
46.9
42.6
47.0
38.6
46.2
41.0
1991
34.1
39.1
34.0
37.8
36.0
44.4
40.9
46.1
38.9
47.8
39.9
1996
30.4
30.1
26.7
33.2
33.2
38.0
39.1
38.7
36.1
43.4
34.9
1998
29.6
29.8
26.3
32.1
30.6
38.4
36.8
40.5
35.6
41.4
34.1
2001
28.1
29.9
28.2
30.0
29.6
36.4
38.1
37.8
34.7
39.3
33.2
Source: Calculations done by the Economics Division, Parliamentary Research Branch, Library of
Parliament. Based on data from the Canadian Institute for Health Information, “Health Expenditure by
Use of Funds, By Source of Finance, Province/Territory 1975-2001,” National Health Expenditure Database
(NHEX).
Note : Hospitals include all hospitals approved by provincial governments providing acute care,
extended and chronic care, rehabilitation and convalescent care, and psychiatric care, as well as nursing
stations and outpost hospitals. “Average Canada” represents the unweighted average for the provinces.
Provincial governments spent some $32.1 billion on hospitals in 2001.21 This
represented almost a third of total provincial/territorial government expenditures on health care.
Hospitals represent the largest category of health care spending in Canada. However, their share
has been declining significantly. For example, in 1986, spending on hospitals, as a percentage of
total health care spending, averaged roughly 41% among the provinces. By 2001, this share fell
to an average of approximately 33% (see Table 2.1). This sharp decline is due primarily to
Only 5% of hospitals in Canada are private for-profit institutions.
Canadian Institute for Health Information, “Health Expenditure by Use of Funds, By Source of Finance,
Province/Territory 1975-2001,” National Health Expenditure Database (NHEX)
(http://www.cihi.ca/dispPage.jsp?cw _page=statistics_results_source_nhex_e).
20
21
25
changes in knowledge and technology that increasingly permit diagnoses and therapies to be
provided safely out-of-hospital and to consequent hospital downsizing and restructuring across
the country. As the proportion of health care spending devoted to hospital care has decreased,
that allocated to home care and other forms of community-based care has increased.
In Volume Five, the Committee enunciated a number of principles regarding the
funding of hospitals. Principle One stated that Canada should keep its current single
funder/insurer model for financing hospital services, and that this single insurer should be
government.22 Principle Eight stated that the current methods used for remunerating Canadian
hospitals should be replaced by service-based funding.23
The Committee believes
that service-based funding will achieve a
number of important objectives,
including: measuring in an appropriate
manner the cost of specific hospital
services; improving overall hospital
efficiency; enabling the public to
compare hospitals based on their
performance;
enhancing
hospital
accountability; fostering competition
among hospitals; reducing waiting lists
and
encouraging
the
further
development of centres of specialization.
The Committee believes that service-based
funding will achieve a number of important
objectives, including: measuring in an
appropriate manner the cost of specific hospital
services; improving overall hospital efficiency;
enabling the public to compare hospitals based
on their performance; enhancing hospital
accountability; fostering competition among
hospitals;
reducing
waiting
lists
and
encouraging the further development of centres
of specialization.
The Committee also acknowledged in Volume Five that modifications to a pure
service-based funding model may be necessary for teaching hospitals and possibly for very small
community hospitals. We also believe that the federal government should consider contributing
to the capital investment needs of Canadian hospitals, particularly academic health science
centres (or teaching hospitals) and hospitals located in areas of exceptionally high population
growth.
This chapter provides information on hospital funding in Canada, summarizes
the testimony received on this issue and reiterates the Committee’s view of the merits of servicebased funding. The chapter is divided into seven sections. Section 2.1 reviews and compares
current methods used for funding hospitals in Canada. Section 2.2 describes service-based
funding and reviews relevant international experience. Section 2.3 details the Committee’s
rationale for recommending service-based funding for hospitals in Canada and highlights the
various challenges posed by this mode of hospital remuneration. Sections 2.4 and 2.5 examine
in detail the particular issues raised with respect to academic health science centres and small and
rural community hospitals. Section 2.6 examines the issue of capital needs of Canadian
hospitals. Finally, Section 2.7 provides the Committee’s view on public versus private (for-profit
and not-for-profit) hospitals.
22
23
Volume Five, pp. 23-25.
Volume Five, pp. 36-39.
26
2.1
Funding Methods for Hospitals in Canada: Advantages and
Disadvantages24
Provincial/territorial governments use a variety of approaches to finance
hospitals. There is no one model that can accurately portray the financing of hospitals in
Canada. Furthermore, provinces/territories do not use a single method to distribute funds to
their hospitals. Most rely on a primary funding approach to allocate the majority of funds and a
number of secondary methods to apportion lesser amounts.
Methods of hospital funding used in Canada, both primary and secondary,
include: line-by-line, ministerial discretion, population-based, global budget, policy-based,
facility-based, project-based and service-based. As Table 2.2 shows, provincial governments rely
on seven of these methods to finance the operating costs of hospitals. Funds for capital
purposes (to pay for hospital construction, major building renovations, and high-cost equipment
purchases) are provided in all provinces using a project-based method.
Unless otherwise indicated, the information provided in this section is based on the following documents:
Sheila Block, The Ontario Alternative Budget 2002 – Health Spending in Ontario: Bleeding our Hospitals, Canadian Centre for
Policy Alternatives (Ontario), May 2002 (www.policyalternatives.ca).
Comité sur la réévaluation du mode de budgétisation des centres hospitaliers de soins généraux et spécialisés
(Comité Bédard), La budgétisation et la performance financière des centres hospitaliers, Santé et services sociaux, Government
of Quebec, 2002 (www.msss.gouv.qc.ca).
Jeffrey C. Lozon and Robert M. Fox, “Academic Health Sciences Centres Laid Bare,” Healthcare Papers, Vol. 2, No.
3, 2002, pp. 10-36 (http://www.longwoods.com/hp/2-3academic/index.html).
Les Vertesi, Broken Promises: Why Canadian Medicare is in Trouble and What Can be Done to Save It, Document tabled with
the Standing Senate Committee on Social Affairs, Science and Technology, 2001.
Ian McKillop, George H. Pink and Lina M. Johnson, The Financial Management of Acute Care in Canada -.A Review of
Funding, Performance Monitoring and Reporting Practices, Canadian Institute for Health Information, March 2001
(http://www.cihi.ca/dispPage.jsp?cw_page=GR_32_E).
Danish
Ministry
of
Health,
Hospital
Funding
and
Casemix,
September
1999
(http://www.sum.dk/publika/eng/hosp_casemix/).
Nizar Ladak, Understanding How Ontario Hospitals are Funded: An Introduction, Joint Policy and Planning Committee,
Ontario, March 1998 (www.jppc.org).
24
27
TABLE 2.2
HOSPITALS IN CANADA BY PROVINCE, 2000
Number
Province of Hospitals
BC
ALTA
SASK
MAN
ONT
QC
NB
NS
PEI
NFLD
80
115
71
79
163
95
30
35
7
33
Number
of Beds
per 1,000
3.7
3.5
3.7
4.1
2.3
3.0
5.3
3.3
3.4
4.6
Primary
Funding
Approach
Line-by-Line and Pop.-Based
Population-Based
Population-Based
Ministerial Discretion
Global Budget
Global Budget
Line-by-Line and Pop.-Based
Ministerial Discretion
Ministerial Discretion
Ministerial Discretion
Secondary
Funding
Approach
Policy-Based
Policy-Based
None
None
Multiple1
Multiple2
None
None
None
None
Source: McKillop et al. (2001), Table 1.1 (p. 9), Table 3.2 (p. 46) and Table 3.5 (p. 53). Population data
from Statistics Canada, CANSIM II, Table 051-0001.
(1) Policy-Based, Facility-Based, Population-Based and Service-Based.
(2) Population-Based and Policy-Based.
Note: Number of beds for Nova Scotia includes acute care only.
More specifically, two provinces (British Columbia and New Brunswick) use a
line-by-line method. Four provinces (Manitoba, Prince Edward Island, Nova Scotia,
Newfoundland) use a ministerial discretion method. Two provinces (Alberta and Saskatchewan)
have primary operating funding approaches with a population-based method, while two others
(Ontario and Quebec) use global budgets. The policy-based method is the most commonly used
secondary funding approach in four provinces (British Columbia, Alberta, Ontario and Quebec).
Two provinces (Ontario and Quebec) also use a population-based method in combination with
the primary method.25 At present, only Ontario uses a service-based method for financing
selected hospital services.
2.1.1 Line-by-line
Line-by-line budgeting used to be the most popular method of hospital financing
in Canada. This method involves negotiating amounts for specific line items (or inputs) such as
in-patient nursing services or medical/surgical supplies. The total budget allocation for an
individual hospital, then, is simply the sum of the line items. British Columbia and New
Brunswick still rely on line-by-line budgeting (combined with a population-based method) as
their primary budgeting approach.
On the positive side, line-by-line budgeting allows provincial ministries of health
to link specific activities with policy objectives through direct spending. For example, a province
that wishes to promote day surgery could increase the line funding available for this activity by a
Although the classification of funding method may be the same for a number of jurisdictions, the way in which
the method is implemented may differ.
25
28
factor greater than that applied to the in-patient nursing line. Line-by-line funding also gives
hospitals a higher degree of financial predictability than some other methods.
However, this method has a number of disadvantages which have caused several
provincial ministries to move away from the approach. On the one hand, the line-by-line
method prevents reallocation among lines and thus reduces flexibility in managing funds. On
the other hand, the approach is not related to performance and therefore does not encourage
efficiency. In addition, line-by-line budgeting provides information only on the cost of inputs,
not on the cost or quality of outputs. Moreover, the effort involved in scrutinizing line-by-line
budget detail is significant. The most serious disadvantage, however, it that it tends to diminish
the capacity of hospital boards and managers to link the hospital’s activities directly with the
needs of the community it serves.
2.1.2 Ministerial discretion
With this method, funding is based on decisions made by the provincial minister
of health in response to specific requests by the hospital concerned. This method is used as the
primary funding approach in Manitoba, Nova Scotia, Prince Edward Island and Newfoundland.
Although the ministerial discretion method is highly subjective, it offers a
number of advantages. From the government’s perspective, this method is extremely flexible;
ministerial decisions are not constrained by formulas or other predetermined budgeting
methods.
The major drawback of this funding approach is that it risks being myopic,
inconsistent and overtly “political.” Significant changes in funding can and do occur with a new
government or a change in policy. Furthermore – and this is critical from the Committee’s point
of view – this method clearly lacks transparency. Witnesses told the Committee repeatedly that
there is a need to depoliticize hospital financing. For example, Mark Rochon of the Ontario
Hospital Association stated that:
We need to consider and promote mechanisms that (…) insulate, as much as we can
and are able to do, decisions concerning the provision of health services from politics. 26
2.1.3 Population-based
Population-based methods use demographic information such as age, gender,
socio-economic status and mortality rates to forecast the demand for hospital services.
Matching the predicted demand for certain health services with the estimated cost of providing
these services yields a spending forecast for individual hospitals (or for regional health
authorities). At present, Alberta and Saskatchewan use population-based funding as their
primary methods, while British Columbia and New Brunswick use it in combination with a lineby-line budget approach. Newfoundland, Nova Scotia, Ontario and Quebec are currently
considering adopting a population-based approach as their primary funding method.
26
Mark Rochon, Ontario Hospital Association (56:42).
29
The Committee learned tha t a population-based method, employing formulae
strictly to distribute funds, can be objective, equitable and accommodate the needs of particular
regions and hospitals. In addition, the CEO of the Calgary Health Region, Jack Davis, told the
Committee that in Alberta, the population funding system had helped to depoliticize the
allocation of resources.27
However, ensuring that a population-based formula accounts for all the factors
that affect the health care a population requires is complex and difficult to implement. Such a
method requires good information systems that are resource-intensive (equipment, databases,
staff).
This budgeting method may become too complex and create a lack of
transparency with users unable to understand or predict how funding amounts have been
determined. According to Les Vertesi, Chief of the Department of Emergency Medicine at the
Royal Columbian Hospital (Vancouver), a population-based funding model can only provide an
estimate of where health care resources will be needed; it will not provide incentives for better
service.28
2.1.4 Global budget
Global budget methods adjust previous spending (such as last year’s base
allocation) to derive a proposed funding level for the upcoming year. The focus is on the total
hospital budget rather than on individual service activities or cost centres within the hospital.
Adjustments can be made to the base amount using a multiplier (such as the rate of inflation) or
a lump-sum amount to establish the funding level for future periods. Quebec introduced global
budgets as its primary funding approach in 1994, while Ontario has used this method since
1969.29
The Committee learned that because hospital activities change little from year to
year, provincial governments find it much easier to simply repeat the previous year’s allotment
with an adjustment for inflation or population growth. Therefore, global budgets are
straightforward to calculate for the provincial government and predictable for the hospital. Dr.
Vertesi explained that global budgets gained popularity mainly because they allowed
governments to control costs while at the same time granting hospital management a great deal
of discretion in the allocation of funds among a hospital’s various operations.30
Similarly, in its brief, the Canadian Healthcare Association made the argument
that global budgets encourage efficiency by permitting hospitals to distribute savings from one
area of operation to another area of need. The Association further argued that global funding
Jack Davis, Calgary Health Region (53:40).
Les Vertesi (2001), op. cit., p. 117.
29 Barer, M.L. (1995), “Hospital Financing in Canada,” Chapter Two in Hospital Funding in Seven Countries, Office of
Technology Assessment: U.S. Congress, p. 23.
(http://www.wws.princeton.edu/cgi-bin/byteserv.prl/~ota/disk1/1995/9525/952504.PDF)
30 Les Vertesi (2001), op. cit., p. 31.
27
28
30
allows the delivery of comprehensive, integrated health care, which, in the long run, can reduce
overall health care costs.31
Despite these advantages, many witnesses expressed the view that global budgets
have numerous drawbacks and that, according to Dr. Vertesi, this mode of hospital
remuneration is “an archaic funding model.”32 First, the Committee was told that funding under
a global budget is unrelated to the services that are actually provided by a hospital. Second, we
also heard that any inequities that exist between hospitals are perpetuated through global
budgets. Third, witnesses stressed that global budgets do not encourage hospitals to improve
performance; indeed, they can perpetuate and reward inefficient hospitals and penalize more
efficient ones. Fourth, the Committee learned that funding under a global budget cannot
accommodate changes in population and management structures. Last, but perhaps most
important, witnesses raised the fact that there is a progressive and permanent loss of information
under global budgets about what specific hospital services cost; hospitals have no incentive to
measure such unit costs.
Overall, the majority of
witnesses agreed that after years of global The Committee believes that the lack of costing
budgets in a number of provinces, no data with respect to hospital services is
one knows how much anything costs any inconsistent with our vision of what a 21st
more and that, as a result, it is difficult to century service sector ought to be: that is, a
know even approximately what the sector capable of providing timely and highpublic is getting for its spending on quality care on the basis of strong evidencehospitals. The Committee believes that
based decision making and held accountable as
the lack of costing data with respect to
a result of governments (and the public)
hospital services is inconsistent with our
knowing what services in what hospitals are
vision of what a twenty-first century
service sector ought to be: that is, a provided efficiently and those that are not.
sector capable of providing timely and
high-quality care on the basis of strong evidence-based decision making, and held accountable as
a result of governments (and the public) knowing which services in which hospitals are provided
efficiently, and which are not.
2.1.5 Policy-based
Under this method, funding is distributed to achieve specific policy objectives.
Unlike the ministerial discretion approach, where the health department (or minister) responds
to individual requests for funding, a funding decision under the policy-based method has an
equal effect on all institutions that provide the services encouraged by a particular policy (such as
a 48-hour postpartum stay in a family birthing unit).
From the government’s perspective, this method provides the department with a
mechanism to ensure that policy initiatives are embraced by hospitals. Nonetheless, many
hospitals consider that this method of funding interferes with their operations and provision of
31
32
Canadian Healthcare Association, Brief to the Committee, June 2002, p. 6.
Les Vertesi (53:44).
31
services. Furthermore, it is not a very predictable source of funding, since funding patterns will
change if governments or policies change.
2.1.6 Facility-based
Facility-based methods use characteristics of the hospital, such as size, amount of
teaching activity, occupancy and distance from nearest tertiary facility (specialized care centres,
etc.), to estimate operating costs. This approach recognizes that the structure of different
hospitals can influence the cost of providing identical services.
Funding under a facility-based approach attempts to accommodate differences in
organizational structure (rural versus urban hospitals, teaching versus community hospitals, and
so on). It is, however, insufficiently responsive to changes in demographics or in disease
patterns. Furthermore, facility-based funding does not reward utilization efficiencies.
2.1.7 Project-based
Project-based methods distribute funds in response to proposals for a one-time
need. This method is often used by provincial/territorial governments to finance significant
capital expenditures (such as building a new hospital wing). Project based budgeting is distinct
from policy-based budgeting: the former method directs funding to an individual hospital for a
specific identifi ed need, while the latter apportions a pool of money among various hospital to
effect policy initiated by government.
2.1.8 Service-based
Service-based funding for hospital services is often referred to as a “case-mixbased approach” in Canadian and international literature; both concepts are used
interchangeably in this chapter.
Case-mix-based or service-based methods use the volume and type of cases
treated (such volume of dialysis, bypass surgery, knee or hip replacement, etc.) by a hospital to
determine funding. More precisely, case-mix measurement requires two essential components:
1) the classification of patients into clinically meaningful groups that use similar levels of hospital
resources, and 2) the attachment of a weight to each group to estimate relative resource use.
These weights usually reflect the average cost of treating the patients in each group; they are
used to construct individual hospital case-mix indices that measure average patient resource
intensity, usually relative to a national norm. A higher case-mix index indicates greater patient
resource intensity. Therefore, under service-based funding, hospitals are reimbursed for the
episode of care for which the patient is admitted and based on the type of service or procedure
performed on the patient.
The current literature on case-mix-based approaches seems to suggest that such
methods fund hospitals more equitably than other methods. A particularly attractive
characteristic of case-mix-based approaches is that they encourage efficiency and performance.
International evidence indicates a clear trend toward such approaches.
32
Ontario used a service-based funding method in the summer of 2001 to
distribute $95 million of additional lump-sum funding to hospitals. The new funding
methodology was developed by the Joint Policy and Planning Committee (JPPC). The JPPC
recommended that this methodology be implemented gradually over the next three years and
that its impact be monitored.33
2.2
Service-Based Funding: Review of International Experience
2.2.1 United States
As in Canada, hospitals represent the single largest category of health care
spending in the United States. The organization of the American hospital sector is, however,
one of the most complex in the world with a heterogeneous collection of hospitals, payers and
funding methods.34 In 1998, 28% of hospitals were classified as public (state or local
government) hospitals, 58% as private, not-for-profit hospitals and 14% as private for-profit
hospitals.35 Financing for hospital services comes from a number of private insurers, out-ofpocket costs and from the Medicaid and Medicare programs.36
In 1983, the Health Care Financing Administration (now Centers for Medicare
and Medicaid Services) introduced the Prospective Payment System (PPS), under which
hospitals were paid according to a case-mix-based approach, the Diagnostic Related Groups
(DRGs) classification. Eighty-one percent of hospitals are now remunerated using the DRG
system.37 The rates that are paid to hospitals are based on the average costs of a specific
treatment and are independent of a patient’s actual length of stay in hospital.38 These rates may
be adjusted upward if a hospital services a population with a disproportionately high number of
low-income residents. While most hospitals use a common rate-setting methodology, actual
rates are determined by each individual state. All rates are reviewed annually by the United
States Congress. Private insurance companies and managed care plans are free to set their own
hospital rates according to state guidelines, if any.
The wide variety of payers and payment rates under the DRG classification has
led hospitals to develop detailed information systems that are equated with high administrative
costs. Nonetheless, DRGs allow for the comparison of resource use across American hospitals
and, as a result, encourage competition among institutions. Appearing before the Committee,
Dr. Duncan Sinclair, former chair of the Ontario Health Services Restructuring Commission,
said:
Ontario Joint Policy and Planning Committee, Hospital Funding Report Using 2000/01 Data, Reference Document
No. RD 9-12, October 2001 (www.jppc.org).
34 Laschober, Mary, and James Vertrees, “Hospital Financing in the United States,” Chapter Eight in Hospital
Funding in Seven Countries, Office of Technology Assessment; U.S. Congress, 1995, p. 136.
(http://www.wws.princeton.edu/cgi-bin/byteserv.prl/~ota/disk1/1995/9525/952510.PDF)
35 Comité Bédard (2001), p. 38.
36 Medicaid is a joint federal-state program that provides health care insurance for low-income Americans.
Medicare is a federal health care insurance program responsible for covering individuals 65 years old and over.
Together, these two programs cover roughly 30% of the American population.
37 Comité Bédard (2001), p. 38.
38 Two lists of rates are used, based on whether a hospital is located in an urban area (defined as more than a million
inhabitants) or a non-urban area.
33
33
it is not a bad idea to have hospitals paid basically on the basis of DRGs and the
volume related to those, much along the line of what is common in the United States.
That is a very good idea.39
The literature suggests that “DRG creep” (or “up-coding”) has become a
common problem among American hospitals. This problem occurs when hospitals attempt to
maximize their reimbursements by choosing diagnostic codes that result in higher payments that
may not be medically justified.40 However, the Committee was also told that close auditing of
the DRG category into which a patient is put has substantially reduced the amount of DRG
creep, particularly since there have been some high-profile cases when health care firms and
their executives have been convicted of fraud associated with this practice.
2.2.2 United Kingdom
Britain’s major reform of the National Health Service (NHS) came in 1991 when
it introduced internal competition by separating the “purchaser” from the “provider” of health
services. Hospitals were set up as independent “trusts” and were expected to negotiate contracts
with purchasers – Fundholding doctors and District Health Authorities. To accommodate this
model, case-mix systems were introduced as the method of payment. The NHS reforms were
severely criticized because they led to significant increases in administrative costs.
More reforms took place in 1997, substituting cooperation for the previous
emphasis on competition. But hospital funding has remained the same. Currently, District
Health Authorities are financed based on their populations. Hospitals are then funded by the
District Health Authorities based on case-mix methods.
2.2.3 France
The hospital sector in France is split between public hospitals, which handle
roughly 75% of hospital activity, and private hospitals, responsible for the remaining 25%. The
two types of hospitals are remunerated differently. All public hospitals receive global operating
budgets that are based on the previous year’s amount and increased annually by a rate
determined by government. Private hospitals, on the other hand, are paid through a
combination of a per diem rate for the number of cases handled.
France is currently considering a move towards case-mix financing for public
hospitals. For almost 20 years, the French hospital sector has been developing DRG-style casemix information systems. In 1996, the Programme de Médicalisation du Système d’Information (PMSI)
released for the first time reliable patient data, designed specifically for French conditions.
When used to measure the performance of French hospitals, the PMSI data revealed significant
disparities in performance and capabilities among institutions and regions. French analysts feel
that the present system of global budgets perpetuates these disparities.
Dr. Duncan Sinclair (50:12).
PricewaterhouseCoopers Healthcare (2000) “Health Care Fraud and abuse: DRG creep,” Issues
(http://www.pwcglobal.com/extweb/manissue.nsf/DocID/80FFF2EE2B921FC9852566D7004D5BC).
39
40
34
2.2.4 Denmark41
Most hospitals in Denmark are public hospitals owned and financed by county
councils. Fewer than 1% of the total number of beds are in private for-profit hospitals. In the
Copenhagen area, the municipally owned and financed hospitals are organized as a public
company, the Copenhagen Hospital Corporation. The corporation is controlled by a board,
with members appointed by the municipalities and the national government, including
representatives from the private sector.
Until recently, the predominant method for allocating resources to hospitals was
through prospective global budgets fixed by county councils. Large capital investments are
decided jointly by county councils and hospitals and provided through project-based funding.
While global budgeting proved effective in controlling hospital expenditures, it
provided limited economic incentives to increase efficiency at the point of delivery, and limited
incentives to increase activity in relation to demand, thus contributing to increasing waiting lists
for some procedures. In response to these inefficiencies, funds were allocated to the counties in
1997 to allow them to experiment with service-based funding. To increase the incentives to
treat patients from other counties, in 1999 the national government decided to introduce full
DRG payments for the treatment of such patients. The use of deliberately high DRG rates was
expected to increase competition between hospitals.
In 2000, the national government formally introduced a system combining global
budget and DRG rates with negotiated activity targets for each hospital. Under the new scheme,
each hospital receives an up-front budget corresponding to 90% of the DRG rates related to the
case-mix in the negotiated activity target, with the remaining 10% allocated according to the
actual activity performed. Hospitals that provide more treatments than their negotiated target
receive extra funds. The national government plans to encourage experiments in which more
than 10% of a hospital’s income is activity based.
2.2.5 Norway42
Fewer than 1% of all hospital beds and 5% of outpatient services in Norway are
private. Norway’s counties are responsible for financing all public hospitals, with the exception
of one regional hospital owned and operated by the national government.
Between 1980 and 1997, Norwegian hospitals received global budgets from their
counties. While it was agreed that this system allowed governments to control costs and the
distribution of resources, a Royal Commission, appointed in 1987, found that global budgets
encouraged some hospitals to restrict their services in order to keep within their budgets.
As a result of the commission’s recommendations, counties, on behalf of
hospitals, were remunerated by the national government by a combination of cost per case,
based on the DRG system, and global budgets. The reform, introduced in 1997, was intended
The information provided in this section is based on European Observatory on Health Care Systems, Health Care
Systems in Transition – Denmark, 2001. http://www.euro.who.int/observatory/TopPage).
42 The information provided in this section is based on European Observatory on Health Care Systems, Health Care
Systems in Transition – Norway, 2000. (http://www.euro.who.int/document/e68950.pdf).
41
35
to increase hospital in-patient activity, raise productivity and shorten waiting lists. The new
payment method was introduced gradually: in 1997, 70% of grants to counties were according to
a needs-based formula while the remaining 30% were paid based on the previous year’s inpatient activity, using national standard DRG rates. In 1998, this was changed to 55% formulabased and 45% activity-based and finally moved to a 50-50 split in 1999. Since 1999, day care
surgery has been financed based entirely on the DRG system. Teaching hospitals receive two
additional grants: one to cover teaching and research, and the other to finance the treatment of
complex and costly patient cases.
2.2.6 Review of international experience by the Comité Bédard
In June 2000, the Quebec Department of Health established a task force to
examine the financing of hospitals in the province. This task force, the Comité sur la réévaluation
du mode de budgétisation des centres hospitaliers de soins généraux et specialisés, was headed by Denis
Bédard. The Comité Bédard released its report in December 2001. One section of the report
reviewed hospital budgeting in the United States, United Kingdom, France, Belgium and
Norway. The Comité Bédard made a number of interesting observations based on this
international review:
•
Population-based approaches are widely used and recognized as an equitable
mode for funding hospitals.
•
There is a move away from global budgeting and a trend towards deploying
information systems based on the DRG model.
•
Countries are looking for mechanisms that can link information on hospital
use and hospital delivery of services.
•
There is a trend toward the development of more sophisticated methods for
assessing hospitals’ financial performance.
•
More emphasis is placed on quality of care in the delivery of hospital services.
Overall, the Comité Bédard recommended a budgeting method for Quebec
hospitals based on DRGs and performance. It was recognized that adjustments would have to
be made for teaching hospitals. The Comité Bédard also recommended that the Quebec
Department of Health build on the work of the Canadian Institute for Health Information
(CIHI) rather than attempting to develop its own database on case-mix groups (CIHI’s work is
discussed in more detail below).
2.3
The Rationale for Service-Based Funding in Canada
It has been recognized both in Canada and internationally that detailed
information on the use of hospital (and other) resources is essential to the efficient delivery of
desired outcomes in health care. With current approaches to funding hospitals in Canada,
decisions are not usually based on detailed costing information, since funding is either decided
politically or based on historical trends and, in any case, the necessary information is just not
available.
36
As explained in Section 2.1
The Committee believes that current
above, provinces have tried recently to improve
their decision-making ability by introducing hospital funding mechanisms, where
funding models that depend on more and better
these are based on funding inputs and
information, such as population-based funding.
not on final outcomes, must be revised
However, this method for determining budgets
to focus on performance in delivering
can provide only rough estimates of what a hospital services.
hospital’s needs might be. Moreover, depending
on the efficiency of the facility, there is no guarantee that the hospital will successfully and
effectively turn these resources into the desired services with the desired outcomes. Therefore,
the Committee believes that current hospital funding mechanisms, where these are based on
funding inputs and not on final outcomes, must be revised to focus on performance in
delivering hospital services.
The majority of the witnesses that appeared before the Committee supported the
idea of moving to service-based funding for hospitals. For example, Michael Decter, former
Deputy Minister of Health in Manitoba and Ontario and currently Chairman, Board of
Directors, Canadian Institute for Health Information (CIHI), stated:
The right way of funding hospitals, in my view, is to fund them for what they do, for
what they actually accomplish in outcome terms. 43
The following advantages of service-based funding were brought to the attention
of the Committee:
•
Better Information – Witnesses told the Committee that service-based
funding increases the need for better information, something the Committee
considers essential to measure the performance of the health care system in
terms of quality and outcomes.44 In fact, the lack of critical information
currently hobbles health care providers and government decision-makers
alike. In its brief, the Canadian Healthcare Association indicated that: “Our
members fully support the need for costing services and improving
performance measurement and benchmarking.”45
•
Transparency and Accountability – Witnesses stressed that, because the
service-based approach relates funding to the actual services provided by a
hospital, accountability for the use of public funds and transparency of costs
would be substantially improved. For example, the submission of the
Ontario Hospital Association to the Committee stated that “the public would
see the direct connection between the level of funding and the number and
types of procedures that are performed, thereby opening up health care
funding to public scrutiny.”46
Michael Decter (52:12).
Mark Rochon, Ontario Hospital Association (56:43).
45 Canadian Healthcare Association, Brief to the Committee, June 2002, p. 6.
46 Ontario Hospital Association, Brief to the Committee, May 22, 2002, p. 36.
43
44
37
•
Equity in the Distribution of Funding – With its “price times volume”
approach, many witnesses considered service-based funding to be a more
equitable means of funding hospitals than through current methods.47 In
addition, by attaching a price to specific hospital services, service-based
funding enables the funder to influence change by changing the value
attached to specific services.
•
Investment in Capital – Dr. Les Vertesi informed the Committee that the
health care system in Canada is “under-capitalized.” He blamed this on the
use of global budgets, which do not attract capital. He argued that servicebased funding, on the other hand, attracts outside capital to build facilities.
•
Independence – Many witnesses believed that a move to service-based
funding would result in hospitals becoming more independent from
government. This would help to de-politicize decision-making with respect
to hospital services. The Canadian Healthcare Association disagreed with
this point, arguing that service-based funding would most likely lead to
greater rather than less micromanagement by governments.48 The Committee
does not share this view. Along with the majority of witnesses, we believe
that service-based funding will provide hospitals with the needed flexibility to
allocate financial and human resources according to principles of best
practice, efficiency and locally-determined needs.
•
Reduction in size of Provincial Health Departments – Indeed, the Committee
believes that service-based funding will enormously reduce the amount of top
down, control and command micromanagement of hospitals which now
characterizes all provincial departments of health. The reduction in the role
of these departments should lead to a corresponding reduction in the number
of their employees.
•
Patient-Oriented Service Delivery – Dr. Vertesi stated that by paying
hospitals for the services they actually provide, patients become a source of
income rather than a burden to the facility. Service-based funding creates
incentives for providers to increase efficiency, service volumes, and patient
satisfaction, precisely what is needed currently.49
•
Efficiency and Performance – Current hospital funding mechanisms do not
provide the right incentives and often produce perverse results with respect
to financial management. In fact, a 1998 study by the Ontario Joint Policy
and Planning Committee showed that with global budgets there is no
correlation between hospital deficits/surpluses and cost-efficiency in the
Ontario hospital sector. More precisely, the study concluded that there are a
number of inefficient Ontario hospitals that run budget surpluses and an
even greater number that are considered cost-efficient but have deficits. 50
This opinion was also expressed by Ladak (1998), op. cit., p. 3.
Canadian Healthcare Association, Brief to the Committee, p. 7.
49 Les Vertesi (2001), op. cit., p. 118.
50 Ontario Joint Policy and Planning Committee Financial Issues Advisory Group (1998), “Understanding the
Financial Pressures of Ontario Hospitals: Short and Long Term Solutions”, Document No. RD 7-10.
47
48
38
Service-based funding changes the financing perspective from paying
hospitals a specific amount to meet their anticipated needs to paying them
according to what they actually do. As elsewhere in the economy, this fosters
both efficiency and performance.
•
Multiple Ownership Structures – The combination of a single funder/insurer,
service-based funding and the separation of funder and provider means that
the funder is neutral on the issue of who owns a hospital. The
funder/insurer would purchase the service from that institution offering the
best price, provided that it met the necessary quality standards. Such an
institution could be either publicly owned or owned by a private not-forprofit
or
for-profit
organization. As indicated in
The Committee emphasizes that it is
Volume Five, the Committee
not pushing for the creation of private,
believes that the patient and
for-profit, facilities. But we do not
the funder/insurer will be believe that they should be prohibited,
served equally no matter what
just as they are not now prohibited
the corporate ownership of a
under the Canada Health Act.
health care institution maybe,
as long as the two following
conditions are met: 1) all institutions in a province are paid the same amount
for performing any given medical procedure or service; 2) all institutions, no
matter their ownership, are subjected to the same rigorous, independent
quality control and evaluation system. The Committee emphasizes that it is
not pushing for the creation of private, for-profit, facilities. But we do not
believe that they should be prohibited, just as they are not now prohibited
under the Canada Health Act.51 Indeed, we fully expect that the overwhelming
majority of institutional providers would continue to be, as they are now,
privately owned, not-for-profit institutions.52
•
Flexibility in Changing Priorities – Service-based funding allows government
to change priorities with respect to particular procedures and services by
altering the amount it will pay for them.
•
Competition to Provide the Best Services – Service-based funding will lead to
particular services being provided at hospitals which are most efficient and
perform the greatest number (highest volumes) of these services.
Competition in the provision of services will improve quality and force those
hospitals that wish to continue providing particular services to do so even
more efficiently.
•
Centres of Excellence – The Committee heard many times that a servicebased funding method would lead to the development of centres of
specialization – or “centres of excellence”, as they were referred to by a
( www.jppc.org)
51 This point is clearly enunciated in a document prepared for the Commission on the Future of Health Care in
Canada by Colleen Flood and Sujit Choudhry, Strengthening the Foundations: Modernizing the Canada Health Act,
Discussion Paper No. 13, August 2002.
52 Volume Five, pp. 38-39.
39
number of witnesses – for the provision of certain treatments or surgeries.
Such 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. Indeed, recent articles in the New England Journal of
Medicine have shown that the best indicator of quality, whether it is surgery or
a diagnostic procedure, is volume. 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” for a number
of complex surgical procedures.53 There are, obviously, desirable limits to the
Centre of Excellence concept that are reached when accessibility to services is
compromised by virtue of the fact that the hospital offering a particular
service is far away. A balance thus needs to be struck between the quality and
cost-effectiveness/efficiency principles and that of ready accessibility.54
While most witnesses stated that they supported a move to service-based funding
for hospitals, the Committee was cautioned that there are a number of substantial challenges in
the implementation of such a funding model. These challenges are summarized below.
2.3.1 Appropriateness of service mix
Service-based funding is attractive to hospital managers because they are
responsible for choosing which services their institution will provide and at what levels. With
this discretion available to management, hospitals will adjust their service mix in order to earn
the highest possible returns consistent with meeting the needs of the population they serve.
Hospitals will be encouraged to specialize in those services they can do best, and those for which
the rates of remuneration are most attractive; they will reduce to the point of not providing
those low-volume services that are not, for them, appropriately funded. In highly populated
urban areas, this would lead to facilities specializing in the provision of certain services.
However, the Committee was told that in smaller, rural communities, particularly those located
some distance from a major urban centre, preserving accessibility to particular services may well
claim priority. In this case, hospitals may choose to continue to provide needed services despite
relatively low rates of remuneration. It is, therefore, essential that rates be reviewed and revised
on a regular basis. The concerns with respect to small and rural community hospitals are
discussed in Section 2.5.
2.3.2 Over-servicing and up-coding
With a hospital’s finances dependent on the volume and mix of services it
provides, incentives are created to encourage efficiency and to increase productivity. There is
concern, however, that remunerating hospitals for each service performed could lead to overservicing and, possibly, improper billing (“DRG creep”). The issue of over-servicing arises with
Specialized hospital services include for example paediatric cardiac surgery and gamma knife neurosurgery.
For example, with paediatric coronary surgery, given the relatively small number of children affected and the
generally reparative nature of the problems (as opposed to life-threatening), the case is compelling to concentrate
those procedures in very few centres (as is now being done in Ontario). But for adult coronary artery by-pass, for
example, it would make no sense to have only one Centre in Ontario doing them.
53
54
40
physicians who are paid on a fee-for-service basis. The Committee believes that this method of
payment has led some physicians to concentrate on the number of patients seen rather than
quality of their care. The Committee was told, however, that while the possibility of overservicing always exists with hospitals, it is less likely to occur given that many “players”, such as
referring and consulting physicians and, of course, patients themselves, are involved in every
decision to provide a given person with a specified service in hospital.
In the opinion of Dr. Duncan Sinclair, former Commissioner of the Ontario
Health Services Restructuring Commission:
[t]he danger is very much less in hospitals, given that the hospital itself is not the
gatekeeper. However, one would have to be careful to avoid collusion between those who
are the gatekeepers of hospital function and the hospitals themselves.55
Some witnesses stressed that over-servicing is especially dangerous in a system
such as that in Canada where hospital-based specialists are also paid under a fee-for-service
scheme. This problem can be greatly alleviated, however, by having hospital-based specialists
paid under a different remuneration scheme, as in Sweden and the United Kingdom.
Under a service-based funding system, cases are given weights in relation to their
severity and the corresponding use of resources: the higher the case weight, the greater the
remuneration. Therefore, hospitals have an incentive to up-code, that is, to report the highest
weight for each case, whether this classification is justified or not.
Michael Decter raised the concern of improper billing or up-coding with respect
to service-based funding:
I think service-based funding is the right way with a couple of caveats. You must have a
system that is well enough documented and data strong enough you do not get gamed. As
you will remember, a major hospital chain in the U.S. – HCA Columbia – was
litigated by the government of the United States for cheating them to the tune of hundreds
of millions, if not billions of dollars, by having their thumb on the scale on the coding. 56
Audits, fines and penalties will have to be put in place to prevent abuse of the
payment system. A detailed and accurate set of costing rates will also reduce the incentives to
up-code. Having an independent system of evaluation, as recommended in Chapters One and
Ten, would alleviate this problem to a great extent.
2.3.3 Rates, information and data
Before service-based funding can be implemented, reliable case costing
information and methodologies must be developed. Sharon Scholzberg-Gray, President and
CEO of the Canadian Healthcare Association, informed the Committee that shifting to an
55
56
Duncan Sinclair (50:12).
Michael Decter (52:13).
41
entirely service-based funding system requires costing data that do not yet exist. In its brief, the
Association also indicated that:
The costing data that has been developed in Ontario has taken 10 years to develop.
While it has been an important and necessary initiative, there are still significant
operational issues to deal with including: the fact that this process only covers 50-60% of
hospital services (it does a good job of inpatient services and surgeries, but not outpatient
services); there is a need to add “complexity factors” (such as recognizing the unique
situation of remote hospitals and teaching hospitals); and the tendency to allocate
administrative costs to services that are not covered by the process, thus appearing to be
very efficient. Given the ongoing challenges of establishing an Ontario system, one can
imagine the magnitude and complexity of issues that need to be resolved when developing
a pan-Canadian costing system. 57
Currently, the Canadian Institute for Health Information (CIHI) is responsible
for the collection, establishment and revision of service case rates. The work on collecting
costing data in Canada began in 1983, when the Hospital Medical Records Institute undertook to
develop a Canadian database on case-mix groups, which is now maintained by CIHI. At the
time of implementation, the lack of comprehensive Canadian case-mix costing data resulted in
the importation of American cost data (New York State and Maryland) that were adjusted for
Canadian lengths of stay. Now, CIHI uses data from selected hospitals in Alberta and Ontario
to estimate the case-mix weights.
Kevin Empey, Chief Financial Officer of University Health Network in Toronto,
stressed that more hospitals must submit costing data if accurate remuneration rates are to be
established. He indicated, for example, that in 2000 only 2 of the 13 teaching hospitals in
Ontario and 3 of the province’s 69 community hospitals, along with a small number of Alberta
hospitals, provided costing data for the establishment of Canadian case rates.58 In order to
develop sufficiently current and detailed rates, it is essential that the majority of hospitals be
required to produce and submit costing data. Kevin Empey also stressed that:
We need a system which either creates an incentive or a penalty to motivate institutions
to provide data and to participate in the inputting of it. This would end up with a better
structure and better data. 59
2.3.4 Innovation
In its brief, the Canadian Healthcare Association argued that service-based
funding, with its focus on providing services at the lowest cost, would discourage innovation,
both with respect to new procedures and new technology.60 This is especially a concern for
Academic Health Sciences Centres and teaching hospitals. Teaching facilities must be able to try
Canadian Healthcare Association, Brief to the Committee, p. 7.
Kevin Empey (56:45).
59 Ibid.
60 Canadian Healthcare Association, Brief to the Committee, p. 6.
57
58
42
new and highly specialized, but very costly, procedures without being put at risk by a rate-based
system. It is therefore important that case-mix funding approaches not create perverse
incentives by discouraging innovation of this (or any) kind. The concerns raised with respect to
teaching hospitals are discussed in Section 2.4.
2.3.5 Comprehensive health care
Members of the Canadian Healthcare Association pointed out that service-base
funding focuses on “procedure-driven” health care instead of the provision of comprehensive
and integrated care. In other words, service-based funding would simply encourage health care
providers to respond to sickness and to concentrate less on a broad continuum of services,
including health promotion and disease prevention. They felt that funding under global budgets
helped to provide more extensive care than service-based funding would be able to. Indeed,
Mark Rochon of the Ontario Hospital Association, who supported the idea of a move towards
service-based funding, also made the comment:
I think we need also to recognize that there are some aspects of service that perhaps ought
to be funded with other than a service based approach. I am thinking, for example, of
services that relate to health promotion and prevention. Perhaps the argument could be
made that stand-by services such as emergency rooms could also be funded on a global
basis.61
2.3.6 Escalation of costs
In the opinion of the Canadian Healthcare Association, it was precisely this type
of procedure-driven care – one that would be fostered by service-based funding – that has
resulted in an escalation of costs:
The cost escalations currently being experienced within our health system are almost
entirely related to “cost of procedures” related to physician services and drug costs. Service
based funding would encourage a continuation of these current practices.62
The Committee does not support this opinion. As stated in Volume Five, we
believe that service-based funding fundamentally changes the incentives, with the result that cost
escalation will be reduced in the long run. 63
2.3.7 Lack of simplicity
Many witnesses told the Committee that if service-based funding were to be
implemented, a number of adjustments would have to be made to the rates in order to
accommodate institutions such as teaching hospitals and smaller, rural hospitals. Sharon
Mark Rochon, Ontario Hospital Association (56:43)
Canadian Healthcare Association, Brief to the Committee, p. 6.
63 Volume Five, pp. 36-39.
61
62
43
Sholzberg-Gray, President and CEO of the Canadian Healthcare Association, observed that
while the vast majority of the witnesses supported service-based funding, each witness suggested
modifications that, in aggregate, could lead to an extremely complex funding system:
What we noted in reviewing some of the testimony of people who came before this
Committee to speak about service based funding is that (…) they all wanted special
complications formula – that is, if you are a teaching hospital, one formula; if you are in
a remote area, a different approach; if you do certain things, another approach. 64
The Committee has already acknowledged in Volume Five that some
adjustments would be necessary to service-based funding to accommodate the variety of
hospitals.65 The adjustments that would have to be considered for teaching centres and for small
rural hospitals are discussed in Sections 2.4 and 2.5 of the present volume.
2.3.8 Committee commentary
The Committee concurs with
The Committee believes that
witnesses that, as much as possible, hospitals should
service-based
funding
has
be funded for the specific services they provide, that
numerous
advantages
over
the
is, according to service-based funding. Service-based
funding is the most appropriate method for methods currently used to finance
hospitals in Canada.
financing the operational costs of hospitals, though
we recognize that additional inv estment may be
needed for capital purposes in many Canadian hospitals (see Section 2.6 below). The Committee
believes that service-based funding has numerous advantages over the methods currently used to
finance hospitals in Canada. In our view, Canadians will greatly benefit from service-based
funding in terms of quality and timeliness of hospital care, as well as in terms of transparency,
accountability and performance reporting.
The Committee recognizes that hospital funding is a provincial matter;
nonetheless, the federal government could be of considerable assistance in promoting of servicebased funding. In our view, the federal government, as part of its role in supporting the health
care infrastructure and the health info-structure (see Volume Four)66, should provide some of
the funding necessary to enable the provinces to implement service-based funding. This federal
funding should be part of the federal investment in health information systems that this
Committee recommends in Chapter Ten. Furthermore, the Committee believes that CIHI can
play a major role in the estimation of case-mix groups and their relative weights, both of which
are needed to implement service-based funding.
If Canadians are to derive the most benefits from publicly funded or insured
hospital services, service-based funding must be implemented. Moreover, hospitals also will gain
a lot from service-based funding. This mode of remuneration will allow them to identify
Sharon Sholzberg-Gray (60:27).
Volume Five, pp. 36-39.
66 Volume Four, pp. 95-105.
64
65
44
inefficient practices and hence help improve their productivity. As a result, hospitals will be able
to compete on the basis of quality of care.
The Committee acknowledges that the implementation of service-based funding
will take time. Following the experience in European countries, the new payment method
should be introduced gradually; at the early stages, hospitals should be remunerated by a
combination of service-based funding and their traditional funding methods. The portion of
funding allocated through service-based funding should grow each year and that allocated by the
traditional methods should shrink correspondingly, until at the end of the implementation
period hospitals are remunerated entirely by service-based funding.
For instance, similar to the Norwegian experience, the funding split might begin
with hospitals being remunerated 70% by traditional methods and 30% through service-based
funding. The funding mix might then progress to a 50-50 split, to 70% service-based funding,
and then finally to 100% service-based funding.
Therefore, the Committee recommends that:
Hospitals should be funded under a service-based
remuneration scheme. This method of funding is
particularly well suited for community hospitals located in
large urban centres. In order to achieve this, a number of
steps must be undertaken:
§
A sufficient number of hospitals should be required
to submit information on case rates and costing data
to the Canadian Institute for Health Information;
§
The Canadian Institute for Health Information, in
collaboration with the provinces and territories,
should establish a detailed set of case rates to reduce
incentives to up-code.
§
The federal government should devote ongoing
funding to the Canadian Institute for Health
Information for the purpose of collecting and
estimating the data needed to establish service-based
funding.
§
The shift to service-based funding should occur as
quickly as possible. The Committee considers a fiveyear period to be a reasonable timeframe for the full
implementation of the new hospital funding.
45
2.4
Academic Health Sciences Centres and the Complexity of
Teaching Hospitals
Teaching
hospitals
in
Canada form part of what is known as AHSCs consist of a teaching hospital, a
Academic Health Sciences Centres university faculty of medicine, and other
(AHSCs). AHSCs consist of a teaching health-related research and health care
hospital, a university faculty of medicine,
institutes. Because these centres are
and other health-related research and
responsible for not only patient care but
health care institutes (see Appendix 2.1 for
also teaching and research, they are much
a list of the 16 AHSCs in Canada and their
more complex than community hospitals.
affiliated hospitals). Because these centres
are responsible for not only patient care
but also teaching and research, they are much more complex than community hospitals. They
also offer the newest and most highly sophisticated services and treat the most difficult, complex
cases.
Hospitals with teaching/research activity have higher costs per weighted case
than community hospitals. This is due to the required teaching infrastructure, specialized
programs, higher utilization of diagnostic testing, and the use of resources needed for more
innovative and aggressive treatment procedures:
Studies have shown that procedure costs at academic health science centres are higher
than in community hospitals. This is not only due to the costs of the complexity of care
provided or the introduction and evaluation of leading-edge practice. To fulfill its teaching
and research mandate, some clinical procedures cost more than average and result in
lengths of stay that may be longer than average. Additionally, a major research and
education centre incurs facility and operating costs as a result of providing space and
supporting the medical staff in these endeavours. 67
Because of the educational and research aspects of AHSCs, funding comes
traditionally from at least two separate provincial government departments and, within those
departments, from a variety of sources. While it is almost impossible to distinguish precisely the
academic mission from the health care delivery mission, government funding can be placed into
three broad categories.68
First, the department of education provides operating grants to universities that
in turn provide budgets for health faculties, including salaries for their academic staff. Second,
the department of health provides hospitals with budgets for clinical education to pay the
salaries of post-graduate trainees and partial support of the incomes of clinical faculty. Third,
hospitals receive operating grants from provincial health ministries to help pay for the added
cost of research and training activity.
67
68
S. Kevin Empey, Brief to the Committee, 22 May 2002, p. 12.
Lozon and Fox (2002), op. cit., p. 16.
46
As a result of this complexity, service-based funding poses a number of
problems particular to AHSCs. Patients of AHSC often require very sophisticated treatment,
the cost of which may not be accurately captured in case-mix measurement systems. For
instance,.Kevin Empey, Chief Financial Officer, University Health Network (Toronto), stated:
(…) both pacemaker and defibrillator implants are included in the same [case-mix
group] and thus would be assigned the same case weights and funded identically. This
weighting, and any rate-based funding would not reflect the dramatic differences in the
costs of the devices implanted. The cost of a typical defibrillator implant procedure is
approximately 2.5 times that of a pacemaker implant. 69
Similarly, it is estimated that the cost of one multi-organ transplant costs
$213,000 per patient. However, due to the complexity and the uniqueness of the treatment,
rates ha ve not been determined in Canada for the transplants. As a result, teaching hospitals in
Toronto receive funding at the same rate as for single-organ transplants, which is a fraction of
the true cost of the multi-organ treatment.70 For these reasons, Dr. Hugh Scott of the McGill
University Health Centre stated:
if you want to put it in a formula, there has to be multiples. Any time we try to put
cardiac surgery and psychotherapy in a magic formula, there will be problems. When
you then add in a teaching environment and so on, you will have even more problems. I
look forward to simplicity and elegance, I think sometimes multiple factors have to be
taken into account. 71
Dr. Jeffrey Lozon from St. Michael’s Hospital (Toronto) discussed the
complexity of financing teaching hospitals given the variety of activities they perform:
The most appropriate funding vehicle is the one that most closely aligns the accountability
of the academic health sciences centre and its outputs in a fair funding system. Our
centres are accountable for their outputs. However, it must be understood that our
outputs are going to be different than what they would be in a community hospital or in
a rural environment. They will be more complex. We have different levels of output: we
have output around the knowledge that we create; and we have output around the
numbers of students that were educated.
We would probably be uncomfortable with a one-size-fits-all funding formula that might
suggest my hospital be as low cost as a hospital in Yorkton, Saskatchewan. The
hospitals do different things and so the cost varies. We need to measure the things we do
S. Kevin Empey, Brief to the Committee, 22 May 2002, p. 6.
S. Kevin Empey, op. cit., p.10.
71 Dr. Hugh Scott (63:17).
69
70
47
and we need to be held as accountable as the hospital in Yorkton. However, it is a more
complicated endeavour than strictly counting up the dollars. 72
The AHSC experts who appeared before the Committee supported the servicebased funding methodology as long as case-mix groups and weights are established for AHSCs,
distinct from those developed for community hospitals. Such a funding methodology for
AHSCs should take into account a variety of factors, including the complexity of procedures and
treatments, the introduction of new technologies and the use of costly drugs. Experts also
stressed that consideration should be given to funding the cost of teaching and research
infrastructure out of a different envelope with its own set of incentives for efficient delivery.
In their recent paper “Academic Health Sciences Centres Laid Bare”, Jeffrey
Lozon and Robert Fox stated that AHSCs should be considered a national resource in the health
care system and that the federal government should enhance its role in the funding of AHSCs.
The authors argued that “no longer can the AHSC struggle to arrange funding from a variety of
providers and without the support of the federal government.”73
The Committee agrees with the witnesses that Academic Health Sciences Centres
are distinct from community hospitals in that they perform a wide range of complex activities
ranging from delivery, to teaching and research. Accordingly, the Committee recommends that:
Service-based funding should be augmented by an
additional funding method that would take into account the
unique services provided by Academic Health Sciences
Centres, including teaching and research.
Moreover, the Committee
strongly believes that, since they play an The Committee believes that AHSCs
essential role in teaching, performing constitute a national resource in the
research and delivering sophisticated care, Canadian health care system. The
AHSCs constitute a national resource in the federal government is particularly well
Canadian health care system. They are a
positioned to sustain AHSCs across the
crucial part of the health care infrastructure country.
in Canada. Thus, the federal government is
particularly well positioned to sustain AHSCs across the country, through its well-recognized
roles in financing post-secondary education, funding health research, supporting health care
delivery, financing health care technology and planning human resources in health care. These
issues are discussed in subsequent chapters in this report.
2.5
Small and Rural Community Hospitals
Because larger and medium-sized community hospitals do not face the same set
of challenges as small or rural community hospitals, problems might arise if the same funding
Dr. Jeffrey Lozon (63:16-17).
Lozon, Jeffrey and Robert Fox (2002), “Academic Health Sciences Centres Laid Bare”, lead paper in Healthcare
Papers, Vol. 2 No. 3, p. 30.
72
73
48
formula were to be applied to both types of hospitals. For example, Raisa Deber, Professor at
the University of Toronto, stated that:
(…) on issues related to service-based funding, particularly for hospitals in smaller
provinces or smaller communities, (…) such funding will not be enough to cover the
infrastructure costs of running the organization. 74
In addition, the Canadian Healthcare Association indicated in its brief that:
Service-based funding would be difficult to implement in rural and remote areas,
particularly if there is only one provider and/or organization available to provide
services.75
The review of the testimony provided to the Committee suggests that, for the
most part, small and rural community hospitals are faced with problems of:
1. Limited economies of scale – Small rural hospitals are often faced with fixed
overhead costs and low or unpredictable patient volumes. This leads to higher
costs per patient.
2. Isolation – A hospital in rural Canada is considered to be isolated if the next
closest hospital is more than 150 km away. That hospital then becomes the
primary provider of health care for an entire geographic area. A hospital that is
responsible for a large region must be able to provide a greater range of services
despite low and sporadic patient volumes.
3. Remoteness – Remoteness refers to the distance between a hospital and the
closest tertiary hospital care centre. Hospitals can be remote but not isolated (a
number of hospitals may serve a particular region but be at a considerable
distance from a tertiary hospital care centre). However, much like isolated
hospitals, remote hospitals often have higher fixed overhead costs and must
provide a wider range of health care services compared to community hospitals
located near tertiary centres. All these factors result in higher costs per patient.
4. Special needs population – Many remote hospitals must care for special needs
populations such as residents of First Nations reserves. The health status of
these residents is often below the provincial average, which leads to higher
admission rates.76
Raisa Deber (59:12).
Canadian Healthcare Association, Brief to the Committee, p. 7.
76 Ladak (1998), op. cit., p. 31.
74
75
49
Therefore, the funding formula used for larger community hospitals is often not
suitable for small and rural hospitals. As a result, the funding formula must take into
consideration the particular challenges faced by smaller, rural and remote hospitals.
A number of the witnesses were concerned about the effect of a service-based
funding method on the mix of services offered by rural and smaller community hospitals. For
example, Mark Rochon of the Ontario Hospital Association stated:
We also need to consider that service-based funding should not create incentives for
providers to stop offering necessary services in communities. The needs of specific
communities must be considered as well as the adequacy of service provided in those
communities. 77
Kevin Empey, of University Health Network, added that:
Some providers, when it becomes a full rate based or service based system, will choose to
specialize a little more or get out of something. Certainly in small communities you
cannot afford the major providers, that is, the hospitals, to get out of something just
because of the rates.78
The Committee agrees with the witnesses that, in order to preserve access to
commonly required services, service-based funding should be adjusted to reflect the particular
circumstances of small and rural community hospitals. Therefore, the Committee recommends
that:
In developing a service-based remuneration scheme for
financing of community hospitals, consideration be given to
the following factors:
2.6
§
Isolation: hospitals located in rural and remote areas
are expected to incur higher costs than those in large
urban centres. An adjustment should reflect this fact.
§
Size: small hospitals are expected to incur higher
costs per weighted case than larger hospitals. An
adjustment should recognize this fact.
Financing the Capital Needs of Canadian Hospitals
As indicated in Section 2.1.7, provinces and territories use a method for funding
hospital capital expenditures that is different from the method used in relation to funding
77
78
Mark Rochon (56:43).
S. Kevin Empey (56:45).
50
operating costs. All provinces and territories use a project based method as their capital funding
approach. The project based method is well suited to large-scale, one-time projects.
The Committee was told that the capital needs of Canadian hospitals are
significant. We heard that the current level of capital investment by provincial and territorial
governments, along with hospitals’ well established fundraising infrastructure and charitable
giving, is not sufficient to ensure the sustainability of the hospital sector in Canada. Information
provided to the Committee revealed that:
•
Between 1982 and 1998, real public per capita spending on new hospital
construction decreased from $50 to $2, or a reduction of 5.3% annually.79
•
Since 1998, real public per capita expenditures on new hospital machinery
and equipment has fallen by 1.8% annually.80
As a result, there is a substantial gap between the need for new and renovated
physical plant and equipment and a hospital’s ability to finance capital investment. For this
reason, several witnesses proposed that the federal government provide some funding. The
Association of Canadian Academic Healthcare Organizations told the Committee that there is
precedent in this regard:
It should also be noted that there is a precedent when it comes to the role of the federal
government in this area. In 1948, the federal government introduced the Hospital
Construction Grants Program – which was funded on a cost-sharing basis with the
provinces.81
The Canadian Medical Association stated that, in addition to government
investment in hospital capital, it may be necessary for hospitals to develop innovative
approaches to financing capital infrastructure. According to the Association, there is a need to
explore the concept of public-private partnerships to address capital infrastructure needs as an
alternative to relying solely on government funding.82
While the Committee has supported the consolidation of the hospital sector that
has taken place in recent years in all provinces, we are very concerned that the number of beds
in some hospitals may not be sufficient to respond to the significant increase in demand for
hospital services that exists in a few areas in Canada where there is high and fast population
growth. Indeed, we learned that there are a few regions of the country in which population
growth has been so great that more hospital beds are needed now and many more will be needed
in the coming years. This is particularly true of some metropolitan areas of Alberta (Calgary),
British Columbia (Abbotsford, Vancouver), Nova Scotia (Halifax), Ontario (Oshawa, Toronto),
Quebec (Montreal), and Saskatchewan (Saskatoon).83
Association of Canadian Academic Healthcare Organizations, Brief to the Committee, 13 June 2002, p. 17.
Ibid.
81 Ibid.
82 Canadian Medical Association, For Commissioner Romanow: A Prescription for Sustainability, 6 June 2002, p. 26.
83 Based on the 2001 Census data of Statistics Canada (http://geodepot2.statcan.ca/Diss/Highlights/).
79
80
51
Accordingly, the Committee believes that the federal government should get
involved once again, as it did in 1948, in financially supporting hospitals with the greatest capital
needs. Such federal participation would not involve ongoing financing but should rather be
considered a “catch-up” measure. Even though it would be a one time measure, federal funding
for any given project could be spread over a period of several years.
Specifically, the decision to provide federal support for hospital capital should be
made on the basis of a formula that would indicate that, when population growth in a particular
region exceeds the provincial average by 50%, the federal government would make one-time
only funding available on a cost-shared basis with the province for capital investment in hospital
expansion. Such federal investment could work as follows: the hospital should be able to take
the federal commitment to pay a fixed amount per year over a 10-year period to a financial
institution and borrow against that commitment so that construction could begin right away.
The Committee also believes that provincial/territorial governments should give
consideration to public-private partnerships as a means to obtain additional investment in
hospital capital. Therefore, the Committee recommends that:
The federal government provide capital financial support for
the expansion of hospitals located in areas of exceptionally
high population growth; that is, areas in which the
population growth exceeds the average rate of growth in the
province by 50% or more. Such federal financial support
should account for 50% of the total capital investment
needed. In total, the federal government should devote $1.5
billion to this initiative over a 10-year period, or $150 million
annually.
The federal government should encourage the provinces
and territories to explore public-private partnerships as a
means of obtaining additional investment in hospital
capacity.
Capital investment is also of concern for AHSCs. The Association of Canadian
Academic Healthcare Organizations informed the Committee that building replacement is
underfunded and depreciation is not fully recognized by the federal and provincial governments
for funding purposes. Furthermore, most capital investment decisions appear to be based on
short-term responses to needs rather than a long-term planning horizon. In some cases,
additions or renovations are made to poor structures, when full reconstruction might have been
a better policy decision.
While there are variations in the capital requirements of teaching hospitals, it is
clear that significant investment is needed. For example:
52
•
The Montreal University Health Centre has undertaken an evaluation of
existing facilities (in which some buildings are 40 to 100 years old) and
determined that it will cost $475 million to upgrade its facilities.
•
The University Health Network of Toronto estimates that its capital
requirements for the next 10 years will be over $500 million (i.e., in excess of
$50 million per year).
•
The St. John’s Healthcare Corporation (Newfoundland) recently completed
the development of a Children’s and Rehabilitation Centre at a cost of $70
million.
Based on the information made available to the Committee, the Committee
concluded that the federal government should contribute some $4 billion for the infrastructure
renewal of the 16 AHSC sites. We believe that such federal funding should be provided in
response to requests initiated by AHCSs themselves, subject to review by a group of
independent experts. This, in our view, would ensure transparency.
More precisely, AHSCs should be required to accompany a request with a sound
rationale for additional resources. Each application should be evaluated on its own merits by an
independent expert group that would report to the Minister of Health. Moreover, in order to
ensure accountability, successful applicants should report on their disposition of the funds
received.
Therefore the Committee recommends that:
The federal government contribute $4 billion over the next
10 years (or $400 million annually) to Academic Health
Sciences Centres for the purpose of capital investment.
Academic Health Sciences Centres be required to report on
their use of this federal funding.
2.7
Public Versus Private Health Care Institutions
In Section 2.3 above, the Committee
Service-based funding means that
underlined many advantages to service-based funding
the insurer (the government)
for hospitals, one of which relates to the ownership
would be neutral with respect to
structure of health care institutions. We indicated that
service-based funding means that the insurer (the the ownership of a hospital.
government) would be neutral with respect to the
ownership of a hospital. The funder/insurer would purchase the service from an institution,
provided that it met the necessary quality standards. Since comparable institutions would be
paid the same amount of money for a given procedure, and since all institutions would be
subject to the same independent and rigorous quality control and evaluation system, the
53
ownership structure would not be a matter of public policy concern. For this reason, the
Committee is neutral to the ownership question.
As indicated in Volume
Five, the Committee believes that the
The Committee wants to emphasize that it is not
patient and the funder/insurer will be
pushing for the creation of private, for-profit,
served equally no matter what the facilities. But we do not believe that they should
corporate ownership of a health care be prohibited, just as they are not now
institution may be, as long as the two
prohibited under the Canada Health Act. Indeed,
conditions enumerated above with
we fully expect that the overwhelming majority
respect to pricing and quality control
are met. The Committee wants to of institutional providers would continue to be,
emphasize that it is not pushing for the as they are now, either public or private not-forcreation of private, for-profit, facilities. profit institutions.
But we do not believe that they should
be prohibited, just as they are not now prohibited under the Canada Health Act. Indeed, we fully
expect that the overwhelming majority of institutional providers would continue to be, as they
are now, either public or private not-for-profit institutions.
Furthermore, the Committee recognizes that there is no reason why the private
for-profit provision of publicly funded health services would result in a so-called “two-tier”
health care structure, as long as the funding of services remains publicly based and referrals to
institutions continue to be determined by clinical need. This situation with respect to hospitals
is no different from the provision of primary health care, most diagnostic services, and some day
surgeries – services that are currently delivered in Canada by private for-profit entrepreneurs and
facilities.
Currently, within Canada’s health
care system, only 5% of hospital care is delivered The Committee recognizes that there
by the private for-profit sector. For example, the is no reason why the private for –
Shouldice hospital in Ontario is a private for- profit provision of publicly funded
profit facility; its status was grandfathered when
health services would result in a soMedicare was enacted in that province. Facilities called
“two-tier”
health
care
like this one are regulated on a rate of return
structure, as long as the funding of
basis, to reduce the risk of overcharging patients. services remains publicly based and
In Alberta, private for-profit facilities are allowed, referrals to institutions continue to be
under provincial legislation (Bill 11), to compete
with public and private not-for-profit hospitals determined by clinical need.
for the provision of a set of publicly insured
surgical services. Canada also has a number of private for-profit health care facilities (“private
clinics”) that treat only pa tients who pay privately for the services they receive.
Despite the presence of these private for-profit health care institutions and
facilities in Canada, which appear to provide the same quality of care as not-for-profit and public
institutions, an intense debate continues about the potential role and impact of for-profit
hospitals and clinics in the health care system. This debate culminated in May 2002 with the
publication of a meta-analysis study by P. J. Devereaux et al. in the Canadian Medical Association
Journal. This study found, based on a review of 15 different observational studies, “that private
54
for-profit ownership of hospitals in comparison with private not-for-profit ownership in the
United States results in a higher risk of death for patients.”84 The authors concluded that the
profit motive of private for-profit hospitals may result in limitation of care that adversely affect
patient outcomes:
Why is there an increase in mortality in for-profit institutions? Typically, investors
expect a 10%–15% return on their investment. Administrative officers of private forprofit institutions receive rewards for achieving or exceeding the anticipated profit margin.
In addition to generating profits, private for-profit institutions must pay taxes and may
contend with cost pressures associated with large reimbursement packages for senior
administrators that private not-for-profit institutions do not face. As a result, when
dealing with populations in which reimbursement is similar (such as Medicare patients),
private for-profit institutions face a daunting task. They must achieve the same outcomes
as private not-for-profit institutions while devoting fewer resources to patient care. 85
When he appeared before the Committee, Dr. Arnold Relman, Former Editorin-Chief of The New England Journal of Medicine, expressed similar views:
(…) most, not all of the current problems of the U.S. health care system, and they are
numerous, result from the growing encroachment of private for-profit ownership and
competitive markets on a sector of our national life that properly belongs in the public
domain. It is no coincidence that no health care system in the industrialized world is as
heavily commercialized as ours, and none is as expensive, inefficient, inequitable, or as
unpopular. Indeed, just about the only people happy with our current market-driven
health care system in the U.S. are the owners and investors in the for-profit industries
now living off the system. 86
On the basis of this evidence, many observers have noted that it is plausible, if
not likely, that the results of the American experience can be generalized to the Canadian
context should Canada decide to “open the door” to private for-profit hospitals.
The Committee learned, however, that the Devereaux et al. study has a number
of caveats. First, Brian J. Ferguson, Professor at the Department of Economics at the
University of Guelph (Ontario), informed the Committee in a recent paper that the authors of
the meta-analysis specifically excluded public hospitals from their study, on the basis that
Canadian hospitals are technically private not-for-profit institutions behaving more or less like
American private not-for-profit hospitals.87 Professor Ferguson argued, however, that private
P.J. Devereaux et al., “A Systematic Review and Meta-Analysis of Studies Comparing Mortality Rates of Private
For-Profit and Private Not-for-Profit Hospitals”, in Canadian Medical Association Journal, Vol. 166, No. 11, 28 May
2002, pp. 1399-1406.
85Ibid., pp. 1404-1405.
86 Dr. Arnold Relman (48:8-9).
87 For more information, please consult the recent paper by Brian S. Ferguson, A Comment on the Deveraux et al. MetaAnalysis of Mortality in Private American Hospitals, Draft, Department of Economics, University of Guelph, Ontario,
June 2002.
84
55
not-for-profit hospitals in the United States do not operate at all in the same environment as
Canadian private not-for-profit hospitals: American private not-for-profit hospitals work in a
very competitive context and have considerably more freedom in terms of decision-making than
their Canadian counterparts.
In this regard, Professor Ferguson contended that Canadian private not-forprofit hospitals are much more like American public hospitals than they are like American
private not-for-profit hospitals. In his view, including public hospitals in the Devereaux et al.
meta-analysis could have led to very different results.88 In fact, a number of studies have shown
that public hospitals in the United States have higher risk-adjusted 30-day mortality than forprofit hospitals, which in turn have higher mortality than not-for-profit hospitals.89
Second, Professor Ferguson also criticized the methodology used by Devereaux
et al. on several grounds: criteria for the inclusion of pertinent literature; selection of particular
results for inclusion in the analysis; choice of the dependent variable; omission of some
variables; etc.90 Finally, in a different paper, Professor Ferguson indicated that it is almost
impossible to derive proper conclusions on the potential role of private for-profit hospitals in
Canada from the American literature.91 The health care system in the United States is made up
of several public and private insurers, involves a multiplicity of public and private (not-for-profit
and for-profit) providers, and operates under intense competitive pressures – a situation that is
unlikely to happen in Canada with our single insurer system.
Moreover, the regulatory framework for the provision of hospital care in the
United States is different from that in Canada. This explains why we cannot simply transpose
what is happening in the United States to Canada. For example, Dr. Arnold Relman told the
Committee:
Throughout the American health care system there is inadequate regulation of private,
for-profit health care, as well as private not-for-profit health care. In the for-profit system,
there is so much money in for-profit nursing, hospital care, ambulatory services, and
pharmaceutical services that the regulatory agencies have been co- opted, at times you
might say intimidated, by the political and financial influence of the owners.
(…) In the United States, there is a huge amount of money involved in providing forprofit health care. That money in part is used to ensure that regulation is weak. It
applies to the Food and Drug Administration. It applies to all sorts of regulatory
agencies. I served for six years on a state agency studying the quality of care in
Massachusetts hospitals. It is very clear to me that financial concerns play a major role.
Ibid.
These studies are summarized in a paper by Stephen Duckett, “Does it Matter Who Own Health Facilities”, in
Journal of Health Services Research Policy, Vol. 6, No. 1, January 2001, pp. 59-62.
90 Brian J. Ferguson, op. cit., June 2002.
91 Brian S. Ferguson, Profits and the Hospital Sector: What Does the Literature Really Say?, Health policy working paper
prepared for the Atlantic Institute for Market Studies, February 2002.
88
89
56
(…) If we did have good, aggressive, unbiased regulation, many of the problems I have
talked about in terms of quality would be solved. However, we do not. 92
The findings of the Devereaux et al. analysis also contrast with those a Canadian
study published in 1999 in the Canadian Medical Association Journal which compared the quality of
care in licensed and unlicensed homes for the aged in the Eastern Townships of Quebec.93 For
example, this study found the quality of care provided to elderly residents by large unlicensed
(private for-profit) long-term care facilities to be comparable to that of large licensed (private not
for profit) facilities.94 In addition, the study found that the majority of both licensed and
unlicensed long-term care facilities (no matter what their size) were delivering care of relatively
good quality.
Overall, the Committee acknowledges that the literature on the comparative
costs, quality, effectiveness and general behaviour of private for-profit and private not-for-profit
facilities is quite extensive. We also recognize that these studies reach mixed conclusions. Some
of them suggest that for-profit facilities perform better, while others conclude that not-for-profit
facilities or public hospitals do so. Still, other studies have found no difference in the
performance of the two.
Given the evidence in
The Committee believes that leaving the Canada
the literature, the Committee believes
Health Act as it currently is – which means
that leaving the Canada Health Act as it
permitting private for-profit hospitals or clinics
currently is – which means permitting
to operate under Medicare (since such institutions
private for-profit hospitals or clinics to
operate under Medicare (since such are not currently prohibited under the Act) – will
institutions are not currently prohibited not, as some critics maintain, weaken or destroy
under the Act) – will not, as some the health care system as we know it now.
critics maintain, weaken or destroy the
health care system as we know it now. Other advanced countries, with perfectly well
functioning universal, publicly funded and organized health care systems (such as Australia,
Denmark, Germany, the Netherlands, Sweden and the United Kingdom), already permit private
for-profit hospitals to exist; their presence has not caused any insurmountable problems or
difficulties.
The debate surrounding public versus private not-for-profit versus private forprofit health care institutions does not seem to arouse the same kind of passion elsewhere. As a
matter of fact, the Committee reviewed the operation of the health care system of seven
different countries (see Volume Three) and visited three countries (Denmark, Sweden, United
Kingdom), and found that there are no articles or studies in European countries and Australia
comparing the quality or outcomes of for-profit and not-for-profit or public hospitals. In this
sense, this debate is uniquely North American.
Dr. Arnold Relman (48:23).
Gina Bravo et al., «Quality of Care in Unlicensed Homes for the Aged in the Eastern Townships of Quebec,
Canadian Medical Association Journal, Vol. 160, No. 10, 18 May 1999, pp. 1441-1445.
94 The interpretation of the study findings in terms of ownership status (for profit versus not for profit) were
facilitated by information provided by the statistician who participated in the realization of this study, Marie-France
Dubois.
92
93
57
The Committee believes that it is unlikely that, as a result of the introduction of
service-based funding, Canada would see the emergence of full-scale private for-profit hospitals,
such as those that operate in Australia or the United Kingdom: in both countries, private health
care insurance runs parallel to the public system, and physicians are permitted to have large-scale
private practices, a system that seems unlikely to develop in Canada. It is more likely that private
clinics would remain small and specialized. Such clinics would emerge in niches where their
founders expect to be able to make a profit by operating at lower cost than the public system
does, either by taking advantage of economies of scale or, as seems more likely, by taking
advantage of economics of specialization. These clinics would bring additional capital into the
health care system, since they would be funded privately. This is another reason it is unlikely
that they would develop into full-scale general hospitals: private funding for so ambitious, and
also risky, an enterprise would be much harder to come by than would funding for specialized
clinics.
The Committee strongly believes that there is a need to improve hospital
performance and to develop hospital report cards in Canada, regardless of ownership. This can
be appropriately done through the independent evaluation process recommended in Chapters
One and Ten of this report. Requiring that a single regulatory process apply to all health care
institutions would contribute much to ensuring high quality of care no matter where it is
provided.
58
Appendix 2.1
Academic Health Sciences Centres in Canada and their Affiliated
Hospitals and Regional Health Authorities
1.
Memorial University of Newfoundland and Labrador
Healthcare Corporation of St. John’s
The General Hospital
St. Clare’s Mercy Hospital
Janeway Children’s Health and Rehabilitation Centre
Waterford Hospital
Dr. L.A. Miller Centre
Dr. Walter Templeman Health Centre
2.
Dalhousie University
Capital Health
IWK Health Centre
Queen Elizabeth Health Sciences Centre II
Dartmouth General Hospital
East Coast Forensic Hospital
Eastern Shore Memorial Hospital
Hants Community Hospital
The Nova Scotia Hospital
Twin Oaks Memorial Hospital
Musquodoboit Valley Memorial Hospital
Atlantic Health Sciences Corporation*
Saint John Regional Hospital
St. Joseph’s Hospital
Sussex Health Centre
Charlotte County Hospital
Grand Manan Facility
3.
Université Laval
Centre Hospitalier Universitaire de Québec
Hôpital Laval, Institut Universitaire de Cardiologie et de Pneumologie
4.
Université de Sherbrooke
Centre Universitaire de santé de L’Estrie
Sherbrooke Geriatric University Institute
5.
Université de Montréal
Centre Hospitalier de l’Université de Montréal
Hôpital Sainte-Justine
Institut Cardiologie de Montréal
Hôpital Maisonneuve-Rosemont
Hôpital du Sacré-Coeur de Montréal
59
Institut Universitaire de Gériatrie de Montréal
6.
McGill University
Montreal University Health Centre
Jewish General Hospital
St. Mary’s Hospital
Douglas Hospital
7.
University of Ottawa
Sisters of Charity of Ottawa (SCO) Health Services
Ottawa Hospital
Children’s Hospital of Eastern Ontario
8.
Queen’s University
Kingston General Hospital
Hotel Dieu Hospital
Providence Continuing Care Centre
9.
University of Toronto
University Health Network
St. Michael’s Hospital
The Hospital for Sick Children
Sunnybrook Health Sciences Corporation
Mount Sinai Hospital
Toronto Rehabilitation Institute
Baycrest Centre for Geriatric Care
Centre for Addiction and Mental Health
10.
McMaster University
Hamilton Health Sciences Centre
St. Joseph’s Hospital
11.
University of Western Ontario
London Health Sciences Centre
St. Joseph’s Health Centre
12.
University of Manitoba
Winnipeg Regional Health Authority
St. Boniface General Hospital
Health Sciences Centre
60
13.
University of Saskatchewan
Saskatoon District Health Board
Royal University Hospital
Saskatoon City Hospital
St. Paul’s Hospital
Regina Health District
Regina General Hospital
Pasqua Hospital
14.
University of Calgary
Calgary Health Authority
Rockyview Hospital
Foothills Hospital
Alberta Children’s Hospital
Peter Lougheed Hospital
15.
University of Alberta
Capital Health Authority
Royal Alexandra Hospital
University of Alberta Hospital
Grey Nuns and Misercordia Hospital
16.
University of British Columbia
Provincial Health Services Authority
Children’s and Women’s Health Centre
BC Cancer Agency
Vancouver Coastal Health Authority
Vancouver Hospital and Health Science Centre
Providence Health Care/St. Paul’s Hospital
Source: Based on information provided by Glenn Brimacombe, Chief Executive Officer, Association of
Canadian Academic Healthcare Organizations.
*AHSC functions as main New Brunswick campus for Dalhousie University and Memorial University of
Newfoundland and Labrador.
61
CHAPTER THREE
D EVOLVING F URTHER RESPONSIBILITY TO
REGIONAL H EALTH A UTHORITIES
In Volume Five of its study on health care, the Committee advocated major
restructuring of the hospital and doctor system, leading to the devolution of operational
responsibility for health care spending from provincial governments (ministries of health) to
regional health authorities (RHAs). Under such reform, RHAs would become responsible for
purchasing health services from hospitals and other health care institutions on behalf of the
populations they serve. If a province so wished, RHAs could also become responsible for
purchasing primary health care and prescription drugs.95 Devolving responsibility for the full
range of health services from provincial ministries of health to RHAs would lead to a betterintegrated, more coordinated and truly patient-oriented system of health care delivery.
This type of reform,
which has already been implemented in
The Committee believes that RHAs have done
varying degrees in a number of countries, a commendable job of integrating and
including Sweden and the United organizing health services for people in their
Kingdom, was also proposed in the regions during the last decade in Canad,a and
report of the Premier’s Advisory Council
that they should be given more responsibility
on Health in Alberta (the Mazankowski
and authority for delivering and/or
report).96 The Committee believes that
contracting for the full range of publicly
RHAs have done a commendable job of
integrating and organizing health services insured health services.
for people in their regions during the last
decade in Canada, and that they should be given more responsibility and authority for delivering
and/or contracting for the full range of publicly insured health services.
The Committee also believes that such reform would foster competition among
health care providers (both individual and institutional) and encourage cost-effectiveness and
efficiency in service delivery. As stated in Volume Five, 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 and type of health care providers that
operate in each region, as well as factors such as the urban/rural mix. We also acknowledge that
the goals intended by this reform will have to be achieved through other means in Ontario, the
Yukon and Nunavut, since there are no RHAs in these jurisdictions.97
Volume Five, pp. 39-40.
Premier’s Advisory Council on Health, (Right Hon. Don Mazankowski, Chair), A Framework for Reform, December
2001 (http://www.premiersadvisory.com/).
97 The Committee was told that one of the reasons explaining why there are no RHAs in Ontario is the fact that the
Greater Toronto Area is too big for a RHA. One possibility could be to consider implementing the RHA model
elsewhere in that province, while another model allowing for the integration of care could be implemented in the
GTA.
95
96
63
This chapter is divided into five sections. Section 3.1 provides a general portrait
of RHAs across Canada in terms of their current structure, size, scope of responsibility and
funding. Section 3.2 reviews the objectives for which RHAs were established and summarizes
RHAs’ achievements in light of those objectives. Section 3.3 discusses the barriers which
currently prevent RHAs from fulfilling their responsibilities to their fullest potential. Section 3.4
describes how reforms based on some “internal market” approaches have the potential to
address these concerns through the devolution of further responsibility to RHAs. Finally,
Section 3.5 enunciates the Committee’s position on the role of RHAs in Canada.
3.1
RHAs Across Canada: A Portrait98
In Canada, regional health authorities are playing an ever-increasing role in health
care. In the past 14 years, all provinces (except Ontario) and the Northwest Territories have
devolved responsibility for the management of substantial parts of the health care system from
provincial/territorial governments (ministries of health) to RHAs. The common definition for
RHAs in Canada is as follows:
Regional health authorities are autonomous health care organizations with responsibility
for health care administration within a defined geographic region within a province or
territory. They have appointed or elected boards of governance and are responsible for
funding and delivering community and institutional health services within their regions. 99
Despite this common definition, RHAs across Canada differ greatly in size,
structure, scope of responsibility, and number per province/territory. Table 3.1 provides
information on the current number and approximate date of establishment of RHAs in each
jurisdiction, as well as data on the population served. Regionalization of health care is a fairly
recent phenomenon in many provinces. While some provinces have recently reduced the
number of RHAs (for example, British Columbia went from 52 to 6), others have increased the
number (by 1 in New Brunswick and from 4 to 9 in Nova Scotia). In addition, the size of the
population served by a RHA varies widely both between and within provinces.
Unless otherwise indicated, the information contained in this section is based on the following documents:
Ontario Hospital Association, Regional Health Authorities in Canada – Lessons for Ontario, Discussion Paper, January
2002 (www.oha.com).
Regionalization Research Centre, What is Regionalization? (http://www.regionalization.org/).
Ian McKillop, George H. Pink and Lina M. Johnson, The Financial Management of Acute Care in Canada, – A Review of
Funding, Performance Monitoring and Reporting Practices, Canadian Institute for Health Information, March 2001
(http://www.cihi.ca/dispPage.jsp?cw_page=GR_32_E).
Peggy Leatt, George H. Pink and Michael Guerriere, “Towards a Canadian Model of Integrated Health Care”,
HealthCare Papers, Vol. 1, No. 2, Spring 2000, pp. 13-35.
(http://www.longwoods.com/hp/spring00/Papers2.pdf)
British Columbia Medical Association, Regionalization of Health Care, BCMA Policy and Reports, 1997
(http://www.bcma.org/IssuesPolicy/PolicyPapersReports/regionalization/default.asp).
Jonathan Lomas, Regionalization and Devolution: Transforming Health, Reshaping Politics? Occasional Paper No. 2,
October 1997 (http://www.regionalization.org/OP2.pdf).
Jonathan Lomas, “Devolving Authority for Health Care in Canada’s Provinces: 1. An Introduction to the issues”,
Canadian Medical Association Journal, Vol. 156, Issue 3, February 1997, pp. 371-377 (http://www.cmaj.ca/).
99 Definition provided by the Regionalization Research Centre.
98
64
TABLE 3.1
REGIONAL HEALTH AUTHORITIES (RHAs), 2002
British Columbia
Alberta
Saskatchewan
Manitoba
Ontario
Quebec
Nova Scotia
New Brunswick
Prince Edward Island
Newfoundland
Yukon
Northwest Territories
Nunavut
DATE
ESTABLISHED
NUMBER OF
RHAs
1997
1994
1992
1997-1998
1989-1992
1996
1992
1993-1994
1994
1988-1997
-
6
17
12
12
18
9
8
5
6
9
-
POPULATION
SERVED
(range or average)
320,000 to 1.3 million
20,000 to 900,000
30,000 to 50,000
7,000 to 650,000
411,000
34,000 to 384,000
95,000
143,000
143,000
386 to 17,897
-
Source: Ontario Hospital Association, Regional Health Authorities in Canada – Lessons for Ontario, Discussion
Paper, January 2002 (www.oha.com).
Table 3.2 provides information on the scope of services for which RHAs are
responsible in each province/territory. The scope varies significantly. Hospital services are
common to RHAs in all provinces. In addition, in some provinces, laboratory services, longterm care, home care and a variety of other health services are provided by RHAs through
contracts with private not-for-profit and private for-profit organizations. RHAs in Quebec have
been particularly successful in integrating a wide range of health, social and mental services.
However, physician services, prescription drugs and cancer care have not been devolved to
regions and continue to be administered and funded centrally by all provincial/territorial
governments.
65
TABLE 3.2
SERVICES ADMINISTERE D BY REGIONAL HEALTH AUTHORITIES
BC
ALTA
SASK
MAN
QC
NB
NS
PEI
NFLD
NWT
Hospitals
Long
Term
Care
Home
Care
Public
Health
Mental
Health
Rehab
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
Social
Services
Local
Ambulance
Labs
X
X
X
X
X
X
X
X
X
X
X
Source: Ontario Hospital Association, Regional Health Authorities in Canada – Lessons for Ontario, Discussion
Paper, January 2002 (www.oha.com).
RHAs differ in the degree of their decision-making authority. In some
provinces, RHAs operate within specific, provincially determined administrative and fiscal
constraints (Nova Scotia, Manitoba, British Columbia), while others have greater autonomy
(Alberta, Saskatchewan, Prince Edward Island). Only in a few provinces do RHAs have an
elected board of directors (in Alberta, for example, RHAs have a partially elected board). And
only a few boards include representatives from health care providers (as in British Columbia).
None has any role in raising revenue, but all are responsible for local planning, setting priorities,
allocating funds and managing services for better integration and greater effectiveness and
efficiency, within provincially defined policy guidelines. Many also have some direct role in
delivering services, or at least employing health care providers other than physicians.
RHAs receive funding from the provincial/territorial government, usually
through global budgets that are based on historical spending levels for the population served.
Some jurisdictions (such as Alberta, British Columbia and Saskatchewan) have moved to needsbased per-capita funding (adjusted for population, age, sex and need indicators).
3.2
RHAs: Goals and Achievements100
Initially, the objectives of devolving health care decisions to the regional level
were multiple. According to the Canadian literature, they included: 1) cost containment;
2) responsiveness to local needs; 3) local control of decision-making; 4) coordination and
integration of services; 5) efficient use of health care resources; 6) improved access; 7) effective
management; 8) greater accountability; 9) emphasis on population health and wellness; and
10) better health outcomes.
For more information, see for example the following two documents: 1) Robert Bear, “Can Medicare Be Saved?
Reflections from Alberta”, in Healthcare Papers, Summer 2000, pp. 60-67; 2) The Mazankowski report (December
2001).
100
66
There have been few evaluations of regionalization to determine the extent to
which these goals have been or are now being met. However, the testimony received by the
Committee and the evidence available from the literature suggest that RHAs have been very
successful in many respects:
•
RHAs provide health services at reduced administrative costs. For example,
the Capital Health Region located in Edmonton devotes less than 3% of its
total budget to administrative costs.
•
RHAs have a strong focus on illness prevention and public health and ensure
interactive relationships with their communities.
•
RHAs are well suited to the integration and coordination of the institutions
and organizations providing health services. In doing so, they deliver greater
efficiencies, higher quality of service and continuous quality improvement.
•
Better integration and coordination at the regional level allow for the use of
the least costly providers commensurate with accessibility and quality of care
goals for each individual consumer.
•
Integrated health service delivery at the level of RHAs enhances the ability to
respond to service demands, such as Emergency Department pressures,
through integrated responses using home care, continuing care and acute care
resources.
•
RHAs have greater flexibility in reallocating and consolidating clinical services
between health care providers and institutions.
Overall, RHAs are pivotal to
The Committee views RHAs as key
the health care system, acting as
intermediaries 1) between the patient and the players in the reform of Canada’s
They offer
provider, 2) between government and the health care system.
tremendous
opportunities
for
renewing
local population, and 3) between the insurer
and sustaining health care in Canada.
(government) and the various providers. In
this regard, the Committee views RHAs as
key players in the reform of Canada’s health care system. They offer tremendous opportunities
for renewing and sustaining health care in Canada.
3.3
Barriers that Prevent RHAs from Functioning to Their Fullest
Potential101
During its study, the Committee learned that a number of barriers currently
prevent RHAs from operating to their fullest potential. These are summarized below:
Unless otherwise indicated, the information presented in this section is based on the following documents:
The Mazankowski report (December 2001).
Glenn G. Brimacombe and Lorraine Pigeon, A Review of the Funding Flows of Regional Health Authorities in British
Columbia, The Conference Board of Canada, 2001.
Cam Donaldson, Gillian Currie and Craig Mitton, “Integrating Canada’s Disintegrated Health Care System –
Lessons from Abroad”, C.D. Howe Institute Commentary, April 2001 (www.cdhowe.org).
101
67
•
While RHAs are responsible for delivering health services according to the
needs of their populations, their budgets are, in some provinces, almost
completely determined by government and their performance targets are set
by government. In these provinces, RHAs have few options if they are
unable to meet their residents’ health needs within their existing financial
resources. A number of observers have suggested that RHA boards must
spend a great deal of their energies lobbying the province for increased
funding. They have suggested that this effort would be better spent on
setting their own priorities and achieving their own set of objectives rather
than responding to the priorities and objectives set for them by government.
•
There are weaknesses in RHAs’ planning and budgeting of resources, as well
as gaps in reporting performance. Currently, RHAs are required to provide
business and budget plans to the province. In some cases, however, these
plans are very general in nature. Specific targets are not set and agreed to by
both parties, and budgets are more in the nature of guidelines rather than
setting formal limits on what can be spent and for what purposes. Some
analysts have suggested that agreements with the provincial government
should clearly spell out what happens if RHAs do not manage to live within
their budgets or do not achieve their performance targets. This would greatly
improve transparency and enhance accountability.
•
A useful example of how setting specific targets can be done in practice was
brought to the attention of the Committee. Alberta Health and Wellness,
along with Capital Health of Edmonton and Calgary Health Region, annually
set target volumes for a number of province-wide services (such as organ
transplants, open heart surgery, major trauma and burn care and complex
neurosurgery). These targets are set based on health status, incidence of
health conditions and trend data. The ability of these two Albertan RHAs to
achieve the targets and the associated health outcomes are monitored
annually.
•
While doctors direct much of what happens in health care, they are
remunerated independently of RHAs. For example, if a physician orders a
laboratory test or an X-ray, it is the RHA that carries the financial burden,
not the physician. David Kelly, former Assistant Deputy Minister of Health
in Alberta and British Columbia, told the Committee:
Health regions have been in place now in western Canada for the better part of a decade,
with a mandate and the resources to provide many publicly paid for health care services.
However, to date these regions have been given virtually no responsibility for the provision
of physician services. Physician payment remains a responsibility of Health Ministries,
which negotiate province-wide contracts with the physicians’ unions. To date, these
contracts, in my opinion, have done little to assist in the integration of physician’s services
with regional health care services, or to promote primary care reform. A notable
exception is the decision by Alberta in 1994 to move the responsibility and resources for
the provision of all laboratory services, both hospital and contracted private laboratory, to
68
the health regions. This step, which moved about 10% of the physician budget to the
regions, produced substantial savings and an integrated lab service at the regional level.
Both the Fyke and Mazankowski reports recommend that at least part of the
responsibility for the payment of physician services should move to the regions (…).102
This problem could be significantly ameliorated if the cost of physician services
was included in the budget of RHAs rather than having physicians paid separately by
provincial/territorial governments. Perhaps more important, moving both drug therapy and
primary health care to the budget of RHAs would ensure, from the patients’ perspective, a fully
integrated health care system (or a “seamless system”):
(…) the move to regional health authorities may have reduced some of the problems of
uncoordinated care among organizations but it is not clear whether it has improved
integration of many patient-care processes. Essential components for integrated care have
been excluded from the authority of regional bodies – drugs and medical care being the
most important. A regional health authority without responsibility for physicians and
pharmaceuticals cannot provide integrated health care. 103
In
light
of
this
evidence, the Committee believes that
increased responsibility for decisionmaking related to the full range of
health services, enhanced responsibility
for planning and better control over
the allocation of resources would lead
to greater integration of health services;
these are all appropriate roles for
RHAs in the publicly funded health
care system today and in the future.
The Committee believes that increased
responsibility for decision-making related to
the full range of health services, enhanced
responsibility for planning and better control
over the allocation of resources would lead
to greater integration of health services; these
are all appropriate roles for RHAs in the
publicly funded health care system today and
in the future.
This requires governments to move away from “top-down” approaches and
toward devolving the management and governance of health care at the regional level. The role
of government should be that of overall system governance, setting policies with respect to the
health of the population, negotiating strategic plans and budgets and funding RHAs to achieve
their objectives.
A policy-based on some of the principles of an “internal market” approach is
one potential reform that would devolve greater responsibility to RHAs, depoliticize health care
decisions at the regional level, encourage more competition and more choice in the health care
sector and provide Canadians with a truly seamless health care system.
102
103
David Kelly, Brief to the Committee, pp. 7-8.
Peggy Leatt et al. (Spring 2000), p. 18.
69
3.4
RHAs and the Potential for Internal Markets104
The concept of “internal markets” may sound quite complex, but it simply refers
to the introduction of market-like mechanisms into the publicly funded health care system.
These market-style incentives would take place on the delivery and allocation sides of health care
systems, not on the financing side. Internal market reforms are introduced in pursuit of
efficiencies in the delivery of care and in the allocation mechanisms that distribute revenue to
the health care providers and institutions.
The markets are “internal” because they involve, on both the demand and supply
sides, entities within the publicly funded health care system itself. On the demand side, there is a
publicly funded purchaser that operates as the agent for the population of patients being served.
On the supply side, there is another entity providing the service. In this context, the purchaser
would be the RHA, while the provider could be a hospital, specialist, laboratory, primary care
physician, etc.
A number of observers have suggested that the Canadian health care system
already involves several characteristics inherent to internal markets. For example, in most
provinces RHAs purchase or contract for hospital services on behalf of their citizens. Prior to
that, a global budget or some population-based funding is negotiated separately between the
government and each RHA.
What has not happened yet in Canada is 1) the clear, explicit devolution of
responsibility from governments to RHAs for the purchasing of the full range of health services;
and 2) the establishment of a consistent framework of expectations, so that a variety of
providers could compete for funding on a level playing field, with clear accountability, using a
business or performance contract model. In some instances, RHAs currently simply pass the
budget received from their provincial/territorial governments on to hospitals, based on
historical spending patterns. In addition, none of the RHAs in Canada is responsible for the
budget of physicians (hospital-based specialists or primary health care doctors) or for the
spending on prescription drugs. As a result, there can be no competition (and no market-like
behaviour) among health care providers and institutions, and no real integration of the various
publicly insured health services.
Some Canadian experts contend that an internal market approach based on
RHAs acting as the purchasing agents would foster effective management of health services and
improve the quality of care in their regions:
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. 105
The information provided in this section is based on the following documents:
European Observatory on Health Care Systems, Health Care Systems in Eight Countries: Trends and Challenges, April
2002 (http://www.euro.who.int/observatory/TopPage).
Volume Three, Chapters Four and Five, January 2002.
Volume Five, April 2002.
104
70
Applying the principles of internal market reform at the regional level does not
imply that hospitals currently owned by RHAs must be turned to the private sector. There is
opportunity to apply the rationale behind internal market reforms in Canada through
competitive contracts among the RHAs and the various public (RHA owned) hospitals.
Competition can be further enhanced when private providers are allowed to compete with
public providers for some publicly insured health services (such as day surgery and long term
care). In addition to enhanced competition, these contracts between RHAs and their hospitals
could set specific performance targets; this would greatly improve the accountability of hospitals
and other health care providers.
The Committee holds the view that reforms based on internal market
approaches have the potential to introduce competition among hospitals, other institutions and
individual health care providers. Competition will also provides the incentives for providers to
become more efficient and cost-conscious and to make decisions about what to provide, to
whom, and what standard of service they can achieve.
Furthermore, the Committee
The Committee believes that an
believes that such reforms would ensure that
RHAs have the necessary flexibility to internal market reform can reconfigure
reconfigure services in a way that is more in line services in a way that is more in line
with population needs.
Perhaps most with population needs.
important, reforms based on internal market
principles solve the current problem in some provinces of top-down management by provincial
health departments. In addition, an internal market approach will introduce a much greater
degree of transparency into the system and enhance the accountability of all parts of the system.
Internal market reforms involving the devolution of clear responsibility to
regional health bodies have been implemented in Sweden and the United Kingdom. In Sweden,
prior to reforms, hospitals were owned and operated directly by the county councils, which were
responsible for financing and delivering health services and which employed most physicians,
both hospital-based physicians and those providing primary health care. The reforms brought
new contractual arrangements and new payment schemes.
More precisely, public hospital management was devolved from county council
control to independent boards of directors. Hospital remuneration was changed to Diagnostic
Related Groups (DRGs), a form of service-based funding (like the one recommended in Chapter
Two of this report). Reforms of the primary health care sector were also introduced to allow
county councils to purchase physician services. A number of primary health care physicians now
operate privately under contract with the county councils; they are reimbursed by the county
councils on a fee-for-service basis. Some other county councils have introduced capitation
payments for primary health care physicians. Overall, estimates suggest that county councils in
which internal market reforms were implemented were able to reduce costs by 13% over those
who retained the status quo.
In the pre-reform system of the United Kingdom, hospitals were state-owned
and operated by the National Health Service (NHS) through its RHAs. The budget of each
105
Cam Donaldson et al. (April 2001), p. 8.
71
RHA was determined by the central government and was based on a weighted capitation
formula. Each hospital’s budget was then determined regionally through an administrative
process involving negotiations between its management and the relevant RHA. Hospital
specialists were salaried employees of the NHS. A major critique of the system was that RHAs
were purchasing services on behalf of their local populations, but at the same time they were
running the local hospitals. Thus, they had a pronounced conflict of interest aimed at protecting
those hospitals.
When internal market reforms were introduced, RHAs ceased to manage their
own hospitals directly and became responsible, as purchasing organizations, for contracting with
NHS hospitals and private providers to deliver the services required by their resident
populations. Hospitals, for their part, were transformed into NHS Trusts: that is, not-for-profit
organizations within the NHS but outside the direct ownership of RHAs. A system of DRGs
was developed for providing payment to hospitals.
A review of the literature suggests that there has been little rigorous evaluation of
the role of RHAs as purchasers of care in the United Kingdom. The fact that all RHAs became
purchasers at the beginning of the reforms meant that there was little scope for comparative
analysis. According to some experts, the internal markets did not function as originally
envisaged because of a lack of incentive on both sides of the market to make restructuring work.
Perhaps more important, responsibility for primary health care was never
devolved to RHAs. Primary health care physicians were encouraged to establish GP
Fundholding practices. GP Fundholders were given a fund to purchase, on behalf of their
patients, prescription drugs, hospital-based physician services and some hospital care. As such,
most primary health care physicians practising as GP Fundholders became rival purchasers to
RHAs. In fact, the GP Fundholding system became so popular that the central government
decided to pass purchasing responsibilities from RHAs to GP Fundholders (which later became
Primary Care Trusts).
According to Donaldson, Currie and Mitton (2001), the potential for turning
RHAs into purchasers exists in Canada. RHAs now exist in most provinces/territories and the
fact that most of Canada’s health care is consumed in and around large cities allows, in their
view, for plenty of potential competition among providers. They stress, however, that there are
challenges to overcome.
•
First, the method of remunerating hospitals would have to change if marketlike incentives were to work. That is, hospitals would have to be
remunerated according to service-based funding. This is one of the reasons
why the Committee has recommended service-based funding in Chapter
Two.
•
Second, if hospitals were to commit to contracts established with RHAs,
more control would have to be exerted by hospitals over those who work in
them. Ultimately, this would require that responsibility for the budget of
hospital-based specialists be devolved to RHAs.
•
Third, to achieve a fully integrated or (“seamless”) health care system, the
budget for primary health care physicians would have to be allocated to
72
RHAs for contracting with physicians in their region. Physicians or groups
of physicians should be able to choose the option of entering into contracts
with RHAs or working outside the system. This would require a revision of
the current mode for remunerating doctors.
•
And fourth, serious consideration should be given to devolving authority for
spending on prescription drugs to RHAs.
According to the Mazankowski report, RHAs are ready to take up these
challenges. More precisely, the report stated:
•
RHAs should consider establishing contracts with hospitals in their region as
well as alternative ownership arrangements and payment mechanisms.
•
RHAs should be encouraged to contract with a variety of providers including
clinics, private and not-for-profit providers, groups of health care providers
(including primary health care physicians) and other regions.
•
RHAs should be encouraged to foster the development of centres of
specialization. RHAs with specialized 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 Committee acknowledges the fact that, while internal markets can improve
efficiency in large urban centres and populated areas, they cannot work properly in regions with
a low population density. This point was also raised by Michael Decter, currently Chair of
CIHI’s Board of Directors and formerly Deputy Minister of Health in Ontario, when he stated:
(…) population density is underrated as a factor in the ability to implement an internal
market. It is one of the hazards of the European experience brought to Canada.
Purchaser/provider splits work well where you have enough density of population and
enough density of providers to have some competition.
(…) We have two realities in Canada. We have a good portion of the population,
perhaps 70 percent, living in a handful of big cities where I think this model can work.
The competition could be virtuous in terms of driving a better price and quality over time.
In the rest of it, you need strategies to have enough service there to meet the needs. It is
not a matter of competition. It is more a matter of stability of funding and strategies to
allow providers to actually locate.106
The Committee also acknowledges that there are currently no RHAs in Ontario,
the Yukon and Nunavut. Accordingly, reforms based on internal markets with RHAs having
responsibility for the full range of health services would not be possible in these jurisdictions.
Alternatives approaches to integrating health service delivery and improving efficiency will
therefore need to be considered.
106
Michael Decter (52:12).
73
3.5
Committee Commentary
The Committee believes that the
devolution of further responsibility to regional The Committee strongly believes that
health authorities is an important step in now is the time for RHAs to be given
reforming health care in Canada. In fact, RHAs
greater control over the full range of
exist in most provinces and a large percentage of health care spending in their region.
health care spending occurs in and around large
cities, creating the potential for competition among the various providers and institutions. We
strongly believe that now is the time for RHAs to be given greater control over the full range of
health care spending in their region.
The Committee acknowledges that establishing market-style incentives among
health care institutions requires sufficient numbers of providers and a significant population
base. Thus, while a number of regions across Canada would be capable of undertaking internal
market reforms, some of the smaller provinces and some regions within the larger ones would
be unable to do so. In our view, internal market reforms should be done in those geographic
locations where gains can be achieved in terms of effectiveness and efficiency.
The Committee also believes that a reform based on the principle of internal
markets is the solution to the various barriers that prevent RHAs from operating to their fullest
potential. On the one hand, political interference will be minimized when RHAs are given the
freedom and responsibility for achieving targets and performance standards. On the other hand,
RHAs will have the needed flexibility to allocate their financial resources more cost-effectively
and more in line with the needs of the population they serve. In addition, bringing the primary
health care envelope under the authority of the RHAs will ensure that they have the levers to
exercise more control over these costs. Moreover, devolution of financial responsibility for
hospital services, hospital-based physicians and primary health care will encourage competition
and allow RHAs to deliver/contract for the most efficient and timely services. Finally, assuming
responsibility for the full range of health services will result in a better integrated and more
patient-oriented health care system.
The Committee acknowledges that the introduction of internal market principles
within the publicly funded health care system requires changing the method of remunerating
hospitals. We believe that service-based funding is the most appropriate method, and our
recommendation to that effect is
detailed in Chapter Two.
The Committee is
also aware that, in order to be
successful, internal market reforms
require detailed and reliable costing
information. We also believe that
the recommendations we make in
relation to the full deployment of a
national system of electronic health
records, along with an independent
evaluation of performance and
Despite the fact that the management and delivery of
health services is an “intensively provincial matter”,
the Committee is of the view that the federal
government can play an important role in improving
health care delivery at the regional level through its
sustained investment into the health care infostructure, the evaluation of health care system
outcomes and the supply of human resources in
health care.
74
outcomes (see Chapter Ten), will greatly facilitate such reform.
We understand that there have been few, if any, rigorous assessments of the
internal market reforms undertaken in other countries. We believe that the influence of many
factors, such as introducing different reforms simultaneously, has made it difficult to isolate the
impact of the internal market reforms undertaken elsewhere. For this reason, the Committee
feels it is important to monitor and evaluate the impact that reforms based on internal market
principles can have in Canada on productivity, health outcomes, access to publicly insured
services, waiting times, etc., and to report this information to Canadians.
Despite the fact that the management and delivery of health services is an
“intensively provincial matter,” the Committee is of the view that the federal government can
play an important role in improving health care delivery at the regional level through its
sustained investment into health care info-structure (particularly the development of the
information systems that make it possible to move to service-based funding for hospitals), the
evaluation of health care system outcomes, and the supply of human resources in health care
(each of these issues is addressed in subsequent chapters of this report).
Therefore, the Committee recommends that:
Regional health authorities in major urban centres be given
control over the cost of physician services in addition to
their responsibility for hospital services in their regions.
Authority for prescription drug spending should also be
devolved to RHAs.
Regional health authorities should be able to choose
between providers (individual or institutional) on the basis
of quality and costs, and to reward the best providers with
increased volume. As such, RHAs should establish clear
contracts specifying volume of services and performance
targets.
The federal government should encourage the devolution of
responsibility from provincial/territorial governments to
regional health authorities, and participate in evaluating the
impact of internal market reforms undertaken at the
regional level.
75
CHAPTER FOUR
P RIMARY H EALTH C ARE REFORM
4.1
Why is Primary Health Care Reform Needed?
Primary health care constitutes a patient’s first point of contact with the health
care system. According to the Canadian Medical Association, “primary medical care includes the
diagnosis, treatment and management of health problems; prevention and health promotion; and
ongoing support, with family and community intervention where needed.”107
At present, primary care delivery in Canada is organized mainly around family
physicians and general practitioners working solo or in small group practices. Approximately
one-third of primary care physicians work alone and fewer than 10 percent work in
multidisciplinary practices. The vast majority of primary care practices are owned and managed
by physicians. Fee-for-service (FFS) payment is the dominant form of physician remuneration.
A variety of weaknesses and problems with the way in which primary care is
generally delivered in Canada have been noted. These include:
•
fragmentation of care and services;
•
inefficient use of health care providers;
•
lack of emphasis on health promotion;
•
barriers to access (care not available after hours and on weekends);
•
poor information sharing, collection, and management;
•
misalignment of incentives, especially fee-for-service remuneration that
rewards episodic more than continuing care and health promotion/disease
prevention.108
A fairly wide consensus is
emerging that the creation of primary
care groups (PCGs) is central to reform
of primary care delivery, and just about
every major provincial report issued in
recent years has recommended some
version of primary care reform (see
section 4.2.1). As Michael Decter, former
Deputy Minister of Health in Ontario,
told the Committee:
There is a fairly wide consensus emerging that
the creation of primary care groups (PCGs) is
central to reform of primary care delivery, and
just about every major provincial report issued
in recent years has recommended some version
of primary care reform.
Cited in Ann L. Mable and John Marriott, Health Transition Fund Synthesis Series – Primary Health Care, June 2002,
p. 1.
108 Ibid., p. 2.
107
77
The single biggest thing is to move from a model that cannot really work any more —
which is solo practice — to groups. Those groups could have many configurations. 109
Primary care groups are practices composed of several physicians; they can also
incorporate other health care professionals (potentially including nurses, nurse practitioners,
physiotherapists, dieticians, midwives, psychologists, etc.).
In nearly all existing models of primary care groups, patients have to enrol with a
specific group or physician within a defined group for a definite period of time. The PCG is then
responsible for ensuring access to primary care for enrolled (rostered) patients 24 hours a day,
seven days a week. Once enrolled, patients are expected to remain with their designated primary
health care group for a specific period, usually six months to a year, unless they change their
place of residence. The primary care physician or team acts as the gatekeeper to the rest of the
health care system, referring enrolled patients to specialists. As now, the choice of specialist
would be negotiated with the patient, by the primary care physician concerned . However, the
rostered patient would not have direct access to a specialist (as is, in theory, the case now) or to
other family physicians outside the group, except, of course, in urgent situations.
There are several potential advantages to a system based on PCGs, including:
•
Guaranteed patient access on a 24/7 basis to the patient’s own team of
doctors and other providers;
•
Better utilization of the spectrum of health care providers, and better
coordination of patient services, through interdisciplinary teamwork;
•
Potential cost savings in the longer term by reducing demand on expensive
emergency rooms and specialists’ services and by making sure that the most
appropriately qualified professional handles each task;
•
Provision of health promotion and illness prevention measures to patients.
In Volume Five, the Committee accepted the need for diversity in the models of
primary care groups appropriate for the many and diverse regions and provinces of the country.
The Committee drew on the various reports (see section 4.2.1) to establish a list of desirable
attributes for all models of multi-disciplinary primary health care teams, including:
109
•
The provision of a comprehensive range of services, 24 hours a day, seven
days a week;
•
Delivery of services by the most appropriately qualified health care
professional;
•
Adoption of alternative methods of funding to fee-for-service, such as
capitation, either exclusively or as part of blended funding formulae;
•
Integration of health promotion and illness prevention strategies in the
teams’ day-to-day work.
52:9
78
•
Full integration of electronic patient health records into the delivery of care.
One issue that surfaced during the Committee’s most recent hearings was
whether primary care reform would lead to noticeable cost savings. Some witnesses suggested
that, because PCGs allow for all providers to practise to the full extent of their scope of practice,
it should be possible to save money by having the most appropriately qualified provider deliver
each service. These witnesses saw a potential source of savings in the fact that, for example, up
to 60-70% of the procedures performed by physicians could be done by nurses or nurse
practitioners (nurses with advanced qualifications). They felt that two things could be
accomplished by transferring these tasks to other qualified personnel who are not as highly paid
as physicians: money could be saved in the short term, and physicians would also be able devote
a greater proportion of their time to those tasks for which only they are qualified, many of which
are now referred to specialists because primary care physicians lack the time to do them.110
While all witnesses agreed that there would be efficiency gains by allowing
physicians to concentrate on the full range of procedures where their particular training and
skills were required, several witnesses questioned whether the anticipated cost savings would in
fact be generated. For example, Dr. Peter Barrett, former president of the CMA, noted that:
expanding the primary care team to include nurses, pharmacists, dieticians and others,
while desirable, will cost the system more, not less. Therefore, we need to change our way
of thinking about primary care reform. We must think of this as an investment, not in
terms of cost savings but as a cost effective way to meet the emerging, unmet needs of
Canadians. 111
At the same time, the Committee feels that there would be factors that would
indeed operate to reduce costs. Dr. Barrett’s comment is based on the assumption that there is a
large amount of unmet need which, as a result of primary care reform, would be filled because
more health care professionals will be supplying more services. Under a fee-for-service
arrangement, this would obviously cost more money. At the same time, however, if primary care
physicians provide services through the full range of their competency, there would also be a
decrease in referrals to specialists.112
However all witnesses argued that even if there were no short-term cost savings,
the importance of primary care reform was not diminished. Rather, the discussion brought to
the fore other reasons for pushing it forward. In the words of Professor Brian Hutchison of
McMaster University:
This point is well illustrated by the following facts from a 1999 report of the Ontario Health Services
Restructuring Commission, cited in Volume Four of the Committee’s study (p. 110). One third of billings by
specialists in Ontario in 1997 (at a total cost of $1.4 billion) was work that could have been done by family doctors.
The five most frequently used billing codes by Ontario family doctors in 1997, which account for about 69% of the
total amount billed by these doctors (at a cost of $1.2 billion), were for: intermediate assessments (well baby care),
general assessments, minor assessments, individual psychotherapy, and counselling. The clinical consultants to the
Ontario Health Services Restructuring Commission were of the opinion that most, if not all of the services these
bills represent could well be provided by nurse practitioners, nurses and many well-trained health professionals.
111 56:12
112 Research done for the Ontario Health Services Restructuring Commission shows that the most dramatic
decrease in referrals would be to dermatologists and ear-nose-and-throat specialists.
110
79
The emphasis on cost control has led to a focus on nurse practitioners as substitutes for
physicians. The other dimension that needs to be explored is their potential for
broadening the scope of primary care and providing a greater emphasis on health
promotion, prevention and health counselling, where they have a great deal to offer,
probably more than physicians. We should think of nurse practitioners in a
complementary role, not mainly with the idea of saving money. We should view them in
terms of improving health. 113
The Committee strongly endorses this point of view. Indeed, the synthesis report
on various primary health care projects undertaken under the auspices of Health Canada’s
Health Transition Fund provides further evidence in this direction. Discussing a project that
evaluated the role of a nurse practitioner in the context of a multidisciplinary team working out
of a Calgary clinic, the report says:
Although the physicians were not initially clear on the role of the nurse practitioner, the
project soon saw nurse practitioners facilitating communication among various providers,
“significantly” increasing access to care, improving quality, and handling cases, thus
allowing physicians to spend more time with patients who required their services; 95 per
cent of patients were satisfied with the initiative. 114
4.2
The Provinces and Primary Care Reform
In this section, we review briefly the highlights of six provincial reports that
contain recommendations for primary care reform. We then look at recent implementation
initiatives in three provinces, Ontario, Quebec and New Brunswick, that have progressed
beyond report-writing and pilot projects.
4.2.1 Recent reports
Table 4.1 (end of chapter) presents an overview of the different proposals
contained in six reports released since late 1999,115 organized according to a number of key
58:13
Marriott Mable, op cit., p. 20
115 These reports are:
1. 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.
2. Commission d’étude sur les services de santé et les services sociaux (Michel Clair, Commissioner), Emerging
Solutions – Report and Recommendations, January 2001
3. Saskatchewan Commission on Medicare (Kenneth Fyke, commissioner), Caring for Medicare – Sustaining a Quality
System, April 2001
4. 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.
5. Primary Care Advisory Committee (Kathy LeGrow, Chair), The Family Physician’s Role in a Continuum of Care
Framework for Newfoundland and Labrador, A Framework for Primary Care Renewal, Department of Health and
Community Services, Newfoundland and Labrador, December 2001.
6. Report from the Premier’s Health Quality Council, Health Renewal, Government of New Brunswick, January 2002.
113
114
80
elements of primary care reform. All six contain many important similarities and a number of
significant differences.
All of the reports advocated the delivery of comprehensive primary care through
some form of multidisciplinary team, usually 24 hours a day, seven days a week. However, the
means suggested for achieving this objective varied considerably, as did the detail provided in
the various reports. It is important to note that all stressed the need for the introduction of some
form of Electronic Health Record (EHR – see Chapter Ten), although not all linked this need
directly to their proposals for primary care reform.
The reports differed in their descriptions of the multi-disciplinary teams, and in
the ways in which they envisaged the connections between primary care groups and other health
care providers such as hospitals. Only a minority of the reports advocated specific alternate
funding mechanisms, and only two presented explicit proposals for rostering.
Although it is too early to say whether the recommendations of these various
reports will be implemented, the Ontario example is perhaps instructive. The Health Services
Restructuring Commission (Sinclair) Report was both the first to be issued and contained the
most detailed outline of how primary care reform should be carried out. As Ontario became the
first to begin implementation of a province-wide scheme for primary care reform it is interesting
to note that the actual model being put in place appears to be less uniform, as well as more
flexible and voluntary than the plan contained in the report.
4.2.2 The Ontario Family Health Network
The Ontario Family Health Network (OFHN) was created in March 2001 as a
semi-arm’s-length agency that reports to the Ontario Ministry of Health and Long-Term Care
(MOHLTC). The OFHN provides family physicians with information, administrative support
and technology funding to support the voluntary creation of Family Health Networks (FHNs) in
their communities.
The FHN model encourages groups of family doctors and allied health
professionals, such as nurse practitioners, to work together to provide accessible, co-ordinated
care to patients enrolled with them. OFHN provides funding, guidelines and support, but
doctors voluntarily decide to form a local FHN and plan how they will work together to best
serve their patients.
A minimum of five physicians (one of whom must act as group leader) and 4,000
enrolled patients are required to form an FHN, which can be spread over more than one site. In
addition to regular office hours, one FHN office must be open from 5 p.m. to 8 p.m. Monday to
Thursday, and three hours each day on the weekend. After hours, rostered patients have access
to a phone line staffed by nurses, with support from a FHN doctor on call.
Pilots, known as Primary Care Networks, were created in 1998. Between 1998
and 2000, 14 pilot networks were created in seven communities, today embracing more than 178
physicians and approximately 270,000 enrolled patients. In November 2001, the O ntario Medical
Association (OMA) voted to allow the OFHN to begin offering Family Health Network
agreements to doctors in northern and rural Ontario. In January 2002, the OMA voted to allow
81
a general contract agreement to be released to family doctors throughout the province. In May
2002, a group of six doctors from the Dorval Medical Associates in Oakville formed the
province's first Family Health Network.
Patients who sign on to an FHN agree to contact their Family Health Network
doctor first when they need a health service, unless they are travelling or in an emergency
situation. They also agree to allow the Ministry of Health and Long-Term Care to provide to the
FHN doctor some information about health services received by the patients from family
physicians outside their network. In addition, the MOHLTC can release to the Family Health
Network doctor dates of immunizations, cervical screenings and mammograms.
Referrals to specialists, or to other family physicians for second opinions, is done
by the Family Health Network physician in consultation with each patient. Patients can continue
to use the services of their doctor without joining that doctor’s FHN. Similarly, if they decide to
cancel their enrolment in their doctor’s FHN, they do not have to change family doctors. He or
she can continue to see that doctor on the same basis as before they joined the network. Patients
are free to change the doctor with whom they are enrolled up to twice a year. If, however, they
are seeing another general practitioner on a regular basis, the doctor with whom they are
enrolled can remove them from his or her Family Health Network roster of patients.
Physician satisfaction has been high and, to date, no physicians have left the pilot
networks. The agreements that physicians sign in order to create an FHN address patient and
physician rights and responsibilities, physician compensation, and administrative support.
Payment for rostered patients - which is weighted by age and gender (see Table
4.2) and covers a basket of 57 common primary care services - is expected to amount to about
60% of FHN revenue. There are additional payments for providing preventive health services
such as vaccinations, Pap smears and mammography; bonuses for repatriating patients who
previously saw other physicians for any of the core primary care services; an on-call fee; and
premiums for non-core services such as deliveries and hospital in-patient care.
TABLE 4.2
RATIO FOR PAYMENT OF BASE RATE PAYMENT AND
SPECIAL PAYMENT BY AGE AND SEX
Age
00-04
05-09
10-14
15-19
20-24
25-29
30-34
35-39
Male
1.05
0.55
0.44
0.46
0.46
0.50
0.58
0.72
Female
1.00
0.54
0.46
0.82
1.03
1.07
1.08
1.17
82
Average
1.03
0.55
0.45
0.64
0.74
0.79
0.83
0.95
Age
40-44
45-49
50-54
55-59
60-64
65-69
70-74
75-79
80-84
85-89
90+
Male
0.80
0.88
1.02
1.16
1.27
1.43
1.66
1.99
2.08
2.34
2.64
Female
1.20
1.30
1.46
1.47
1.50
1.58
1.69
2.01
2.08
2.37
2.68
Average
1.01
1.11
1.25
1.33
1.40
1.52
1.69
2.00
2.08
2.36
2.67
Note: $96.85 is the multiplier for the base rate payment.
Source: Matt Borsellino, “Primary Care Payment Options Become
Available,” The Medical Post, 4 December 2001, p. 8.
Physicians can also bill for continuing medical education, and each network is
entitled to up to $25,000 annually to defray additional administration costs. FHNs are also
eligible for funding to set up an information technology system, including electronic patient
records, drug interaction alerts, tracking of preventive care measures and electronic billing.
A physician who does an “average” amount of office work, hospital, obstetrics
and ER, with a roster size of 1,480, patients might be paid $254,846 under the blended model.
For a physician who only does office work and has a roster size of 1,423 patients, the annual
payment might be $204,256. For a roster of only 598 patients, gross payment is $105,455.
Dr. Elliot Halparin, a Georgetown, Ont., family physician and President of the
OMA, said average payment under the blended model of the urban FHN template is an
estimated $244,500, assuming a roster size of 1,600 patients. This compares with $210,700 under
traditional fee-for-service. The numbers are based on the average billings of the 6,500 to 7,000
Ontario family physicians who provide comprehensive care.
While it is too early to attempt any evaluation of the actual OFHN project, an
assessment of the pilot projects (Primary Care Networks or PCNs) that preceded the full rollout
was done by PriceWaterhouseCoopers for the MOHLTC in October 2001. Some of the
conclusions are worth noting:
•
The top five benefits physicians have experienced in being part of a PCN are:
the lifestyle and practice-style benefits of the capitation model; better care for
patients; information technology (IT); increased income; shared call and
coverage for absences.
•
The top challenges physicians have faced in being part of a PCN are:
administrative demands; IT; patient rostering; dealing with the Ministry.
83
•
To date, the involvement of nurse practitioners and other health care
providers in the networks has been limited, although patients report very high
satisfaction with nurse practitioners.
•
Role definition and team integration have been challenges in integrating nurse
practitioners into PCNs; the nurse practitioner to physician ratio extremely
low in many PCNs.
•
It has been proposed that nurse practitioners might have an impact on costeffectiveness, but there is no definitive evidence on the economic impact of
nurse practitioners in the PCNs.
•
There is high physician satisfaction with capitation, and preliminary evidence
of changed behaviours due to capitation incentives.
•
The teletriage service appears to have had a positive impact on emergency
room utilization. Data from the teletriage service provider suggests that in the
absence of the teletriage service, callers would have made 1,874 visits to
hospital emergency rooms. However, the teletriage service advised only 871
callers to seek emergency care – a difference of 1,003 visits.
networks:
The report also noted three categories of barriers that impede the progress of the
•
Implementation barriers. Examples include delays in various IT components,
insufficient multidisciplinary resources, inability to respond to higher than
anticipated teletriage call volumes, and insufficient patient and public
education about the reform.
•
Model barriers. Examples include a physician-centric approach to the reform,
issues with the bonus codes and capitation rates, insufficient feedback to
physicians on outside use, and the need for specific performance measures
for the PCNs.
•
Systemic barriers. Examples include physician shortages, the health care
funding structure, lack of integration with reforms in other health sectors and
gaps in service.
The Committee feels it is important to note that the model adopted in Ontario
differs considerably from that advocated by the Hospital Restructuring Commission. The
Commission had wanted governments to stop paying for individual services performed by
physicians and move to a model in which the PCG as a whole would be funded primarily using
capitation. In the Committee’s view this proposal would have led to the creation of genuine
group practices, instead of the kind of practice that seems to be emerging in Ontario, where
practitioners who remain essentially independent work together under a single roof. The
Committee agrees with the approach recommended by the Hospital Restructuring Commission.
However, two other provinces recently announced initiatives in primary care
reform that more closely resemble the recommendations of the reports that had been
commissioned in their respective jurisdictions.
84
4.2.3 Quebec
On June 4, 2002, the Quebec Minister of Health and the President of the
Quebec Federation of General Practitioners announced that they had reached agreement on
arrangements for establishing the first 20 family medicine groups (FMGs). This is part of a plan
to create over 300 of these groups over the next four years, by which point, as recommended by
the Clair Commission, they are expected to provide primary care service to 75% of the
province’s population. 116
The creation of FMGs is voluntary, as is patient enrolment. Each FMG will
involve 6 to 10 physicians and nurses and provide a full complement of primary care services to
10-20,000 patients.117 During an initial transitional phase, physicians will continue to be
remunerated for clinical activity in the same way as now (fee-for-service, salary, etc.), but will
also receive payment on an hourly basis for activities associated with the operation of the FMG,
such as the coordination of services for enrolled patients, or interdisciplinary collaboration with
other providers, as well as a yearly premium for each patient on their roster.118
Patients enrol with the doctor of their choice within a given FMG. Enrolment
lasts a year and is automatically renewed unless the patient cancels in writing. Patients agree to
consult their doctor (or someone else from the FMG) first, unless it is an emergency or they are
travelling. FMGs are open for extended hours and guarantee service 24/7 using telephone
emergency service.119
The Quebec government has committed $15 million to finance the creation of
the first 20 FMGs, split three ways: $5 million for additional physician compensation; $5 million
for office computerization and equipment; $5 million to hire nurses.120 Each FMG must be
approved by the Minister and must have in place a contract with a local CLSC (community
health centre) as well as an agreement with the regional health board.
The Quebec government also recently introduced legislation, jointly sponsored
by the health and justice ministries, that redefines the role of physicians, allowing them to
delegate more duties to nurses. Nurses will specialize in areas such as surgery, cardiology and
neo-natal intensive care, as well as performing extra tasks in a variety of settings, including in
emergency rooms.121
4.2.4 New Brunswick
The Government of New Brunswick recently announced two related measures
that follow up on the recommendations on primary care reform contained in the Premier’s
Health Quality Council Report. On May 8, 2002 the government brought down legislation
intended to introduce nurse practitioners to the province’s health system and allow registered
Ministère de la Santé et des Services sociaux (MSSS) press release, June 4, 2002.
Health Edition, Vol. 6 No. 23, June 7, 2002, p. 4
118 MSSS fiche technique, « Résumé de l’entente particulière entre la FMOQ et le MSSS relative aux groupes de
médecine de famille. »
119 MSSS fiche technique, “Le groupe de médecine de famille.”
120 Health Edition, op. cit.
121 Medical Post, May 14, 2002.
116
117
85
nurses to make greater use of their skills and training. The legislation will provide for the
creation and registration of nurse practitioners, and will also enable front-line nurses working in
primary care to deal with certain non-urgent conditions on their own, without the direct
intervention of a physician.122 They will be able to order laboratory tests and a variety of
diagnostic procedures and also to issue prescriptions for some drugs.
The Minister of Health also announced that the government will spend $2.1
million to establish at least two community health centres in the province during the current
fiscal year.123 These centres will use multidisciplinary teams of health professionals, including
nurse practitioners.
Both physician and nurses’ organizations have been supportive. In fact, in April
2002 the New Brunswick Medical Society had proposed that some nursing services be billed
directly to Medicare so that both physicians and nurses could see patients. It reasoned that this
would allow family physician practices to take on more patients, shorten waiting lists for
specialists and even attract some nurses back to the profession.
4.3
Overcoming the Barriers to Change
The Committee welcomes these provincial initiatives. We note that, for the first
time, they move primary health care reform off the drawing board and into the realm of
concrete application. These developments therefore offer grounds for guarded optimism that
significant reform of primary care delivery is possible in Canada. However, there remain a
number of barriers to change that must be overcome.
For example, with respect to Ontario, a number of witnesses expressed concern
over the “physician-centric” nature of the OFHN. One of these, Professor Hutchison, told the
Committee that the Ontario model was:
…a very limited model that reflects the process by which it was negotiated — bilateral
negotiations between the government and the Ontario Medical Association. There were
no non-physician stakeholders involved in the discussion. It was a private, “behind closed
doors” set of negotiations.
Although it has interesting elements, it is a pretty traditional approach. It changes
funding (physician payment) methodology, but it does not change a lot of other things. It
certainly does not provide many opportunities for providers to develop and evaluate
varying arrangements that involve non-physician providers such as nurse practitioners,
social workers, midwives, and so on. It is a physician-centred model. 124
Reinforcing that, Dr. Peter Barrett insisted that “to ensure comprehensive and
integrated family care, family physicians should remain as the central provider and coordinator
News Release 453, May 8, 2002.
Medical Post, Vol. 38 No. 21, May 21, 2002.
124 58:23
122
123
86
of timely access to publicly-funded medical services.”125 Dr. Ruth Wilson, the Chair of the
OFHN, acknowledged in her testimony that the current Ontario model was a starting point, and
that she was “expecting and hoping the relationships with other professionals will grow as we
put family health networks in place,”126 adding that “we have a large process of change to
introduce if we are to convince the thousands of family physicians in Ontario to accept this
model.”127
In this regard, the President of the OMA, Dr. Elliott Halparin, noted that it will
take time before physicians sign on in large numbers:
I think it will be a bit like popping popcorn: A few kernels will pop to begin with, but
then there will be a lot of popping going on when people understand that this
acknowledges the complexities involved in providing comprehensive care, that it is good
for patients and, by extension, good for physicians. 128
More generally, witnesses pointed to the continued presence of a variety of
barriers to the implementation of primary care reform. These include:
•
The vested interests of various professional groups
•
Shortages of qualified personnel
•
Fee-for-service as the dominant method of physician remuneration
•
High start-up costs
•
The absence of electronic information infrastructure
The issue that seemed to spark the most controversy among the Committee’s
witnesses was the first. Some felt that strong action, by government if necessary, was needed to
break the log-jam with regard to professional groups protecting their respective turfs. Claude
Forget, former Minister of Health in Quebec, argued that the “sector is not unlike a medieval
guild system in the sense that it is rigid and does not allow the use of someone from another
related profession if you find that you are in a deficit situation, and move him or her over.”129
Graham Scott, former Deputy Minister of Health in Ontario, expressed a similar
view, pointing out that “we have a very well-funded, well-organized, and powerful monster in
the form of each one of these health professional organizations,”130 and that “the eventual
threatened hammer of forced legislation”131 was required to bring the parties to the table in order
to revise the existing regulation of scopes of practice.
56:10
57:7
127 57:17
128 56:22
129 53:54
130 53:47
131 53:49
125
126
87
Other witnesses, however, stressed that primary care reform could not be
imposed upon health care providers, but will work only if adopted voluntarily. Dr. Les Vertesi,
Medical Director at the Royal Columbian Hospital in Vancouver, argued that “there are some
things such as primary health care reform that have to be done by the providers because the
detail is incredibly important.”132 And Professor Hutchison noted that, “the chances of imposing
reforms on unwilling providers are very small, partly because I do not think the public sees
primary care reform as offering huge advantages to them.”133
With regard to scopes of practice, Ms. Kelly Kay, of the Canadian Practical
Nurses Association, noted that:
[the fact that] Licensed Practical Nurses continue to experience artificial limits to
practice, that nurse practitioners must struggle for recognition and remuneration and that
other professionals such as physiotherapists still face restrictions to direct access are
examples that speak to continuing barriers imposed upon professional groups. 134
At the same time, physician representatives noted the progress that had been
made among professional organizations in agreeing to common principles for determining
scopes of practice. Dr. Barrett pointed out that:
The Canadian Medical Association had developed a “scopes of practice” policy that
clearly supports a collaborative and cooperative approach, which has been supported in
principle by the Canadian Nurses Association and the Canadian Pharmacists
Association. We indeed have a signed document to that effect. 135
In Volume Five, the
Committee expressed its support for the …the Committee expressed its support for
revision of scope of practice rules in order to the revision of scope of practice rules in
order to allow all health care providers to
allow all health care providers to deliver the
full range of services for which they have deliver the full range of services for which
been trained.136 In the Committee’s view, they have been trained. In the Committee’s
these should be as standardized as possible
view, these should be as standardized as
across the country. The synthesis report of
possible across the country.
the Health Transition Fund’s primary care
projects reached a similar conclusion, notably with regard to nurse practitioners:
53:90
58:12
134 61:4
135 56:12
136 See also Chapter Eleven for additional comments on the need to reform scope of practice rules.
132
133
88
A federal/provincial/territorial initiative should develop national standards for
terminology and scope of practice. It should include legislative requirements that support
an expanded role for nurses and nurse practitioners. 137
The Committee endorses this conclusion and believes that the federal
government should take the initiative in this regard.
Some witnesses suggested that the key ingredient lacking in order to make more
rapid progress in implementing primary care reform is political will. In this vein, Michael Decter
told the Committee:
It is not about the right model; it is about moving the yardsticks. We have spent a long
time looking for the perfect model for primary care reform. It has worked in some places
largely because someone just had the will to do it. 138
Witnesses reiterated the point made by the Committee in Volume Five that no
single model could be applied in the same fashion in all parts of the country. Kelly Kay stated,
“primary health care service delivery will look different in each community” since “communities
must customize primary health care services in response to their own identified needs.”139 For
her part, Dr. Susan Hutchison, Chair of the GP Forum of the Canadian Medical Association,
told the Committee:
The mix of health care providers varies based on the needs of the population. There is no
ideal mix. What works best is an adequate human resource to meet the needs of the
population. The mix of providers is dictated by the services required to address these
patient needs. The ideal range of services for a given team would depend on the needs of
the population and the available mix of providers. There may be considerable variability
between the needs of a given population, as is the case in Aboriginal populations, for
example.140
The Synthesis Report on Health Transition Fund projects in primary care (June
2002), reached a similar conclusion, noting that “the health system has already demonstrated its
capacity and ability to support organizational variations and could continue to do this within an
overarching theme of primary health care integration.”141 It also drew a number of lessons that
coincide with the recommendations made by the Committee in Volume Five, both with respect
to the basic features a reformed primary care system should have, and to developing a national
health human resources strategy and implementing a national electronic health record. In
particular, it concluded:
Marriott Mable, op. cit., p. 29.
52:16
139 61:5
140 56:15
141 Marriott Mable, op. cit., p. 24
137
138
89
The first-hand experience gained through the HTF projects offers new insights and
reinforces long-standing knowledge about aspects of primary health care: the benefits of
group practices and multidisciplinary teams; the untapped potential of nurses; and the
linkages between determinants, health promotion and disease, and injury prevention. 142
The report also insisted that certain conditions were necessary to the success of
primary care reform, arguing that “the development of a common electronic health record and
access to computers and other technology for services, information, and research is essential to
successful primary health care.”143
4.4
The Federal Role
In Volume Five the Committee recommended that:
The federal government continue to work with the
provinces and territories to reform primary care delivery,
and that it provide ongoing financial support for reform
initiatives that lead to the creation of multi-disciplinary
primary health care teams that:
§
are working to provide a broad range of services, 24
hours a day, 7 days a week;
§
strive to ensure that services are delivered by the
most appropriately qualified health care professional;
§
utilise to the fullest the skills and competencies of a
diversity of health care professionals;
§
adopt alternative methods of funding to fee-forservice, such as capitation, either exclusively or as
part of blended funding formulae;
§
seek to integrate health promotion and illness
prevention strategies in their day-to-day work;
§
progressively assume a greater degree of
responsibility for all the health and wellness needs of
the population they serve.
Ongoing financial support for reform initiatives that lead to the creation of
multidisciplinary primary health care teams would represent a continuation of the commitment
to primary care reform that the federal government displayed in funding the $150 million Health
Transition Fund, of which over $60 million was spent on projects related to primary care
142
143
Ibid.
Ibid., p.25
90
reform. The federal government also committed $560 million out of the $800-million Primary
Health Care Transition Fund (PHCTF) that was created as a result of the First Ministers
Conference in 2000 to assist the provinces and territories in broadening and accelerating primary
health care initiatives. This money is to be allocated on a per capita basis. To access these funds,
each provincial and territorial government must develop one proposal showing how their
PHCTF funding will support the transitional costs associated with primary health care reform.
However, the PHCTF is not an ongoing program. The Committee recognizes
that the start-up costs for primary care groups can be substantial. Based on the actual costs of
implementing primary care reform in Quebec, this cost could be as much as $750,000 per group,
while earlier estimates from Quebec had placed this cost as high as $1 million per group.
The Committee therefore recommends that:
The federal government commit $50 million per year of the
new revenue the Committee has recommended it raise to
assist the provinces in setting up primary care groups.
This money would be in addition to any funds made available through the
PHCTF and should enable the creation of between 50 and 65 primary care groups per year.
In order for primary care groups to function effectively, the Committee is
convinced that they must act as gatekeepers to the rest of the health care system. For example,
patients who are enrolled in a particular PCG must have incentives, both positive and negative,
to ensure that they consult their PCG physician rather than seek care from specialists on their
own. Referrals to specialists should therefore be made by a primary care provider in consultation
with the patient.
Nevertheless, the Committee does not
believe it appropriate to prohibit patients from In order for primary care groups to
function
effectively,
the
consulting other doctors, especially specialists, should
they so desire. But it does believe that patients who
Committee is convinced that they
choose to seek care elsewhere, care that could be must act as gatekeepers to the rest
provided adequately within the PCG with which they
of the health care system.
are enrolled, should bear the financial consequences of
their decisions. In other words, patients should be obliged to pay a fee in order to consult other
physicians, including specialists, when they do so on their own initiative.
In Volume Five, the Committee also recommended the establishment of an
ongoing framework to deal with human resource issues, in particular by creating a permanent
national coordinating body for health human resources composed of representatives of key
stakeholder groups and of the different levels of government. Its mandate would include
coordinating initiatives to ensure that adequate numbers of graduates are being trained to meet
the goal of Canadian self-sufficiency in health human resources.144
144
See also Chapter Eleven of this volume.
91
With respect to the development of electronic health records, the Committee
recommended in Volume Five that the Canada Health Infoway initiative be extended beyond its
current 3-5 year mandate in order to develop, in collaboration with the provinces and territories,
a national system of electronic health records. Several witnesses suggested not only that the
development of electronic health records is crucial to the reform of primary health care, but that
it is an area in which the federal government can exercise leadership.
In the words of Jack Davis, CEO of the Calgary Health Region, “the one area I
would see that has a real potential for federal investment is the electronic health record.”145 Dr.
Kenneth Sky, past president of the Ontario Medical Association, suggested that “for physicians,
the IT component of primary care reform is a big incentive,”146 and Michael Decter felt that
electronic health records were so important that “bribery is in order in this particular sphere. I
would bribe the doctors to convert.”147
The Committee agrees that the federal government should take the lead role in
expediting the development of a national electronic health record, and presents specific
recommendations to this effect in Chapter Ten.
53:88
56:22
147 52:14
145
146
92
Appendix 4.1:
GP Fundholding in Great Britain
In discussions of primary care reform, reference is often made to the British
experience in the 1990s with the introduction of “internal markets”. Before 1990, it was accurate
to describe the British National Health Service (NHS) as being run by a monolithic bureaucracy
that controlled all aspects of the system. At that time, NHS hospitals and community health care
units were state-owned and operated by the NHS’s regional health authorities. Each hospital’s
budget was determined through an administrative process involving negotiations between its
management and the NHS administration. GPs provided care through a “rostering” system that
required patients to register with one GP, who then acted as “gatekeeper” to the rest of the
system. GPs worked under contract with the NHS and were remunerated through a mixed
system that combined a salary with capitation based on the number of patients on a doctor’s list.
With primary care reform, introducing internal markets allowed some general
practices to volunteer as “Fundholders”. Family practices that served a sufficient number of
patients became purchasers who were then able to contract with hospitals and other communitybased providers (such as cistrict nurses) for defined services. Fundholder budgets were restricted
for the purchase of hospital and community services; they could not be used to supplement GPs
incomes. GPs have always been paid by the NHS as independent, self-employed professionals.
The various reforms enacted throughout the 1990s, such as fundholding and more recently the
creation of Primary Care Groups and Trusts, have not fundamentally affected the ways in which
British GPs derive their incomes.
In the early 1990s the GP fundholding system was expected to be only a small
part of the overall reform process, but it quickly became more popular than anyone had
anticipated, due to a variety of factors. There was evidence early on that fundholders could
secure improved services for their patients. This created a bandwagon effect; few physicians
wanted to be left behind. The Conservative government reinforced this trend by offering further
benefits (e.g. computers) exclusively to fundholding practices. Moreover, fundholding gave GPs
a central and more authoritative role in the overall system than they had had previously.
Consultants (specialists) were forced to become more responsive and accountable to GPs who
had the option to take their business (referrals) elsewhere.
The Labour government under Tony Blair, first elected in 1997, was critical of a
number of aspects of internal market reform. In particular, it felt that GP fundholding had
allowed a form of “two-tierism” to develop in Britain because patients of GP Fundholders were
often able to obtain treatment more quickly than patients of non-Fundholders. This was
considered inimical to the founding principles of the NHS, and as a result Labour sought to curb
the forms of competition they saw as being at the root of emerging inequalities.
In April 1999, government required all GPs to join a Primary Care Group (PCG
- groupings of GP practices in geographical areas far larger than the previous fundholding
model, covering between 50,000 to 250,000 people.) PCGs brought local primary care providers
together under a board dominated by GPs, but also representing nurses and other local
community providers. PCGs were expected to develop through stages to become “Trusts”
(PCTs) able to assume full responsibility for commissioning (contracting for) care and for the
93
provision of community health services for their population. By April 2002, nearly all the PCGs
had made the transition to Trust status.
In principle, this evolution gave all GPs the benefits of fundholding, a single
regional budget encompassing general medical services, and prescription drugs, as well as
hospital and specialist care. However, a recent assessment by the King’s Fund suggests that there
is still some way to go before PCTs “will be able to realise their undoubted potential.” The
authors of this study concluded that PCTs are developing at different speeds and that while
“they have made progress in developing and integrating primary and community care…their
commissioning and health improvement functions are, as yet, limited.”148
It is worth noting that until the market reforms of the 1990s, GPs retained a
monopoly on primary care delivery through their role as gatekeepers to all other dimensions of
the system. A number of reforms introduced by the Labour government have allowed nurse-led
providers to assume a growing role in this regard. These have included the creation of a nursestaffed 24-hour telephone advice line (NHS Direct) and the creation of a number of walk-in
centres where initial assessments are performed by nurses, who can then refer patients to local
GPs if necessary.
A number of factors make it very difficult to draw definitive conclusions from
the British experience that can be easily applied to the Canadian context. There have not always
been sufficient data available, and the rapidity of change has not facilitated careful study.
Moreover, given the very different structure of the two systems, it is difficult to apply the lessons
to the Canadian health care system. However, a number of points bear mention:
148
•
In the first place, despite the Labour Government’s opposition to the form
taken by the “internal market” under the previous Conservative government,
the Labour governement has nonetheless retained key elements of the
purchaser-provider split the Conservatives introduced.
•
Second, the transition that the Blair government has engineered from GP
fundholding to the creation of PCGs and PCTs would seem to highlight the
successes of the fundholding scheme more than its deficiencies. It is because
the fundholding GPs were successful in negotiating with hospital trusts on
behalf of their patients that fears of “two-tierism” emerged.
•
Third, the shift to grant a greater role in the delivery of primary health care
services to nurses and other providers parallels similar recommendations that
have been voiced consistently in the Canadian debate over primary care
reform.
John Appleby and Anna Coote, Five Year Health Check, King’s Fund, April 2002, p. 47.
94
TABLE 4 1
REVIEW OF RECENT PRO VINCIAL REPORTS CONTAINING RECOMMENDATIONS
ON PRIMARY HEALTH CARE REFORM
Report
Sinclair
(Ont.)
Dec. 1999
Scope of service
Comprehensive primary
care would be provided
24 hours a day, seven
days a week; this would
be achieved through
after-hours clinics (or
extended office hours)
and around-the-clock
telephone triage.
Team Composition
Physicians and nurse
practitioners as “core
providers”, in an
interdisciplinary team including:
registered nurses, midwives,
psychologists and social
workers, pharmacists,
physiotherapists, dieticians,
Individual health care providers
would work to the full extent of
their scope of practice.
Clair
(Que.)
Jan. 2001
Group practices would
ensure round-the-clock,
seven-days-a-week
coverage. Services to
include health promotion
and disease prevention,
diagnosis and treatment,
referral to hospitals and
specialists, coordination
of continuum of care,
and referral to social care.
Group practices would
make services available
around the clock.
Outside of office hours,
telephone calls would be
forwarded to a nearby
group member; 24-hour
back-up through a
provincial call centre. No
explicit list of services.
Practices comprise only
physicians and nurse
practitioners, but they work in
partnership with the existing
network of CLSCs (social
workers, dieticians,
psychologists, physiotherapists,
etc.).
Fyke
(Sask.)
Apr. 2001
Remuneration
Group rather than
individual funding,
primarily on the
basis of capitation
supplemented by
other methods;
group determines
how its member
providers are
reimbursed. Not
merely office
sharing.
A blended system
of remuneration
that includes
elements of
capitation, a lump
sum for
participation in
some programs, and
FFS for prevention
or to promote
productivity.
Primary care group practices
would involve a variety of
providers including physicians,
nurse practitioners, midwives,
physiotherapists, dieticians,
home care workers, and
professionals in the areas of
mental health, rehabilitation,
addiction and public health.
Size of practice
Three distinct models:
urban – 6 MDs, 2
NPs for about 1,680
patients;
rural – 2 MDs and 2
NPs for 1,293
patients;
remote – 1 MD and
3 NPs for 1,142
patients.
EHR*
Yes
Rostering
Yes
External Relations
Each practice would be responsible
for developing agreements with
other health care organizations and
providers (hospitals, specialists,
public health, rehabilitation
centres, long-term care facilities,
home care, community care).
6 to 10 physicians
working in a polyclinic
or within a CLSC with
the collaboration of 2
to 3 nurse
practitioners, and
responsible for
between 1,000 and
1,800 persons.
Yes
Yes
Contract with the regional health
authority, and between the primary
care group practice and the CLSC.
Regional health authorities would
be responsible for coordinating the
network of primary care group
practices with other service
providers.
Yes
95
Regional health authorities would
organize and manage primary care
group practices, contracting with
or otherwise employing all
providers including physicians.
Report
Mazankowski
(Alta.)
Dec. 2001
Scope of service
Gives very general
approval to the idea of
primary health care
reform. Comprehensive
care would be delivered
by multidisciplinary
teams.
Team Composition
Teams might include a family
doctor, nurse or nurse
practitioner, mental health
worker, social worker and
others.
Nfld.
Dec. 2001
A network of primary
health care teams
providing a ‘Continuum
of Care’ (including
preventative, promotive,
curative, supportive and
rehabilitative care).
Primary care physicians would
work collaboratively with other
health care providers and other
physicians. Within each team,
each health care provider would
practice at the highest level of
his or her respective skill set.
N.B.
Jan. 2002
Access to a
comprehensive range of
ambulatory services 24hours a day, seven-days a
week, coordinated from
one location, where
possible a Community
Health Centre. Where
these would not be open
24 hours a day, phone
calls would be re-directed
to an around the clock
service site.
A collaborative model and a
team approach to providing
primary care. Family physicians
would not see every patient and
other members from the team
of health providers could
provide consultation and/or
perform treatment services. The
goal would be to make full use
of all providers based on their
respective knowledge, skills and
abilities.
Remuneration
Identifies FFS as a
barrier to change.
Suggests that a
blended funding
model is the best
likely alternative,
and sees the
Ontario Family
Health Network as
an excellent
example.
Did not endorse any
specific funding
method (no
universal model)
but seemed to
support some form
of flexible, blended
funding. No
mention of
capitation.
Size of practice
All primary care
services, where
feasible, should be
provided or
coordinated through a
network of
Community Health
Centres. These would
be viewed as the
physical ‘nucleus’ of
primary care in the
community.
*Electronic Health Record
Source: Library of Parliament
96
EHR*
Yes
Rostering
External Relations
Physicians should be given the
option of contracting with
Regional Health Authorities for a
portion of their income.
Yes
Regional boards would outline for
physicians what medical services
are required for their region.
Physician groups would enter into
formal arrangements with boards
to ensure delivery of the full basket
of services listed in the agreement.
Yes
Other providers could be accessed
via telehealth and/or on site at the
Community Health Centre.
Part III:
The Health
Care Guarantee
97
CHAPTER FIVE
T IMELY ACCESS
TO
HEALTH C ARE
Most of Volume Six covers specific issues relating to the delivery of health care.
Hospital restructuring, financing health care, primary health care reform and expanding public
coverage for prescription drugs, some home care and palliative care are all critical components
of a fiscally sustainable health care system. This chapter, however, focuses on a less frequently
discussed, but very important, issue – the right to health care and the implications of the
Canadian Charter of Rights and Freedoms (the Charter) for the provision of timely access to medically
necessary care.
Timely access to needed
care does not necessarily mean
immediate access. Nor is the issue of
timely access limited to life-threatening
situations. Timely access means that
service is being provided consistent
with clinical practice guidelines to
ensure that a patient’s health is not
negatively affected while waiting for
care.
The Committee feels it is important to stress
that timely access to needed care does not
necessarily mean immediate access. Nor is the
issue of timely access limited to life-threatening
situations. Timely access means that service is
being provided consistent with clinical practice
guidelines to ensure that a patient’s health is
not negatively affected while waiting for care.
The issue of timely access to health care is of particular importance at this time
for the following reasons. First, repeated public opinion polls increasingly have shown that the
greatest concern Canadians have about the existing publicly funded health care system is the
perceived length of waiting times for diagnostic services, hospital care and access to specialists.
This concern is evidence that timely access to health care – as that is defined by patients – is
often not available.
Second, the lack of timely access to needed care can seriously contribute to the
deterioration of a person’s health and well-being. Given this fact, it is likely that increasing
pressures will be exerted on governments, hospitals and physicians to ensure that medically
necessary care is provided, within the publicly funded health care system, in a timely manner. It
is also very likely that, failing substantial improvement, Canadians will exert pressure on
government to make it legally possible for individuals to obtain timely care in a parallel private
hospital and doctor system.
Third, if the pressure on government is not effective, for the reasons described
below, the Committee believes that the courts are likely to rule unconstitutional current laws that
effectively prevent Canadians from paying privately, in Canada, for health care services that are
publicly insured.
Therefore, solving the timely access problem is critical if Canada is to preserve
the single insurer model of the publicly funded hospital and doctor system that Canadians, and
the Committee, so strongly support.
99
Do Canadians have a right to health care? Can Canadians be prevented from
obtaining timely care when the publicly funded health care system fails to ensure timely access?
This chapter addresses these questions.
5.1
The Right to Health Care – Public Perception or Legal Right?
To begin, it is important to
The Committee has previously noted the
distinguish between a legal right to health
care and the public perception of the existence of public opinion polls that reveal
existence of that right. In Volume Four,
that Canadians believe they have a
the Committee noted the existence of constitutional right to receive health care
public opinion polls that reveal that even though no such right is explicitly
Canadians, encouraged by politicians and contained in the Charter.
the media, believe they have a
constitutional right to receive health care even though no such right is explicitly contained in the
Charter.149 Nor does any other Canadian law specifically confer that right, although government
programs exist to provide publicly funded health services.150
The preamble to the Canada Health Act151 (the Act) states that:
continued access to quality health care without financial or other barriers will be critical
to maintaining and improving the health and well-being of Canadians.
As well, section 3 of the Act provides that the primary objective of Canadian
health care policy is:
to protect, promote and restore the physical and mental well-being of residents of Canada
and to facilitate reasonable access to health services without financial or other barriers.
These statements from the Canada Health Act, supportive as they are, do not
grant a right to health care.
Similarly, international instruments such as the Universal Declaration of Human
Rights, 1948, to which Canada is a signatory, speak of the right to a standard of living adequate
for health and well-being, including medical care and the right to security in the event of sickness
and disability; but they too do not provide a basis for a constitutional, or even legal, right to
health care.152
149
Volume Four, p. 38.
Colleen Flood and Tracy Epps, Can a Patients’ Bill of Rights Address Concerns About Waiting Lists? Draft
Working Paper, Health Law Group, Faculty of Law, University of Toronto, October 9, 2001, p. 7.
151
R.S. 1985, c. C-6.
152
The Canadian Bar Association Task Force on Health Care, What’s Law Got To Do With It? Health Care
Reform in Canada, (Ottawa: The Canadian Bar Association, August 1994) p. 24.
150
100
Clearly, there is a significant discrepancy between what the public believes and
the absence of a legal right to health care.
Despite the absence of a legislated right to health care, there is a growing body of
literature and court decisions on the effect of the Canadian Charter of Rights and Freedoms in the
context of health care. Of particular interest are the implications of section 7 of the Charter for
the provision of timely health care in Canada.
5.2
The Extent to which Publicly Insured Health Services are
Available Outside the Publicly Funded Health Care System
In Volume Four, the Committee discussed the impact of the Canada Health Act
on the provision of privately funded health care. We stressed that the Act does not prohibit the
provision of privately paid-for health services. Rather, the Act sets out the conditions under
which the provinces and territories will receive or be denied full federal funding for providing
medically necessary physician and hospital services to their residents.153
In order to receive full federal funding, provincial and territorial public health
care insurance plans must meet the five key conditions: public administration,
comprehensiveness, portability, universality and accessibility. The Canada Health Act also creates
an important incentive for the provinces and territories to discourage doctors and hospitals from
extra-billing patients or imposing user charges for medically necessary health services. If extrabilling occurs or user charges are required, the federal cash contribution provided under the
CHST can be reduced by an equivalent amount.
The Canada Health Act does not contain prohibit health care providers who do
not bill their provincial health care insurance plans from delivering, and being compensated
privately for, provincially insured health services. Moreover, the Act does not limit, in any way,
the delivery of publicly insured services by privately owned (not-for-profit or for-profit) service
delivery institutions. Indeed, private health care institutions currently deliver publicly insured
health services in every province. What the Canada Health Act does is provide for significant
financial penalties when provinces allow private payments for publicly insured services,
particularly where extra-billing and user charges are involved.
Provincial and territorial legislation work in tandem with the Canada Health Act to
discourage and/or prevent medically necessary services from being provided outside the publicly
funded health care system. Physicians can opt out of providing services in the public health care
system and bill patients directly, but a variety of provincial regulations effectively discourage
physicians from doing so. Many provinces prohibit opted-out doctors from charging patients
more than the public system rate. Some provinces deny reimbursement to patients who receive
insured health services from opted-out doctors. Moreover, the majority of provinces do not
permit private health care insurance to be purchased for services insured under provincial health
153
Volume Four, pp. 38-39.
101
care plans, even though all of them allow residents to purchase private insurance for hospital
and physician services that are not classified as “medically necessary.”154
In Volume Four, the Committee said:
The Canada Health Act along with provincial/territorial legislation has prevented the
emergence of a private health care system that would compete directly with the publicly
funded one. It is simply not economically feasible for patients, physicians or health care
institutions to be part of a parallel
system.155
The Committee is concerned that Canadians
The end result is that
Canadians have few, if any, real options
in this country when the publicly
funded health care system fails to
provide timely care. Those who can
afford to do so may seek care in the
United States, but most simply wait
hoping, sometimes in vain, that the
public system can accommodate them.
5.3
have few, if any, real options in this country
when the publicly funded health care system
fails to provide timely care. Those who can
afford to do so may seek care in the United
States, but most simply wait hoping,
sometimes in vain, that the public system can
accommodate them.
Timely Health Care and Section 7 of the Canadian Charter of
Rights and Freedoms
The presence of long waiting lists for certain medically necessary treatments and
hence the absence of timely care raise a number of issues, not the least of which relate to the
rights and entitlements of patients who are waiting for care. In this regard, in its Volume Four,
the Committee posed the following questions:
If a right to health care is recognized under section 7 of the Charter, and if access to
publicly funded health services is not timely, can governments continue to discourage the
provision of private health care through the prohibition of private insurance?
Is it just and reasonable in a free and democratic society that government ration the
supply of publicly funded health services (through budgetary allocations to health care)
and simultaneously, effectively prevent individuals from obtaining the service in Canada,
even at their own expense? 156
These questions have provoked considerable debate that, in the Committee’s
view, has significant implications for the Canadian health care system, as we know it. Indeed,
154
Colleen M. Flood, Tom Archibald, “The illegality of private health care in Canada”, Canadian Medical
Association Journal, March 20, 2001, 164 (6), p. 825-830.
155
Volume Four, p. 40.
156
Ibid.
102
the Committee raised these questions both to stimulate discussion and to caution governments
that policies and laws that restrict, or discourage, access to privately funded health care will be
increasingly difficult, if not impossible, to maintain if timely access to medically necessary care is
not provided in the publicly funded system.
Thus, in the Committee’s
opinion, the failure to deliver timely
health services in the publicly funded
system, as evidenced by long waiting lists
for services, is likely to lay the foundation
for a successful Charter challenge to laws
that prevent or impede Canadians from
personally paying for medically necessary
services in Canada, even if these services
are included in the set of publicly insured
health services.
In the Committee’s opinion, the failure to
deliver health services in the publicly funded
system, as evidenced by long waiting lists for
services, is likely to lay the foundation for a
successful Charter challenge to laws that
prevent or impede Canadians from personally
paying for medically necessary services in
Canada, even if these services are included in
the set of publicly insured health services.
The Canadian Charter of Rights and Freedoms guarantees certain fundamental rights
and freedoms. Section 7 of the Charter states:
Everyone has the right to life, liberty and security of the person and the right not to be
deprived thereof except in accordance with the principles of fundamental justice.
Although the Charter makes no explicit references to health care, it has been
argued that section 7 has significant implications in the health care question. The section 7
argument is not based on a constitutional guarantee to government-funded health care, but
rather on the section 7 rights to liberty and security of the person which, it could be argued, may
be impaired if adequate and timely health care cannot be provided in the publicly funded health
care system.
These rights, then, could be interpreted to imply that if individuals are unable to
get timely care within the publicly funded health care system, governments should not be able to
prevent an individual from paying for the service in order to obtain the service elsewhere in
Canada. That is, while health care itself may not be a right, individuals do have the right not to
be prevented by government from seeking timely health care elsewhere in Canada, if the service
cannot be provided in a timely manner within the publicly funded system.
In 1994, the Canadian Bar Association Task Force on Health Care expressed the
opinion that there is no right to health care under the Charter. This conclusion was based on
the view that the Charter is often interpreted as a negative rather than a positive instrument –
one that generally does not compel governments to act in a particular manner, but rather
protects Canadians against coercive government action.157
In the context of health care, then, the Charter might not require governments to
ensure that a certain level of health care is available in the publicly funded system, but the
157
What’s Law Got To Do With It? Health Care Reform in Canada, (1994) p. 26.
103
Charter could be employed to stop governments from taking restrictive measures that deny
individuals from having the freedom to seek health care on their own in Canada when the
publicly funded system fails to provide such care in a timely manner.
Indeed, the Task Force pointed out that individuals could advance the legal
argument that section 7 includes a right to purchase health services when government cannot
ensure, or is not willing to ensure, the provision of adequate services (which could clearly include
a government not providing the service in a timely manner).158
Legal experts told the Committee that section 7 has application to health care
and it is just a matter of time before its parameters are explored more thoroughly in the courts.
Recent judicial decisions give evidence of a probable expansion of the Charter in relation to
health care. Cases based on section 15 of the Charter, the equality section, have had some
success.159 But the implications of section 7 for timely access to health services have yet to be
fully tested in the courts.
In a recent C.D. Howe Institute Commentary, entitled The Charter and Health
Care: Guaranteeing Timely Access to Health Care for Canadians,160 authors Stanley Hartt and Patrick
Monahan examine whether governments can prohibit or impede Canadians from accessing
medically necessary health services by paying for them privately, if timely access to such services
is not available in the publicly funded health care system.
Basing their analysis on section 7161 of the Charter, Hartt and Monahan conclude
that, when the publicly funded health care system fails to provide timely access to medically
necessary care, restrictions on private payment or the purchase of private health care insurance
violate an individual’s right to liberty and security of the person guaranteed by section 7 and are
inconsistent with the principles of fundamental justice. Because this Commentary is probably
the most detailed examination of the application of section 7 in the health care context to date,
the Committee believes it is worth outlining Hartt and Monahan’s arguments in some detail.
Hartt and Monahan maintain that an individual’s decisions with respect to his or
her medical care are fundamental personal decisions affecting health, life and death and are
therefore protected under the section 7 liberty guarantee. Consequently, when governments
effectively prevent individuals from obtaining health care outside the publicly funded system,
they have a concomitant obligation to ensure that timely care is provided within that system.
158
Ibid., p. 94.
In Eldridge v. British Columbia (Attorney General) [1997] 3 SCR 624, the Supreme Court of Canada held
that the provincial government’s failure to fund sign-language interpreters in hospitals under its public health
insurance system discriminated against deaf patients on the basis of physical disability and violated their
equality rights under section 15 of the Charter.
160
Stanley H. Hartt Q.C., Patrick J. Monahan, The Charter and Health Care: Guaranteeing Timely Access to
Health Care for Canadians, C.D. Howe Institute, Commentary, No. 164, May 2002.
161
According to Hartt and Monahan (p. 9), a claim under section 7 of the Charter has three aspects:
1) An action of a legislature or government that deprives a person of one of more of “life, liberty and security of
the person”; 2) The deprivation must be contrary to the principles of fundamental justice; 3) The violation
cannot be justified under section 1 of the Charter, which requires that a violation of a protected right must be a
“reasonable limit” that can be demonstrably justified in a free and democratic society.
159
104
Hence, when the public system cannot or will not deliver timely care, Hartt and
Monahan argue that individuals should be free to acquire the necessary care elsewhere. And
hence, under these circumstances, restrictions on the ability to access care outside the public
system, including restrictions on the right to buy private health care insurance, constitute a
violation of the right to make personal decisions affecting life and health as provided under
section 7’s liberty guarantee.162
The right to security of the person under section 7 has both a physical and a
psychological aspect which, on the basis of the 1988 Supreme Court of Canada decision in the
Morgentaler case, Hartt and Monahan interpret as encompassing the adverse physical and
psychological impacts associated with excessive waiting for medical care. They assert:
Where governments institute measures that delay or impede access to medically necessary
services and where that delay materially increases medical risks or otherwise results in
adverse health consequences, the violation of security of the person is clear. 163
Even if there is a limitation on the right to liberty or security of the person,
however, section 7 will not be violated unless it can be shown that the limitation is inconsistent
with the “principles of fundamental justice.” While the courts have concluded that fundamental
justice has both procedural and substantive aspects, the term has not been specifically defined.
Hartt and Monahan argue that it is manifestly unfair, and therefore contrary to the principles of
fundamental justice, to establish a system where medically necessary services are for all intents
and purposes accessible only through the public health care regime but are unavailable on a
timely basis.164
Consequently,
Hartt
and
Hartt and Monahan maintain that, if
Monahan maintain that, if health services are
health services are not available on a
not available on a timely basis, then provincial
timely basis, then provincial governments
governments cannot legally prohibit Canadians
cannot legally prohibit Canadians from
from obtaining those services in Canada, nor
obtaining those services in Canada, nor
can the federal government use the financial
penalties in the Canada Health Act to compel
can the federal government use the
the provinces to enforce constitutionally financial penalties in the Canada Health
invalid restrictions.165
In other words, Act to compel the provinces to enforce
governments cannot fail to ensure the constitutionally invalid restrictions.
provision of timely access to medically
necessary health services and at the same time prevent Canadians from obtaining such services
outside the publicly funded system. This includes governments being unable to prevent
Canadians from acquiring private health care insurance to cover the cost of purchasing such
services outside the publicly funded system.
162
Ibid., p. 17.
Ibid., p. 15.
164
Ibid., p. 20-21.
165
Ibid., p. 5.
163
105
It would follow, if Hartt and Monahan are correct, that the Charter would
prevent the prohibition by government of an individual’s right to obtain health services privately
when the government fails to provide such services in a timely manner:
Existing restrictions on the private purchase of medically necessary services are entirely
justifiable in circumstances where such medical services are available on a timely basis
through the public system, 166
(…) where the publicly funded health care system fails to deliver timely access to
medically necessary care, governments act unlawfully in prohibiting Canadians from
using their own resources to purchase those services privately in their own country. In
these circumstances, the restrictions on private payment and private health insurance that
are found in the laws of various provinces force Canadians into a system that, at a
minimum compromises their health and potentially may endanger their lives. 167
However, Hartt and Monahan’s analysis does not conclude that the only remedy
is for government to relax the restrictions on an individual’s ability to purchase private health
care insurance. Indeed, Hartt and Monahan believe governments can do one of two things –
governments can either finance and structure the publicly funded health care system in such a
way that it provides timely access to medically necessary care, or they can allow Canadians to buy
that care if such access is not available in the publicly funded health care system in a timely
manner. 168
The Committee finds the
Hartt and Monahan analysis compelling. Governments can do one of two things –
However, at the same time, it should be governments can either finance and
noted that the Quebec Superior Court structure the publicly funded health care
reached a different conclusion in a case system to provide timely access to
[Chaoulli c. Québec (Procureure générale)]169 medically necessary care, or they can
where section 7 of the Charter was used to
allow Canadians to buy that care if such
dispute
the
Quebec
government’s access is not available in the publicly
prohibition on the purchase of private health funded health care system in a timely
care insurance to pay for the private manner.
provision of health services which are also
covered under the provincial health care insurance plan. Chaoulli dealt with the plaintiff’s wish to
buy private insurance for future care and treatment to which timely access might be denied. In
other words, the Chaoulli case dealt with potential future events that might possibly take place,
and not with events that had already occurred. Thus, the Chaoulli case is not directly on the issue
discussed in the Hart and Monahan paper because it is dealing with a speculative future event.
166
Ibid., p. 3.
Ibid., p. 4.
168
Ibid.
169
[2000] J. Q. No. 470 (QL) (C.S.Q. Piche J.)
167
106
The Quebec Superior Court refused the Chaoulli claim, concluding that,
although prohibitions on private insurance could violate rights of liberty and security of the
person under section 7 of the Charter, it was nevertheless consistent with the principles of
fundamental justice under section 7 to deny the ability to purchase private insurance for medical
services covered under the Quebec public health care insurance plan.170
In determining whether the Quebec restrictions were consistent with the
“principles of fundamental justice” and therefore not a violation of section 7, the Court sought
to balance the right to purchase private health care insurance against the collective goal of
ensuring equal access to medically necessary health services for all Quebec residents. To allow
private health care insurance, in the court’s view, would compromise the integrity, proper
functioning and viability of the publicly funded health care system.171 In reflecting on this court
decision, it is important to keep in mind that this was a decision by a court of first instance and
has yet to be commented on by an appellate court or by the Supreme Court of Canada.
It is also worth noting that this conclusion was reached in spite of the fact that in
European countries and Australia, which have universal and publicly funded health care systems,
the purchase of private health care insurance is permitted and does not appear to have caused
irreparable damage to the functioning and viability of their publicly funded health care systems.
It must also be pointed out that experience in these countries severely weakens
the argument which some have made that even if the prohibition on purchasing health care
insurance violates an individual’s right to timely health care, this violation can be justified under
section 1 of the Charter. In order for this argument to be valid, the violation must be a
“reasonable limit” that can be “demonstrably justified in a free and democratic society.” Since
other free and democratic societies have universal health care systems and also allow individuals
to purchase health care insurance which can be used to cover the cost of obtaining such services
outside the publicly funded system, and since the health care systems in these countries appear
to function effectively, the courts may be unwilling to accept the argument that the violation of
an individual’s right to timely health care (by prohibiting a parallel private system) is a
“reasonable limit that can be demonstrably justified.”
Although not argued on Charter grounds, another Quebec case (Stein v. Quebec
(Régie de l’Assurance-maladie) took a different approach by holding the provincial government
responsible for reimbursing a patient’s medical expenses incurred in the United States for
treatment for a life-threatening condition when timely access to the required care was not
available in Quebec.172 In the Stein case, the patient was advised to seek surgery for lifethreatening cancer no later than four to eight weeks after the diagnosis. After waiting longer
than the suggested period for the required treatment, Stein sought medical care in New York.
Subsequently, Stein contested the Quebec health care insurance board’s refusal to reimburse his
medical expenses. The court sided with Stein, noting that in his circumstances, where the danger
to his life was increasing daily, it was unreasonable for him to have to wait for surgery in
Montreal. In this case, it is worth noting the emphasis the court placed on timely access to care.
170
Ibid., para. 243.
Ibid., para. 261-263.
172
Stein v. Québec (Régie de l’Assurance-maladie), [1999] QJ No. 2724.
171
107
5.4
Committee Commentary
Even though Canadian courts
The failure to address effectively the
have not yet established a right to health care
issue of the lack of access to timely care
under the Charter, it is clear to the Committee
that, when timely access to appropriate care is
is also highly likely to lead to the
not available in the publicly funded health care
establishment of a parallel private
system, the prohibition of private payment for
hospital and doctor system.
health services becomes increasingly difficult, if
not impossible, to justify. The rights to liberty and to security of the person under section 7 of
the Charter are likely to be violated when timely access to publicly funded health care is denied
and, simultaneously, Canadians are effectively prevented from obtaining the required care
elsewhere in Canada.
The failure to address effectively the issue of the lack of access to timely care is
also highly likely to lead to the establishment of a parallel private hospital and doctor system.
Therefore, solving the waiting time issue, or lack of timely care problem, is critical if Canada is to
preserve the single payer model of health care that Canadians, and the Committee, so strongly
support.
It is the Committee’s strong belief that governments should not be passive and
wait for the courts to determine how Canadians will gain timely access to medically necessary
care. The time has come when governments must address the waiting time problem.
Governments cannot continue to turn a blind eye to the increasing problem of
the lack of timely access to health care. They, and the providers of care themselves – particularly
hospitals and physicians must find a solution to the problem of providing timely access to
appropriate levels of health care.
The
Committee’s
preferred
approach to solve the problem of long waiting
times, and thus avoid the development of a
parallel private system, is twofold: first, more
money must be invested in health care for the
purposes described in the other chapters of this
report; and second, governments must establish
a national health care guarantee – a set of
nationwide standards for timely access to key
health services – the parameters of which we
explore in the next chapter.
108
It is the Committee’s strong belief that
governments should not be passive and
wait for the courts to determine how
Canadians will gain timely access to
medically necessary care. The time has
come when governments must address
the waiting time problem.
CHAPTER SIX
T HE H EALTH C ARE G UARANTEE
6.1
The Public Perception of the Problem of Waiting Lists
The accessibility principle of the Canada Health Act stipulates that Canadians
should have “reasonable access” to insured health services. However, the Act does not define
what constitutes reasonable access. Lately, concerns about access to health care have been
associated with the problem of waiting lists and times – that is, lack of timely access is
increasingly perceived to be a major problem plaguing the health care system. Of course,
“timely” is a subjective word; what is timely to one person may be an eternity for another,
particularly where illness is involved. Nevertheless, the Committee believes that “timely access”
describes more accurately what the public expects from the publicly funded health care system
than “reasonable access.”
Results of a study conducted by
Statistics Canada released in July 2002 173 The Committee learned that almost one
in five Canadians who accessed health
provide, for the first time, a reliable indication
of the extent to which Canadians perceive care for themselves or a family member
in 2001 encountered some form of
lengthening waiting times to be a major failing
difficulty, ranging from problems getting
of the publicly funded health care system. The
survey revealed that “almost one in five an appointment to lengthy waiting
Canadians who accessed health care for times.
themselves or a family member in 2001
encountered some form of difficulty, ranging from problems getting an appointment to lengthy
waiting times.”174 And, of the estimated 5 million people who visited a specialist, roughly 18%,
or 900,000 people, reported that waiting for care affected their lives. The majority of these
people (59%) reported worry, anxiety or stress. About 37% said they experienced pain. The
report concluded that:
Perhaps the most significant information regarding access to care was about waiting
times. According to the results of the survey, Canadians reported that waiting for
services care was clearly a barrier to care… Long waits were clearly not acceptable to
Canadians, particularly when they experienced adverse affects such as worry and
anxiety or pain while waiting for care. 175
These new Statistics Canada data suggest strongly that the anecdotal evidence
concerning the growing problem of waiting lists cited by the Committee previously corresponds
to a real and growing problem confronting the publicly funded health care system in Canada.
Access to Health Care Services in Canada, 2001, Claudia Sanmartin, Christian Houle, Jean-Marie Berthelot, and
Kathleen White, Statistics Canada, June 2002.
174 Statistics Canada, The Daily, July 15, 2002.
175 Access to Health Care, p. 21.
173
109
The Committee is firmly convinced that this problem must be addressed. The status quo is
simply unacceptable. Before presenting the Committee’s recommendations, this chapter
examines Canadian and international experience in dealing with the problem of waiting times.
6.2
The Reality of the Waiting List Problem
One of the
One of the aspects of the waiting list issue that the
aspects of the waiting list issue
Committee has found most troubling is the lack of
that the Committee has found
most troubling is the lack of accurate data on the numbers of Canadians who must
accurate data on the numbers wait to consult specialists, obtain diagnostic
of Canadians who must wait to
procedures or receive treatment in a hospital, and the
consult
specialists,
obtain absence of accurate data on the length of time they are
diagnostic
procedures
or having to wait and for what services relating to what
receive treatment in a hospital,
diseases, conditions and indications.
and the absence of accurate
data on the length of time they are having to wait and for what services relating to what diseases,
conditions and indications. This lack of data poses a serious dilemma for public policy makers.
There is strong public perception of a serious waiting list problem, but few or no data by which
to measure the extent of that problem, and few standards and protocols to assign needs-based
priority to those waiting for treatment.
On the one hand, whether a social problem is real or only perceived,
governments naturally want to be seen to be responding to it. On the other hand, with regard to
the waiting list problem, if, from the perspective of genuine clinical need (as opposed to patient
demand), the health of patients is not being compromised while waiting for diagnosis or
treatment, there is little justification for spending a lot of money increasing the supply of the
health care resources in question. Determining the true extent of waiting list problems, and their
impact on the health and well-being of the people affected, is fundamental to formulating an
appropriate public policy response.
What is known is that there are two excellent examples of objectively prioritized
waiting lists in Canada – the Cardiac Care Network of Ontario and the Western Canada Waiting
List Project. These show that, with the creation of disciplined waiting lists in which patients
receive treatment according to their priority of need and within a timeframe set by clinical
guidelines, the problem of waiting and the perception that the times are too long can be
alleviated and in many cases resolved.
These examples also show that the use of needs-based clinical guidelines for
waiting list management makes clear the real need for new resources; i.e., when patients with
prioritized need cannot be provided with timely access by waiting list management alone and
hence when new resources are needed. Moreover, if new resources are required, whether the
resources be money, equipment, health care providers or hospital beds, a needs-based approach
to managing waiting lists shows clearly what type, and how much, of the various new resources
are required.
From a policy standpoint, therefore, it is essential that Canada begin to develop,
as quickly as possible, an accurate database on waiting lists together with needs-based service
110
criteria for people waiting for care, like the criteria described in the next section. Indeed, one of
the reasons for the Committee’s emphasis on the need for a dramatic and accelerated
improvement in health information systems (see Chapter Ten) is precisely to enable the
development of prioritized waiting lists and data on their application.
However, the Committee believes that Canadians should not have to wait until
completion of this essential step to address a problem that should have been tackled years ago.
Patients and their families must see clear evidence, first, of governments’ determination to act
and second, of progress on the waiting list problem. Therefore, in section 6.5 below, the
Committee recommends that a “health care guarantee,” that is, a set of needs-based maximum
waiting times, be put in place immediately.
6.3
Canadian Experience
As stated above, two Canadian examples provide strong evidence that it is
possible to tackle the problem of waiting lists.
6.3.1 Cardiac Care Network of Ontario
The Cardiac Care Network of Ontario (CCN) has long been recognized as a
model for managing waiting times, primarily by creating a needs-based priority order of waiting.
Established in 1990 to coordinate, facilitate and monitor access to advanced cardiac care as well
as to advise the ministry on adult cardiac care issues, CCN has since developed processes to
facilitate and monitor patient access, a broad range of guidelines for cardiac services and a
comprehensive provincial cardiac information system to support the provision of care, research
and continuous improvement in services. Initially focused on cardiac surgery, CCN’s priorities
have been broadened to include catheterization, angioplasty and stents, as well as pacemakers,
implantable cardiac defibrillators and cardiac rehabilitation.
CCN uses information about patients and their medical condition to calculate an
urgency rating score (URS). The URS is a guideline to aid in prioritizing patients’ need for care,
i.e., a disciplined waiting list based on relative need for the services concerned. It is also used in
monitoring the timely availability of care throughout the province. Regardless of the service
needed, the more serious a patient’s condition (as determined by the patient’s URS), the sooner
he or she receives care. As a result of CCN’s efforts, waiting times for bypass surgery have
dropped substantially since the mid-1990s. Median waiting times for patients whose need is
considered to be urgent have consistently remained at about three days, regardless of variation in
the total number of patients on the list.176
6.3.2 The Western Canada Waiting List Project
The results of the Western Canada Waiting List (WCWL) project, published in
March 2001,177 indicate that it may be possible to generalize the kind of system employed by the
See the submission of the Cardiac Care Network to the Commission on the Future of Health Care in Canada,
October 29, 2001.
177 From Chaos to Order: Making Sense of Waiting Lists in Canada, Final Report, the Western Canada Waiting List
Project, March 2001.
176
111
CCN and apply it to other major illnesses and procedures. The WCWL project is a collaborative
undertaking by a variety of organizations, including regional health authorities, provincial
medical associations, provincial ministries of health, and health research centres. It was
established to address the perception of significant and long-standing problems of access to
health care in Western Canada and to influence the way in which waiting lists are structured,
managed, and perceived.
In Canada, patient prioritization is not standardized for any medical service (with
the exception of CCN in Ontario). This means that there is currently no provincially or
nationally accepted method of measuring or defining waiting times for medical services, nor are
there standards and criteria for “acceptable” waits for the vast majority of health services. It is
impossible, therefore, to determine whether, from a clinical point of view, patients have waited a
reasonable or unreasonable length of time to access care. The absence of standardized criteria
and methods to prioritize patients waiting for care means that patients are placed and prioritized
on waiting lists based on a range of clinical and non-clinical criteria that vary by individual
referring physician across institutions, regional health authorities, and provinces.
Production of physician-scored point-count tools for assigning priority to
patients on waiting lists was the overarching goal of the WCWL project. This task was carried
out in five significantly different clinical areas: cataract surgery; general surgery procedures; hip
and knee replacement; MRI scanning; and children’s mental health. A set of priority criteria and
a scoring system were developed through extensive clinical input from panel members. These
went through several stages of empirical work assessing their validity and reliability. Clinicians
who tested the priority setting tools generally concluded that they had the potential to be useful
in clinical settings.
The results from the WCWL project indicate that clinicians, administrators, and
the public believe that better management of waiting lists is necessary, possible and appropriate.
What is necessary now is to develop appropriate standards and criteria to work out acceptable
waiting times for patients at different levels of priority of need. The WCWL was not able to
undertake this work, given that it was not part of the mandate associated with its funding.
Nonetheless, the authors of the WCWL final report contended that there is a
strong possibility of achieving some semblance of order in establishing treatment priorities and
access to elective care. Experience from other jurisdictions has shown that systematic
approaches and priority setting techniques can be used to improve the management of waiting
times. Research conducted for the WCWL project178 suggested a number of approaches to make
this happen, including the following:
178
•
the process to establish standard definitions for waiting times should be
national in scope
•
standard definitions should focus on four key waiting periods – waiting for
primary care consultation; for initial specialist consultation; for diagnostic
tests; and for surgery.
Sanmartin, Claudia, “Toward Standard Definitions of Waiting Times for Health Care Services,” p.361.
112
As CCN and the WCWL clearly show, substantial improvement in both the
reality and perception of the waiting list problem is possible through adopting an approach
based on the clinical needs of patients on waiting lists. Since few or no data are yet available to
establish how much the problem can be improved with new waiting list management techniques,
there are those who suggest that it would be jumping the gun to act before the real, as opposed
to the perceived, extent of the waiting list problem is fully understood. They believe that
implementing measures such as the Committee’s proposed health care guarantee (described in
section 6.5, below) would be premature. The Committee rejects this point of view. In the
Committee’s view, Canadians deserve a health care
guarantee now. At the least, such a guarantee would serve as
In the Committee’s view,
a spur to the creation of the necessary standards, criteria and Canadians deserve a health
information systems. Certainly, a health care guarantee care guarantee now.
would alleviate much of the current anxiety of patients and
their families.
6.4
International Experience
While there are no definitive conclusions to be drawn from international
experience, there is evidence that establishing formal maximum waiting times for specific
procedures can have a positive influence on reducing actual waiting times. Several factors limit
the lessons that can be drawn from international examples. In the first place, health care systems
are extremely complex and are rooted in the particular history and culture of the country in
which they operate. With respect to the specification of maximum waiting times – or what the
committee has called the health care guarantee – experience is limited to a small number of
countries, is very recent, and recommended maximum waiting times have been subject to
revision. Despite these caveats, the Committee believes it is possible to draw on international
experience to improve the situation relating to waiting times in Canada.
6.4.1 Sweden
In its previous reports,179 the Committee referred to the Swedish experience in
the early 1990s with a form of health care guarantee. 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 also put in
place a system where waiting times for major procedures are posted daily on a website. People
can check the website and may choose to travel to the hospital and next available physician or
surgeon with the shortest waiting time.
In 1997, a revised health care guarantee came into force – the so-called “0/7/90”
guarantee. It stipulates that patients must receive care from a nurse practitioner in a primary
health care centre the same day and that an appointment with a physician must be offered within
seven days. Finally, should a patient need referral to a specialist, an appointment must be
offered with three months. When appointments cannot be offered within these time limits, the
patient is entitled to see a health care provider in another county at no additional cost. When
179
See, for example, Vol. 5, p. 56 and Vol. 3, p. 33.
113
treatment is required, the health care guarantee states that it must be provided without delay but
no maximum waiting times are specified.
Overall, the care guarantee in Sweden appears to do more to improve patients’
freedom of choice than constitute a mechanism to regulate waiting times. Under the Stockholm
County Council, for example, patients can choose among many providers and institutions but in
practice relatively few patients exercise this freedom of choice, and not all even know of its
availability. For the most part, Swedes place high value on proximity to care; it seems that the
vast majority of patients prefer to receive care in their own county rather than travel elsewhere,
even if it means waiting longer.
6.4.2 Denmark180
In Denmark, the Ministry of Health and the Association of County Councils,
who are jointly responsible for funding and delivering health care services, agreed in 1993 on a
target, to be reached by the end of 1995, of a three-month maximum waiting time for all nonacute surgical treatment. The guarantee was accompanied by financial incentives for the counties
to meet this target. But, in spite of increased activity and generally decreasing waiting times, it
proved impossible for the counties to fulfill the guarantee and it was subsequently revoked in
1997.
Until very recently, a “political” approach was used to encourage reduction in
waiting times by providing associated increases in health care funding. Differentiated targets
were developed based on assessments of the impact of waiting times on different patient groups.
As of March 2000, targets had been set for life-threatening heart conditions (two, three or five
weeks depending on the specific diagnosis and treatment available), breast cancer, lung cancer,
uterine cancer and intestinal cancer (two weeks from referral to preliminary investigation, two
weeks from patient acceptance of surgery to surgical intervention, and two weeks from surgery
to the start of post-surgical treatment).
A central government report published in 2000 indicated that the overall
percentage of patients waiting more than three months fell from 32% in 1995 to 28% in 1997
and 21% in 1998. In 1998, 71% of all patients were treated immediately, 14% were treated
within a month and 8% had to wait more than three months. The average waiting time for
surgical procedures declined from 93 days in 1995 to 87 days in 1997.
Since 1997, the Ministry of Health has posted on the Internet expected waiting
times at different hospitals for 24 types of diagnoses. This initiative was intended to broaden
patients’ ability to choose among hospitals throughout the country. In June 2001, the Social
Democratic government announced an investment of 500 million kroner (about $100 million
CAD) to reduce further waiting times for cancer treatment, and followed that with legislation to
expand guaranteed minimum waiting times to patients with all forms of cancer.
Nonetheless, in the Danish elections in November 2001, concern over growing
waiting times at public hospitals was one of the factors that contributed to the defeat of the
For a detailed description of the Danish health care system, see Health Care Systems in Transition: Denmark, Signild
Vallgarda Allan Krasnik and Karsten Vrangbaek, the European Observatory on Health Care Systems, 2001.
180
114
Social Democrats at the hands of the right-wing Liberal Party. The new government has since
allocated a further 1.5 billion kroner (about $290 million CAD) to be distributed throughout the
publicly funded hospital system solely for the purpose of reducing waiting lists.
The government has also declared that, as of July 1, 2002, patients forced by the
public system to wait longer than two months for treatment of any kind have the right to choose
a private hospital or a hospital in another country without paying additional fees. As in Sweden,
the Danes see this as an extension of patient choice, rather than a true health care guarantee. Mr.
John Erik Petersen, Head of Department, Ministry of Health and the Interior, Government of
Denmark, who testified before the Committee via videoconference, explained it as follows:
We introduced a free choice of hospitals among the public hospitals 10 years ago.
However, we have not yet had free choice for the few Danish private hospitals, nor
hospitals abroad.
As of July 1, we are introducing an extended free choice of hospital to include private
hospitals and hospitals in other countries in cases where the patient cannot be treated in
the public hospitals in his own country or neighbouring counties within two months.
That is where the care guarantee comes in. It is not really a guarantee, but it is an
extended free choice after two months of waiting time.
We also have a care guarantee, but that is only in a few areas of life-threatening cancer
and heart diseases. That has been in effect for a year now. That is a guarantee in the
sense that the councils, the hospitals, are obliged to find care opportunities for the patient
within the time limits, which are shorter than two months. They are obliged to find care
for the patient, which is not the case with the extended free choice. You get a free choice
to private hospitals or abroad if you wait more than two months, but there is no
guarantee that there is a private hospital that will take care of you. 181
Interestingly, as in Sweden, the Danes do not expect many people to take
advantage of the new guarantees. Mr. Petersen further explained:
With regard to the two-month time limit, we do not foresee that all waiting times over
two months will disappear in Denmark. We know already from the existing free choice
among public hospitals that patients often choose to wait longer to be treated at their
local hospitals rather than travelling to Europe and other parts of the country, even
though Denmark is a rather small country. Therefore, we do not foresee that that many
people will take advantage of this offer.182
181
182
Committee Proceedings, June 17, 2002. 64:4.
Ibid., 64:
115
The Danish witnesses suggested to the Committee that the determination of two
months as the period after which Danes could exercise free choice of hospital had more to do
with political dynamics than with evidence-based clinical decision-making. This contrasts with
the maximum waiting times for cancer and heart diseases that were established on the basis of
clinical criteria. Nonetheless, the two-month guarantee represented, in the words of Dr. Steen
Friberg Nielsen, CEO, Top Management Academy, Government of Denmark, “a political
decision regarding the level of service”183 that the government was committed to offer its
citizens.
6.5
Committee Recommendations
The Committee believes that there are two sets of factors that contribute to the
perceived growing problem of waiting times in Canada.
One is the apparent shortage of personnel and diagnostic equipment. In the
Committee’s view, these shortages have been severely exacerbated by decisions taken by
governments at all levels over the past decade – decisions made as governments sought to
reduce health care costs (and other public expenditures) dramatically. This has led to a situation
in which some components of the health care system are increasingly unable to respond to the
demands that are placed upon them. In a system that strives to treat everyone equally, this
imbalance between the supply of services and the demand for them has resulted in growing
waiting times, and, as the Statistics Canada data show, growing public concern over their length.
But the lack of disciplined, prioritized waiting lists based on standards, criteria
and clinical, need-based data on the condition of patients substantially exacerbates this problem.
The absence of data certainly makes it harder to determine what to do about it. In fact, in
Canada’s health care system it is impossible to distinguish effectively between genuine, clinically
based patient needs on the one hand, and, on the other, patient- and physician-generated
demand for immediate service (when waiting would have no impact on the person’s health).
Not all waiting lists are the result of shortages. As already noted, evidence
suggests it is possible to reduce these waiting times by tackling them head-on, as CCN has done
in Ontario. We strongly suggest that a major factor contributing to growing waiting times has
been the slowness of the “players” in the system – hospitals and their specialist physicians and
surgeons in particular – to apply systematic management to waiting lists for all major procedures,
diagnostic tests and consultations. In the same spirit in which it supports all efforts to improve
the efficiency of the health care system, the Committee welcomes attempts to find better ways to
manage waiting lists, such as the WCWL project, so that patients in the greatest need are tended
to first and that, wherever possible, waiting times for everybody are kept to a minimum. The
Committee believes, however, that it is highly unlikely that better management of waiting lists
will, on its own, suffice to resolve the waiting list problem. Undoubtedly some of it is
attributable to shortages.
The question then arises why the situation has been allowed to deteriorate to the
point where almost one in five Canadians reports difficulty in accessing needed health services in
a timely manner. In the Committee’s view, one reason is that cost-cutting – or, more precisely,
183
Ibid., 64:
116
the failure to continue to increase funding at the same rate as growth in health care costs – has
been an option attractive to government. This option has proven possible to implement
relatively easily, the reason being that, to date, governments have not had to bear the burden of
the consequences that result from their cost-cutting decisions. Instead, these costs have been
borne largely by patients who face longer waiting times for health services.
In keeping with its
In keeping with its philosophy that the best way
philosophy that the best way to
reform a complex system such as to reform a complex system such as health care
health care delivery is to introduce delivery is to introduce appropriate incentives for
appropriate incentives for all the all the players involved, the Committee is firmly
players involved, the Committee is convinced that governments must be made to bear
firmly convinced that governments the responsibility for their decisions. Thus, the
must be made to bear the Committee believes that the blame for the waiting
responsibility for their decisions. list problem should be placed where it belongs –
Thus, the Committee believes that on the shoulders of governments for not funding
the blame for the waiting list the system adequately, and jointly on
problem should be placed where it governments and providers of health services, the
belongs – on the shoulders of
governments for not funding the providers for not developing clinical, needs-based
system adequately, and jointly on waiting list management systems and
governments for not demanding and funding such
governments and providers of health
services, the providers for not systems to ensure the rationality of waiting lists,
developing clinical, needs-based including those that are attributable to
waiting list management systems and
underfunding.
The Committee believes that
governments for not demanding and governments must pay for the remedy, namely
funding such systems to ensure the
patient treatment in another jurisdiction, while
rationality of waiting lists, including
waiting list management systems are being
those that are attributable to
developed and put in place.
underfunding.
The Committee
believes that governments must pay
for the remedy, namely patient treatment in another jurisdiction, while waiting list management
systems are being developed and put in place.
Therefore, the Committee recommends that:
For each type of major procedure or treatment, a maximum
needs-based waiting time be established and made public.
When this maximum time is reached, the insurer
(government) pay for the patient to seek the procedure or
treatment immediately in another jurisdiction, including, if
necessary, another country (e.g., the United States). This is
called the Health Care Guarantee.
117
The Committee realizes that governments may well take the position that if a
patient does not receive timely access for a medically necessary service, and hence becomes
entitled to service elsewhere under the health care guarantee, the responsibility (or blame) may
rest with the hospital or its physicians for not being sufficiently efficient in the use of existing
resources and not managing waiting lists well enough. Under these circumstances, the
government may well seek to recover the costs incurred through the care guarantee from the
hospital and/or the physician(s) concerned. That is, governments may well place the
responsibility for meeting the maximum waiting times on the shoulders of those responsible for
actually managing the system. This is reasonable if it can be shown that underfunding is not the
sole or even the primary cause of a patient waiting too long for a service.
But this is an issue to be
resolved between governments and the
institutions and the physicians that they
fund. Patients should not be affected.
Their sole concern should be to get needed
treatments in a timely fashion and to have
them paid for publicly. Therefore, in the
first instance, governments as the patient’s
insurer should have the responsibility of
meeting the health care guarantee.
The point at which this health care
guarantee would apply for each procedure
would be based on an assessment of when a
patient’s health or quality of life is at risk
of deteriorating significantly as a result of
further waiting. Waiting times would be
established by scientific bodies using
clinical, evidence-based criteria.
The point at which this health care guarantee would apply for each procedure
would be based on an assessment of when a patient’s health or quality of life is at risk of
deteriorating significantly as a result of further waiting. Waiting times would be established by
scientific bodies using clinical, evidence-based criteria. In order to accomplish this, the
Committee recommends that:
The process to establish standard definitions for waiting
times be national in scope.
An independent body be created to consider the relevant
scientific and clinical evidence.
Standard definitions focus on four key waiting periods –
waiting time for primary health care consultation; waiting
time for initial specialist consultation; waiting time for
diagnostic tests; waiting time for surgery.
The Committee recognizes that it is necessary to deal simultaneously with both
sets of factors noted above. First, the techniques for effectively managing waiting lists based on
sound clinical methods must be brought to bear on the management of waiting times in an
efficient and equitable manner. Second, for sufficient resources to be made available so that this
118
can happen, the political will must be there, and government must therefore have an incentive to
act appropriately.
Since government has the responsibility for funding an adequate supply of
essential services provided by hospitals and doctors, it has an obligation to help them 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.
A maximum waiting time guarantee gives concrete form to this obligation. Were
it to be implemented, such a health care guarantee would mean that government would have to
shoulder the responsibility of needed care not being delivered in a timely fashion, provided, of
course, the funded hospitals and physicians discharge their parts of the bargain by developing
and using clinical criteria to prioritize needs-based waiting lists and by employing their resources
in an optimally cost-effective manner. Allowing waiting times to increase would no longer
represent a cost-free option for governments, nor for hospitals and doctors, when underfunding is not the primary reason for prolonged waiting, since they would be required to pay to
have patients obtain treatment in other jurisdictions.
Other Canadian reports have made similar recommendations for dealing with
waiting times. Based on a review of the Swedish experience, the report of the Premier’s Advisory
Council on Health in Alberta (the Mazankowski report) 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 provided by either a public or a private provider.
More recently, the Canadian Medical Association endorsed the Committee’s
health care guarantee proposal and included it in its document A Prescription for Sustainability
issued on June 6, 2002. The CMA proposed that “guidelines and standards around quality and
waiting times”184 be established for a clearly defined basket of core services, and argued that “if
the publicly funded health care system fails to meet the specified agreed-upon standards for
timely access to core services, then patients must have other options to allow them to obtain this
required care through other means.”185 The Committee is pleased that the CMA has adopted its
proposal.
6.6
The Potential Consequences of Not Implementing a Health Care
Guarantee
There are two pieces of the puzzle that must be in place in order to make
significant progress in reducing waiting times, in renewing the health care contract between
Canadians and their governments, and in restoring the confidence of the Canadian public in
their health care system. First, governments at all levels must back their words with deeds by
184
185
The Canadian Medical Association, A Prescription for Sustainability, p. 16
Ibid., pp. 16-17.
119
committing to a health care guarantee that establishes the right of Canadians to receive the care
that they need in a timely manner; and second, this commitment must be applied using the best
possible system for managing waiting times.
As the delivery of health care in Canada is a provincial responsibility, the health
care guarantee must be adopted by the provinces/territories if it is to be implemented. The
Committee believes that the principal way in which the federal government can contribute to the
implementation of the health care guarantee is to ensure that there is agreement between the
federal and provincial governments on the ways to make the financing of publicly insured health
services stable and predictable. The Committee believes strongly that federal funding must be
maintained at an adequate and predictable level and discusses in detail issues related to financing
in Chapters Fourteen and Fifteen of this report.
Nonetheless, it is important to consider the consequences that would follow
from a refusal on the part of the provinces to adopt the health care guarantee. In the preceding
chapter, the Committee made the case that governments can no longer have it both ways – they
cannot fail to provide timely access to medically necessary care in the publicly funded health care
system and, at the same time, prevent Canadians from acquiring those services through private
means. Thus, one consequence of not implementing the health care guarantee would be to
render it highly likely that the current legal prohibition on the creation of a parallel private health
care insurance and delivery system would be challenged successfully in the courts.
A second consequence would be that it would fall to the federal government to
consider enacting its own legislation to enforce the health care guarantee. The federal
government could, for example, consider setting national maximum waiting times on its own for
various procedures, at the expiration of which the health care guarantee would come into effect.
When a patient exceeded the maximum waiting time, the federal government could then pay the
cost of treating the patient in another jurisdiction, including in the United States, and deduct the
cost from the cash it transferred under the CHST to the province in which the patient resides.
Thus the penalty for violating the health care guarantee would be similar to the
penalty that provinces now incur for violating the Canada Health Act. Currently, in cases where
the federal government finds that a province has applied user charges or engaged in extra billing
that are prohibited under the Act, it can withhold from the funds it would otherwise have
transferred to the province an amount equivalent to what the provinces have received.
Obviously, the adoption of such legislation by the federal government would be
highly contentious. However, it would ensure that a national health care guarantee of maximum
waiting times came into effect – an outcome that the Committee insists must happen and that
the Committee believes would also be strongly supported by the Canadian public.
6.7
Concluding Thoughts on the Health Care Guarantee
The Committee believes that it should be possible for the federal and
provincial/territorial governments to reach agreement on a national set of maximum waiting
times for various procedures. It passionately hopes that it will not be necessary for unilateral
action to be taken by the federal government or for a parallel system of private delivery, financed
by private insurance, to emerge as a result of judicial decisions. The Committee has pointed to
120
these potential consequences of not implementing the health care guarantee only because it
categorically rejects the status quo: Canadians in need of medically necessary services must be
given timely access to them.
It is also important to note that the Committee’s recommendation that the health
care guarantee be implemented overlaps with a number of other important recommendations
contained in this report. For example, health information systems and the means of evaluating
performance and outcomes such as the Committee has recommended in Chapter Ten must be
put in place in order to monitor waiting times across the country, so that patients receive timely
treatment and the standards imposed by the health care guarantee can be monitored. In addition,
the reform of primary health care delivery along the lines the Committee has proposed in
Chapter Four is essential to the efficient and timely provision of health care in the twenty first
century.
121
Part IV:
Closing the Gaps
in the Safety Net
123
CHAPTER SEVEN
E XPANDING C OVERAGE TO INCLUDE P ROTECTION A GAINST
C ATASTROPHIC P RESCRIPTION D RUG C OSTS
In previous volumes, the Committee highlighted a number of critical issues with
respect to prescription drug insurance coverage in Canada and the cost of prescription drugs:
•
In recent years, the cost of prescription drugs has escalated faster than all
other elements in health care. Spending on prescription drugs accounts for a
very significant and increasing share of public sector health care expenditures.
The expectation is that the upward pressures on prescription drug costs will
continue as new, effective, but very costly, drugs (particularly those
genetically tailored to the individual) enter the Canadian market in the next
decade.
•
The Canada Health Act does not apply to prescription drugs used outside the
hospital setting, and publicly funded drug coverage varies considerably from
province to province. This contrasts sharply with the policy in many OECD
countries, in which publicly funded coverage is provided for prescription
drugs as well as hospital and doctor services.
•
Private insurance coverage for prescription drugs provided through
employer-sponsored plans or individual insurance policies varies significantly
in terms of design, eligibility and out-of-pocket costs to plan members.
•
Despite the availability of both public and private drug insurance plans, many
Canadians have no coverage at all for prescription drugs. Moreover, among
those with some form of coverage (either public or private), there is
substantial variation in its nature and quality.
•
Financial hardship due to high prescription drug expenses is increasingly a
real risk – indeed, it is a reality – for many individual and families in Canada.
This chapter reviews trends
The Committee strongly supports the view
in drug costs and examines the current level
of insurance coverage for prescription drugs that no Canadian should suffer undue
in Canada. Particular attention is devoted to
financial hardship as a result of having to
the absence and insufficiency of coverage for pay health care bills. It is essential that
very high prescription drug expenses. The this principle be applied to prescription
chapter
presents
the
Committee’s drug expenses.
observations on Canadians’ need for
enhanced protection against severe or “catastrophic” prescription drug expenses, and its
recommendations on how the federal government should contribute to achieving this goal.
As stated in previous volumes, as well as in the present volume, the Committee
strongly supports the view that no Canadian should suffer undue financial hardship as a result of
125
having to pay health care bills. This basic principle at the root of Canadian health care policy
should be applied to prescription drug expenses.
7.1
Trends in Drug Spending186
The Canadian Institute for Health Information reports that since 1997 spending
on drugs (both prescription and non-prescription) has been the second-largest category of health
care spending in Canada, behind hospitals but now ahead of spending on physician services. It
is expected that final figures will show that in 2001, spending on drugs was equivalent to almost
50% of the amount spent on hospitals.
Spending on drugs has grown from $3.8 billion in 1985 to $15.5 billion in 2001.
During this 16-year period, data from CIHI show that spending on drugs has grown faster than
inflation and beyond the rate attributable to population growth. More precisely, from 1985 to
1992, drug expenditures increased on average by 12% annually. Between 1992 and 1996, they
grew by an average of 5% annually. The growth rate then rose to around 10% in 1997 and 1998,
and dropped to around 8% in 1999. Although the data have not yet been finalized, the average
growth rate of drug spending is expected to have been about 7% in 2000 and 9% in 2001.
Prescription drugs make up the largest component of the total spending on drugs
(79% in 2001, up from 67% in 1985). Non-prescription drugs accounted for the remaining 21%
of drug spending in 2001 (compared to 33% in 1985). For the most part, non-prescription
drugs are purchased directly by consumers and paid for out-of-pocket. By contrast, many payers
are involved in the financing of prescription drugs. They include both the public sector
(provincial/territorial Pharmacare programs, federal government plans for specific groups and
Workers’ Compensation Boards) and the private sector (private insurance plans and individuals).
Most of the information provided in this section is based on data from the Canadian Institute for Health
Information, Drug Expenditure in Canada, 1985-2001, Ottawa, April 2002. The media release for this report is
available on CIHI’s Website at http://secure.cihi.ca/cihiweb/dispPage.jsp?cw_page=media_24apr2002_e
.
186
126
TABLE 7.1
SPENDING ON PRESCRIPTION DRUGS BY SOURCE OF FINANCE
(PERCENTAGE)
P/T Governments
Federal Government
Workers’ Compensation Boards1
Sub-Total Public Sector
1985
40.6
2.3
0.5
43.4
1988
42.6
1.9
0.6
45.1
1999
38.2
2.4
3.1
43.7
2001
42.0
2.4
4.8
49.2
Private Insurers
Out-of-Pocket
Sub-Total Private Sector
Total All Sources
N/A
N/A
56.6
100.0
30.5
24.4
54.9
100.0
33.5
22.8
56.3
100.0
29.9
20.9
50.8
100.0
1) Data from 1997 and beyond include spending by WCBs as well as the Quebec Drug Insurance Fund.
N/A: not available.
Source: CIHI (April 2002), Drug Expenditure in Canada, 1985-2001, and Economics Division,
Parliamentary Research Branch, Library of Parliament.
In 1985, 57% of prescription drug spending came from the private sector (see
Table 7.1). By 2001, it had decreased to 51%. Correspondingly, the share of prescription drugs
financed from public sources increased steadily from 43% to 49%. Table 7.1 also shows that the
total proportion of prescription drugs paid out-of-pocket by individual Canadians has decreased
from 24.4% in 1988 to 20.9% in 2001. That is, an increasing share of total prescription drug
spending in Canada is being picked up by public sector drug coverage plans.
CIHI data on drug spending do not include drugs dispensed in hospitals, which
it classifies as hospital expenditure. Estimates provided by CIHI in its April 2002 report suggest
that drug expenditures in hospitals amounted to $1.1 billion in 2001. In addition, the share of
total hospital expenditures spent on drugs has consistently increased between 1985 and 2001,
from 2.8% to 3.4%. CIHI notes, however, that the rate of growth in drug expenditures in
hospitals has been slower than that of out-of-hospital drug spending. Although there may have
been some shift in drug spending from hospitals to the community, CIHI stresses that more
research is required to examine the relationship between drug utilization in and out-of-hospital.
Many observers expect out-of-hospital costs of prescription drugs to grow
substantially in the coming years, for a number of reasons:
•
The cost of developing and marketing new drug therapies has risen rapidly as
pharmaceutical companies tackle more challenging diseases and face more
stringent drug approval processes around the world.
•
Rapid scientific progress has introduced the possibility of developing new
genetically tailored drugs, applicable to a small number of patients suffering
with chronic degenerative conditions, that are potentially extremely effective
and also enormously costly.
127
•
Many of the newer drug therapies are targeted at chronic conditions treated
at home, as opposed to acute conditions treated in hospital.
•
Changes in medical practice and new technology have replaced some
hospital-based treatment with home care, which is now being provided for a
number of conditions with high drug therapy costs.
The net effect is that many Canadians now incur high levels of prescription drug
costs that were inconceivable only a few years ago.
7.2
International Comparisons
In comparison to selected OECD
Many Canadians now incur high
countries, Canada allocates a large proportion of its total
health care spending to drugs, ranking second in 1998 to levels of prescription drug costs
that were inconceivable only a
the United Kingdom. In the same year, Canada ranked
fourth for the level of drug spending per capita, after the few years ago.
United States, Germany and Sweden. Spending on
drugs varies greatly across countries and is influenced by numerous factors, including specific
public policy traditions and institutional characteristics (reimbursement systems for users and
providers, prescribing habits, etc.).187
Stephane Jacobzone, Pharmaceutical Policies in OECD Countries: Reconciling Social and Industrial Goals, Occasional
Paper No. 40, Labour Market and Social Policy, OECD, April 2000 (www.oecd.org).
187
128
TABLE 7.2
PUBLIC INSURANCE COVERAGE FOR PRESCRIPTION DRUGS
Australia
§
§
Formulary
National formulary listing only
drugs that receive a positive
assessment with respect to safety,
quality, clinical efficacy and costeffectiveness.
Therapeutic reference-based
pricing.1
§
§
§
§
Germany
§
§
Netherlands
Sweden
§
§
§
§
United
Kingdom
§
§
The federal government maintains a
“negative list” of drugs that are not
entitled to public reimbursement.
Therapeutic reference-based
pricing.1
§
National formulary.
Therapeutic reference-basedpricing.1
§
There is no national formulary, but
each county council has developed
its own list.
All drugs prescribed by doctors and
hospitals are purchased by a single
national agency, Apotekbolaget, a
state-owned company that owns all
pharmacies in Sweden..
§
§
§
National formulary under the NHS. §
There is also a negative list , that
§
excludes some drugs from NHS
prescription on the grounds of poor
therapeutic value or excessive cost.
Cost Sharing
Fixed co-payment per prescription,
subject to an annual ceiling. Co-payment
varies by type of beneficiary.
Exemptions for some segments of the
population.
Higher cost sharing for brand-name
drugs when generic copies are available.
Individuals must pay for drugs not listed
on the formulary.
Fixed co-payment per prescription. Copayment varies by type of beneficiary and
size of prescription.
Fixed co-payment per prescription,
subject to an annual ceiling. Co-payment
varies by type of beneficiary.
Exemptions for some segments of the
population.
Fixed co-payment per prescription,
subject to an annual ceiling. Co-payment
varies by type of beneficiary.
Exemptions for some segments of the
population.
Fixed amount per prescription.
Exemptions for some segments of the
population.
Therapeutic reference-based pricing ensures that the government pays only up to the price of a lowerpriced drug that is therapeutically interchangeable with, or equivalent to, the prescribed drug.
Source: Stephane Jacobzone, Pharmaceutical Policies in OECD Countries: Reconciling Social and Industrial Goals,
Occasional Paper No. 40, Labour Market and Social Policy, OECD, April 2000; Donald Willison et al.,
International Experience with Pharmaceutical Policy: Common Challenges and Lessons for Canada, Project funded
under Health Canada’s Health Transition Fund, 30 April 2001; Senate Committee on Social Affairs
(Volume Three); and Economics Division Parliamentary Research Branch, Library of Parliament.
1)
In contrast, Canada and the United States exhibit a much lower public share of
spending on drugs, which is largely explained by the fact that the entire population of other
countries is covered for prescription drugs by public insurance. Also, the countries with which
Canada and the United States are compared have formularies restricting the number of drugs
129
covered under public insurance, and they impose cost sharing (co-payments, co-insurance and
deductibles) with waivers for certain groups of beneficiaries (see Table 7.2).
7.3
Coverage for Prescription Drugs in Canada188
Currently, coverage for prescription drugs in Canada is offered through a
mixture of public and private insurance plans described briefly below.
7.3.1 Public prescription drug insurance plans
With respect to public plans it is worth noting that:
1. All provinces have public prescription drug programs that cover virtually all the
drug costs of low-income seniors (those receiving GIS, the Guaranteed Income
Supplement), a group that constitutes about 5% of Canada’s adult population.
This group is thus fully protected from catastrophic prescription drug expenses.
All provinces except Newfoundland also offer coverage to higher-income seniors
as well.
2. All provinces also have programs that provide prescription drug coverage for
recipients of social assistance, a group that comprised 6.8% of the population in
2000, protecting them also from catastrophic prescription drug expenses.
3. The federal government assumes the full cost of providing prescription drugs (as
well as other health services) for some Aboriginal populations and certain armed
forces veterans. These groups, which account for approximately 2% of the
Canadian population, are thereby fully protected against catastrophic prescription
drug expenses.
4. Provincial governments in British Columbia, Saskatchewan, Manitoba, and
Ontario have prescription drug plans targeted to the general population that
provide a protective cap (in some cases based on family income) on the personal
cost of drug expenses borne by individuals.
5. Quebec mandates prescription drug coverage with an out-of-pocket cap no
greater than $750 for all residents, whether under employer-sponsored programs
or the provincial program.
This section is based on information provided by Fraser Group/Tristat Resources, Drug Expenses Coverage in the
Canadian Population: Protection From Severe Drug Expenses, August 2002. This study was sponsored by the Canadian Life
and Health Insurance Association at the request of the Committee.
188
130
6. Alberta offers to all residents a public, voluntary, premium-based prescription
drug insurance plan that provides significant drug expense coverage after a three
month waiting period.
In summary, a significant number of public drug plans provide a significant
degree of protection against personal financial hardship to Canadians who face very high
expenses for prescription drugs. However, the federal government does not directly contribute
to any of the provincial plans.
7.3.2 Private prescription drug insurance plans
Private sector drug insurance plans contribute significantly to Canadians’
prescription drug coverage:
1. They are an entirely voluntary initiative, sponsored mostly by employers but also
by unions, joint union/employer entities and educational institutions. In
addition, about 1% of Canadians are covered by health insurance policies
purchased individually.
2. An estimated 2.4 million Canadians belong to private-sector plans that cover
100% of prescription drug expenses, thus completely protecting their members
from financial hardship attributable to very high drug costs. An additional
300,000 have plans that, in combination with public prescription drug coverage,
provide 100% coverage.
3. An estimated 9.7 million Canadians (the 2.4 million mentioned above plus an
additional 7.3 million Canadians, totalling 55% of those in private-sector plans)
have private-sector plans that include an overall protective cap on the out-ofpocket costs of individual plan members.
4. The remaining 8.1 million Canadians in private-sector plans (45% of those in
private-sector plans) have coverage that, for the most part, provides substantial –
but not complete – protection from catastrophic prescription drug expenses.
In Volume Four, the Committee recounted the real-life experience of one
Atlantic Canadian whose experience illustrated this last point. A professional librarian and
member of a good-quality employer-sponsored plan, the individual in question faced personal
out-of-pocket costs of $17,000 annually attributable to his wife’s requirement for prescription
drugs that cost $50,000 a year.
The Committee recently heard of another Atlantic Canadian resident whose
medication for pulmonary hypertension (a life-threatening condition) costs more than $100,000
a year. The individual in question’s current expenses are over $4,600 monthly (or $55,000
annually) in order to cover the insurance premium, the drug, the peripherals needed to
administer the drug, additional necessary medications and oxygen tanks. An anticipated increase
131
in dosage within the next year will increase the monthly bill to approximately $5,150, or $61,800
annually. People become eligible for government assistance in this province only once they have
exhausted all their savings, including RRSPs.
7.3.3 Plan features and their relation to protection from severe drug
expenses
While prescription drug insurance plans have many different features and
attributes, only four relate to the extent of protection such plans offer against catastrophic drug
expenses. These are: deductibles, co-payments/co-insurance, annual or lifetime maximums, and
out-of-pocket caps.
A deductible is the amount of drug expense that must be paid initially by an
individual before the drug insurance plan reimburses any expense. The deductible is normally
applied to a calendar or plan year. Deductibles are commonly expressed as fixed dollar amounts,
but some legislated public drug insurance programs use amounts related to family income.
Deductibles, unless they are extraordinarily high, usually have minimal impact on the degree of
protection a plan provides against catastrophic drug expenses.
Co-payments and co-insurance correspond to the portion of the cost of each
prescription that must be paid by the individual. Co-payments take the form of a flat amount
per prescription (e.g., $5), while co-insurance requires a fixed percentage per prescription (e.g.
5%). Co-payments can also include the pharmacist’s professional dispensing fee (as opposed to
the cost of the drug itself). They do not protect individuals, as in the professional librarian
example cited above, from very high personal expenses resulting from the prolonged use of very
expensive drugs.
An annual or lifetime maximum restricts to a specific amount the total amount of
prescription drug expenses that a plan will pay on behalf of a plan member. Expenses in excess
of this amount are to be paid out-of-pocket. For instance, a plan with a $5,000 annual maximum
would pay no more than that in a given year. The higher the maximum, the greater the
protection. It is highly unusual for public prescription drug insurance plans to impose maxima.
Some private-sector plans do, but most have unlimited coverage or specify very high annual or
lifetime maxima such as a million dollars.
Finally, out-of-pocket caps are provisions of plans that restrict the total amount of
deductibles, co-payments and co-insurance to be imposed on an individual during a given year.
These may be expressed either as a fixed upper limit (e.g., $1,500) or as an amount related to
family income (e.g., 3%). Many prescription drug insurance plans, particularly private-sector
plans, do not have explicit caps on out-of-pocket drug expenses. This feature in a drug plan
guarantees the insured individual protection against catastrophic prescription drug expenses.
The lower this limit, the higher the degree of protection.
7.4
An Emerging Issue: Catastrophic Prescription Drug Expenses
Generally, the direct financial impact of the rise in drug spending described
above is relatively modest because the proportion of average household expenditures spent on
132
prescription drugs remains small in absolute terms. CIHI data show that in 1999 the annual per
capita expenditure on prescription drugs was $331.38, of which $75.49 was paid for out-ofpocket.
Nonetheless, some individuals and families can and do incur much more
substantial expenses. While it is important to recognize that this affects relatively few people for
the moment, the Committee believes that the problem warrants careful attention because:
1. Most important, some individuals do experience substantial personal financial
hardship in paying for drug expenses, thereby frustrating the fundamental
objective of Canadian health policy referred to above.
2. Those facing a significant personal financial burden may discontinue (or not
begin) treatment requiring expensive medications.
3. Physicians may admit patients to more costly hospital based treatment so they
are spared the high costs for drugs dispensed for use out of hospital.
4. Doctors may prescribe and patients may demand cheaper but less effective
drugs.
5. Individuals may stay on social assistance rather than seek employment in order to
maintain drug coverage.
6. The drug plan to which the affected individual belongs may experience sufficient
financial expenditures that it prompts the plan sponsor to limit or discontinue it,
thereby reducing or eliminating drug expense protection for all members of the
plan. Other drug plan sponsors may take pre-emptive action to reduce the
financial risk of catastrophic drug costs to their own plans
Estimates by Fraser Group/Tristat
Resources show that currently 98% of the
Canadian population is covered by one or more
public and/or private prescription drug coverage
plans (see Table 7.3). Two percent of Canadians
(some 600,000 individuals) have no prescription
drug coverage whatsoever and must assume full
personal financial exposure in the event they
require expensive prescription drugs.
133
Two percent of Canadians (some
600,000
individuals)
have
no
prescription drug coverage whatsoever
and must assume full personal
financial exposure in the event they
require expensive prescription drugs.
TABLE 7.3
PRESCRIPTION DRUG EXPENSE COVERAGE IN THE CANADIAN PO PULATION
Covered by
Percent of Population
53%
58%
13%
2%
Public Plans
Private Plans
Both Public and Private
No Coverage
Source: Fraser Group/Tristat Resources, Drug Expense Coverage in the Canadian Population:
Protection From Severe Drug Expenses, August 2002, p. 11.
Fraser Group/Tristat Resources also analyzed the variations in the current levels
of protection from severe drug expenses by province. Tables 7.4 and 7.5 show the percentage of
the population of each province that would face various levels of out-of-pocket expenses when
confronted with total prescription drug expenses of either $5,000 (Table 7.4) or $20,000 (Table
7.5). Each table divides the population of the province into four groups according to how much
they would each pay out-of-pocket: (a) those who would pay up to $750; (b) those who would
pay between $751 and $2,000; (c) those who would pay over $2,000; (d) those with no coverage
at all.
Thus, for example, Table 7.4 indicates that 70% of B.C. residents with drug
expenses of $5,000 pay no more than $750 out of pocket, while the remaining 30% of B.C.
residents pay between $751 and $2,000. In Newfoundland, only 48% of the population who
spend $5,000 on prescription drugs pay up to $750, while 24% of population of that province
pay between $751 and $2,000. However, there are also 28% of Newfoundlanders who have no
coverage at all and therefore have to pay the full $5,000.
For those with $20,000 in prescription drug expenses (Table 7.5), the percentages
of B.C. residents with each level of out of pocket expenses remain the same. In Newfoundland,
48% of the population still pay only up to $750, and the same 28% of the population have no
coverage and must pay the full $20,000. The 24% of the population that paid between $751 and
$2,000 when faced with drug expenses of $5,000, now has to pay over $2000.
While the lack of coverage for a substantial proportion of Atlantic Canada
residents remains a striking feature of the national pattern, the tables also point to significant
variations in out-of-pocket levels among provinces that have programs covering their entire
population. Quebec stands out as having the least variation in protection levels, followed by
British Columbia, Manitoba and Saskatchewan.
134
TABLE 7.4
OUT-OF-POCKET COSTS FOR PRESCRIPTION DRUG EXPENSES OF $5,000
(PERCENTAGE OF POPUL ATION)
BC
ALTA
SASK
MAN
ONT
QC
NB
NS
PEI
NFLD
Canada
Up to $750
70%
43%
68%
84%
70%
100%
45%
47%
48%
48%
73%
$751 - $2,000
30%
57%
24%
13%
25%
0%
28%
29%
25%
24%
23%
Over $2,000
0%
0%
8%
3%
5%
0%
0%
0%
0%
0%
2%
No coverage
0%
0%
0%
0%
0%
0%
27%
24%
27%
28%
2%
Total
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
TABLE 7.5
OUT-OF-POCKET COSTS FOR PRESCRIPTION DRUG EXPENSES OF $20,000
(PERCENTAGE OF POPUL ATION)
BC
ALTA
SASK
MAN
ONT
QC
NB
NS
PEI
NFLD
Canada
Up to $750
70%
43%
67%
84%
70%
100%
45%
47%
48%
48%
73%
$751 - $2,000
30%
0%
25%
13%
12%
0%
0%
0%
0%
0%
20%
Over $2,000
0%
57%
8%
3%
18%
0%
28%
29%
25%
24%
5%
No coverage
0%
0%
0%
0%
0%
0%
27%
24%
27%
28%
2%
Total
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Source: Fraser Group/Tristat Resources, Drug Expense Coverage in the Canadian Population:
Protection From Severe Drug Expenses, August 2002, pp. 48-49.
135
Data from the same group also indicate that coverage for the great majority of
Canadians (89%) provides a protective cap on out-of-pocket costs regardless of the amount of
high prescription drug expenses. However, 9% of the Canadian population have drug coverage
plans without such protective caps, that require co-payments or have reimbursement limits. For
these individuals, out-of-pocket costs increase as their prescription drug expenses increase.
In total, 11% of Canadians are at substantial risk of significant financial hardship
from high prescription drug expenses paid out of their own pockets. Table 7.6 illustrates the
out-of-pocket costs for an individual requiring prescription medications costing $20,000 per
year.189
TABLE 7.6
Plan Type
A common employee benefit plan
Social assistance in many provinces
Indian Affairs NIHB
Another common employee benefit plan
Alberta Seniors Plan
Quebec RAMQ for individuals under
age 65
British Columbia Pharmacare
Ontario Trillium Plan (for family income
of $60,000)
Most common employee benefit plan
Federal Civil Service
Alberta Non-Group Program
No Coverage
Plan Parameters
Deductible
Co-payment
0
0
0
0
0
0
$25
0
0
30% not to
exceed $25
per
prescription
$100
25% out-ofpocket
(capped at
$750)
$800
0
4% of
adjusted
family
income
0
20%
$60
20%
0
30%
N/A
N/A
Out-of-Pocket
Cost ($)
0
0
0
25
About 900
(assuming 3
prescriptions
per month
750
800
2,400
4,000
4,048
6,000
20,000
In a separate analysis of claims data from a large number of employer sponsored
drug plans (approximately half of all plans in Canada), research presented to the Committee
showed that for the year 2000:
While this is not a common occurrence, approximately 4,000 individuals in private plans exceeded this level of
expense in 2000. A comparable figure for public plans is not available.
189
136
•
A few individuals had drug expenses exceeding $200,000.
•
About one person per thousand insured had personal medical expenses
(supplemental to medicare) exceeding $10,000. The great majority of these
expenses were for prescription drugs.
From these data, it is estimated
that some three persons per thousand or about
53,000 persons covered by private-sector plans
experienced drug expenses exceeding $5,000 in
the year 2000.
It is possible to say, therefore, with
some confidence that more than 100,000
Canadians experience annual drug
expenses exceeding $5,000; that number
is virtually certain to increase in the
years ahead.
Published data from the Ontario
Drug Benefit program suggest that the frequency
of drug expenses exceeding $5,000 may be several times higher (between 10 and 20 per
thousand) within public plans covering seniors and those unable to work. This is not particularly
surprising since public plans cover all seniors, who represent the age segment of the population
most likely to make high use of prescription drugs.
It is possible to say, therefore, with some confidence that more than 100,000
Canadians experience annual drug expenses exceeding $5,000; that number is virtually certain to
increase in the years ahead. How these heavy expenses are paid – that is, how much is paid by a
private insurance plan, how much by a public insurance plan and how much by the individual
out-of-pocket – will, of course, vary from individual to individual.
7.5
Protecting Canadians Against Catastrophic Prescription Drug
Expenses
In developing its proposal to expand the federal government’s role in health care
to include protection against the impact of severe or “catastrophic” prescription drug expenses,
the Committee has sought to accomplish two objectives.
First, and foremost, the Committee wants to make sure that no Canadian
individual or family is exposed to undue financial hardship as a result of having to pa y all, or
even a significant fraction, of the costs of extremely expensive and/or prolonged prescription
drug treatments. This is entirely consistent with the basic public policy objectives underpinning
the system of public health care insurance in Canada.
Second, the Committee
wants to create the conditions for long-term Specifically, the Committee’s proposal calls
sustainability of current prescription drug for the federal government to take over
coverage programs, both provincial public responsibility for 90% of prescription drug
and private supplementary drug insurance expenses that exceed a certain limit that
plans, in the face of escalating prescription
qualifies them as “catastrophic.”
drug costs and the anticipated introduction
of increasingly expensive and effective drug therapies.
The Committee’s proposed plan therefore builds on, rather than replaces,
Canada’s extensive current systems of provincial prescription drug coverage and private
137
supplementary drug insurance plans. The Committee’s intent, therefore, is to present a feasible
and realistic program that will inject new federal money into expanding available coverage in
ways that will protect Canadians against undue financial hardship resulting from severe or
catastrophic prescription drug expenses.
Specifically,
the
Committee’s
proposal calls for the federal government to take In order to ensure uniformity of
over responsibility for 90% of prescription drug coverage throughout the country,
expenses that exceed a certain limit that qualifies and in order to be able to control
them as “catastrophic.” The federal government which drugs are eligible to be
should establish criteria and conditions that private
covered under this program, it will
and provincial/territorial public plans would have to
also be necessary to establish a
meet to be eligible to receive this federal assistance.
national drug formulary.
In exchange, the federal government would assume
90% of the expense of protecting Canadian
individuals and families against catastrophic drug expenses. In order to ensure uniformity of
coverage throughout the country, and in order to be able to control which drugs are eligible to
be covered under this program, it will also be necessary to establish a national drug formulary
(see section 7.6, below).
The Committee is aware that the final parameters of the catastrophic
prescription drug insurance plan would have to be established through negotiations between all
the concerned parties – the federal and provincial/territorial governments as well as
supplementary drug plan sponsors and carriers. However, the Committee feels that the basic
contours of the plan it has worked out constitute a realistic and acceptable framework for
implementation.
7.5.1 How the plan would work
To qualify for federal assistance, To qualify for federal assistance,
provinces/territories would have to put in place a
provinces/territories would have to put
program that would ensure that residents of the
in place a program that would ensure
province/territory would never be obliged to pay
out-of-pocket more than 3% of their family that residents of the province/territory
would never be obliged to pay out-ofincome for prescription drugs. That is, personal
pocket more than 3% of their family
prescription drug expenses for any family of the
province/territory would be capped at 3% of the
income for prescription drugs.
individual’s total family income. The federal
government would agree to pay 90% of
prescription drug expenditures in excess of $5,000 for individuals for whom the combined total
of their out-of-pocket expenses and the provincial contribution for which they were eligible was
greater than $5,000 in a single year. Thus, the participating provincial/territorial governments
would have to pay only 10% of the cost that exceeded $5,000 of supplying prescription drugs to
families who incurred catastrophic drug expenses (i.e., those whose total drug expenses exceeded
$5,000 for the year).
138
To qualify for federal assistance,
sponsors of private supplementary prescription To qualify for federal assistance,
drug insurance plans would have to guarantee sponsors of private supplementary drug
that no individual plan member would be insurance plans would have to
obliged to incur out-of-pocket expenses that guarantee that no individual plan
exceed $1,500 per year. That is, for private-sector member would be obliged to incur out of
plans, out-of-pocket costs for plan members
would be capped at $1,500 in any given year. For pocket expenses that exceed $1500 per
plans that meet this criterion, the federal year. Private supplementary drug plans
government would then agree to pay 90% of would retain responsibility for drug
expenses up to $5000.
prescription drug costs in excess of $5,000 for
individual plan members whose total
prescription drug costs exceed $5,000 per year, with the plan paying the remaining 10%. Thus,
each individual plan member’s out-of-pocket costs would be capped at either 3% of family
income or $1,500, whichever is less.
Private supplementary drug plans would retain responsibility for drug expenses
up to $5,000, and would be strongly encouraged to put in place a pooling mechanism to assist all
plans in dealing with costs in the $1,500 – $5,000 range. Private plan sponsors would, of course,
be able to offer additional benefits and enhancements beyond the minimum requirements to be
eligible for federal assistance.
The net result of this new program to protect Canadian individuals and families
against the consequences of severe prescription drug expenses would be that no one would ever
be obliged to pay more than 3% of their family income for prescription drugs. Those who are
members of a private plan that participates in the federal program would never pay more than
$1,500 or 3% of their family income for prescription drugs, whichever is lower. Depending on
whether or not an individual is a member of a private plan, the first $5,000 in total prescription
drug expenses would be paid by some combination of individual out-of-pocket spending, public
and private insurance. The federal government would then pay 90% of the prescription drug
costs over $5,000 incurred by any individual in the course of a single year, with the remaining
10% of the costs over $5,000 being paid by either a provincial or a private supplementary plan.
To illustrate how this program would work in practice, consider the following
example. Three individuals each incur $10,000 in prescription drug expenses in the course of a
given year. One of them, Jane, earns $60,000 annually. Another, Bob, earns $30,000. Both Jane
and Bob are enrolled in supplementary private insurance plans that meet the federal eligibility
criteria for catastrophic prescription drug coverage. The third, Anne, is self-employed and also
earns $60,000 a year, but does not have private supplementary drug insurance. All three live in a
province that participates in the federal plan.
In Anne’s case, she would seek assistance from the provincial prescription drug
insurance plan. Since 3% of Anne’s income is $1,800, she would be entitled to receive $8,200
from the provincial plan to meet her total cost of $10,000.
In Bob’s case, his out-of-pocket expenses would be capped at $1,500 under his
private supplementary drug insurance plan. However, 3% of his income is only $900. Bob
139
would therefore be entitled to a $600 rebate from his insurance plan, so his total out-of-pocket
expenditure does not exceed 3% of his income.190
In Jane’s case, her out-of-pocket expenses would, like Bob, be capped at $1,500
by her private supplementary plan, but since 3% of her income ($1,800) is greater than her outof-pocket costs ($1,500), she would not be entitled to additional assistance.
Let's now suppose that Jane and Bob get married. They still each incur $10,000
in prescription drug expenses annually, for a total of $20,000. Their family income is now
$90,000 ($60,000+$30,000). Their private supplementary insurance plan caps their out-of-pocket
expenses at $1,500 each, for a total of $3,000. However, 3% of their family income is only
$2,700. Jane and Bob, therefore, are entitled to receive a $300 rebate from the provincial
government.
The federal government’s contribution would be paid either to the provinces or
to the supplementary private insurance plans, but not directly to individuals. These payments
would be made at regular pre-determined intervals (quarterly, semi-annually or annually) and
claims submitted to the federal program would, of course, be subject to periodic audit to ensure
that they corresponded to expenses that were actually incurred.
7.5.2 The benefits of the plan
Taken together, these measures would provide effective protection against
catastrophic prescription drug expenses for all Canadians and offer additional benefits to those
with lower incomes by capping out-of-pocket expenses at 3% of family income. The plan also
contains incentives for both the provincial/territorial governments and private supplementary
plan sponsors to participate.
For the provinces and territories, the Committee’s plan is structured so that the
federal government provides financial assistance for some coverage that all provinces/territories
already offer, such as paying the costs of catastrophic prescription drug expenses of seniors and
people on social assistance. The federal contribution would therefore free up provincial money
and enable provinces to pay for whatever improvements to provincial prescription drug plans
are required to put in place the guarantee that no resident incur out-of-pocket costs in excess of
3% of his/her income. Furthermore, it shifts the onus from the provinces to the federal
government to deal with the increasing incidence of very high (catastrophic) drug costs
attributable to escalation in the cost of drugs themselves and the introduction of new, more
sophisticated, and particularly expensive drug therapies.
Thus,
even
those
provinces/territories that do not
currently provide any coverage against
catastrophic expenses for the working
population under the age of 65 (and that
The net result would be, of course, a real step
forward for those Canadians (roughly 600,000
people) who currently have no protection
whatsoever against catastrophic prescription
drug expenses.
Note that it should be possible to work out a payment plan that enables people who are not in a position to wait
for a rebate from the government at the end of the year to benefit from a credit at the point of purchase, or some
similar scheme to reduce their actual out of pocket expenses to a manageable limit.
190
140
might also have difficulty participating in a traditional federal cost-sharing program because of a
lack of available provincial money to match the federal dollars) are likely to derive sufficient
financial benefit under this program to allow them to meet the federal eligibility criterion. The
net result would be, of course, a real step forward for those Canadians (roughly 600,000 people)
who currently have no protection whatsoever against catastrophic prescription drug expenses.
The Committee’s proposal would also help ensure the long-term sustainability of
private supplementary drug insurance plans for those that agree to cap their members’ out-ofpocket expenses at $1,500 per year. It would remove the spectre of extreme volatility in plan
costs due to catastrophic drug expenses. Moreover, potential plan sponsors who have hesitated
to adopt supplementary prescription drug benefit plans in the past out of fear of potentially
facing catastrophic drug costs may now be more inclined to introduce them. This is particularly
important for small and new businesses, enabling them to offer more competitive benefits
packages to prospective employees than would otherwise be possible.
7.5.3 How much would the plan cost?
It is estimated that implementing this federal initiative to protect all Canadians
against catastrophic prescription drug costs would cost approximately $500 million per year. At
the request of the Committee, this cost estimate was prepared using a large-scale microsimulation model of national drug coverage constructed by the Fraser Group and Tristat
Resources, researchers who have authored several major studies of prescription drug coverage in
Canada. Their most recent study, Drug Expense Coverage in the Canadian Population: Protection from
Severe Drug Expenses, was presented to the Senate Committee on June 12, 2002.
The model by the Fraser Group and Tristat Resources is built on four key data
files:
•
The Statistics Canada Survey of Labour Income Dynamics (SLID) sample of
approximately 60,000 Canadian households provides the basic demographic
characteristics.
•
The Statistics Canada Survey of Work Arrangements is used to establish
supplementary drug coverage status.
•
The Plan Parameter File, which establishes the terms of the public and
private plans, was developed from an analysis of public plan provisions and
records of 80,000 employer-sponsored plans.
•
The Drug Need File, containing the estimated average annual drug expense
for each age and gender group as well as the probability distribution by size
of expense, is based on an analysis of supplementary drug plan claims data as
well as published data from some public programs.
The entire model is balanced to aggregate benchmarks derived from macro
statistics provided by the Canadian Institute for Health Information for the year 2000, adjusted
for the characteristics of the sample frame used by the Statistics Canada surveys.
141
The Committee has added an additional cushion to the raw output from the
model with a view to providing a prudent and robust estimate that is believed to overestimate
somewhat the likely costs.
7.5.4 Committee’s Proposal for a Catastrophic Prescription Drug
Insurance Plan
In summary, then, the Committee recommends that:
The federal government introduce a program to protect
Canadians against catastrophic prescription drug expenses.
For all eligible plans, the federal government would agree to pay:
§
90% of all prescription drug expenses over $5,000 for
those individuals for whom the combined total of
their out-of-pocket expenses and the contribution
that a province/territory incurs on their behalf
exceeds $5000 in a single year;
§
90% of prescription drug expenses in excess of
$5,000 for individual private supplementary
prescription drug insurance plan members for whom
the combined total of their out-of-pocket expenses
and the contribution that the private insurance plan
incurs on their behalf exceeds $5,000 in a single year.
§
the remaining 10 % would be paid by either a
provincial/territorial plan or a private supplementary
plan.
In order to be eligible to participate in this federal program:
§
provinces/territories would have to put in place a
program that would ensure that no family of the
province/territory would be obliged to pay more
than 3% of family income for prescription drugs;
§
sponsors of existing private supplementary drug
insurance plans would have to guarantee that no
individual plan member would be obliged to incur
out-of-pocket expenses that exceed $1,500 per year;
this would cap each individual plan member’s outof-pocket costs at either 3% of family income or
$1,500, whichever is less.
142
7.6
The Need for a National Drug Formulary
It is clear to the Committee that, in order to implement its plan to protect
Canadian individuals and families from catastrophic prescription drug costs in a uniform and
equitable manner across the country, it will be necessary to establish a national drug formulary.
The concept of a national drug formulary was brought to the Committee’s attention by a
number of witnesses during its study.
A drug formulary refers to a list of prescription drugs that are supplied under
public drug insurance plans. A “national” drug formulary does not mean that the federal
government alone would be responsible for determining which prescription drugs would be on
it. Rather, a national formulary is best conceived in terms of harmonization among the federal,
provincial and territorial participants together with the participation of other interested
stakeholders.
As the Committee noted in Volume Four of its study, the benefits of a national
drug formulary include the following:
•
Elimination of the potential for log-rolling, or pressuring one province to add
a drug to its formulary because another has already done so;
•
Enhanced ability to undertake and make available nationally the research
needed to understand whether the benefits of a new (and costlier) drug
genuinely represent a significant improvement on existing (and cheaper)
drugs.191
The establishment of a national drug formulary could lead the way to the
creation of a single national buying agency – one that covers all provincial/territorial/federal
jurisdictions. The substantial buying power of such an agency would strengthen the ability of
public prescription drug insurance plans to negotiate the lowest possible purchase prices from
drug companies.
Given the plan to protect Canadians against catastrophic prescription drug costs,
a national drug formulary would mean that all Canadians would receive comparable coverage
and access to drugs regardless of where they lived. It would also enable the funders of the
program to exercise control over which drugs were eligible for coverage. The Committee
believes that, since the federal government will be funding 90% of the cost, it is essential that the
federal government be at the table when these decisions are made. Moreover, given the potential
for exponential growth in the costs of new drug therapies, the funders of the program will have
to agree jointly which drugs are covered under the plan. The Committee therefore recommends
that:
The federal government work closely with the provinces and
territories to establish a single national drug formulary.
191
Volume Four, p. 71.
143
CHAPTER EIGHT
E XPANDING C OVERAGE T O I NCLUDE P OST -ACUTE HOME C ARE
8.1
Brief Review of Key Points about Home Care from Volumes Two
and Four
Spending on home care in Canada (both public and private) has increased
continually over the past two decades (see Figures 8.1 and 8.2). In previous Volumes, the
Committee noted that there is no consensus about what services should be included in the
definition of home care. Home health care services can cover some acute care (intravenous
therapy and dialysis, for example), long-term care (for individuals with degenerative diseases
such as Alzheimer’s or chronic physical or mental disabilities), and end-of-life care for those
with terminal conditions. In addition to health care, home care can include social support
services such as monitoring, homemaking, nutritional counselling and meal preparation. It
extends along a wide continuum of care.
There are two basic kinds of home care providers: formal caregivers such as
nurses, therapists, and personal support workers; and informal caregivers, usually family
members or friends. The 1998/99 Population Health Survey found that the majority of those
who reported needing care in the home due to aging, chronic illness or disability received no
formal, publicly funded care whatsoever. Between 80% and 90% of all home care provided to
people with these needs is unpaid. The survey did not report the extent to which needs not paid
for from public funds are being paid for privately, met by informal caregivers, or simply not met.
The need for home care
will become a major challenge as the baby
boomers age, average life expectancy rises,
health care delivery becomes both more
de-institutionalized
and
more
technologically complex, and as work and
social patterns decrease the availability of
informal care-giving by family members.
The Committee heard that home care can
fulfill a number of functions, notably:
The need for home care will become a major
challenge as the baby boomers age, average
life expectancy rises, health care delivery
becomes both more de -institutionalized and
more technologically complex, and as work
and social patterns decrease the availability
of informal care-giving by family members.
•
it substitutes for services provided by hospitals and long-term care facilities;
•
it maintains clients’ capacity to remain in their current environment, usually
their homes, as an alternative to moving to another and often more costly
venue such as a long-term care facility; and
•
it reduces dependency, primarily by providing monitoring at additional shortrun but lower long-run costs.
145
Many witnesses contended that when home care is substituted for acute care –
usually hospital-based care – it should be considered the same as acute care delivered in other
settings and, a ccordingly, should be encompassed under the Canada Health Act.
Currently, each province and territory offers some form of home care program,
but not as a “medically necessary” service under the Canada Health Act. Therefore, publicly
funded home care programs vary greatly across the country in terms of eligibility, scope of
coverage and applicable user charges. Although its provision has increased in most provinces in
recent years, public spending on home care still represents a small proportion of overall
provincial health care budgets.
Recent studies suggest that although home care is generally cost-effective, it is
clear that in many cases institutionalized care remains more efficient, particularly for the frail
elderly. Of course, institutionalized care is always more convenient for service providers.
But cost and the ease of service delivery are not the only factors to be taken into
account. Many people want to receive care if it is available to them in their homes, rather than in
institutions.
In Volume Four (section 8.10), the Committee outlined four options for federal
contributions to the financing of home care:
1. A National Home Care Program
Under this option, the federal government would increase its transfers to assist
the provinces and territories to develop home care programs in their respective jurisdictions.
The federal government would work closely with the provinces and territories to develop
national home care standards, a critical issue if home care is to become a fully integrated
component of Canada’s health care delivery system.
2. Tax Credit and Tax Deduction to Home Care Consumers
The federal government could offer enhanced financial assistance to home care
consumers through tax changes that build upon existing income tax provisions. Alternatively
new tax incentives could be created to encourage people to put money aside for their long-term
care needs.
3. Creating a Dedicated Insurance Fund to Cover the Need for Home Care
Using a dedicated, capitalized insurance fund approach such as that suggested by
the Clair Commission in Quebec, home care could be offered as benefits in kind or as monetary
benefits.
146
4. Specific Measures Aimed at Informal Caregivers
The reduction in in-patient hospital services has increased the burden of care on
families and friends of home care patients. Currently, more than 3 million Canadians – mostly
women – provide unpaid care to ill family members in the home. This option would provide
further financing support for Canada’s informal caregivers, using the Canada Pension Plan
(CPP) and/or Employment Insurance programs to assist those who leave the workforce
temporarily to provide informal care.
8.2
Other Options
These options were focused on federal involvement in all three aspects of home
care (substitution, maintenance and prevention). The only specific aspect that was raised in
Volume Five was in relation to the development of a national health info-structure and
concerned the need to invest in tele-homecare. In Volume Five, the Committee also announced
its intention to produce a thematic study on the issue of home care in the near future.
In subsequent testimony, the Committee heard that it is important to consider
devising a national home care strategy in stages, beginning with the function of home care as a
substitute for acute care.
Health Canada showed in 1999192 that on a national basis, one-third of home
care’s clientele has acute needs and two-thirds employ its long-term services (Table 8.1). The
latter are recipients of continuing care, while the former are post-acute care recipients, usually those
requiring services for a short period following hospitalization. Recent hospital transformations
through closures, mergers, reductions in lengths of stay, and changes to the size and function of
hospitals have shifted the traditional home care caseload, putting greater emphasis on post-acute
home care recipients.
Home care is no longer the
preserve of the elderly. Forty-five percent of Recent hospital transformations
home care recipients in Ontario are under 65 through closures, mergers, reductions
years of age and 15 percent are children. 193 in lengths of stay, and changes to the
Moreover, the services profiles are distinct for
size and function of hospitals have
the two main groups of home care clients. The
shifted the traditional home care
post-acute care group receives care for a short
caseload, putting a heavier emphasis
period, generally less than 90 days; the other, on post-acute home care recipients.
made up primarily of elderly and disabled people,
receives care on a continuing basis. For short-term recipients, nursing services make up the
lion’s share (63.0%) of home care received; the remaining services are divided between personal
support (20.6%) and various other therapies (16.4%). In contrast, for continuing care recipients,
“Provincial and Territorial Home Care Programs: A Synthesis for Canada,” Health Canada, June 1999.
Laporte A, Croxford R, Coyte PC: Access to home care services The role of socio-economic status. Presentation at
the Canadian Health Economics Research Association Conference, Halifax, May 2002.
192
193
147
personal support is the most prevalent service (59.2%), followed by nursing care (35.5%);
therapeutic services are rarely necessary.194
TABLE 8.1
PERCENTAGE OF ACUTE, LONG-TERM, AND OTHER CLIENTS, 1996-97
(JURISDICTIONS WHERE DATA ARE AVAILABLE)
Province/
Territory
B.C.
Alta.
Acute Care Long-Term
Others
Clients
Care Clients
56.4
34.5
N/A
41.0
52.0
7.0
Total
90.9
100.0
Sask.
22.9
70.5
6.6
100.0
Que.
N.B.
21.1
53.3
63.7
46.6
15.2
N/A
100.0
99.9
P.E.I.
20.0
75.0
5.0
100.0
Y.T.
Canada
16.6
33.0
73.7
58.0
9.6
8.7
99.9
99.7
The Committee believes the model of home care delivery pioneered in New
Brunswick should be highlighted.
8.3
The Extra-Mural Program in New Brunswick
Founded in 1981, under then Health Minister, now Senator, Brenda Robertson (a
member of this Committee), the New Brunswick Extra-Mural Hospital (NBEMH) was Canada’s
first government-funded home-hospital program. It is often cited as a possible model for other
jurisdictions. Designated as a Hospital Corporation under the New Brunswick Hospital Act, its
services were eligible to be insured by the province. “The mission of the NBEMH was to
provide a comprehensive range of coordinated healthcare services for individuals of all ages for
the purpose of promoting, maintaining and/or restoring health within the context of their daily
lives.”195
In 1996, a major restructuring of the NBEMH took place. A change in legislation
changed the status of the NBEMH from that of a Hospital Corporation to its current status as
an Extra-Mural Program (EMP). Management of the existing service delivery units devolved to
the eight Region Hospital Corporations (RHCs). The RHCs manage hospital facilities,
community health care centres (four sites in the province), and the Extra-Mural Service Delivery
Units located in their territory. While management of service delivery has been decentralized,
overall direction, including development, standard setting, funding, and monitoring of the EMP
194
195
Ibid.
Brief to the Committee, p. 3.
148
is the responsibility of the Hospital Services Division of the New Brunswick Department of
Health and Community Services.
Thirty service delivery sites provide for the delivery of EMP services to clients
across the entire province. Staff includes clinical coordinators, liaison nurses, support staff, and
field staff representing the disciplines of clinical nutrition, nursing, occupational therapy,
physiotherapy, speech language pathology, social work, and respiratory therapy. All professional
staff members are employees of the EMP who work in interdisciplinary teams. Support services
such as homemaking and meals-on-wheels are contracted. Direct care staff provides the casemanagement function as well. Nursing services are available 24 hours a day, seven days a week,
while all other disciplines deliver services Monday to Friday.
Clients of the program fall into one of four categories or groupings:
•
Acute Care: The objective is to facilitate early discharge or prevent
admissions to more costly facilities, including hospitals; to improve or restore
function through the provision of assessment and intervention in clients’
natural environments. Services include, but are not limited to, selective
chemotherapy, oxygen therapy, diabetes management, IV therapy, wound
care, intravenous hydration and medication administration, and postoperative rehabilitation.
•
Continuing Care: the objective is to maintain and prevent further
deterioration in health/function so that individuals can remain in their
current environments for as long as possible. Services include, but are not
limited to, oxygen therapy; medication assessment, management, and
monitoring; seating and positioning; adaptive equipment aids/prescription;
support for individuals on mechanical ventilation; and group therapy.
•
Promotive/Preventive Care: The purpose is to provide information, advice,
or any planned combination of educational and organizational supports to
maintain or enhance health; to prevent the occurrence of injuries, illnesses,
chronic conditions and their resulting disabilities.
•
Palliative Care: the objective is to provide interventions that help alleviate
pain and manage the symptoms of a terminal illness; to provide support and
respite to individuals and their informal support networks so individuals may
die at home or delay admission to a medical care facility for as long they so
choose.
Assessment, treatment, education, and consultation are a component of each
type of care. The services provided are intended to promote client independence for as long as
possible. At its inception the budget for the EMP was $250,000. As shown in Table 8.2, in a
province with a total population of just over 750,000 it has grown into a program with a budget
around $40 million. It offers an example of how it is possible to phase in a comprehensive home
care program over time.
149
8.3.1 Building on the New Brunswick example: direct referrals to home
care
The Committee took
[…] “approximately 55% of acute care
particular note of the fact that the New
Brunswick EMP enabled doctors to refer clients are admitted directly from the
community,” without having been admitted
patients directly to the program. Cheryl
Hansen, Provincial Director of the EMP, to a hospital. The Committee highlights this
told the Committee that “between 50 to
aspect of the EMP in the hope that other
60 per cent of the EMP total caseload is
jurisdictions will consider developing
for acute care services or is the acute care similar programs that offer the possibility
replacement and substitution function of
of extending the range of services available
hospitals.” In her brief to the Committee
to Canadians under the Canada Health Act
she further indicated that “approximately
55% of acute care clients are admitted in an effective and cost-efficient fashion.
directly from the community,”196 without
having been admitted to a hospital. The Committee highlights this aspect of the EMP in the
hope that other jurisdictions will consider developing similar programs that offer the possibility
of extending the range of services available to Canadians under the Canada Health Act in an
effective and cost-efficient fashion.
TABLE 8.2
EXTRA-MURAL PROGRAM – ASSORTED DATA
1996-97
Staff (FTE)
Separations3
Nursing Visits 1, 3
Rehab. Visits2, 3
Other Visits 3
Total Visits
Gross Expenditures ($M)
Average Cost / Visit 3
Average Cost / Separation 3
527
10,866
270,145
34,107
40,457
344,709
$28.6
$83
$2,632
1997-98
590
11,972
275,586
64,080
42,587
382,253
$31.7
$83
$2,662
1998-99†
592
12,680
295,817
93,459
43,522
432,720
$35.0
$81
$2,758
1999-00†
2000-01*‡
608
13,924
326,630
87,946
45,040
459,616
$37.2
$81
$2,674
668
19,941
282,813
78,609
39,148
400,570
$39.7
$99
$1,990
Source: New Brunswick Department of Health and Wellness, Annual Report 2000-2001.
Notes:
1. Includes occupational therapy, physiotherapy and speech language pathology visits.
2. Includes social work, clinical nutrition, and respiratory therapy visits .
3. For 1999-2000 fiscal year only, due to the implementation of a new EMP information system,
statistics are estimated based on activity data collected from April to September 1999.
† Staffing and volume increases attributed to the Rehabilitation Services Plan
* Preliminary data
‡ Statistics may vary from previous years as EMP went live with a new information system in 2000-01
(EMP Information System). Collection of statistics is according to New Brunswick MIS guidelines in
2000-01.
196
Brief to the Committee, p. 3.
150
8.4
Organizing and Delivering Post-Acute Home Care
In this section and the two that follow, the Committee outlines its specific
proposal for a national program to provide publicly funded insurance coverage for post-acute
home care, that is, for people requiring treatment at home following an episode of
hospitalization.197 We describe mechanisms for the financing, delivery and organization of home
care following hospitalization.
Although other types of home care
services are also important contributors to good health,
…the Committee believes it is
the Committee believes it is important to focus at this
important to focus at this time
time on the financing, organizing, and delivery of post- on the financing, organizing, and
acute home care. The Committee’s objective is to delivery of post-acute home care.
stimulate the development of a new national program
that provides public insurance coverage for services that are now delivered to Canadians in their
own residences and are not therefore covered under the provisions of the Canada Health Act.
Although we do not now propose a comprehensive home care program, the Committee is
convinced that it is important to begin with what we believe to be a fiscally feasible expansion of
the health care safety net in Canada.
8.4.1 Definition of post-acute home care
Post-acute home care refers to the
provision of home care services to patients who
have experienced an episode of hospital care. The
first challenge to face in developing a national
program for post-acute home care is in the
identification and classification of home care
following hospital care and linking relevant home
care services to an initial episode of hospital care,
whether in-patient care or same-day surgery.
8.4.1.1
…the Committee is convinced that it
is important to begin now a fiscally
feasible expansion of the health care
safety net in Canada. We believe our
proposed program meets the test of
fiscal feasibility.
When does Post-Acute Home Care (PAHC) servicing start?
Fortunately, studies have explored the definition of post-acute home care
(PAHC) in the context of health service restructuring.198 Most experts have defined post-acute
home care recipients as individuals who received their first home care visit within 30 days of
their in-patient or same-day hospital discharge date. Initiation of home care beyond 30 days of
The Committee wishes to acknowledge the invaluable assistance of Dr. Peter Coyte in the preparation of its
proposal for the development of a national publicly funded program for post-acute home care. Professor Coyte is
Professor of Health Economics and CHSRF/CIHR Health Services Chair at the University of Toronto. He is also
the Co-Director of the Home and Community Care Evaluation and Research Centre, and the President of Canadian
Health Economics Research Association. Many of the specific recommendations were developed by Professor
Coyte in a background paper prepared at the request of the Committee.
198 Coyte PC, Young W: Regional variations in the use of home care services in Ontario, 1993/1995. Canadian Medical
Association Journal, 161:4, 376-380, 1999; Coyte PC, Young W: Reinvestment in and use of home care services, Technical
Report No. 97-05-TR, Institute for Clinical Evaluative Studies: Toronto, Ontario, November, 1997; Coyte PC,
Young W, DeBoer D: Home care report for the Health Services Restructuring Commission. Report to the Health Services
Restructuring Commission, Health Services Restructuring Commission: Toronto, 1997.
197
151
discharge is unlikely to be directly
related to previous hospitalization. 199
An interval shorter than 30 days might
exclude episodes of home care that
were
related
to
the
prior
hospitalization but were postponed
because of scheduling or other
difficulties.
The Committee therefore proposes that post-acute
home care recipients should be defined as
individuals who received their first home care
visit within 30 days of their in-patient or sameday hospital discharge date.
The Committee therefore proposes that post-acute home care recipients should
be defined as individuals who received their first home care visit within 30 days of their inpatient or same-day hospital discharge date.
8.4.1.2
When does PAHC servicing end?
While there appears to be consensus in the literature on the definition of who
should initially qualify as a PAHC recipient, the identification of those home care services that
are relevant or attributable to the original hospitalization represents a greater challenge. The
current ad hoc solution has usually been to impose an arbitrary date beyond which further inhome servicing may be presumed to be unrelated to the original reason(s) for hospitalization. In
some instances this cut-off date has been one year after discharge;200 in other cases it has been
60days. One rationale for use of the 60 day limit is that it is consistent with the short stay (or
short term) classification of home care episodes; episodes of home care that extend beyond 60
days are then classified as long stay (or continuing care).
It is important to note, that over 50% of PAHC recipients are discharged from
home care before 30 days of home care have elapsed, and almost 70% before 60 days; only
12.7% receive PAHC past six months. The Committee has decided to adopt a cut-off date of
three months, that is a period inbetween 60 days and six months. Hence, somewhere in the
range of 75-80% of PAHC recipients will have been discharged from home care before the three
months have elapsed.
The Committee therefore recommends that:
An episode of PAHC should be defined as all home care
services received between the first date of service provision
following hospital discharge, if that date occurs within 30
days of discharge, and up to three months following
hospital discharge.
Hollander M: The costs, and cost -effectiveness of continuing care services in Canada. Queen's-University of Ottawa
Economic Projects Ottawa,1-113, 1994; Coyte and Young (1999); Coyte and Young (1997); Coyte, Young and
DeBoer (1997); Kenney GM: How access to long-term care affects home health transfers. Journal of Health Politics
Policy and Law, 83: 412-414, 1993.
200 Coyte and Young (1999); Coyte and Young (1997); Coyte, Young and DeBoer (1997).
199
152
8.4.2 Organizational arrangements for PAHC
The national estimates of the total cost of the Committee’s PAHC program will
be derived below. The manner in which such funds are allocated and the mechanisms used to
assign responsibility for the organization and delivery of such care are tremendously important.
This section outlines mechanisms for the finance, organization and delivery of PAHC.
Control and responsibility for the organization and delivery of PAHC varies
across Canada but is usually the responsibility of organizations that are distinct from hospitals.
This has created parallel sets of entrenched interests, pitting organizations responsible for
hospital care against those responsible for home care, and creating conflict that has foreclosed
on or restricted opportunities for service integration, stifled innovation and put unnecessary
limits on service cost-effectiveness.
Therefore the Committee believes that it would be a mistake to continue to fund
those organizations charged with the distinct responsibility to negotiate, select, approve, and
evaluate (internal or external) contractual arrangements with home care providers. The
development (or perpetuation) of a separate program for PAHC that entails another set of
vested interests would do little to ensure that funding follows the care recipient. The financing
of PAHC should be first directed to hospitals, and the Committee recommends that:
Financing for post-acute home care should be first directed
to hospitals.
There is an abundance of
Directing the funding for the provision
evidence to indicate that hospitals respond in
of PAHC to hospitals will allow them
predictable ways to financial incentives. The
introduction of service-based reimbursement, to benefit from the potential costwhereby hospitals are reimbursed at a fixed savings associated with shorter lengths
rate for each type of service delivered (in of stay, thereby encouraging the uptake
keeping
with
the
Committee’s of home care and greater use of PAHC.
recommendations on hospital funding in
Chapter Two), would provide incentives to shorten lengths of stay and to shift the hospital
caseload toward day surgery and away from in-patient care.201 Furthermore, given the
relationship between PAHC and hospital care, the introduction of service-based reimbursement
for hospitals would increase their demand for PAHC. 202
A variet y of studies have explored the classification of linked episodes of hospital care and PAHC. Based on the
work performed for the Health Services Restructuring Commission in Ontario, for example, each inpatient and
same day surgery hospitalization could be assigned to one of twenty-five mutually exclusive and exhaustive Major
Clinical Categories (MCCs) in the case of inpatient care, and one of six Day Procedure Groups (DPGs) in the case
of same day surgery. [Coyte and Young (1999); Coyte and Young (1997); Coyte, Young and DeBoer (1997); Kenney
(1993); Canadian Institute for Health Information: Length of stay database by CMG. Ottawa. Canadian Institute for
Health Information, 1994. Canadian Institute for Health Information: DPG booklet. Ottawa. Canadian Institute for
Health Information. 1996.]
202 Kenney (1993); Kenney GM: Understanding the effects of PPS on Medicare home health use. Inquiry, 28: 129139, 1991.
201
153
Directing funding for the provision of PAHC to hospitals will allow them to
benefit from the potential cost-savings associated with shorter lengths of stay, thereby
encouraging the uptake of home care and greater use of PAHC.203 In contrast, if a separate
organization were financed for the provision of in-home care, the potential cost-savings
achieved through either shorter hospital stays or the use of day surgery would be much less likely
to be captured, and hence, would not have a direct impact on decisions regarding service
provision.
Consequently, the Committee believes that efficiency gains in the provision of
both hospital care and PAHC are better advanced through the vertical integration and joint
financing of these services, and recommends that:
In order to encourage innovation and service integration,
and to enhance the efficient and effective provision of
necessary health care irrespective of the setting in which
such care is received, a service-based method of
reimbursement for PAHC should be developed in
conjunction with service-based arrangements for each
episode of hospital care.
Furthermore, in the Committee’s view, PAHC programs should not be restricted
only to nursing and therapy services. This could lead to distorted patterns of practice because
PAHC recipients, like many patients using other forms of home care, utilise a full array of home
care services. Limiting the scope of services covered under the program might encourage
hospitals to substitute nursing services for other kinds of personal support services that would
be more cost effective, raising, rather than lowering, the aggregate cost of care.
This point was reinforced by the experience of the New Brunswick Extra-Mural
Program. In her brief to the Committee, Cheryl Hansen indicated that one of the lessons they
learned was that:
The acute care substitute function of homecare requires a comprehensive team working
collaboratively to meet the needs of the client and family. An essential component of acute
care services is the provision of appropriate short term home support services e.g.,
homemaking.[…]The funding and provision of adequate short term support needs to be
addressed in order for the replacement/ substitution function of homecare to occur in a
fashion that ensures quality service for the client and family.204
For these reasons the Committee believes that the reimbursement arrangements
for the provision of home care following hospital care should be flexible in order to encourage
innovation and efficiency and recommends that:
203
204
Kenney (1993).
Brief to the Committee, June 17, 2002, p. 7.
154
The range of services, products and technologies (including
prescription drugs) that may be used to facilitate the use of
home care following hospital care not be restricted.
8.4.3 Who provides PAHC?
The Committee recognizes
that the methods by which PAHC is In some circumstances, hospitals may
organized and delivered is a separate provide the services themselves; in other
question from how these services are funded, situations hospitals may contract with
and that many different forms of service not-for-profit or for-profit home care
delivery are feasible. In some circumstances,
service
providers,
or
in
other
hospitals may provide the services circumstances hospitals may contract
themselves; in others, hospitals may contract with third party agencies that subwith not-for-profit or for-profit home care
contract with home care service providers.
service providers; in yet other circumstances,
hospitals may contract with third-party agencies that sub-contract with home care service
providers.
The organizational options for PAHC are many and offer a variety of potential
benefits. First, the establishment of separate third party home care agencies may present some
hospitals with an opportunity to pool resources and gain economies of scale in service provision,
despite the potential to incur additional contracting and other administrative costs.
Second, hospitals may develop dedicated in-home service teams to deal with the
particular community circumstances faced by care recipients.
Finally, hospitals may contract-out (or out-source) the provision of PAHC to
home care service providers. This arrangement has a number of advantages. It can permit
service specialization by providers familiar with circumstances in the community; it offers the
prospect of service integration between hospital and PAHC; and it yields opportunities to take
advantage of cost savings associated with improvements in patterns of care.
The Committee therefore recommends that:
Hospitals have the option to develop contractual
relationships directly with home care service providers or
with transfer agencies that may provide case management
and service provision arrangements.
Regardless of the organizational
arrangement selected, the providers of PAHC
should receive service-based reimbursement. As
described in detail in Chapter 2, the amount of
money a provider is paid under service-based
funding depends on the acuity of the case being
155
Regardless of the organizational
arrangement selected, the providers of
PAHC should receive service-based
reimbursement.
treated. Thus, service-based funding levels would be determined by clinical guidelines. This
method ensures that the PAHC service providers receive a flat rate for their services to a specific
patient, thereby encouraging service innovation and integration, and enhancing the efficient and
effective allocation of health care services.
Reimbursing home care service providers with a fixed, predetermined payment
offers a number of incentives. First, providers may retain residual income and therefore have
the incentive to select the most efficient ways of delivering services. Second, to take advantage
of economies of scale and scope, both vertical and horizontal service integration may occur.
Such integrated organizations may be in a better position than other organizations to delegate
tasks cost-effectively and improve the continuity of care. Third, to the extent to which payment
exceeds the costs incurred in service provision, incentives exist for such organizations to
compete for additional care recipients.205
However, there is a negative incentive given that this reimbursement method
also tends to encourage the avoidance of care recipients with high service needs, i.e., “cherrypicking.” Also, in the absence of a vigilant program of evaluation, organizations may be tempted
to skimp on service provision, potentially leading to diminished quality of care. Consequently,
the determination of an appropriate risk-adjusted service-based payment that closely reflects the
service needs of PAHC recipients and the introduction of a systematic program of outcome
performance, are policies that must be developed in concert with modified funding schemes to
ensure cost-effective and uniformly accessible PAHC of high quality.
The Committee therefore recommends that:
Contracts formed with home care service providers should
include, in addition to service-based reimbursement
arrangements, mechanisms to monitor service quality,
performance and outcome.
8.5
The Cost of a National Post-Acute Home Care Program
8.5.1 How to calculate the cost of a national PAHC program
As shown in Figure 8.3 (at the end of this chapter), there are wide interprovincial
variations in per capita public home care expenditures in Canada, variations that persist even
after adjusting for the age-sex composition of the underlying population. While the average per
capita public funding for home care in fiscal year 2000 was $87.51, there was a four-fold
variation in such expenditures, ranging from the highest in New Brunswick ($193.76) to the
lowest in Prince Edward Island ($47.85) and Quebec ($51.89).206 These variations are due, in
Valdeck BC, Miller NA: The Medicare home health initiative. Health Care Financing Review, 16:1, 7 – 16, 1994; Phillips
BR, Brown RS, Bishop CE, et al: Do preset per visit payments affect home health agency behaviour? Health Care
Financing Review, 16:1, 91- 107, 1994.
206 Health Canada: Health expenditures in Canada by age and sex 1980-81 to 2000-01. Health Policy and Communications
Branch, Health Canada: Ottawa, August, 2001.
205
156
part, to the extent to which the provincial publicly funded home care program is extensive (as it
is in New Brunswick) or quite restricted (as it is in Prince Edward Island and Quebec).
Nationally, public home care expenditures were $2,690.9 million in fiscal year
2000.207 In order to identify the proportion associated with PAHC, the Committee used methods
based on previous work in Ontario for the Health Services Restructuring Commission. 208 All
home care recipients were identified for fiscal year 1997 and assigned to one of four mutually
exclusive categories, as shown in Figure 8.4 (at the end of this chapter), based on their use of
home care in relation to an episode of hospital care.
Home care recipients were first classified according to whether they had had an
episode of hospital care, whether inpatient or same-day surgery, during fiscal year 1997.209 If
they had had an episode of hospital care, the pattern of home care provision within 30 days of
discharge was analyzed. If the first home care visit following hospital discharge took place
within thirty days, the pattern of use of home care services in the 30 days prior to hospitalization
was analyzed. Accordingly, the four home care recipient categories were: no hospitalization; no
PAHC; PAHC without prior home care; and PAHC with prior home care.
The use of home care services and the average cost of such services were
analyzed for one year following either the first home care service date (for recipients who did
not receive PAHC) or the first home care service date following hospital discharge (for
recipients who received PAHC).
Two estimates are offered for the proportion of total home care costs
attributable to PAHC. The first (high) estimate is based on the proportion of home care recipients
that received PAHC, while the second (low) estimate is based on the proportion of expenditures
attributable to such care. While 42.8% of home care recipients received PAHC services, only
26.5% of total home care expenditures were attributable to such care. The use of both estimates
on which to base the cost of a national PAHC program recognizes the uncertainty associated
with developing cost estimates for a program of this kind, given the absence of a health
information system relating to the use of home care services.
8.5.2 What about hidden costs?
In addition to home care service costs, other costs associated with the provision
of PAHC are hidden in other provincial spending categories. Drug costs are a major item that is
hidden. For fiscal year 2001, the Ontario Drug Benefit (ODB) program expenditure attributable
to home care recipients was estimated at $86.8 million.210 While this amount probably
underestimates provincial drug program costs associated with the provision of home care, it may
be used to approximate the hidden costs associated with the provision of PAHC. 211
Ibid.
Coyte and Young (1999); Coyte and Young (1997); Coyte, Young and DeBoer (1997).
209 See Figure 8.4.
210 Peter Coyte, Personal Communication, Mr. Carl Marshall, Associate Director, Administration, Finance and
Eligibility, Drug Programs Branch, Ontario Ministry of Health and Long -Term Care, 2002.
211 Suppose the identified ODB program expenditures attributable to home care only represents the hidden costs
incurred by those under sixty-five years of age during their home care episode. Under this assumption, estimates of
207
208
157
8.5.3 How much will a national PAHC program cost?
A calculation done for the Committee combined estimates of the hidden costs
with those for the direct service costs and, converting to 2002 dollars, used the growth in home
care funding in Ontario between fiscal years 2000 and 2002 of 11.9% and estimated the cost of
providing post-acute home care for a one-year period following hospitalization. This yielded a
total cost estimate for a national PAHC program of between $1,021.1 million and $1,511.8
million for fiscal year 2002.212 Given that the Committee has recommended a period of three
months’ coverage, it is legitimate to fix the estimated cost of the program at approximately
$1,100 million per year. The Committee recognizes that this estimate is probably somewhat high.
8.6
Paying for Post-Hospital Home Care
The Committee believes the cost of a national PAHC program should be shared
equally between the provincial and federal governments. It therefore recommends that:
The federal government establish a new National PostAcute Home Care Program, to be jointly financed with the
provinces and territories on a 50:50 basis.
This brings the total cost (in fiscal year 2002 dollars) of a National PAHC
Program to be borne by the federal government to approximately $550 million per year.
It is also necessary to ask, however, whether the person receiving the home care
– the patient – should also contribute to the cost of this expansion of publicly insured health
care services. There are two ways of looking at this question.
The first is that the need for this expanded service arises as a result of the
individual’s having been in hospital and that the service is therefore simply an extension of
hospital care which, under Medicare, should be “free” to the patient and paid entirely out of
public funds. Moreover, one advantage of implementing this option of providing first-dollar
coverage is that, since the full cost of home care coverage will be paid by the PAHC program,
there is no reason for patients to object to shorter hospital stays. That is, no disincentive is
introduced to the transfer of patients from high-cost hospital care to less expensive non-hospital
care. This increases the likelihood of realizing efficiency gains for the health care system as a
whole.
The second approach is that since patients are, for the most part, paying
currently for at least some aspects of this home care service, it is reasonable that patients
the hidden costs associated with an episode of home care are $627.97 (in 2001 dollars). Since these costs are
assumed to be uniform across all categories of home care recipients, they may be used to compute a “hidden cost”
inflation factor for PAHC. This inflation factor may be defined as one plus the ratio of the hidden costs ($627.97)
to the cost per PAHC recipient. The latter depends on the home care costs attributable to PAHC recipients divided
by the number of such recipients (137,915 from Figure 4). Using figures from Ontario, in conjunction with the
high estimate for PAHC costs, the hidden cost inflation factor is (1.1731), while this factor is (1.2796) when using
the low estimate for PAHC costs.
212 The low estimate was calculated as $2,690.9 million * 1.119 * 0.265 * 1.2796, while the high estimate was derived
as $2,690.9 million * 1.119 * 0.428 * 1.1731.
158
continue to pay a small part of the cost, provided that the actual dollar amount paid by the
patient is adjusted in proportion to his or her income. The amount paid by the individual patient
should be small enough to meet the test of the Committee’s second objective for publicly
funded health care, namely, that no Canadian should suffer undue financial hardship as a result
of having to pay health care bills.
One method that has been suggested for implementing this second approach
involves treating insured services as taxable benefits. Using this model, at the end of each year,
people who had received services under the PAHC program would be sent a statement from the
provincial government indicating the total cost of the home care services obtained. This cost
would then become a taxable benefit. Patients could be protected against undue financial
hardship as a result of having to pay this increased tax by capping the maximum amount of
additional income tax any individual would have to pay at 3% of the individual’s income.
This second view holds also that any new public money spent for expanded
health care services should benefit those Canadians who can least afford to pay for these
services; those who can afford to make a financial contribution to the cost should do so. Only
by adopting this approach to the expansion of the public health care system, this argument
continues, can Canada afford to close the widening gaps in the health care safety net. Indeed,
this is one of the reasons the Committee’s proposal for an insurance program to protect
Canadians against catastrophic drug costs includes an element of “patient pay.”
Nevertheless, with respect to its proposed new PAHC program, the Committee,
after considerable reflection, agrees with the first view. Although it is concerned about the
precedent of first-dollar coverage for expanded publicly funded services, the Committee believes
that the advantages in terms of encouraging efficiency – encouraging the transfer of patients
from higher-cost hospital beds to lower-cost home care beds – and equity, outweigh the
disadvantages. With respect to the expansion of public health insurance to include post-acute
home care, the Committee therefore recommends that:
The PAHC program be treated as an extension of medically
necessary coverage already provided under the Canada
Health Act, and that therefore the full cost of the program
should be borne by government (shared equally by the
provincial/territorial and federal levels).
159
19
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8-1
999
Millions of Dollars
Figure 8.1: Public Home Care Expenditures in Canada
1980-81 to 2000-01
3000
2500
2000
1500
1000
500
0
Fiscal Year
Figure 8.2: Private Home Care Expenditures in Canada
1980-81 to 2000-01
900
800
700
600
500
400
300
200
100
0
Figure 8.3: Per Capita Public Home Care
Expenditures for Canadian Provinces and
Territories, 2000-01
250
$ per capita
200
150
100
50
Nu
na
vu
t
Yu
ko
Te
n
rri
tor
ies
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rth
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est
Al
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itis
rta
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an
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ew
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eE
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Figure 8.4: Home Care Recipients and Mean Expenditures (in 2002 Dollars)
Unique Home Care Recipients
Hospitalization
Yes
Post-Acute Home Care?
Yes
Home Care Prior to Hospitalization?
No
No Hospitalization:
#118,900
$3,160
No
No PAHC:
#65,386
$2,199
No
Yes
PAHC w/o Prior Home Care:
#91,346
$1,837
PAHC with Prior Home Care:
#46,569
$5,739
161
CHAPTER NINE
E XPANDING C OVERAGE
TO I NCLUDE
P ALLIATIVE H OME C ARE
Throughout the different phases of the hearings, the importance of palliative and
end-of-life care was brought to the Committee’s attention. Palliative care is a special kind of
health care for individuals and families who are living with a life-threatening lilness that has
reached such an advanced stage that death is on the horizon.
The goal of palliative care is to provide the best possible quality of life for the
terminally ill by ensuring their comfort and dignity and relieving pain and other symptoms.
Palliative care is designed to meet not only the dying person’s physical needs but also his or her
psychological, social, cultural, emotional and spiritual needs and those of his or her family as
well.
9.1
The Need for a National Palliative Home Care Program
Palliative care can be offered in a
variety of places — at home, in hospitals, in The Committee believes that there is a
long-term care facilities, and occasionally in clear need to ensure that proper
hospices. As was reported by the Senate palliative care is universally available,
Subcommittee to Update Of Life and Death in
and that it is provided in a manner that
June 2000, palliative care services in Canada are
respects the wishes of the dying person
often fragmented and frequently nonexistent.
and his or her loved ones.
Patients may not have access to palliative care
services until very close to death and in many
cases not at all. The report also indicated that palliative care in hospitals is usually paid for by a
provincial health plan, which typically covers professional care and drugs, medical supplies, and
equipment while the person remains in the hospital. In long-term care facilities, however,
residents may be required to pay varying amounts for their care and supplies.
The Committee believes that there is a clear need to ensure that proper palliative
care is universally available, and that it is provided in a manner that respects the wishes of the
dying person and his or her loved ones.
Different components of the health care system are involved in the many facets
of palliative, end-of-life care. From a policy perspective, it is important that the federal and
provincial/territorial governments work together to ensure that Canadians are well cared for and
have choice in care at the end of their lives.
The Committee recognizes the importance of providing access to palliative care
services for Canadians of all ages and across all relevant sectors of the health care system,
hospitals, hospices, community services, as well as non-governmental organizations. It also
recognizes that enabling universal access to palliative care services at all of these sites would
require major changes that would be very hard to implement.
163
Recent studies have estimated that while over 80% of Canadians die in hospital,
fully 80-90% of Canadians would prefer to die at home, close to their families, living as normally
as possible. But the services necessary in the home are often not available. Where they do exist it
is usually as result of initiatives taken at the community level or by local institutions and regional
health authorities, rather than as a consequence of government policy intended to reach the
whole Canadian population.
The
Committee
is
convinced that it is essential for the While the Committee is aware that there are
important limits to what the federal
federal government to make a substantial
contribution to making palliative care government can achieve directly in this area, it
services available to Canadians in their is nonetheless convinced that it is essential for
homes. However, it has proven the federal government to make a substantial
impossible to obtain the data that would
contribution to making palliative care services
permit accurate estimates of the cost of a available to Canadians in their homes.
national palliative home care program.
None of the experts or potential sources
of accurate statistical information on palliative care with whom the Committee consulted had
detailed costs on palliative home care. Nonetheless, the Committee believes the federal
government should set aside the funds now to cover the initial costs of a program that should be
developed in conjunction with the provinces and territories and paid for on a 50:50 cost-sharing
basis. The Committee therefore recommends that:
The federal government agree to contribute $250 million per
year towards a National Palliative Home Care Program to
be designed with the provinces and territories and cofunded by them on a 50:50 basis.
9.2
Financial Assistance to Caregivers Providing Palliative Care at
Home
In
addition to
helping establish a national In addition to helping to establish a national
program to pay the costs of end-of- program to pay the costs of end-of-life care for
life care for Canadians who choose
Canadians who choose to die in their own homes,
to die in their own homes, there are
also other measures that the federal there are also other measures that the federal
government should consider in government should consider in order to alleviate the
order to alleviate the burden that burden that now falls on the shoulders of thousands
now falls on the shoulders of of informal caregivers.
thousands of informal caregivers.
These are discussed in this section and the ones that follow.
Most of the costs of care in the home are currently assumed by the dying
person’s family. During Phase Two of its study, the Committee was told that, in general, the
majority of informal caregivers are women who must often simultaneously manage responsibility
164
both for aging parents and their own children while also holding down full-time paid work. This
combination of responsibilities can not only lead to stress-related illness and loss of work time
for the caregiver, but may also increase the risk of neglect and mistreatment of those receiving
care.
In its 1999 report, Caring about Caregiving: The Eldercare Responsibilities of Canadian
Workers and the Impact on Employers, the Conference Board of Canada found that 48% of those
providing personal care in the home said it was very difficult to balance their personal and job
responsibilities; 42% of them experienced a great deal of stress in trying to juggle their various
roles; 57% felt that they did not have enough time for themselves; 53% cut back on sleep; and
44% had experienced minor health problems in the past six months.
These statistics, which apply to all caregivers at home and not just those
delivering palliative care, illustrate how reliance on informal caregivers imposes costs on
Canadians, while at the same time saving the health care system money. If care were not
provided informally, in all likelihood greater costs would be incurred by hospitals and other
providers.
In Volume Four, the Committee insisted on the importance of providing support
to informal caregivers. It recognized that current tax provisions are inadequate to compensate
informal caregivers for the time and resources they provide. The Committee highlighted the fact
that the National Advisory Committee on Aging (NACA) had recommended that the Canada
Pension Plan (CPP) and the Employment Insurance (EI) program be adjusted to accommodate
individuals who leave the workforce temporarily to provide informal care.
With increased support in the
form of a policy to provide caregivers with
financial and information resources, dying
Canadians would have access to quality care
and would be able to choose where they
wished to spend their final days. Increased
assistance to caregivers would ensure that
they have the knowledge, skills, income
security, job protection and other supports
they require to provide care to the dying
while maintaining their own health and wellbeing throughout the dying and grieving
process.
Many working Canadians are faced with
stark choices as they try to balance the
need to provide for their family with caring
for a terminally ill family member.
Minimizing the amount of lost income
during this temporary but very difficult
period would be an important first step
toward improving the situation facing
family caregivers of dying individuals.
Many working Canadians are faced with stark choices as they try to balance the
need to provide for their family with caring for a terminally ill family member. Minimizing the
amount of lost income during this temporary but very difficult period would be an important
first step toward improving the situation facing family caregivers of dying individuals.
In Volume Four, the Committee referred to statistics from NACA that estimated
that providing benefits through the EI system to persons leaving the workforce to care for an
ailing relative would increase the overall cost of EI by about $670 million per year. This estimate
was based on the total number of caregivers and a 10-week period of benefit payment. Using
165
figures from Statistics Canada on the actual number of palliative care patients, and reducing
slightly the period of eligibility for benefits, the Committee has determined that the overall cost
to the EI system for providing benefits to informal caregivers who were caring for palliative care
patients would be significantly less than NACA had calculated.
In 1999, 219,530 Canadians died. Not all, however, required palliative care. By
eliminating accidental deaths and certain types of illness, the Committee has determined that
approximately 160,000 Canadians can be expected to require palliative care in any given year.
Using the average EI rate of $257 per week and a period of 6 weeks (instead of the 10-week
period used by the National Council on Aging), providing EI benefits to individuals providing
palliative care in the home would cost approximately $240 million per year. The Committee
believes that up to six weeks of leave should be granted to employees who provide palliative care
to a dying relative at home, and that the federal government should consider allowing employees
who take advantage of this leave to be eligible to receive EI benefits. The Committee therefore
recommends that:
The federal government examine the feasibility of allowing
Employment Insurance benefits to be provided for a period
of six weeks to employed Canadians who choose to take
leave to provide palliative care services to a dying relative at
home.
9.3
Caregiver Tax Credit
The Employment Insurance system is not the only avenue that exists for
providing support to caregivers. Tax credits are another option. The 1998 budget recognized
that families caring for an ill loved one required government assistance, and implemented a tax
credit that applies to individuals residing with, and providing in-home care for, an elderly parent
or grandparent or an infirm, dependent relative. This credit reduces combined federal-provincial
tax by up to $600.
The federal government also provides a medical expense tax credit. This credit
allows Canadians to deduct the cost of certain medical devices, aids or equipment. A number of
other tax credits also exist, including the disability tax credit and the attendant care expense
deduction.
The Committee recommends that:
The federal government examine the feasibility of
expanding the tax measures already available to people
providing care to dying family members or to those who
purchase such services on their behalf.
166
9.4
Job Protection
Under the Constitution, the provinces have the primary responsibility for labour
legislation, including job protection. However, there are areas that fall under federal jurisdiction,
including the federal public service, military personnel, and individuals working in federal
penitentiaries. People employed in these areas are governed by the Canada Labour Code and the
Treasury Board assumes responsibility for employees of the federal government.
With regard to job protection, it would be possible for the federal government to
take a leadership role in ensuring that people under its jurisdiction who take time off from work
in order to care for a dying relative not endanger their employment status. The Committee
therefore recommends that:
The federal government amend the Canada Labour Code to
allow employee leave for family crisis situations, such as
care of a dying family member, and that the federal
government work with the provinces to encourage similar
changes to provincial labour codes.
Furthermore, the federal government could take additional steps with regard to
its own employees. The Committee recommends that:
The federal government take a leadership role as an
employer and enact changes to Treasury Board legislation
to ensure job protection for its own employees caring for a
dying family member.
9.5
Concluding Remarks
The federal government can provide strong leadership and support for dying
Canadians and their families, in particular by ensuring that Canadians who choose to die at home
have access to the services that they need to do so with dignity. A new cost-shared palliative
home care program would represent a major step toward making this possible.
As well, the additional
measures recommended in this chapter The federal government is in a position to
would significantly improve the situation
provide strong leadership and support for
confronting family members who care dying Canadians and their families, in
for the dying at home. The Employment
particular by ensuring that Canadians who
Insurance option would provide
immediate financial assistance. Moreover, choose to die at home have access to the
it would likely trigger job protection services that they need to do so with dignity.
legislation in the provinces, as did
extended maternity benefit legislation. The disadvantage of this option is that it is only available
to insured workers. Tax credits, on the other hand, have the advantage of providing broader
167
coverage. However, such credits do not offer earnings replacement during the time of need, nor
would they likely help to initiate job protection legislation.
Taken together, all the measures recommended in this chapter constitute a
package that, if implemented, would mark real progress towards making quality end-of-life care
for Canadians a reality.
168
Part V:
Expanding Capacity and
Building Infrastructure
169
CHAPTER TEN
T HE F EDERAL ROLE
IN
H EALTH C ARE INFRASTRUCTURE
In Volume Five, the Committee presented its findings and general
recommendations with respect to the role of the federal government in health care
infrastructure.213 These recommendations were based on the third of the roles the Committee
spelled out in Volume Four for the federal government in health and health care, a role intended
to “support health care infrastructure and health infostructure.”214
In
this
chapter,
the
Committee provides more specific details on
its recommendations relating to health care
technology (Section 10.1), electronic health
records (Section 10.2) and evaluation of
quality, performance and outcomes (Section
10.3) – three areas of Canadian health care
infrastructure which the Committee strongly
feels must be given priority by the federal
government.
The Committee strongly believes that
health care technology, electronic health
records and the evaluation of quality,
performance and outcomes are three areas
of Canadian health care infrastructure that
must be given priority by the federal
government.
The collection of patient information under a system of EHR and the related use
of such information for the purpose of 1) clinical practice, 2) system management, 3)
performance and outcome evaluation, and 4) health research, raise a number of important and
complex issues with respect to the protection of personal health information; these are reviewed
in Section 10.4
10.1
Health Care Technology
In Volume Five, the Committee noted that, despite the importance of health care
technology in delivering timely and high-quality health services, the availability of many new
technologies continues to be disproportionately low in Canada in comparison with other OECD
countries. More specifically, Canada ranks 21st of 28 OECD countries in the availability of CT
scanners, 19 th of 22 in availability of lithotriptors, and 19th of 27 in availability of MRIs. Its only
acceptable ranking is in the availability of radiation equipment, where it ranks 6th out of 17.
Data also show that this technology gap is widening. For example, the
availability of MRIs in Canada worsened between 1986 and 1995 relative to other OECD
countries, including Australia, France, the Netherlands and the United States.215
In addition, we noted in Volume Five that the aging of health care technology is
also of concern. For example, information provided to the Committee indicated that between
30% and 63% of imaging technology currently used in Canada is outdated. Not only can the
Volume Five, pp. 69-89.
Volume Four, p. 9.
215 Volume Five, pp. 69-70.
213
214
171
outdated nature of health care technology negatively affect the health of a patient, but it also
raises concerns about the legal liability of health care providers.216
The Committee is concerned
that the shortage of health care technology
and the use of outdated equipment impede
exact diagnosis and inhibit high-quality
treatment. Moreover, we are concerned that
the deficit in health care technology has been
translated into limited access to needed care
and lengthened waiting times. In our view,
health care technologies are key to providing
Canadians with timely and high-quality
health care.
The Committee is concerned that the
shortage of health care technology and the
use of outdated equipment impede exact
diagnosis
and
inhibit
high-quality
treatment. Moreover, we are concerned that
the deficit in health care technology has
translated into limited access to needed care
and lengthened waiting times.
In September 2000, the federal government responded to the deficit in health
care technology by establishing the Medical Equipment Fund (MEF). The MEF allocated $1
billion (transferred on a per capita basis over a two-year period) to the provinces and territories
for the purchase of health care technology. The Committee has welcomed this injection of new
federal funds. However, we raised a number of concerns in Volume Five about the MEF:
•
First, some provinces have not applied for their share of this fund, possibly
because the federal government requires matching grants that some of the
poorer provinces have difficulty financing.
•
Second, additional resources are required to operate the new equipment.
Even if provinces can afford their share of the capital investment, they may
have difficulty funding the additional ongoing operating costs.
•
Third, the investment did not address the problem of old equipment that
needs to be upgraded.
•
Fourth, even with this new funding, Canada still does not rank at a level
comparable to other OECD countries.
•
And finally, there are apparently no mechanisms to ensure accountability on
the part of the provinces/territories as to exactly where money targeted to
purchasing new equipment is actually spent.
In July 2002, the Canadian Medical Association gave the Committee a report on
the Medical Equipment Fund that addressed many of these concerns.217 This background paper
made the following observations:
•
Because of the lack of a transparent accountability mechanism, it is very
difficult to determine whether the MEF reached its intended destination.
Volume Five, p. 70.
Canadian Medical Association, Whither the Medical Equipment Fund?, Background paper and technical notes, July
2002.
216
217
172
•
Of the $1 billion allocated through the MEF, approximately 60% was used
for new (incremental) spending on health care technology, while 40% was
used to pay for already planned expenditures.
•
The MEF resulted in a modest to significant improvement in the availability
of health care technology in Canada compared to other OECD countries.
For example, the gap in health care technology has been reduced significantly
in terms of radiation equipment and MRIs since the introduction of the
MEF, while a substantial gap remains with respect to CT scans, PET scans
and lithotriptors.
•
An estimated investment of $1.15 billion is still needed to bring Canada up to
the 1997 level of the 7-OECD country average. Of this amount, $650
million is required for the purchase of new medical equipment and $500
million is required for additional operating costs. The latter amount is critical
to ensure that the purchasing funds can in fact be used by all
provinces/territories; otherwise, the investments may not be made due to the
lack of fiscal capacity of some provinces/territories.
The overall estimate by the
Canadian Medical Association is very The Committee believes that additional
conservative; the calculation rests on only funding is required for the purchase of
selective technologies (CT scans, MRIs, health care technology. We also believe
lithotriptors,
PET
scans
and
linear that the federal government should
accelerators). Moreover, the $1.15 billion support the provinces and territories to
investment in health care technology would purchase new medical equipment.
bring Canada only to the level in 1997 of the
other OECD countries for these five specific technologies.218
Other calculations by the Association of Canadian Academic Healthcare
Organizations suggest that between $1.7 and $2.5 billion (or some $420 million per year over
five years) is required by Academic Health Sciences Centres (AHSCs) for the purchase and
operation of advanced medical equipment.
The findings in the papers by both the Canadian Medical Association and the
Association of Canadian Academic Healthcare Organizations reinforce the observations and
conclusions made by the Committee in Volume Five. Accordingly, we believe that additional
funding is required for the purchase of health care technology. We also believe that the federal
government should support the provinces and territories to purchase new medical equipment.
It is the view of the Committee that the
federal government should ensure that any new funding
for health care technology be spent on incremental
purchases of medical equipment and not to offset
already planned expenditures. Moreover, we strongly
feel that a better accountability mechanism is needed for
The Committee strongly feels
that a better accountability
mechanism is needed for
targeted federal funds such as
the Medical Equipment Fund.
Association of Canadian Academic Healthcare Organizations, Background Information in Support of a National
Teaching Centre Health Infrastructure Fund, Draft Submission to the Committee, 6 August 2002.
218
173
targeted federal funds such as the MEF.
The Committee also noted in Volume Five that there is a need to perform more
health care technology assessment (HTA) when considering the introduction of a new
technology or the replacement of existing medical equipment.219 HTA provides information on
safety, clinical effectiveness and economic efficiency and also considers the social, legal and
ethical implications of the use of health care technology. The Committee stressed that all levels
of government invest less than $8 million in total in Canada on HTA, whereas the United
Kingdom provides some $100 million to its national HTA body, the National Institute for
Clinical Evidence. Accordingly, we recommended in Volume Five that the federal government
provide additional funding to HTA agencies for the purpose of assessing new and existing health
care technology.
Finally, the Committee believes that a significant portion of the funding for the
purchase of health care technology should be provided to AHSCs that currently house a large
proportion of advanced medical equipment. AHSCs are also well suited, given their physical
and clinical infrastructure, to undertake state-of-the-art HTA activities. It is the view of the
Committee that federal funding for health care technology should not be provided to privately
owned and operated clinics since they do not perform teaching, assessment and research
activities.
The Committee acknowledges the important role of AHSCs in introducing and
assessing new health care technology. We also recognize that community hospitals require
additional investment in new medical equipment as well. It is our view that the federal
government must play a leading role in sustaining long-term investment in needed health care
technology.
The Committee does not
believe, however, that a program such as the
The Committee agrees with witnesses that
MEF is the means by which such a goal should federal funding should be provided within
be achieved. We agree with witnesses that a multi-year fiscal framework, responding
federal funding should be provided within a
to requests initiated by health care
multi-year fiscal framework, responding to
requests initiated by health care institutions institutions themselves with review by a
themselves with review by a group of group of independent experts.
independent experts. This would, in our view,
provide a more effective and accountable model of governance.
More precisely, under this model, teaching hospitals, community hospitals and
regional health authorities would be required to accompany a request with a sound rationale for
additional resources. Each application would be evaluated on its own merits by an independent
expert group that would report to the Minister of Health. Moreover, in order to ensure
accountability, successful applicants would have to report on their disposition of the funds
received. Therefore, the Committee recommends that:
219
Volume Five, pp. 72-75.
174
The federal government provide funding to hospitals for the
express purpose of purchasing and assessing health care
technology. The federal government should devote a total
of $2.5 billion over a five-year period (or $500 million
annually) to this initiative. Of this funding, $400 million
should be allocated annually to Academic Health Sciences
Centres, while $100 million should be provided annually to
community hospitals. The community hospital funding
should be cost-shared on a fifty-fifty basis with the
provinces, while the Academic Health Sciences Centre
funding should be 100% federal.
The institutions benefiting from this program be required to
report on their use of such funding.
10.2
Electronic Health Records
The
electronic
health record (EHR) is based on an The electronic health record (EHR) is based on an
automated provider-based system automated provider-based system within an
within an electronic network that electronic network that provides complete
provides complete patients’ health
patients’ health records including visits to
records
including
visits
to
physicians, hospital stays, prescription drugs,
physicians,
hospital
stays,
laboratory tests, and so on.
prescription drugs, laboratory tests,
and so on. In Volume Five, the
Committee stressed that an EHR system is the first step in gathering health-related information
that will allow for evidence-based decision making throughout the whole health care system. An
EHR system also offers tremendous opportunities to integrate the various components of
Canada’s health care system that currently work in silos.220
An important characteristic of an EHR system is that it can make patient data
available to health care providers and institutions anywhere on a need-to-know basis by
connecting interoperable databases that have adopted the required data and technical standards.
Not only can an EHR system greatly improve quality and timeliness in health care delivery; it can
also enhance health care system management, efficiency and accountability. Moreover, the data
collected from an EHR system can provide very useful information for the purpose of health
research.
The benefits of an EHR system are numerous:
220
Volume Five, pp. 78-80.
175
National, interoperable EHR solutions that bring comprehensive and portable
information to health providers and their patients will empower Canadians and help to
significantly improve the quality, safety, accessibility, timeliness and efficiency of services.
Furthermore, EHR solutions will enable the creation, analysis and dissemination of the
best possible evidence from across Canada and around the world as a basis for more
informed decisions by patients, citizens and caregivers; by health professionals and
providers; and by health managers and policymakers. They will also help maximize the
return on ICT investments through alignment, and drive the development of common
standards and interoperability. 221
All levels of government in Canada have recognized the importance of
developing and deploying EHR systems. On September 11, 2000, the First Ministers agreed to
work together to develop an interlinked EHR system over the next three years and to work
collaboratively to develop common data standards to ensure compatibility and interoperability of
provincial health information networks together with stringent protection of personal health
information.
In support of the agreement reached by the First Ministers, the federal
government committed $500 million in 2000-01 to a private not-for-profit corporation known as
Canada Health Infoway Inc. (or Infoway). Infoway is not a federal agency or a Crown corporation,
nor is it controlled by the federal government. The members of Infoway are the Deputy Ministers
of Health of the provincial, territorial and federal governments Infoway is governed by a Board
of Directors who are representatives of regions of Canada.222 The Board also involves some
independent directors.
In July 2002, Infoway forwarded a copy of its business plan to the Committee. As
part of its business plan, Infoway intends to invest in projects that enhance patient care, build on
the existing base of information management, ensure leverage of financial investments and align
federal, provincial and territorial priorities in a sustained fashion in order to achieve a panCanadian EHR system.
The Committee recognizes
that the cost of building a pan-Canadian,
interoperable EHR system will greatly exceed
the
initial
$500-million
investment
contributed by the federal government.
Indeed, data from Infoway suggest that
implementing a coordinated system of EHR
throughout Canada will require $2.2 billion.
Without coordination, that is if jurisdictions
implement EHR in isolation from each
other, the one-time costs of EHR
The Committee believes that both
Canadians and their publicly funded health
care system will benefit greatly if the system
of electronic health records is national in
scope. Indeed, a national EHR system is
critical. To achieve this, the federal
government must provide leadership and the
necessary resources.
Linda Lizotte-MacPherson, President and CEO of Infoway, Letter to the Committee, 24 July 2002, p. 7.
To date, Quebec has elected not to participate as a member and as such has not availed itself of its right to
appoint a representative to Infoway’s Board of Directors.
221
222
176
deployment would reach $3.8 billion. Accordingly, achieving the full deployment of an EHR
system will require a significant alignment of effort on the part of all jurisdictions, a pooling of
resources, partnerships with the private sector and new sources of funding.
Overall, the Committee is very enthusiastic about the work undertaken by Infoway
in deploying a national system of EHR. We believe that both Canadians and their publicly
funded health care system will benefit greatly if the system of electronic health records is
national in scope. Indeed, a national EHR system is critical. It is our view that, to achieve this,
the federal government must provide leadership and the necessary resources. Therefore, the
Committee reiterates its recommendation from Volume Five that:
The federal government provide additional financial
support to Canada Health Infoway Inc. so that Infoway
develop, in collaboration with the provinces and territories,
a national system of electronic health records.
Furthermore, the Committee recommends that:
Additional federal funding to Infoway amount to $2 billion
over a five-year period, or an annual allocation of $400
million.
The issue of privacy,
confidentiality and protection of personal
The Committee is of the view that, in the
health information in the context of an absence of a common EHR, both privacy and
EHR system is perhaps the most sensitive
health care are substantially at risk from
one raised during the Committee’s hearings the wide dispersal of fragments of a
on this question. We address this question
patient’s record here and there in doctors’
in detail in Section 10.4 below. However,
it is worth noting here that an EHR system offices, hospitals, public health units, home
care providers, nursing homes, etc.
has the potential to actually improve the
present situation with respect to the
privacy of patients’ health information. Currently, the privacy of individual health records is not
secure. Moreover, patients do not have effective access to their own records and, in fact, don’t
even know where those records are. The Committee is of the view that, in the absence of a
common EHR, both privacy and health care are substantially at risk from the wide dispersal of
fragments of a patient’s record here and there in doctor’s offices, hospitals, public health units,
home care providers’ files, nursing homes, etc.
10.3
Evaluation of Quality, Performance and Outcomes
In Volume Five,223 the Committee stated that long-term investment in
information and communication technology, including an HER system, will allow the collection
223
Volume Five, pp. 80-83.
177
of more timely and better information on access to care, quality delivery, system performance
and patients’ outcomes. We also indicated that while governments must finance the HER
system, they should not be responsible for assessing health data and evaluating quality and
outcomes. We agreed with witnesses that, currently, collection and evaluation of health-related
information is done by the same people who are responsible for paying for, and for providing,
health services – that is, governments.
Accordingly, we noted the fact
that there is no independent assessment of The Committee is convinced that the role
of the evaluator of the health care system
outcomes and no external audit of the impact
of various procedures on patients. This must be separated from that of the insurer
concern was also raised by various provincial
and provider in order to obtain an
commissions on health care. Based on the independent assessment of health care
testimony and provincial reports, the system performance and outcomes.
Committee concluded that the role of the
evaluator of the health care system must be sepa rated from that of the insurer and provider in
order to obtain an independent assessment of health care system performance and outcomes.
As explained in great detail in Chapter
One, the Committee believes that such independent The Committee believes that such
evaluation should be performed at the national (not independent evaluation should be
federal) level. This would allow for the pooling of performed at the national (not
expertise, thereby making the most effective use of the
federal) level by the National
limited human resources currently available in Canada,
Health
Care
Commissioner
and result in major economies of scale. This is why we
recommended in Chapter One.
have recommended in Chapter One the appointment of
a National Health Care Commissioner charged with
providing comments and recommendations on health care system performance, health status
and health outcomes.
Moreover, the Committee believes that the work of the National Health Care
Commissioner in evaluating health care system performance and outcomes should build on
those national organizations that are currently devoted to the task of performing independent
health care system evaluation.
One organization that the Committee believes strongly should collaborate in a
national system of independent evaluation is the Canadian Institute for Health Information
(CIHI). In our view, CIHI has a credible history in collecting standardized data and developing
indicators for the health care system. Its work has been developed through a cooperative
process involving various jurisdictions and multiple stakeholders.
In addition, CIHI already has
extensive data holdings that serve to support
monitoring of the health care system (in a variety of
fields such as human resources, adverse events,
waiting times, Case Mix Groups (CMGs), system
performance, health status indicators, financial
178
It is the view of the Committee that
CIHI has a credible history in
developing indicators for the health
care system.
management, and so on). Furthermore, CIHI has already established credible mechanisms for
reporting to the public.
Since its inception, CIHI has been providing the Canadian public, health care
managers and policy makers with excellent information. However, its budget, which is currently
set at $95 million over four years (2001-2005), falls short of the investment necessary to provide
the information required to plan, manage and report on the impact on the health care system
changes recommended by the Committee. Thus, we believe strongly that CIHI’s budget must
be augmented considerably.
Another national organization, the Canadian Council on Health Services
Accreditation (CCHSA), has built a solid foundation on the basis of a voluntary accreditation
process for health care institutions. The Committee learned that its strength derives from its
primary focus on continuous quality improvement, a strength that should be preserved.
The Committee believes that, as part of a national system of evaluation, the
mandate of CCHSA should be expanded to require regular accreditation, at regular intervals, for
all sectors of health care (RHAs, public and private hospitals, primary health care settings, etc.).
Accreditation should be based on well recognized national standards. If standards are not met
and remediation is inadequate, then accreditation should not be given. The accreditation process
would be supportive of a transparent accountability process.
Therefore, the Committee recommends that:
The federal government provide additional annual funding
of $50 million to the Canadian Institute for Health
Information. In addition, an annual investment of $10
million should be provided to the Canadian Council on
Health Services Accreditation. This new federal investment
will help establish a national system of evaluation of health
care system performance and outcomes, and hence facilitate
the work of the National Health Care Commissioner.
10.4
Protection of Personal Health Information
Electronic health records will likely affect the application of fair information
principles in a number of ways. As compatible EHR systems are developed and implemented
across the country, the traditional, bilateral relationship between patient and provider will be
transformed into a more complex web of interactions between the patient and the health care
system.
By their very nature, paper records are limited to discrete pieces of personal
information that could feasibly be gathered in paper form, contained in a specific physical
location, often collected by a single provider and accessible to that same provider in the context
of one individual encounter at a time. This contrasts with EHRs, which can assemble a more
complete, comprehensive and longitudinal record of a person’s health information originating
179
from multiple sources, captured in electronic form that is readily available and potentially
accessible to multiple authorized users, in real-time, irrespective of location.
This transformation will inevitably affect how patients can meaningfully and
practically exercise their right to protection of personal health information. Likewise, this
transformation will affect how responsibility and accountability are coordinated and shared
among the multiple users of that information.
For these reasons, advancements
in health information technology, including the
Health
information
technology
development and implementation of EHRs, are
provides a real opportunity for
often perceived as threats to individual privacy.
increased privacy protection through
This is in part due to the potential for increased
more effective security safeguards to
access by multiple users and the seeming lack of
restrict access and enhanced tracking
patient control over personal health information.
This being said, however, health information features to audit all transactions.
technology also provides a real opportunity for
increased protection of privacy, as compared to paper records, through more effective security
safeguards to restrict access and enhanced tracking features to audit all transactions. It also
offers the opportunity for increased, rather than diminished, personal access to and control of
health information by patients. These potential advantages balance the potential threats of
EHRs.
A system of EHRs is
planned as the first critical phase in the EHRs also promise improved health care by
development of an eventual pan-Canadian giving providers access to a more
health info-structure. The immediate and
comprehensive understanding of their
obvious benefits of EHRs in the context of patients’ health status as an essential aid
primary health care include improved for proper diagnosis, effective treatment and
efficiency of the system through more
effective management of patients’ health safe prescriptions, particularly in situations
records and integrated health services of emergency or out-of-province care.
delivery. EHRs also promise improved
health care by giving providers access to a more comprehensive understanding of their patients’
health status as an essential aid for proper diagnosis, effective treatment and safe prescriptions,
particularly in situations of emergency or out-of-province care.
Moreover, the pan-Canadian health info-structure promises to empower patients
with better health information as well. This will allow patients to make more informed choices
about their own health, the health of others and the health care system. A health infostructure
will allow health care managers to evaluate service providers better and will enhance
accountability of the system. It will also provide researchers with the evidentiary bases needed
to continue to improve health care and better understand the determinants of health. 224
Canada Health Infoway, Paths to Better Health, Final Report of the Advisory Council on Health Infostructure.
December 1999
224
180
Currently, there are three main privacy issues that must be addressed for EHRs
to become a reality in Canada in the next five to seven years. These are:
1. The need for a more harmonized approach to privacy across all jurisdictions to
allow for more consistent conditions for sharing personal health information
among users and more consistent protection of personal health information for
patients.
2. The need to develop robust and effective privacy safeguards, policies and
procedures that can be implemented in a pragmatic, practical and cost-effective
manner.
3. The need to build public confidence that personal health information will be
protected in an electronic world.225
Currently, there is significant variation in privacy laws and data access policies
across the country that poses a challenge for EHR systems that are dependent on inter-sectoral
and inter-jurisdictional flows of personal health information. Differences in rules on how the
scope of purpose is defined, the form of consent required, the conditions for substitute
decision-making, the criteria for non-consensual access to personal health information, periods
for retention of data and requirements for destruction, to name but a few, must be seriously
addressed in order to enable the development of EHR systems.
In addition, existing oversight bodies in different sectors and jurisdictions have
varying delegated legislative authority over some parts of an EHR system, but not others.
Without some overarching coordination, this piecemeal approach will render very difficult, in
practice, any system of review and oversight, process for approval, procedure for investigation
and application of sanctions.
The Committee encourages ongoing federal/provincial/territorial efforts to
develop a harmonized approach to protecting personal health information. In particular, the
Committee recommends that:
The federal government work to achieve greater consistency
and/or coordination across federal/provincial/territorial
jurisdictions on the following key issues:
§
Need-to-know rules restricting access to authorized
users based on their purposes;
See Advisory Council on Health Infostructure, Canada Health Infoway, Paths to Better Health, Final Report,
December 1999; Federal/Provincial/Territorial Advisory Committee on Health Infostructure, Tactical Plan for a
Pan-Canadian Health Infostructure, 2001 Update; discussions of Regional Fora held by Canada Health Infoway Inc.
summarized at http://www.canadahealthinfoway.ca/sub.php?lang=en&secLoc=frm).
225
181
§
Consent rules governing the form and criteria of
consent in order to be valid;
§
Conditions authorizing non-consensual access to
personal health information in limited circumstances
and for specific purposes;
§
Rules governing the retention and destruction of
personal health information;
§
Mechanisms for ensuring proper oversight of crossjurisdictional electronic health record systems.
Another major challenge facing EHR development is the need to find ways of
implementing compatible EHR systems in a manner that both protects people’s right to privacy
of personal health information and is feasible and workable in practice. While there may be
ways of introducing the most stringent physical, technological and organizational safeguards
possible, these may simply not work in practice or be cost-effective. Moreover, safeguards
change significantly over time as technology and customary practice evolves, requiring constant
updating and upgrading. Organizations must distinguish passing trends from well-tested and
proven state-of-the-art measures and make realistic investment choices accordingly.
In an EHR environment, many players will be involved in the collection of
personal health information for inclusion in the common record. There will be many authorized
users that can potentially gain rightful access to the EHR, adding information and collectively
participating in the development of the record. As control will be shared among various players
and users, so too shall accountability be shared. A real challenge lies in coordinating and
apportioning responsibilities so that patients’ rights do not fall between the cracks. Despite the
seemingly amorphous environment of an EHR system, patients must be able to direct their
questions and concerns to an identifiable, responsible entity and exercise, in a meaningful way,
their rights to access, correction and redress in the event of non-compliance.
Therefore, the Committee recommends that:
Canada Health Infoway Inc. and other key investors
structure their investment criteria in such a way as to create
incentives for developers of EHR systems to ensure
practical and pragmatic privacy solutions for implementing
the following:
§
State-of-the-art security safeguards for protecting
personal
health
information
and
auditing
transactions;
§
Shared accountability among various custodians
accessing and using EHRs;
182
§
Coordination among custodians to give meaningful
effect to patients’ rights to access their EHR, rectify
any inaccuracy and challenge non-compliance.
In order to enable the development and implementation of EHRs, public trust
and confidence are indispensable. There is currently little research on understanding the
determinants of Canadians’ attitudes about the use of their personal health information for
different purposes. Such research is vital if EHRs are to be developed and implemented in a
manner that takes into account these determinants and respects people’s underlying concerns in
specific contexts.
While the advantages of EHRs may be obvious to those who are in the business
of developing them, these advantages must also be made obvious to individual Canadians. The
promise of an eventual pan-Canadian health info-structure belongs to everyone. An informed
and meaningful dialogue should occur, engaging all key stakeholders, including patient groups
and consumer representatives. Providers will be better equipped to improve the quality of the
care they deliver and integrate their services; policy-makers and managers will be better informed
and able to ensure access to health care and accountability for actions throughout the system;
researchers will be able to evaluate the effectiveness of health care products and services and
better understand the determinants of Canadians’ health; members of the public will be better
empowered to make informed choices about their own health, their health care and about
health-related policy. An open, transparent, and iterative public communication strategy would
go a long way to bring home the many benefits of EHRs and the truly inclusive vision of an
eventual pan-Canadian health info-structure. Therefore, the Committee recommends that:
Key stakeholders, including the federal, provincial and
territorial Ministries of Health, Canada Health Infoway
Inc., the Canadian Institute for Health Information and
Canadian Institutes of Health Research, undertake the
following:
§
Rigorous research into the determinants affecting
Canadian attitudes regarding acceptable and
unacceptable uses of their personal health
information;
§
Informed and meaningful dialogue with key
stakeholders, including patient groups and
consumer representatives;
§
An open, transparent and iterative public
communication strategy about the benefits of EHRs.
183
CHAPTER ELEVEN
H EALTH C ARE H UMAN RESOURCES
11.1
The Extent of Health Human Resource Shortages
Over the course of its
hearings the Committee has heard Addressing the shortage of professionals
overwhelming evidence of a persistent in all health care disciplines and finding
human resource shortage in all sectors of the
ways to increase their individual and
health care system, affecting specialist collective productivity are two of the most
physicians as well as family practitioners,
pressing, yet complex, problems facing
registered nurses as well as licensed practical
nurses, laboratory technologists as well as health care policy makers.
pharmacists. Addressing the supply of
professionals in all health care disciplines and finding ways to increase their individual and
collective productivity are two of the most pressing, yet complex, problems facing health care
policy makers.
Hardly a month goes by without the release of a new study or report that further
documents the breadth and the gravity of the situation. A number of these that have appeared
since the release of the Committee’s last report tell a familiar story.
According to a new report issued by the Canadian Institute for Health
Information (CIHI) in June 2002, physician supply in Canada peaked in 1993 and has suffered a
5% decline since then, bringing the ratio of physicians to population down to the level it was 15
years ago.226 This report provided one more graphic illustration of the extent of the human
resource shortage and its consequences, including fewer family doctors, fewer younger
physicians and heavier workloads for doctors.
Two recent provincial documents on physician supply also lend further support
to the view expressed by the Committee in its previous reports that the human resource
question is one area where it is increasingly legitimate to speak in terms of a crisis confronting
the system. The Quebec College of Physicians examined the numbers of doctors actually in
practice, rather than relying on raw registration numbers, and found that the province would
need more than 1,400 additional physicians to provide necessary services to the population. 227
For its part, the Ontario Medical Association estimated that there was a further
net loss of 110 physicians from that province between 1999-2000, bringing the total shortfall to
an estimated 1,585 physicians. The report indicates that there are now over 100 underserviced
communities in the province.228
Dr. Benjamin TB Chan, From Perceived Surplus to Perceived Shortage: What Happened to Canada’s Physician Workforce in
the 1990s?, Canadian Institute for Health Information, June 2002.
227 Medical Post, June 4, 2002.
228 Ontario Medical Association “Position paper on physician workforce policy and planning”, April 2002.
226
185
At the same time, the Committee is concerned that all of the studies referred to
above focus on the number of practising physicians, and do not address the problem of
productivity. Clearly, improving physician productivity would reduce the numbers of additional
physicians required in Canada.
For example, most surgeons say that they
…the Committee is concerned
could increase their productivity if they were given more
operating time, and greater access to short term beds for that all of the studies referred to
their patients, who could then complete their recovery at above focus on the number of
home.229 This fact raises the following policy question: is practising physicians, and do not
it better to remove the existing roadblocks to improved
address
the
problem
of
surgeon productivity, or to produce more surgeons who
productivity.
will, like their predecessors, not be as productive as they
could be or want to be because institutional constraints prevent them from increasing their
productivity? Policy questions like these cannot be properly answered without a much better
understanding of the current level of productivity of physicians and the barriers to increasing
that productivity.
The Committee believes
that it is essential that independent The Committee believes that it is essent ial
research organizations, not affiliated with that independent research organizations not
affiliated to the medical profession (such as
the medical profession, undertake detailed
studies of physician productivity and of the CIHI or the CIHR), undertake detailed
barriers that impede increases in studies of physician productivity.
productivity. Government, as the funder of
the system, and those who actually provide health services must understand the factors that
influence productivity in health care and how the productivity of the key personnel in the system
can be improved.
In other fields, the availability of, for example, information technology has
increased the productivity of other professionals over the past 20 years. Surely better diagnostic
equipment, more effective drugs, improved out-of-hospital treatments, combined with the
improved health status of Canadians over the past 20 years should have made physicians more
productive. But whether this has actually happened is not known. This is why the proposed
research is needed.
The Committee believes that similar observations to those about physician
productivity could also be made about other health care professionals. The Committee therefore
recommends that:
Studies be done to determine how the productivity of health
care professionals can be improved. These studies should
be either undertaken or commissioned by the National
Coordinating Committee on Health Human Resources that
the Committee recommends be created.
229
See Chapter 8 of this volume for the Committee’s proposal for a post-hospital home care program
186
Three recently issued reports provide additional data on the extent of the
shortage of nurses. CIHI reported in June 2002 that although there was a slight increase (1.2%)
in the number of nurses employed in Canada between 1997 and 2001, it was not sufficient to
keep pace with population growth. There are thus fewer nurses per capita in the country today
than five years ago. The report also indicated that the nursing workforce is aging rapidly, with
the average age of RNs employed in nursing going from 42.4 years in 1997 to 43.7 years in
2001.230
A study conducted for the Canadian Nurses Association that examined trends
since 1966 noted “throughout the entire 35 years covered by the data series, the nursing
workforce has seen the age composition shift to older age groups.”231 The CNA report also
made projections with regard to nursing supply and demand for the next 10 to 15 years,
concluding that “there will be a shortage of 78,000 RNs in 2011 and 113,000 RNs by 2016.”232
The Final Report of the Canadian Nursing Advisory Committee, chaired by Mr.
Michael Decter, was released in August 2002. It identified three barriers to a quality workplace
for Canadian nurses,233 namely:
•
the need for an increased number of nurses;
•
the need to improve the education and maximize the scope of practice of
nurses;
•
the need to improve working conditions of nurses.
Amongst its 51 recommendations designed to help eliminate these barriers, the
Advisory Committee advocated that the number of new, first-year seats in schools of nursing for
Registered Nurses be increased by 25% (roughly 1,100 new seats) in September 2004 and that
this number be adjusted upward by a further 20% in each of the subsequent four years.
Still, not enough is known about the productivity of nurses and what could be
done to improve it. For example, in its report, the Canadian Nursing Advisory Committee
endorses the need for “provincial and federal resources […] to be directed toward the
development of accurate and manageable strategies to measure and report on workload.”234 The
Committee believes that the same type of productivity research that is proposed with respect to
physicians is also needed in order to understand better how nurses spend their time at work, and
what institutional barriers stand in the way of improved productivity. This is why the
recommendation made above includes all health care professionals.
Although allied health professionals receive less public attention, the Committee
has repeatedly drawn attention to the fact that the human resource shortage is not limited to
doctors and nurses. For example, the Committee noted in previous Volumes that over 20
Canadian Institute for Health Information, Supply and Distribution of Registered Nurses in Canada, 2001 Report, June
2002.
231 Canadian Nurses Association, Planning for the Future: Nursing Human Resource Projections, June 2002, p. 20.
232 Ibid., p. 1.
233 Our Health, Our Future: Creating Quality Workplaces for Canadian Nurses, Advisory Committee on Health Human
Resources, 2002, p. 3.
234 p. 36
230
187
disciplines reported experiencing important shortages, ranging from physical and occupational
therapists to radiography and medical laboratory technologists to public health inspectors.
Moreover, witnesses indicated that despite these shortages, enrolments in
training programs are being cut. One example was medical laboratory technology in Alberta,
where places in training schools had been cut from 40 to 20 students. Witnesses also referred to
other disturbing figures, considering the ever-increasing demand for technical and professional
employees attributable both to new technologies and to a growing population. For example,
there has been a 42% decrease in the number of graduates from medical laboratory technology
programs across the country since 1987, while diagnostic imaging produced 15% fewer
graduates over the same period. The Canadian Society for Medical Laboratory Science has
predicted a nation-wide shortage of general medical laboratory technologists within the next 5 to
15 years.
A further illustration was provided by the Canadian Pharmacists Association. It
noted that a shortage of pharmacists is a problem in many countries including Canada, the
United Kingdom and the United States. The under-supply of pharmacists translates into
increased vacancies, longer delays in filling vacancies, increases in overtime hours, and marketbased wage increases that exceed the cost of living. Another recent study suggests that well over
2,000 additional pharmacists could readily find work in Canada.
The decline in the number of graduates has also been compounded by what has
been called “credential creep.” This refers to the gradual increase in the educational levels
required to gain employment in a particular field, said to be driven by increasing complexity of
the work involved. Among the consequences of “credential creep” are that it takes longer to
train new graduates, thereby exacerbating the existing shortages of all health care professionals.
Credential creep also has other consequences. On the one hand, it can lead to the
transfer of some programs from community colleges to universities; on the other, it can lead to
graduates seeking higher levels of compensation they believe are justified by the additional
training they have undergone.
The Committee is concerned that these developments occur without sufficient
independent study to verify that the changes in the level of qualification and remuneration are
warranted. The Committee believes that a review of the length of time required to train various
health care professionals is needed, as well as an examination of what is the most appropriate
educational institution to provide the needed training.
11.2
Health Human Resources: The Need for a National Strategy
The Committee believes
strongly that one of the major
consequences of the growing world-wide
shortage of health human resources is
that Canada must develop a strategy to
enable the country to become selfsufficient in health human resources.
The Committee believes strongly that one of
the major consequences of the growing
world-wide shortage of health human
resources is that Canada must develop a
strategy to enable the country to become
self-sufficient in health human resources.
188
In the Committee’s view, moving forward in this regard entails recognizing that
such a strategy cannot be a “federal” one but must rather involve all stakeholders, bearing in
mind that the training and education of health care professionals is a provincial responsibility.
For Canada to attain the objective of self-sufficiency in health human resources, long-term
cooperation and coordination among all stakeholders in the health care field are essential.
In the Committee’s opinion, problems relating to interprovincial competition for
graduates in health-related fields further highlight the necessity to develop a national health
human resources strategy. Competition among different jurisdictions for scarce human
resources, whether interprovincial or international, can lead to severe regional disparities in the
ability to provide health care services.
The Committee believes that the
federal government must play a much stronger role The Committee believes that the
than it has to date in coordinating efforts to federal government must play a
much stronger role than it has to
develop and implement a national health human
resource strategy and to deal with shortages. Given date in coordinating efforts to deal
that it is clear that there can be no “quick fix” to
with health human resources
the crisis in health human resources, and that a
shortages.
wide range of interests and concerns must be
considered in the search for long-term solutions, it seems to the Committee appropriate to
recommend the establishment of an ongoing framework to deal with human resource issues.
The Committee therefore recommended in Volume Five that:
The federal government work with other concerned parties
to create a permanent National Coordinating Committee for
Health Human Resources, to be composed of
representatives of key stakeholder groups and of the
different levels of government. Its mandate would include:
§
disseminating up-to-date data on human resource
needs;
§
coordinating initiatives to ensure that adequate
numbers of graduates are being tr ained to meet the
goal of self-sufficiency in health human resources;
§
sharing and promoting best practices with regard to
strategies for retaining skilled health care
professionals and coordinating efforts to repatriate
Canadian health care professionals who have
emigrated to other countries;
§
recommending strategies for increasing the supply of
health care professionals from under-represented
groups, such as Canada’s Aboriginal peoples, and in
189
under-serviced regions, particularly the rural and
remote areas of the country;
§
examining the possibilities for greater coordination
of licensing and immigration requirements between
the various levels of government.
As noted earlier, the Committee also believes that the National Coordinating
Committee on Health Human Resources should assume responsibility for studying how the
productivity of health care professionals can be improved. It is also clear to the Committee that
no single group of professionals, nor any single level of government, should predominate in the
deliberations of the proposed National Coordinating Committee.
The Committee also recommends that the federal government undertake a
number of specific initiatives designed to increase the supply of health care professionals,
namely that:
The federal government:
§
Work with provincial governments to ensure that all
medical schools and schools of nursing receive the
funding increments required to permit necessary
enrolment expansion;
§
Put in place mechanisms by which direct federal
funding could be provided to support expanded
enrolment in medical and nursing education, and
ensure the stability of funding for the training and
education of allied health professionals;
§
Review federal student loan programs available to
health care professionals and make modifications to
ensure that the impact of inevitable increases in
tuition fees does not lead to denial of opportunity to
students in lower socio-economic circumstances;
§
Work with provincial governments to ensure that the
relative wage levels paid to different categories of
health professionals reflect the real level of education
and training required of them.
In previous volumes, the Committee had noted that there was a serious shortage
of health care providers from Aboriginal backgrounds. In order to help to address this problem
the Committee also recommended in Volume Five that:
The federal government work with the provinces and
medical and nursing faculties to finance places for students
190
from Aboriginal backgrounds over and above those
available to the general population.
Moreover, since all the measures described in the above recommendations take
time to implement, various shorter-term measures are required to deal with the health human
resources crisis. One such avenue involves the tax system. Short-term tax incentives were used
in the late 1960s and early 1970s to attract university professors to Canada at a time when the
country faced a severe shortage of qualified university faculty members. The Committee believes
a similar approach should be considered at this time with respect to health care professionals. It
therefore further recommends that:
In order to facilitate the return to Canada of Canadian
health care professionals who are working abroad, the
federal government should work with the provinces and
professional associations to inform expatriate Canadian
health professionals of emerging job opportunities in
Canada, and explore the possibility of adopting short-term
tax incentives for those prepared to return to Canada.
The following sections of this chapter contain additional observations related to
the health human resources shortage in Canada, as well as a number of further
recommendations to help alleviate it.
11.3
Increasing the Number of Physicians Trained in Canada
The recent CIHI report referred to above has made a new contribution to the
discussion of physician supply in Canada by assigning weights to the various factors that have
contributed to the decline in the ratio of physicians to population:
•
about 25% of the decline can be attributed to longer postgraduate training for
doctors, both because family doctors now require two years of postgraduate
training instead of one before entering independent practice, and because a
higher proportion of doctors are choosing to become specialists, which
requires much longer training periods;
•
22% of the drop was attributable to fewer foreign doctors entering Canada;
•
17% was caused by increased physician retirement;
•
to date, only 11% of the decline can be attributed to decreased enrolment in
medical schools, but the full effect of the cuts of the 1990s will only be felt in
coming years.
The author of the report, Dr. Ben Chan, notes that several key mistakes were
made in policy design during the 1990s. In the first place, unintended consequences were not
taken into account. For example, it was not fully appreciated that increasing the length of
training (e.g., two rather than one year of postgraduate training for family physicians)
permanently reduces the supply of physicians. Second, policies were not reviewed frequently
191
enough, so the effects of a number of policies combined in unexpected ways to generate a larger
shortage than was anticipated. Finally, measures that gave the system flexibility were eliminated;
for example, students were forced to lock into career choices at very early stages in their
undergraduate education without the benefit of practical experience or the possibility of
changing their minds at a later date.235
The Committee remains
The Committee remains convinced that the
convinced that the only long-term solution
to the human resources crisis remains the only long-term solution to the human
development of a national strategy that resources crisis remains the development of
focuses on training enough physicians and a national strategy that focuses on
training enough physicians and other
other health professionals in Canada to meet
the country’s needs, as well as on increasing
health professionals in Canada to meet the
physician productivity. A recent estimate country’s needs, as well as on increasing
provided to the Committee by Dr. Abraham
physician productivity.
Fuks, President of the Association of
Canadian Medical Colleges (ACMC), indicated that simply to maintain the current physician to
population ratio, 2,500 students would have to enter medical school by 2005, an increase of 640
students from the 2001 first-year enrolment of 1,860.236
In Volume Five, the Committee recommended that the federal government
provide ongoing financial assistance to the provinces to increase enrolments in Canadian
medical schools. According to the ACMC, the cost per place in a Canadian medical school is
currently estimated at $260,000 over a four-year period. An additional 640 students would
therefore cost approximately $160 million per year once the new levels of enrolment were
attained.237 The Committee believes that this would be money well spent, and therefore
recommends that:
The federal government contribute $160 million per year,
starting immediately, so that Canadian medical colleges can
enrol 2,500 first-year students by 2005.
Moreover, it is important to bear in mind Dr. Chan’s conclusion that it is
necessary to review regularly the levels of enrolment to ensure that they remain in accord with
evolving circumstances. Dr. Fuks estimated that in order to offset current physician shortages
(rather than merely maintaining the current physician to population ratio) it would be necessary
to increase enrolments further to 3,000 first-year students by 2009. It is important to note,
however, that such forecasts do not take into account the impact of potential improvements in
productivity. The Committee believes it necessary to keep a careful watch on the situation, and
recommends that:
Dr. Ben Chan, “How Canada can better manage its MD supply,” Medical Post, June 25, 2002.
Dr. Abraham Fuks, Brief to the Committee, July 23, 2002.
237 The cost per student, per year is one quarter of the total of $260,000, that is $65,000. However, once there are
the desired number of new students enrolled in each year of the four-year medical degree program, this $65,000 per
student per year must be multiplied by four, so that the total cost of the new places is $260,000 per year.
235
236
192
The proposed National Coordinating Committee for Health
Human Resources be charged with monitoring the levels of
enrolment in Canadian medical schools and make
recommendations to the federal government on whether
these are appropriate.
Clearly, however, it will take time to raise the levels of enrolment, and it will be
even longer before these increases translate into greater numbers of doctors in the field. In the
short term, then, measures should also be taken to relieve some of the pressure. The Committee
has already reiterated its recommendation from Volume Five that the federal government
explore the possibility of adopting short-term tax incentives in order to repatriate health care
professionals working abroad.
There are also a number of highly skilled and well-trained Canadians who are
completing their basic medical education outside Canada, notably in Australia, Ireland and the
UK. Dr. Fuks told the Committee that many of these students, who are receiving their training
in high-quality medical faculties, are eager to return to Canada. The Committee believes that
there should, therefore, be a robust policy of recruitment for such expatriate Canadians to return
to Canada for post-graduate training and practice in this country.
In order to accommodate these returning students, as well as the international
medical graduates discussed below, it will also be necessary to increase the number of postgraduate residency positions. Based on figures provided by the Association of Canadian Medical
Colleges,238 the Committee therefore recommends that:
The federal government should contribute financially to
increasing the number of post-graduate residency positions
in medicine to a ratio of 120 per 100 graduates of Canadian
medical schools.
As the Committee noted in Volume Five, this will also allow Canadian physicians
who are already in practice greater opportunity to re-enter postgraduate training and pursue
additional qualifications.
11.4
Integrating International Medical Graduates
Another measure specific to dealing with the shortage of physicians is the
development of a national plan to make better use of international medical graduates (IMGs)
already here. In the past, Canada has been able to rely on recruitment from abroad to fill some
of the gaps. For example, over 50% of doctors practising in Saskatchewan are international
medical graduates who have been trained elsewhere and recruited to Saskatchewan later in their
careers. However, other countries now face many of the same shortages that confront our
system. There does not seem to make much sense for all developed countries to poach endlessly
each other’s highly trained health care professionals.
238
Dr. Fuks, op. cit.
193
Most experts estimate that there are currently at least 2,000 international medical
graduates in Canada who are not licensed to work as physicians.239 There is no common
program for issuing credentials to IMGs, and each province has a limited program for admitting
IMGs to residency programs. For example, Ontario reserves 40 spots for IMG training, but
despite 1,000 applications last year only 25 were admitted.
There are some signs of progress, however. In April 2001, Manitoba launched
the first permanent program in Canada to assist IMGs to obtain medical licences. It relies on a
three-stage Clinicians Assessment and Professional Enhancement (CAPE) process, an evaluation
tool developed by the University of Manitoba’s faculty of medicine, to assess the medical
knowledge and clinical skill of foreign-trained doctors. The CAPE program has proved so
successful that the College of Physicians and Surgeons of Nova Scotia refers IMG applicants
who do not have licensed North American training or clinical practice experience to the
Manitoba program for assessment.240
Members of the Association of Canadian Medical Colleges recently concluded
that there is a pressing need for a national strategy, incorporating national standards, to assist in
integrating IMGs into the Canadian medical workforce. They proposed that there be a common
evaluation program that would allow IMGs to be classified in one of four categories: their
education and training is equivalent and they should be licensed practise in Canada; they need
some extra training; their medical education is equivalent but they need to do postgraduate
training here; or neither their education nor training is adequate and they have to begin again at a
medical school in Canada.
The Committee therefore recommends that:
The federal government work with the provinces to
establish national standards for the evaluation of
international medical graduates, and provide ongoing
funding to implement an accelerated program for the
licensing of qualified IMGs and their full integration into
the Canadian health care delivery system.
11.5
Alleviating the Shortage of Nurses
As noted earlier in this chapter, a study conducted for the Canadian Nurses
Association indicated that the country would be short 78,000 RNs in 2011 and that this shortfall
could reach 113,000 by 2016. The study reached these conclusions despite using what it calls
relatively optimistic assumptions with regard to the number of nursing graduates that can be
anticipated in the coming five years. The report estimates that “the output from Canada’s
nursing schools is expected to grow from 4,599 graduates in the year 2000 to more than 9,000
per annum by the year 2007.”241 (See Table 11.1, below).
Medical Post, June 11, 2002.
Pamela Clarke, “The Foreign Question,” Medical Post, May 28, 2002.
241 CNA, op. cit., p. 1.
239
240
194
TABLE 11.1
NUMBER OF NURSING GRADUATES, 1999-2008*
Year
Canada
1999
5,221
2000
4,599
2001
5,499
2002
6,782
2003
7,578
2004
7,678
2005
7,834
2006
8,829
2007
9,182
2008
9,382
Source: Projections by Eva Ryten for the Canadian Nurses Association, June, 2002.
* 1999-2001, actual data; 2002-208, projections
But even with almost doubling the number of graduates, and an expected influx
of 1,200 nurses trained abroad every year from 2002 onwards, the study categorically affirmed
that it will not be possible to meet the anticipated demand for nursing services. Nor is there a
sufficiently large pool of trained nurses who are not currently employed in nursing who could be
enticed back into the profession in order to help deal with the shortfall. In fact, the report points
out that:
It is particularly relevant to note that in both 2000 and 2001, there were fewer than
3,000 RNs who were not working as nurses but looking for jobs in nursing. This is a
tiny number compared with the total stock of RNs in the country. 242
Nonetheless, the Committee believes that everything possible should be done to
entice those qualified nurses who have left the profession to return to active nursing. This is all
the more important since, even if it were deemed advisable to substitute licensed practical nurses
(LPNs) for RNs, the report notes that there are not enough qualified LPNs to make up the
shortfall either.
For licensed practical nurses to meet a significant portion of nursing service requirements
that cannot be met by RNs due to the nursing shortage, the LPN complement would
have to be growing at an extremely rapid rate. But, in fact, the number of LPNs has
been stagnant or decreasing for nearly 20 years. In 1983, there were 83,539 LPNs in
Canada. By 1999, this number was down to 66,100. 243
At the same time, Ms. Kelly Kay of the Canadian Practical Nurses Association
told the Committee that:
In most jurisdictions, licensed practical nurses are in short supply. However, there are
still situations such as in the province of Ontario where 1,400 registered practical nurses
reported on their last registration data form that they were seeking employment in
nursing. 244
Ibid., p. 13.
Ibid., p. 74.
244 61:25
242
243
195
Although in 1997 it appeared that the trend was towards a decline in the number
of applications to nursing schools, this no longer seems to be true. Ms. Ginette Lemire-Rodger,
outgoing president of the CAN, explained to the Committee that:
In Canada, this year alone, thousands of well-qualified students have been turned away.
The universities reject them because there are only 70 places for every 800 applications
across the country. There is no lack of young people and not-so-young people wanting to
take up nursing, but the governments are not funding the seats in the universities. 245
Clearly, then, everything points to the
need to increase the number of nursing graduates in
fairly dramatic fashion. The committee noted in Volume
Five that Human Resources Development Canada
(HRDC) has undertaken a major sector study in order to
make recommendations with regard to the supply of
nurses. However, as Michael Decter remarked to the
Committee:
Clearly, then, everything points
to the need to increase the
number of nursing graduates in
fairly dramatic fashion.
I know the Government of Canada through HRDC is funding two large studies. To
paraphrase David Sackett, you do not need a double blind, random clinical trial to
apply common sense. Common sense would say we need more nurses in this country and
we need them urgently. 246
In calculating how many new places should be allotted, the CNA report cautions
that in the long run it is important to avoid
periods of either very sharp increases or decreases in output over short spaces of time.
Doing this repeatedly over long periods of time leads to a roller coaster of surpluses and
shortages in supply. Ideally, levels of output would increase gradually each year in line
with increased needs.247
Had there not been a serious underfunding of nursing positions during the
nineties, the CNA estimates that the number of graduates needed would still have been of the
order of 10,000 per annum. The CNA report explained that this is because “even if the crisis of
the 90s had never occurred, Canada would be facing nursing shortages in both 2011 and 2016,
albeit of a smaller magnitude, because of the impending retirement of the larger graduating
cohorts who are being replaced by smaller ones.”248 Taking the consequences of the erroneous
decisions of the nineties into account, the CNA felt it prudent to recommend that nursing
programs be expanded in order to attain an annual output of 12,000 graduates.
61:16
52:8
247 CNA, op. cit., p. 76.
248 Ibid., p. 73.
245
246
196
The Committee endorses this estimate. Table 11.1 gives the projections
contained in the report for current and projected provincial output of graduates until 2008. The
Committee recommends that:
The federal government phase in funding over the next five
years so that by 2008 there are 12,000 graduates from
nursing programs across the country, and that the federal
government continue to provide full additional funding to
the provinces for all nursing school places over and above
10,000, for as long as is necessary to eliminate the shortage
of nurses in the country.
Using the figures given in Table 11.1 that indicate the anticipated levels of
nursing graduates, this means that by 2008 it will be necessary to graduate an additional 2,618
nurses. The numbers could be increased as follows to build towards this figure:
TABLE 11.2
Current anticipated number of graduates
Projected number of graduates given additional
federal funding
2004
7,678
8,000
2005
7,834
9,000
2006
8,829
10,000
2007
9,182
11,000
2008
9,382
12,000
The Committee was told by the CNA that each additional nursing position in
Ontario cost $7,700 per year. Based on a four-year program, this translates into approximately
$30,000 to train each new nurse. Extending this estimate to all nursing places across the country,
it would cost approximately $80 million per year to bring the number of nursing graduates to the
12,000 level recommended by the CNA.249 To be sure tha t sufficient funds are available, and in
light of the seriousness of the nursing shortage, the Committee believes that it would be prudent
to set aside a further $10 million in the hope that more nurses could graduate even sooner. The
Committee therefore recommends that:
The federal government commit $90 million per year from
the additional revenue the Committee recommends that it
raise in order to enable Canadian nursing schools to
graduate 12,000 nurses by 2008.
11.6
Allied Health Professionals
The Committee was not able to obtain sufficient data to work out a detailed
proposal with regard to the precise numbers of new graduates that would be needed to respond
249
This calculation was done on the same basis as for the medical students (i.e. 2,618. x $30,000)
197
to the shortages of allied health professionals discussed earlier in this chapter. Nonetheless, the
Committee believes that it is essential for the federal government to commit funds to addressing
these pressing needs. The Committee therefore recommends that:
The federal government commit $40 million per year from
the new revenues that the Committee has recommended it
raise in order to assist the provinces in raising the number
of allied health professionals who graduate each year.
The exact allocation of these funds be determined by the
proposed National Coordinating Committee for Health
Human Resources.
11.7
Funding Post-Graduate Training
The cost of training new health care professionals does not end the moment they
graduate from university or college. There are additional costs that are borne in large part by
academic health sciences centres, not only for physicians but for the full range of health care
professionals. The Association of Canadian Academic Healthcare Organizations (ACAHO) has
estimated the additional costs associated with increases in health care training positions for all
the health care professions to be in the range of $300 – $550 million over the course of their
training cycle (or between $60 and $110 million per year). These costs include funding for
instructors, space, overhead and supplies. The Committee therefore recommends that:
The federal government devote $75 million per year of the
new money the Committee recommends be raised to
assisting Academic Health Sciences Centres to pay the
costs associated with expanding the number of training
slots for the full range of health care professionals.
11.8
Health Human Resources: Scope of Practice Rules Review
The final area of the Committee’s human
resource recommendations involves the need for a
thorough independent review of the scope of practice
rules for the various health care professions. This review
needs to focus on removing the barriers to fruitful
collaboration that now exist among health care
professionals and that prevent some health care
professionals (e.g., nurse practitioners) from using the
full set of skills for which they have been trained.
198
The final area of the Committee’s
human resource recommendations
involves the need for a thorough
independent review of the scope of
practice rules for the various
health care professions.
The importance of dealing with this problem on an urgent basis was clearly
stated by Dr. Duncan Sinclair, the Chair of the Ontario Health Service Restructuring
Commission, in his testimony to the Committee:
Having a doctor do work that a nurse practitioner or nurse could do is like calling an
electrician to change a light bulb or a licensed mechanic out of the garage to fill your tank
and check the oil and tire pressure – would they do a good job? They would do an
excellent job! But would it be a good use of their time, training and expertise? It would
not! It would constitute an expensive and inefficient use of scarce resources, both of money
and the expertise of very talented people. 250
The Committee believes that such expensive and inefficient use of scarce human
resources needs to cease now. As noted in Chapter Four on Primary Health Care Reform, the
synthesis report of the Health Transition Fund’s primary care projects concluded with regard to
nurse practitioners that:
A federal/provincial/territorial initiative should develop national standards for
terminology and scope of practice. It should include legislative requirements that support
an expanded role for nurses and nurse practitioners. 251
The Committee therefore recommends that:
An independent review of scope of practice rules and other
regulations affecting what individual health professionals
can and cannot do be undertaken for the purpose of
developing proposals that would enable the skills and
competencies of diverse health care professionals to be
utilized to the fullest and enable health care services to be
delivered by the most appropriately qualified professionals.
11.9
Committee Commentary
The Committee acknowledges that there needs to be an increase in the number
of people employed in each of the health care professions, and our recommendations are
designed to address this problem.
But the Committee is also very concerned about the overall costs that this
increase in human resource supply will entail for the system as a whole. The Committee is keenly
aware, for example, that physicians are the major cost-drivers in the system.252 Since increasing
See Volume Four of the Committee’s study, Issues and Options, p. 110-11.
Ann L. Mable and John Marriott, Health Transition Fund Synthesis Series – Primary Health Care, June 2002, p. 29.
252 There is also evidence to suggest that Canadian physicians are well remunerated compared to physicians in other
countries. OECD data indicates that the ratio of average physician income to average employee compensation in
Canada was 3.2. Only ratios in the United States (5.5) and Germany (3.4) were higher than Canada’s, while the ratio
250
251
199
the supply of physicians does not decrease the average cost that each physician imposes on the
system, as the number of practising physicians increases the only way in which the system could
remain fiscally sustainable is for significant productivity improvements also to occur.
The Committee therefore feels
that it is necessary for the increase in the
numbers of educational positions to be
accompanied by detailed studies of how to
improve the productivity of each of the health
care professions. If these studies are not done,
and if productivity is not substantially
improved, the Committee is concerned that
this could lead to an unsustainable escalation
of overall health care costs.
The Committee therefore feels that it
is necessary for the increase in the
numbers of educational positions to
be accompanied by detailed studies of
how to improve the productivity of
each of the health care professions.
was much lower in a number of other countries such as Australia (2.1), France (1.9) and the UK (1.4). See,
Reinhardt, Uwe E., Peter S. Hussey and Gerard F. Anderson, “Cross-National Comparisons of Health Systems
Using OECD Data, 1999” in Health Affairs, May-June, 202, p. 175.
200
CHAPTER TWELVE
N URTURING E XCELLENCE IN
C ANADIAN H EALTH RESEARCH 253
Health research is about creating and applying new knowledge with respect to
health and health care. Health research encompasses a full spectrum of activities that range
from biomedical research, to clinical research, to health services research, and to population
health research:
•
Biomedical research pertains to biological organisms, organs, and organ
systems. For example, this type of research would use animal or human
tissues or cell culture to understand how the body controls the production of
blood cells in the bone marrow, how those controls break down in leukemia,
and how normal controls might be reinstated by treatment with drugs.
•
Clinical research relates to studies involving human participants, healthy or
ill. An example would include clinical trials on humans to test the toxicity
and effectiveness of a possible new treatment for leukemia that has shown
promising results in basic biomedical research, and then to compare the new
drug with other drugs in terms of their net benefit to patients.
•
Health services research embraces health care delivery, administration,
organization and financing. An example might be research into the
mechanisms for handling patients with leukemia, from the means for
diagnosis, through their treatment in hospital, on an out-patient basis, or at
home, to their long-term follow-up through hospital or community care.
•
Population health research focuses on the broad factors that influence
health status (socio-economic conditions, gender, culture, literacy, etc.). An
example might be a study using large databases of personal health
information gained from a number of sources to learn whether the incidence
of leukemia is associated with environmental or other factors.
Health research is the source of new knowledge about human health, how to
maintain optimal health, how to prevent, diagnose and treat disease, and how to manage our
health care system. Health research leads to the development of new or improved drug therapy,
treatment, medical equipment and devices, and new ways of organizing and delivering health
care. Health research also contributes to a better understanding of the complex interplay of the
social, economic, environmental, biological and genetic determinants that affect our health and
our susceptibility to disease.
The Committee was told that health research fosters the creation of knowledgebased employment, which in turn contributes to reversing the brain drain observed in the
country. Overall, witnesses stressed that health research improves the personal and economic
health of Canadians and enhances our international competitiveness:
253
This chapter is an updated version of Chapter Five included in Volume Five, pp. 91-125.
201
Health research provides enormous economic, social and health care rewards to society.
The jobs that are created by these investments are high-quality, well-paying, knowledgebased positions that generate worldwide recognition for Canadians. These investments
also support the rejuvenation of academic institutions across the country. They help train
new health professionals in the latest technologies and techniques and they provide
important support for the health care delivery system in Canada. Most importantly, the
results of these activities lead directly to better ways to treat patients, which ensures a
healthier and more productive population. 254
The Committee also heard that health research could serve as a catalyst to
regional economic development and that the health services innovations generated through
health research activities could greatly contribute to enhancing the quality and sustainability of
Canada’s health care system. As health research activity spreads out from the academic health
sciences centres and government and into more community-based settings, we can anticipate
that standards of care will improve, as health care providers engaged in health research will be
better connected with the most recent information. Overall, health research provides
tremendous opportunities for both economic and health care progress.
The Committee believes that Canada must
actively engage in health research to capture its share of The Committee believes that
benefits. The Committee also strongly believes that the Canada must actively engage
in health research to capture
federal government has a critical role to play as a facilitator,
its share of benefits.
catalyst, performer, consensus builder and coordinator in the
overall effort to nurture excellence in health research. This
chapter addresses a series of issues, including funding, partnerships and ethics, which we believe
deserve close attention if Canada is to achieve the highest standard of excellence in health
research.255
12.1
Assuming Leadership in Canadian Health Research
As Table 12.1 shows, health research in Canada is characterized by a complex
network that involves a wide range of disciplines and a multiplicity of performers carrying out
their research activities in a variety of locations. In Canada, health research is performed by
universities, teaching hospitals, business enterprises, government, and non-profit organizations.
This research is financed from a variety of public, private, Canadian and foreign sources.
Dr. Barry D. McLennan, Chair of the Coalition for Biomedical and Health Research (CBHR), The Improving
Climate for Health Research in Canada, Brief to the Committee, 9 May 2001, p. 2.
255 The Committee wishes to say that sections 12.1 and 12.2 of this ch apter were inspired by a speech given by
Dr. Kevin Keough, Chief Scientist at Health Canada, at the third annual Amyot Lecture organized by Health
Canada. We found his lecture very useful in highlighting some of the challenges and opportunities facing health
research.
254
202
TABLE 12.1
THE CANADIAN HEALTH RESEARCH NETWORK
DISCIPLINES
§
§
§
§
§
§
§
§
§
Clinical Disciplines
Social Sciences and
Humanities
Epidemiology
Life Sciences
Cellular and
Molecular Biology
Chemistry
Engineering
Computing and
Mathematical Sciences
Health Services
LOCATIONS
§
§
§
§
§
§
§
Academia (Universities,
Teaching Hospitals,
Research Institutes)
Industry
Government
Physicians’ Practices
Community Organizations
Community Hospitals
Others
SOURCES OF FUNDING
§
§
§
§
§
§
Governments (Federal,
Provincial, Departments,
Funding Agencies)
Non-Government
Organizations and National
Voluntary Organizations
International Sources
Industry
Universities
Others
The different stakeholders in health research collaborate with each other in
various ways: government-university, university-industry, government-industry. In fact, the
Committee was told that science is a continuum and the multiple components of health research
cannot exist independently of the others. Each component has an important, albeit changing,
research role to play in ensuring maximum health benefits for Canadians.
The federal government has always played an important role in health research as
a funder, performer and user of research. The federal government financially supports health
research carried out in universities, teaching hospitals and research institutes (extramural
research); it performs health research in its own laboratories (intramural or in-house research);
and it utilizes the outcomes of health research carried out elsewhere. Moreover, the federal
government has an important role to play in setting national priorities for health research.
The Committee believes that, in a country as vast as Canada, the federal
government has a catalytic leadership role in working with the provincial and territorial
governments to ensure that our health care system is driven by research and innovation. To be
successful, the federal government needs to have a close collaboration with the provinces and
territories to sustain a culture that supports the creation and use of knowledge generated by
health research.
In addition, the Committee
agrees with a 1999 report of the Council of
Science and Technology Advisors that health
research performed, funded and used by the
federal government must be of the highest
quality. It must be demonstrated to meet or
203
The Committee agrees that health
research performed, funded and used by
the federal government must be of the
highest quality.
It must be
demonstrated to meet or exceed
international standards of excellence in
science, technology and ethics.
exceed international standards of excellence in science, technology and ethics.256
The Committee was informed that, as the cost, complexity and pace of
advancement in health research accelerate, individual organizations no longer have the resources
or expertise to work in a vacuum:
Traditionally, investigators have worked in isolation, pursuing their own research
agendas and living grant-to-grant. This scattered, ad hoc approach simply won’t work
in today’s world when the complexity of science requires the pooling of resources. 257
At the third annual Amyot Lecture organized by Health Canada, Dr. Kevin
Keough, Chief Scientist at Health Canada, stated that it is necessary to adopt an inclusive (or
horizontal) approach to health research and to find new ways to partner – that is, to bring
together multidisciplinary teams of scientists from across the whole health research system to
combine their intellectual, financial and physical resources in conducting the research required to
better understand the complex and highly interconnected world in which we live. 258
The Committee agrees with Dr. Keough that it is critical to sustain effective
partnerships and to distribute the effort of individual partners in a manner that will maximize the
output of Canadian health research. In our view, complementary and collaborative approaches
to health research are not only feasible and cost-effective, but also contribute to better research
outcomes for all stakeholders.
This
The Committee agrees that it is critical
overarching goal can only be met if the role of
to sustain effective partnerships and to
the federal government continues to adapt to
the changing health research environment. In distribute the effort of individual
partners in a manner that will maximize
addition to being a performer, funder and user
of health research, the federal government the output of Canadian health research.
must become more active as a catalyst and a
facilitator.
The Committee strongly believes that the federal government should assume
leadership in Canadian health research and, therefore, we recommend that:
Health research and its translation into the health care
system be routinely on the agendas of meetings of federal
and provincial/territorial Ministers and Deputy Ministers of
Health, and that the Canadian Institute of Health Research
be represented and be involved in setting the agendas for
health research at those meetings. This would greatly help
to sustain a culture that supports the creation and use of
Council of Science and Technology Advisors, Building Excellence in Science and Technology (BEST): The Federal Roles in
Performing Science and Technology, December 1999, p. 5.
257 The Western Canadian Task Force on Health Research and Economic Development, Seizing the Future – Health as
an Engine of Economic Growth for Western Canada, Summary of the Report, August 2001, p. 2.
258 Dr. Kevin Keough, Amyot Lecture, October 2001.
256
204
knowledge generated by health research throughout
Canada.
The federal government set, on a regular basis, national
goals and priorities for health research in collaboration with
all stakeholders.
The
federal
government
foster
multi-stakeholder
collaborations when performing, funding and using health
research. This should contribute to capitalizing on the best
available resources while minimizing overlap and
duplication.
Dr. Keough stressed that, as a starting point, the federal government should
encourage the interchange of health research scientists between government, academia and the
private sector. A freer flow of scientists would enhance the quality of Canadian health research,
improve science and research advice to government, maximize the contribution of Canadian
scientists to the whole health research community, and contribute to the renewal of the science
base in all sectors. The Committee shares similar views and, therefore, recommends that:
The federal government take a leadership role, through the
Canadian Institutes of Health Research and Health Canada,
in developing a strategy to encourage the interchange of
research scientists between government, academia and the
private sector, including national voluntary organizations.
The Committee wishes to acknowledge the important role played by national
voluntary organizations in health research. These organizations act as a key bridge at the
national level between health research and its application through knowledge transfer of
information to researchers, health care providers and the general public. It is the view of the
Committee that, given the knowledge and experience these national voluntary organizations
bring, as well as the significant proportion of the health research enterprise which they support,
they must be included in the multistakeholders collaboration in health research.
12.2
Engaging the Scientific Revolution
Witnesses told the Committee that health research in Canada and throughout the
world is currently undergoing a scientific revolution. They explained that this revolution in
health research is fuelled by the ongoing advances in genomics, engineering and cell biology.
Research in these scientific disciplines will have a profound effect on the detection, diagnosis
and treatment of various genetically linked diseases. Elucidation of the physiological processes
associated with various conditions will require years of efforts to identify the relevant genes and
to determine how they interact.
205
We are in the midst of a profound global revolution being driven by our rapidly emerging
understanding of the molecular basis of life, of human biology and of disease. Like prior
revolutions in science, this revolution is being driven by the collision of diverse disciplines
and approaches: genetics, molecular biology, the broader bio-sciences, [information
technology] and computational methodologies, small molecules and surface chemistry,
bioethics, epidemiology, health economics, and the social sciences and humanities. The
pace of this health research revolution is still accelerating, driven by significant global
investments by governments, industry and philanthropy. 259
As the human genome project approaches completion, the next challenge is to
understand the function of the 30,000-40,000 genes that humans appear to possess. These genes
encode the entire protein set or proteome estimated at 2 million. Thus, the next frontier in
biology appears to be proteomics, the cataloging and functional description of all proteins in
living organisms, which is far more complex and promising than genomics.
Similarly, advances in biomedical engineering and miniaturization on the
molecular scale will push development of more sophisticated devices for diagnosis and therapy –
targeted delivery of drugs, biological testing, molecular imaging, and tissue and organ repair.
Canada has a real opportunity to become a world leader in this field of “nanotechnology” or
“nanomedicine.”
The study and use of stem cells is another good example of the potential impact
that health research can have on health and health care. Stem cells have the unique property,
whatever their origin, of becoming specialized cells. Currently, both the research community
and related stakeholders are very enthusiastic about the potential of stem cells, both from
embryonic and adult sources. It is anticipated that research on these cells will lead to treatments
for serious diseases such as Parkinson’s, Alzheimer’s, diabetes and spinal cord injuries. It is also
widely believed that these cells can ultimately be manipulated to grow into virtually any tissue or
organ thus providing much needed organs for transplant.
Recent research has been successful in programming human embryonic stem
cells into producing insulin. Normally, this function is performed by specialized pancreatic islet
cells. Should this treatment prove to be able to provide a cure for diabetes, which is presently
being treated by regular injection of insulin, it will not only improve the quality of life for the
individual, but will also ease the economic burden of disease. In a different study, stem cells
isolated from the skin of animals were coaxed into becoming neural, muscular and fat cells.
Other areas where the scientific revolution has a definite impact are chemistry
and computer science where advances in molecular modelling combined with synthetic
chemistry change the way novel drugs are discovered. Bioinformatics and robotics are also areas
that will benefit health research.
The scientific revolution in health research is not limited to basic and biomedical
research; it is also creating tremendous opportunities for research into health services and
population health. More than ever before, research is undertaken in Canada and abroad to find
259
Dr. Alan Bernstein, president of the CIHR, Health Research Revolution – Innovation Will Shape This Century .
206
new ways of delivering quality care and to understand the implications of the interaction of the
determinants that affect the health of a population.
At the third Amyot Lecture, Dr. Keough stressed that advances in health
research, and the need for governments and individuals to accommodate them, will continue to
accelerate. This means that governments must be able to both perform and rely on good
science, which is based on sound research harnessed for the public good. The government’s
effectiveness in integrating progresses from emerging areas such as biotechnology and
nanotechnology depends on this principle.
The Committee agrees with Dr. Keough that it is imperative for Canada to take
up the challenges wrought by the scientific revolution. We are convinced that countries with a
strong health research network are more capable of translating advances and innovations into
cost-effective health services, modern and internationally competitive policy and regulatory
frameworks, new or adaptive products, and new health promotion activities. An energetic
health research environment contributes to improved health, higher quality of life, and an
efficient health care system. This in turn engenders public confidence, a vibrant business
environment and a strong economy.
Along with Dr. Keough, the The Committee believes that good
Committee believes that good science is good science is good economics and that
economics and that the government has a crucial
role in maximizing the gains for Canada and its the government has a crucial role in
citizens. Clearly, the costs of doing good science are maximizing the gains for Canada
and its citizens.
high; but the costs of not doing it are even higher.
These scientific developments are rapidly expanding
and there is fierce competition in the field. Along with numerous witnesses, the Committee is
convinced that Canada cannot afford to fall behind. The potential pay-off is a fast and
economically beneficial transfer of knowledge and its conversion into tangible benefits for the
Canadian population.
It is the opinion of the Committee that such a formidable challenge can be met
only through a concerted effort by government, industry, academia, non-governmental
organizations and international organizations. Each of these partners has its own specific role.
However, coordination and support should be provided by the federal government, through its
agencies and departments, especially CIHR and Health Canada. Therefore, the Committee
recommends that:
The federal government, through both Health Canada and
the Canadian Institutes of Health Research, coordinate and
provide resources to ensure that Canada contributes to and
benefits from the scientific revolution to maximize the
economic, health and social gains for Canadians.
The Committee strongly believes that Canada can be a world leader in health
research, building on our strengths in human genetics, stem cell biology, population health,
bioethics, proteomics, and health economics. We have a tremendous opportunity to apply the
207
knowledge generated from genomics and proteomics research to the study of human
populations and human research. For example, the CIHR through its institutes of Genetics and
Health Services and Policy Research are partnering with the Federal/Provincial/Territorial
Coordinating Committee on Genetics and Health to identify and prioritize emerging issues that
can be addressed through research.
The field of genomics and proteomics in Canada could benefit from a more
integrated investment approach. For example, with a long-standing record of excellence in
protein science research and training, Canada is well positioned to make a significant
contribution in proteomics. The Canadian Proteomics Initiative – a partnership between CIHR’s
Institute of Genetics and the Protein Engineering Network of Centres of Excellence (PENCE)
– is working to build on the federal government’s investments to date in infrastructure to build a
large-scale national program that will ensure that Canada’s remains internationally competitive.
Therefore, the Committee recommends that:
The Canadian Institutes of Health Research and Genome
Canada fund research that positions Canada as a world
leader in the new area of genomics and human genetics so
that the health care system can take appropriate advantage
of this new technology to improve the health of Canadians.
The Canadian Institutes of Health Research play a
leadership role in establishing best practices for addressing
the complex ethical issues raised by the use of this new
technology in health research and health care.
12.3
Securing a Predictable Environment for Health Research
As indicated in Volume Two, the federal government has had a long tradition in
financing health research. 260 The most recent estimates by Statistics Canada indicate that the
majority (some 79%) of federally funded health research is “extramural” as it takes place in
universities and hospitals (68%), private non-profit organizations (6%), and business enterprises
(4%).261
The principal federal funding body for health research is the Canadian Institutes
of Health Research (CIHR). In fact, CIHR is the only federal entity whose budget is entirely
devoted to health research. Its creation in 2000 involved a major evolution of the mandate of
the Medical Research Council of Canada (MRC) and incorporation of the National Health
Research and Development Program (NHRDP), formerly Health Canada’s main financing
instrument for extramural health research. Despite the creation of CIHR, Health Canada is still
involved in the financing of some extramural health research in a wide range of fields (children’s
health, women’s health, Aboriginal health, etc.).
Volume Two, pp. 93-104.
Statistics Canada, Estimates of Total Expenditures on Research and Development in the Health Field in Canada, 1988 to
2000, Catalogue No. 88F0006XIE01006, April 2001.
260
261
208
There are also a number of federal research-oriented bodies whose funding
focuses entirely on health-related research. These include namely the Canadian Health Services
Research Foundation (CHSRF) and the Canadian Coordinating Office for Health Technology
Assessment (CCOHTA). Many feel that for a country of the size of Canada, there are too many
federal funding organizations.
In addition, there are several secondary sources of extramural federal health
research funding. More precisely, the federal government is responsible for a number of
research councils, agencies and programs that devote (to various extents) a portion of their
budget for health-related research. These include the Natural Sciences and Engineering
Research Council (NSERC), the Social Sciences and Humanities Research Council (SSHRC), the
Canada Foundation for Innovation (CFI), the Canada Research Chairs (CRCs), and the
Networks of Centres of Excellence.262 The federal government has also funded Genome
Canada, a not-for-profit corporation dedicated to developing and implementing a national
strategy in genomic research.
The remainder of the federally funded health research (some 21%) is
“intramural” or “in-house” research, that is research conducted in federal government facilities.
Federal facilities in which health-related research is performed include Health Canada, Statistics
Canada, the National Research Council, Human Resources Development Canada, Agriculture
Canada, Environment Canada (in partnership with Health Canada) and the Canadian Food
Inspection Agency.
12.3.1 Federal funding for health research
The federal government has, on many occasions, demonstrated its commitment
to health research. The Committee applauds the high priority for research given in the 2001
Speech from the Throne and particularly its announcement to increase funding for health
research:
Our government’s overriding goal is nothing less than branding Canada as the most
innovative country in the world – as the place to be for knowledge creation; where our
best and brightest can make their discoveries; where the global research stars of today and
tomorrow are born; becoming the magnet for new investments and new ventures.
(…) The Government of Canada will (…) provide a further major increase in funding
to the Canadian Institutes of Health Research, to enhance their research into disease
The NCEs are supported and overseen by the three Canadian granting agencies (CIHR, NSERC and SSHRC).
It is worth noting that eight networks, of the currently funded 22 NCEs, conduct health research in the fields of:
arthritis, bacterial diseases, vaccines and immunotherapeutics for cancer and viral diseases, stroke, health evidence
application, genetic diseases, stem cells and protein engineering. Some of the other NCEs may have impact on
health and health care (e.g. Institute for Robotics and Intelligent Systems or Canadian Water Network).
262
209
prevention and treatment, the determinants of health, and the effectiveness of the health
care system.263
The Committee also recognizes the creation of CIHR as a major achievement in
health research. We laud the increased funding for CIHR announced in the December 2001
Budget Speech, despite the severe financial pressures the federal government faces. In addition,
the creation of, and funding for, the Canada Foundation for Innovation in 1997, followed by the
Millennium Scholarships, the Canada Research Chairs, and Genome Canada, are clear
indications that health research and innovation are integral to public health-related policy in
Canada.
Throughout
its
study,
the
Committee was told that while the increase in Throughout its study, the Committee
was told that while the increase in
federal funding represents significant support for
health research, Canada still does not compare federal funding represents significant
favourably with other industrialized countries in support for health research, Canada
this regard.
In fact, the role of national still does not compare favourably with
government in financing health research, expressed other industrialized countries in this
in purchasing power parity (PPP) per capita, is regard.
much higher in the United States, the United
Kingdom, France and Australia than in Canada. For example, as stated in Volume Two, the
American government provided in 1998 four times more funding per capita to health research
than did the Canadian government.264
Witnesses unanimously recommended that the federal government’s share of
total spending on extramural health research be increased to 1% of total health care spending in
Canada, from its current level of approximately 0.5%. This could involve increasing CIHR’s
current budget to $1 billion from the current level of $560 million. Additional resources should
also be devoted to federally performed health research (discussed in the following section).
Overall, increased investment in extramural and in-house health research would bring the level
of the federal contribution to health research more in line with that of national governments in
other OECD countries. More importantly, this would help maintain a vibrant, innovative and
leading edge health research industry.
Another concern brought to the attention of the Committee related to the longterm nature of research in contrast to existing
budgetary program planning. High quality research The Committee strongly supports
is very competitive internationally and requires long- the view that health research
term commitments. Young researchers, on whom
money is money to support the best
Canada’s future in research depends, commit their
and brightest minds. Ultimately,
careers on the basis of their perceptions of the long- Canada’s challenge in health
term environment for research. Canada will not
research is a challenge to attract
attract or keep excellent people without providing an
and retain outstanding people.
excellent environment for research. Research pays
little attention to national borders. The world
263
264
Government of Canada, Speech from the Throne, First Session of the 37th Parliament, 30 January 2001.
Volume Two, p. 97.
210
recognizes excellence, and competes vigorously for it.
The Committee strongly supports the view that health research money is money
to support the best and the brightest minds. At least two-thirds of funds for health research go
to salaries and training stipends for highly qualified and motivated researchers, research
assistants, technicians, research trainees, etc. Ultimately, Canada’s challenge in health research is
a challenge to attract and retain outstanding people.
The role of the federal government is central to this competition for excellent
researchers. In particular, CIHR is the long-term source of research funds for the health
research activities stimulated by the Research Chairs, the Canadian Foundation for Innovation,
and Genome Canada, all of which are adding greatly to Canada’s capacity for excellence in
research. CIHR is also an essential partner for research stimulated by the many health research
charities.
Overall, the Committee believes that the federal government must establish and
maintain long-term stability in the Canadian health research environment. Providing an
adequate and predictable level of funding is a necessary prerequisite. We agree with witnesses
that the federal government must increase its investment in health research so that federal
extramural funding accounts for 1% of total health care spending.
In our view, such additional federal funding should be directed to research
projects that can have a significant impact on health status or that contribute substantially to
improvements in health care quality and delivery. Research in such fields as population health,
public health, health services delivery, clinical practice guidelines, early child development, and
women’s and Aboriginal health should be given the highest priority.
The Committee also believes that the establishment of CIHR has resulted in the
creation of a broad platform upon which to launch bold new initiatives in health research.
Moreover, we believe that CIHR and its 13 Institutes must insist on the translation of
knowledge generated by research; this will ensure that the results of health research are
translated into action including changes in clinical practice, health care policy, and individual
behaviours.
Health research is a long-term investment; many research projects span a
researcher’s whole career, and grants are usually awarded for three- to five-year terms, which are
simply not consistent with the one-year-at-a-time budget allocation to CIHR. Overall, the
Committee recommends that
The federal government:
§
Increase, within a reasonable timeframe, its financial
contribution to extramural health research to achieve
the level of 1% of total Canadian health care
spending. This requires an additional investment of
$440 million by the federal government;
211
§
Recognize that health research is a long term
proposition, and therefore set and adhere to clear
long-term plans for funding health research,
particularly through the Canadian Institutes of
Health Research.
More precisely, the federal
government should commit to a five-year planning
horizon for the CIHR budget;
§
Provide predictable and appropriate investment for
in-house health research.
12.3.2 Federal in-house health research
A report by the Council of Science and Technology Advisors identified a clear
need for the federal government to perform in-house research. This report stressed that the
federal government must have an adequate research capacity to deliver the following key roles:
•
Support for decision making, policy development and regulations.
•
Development and management of standards.
•
Support for public health, safety, environment and/or defence needs.
•
Enabling economic and social development.265
In other words, the ability of the federal government to set policy and enforce
regulations requires it to have an appropriate in-house research capacity. In addition, the
government needs to have access to the highest possible quality scientific and technological
information in a time frame that meets its needs. Failure to use the best available data and
analysis could expose the government to liabilities for damages caused by those decisions.
The major key player in federal intramural health research is Health Canada, for
which this function is critical to the fulfillment of its mandate. The department is mandated to
help the people of Canada maintain and improve their health and to ensure their safety. Thus, in
addition to access to top-quality scientific and technological information, Health Canada must
obtain advice to set policy and enforce regulations. The required in-house research capacity
includes expertise in:
•
the state and spread of disease;
•
ensuring the safety of food, water and health products, including
pharmaceuticals;
•
air quality issues; and,
•
fulfilling health promotion obligations.
Council of Science and Technology Advisors (CSTA), Building Excellence in Science and Technology (BEST): The
Federal Role in Performing Science and Technology, 16 December 1999, p. 12. The CSTA consists of a group of external
experts providing the federal government with on science and technology issues.
265
212
To undertake these responsibilities, Health Canada’s researchers must possess
independent knowledge and skills over a wide range of scientific disciplines, ranging from the
behavioural sciences to cellular and molecular biology. In addition, Health Canada must have an
adequate in-house capacity to assimilate, interpret and extrapolate the knowledge obtained from
other health research partners. Finally, the department must be able to draw widely on expertise
and facilities that are not available in-house.
Overall, the Committee learned that Health Canada has a unique role. In order
to meet its mandate, the department must be able to provide the best possible independent
science advice related to its legislated responsibilities, to undertake a wide range of scientific
activities related to its role as regulator and policy advisor, and to provide evidence-based health
services and programs. This unique obligation requires Health Canada to have the necessary
science and research capacity to fulfill these three functions.
The Committee feels it is important to acknowledge that Health Canada has
taken an important step in ensuring, through the appointment in 2001 of a Chief Scientist, that it
possess the ability to meet its mandate. The Chief Scientist and his office play a pivotal role in
bringing leadership and coherence to Health Canada’s scientific responsibilities and activities by
championing the principles of alignment, linkages and excellence espoused by the Council of
Science and Technology Advisors.
The Committee strongly believes
that there is a clear need for the federal
government to perform health research and that it
must have the capacity to deliver its mandate. The
Committee also acknowledges the importance for
Health Canada of partnering with stakeholders
outside of government when necessary.
Therefore, the Committee recommends that:
The Committee strongly believes
that there is a clear need for the
federal government to perform
health research and that it must
have the capacity to deliver its
mandate.
Health Canada:
12.4
§
Be provided with the financial and human resources
in health research that are required to fulfill its
mandate and obligations;
§
Engage actively in the establishment of linkages and
partnerships with other health research stakeholders.
Enhancing Quality in Health Services and in Health Care
Delivery
As indicated on numerous occasions in this report, the Canadian health care
delivery system is facing a very serious situation, marked by rising costs, a high degree of
dissatisfaction and high expectations. While many recommendations for change to the publicly
funded health care system have been made over the years, most of them have not been based on
213
scientific evidence, but rather have been grounded on anecdotal evidence or political posturing.
For these reasons, research on all aspects of Canada’s publicly funded health care system is, at
the present time, very critical for health care policy makers and managers.
Areas in need of more research are varied and include:
•
health promotion policies
•
disease and injury prevention strategies (at both the individual and population
levels)
•
determinants of health
•
approaches to primary care management
•
new modes of remuneration for health care providers and institutions
•
decision-making by health care providers and users
•
organizational care delivery models
•
health care policy management
•
health care resources allocation
•
impact of selected areas of privatized health care
•
pharmaco-economics
•
assessment and utilization of health care technology and equipment.
Clinical research and the involvement of health care providers themselves in
health research are key elements in ensuring that fundamental research is translated into better
health and health care. Clinical trials and large-cohort population health research studies are
under-supported in Canada, in part due to the large, long-term financial commitment that is
required before such studies can be launched. Urgent investment in training and subsequent
career support is needed for clinician investigators in Canada. Harassed by ever increasing
demands for clinical service, they find it increasingly difficult to remain competitive in
competitions for grants and awards.
In Canada, a wide range of organizations are involved in health services research.
It is the view of the Committee that, at this critical time for our health care delivery system, it is
essential that this type of research be well funded and that these research centres and their
investigators take part in the present debate
about the future structure of the Canadian The Committee believes that the
federal government, given its unique
hospital and doctor system and about how the
growing gaps in health care coverage can be role in health research, should commit
closed.
a significant investment in promoting,
Moreover, many studies have
shown that there is a major gap between new
knowledge and its application in every day
medicine. For example, only 46% of elderly
214
in partnership with the provinces and
territories, the adoption of research
findings in clinical practice.
patients were given pneumococcal vaccine, though it is the group most at risk for suffering from
such infections. Aspirin, although recommended for all adult diabetic patients, was prescribed in
only 20% of cases, and counselling on HIV transmission was given to less than 3% of
adolescents during physician’s office visits.266 In addition, wide variations in practice patterns
and outcomes persist across regions as well as across provinces. The Committee believes that
the federal government, given its unique role in health research, should commit a significant
investment to promoting, in partnership with the provinces and territories, the adoption of
research findings in clinical practice. This must be done while continuing to support new
research on priority health issues and the development of new tools, so that in the future this
knowledge and the new tools can be translated into and implemented to produce improved
health and enhanced health care.
Overall, the Committee acknowledges that more health research should be
undertaken in order to enhance quality in health services and in health care delivery. Therefore,
we recommend that:
The federal government, through the Canadian Institutes of
Health Research, Health Canada and the Canadian Health
Services Research Foundation, devote additional funding to
health services research and clinical research and that it
collaborate with the provinces and territories to ensure that
the outcomes of such research are broadly diffused to health
care providers, managers and policy-makers.
12.5
Improving the Health Status of Vulnerable Populations
There are many groups in Canadian society that have, for numerous reasons, less
immediate access to health services appropriate to their specific needs. Examples include
individuals with mental health problems, individuals with addiction problems, people with
physical disabilities, some ethnic minorities, women in difficult circumstances, people living in
rural and remote communities, the homeless and the poor. The Committee acknowledges that
there is an urgent need in Canada to support cross-disciplinary health research that will provide
new evidence on the diverse factors that influence health status, and on approaches to
improving access to needed health care for vulnerable groups. CIHR has recently set up a
strategic plan through three of its Institutes to study this crucial problem, but more resources are
needed. Therefore, the Committee recommends that:
The federal government, through the Canadian Institutes of
Health Research and Health Canada, provide additional
funding to health research aimed at the health of
particularly vulnerable segments of Canadian society.
266
JAMA, vol. 286, p. 1834 (2001).
215
In Volume Four of its health care study, the Committee stated that the health of
Aboriginal Canadians is a national disgrace. There is a disproportionately, and completely
unacceptable, large gap in health indicators between Aboriginal and non-Aboriginal Canadians.
Aboriginal peoples experience much higher incidence of many health problems, including:
significantly higher rates of cancer, diabetes and arthritis; heart disease among men; suicide
among young men; HIV/AIDS; and morbidity and mortality related to injuries. Infant mortality
rates are twice to three times the national average, with high rates of fetal alcohol syndrome and
fetal alcohol effects (FAS/FAE), and poor nutrition. Approximately 12% of Aboriginal children
have asthma, in comparison with 5% of all Canadian children. This last trend is attributable, at
least in part, to environmental health issues, such as the presence of moulds in houses.267
The Committee believes that
The Committee believes that research
research is perhaps the most important element that
is perhaps the most important
will help improve the health status of Aboriginal
element that will help improve the
Canadians. In our view, the creation of CIHR’s
health
status
of
Aboriginal
Institute of Aboriginal Peoples’ Health is an
important step in this direction. Health Canada,
Canadians.
which delivers numerous programs and services to
First Nations and Inuit communities, needs to strengthen its research capacity as well as its
capacity to translate health research into effective public policy. In particular, Health Canada
requires a strong research capacity to:
•
compile and analyze available population-based information to identify
trends, emerging issues, and differences across geographic regions or
communities;
•
review programs and services to identify the most effective practices in First
Nations and Inuit communities and to assess timely progress in addressing
key health issues; and
•
maintain and augment the capacity to analyze research both nationally and
internationally, and integrate best practice into policy and program
development, implementation and evaluation.
Therefore, the Committee recommends as a matter of urgency that:
The federal government provide additional funding to
CIHR in order to increase participation of Canadian health
researchers, including Aboriginal peoples themselves, in
research that will improve the health of Aboriginal
Canadians.
Health Canada be provided with additional resources to
expand its research capacity and to strengthen its research
translation capacity in the field of Aboriginal health.
267
Volume Four, pp. 129-135.
216
Research into the field of health in developing countries is also of concern. The
Committee learned that very little research activity is directed towards health problems that
affect developing countries. In fact, data suggest that less than 10% of health research is
devoted to diseases or conditions that account for 90% of the global disease burden.
The primary causes of morbidity and mortality in developing countries can be
grouped under four general areas: malnutrition, poor sexual and reproductive health,
communicable diseases, and non-communicable diseases including injuries. A recent report by
the World Health Organization shows that long-term economic growth is impossible where
large numbers of people are malnourished, sick or dying.
It is the view of the Committee that, given its expertise and excellence in health
research, Canada should assume a leadership role in this area. The federal government has taken
a step in the right direction. In a first-ever collaborative effort, four Canadian government
organizations have joined their forces to formalize a shared commitment to address the
problems of global health through research. The Canadian International Development Agency
(CIDA), CIHR, the International Development Research Centre (IDRC) and Health Canada
have formed the Global Health Research Initiative. Not only will this joint undertaking allow
the four partners to operate their programs and research more effectively, it will also contribute
to a great humanitarian cause – the health protection of citizens of all countries, including
Canadians. This is the beginning; much more needs to be done. Therefore, the Committee
recommends that:
The federal government provide increased resources to the
Global Health Research Initiative.
12.6
Commercializing the Outcomes of Health Research
One outcome of health
research is the creation of new
knowledge. New knowledge is in itself
of great value to society but the overall
impact of health research is maximized
when new knowledge is translated into
social
and
economic
benefits.
Commercialization of health research
outcomes represents one way to achieve
this knowledge translation.
New knowledge is in itself of great value to
society but the overall impact of health
research is maximized when new knowledge is
translated into social and economic benefits.
Commercialization
of
health
research
outcomes represents one way to achieve this
knowledge translation.
Commercialization of health research can happen at many different stages of
research and each stage faces different challenges. For example, one of the main challenges
facing commercialization of academic health research (occurring in universities and hospitals) is
that their early stage of development makes the investment of capital by private sector very risky,
thus speculative. By contrast, once a product is marketable, such as the late stage clinical trials
(mainly performed by large research-based pharmaceutical firms), the main challenges relate to
217
intellectual property and the patent regime, as well as to approval and monitoring of drugs.
Commercialization of health research outcomes brings numerous benefits including:
•
improved health, resulting in a more productive workforce;
•
enhanced health services quality;
•
increased efficiency in health care system delivery;
•
expanded research funding leveraged from commercialization and research
partnerships;
•
enhanced job creation with newly formed companies;
•
and greater economic activity from the manufacturing, marketing and sales of
new health care products and services.
In its brief to the Committee, the Council for Health Research in Canada
indicated that spin-off biotechnology companies formed by CIHR-funded scientists are an
important by-product of public investment in health research:
For instance, 23 companies have been formed at the University of British Columbia
employing 732 people. At McGill, 18 companies have been formed employing 392
people. At the University of Ottawa, 10 companies have been formed employing 459
people. Such companies cannot flourish without public investments to fund a steady
discovery pipeline.268
Visudyne is one example of Canadian health research that has produced some
powerful advances in health care. The drug, which is approved for use in over 30 countries, is
the only approved treatment for age-related macular degeneration, the leading cause of agerelated blindness. This treatment was developed at the University of British Columbia (UBC)
and was funded, in part, by the federal government. UBC assisted in the start-up of QLT Inc. to
commercialize this product that has head offices in Vancouver, employs over 350 people and
has a market capitalization of $1.5US billion.
Another example is 3TC, the only inhibitor of HIV reverse transcriptase with
few or no side effects and a common component of treatment for HIV/AIDS, which also arose
out of federally funded research performed in Montreal. BioChem Pharma Inc., prior to its
acquisition by Shire Pharmaceuticals plc. (based in the United Kingdom), had head offices in
Montreal, employed 278 people, and had a market capitalization of $3.7US billion.
These examples illustrate the potential of health research to treat disease, create
employment and generate economic benefits for Canada. While many academic technologies
are licensed to foreign companies, it is reasonable to expect that value should be created and
retained in Canada wherever possible and appropriate when the federal government has made
investments in health research.
Council for Health Research in Canada, Health Research: The Engine of Innovation, Brief to the Committee, 30
December 2001, p. 2.
268
218
As stated in Section 12.2, “good science is good economics.” However, during
his testimony, Dr. Henry Friesen, Team Leader of the Western Canadian Task Force on Health
Research and Economic Development, told the Committee that the conditions are not presently
in place to enable publicly funded health research to maximize the returns to Canadian
taxpayers.269 In the opinion of this Task Force, the capacity for research commercialization is
sub-optimal and clearly unacceptable.270
Similar findings were presented in a 1999 report published by the Advisory
Council on Science and Technology (ACST) and prepared by its Expert Panel on the
Commercialization of University Research.271 The Expert Panel made the case that research
results from federal funding of university research, where there is commercialization potential,
should be managed as an asset that can return benefits to the Canadian economy and Canadian
taxpayers. The Expert Panel also showed that the United States has a much better track record
in commercialization of university-based research than Canada, despite a growing private sector
involvement in funding research at Canadian universities.
Most major research institutions (universities and research hospitals) in Canada
have in-house technology commercialization offices that are funded by university sources and, in
cases of successful offices, by revenue derived from operation. Currently, the expenses
associated with commercialization activities are not covered by direct federal research funding.
The Committee learned that the vast majority of these technology commercialization offices
have costs that exceed their revenue. They are operated as a cost centre and not as a profit
centre for the institution. However, while their function is not critical to the research enterprise
(creation of new knowledge), an argument could be made to include costs of operating these
offices in the calculation of indirect research costs since technology commercialization is a
research-related activity.
The question of funding indirect costs in Canadian research by the federal
granting agencies has been one of contention in recent years. It has been recognized as one
element to explain the lower level of competitiveness of Canadian researchers. Indirect costs are
those expenses associated with administration, maintenance, commercialization and the salary of
the principal investigator that is attributable to the research project. The ACST in its 1999
report 272 and subsequent publications has made the recommendation that the federal
government increase its investment by supporting the indirect costs of sponsored research.
Similarly, the brief of the Council for Health Research in Canada stressed:
[The] indirect costs of research must be funded in order to provide a cutting-edge research
environment that will fully realize the benefits of the government’s Innovation Agenda.
See Committee Proceedings, Issue No. 30.
Western Canadian Task Force on Health Research and Development, Shaping the Future of Health Research and
Economic Development in Western Canada, August 2001, pp. 19-20.
271 Expert Panel on the Commercialization of University Research, Public Investments in University Research: Reaping the
Benefits, Advisory Council on Science and Technology, 4 May 1999.
272 Ibid.
269
270
219
(…) The Council believes it should be a priority for the government to develop a specific,
long-term plan to address this issue as soon as possible.273
The Committee acknowledges
that, in its December 2001 Budget, the federal
government provided a one-time investment
of $200 million through the granting councils
to help alleviate the financial pressures that are
associated with the rising indirect costs of
research
activities,
including
commercialization.
We both hope that
universities and research hospitals will use
some of these funds to improve their
commercialization abilities, and that the federal
government will make this investment
permanently recurrent.
The Committee agrees with witnesses and
recent reports that there is a need to find
ways to maximize the returns to
Canadians from the commercialization of
federally funded health research.
We
believe that the federal government should
establish the necessary conditions to
enable researchers and those technology
commercialization
offices
providing
support and services to researchers to
perform to their full potential in
commercializing the results of federally
funded health research.
The Committee agrees with
witnesses and recent reports that there is a
need to find ways to maximize the returns to Canadians from the commercialization of federally
funded health research. We believe that the federal government should establish the necessary
conditions to enable researchers and those technology commercialization offices providing
support and services to researchers to perform to their full potential in commercializing the
results of federally funded health research.
Further, the Committee believes that CIHR, Canada’s premier vehicle for
funding health research with a legislated mandate to translate knowledge into improved health, is
uniquely positioned to assess the recommendations made by the Western Canadian Task Force,
the ACST’s Expert Panel and other studies on technology commercialization as they apply to
health research. We believe that CIHR should use these reports as the basis for developing and
delivering on an innovation strategy that considers programs, policies and people. In our view,
such a strategy would see CIHR support and strengthen the capacity of academic technology
commercialization offices to maximize the transfer of technologies to market, thereby creating
of Canadian companies and jobs and enhancing Canada’s innovation capacity. In addition, we
believe that this innovation strategy must be developed within a framework that includes
governing principles of public good and benefit to Canada so that any strategy to maximize the
social and economic impact does not threaten academic freedom or influence the direction of
research or the delivery of health care. Therefore, the Committee recommends that:
The federal government require an explicit commitment
from all recipients of federally funded health research that
they will obtain the greatest possible benefit to Canada,
whenever the results of their federally funded research are
used for commercial gain.
273
Council for Health Research in Canada, Brief to the Committee, p. 5.
220
The Canadian Institutes of Health Research, while not
ignoring the social value of health research that does not
result in commercial gain, seek to facilitate appropriate
economic returns within Canada from the investments it
makes in Canadian health research, whenever the results of
investments in Canadian health research are used for
commercial gain. In doing so, CIHR should develop an
innovation strategy aimed at accelerating and facilitating
the commercialization of health research outcomes.
The federal government invest additional resources to
enhance the output of Canadian health researchers and
strengthen the commercialization capacity of performers of
federally funded health research through CIHR’s innovation
strategy. This new funding would be additional to the
current health research investment. In particular, the
funding of the indirect costs of research by the Canadian
granting agencies should be made permanent. Health
research performers should be made accountable for the use
of these commercialization funds.
One aspect of the commercialization of health research outcomes that generated
controversy recently is the issuance of patents for higher life forms. This subject goes deeply
into ethical, intellectual property, and economical issues. Although these questions are highly
relevant to Canadian health research and the work of this Committee, they are debated
elsewhere. Indeed, the Canadian Biotechnology Advisory Committee (CBAC) has been
mandated by the federal government to provide advice on this crucial issue. The CBAC
published an interim report on the subject at the end of 2001 where it recommended that human
beings at all stages of development, are not patentable.274 Further, the report recommended that
a systematic research program be undertaken to assess the impact of biotechnology patents on
various aspects of health services. It is clearly an issue that deserves serious consideration, but is
beyond the scope of this report.
12.7
Applying the Highest Standards of Ethics to Health Research
The preceding sections have demonstrated Canada’s growing excellence in, and
high priority for, health research. However, history has shown that the pursuit of new
knowledge in health research can lead, for example, to abuse of the people who are involved as
the subjects of research, to invasions of privacy, and to abuse of animals. In various ways,
numerous reports have emphasized that new knowledge must not be gained at the expense of
abuse of humans and other life forms, and that excellence in health research requires excellence
in ethics.
Canadian Biotechnology Advisory Committee, Biotechnology and intellectual property: patenting of higher life forms and
related issues, Interim report to the Government of Canada Biotechnology Ministerial Coordinating Committee,
Ottawa, November 2001.
274
221
But what is ethics? Laura Shanner, Professor at the University of Alberta, told
the Committee that “ethics” is a “systematic, reasoned attempt to understand and make the best
possible decisions about matters of fundamental human importance.”275 When we refer to
ethical issues informed by biological knowledge in medicine, we refer to “bioethics.” Dr. Nuala
Kenny, Professor of Pediatrics at Dalhousie University (Nova Scotia), defined bioethics as
follows:
Bioethics is a particular understanding of ethics that brings the discipline of philosophy to
assist in making value-laden decisions. It is about the right and the good. It is a
practical discipline. Bioethics is ethics in the realm of the biosphere, human biology. It is
actually broader than human health, but most people use it in that context.
It asks how, in a pluralistic society, do you lay out the values, the issues and the interests
at stake when making a decision about the right and the good, generally about an
individual patient situation. Then, how do you assist the relevant parties in establishing
some kind of priority, so that if there are competing goods or competing harms, you make
your choices in a responsible way.276
In many fields, difficult decisions often involve consideration of numerous
factors, each implicating different – and often conflicting – values, principles, viewpoints, beliefs,
expectations, fears, hopes, etc. When facing such difficult decisions, people may reach different
conclusions not only because they consider different factors, but also because they weigh them
against each other in different ways. The practical effect of the discipline of ethics is to help
those who face complex decisions to identify the inherent values and principles, to weigh them
against each other, and to come to the best possible decision. Though based on strong
theoretical foundations, ethics in health care and health research deals with real life situations.
Because research seeks constantly to expand the forefront of knowledge, it poses
the most challenging questions of ethics. The purpose of this section is to survey some of the
major areas of research ethics in terms of the policies and mechanisms now present and/or
needed in Canada, to ensure that health research is carried out in a manner that meets the ethical
standards of Canadians.
12.7.1 Research involving human subjects
Health research must involve humans as research subjects. While research with
other life forms can provide much essential knowledge, in the end only research directly on
human beings can tell us, for example, whether a potential new approach to prevention,
diagnosis or treatment of disease is safe enough to use in humans, whether it actually helps
patients, what its side effects are, and whether it is better than a treatment that is already
available.
275
Laura Shanner, Ethical Theories in Bioethics and Health Law, University of Alberta, Brief to the Committee, 2000, p.
1.
276
Dr. Nuala Kenny (42:59-60).
222
Research
subjects,
often
patients with diseases whose treatment is under Research subjects, often patients with
study, bear the risks of the research so that diseases whose treatment is under study,
others may gain from the knowledge that bear the risks of the research so that
research is intended to provide. Research others may gain from the knowledge
involving humans poses many risks: abuse of
that research is intended to provide.
people, misuse, exploitation, breaches of
privacy, confidentiality, etc. Because health research raises such a wide range of issues, an
international consensus has developed over the last 50 years or so. This international consensus,
which started with the Nuremberg Code (1947) and the Declaration of Helsinki (1964, revised in
2000), requires that the ethical aspects of any research project involving humans be reviewed and
approved, with modifications if needed, by an appropriately constituted ethics committee (in
Canada called “Research Ethics Board” or REB) before the research project is started.
The Research Ethics Board “is a societal mechanism to ensure the protection of
research participants.”277 REBs are multidisciplinary local institution-based boards, independent
of the investigator and research sponsor, established to review the ethical standards of research
projects within their institutions. They have the power to approve, reject, request modifications
to, or terminate any proposed or ongoing research involving human subjects. In effect, the REB
attests, for each research protocol, that the proposed research, if it is carried out in the manner
agreed to by the REB, meets or exceeds standards of ethics that Canadians expect.
The dominant national policy for the ethics of research involving humans, the
Tri-Council Policy Statement: Ethical Conduct for Research Involving Humans (TCPS), was published by
CIHR, the SSHRC and NSERC in 1998. The TCPS followed earlier policies (MRC, 1978, 1987,
and SSHRC, 1976). The Panel and Secretariat on Research Ethics, launched in November 2001
by the three federal research funding agencies, are responsible for coordinating the evolution
and interpretation of the TCPS. The objective is to keep the TCPS up-to-date in response to the
rapidly evolving advances in knowledge, research and technology.
The Tri-Council Policy Statement has been adopted by academic institutions (where
the majority of health research involving humans is carried out) and by some governmental
departments and agencies, including the Department of National Defence (DND) and the
National Research Council (NRC).
Health Canada is establishing its own Research Ethics Board, which will also use
the TCPS, to assess the ethical acceptability of in-house research, research that is contracted to
non-Health Canada researchers which requires ethical review and research applications to CIHR
or other funding agencies. Health Canada has also adopted the International Conference on
Harmonization (ICH) guidelines applying to clinical trials involving the participation of human
subjects.278
National Council on Ethics in Human Research, Protecting Human Research Subjects: Case-Based Learning for Canadian
Research Ethics Boards and Researchers, Ottawa, 2000, p. 7.
278 Despite the care taken by the three federal granting agencies and Health Canada in the international
harmonization of guidelines applying to clinical trials involving human subjects, the Committee would like to be in
no doubt that any Canadian participating in clinical trials from outside Canada be protected by ethical standards that
are at least as stringent as those applying here.
277
223
Since the 1970s, in accord with national policies governing ethics in research
involving humans, some 300 local REBs in Canada have been established in a variety of settings
including universities, government laboratories, community organizations and teaching and
community hospitals. In many teaching hospitals, at least 50% of the research protocols
reviewed by REBs are clinical trials that are sponsored by industry for purposes of testing new
pharmaceutical interventions in human health so as to meet the regulatory licensing
requirements of Health Canada and the USA Food and Drug Administration. In addition, some
company-based and private for-profit REBs have developed over the last few years to allow
REB review of privately sponsored research outside academic institutions, and hence without
access to local REBs. In Alberta, all physicians who are not covered by an institutional REB are
required to use the REB of the Alberta College of Physicians and Surgeons. Newfoundland is
moving towards establishing a single REB for all health research in the province.
In 1989, the National Council on Ethics in Human Research (NCEHR) was
created by the MRC with the support of Health Canada and the Royal College of Physicians and
Surgeons of Canada. NCEHR works to foster high ethical standards for the conduct of research
involving humans across the country by offering advice on the implementation of the TCPS,
primarily through educational activities and site visits to local REBs. NCEHR is now funded by
CIHR, SSHRC, NSERC, Health Canada and the Royal College of Physicians and Surgeons.
12.7.2 Issues with respect to research involving human subjects 279
The Tri-Council Policy Statement, in effect Canada’s national statement of policy for
ethical conduct in health research involving humans, appears to be consistent with world
standards. For the most part, REBs in Canada seem to operate to a high standard, building on
more than two decades of experience and the dedication of many people across the country.
However, the Committee learned that serious gaps have been identified in a number of reports
released in recent years by NCEHR and CIHR, as well as by the Law Commission of Canada.280
A summary of the main issues or gaps identified in these reports is presented below:
•
Although the Tri-Council Policy Statement sets very high standards, there is
currently no oversight mechanism to ensure compliance with these standards.
On the one hand, there is no process of certification, accreditation or regular
inspection of the research ethics review procedures performed by REBs. On
the other hand, and though more REBs are starting to address this issue, few
monitor the conduct of research once a research protocol has been approved.
The following section does not deal with the ethical boundaries surrounding research into human reproductive
health as federal legislation is expected to be tabled soon in the House of Commons. The Committee recognizes
that this area is at the cutting edge of applied research and evolves rapidly. In our view, all research involving
human reproductive material, human organisms derived from such material, other human cell lines, or part of any
of them (including human genes) should be subject to full ethical review by REBs and application of the TCPS and
other applicable legislation.
280 More specifically, see the following four reports: 1) NCEHR (formerly National Council on Bioethics in Human
Research or NCBHR), “Protecting and Promoting the Human Research Subject: A Review of the Function of
Research Ethics Boards in Canadian Faculties of Medicine”, NCBHR Communiqué, Volume 6 (1), 1995, pp 3-28; 2)
Draft report of the Task Force established by the NCEHR to study models of accreditation for human research
protection programs in Canada, September 28, 2001; 3) McDonald, Michael (Principal Investigator), The Governance
of Health Research Involving Human Subjects, research sponsored by the Law Commission of Canada, Ottawa, May 2000;
4) Draft Report of the Task Force on Continuing Review, CIHR, 2001.
279
224
In other words, REBs often have limited knowledge of what happens after
they have approved a research protocol.
•
Some concerns were raised about real or perceived conflicts of interest by
researchers or institutions. Though international consensus suggests that
REBs would be established within research institutions, and that the work of
REBs requires close collaboration with other institutional responsibilities,
REBs must be able to operate free from institutional or researcher pressures.
•
Similarly, a lack of public oversight of private REBs that act independently or
through Contract Research Organizations hired by drug companies raises
concerns about their independence and conflicts of interest.
•
There is a basic need for more resources for REBs. As the work becomes
increasingly
complicated
with
globalization,
technology
and
commercialization, REBs are struggling to find committee chairs or even
members.
•
There are currently no standard training requirements for Canadian REB
members and researchers in research ethics. However, in the absence of
similar Canadian standards, Canadian researchers must meet American
educational standards for American funded health research involving human
subjects.
•
The current ethics review processes are “producer-driven” rather than
“consumer-driven.” In other words, there is a lack of representative
participation in governance on the part of research subjects.
•
There is an urgent need for empirical research on the effects of health
research on human subjects as well as on the effectiveness of the ethics
governance procedures.
To sum up, the governance, transparency and accountability of the ethics review
processes in Canada need to be improved:
(…) we were surprised to see how substantial the gaps were between the ideals expressed
in policy and the ground arrangements for accountability, effectiveness and the other
criteria for good governance.281
The Committee agrees with many
reports that the central concern for Canada is the
public accountability of the overall processes for
assuring the ethics of research involving humans. We
recognize the excellent work that has been done across
Canada by dedicated people in many environments
who have strived to ensure that health research
involving human subjects meets the highest standards
of ethics, and we are confident that the standards
281
Professor Michael MacDonald, Law Commission of Canada.
225
The Committee agrees with many
reports that the central question for
Canada is the public accountability
of the overall processes for assuring
the ethics of research involving
humans.
achieved in Canada are as good as any in the world. Indeed, the report released by the Law
Commission of Canada stated:
We are also very much impressed with the calibre of scholarly, ethics and legal expertise
represented on many REBs. And, at a general level, Canadians scholars are prominent
internationally in research regarding legal and ethical aspects of human subjects
research.282
However,
the We urge the various leading stakeholders of health
research involving human subjects to work together
Committee believes that the present
to develop a governance system for health research
varied structures and approaches to
health
research
ethics
are involving human subjects that can meet the
inconsistent
with
the
public following objectives: the promotion of socially
accountability that an area of this beneficial research; the protection of research
importance requires. Accordingly, participants; and the maintenance of trust between
we urge the various leading the research community and society as a whole.
stakeholders of health research
involving human subjects to work
together to develop a governance system for health research involving human subjects that can
meet the following objectives: the promotion of socially beneficial research; the protection of
research participants; and the maintenance of trust between the research community and society
as a whole.283 This initiative should involve Health Canada, CIHR, other federal funding
agencies, the Panel and Secretariat on Research Ethics, industrial research sponsors, research
institutes, health professional licensing bodies and associations, NCEHR, the newly created
Canadian Association of Research Ethics Boards, etc. Therefore, the Committee recommends:
Health Canada initiate, in collaboration with stakeholders,
the development of a joint governance system for health
research involving human subjects for all research that the
federal government performs, that it funds, and that it uses
in its regulatory activities.
Health Canada, in the development of this ethics
governance system, regard the following components as
essential to progress:
§
282
283
Work initially on all (health) research that the federal
government performs, funds, or uses in its regulatory
activities, to develop an effective and efficient system
of governance that will become accepted as the
standard of care across Canada;
Ibid., p. 300.
These objectives correspond to those that were identified in the McDonald report cited in the previous footnote.
226
§
Give prime importance in the governance system to
effective education and training mechanisms for all
who are involved in research and research ethics,
with certification appropriate to their different
responsibilities;
§
Develop standards, based on the Tri-Council Policy
Statement, the International Conference on
Harmonization guidelines applying to clinical trials
involving human subjects, and other relevant
Canadian and foreign standards, against which
research ethics functions or Research Ethics Boards
can be accredited or certified as meeting the levels of
function that are consistent with the expectations of
Canadians and with those in other countries;
§
Ensure that the Tri-Council Policy Statement is
updated and is maintained at the forefront of
international policies for the ethics or research
involving humans;
§
Remove inconsistencies between the various policies
under which research involving humans is now
governed, and make Canadian standards consistent
with those of other countries that affect Canadian
research;
§
Establish an accreditation or certification process for
research ethics functions that is at arm’s length from
government, but clearly accountable to government;
§
Develop the governance system through open,
transparent and meaningful consultation with
stakeholders.
12.7.3 Animals in research
Because animals are biologically very similar to humans, animals are used in
research to develop new biological knowledge that has a high chance of applicability to the
human condition. However, because animals are not identical to humans, new knowledge that
arises from research with animals must be tested in humans before it is applied to human health.
Ethical concerns about the use of animals by humanity, particularly their use in
research, have been recognized since the 19th century, especially in England. In Canada, these
concerns caused MRC and NRC to undertake studies leading in 1968 to the creation of the
Canadian Council on Animal Care (CCAC). Currently, CCAC receives 87% of its $1.2 million
budget from CIHR and NSERC to cover CCAC services to the research institutions that they
227
fund. CCAC obtains the rest of its revenues from fees for service charged to governmental and
private institutions.
CCAC awards the Certificate of Good Animal Practice  to institutions that it
determines are in compliance with its standards. Compliance is determined through site visits by
assessment panels. CIHR and NSERC make participation in the CCAC program mandatory for
all those who wish to receive their research funding and inform institutions that they will
withdraw funds from institutions that CCAC states are not in compliance with its standards.
The CCAC reports that institutions generally comply with its recommendations.284
In its brief to the Committee, the Coalition for Biomedical Health Research
stated that CCAC standards are recognized both nationally and internationally:
(…) research that complies with CCAC guidelines and policies constitutes ethically
sound and responsible activity.
(…) CCAC’s nationally and internationally accepted standards (…) provide the
needed balance between the protection of animals and the benefits that are gained by the
use of animals in science.285
The formal structure of the CCAC, along with its monitoring program, is
regarded by many, in Canada and abroad, as an optimal model enabling it to work effectively at
arm’s length from and with government.286 In addition, recent report suggested that such a
model could be considered in the field of research involving human subjects. For example:
An interesting model in Canada and one, which I think we need to look at seriously
with regard to an accreditation process for human research, is the Canadian Council on
Animal Care. (…) it now has remarkable credibility with international recognition.
(…) It remains a very interesting and almost uniquely Canadian model. It has federal
fiscal support and yet, functioning on its own, setting standards and having a very
respected accreditation process for animal research.287
The Committee acknowledges that
CCAC performs a world class service to Canadians in a
cost-effective manner. Though there is no doubt that
some Canadians will disagree, mainly those who reject
any use of animals in research, the Committee believes
that the CCAC offers clear evidence that a very sensitive
The Committee acknowledges
that CCAC performs a world
class service to Canadians at a
remarkably low cost.
Louis-Nicolas Fortin and Thérèse Leroux, “Reflections on Monitoring Ethics Review of Research with Human
Subjects in Canada”, NCEHR Communiqué, Summer 1997.
285 Coalition for Biomedical and Health Research, Brief to the Committee, p. 8.
286 Sub-Committee on Ethics, The Ethics Mandate of the Canadian Institutes of Health Research: Implementing a
Transformative Vision, Working Paper prepared for the Interim Governing Council of the CIHR, 10 November 1999,
pp. 18-19.
287 Dr. Henry Dinsdale, Speech to the National Workshop of the NCEHR, March 2001, p. 5.
284
228
area that requires minute by minute attention and care can be effectively managed by an
approach based on:
•
Belief, until proven wrong, that institutions and individuals are seeking to
work in a manner that reflects the values of Canadians;
•
A firm foundation in increasing awareness and training of individuals on
issues and standards;
•
An assessment approach that is based on internationally recognized standards
and that leads to certification of facilities and processes, that involves experts
and lay persons, and that operates in a collegial manner until the point when
there is evidence of wrongdoing and failure to take the necessary corrective
measures.
While not advocating simply copying CCAC’s mechanisms into the challenge of
governance of research involving humans, the Committee believes that much can be learned
from CCAC’s experience. The Committee, however, identifies a gap in the interactions between
the CCAC and the federal government. Though numerous departments and agencies place
themselves under CCAC’s assessment program for research involving animals that is carried out
in their own facilities, and CIHR and NSERC require compliance with CCAC’s standards as a
condition of receiving research funds, we believe that this is not enough. Therefore, we
recommend that:
All federal departments and agencies require compliance
with the standards of the Canadian Council on Animal Care
for:
§
All research that is carried out in federal facilities,
and
§
All research that is funded by federal departments or
agencies but performed outside federal facilities, and
§
All research that is carried out without federal
funding or facilities, but that is submitted to or used
by the federal government for purposes of exercising
its legislated functions.
12.7.4 Privacy of personal health information
All personal information is precious to individuals, but information about
personal health is probably the most sensitive to most people. Health information goes to a
person’s most intimate identity, not only because it directly affects the individual him or herself,
but also because it can affect family members and others, as well as other aspects of the person’s
life, such as his/her employment or insurability.
229
The right to privacy and confidentiality
The right to privacy and
of personal health information is a very important value
confidentiality of personal
for Canadians. Now more than ever, Canadians need
reassurance that their privacy and confidentiality will be
health information is a very
respected in this era of rapidly advancing technology.
important value for Canadians.
However, the quality of their health and health care is
also a value that Canadians cherish very dearly. Health care providers, health care managers and
health researchers need access to personal health information to improve the health of
Canadians, strengthen health services and sustain a high quality health care system. The present
challenge for Canadians is to set acceptable limits around the right to privacy, on the one hand,
and the need for access to information (by health care providers, managers and researchers) on
the other, in order to achieve an appropriate balance between them.
The Personal Information Protection and Electronic Documents Act or PIPEDA,
promulgated in June 2000, has stimulated intensive debate and study of this question in the past
two years. The health sector had not recognized the potential effects of this legislation on health
research and health care management until the legislative review of the Bill was well advanced
through the House of Commons. Representatives from various parts of the health sector
therefore intervened strongly in hearings before this Senate Committee in late 1999. Their
testimony clearly demonstrated that the health sector was not part of the broad consensus
supporting the bill, and also that there was no consensus within the health sector itself as to an
appropriate solution to the issues about privacy of health information which are raised by the
bill. As a result, the Committee concluded that there was a significant degree of uncertainty
surrounding the application of PIPEDA to personal health information that required
clarification. In response to the Committee’s recommendation288, therefore, the federal
government decided to delay the application of PIPEDA to personal health information until
January 1, 2002. This delay would allow one extra year from the time of proclamation to
motivate government and relevant stakeholders in the health sector to resolve these uncertainties
and formulate a solution that is appropriate for the protection of personal health information.
The Committee is pleased that several groups in the health sector have seriously
addressed many of the concerns raised by PIPEDA, and in particular, the need to protect
personal health information, while at the same time allow restricted use of such information for
essential purposes such as health research and health care management (which includes the
provision, management, evaluation and quality assurance of health services).
Over the past two years, CIHR has undertaken a wide-range analysis of the
privacy issues and initiated a broad consultation process with various stakeholders, culminating
in recommendations for the interpretation and application of PIPEDA to health research.289
CIHR’s recommendations set out precise legal wording in the form of proposed
regulations under PIPEDA that, without changing the Act, would facilitate its interpretation and
application in the area of health research. These recommendations were presented to the
Second report of the Standing Senate Committee on Social Affairs, Science and Technology, 36th Parliament, 2nd
Session, 6 December 1999.
289 CIHR, Recommendations for the Interpretation and Application of the Personal Information Protection and Electronic Documents
Act in the Health Research Context, 30 November 2001. CIHR’s proposed regulations are available on the CIHR
Website at http://www.cihr.ca/about_cihr/ethics/recommendations_e.pdf.
288
230
Committee as the most realistic, short-term solution, recognizing that PIPEDA would not likely
be amended before January 1, 2002. CIHR emphasizes that its proposed regulations, though
significantly limited by the current wording of PIPEDA, could nevertheless provide the
necessary guidance to help clarify certain ambiguous terms in a manner that will achieve the
objectives of the Act without impeding vitally important research. CIHR is also of the view that
regulations, as legally binding instruments, are necessary to enable researchers, and Canadians in
general, to understand what the law expects of them and how to govern their conduct
accordingly. Furthermore, such regulations could provide the necessary basis on which
provinces and territories could develop substantially similar legislation before January 1, 2004, as
provided for by PIPEDA.290
Finally, CIHR recognizes the need for further work with various stakeholders
and the provinces to establish an overall, more coherent, comprehensive and harmonized legal
or policy framework for the health sector. Ultimately, whatever law or policy governs this area
needs to be interpreted and applied in a flexible and feasible manner, and users need to develop
more detailed guidelines for promoting best information practices in their daily work.
The Committee has considered the regulations proposed by CIHR and we
commend CIHR for its efforts in this regard. We fully support the intent of the proposed
regulations. As stated in its Fourteenth Report dated December 14, 2001291, the Committee
believes that these regulations should be given serious consideration and, therefore, we
recommend that:
Regulations such as those proposed by the Canadian
Institutes of Health Research receive their fullest and fairest
consideration in discussions about providing greater clarity
and certainty of the law with the view to ensure that its
objectives will be met without preventing important
research to continue to better the health of Canadians and
improve their health services.
A second and parallel initiative was undertaken by a Privacy Working Group
composed of representatives from the Canadian Dental Association, the Canadian Healthcare
Association, the Canadian Medical Association, the Canadian Nurses Association, the Canadian
Pharmacists Association, and the Consumers Association of Canada. The Privacy Working
Group addressed the need to access personal health information for the purposes of health care
management. In a report submitted to Health Canada, the Privacy Working Group enunciated
the following principles.292
•
Confidentiality of information in health care delivery is of great importance
to Canadians. Fear of disclosure to others of personal health information is
Indeed, the Act gives provinces and territories until January 1, 2004, to develop substantially similar legislation.
Standing Senate Committee on Social Affairs, Science and Technology, Fourteenth Report, 37th Parliament, 1st
Session, 14 December 2001.
292 Privacy Working Group, Privacy Protection and Health Information: Understanding the Implementation Issues, report
submitted to Health Canada, December 2000.
290
291
231
likely to harm the trust that is essential in the relationship between patients
and providers, and hence limits the willingness to seek care, or to impart
information that is important to patient care.
•
While an individual’s right to privacy of personal health information is of
great importance, it is not absolute. This right is subject to reasonable limits,
prescribed by law, to appropriately balance the individual’s right to privacy
and societal needs, as can be reasonably justified in a free and democratic
society.
•
Individuals have the right to: privacy of their personal health information;
decide whether and under what conditions they want such information
collected, used or disclosed; know about and have access to their health
records and ensure their accuracy; and have recourse when they suspect a
breach of their privacy.
•
In parallel, health care providers and organizations have obligations to: treat
personal health information as confidential; safeguard privacy and
confidentiality using appropriate security methods; use identifiable
information only with the individual’s consent except when the law requires
disclosure or there is compelling evidence for societal good under strict
conditions; restrict the collection, use and disclosure of personal health
information to de-identified information, unless the need for identifiable
information is demonstrated; and, implement policies, procedures and
practices to achieve privacy protection.
When the Committee met in December 2001 to examine progress made with
respect to the application of PIPEDA to health care, we were informed that, while the members
of the Privacy Working Group agreed on many issues, they had not yet achieved a definitive and
unified position. The Privacy Working Group was of the view that progress towards achieving
consensus would require the active involvement and leadership of the federal government. The
federal government, however, has taken the position that the concerns of the Privacy Working
Group should be resolved between the members of the group and the Privacy Commissioner.
The Committee believes that further guidance and direction is needed in respect
of the provision, management, evaluation and quality assurance of health services. For this
purpose, constructive and collective efforts by all affected parties must be made to address the
relevant issues, and government must lead by example. As stated in its 14th Report, the
Committee recommends that:
Discussions continue among stakeholders, the Privacy
Commissioner, and those federal and provincial
government departments involved with the provision,
management, evaluation and quality assurance of health
services.
232
Like other Canadians, the
members of the Committee place a very The Committee believes that Canadians
must engage in a careful and thoughtful
high priority on the protection of personal
health information. Though protection of consideration of the reasons why personal
personal
health
information
is information is needed for health research
understandably of very high importance, and health care management purposes, the
we must recognize what else is at risk if
social benefits that accrue to Canadians
access is summarily rejected because of individually and collectively as a result,
perceived threats to the privacy and and the conditions that must be met before
confidentiality. Rather than give absolute
access is allowed.
status to the right to privacy, the
Committee believes that Canadians must engage in a careful and thoughtful consideration of the
reasons why personal information is needed for health research and health care management
purposes, the social benefits that accrue to Canadians individually and collectively as a result, and
the conditions that must be met before access is allowed. Because of its long-standing
responsibility in funding health care and financing health research, the federal government
should play a major role in promoting greater public awareness and facilitating greater debate in
regard to these issues.
CIHR’s Draft Case Studies Involving Secondary Use of Personal Information in Health
Research (December 2001) constitutes an excellent model for encouraging discussion and broader
understanding through very concrete examples of real health research projects involving
secondary use of personal information. Parallel efforts by others to develop similar case studies
illustrating why and how personal information is used for health care management purposes
would also be extremely valuable. In light of the above, the Committee recommends that:
The federal government, through the Canadian Institutes of
Health Research and Health Canada, together with other
relevant stakeholders, design and implement a program of
public awareness to foster in Canadians a broad
understanding of:
§
the nature of, and reasons for, the extensive
databases containing personal health information
that must be maintained to operate a publicly
financed health care system, and
§
the critical need to make secondary use of such
databases for health research and health care
management purposes.
This being said, the Committee believes that if Canadians are to allow restricted
access to personal health information for essential functions, such as health research and health
care management, it is imperative that their personal health information be adequately protected.
We wish to emphasize the importance of ensuring, all the while, that Canadians remain
confident that the privacy of their personal health information is being respected. We see here,
once again, a major federal role to promote a fulsome discussion of the relevant ethical issues
233
and examination of the control and review mechanisms necessary for ensuring that the
secondary use of personal information for health care management and health research purposes
is conducted in an open, transparent and accountable manner. Therefore, the Committee
recommends that:
The federal government, through the Canadian Institutes of
Health Research and Health Canada, together with other
relevant stakeholders, be responsible for promoting:
§
thoughtful discussion and consideration of the
ethical issues, particularly informed consent issues,
involved in the secondary use of personal health
information for health care management and health
research purposes;
§
thorough examination of the control and review
mechanisms needed for ensuring that databases
containing personal health information are
effectively created, maintained and safeguarded and
that their use for health care management and health
research purposes is conducted in an open,
transparent and accountable manner.
12.7.5 Genetic privacy
The discussion above has addressed issues of privacy of personal health
information arising from databases from the existing health care system. The Committee
recognizes that new technologies allowing analysis of genes is also introducing new
considerations into the management of personal health information. The exploding abilities to
link DNA sequences to disease offer the potential both to greatly increase the health care of the
individual but also to intrude into the privacy of both the individual and his or her relatives. In
addition, these technologies allow the prediction of diseases that have not yet become evident.
However, a majority of these predictions represent increased probability of the incidence of the
disease, the test being often statistical in nature (e.g., the likelihood is twice that of the general
population) rather than absolute (as for Huntington’s disease, for example).
The application of the new
genetic technologies to human health is as
yet in its infancy, but at least some of the
potential benefits and harms are becoming
evident. The concerns include the fear that
access to genetic information on individuals
might affect their employability or
insurability.
The
Committee
is
pleased
that
interdepartmental discussions are underway
within the federal government on this wide
range of issues, and encourages their pursuit
to provide guidance and advice on means of
addressing these complex issues in the best
interests of Canadians.
234
The Committee is pleased that interdepartmental discussions are underway
within the federal government on this wide range of issues, and encourages their pursuit to
provide guidance and advice on means of addressing these complex issues in the best interests
of Canadians.
12.7.6 Potential situations of conflict of interest
Advances in human health often involve participation of researchers in academia,
in government and in industry. The boundaries between these are becoming increasingly
blurred, and much mutual trust and collaboration is required between them. For example:
•
The large majority of published health research in Canada is done by
researchers in academic institutions, who obtain funding from government,
philanthropic and industrial sources.
•
Academic researchers are increasingly entrepreneurial, and are the source of
many start-up companies that are providing fast economic growth in the
biological revolution.
•
Industries obtain many of their ideas for new commercial entities, including
new interventions in health, from academic research, and are starting to
establish research centres in academia in exchange for right of first refusal on
intellectual property.
•
Government regulates health interventions, as well as contributing to
knowledge through its in-house research. Regulations depend on research
carried out by industry, often in academic institutions, which is assessed by
governmental scientists, who may call on academic scientists for advice and
other assistance.
The potential for conflicts of interest are obvious, as are the concerns that, for
example, industrial interests in protecting intellectual property and commercial interests might
adversely affect the performance or publication of research carried out in public institutions or
with public funds. Media attention has rightly focused on instances when these fears appear to
have been realised.
The
Committee
acknowledges that industrial research is The Committee is of the view that the majority
an essential component of health of industry works to high standards of ethics,
fully consistent with the expectations of
research and health care. In fact, our
growing abilities to promote health and Canadians. Indeed, companies cannot expect to
to prevent, diagnose or treat disease are survive in today’s world if they flout society’s
very largely due to industry.
In expectations.
addition, despite a number of
publicized cases with evidence of conflict of interest, the Committee is of the view that the
majority of industry works to high standards of ethics, fully consistent with the expectations of
Canadians. Indeed, companies cannot expect to survive in today’s world if they flout society’s
expectations.
235
However, the Committee understands that the growing role of industry in
Canada’s health research spectrum, particularly in clinical trials, is a cause for concern. This was
highlighted in a recent editorial by the International Committee on Medical Journal Editors,
which laid out the ground rules for avoiding conflict of interest in publications.293 In particular,
there is a need to find an appropriate balance between clinical research performed in the
academic sector, the ability to compare different treatments for the same disease, the focus of
research on diseases in which profits are most likely, (e.g., diseases of wealthy as opposed to
poor nations), the publication of negative results (e.g., the need for a registry of all clinical trials),
and related areas.
The Committee welcomes the work of CIHR in expanding the collaborative
health research programs between academic and industrial research through the UniversityIndustry Program and the CIHR/Rx&D294 Program. We understand that CIHR partnerships
with industry need to be encouraged. However, there is a need to consider whether explicit
guidelines should be developed; these guidelines could assist in determining the impact of
ethically problematic areas in CIHR’s relations with industry. We have learned that CIHR has
set up a working group to study this issue. Therefore, the Committee recommends that:
The Canadian Institutes of Health Research, in partnership
with industry and other stakeholders, continue to explore
the ethical aspects of the interface between the sectors with
a view to ensuring that the collaborations and partnerships
function in the best interests of all Canadians.
293
294
See Canadian Medical Association Journal, 18 September 2001, Vol. 165, pp. 786-788.
Partnership between CIHR and Canada’s Research-Based Pharmaceutical Companies.
236
Part VI:
Health Promotion and
Disease Prevention
237
CHAPTER THIRTEEN
H EALTHY P UBLIC P OLICY : H EALTH B EYOND H EALTH C ARE
As the Committee has noted in Volume One, it is clear that the health care
system is an important contributor to good health. Services as widely varied as childhood
immunization, medications to reduce high blood pressure or prevent asthma, and heart surgery
all contribute to health and well-being. In fact, the Canadian Institute for Advanced Research
estimates that 25% of the health of the population is attributable to the health care system alone
(see Chart 13.1).295 Obviously, it is important that the health care sector is fiscally sustainable
and continually strives to provide timely services of high quality. Many of the recommendations
made by the Committee in this report are designed specifically to achieve sustainability,
timeliness, quality and efficiency in health care delivery, all with the objective of improving the
health and well-being of Canadians.
CHART 13.1
ESTIMATED IMPACT OF DETERMINANTS OF HEALTH ON THE
HEALTH STATUS OF THE POPULATION
Health Care System 25%
Biology and Genetic
Endowment - 15%
Physical Environment
- 10%
Social and Economic
Environment - 50%
Source: Estimation by the Canadian Institute for Advanced Research, Graph available on Health Canada's Website.
295
Volume One, p. 81.
239
The remaining 75% of the health of the Canadian population is determined by a
multiplicity of factors outside the health care system. These factors, which are often referred to
as the “non-medical determinants of health,” include: biology and genetic endowment; income
and social support; education and literacy; employment and working conditions; physical
environment; personal health practices and skills; early childhood development; gender; and
culture.
Throughout its study, the Committee was told repeatedly that, to maintain and
improve health status, governments should, in addition to sustaining a good health care system,
develop public policies and programs that address these non-medical determinants of health.
Such policies and programs encompass a wide spectrum of interrelated activities, ranging from
health and wellness promotion, through illness and injury prevention and public health and
health protection, to broader population health strategies. These are all components of a healthy
public policy:
•
Health and Wellness Promotion: these activities are designed to encourage
Canadians to take a more active role in improving their health through, for
example, exercise and healthy food and lifestyle choices.
•
Illness and Injury Prevention: consists of activities directed toward
decreasing the probability of individuals, families and communities
contracting specific diseases and injuries. Prevention activities seek to reduce
unwanted health outcomes by reducing or eliminating associated risk factors.
Immunization, early detection of disease through screening programs and
reduction of exposure to potentially injurious activities (use of seat belts in
the car, fences around pools, safer roads, etc.) are examples of illness and
injury prevention.
•
Public Health and Health Protection: are intended to protect the health of
Canadians against current and emerging health threats. This includes the
surveillance and control of disease outbreaks and trends (in both infectious
and chronic illnesses) and the monitoring of safety and effectiveness of a
variety of products (such as food, drugs and medical devices), as well as
environmental health assessments.
•
Population Health Strategies: include a wide range of government policies
and programs that can influence income redistribution, access to education,
housing, water quality, workplace safety, and so on – all major determinants
of the health of a population.
•
Healthy Public Policy: is a concept that encompasses health and wellness
promotion, disease and injury prevention, public health and health
protection, as well as population health. Under a healthy public policy
strategy, every major action, program and policy of government is evaluated
in terms of its implications for the health of Canadians. Healthy public policy
requires an intersectoral approach – one that engages the several sectors that
are responsible for, or affect, each of the determinants of health.
There is increasing evidence that investing more human and financial resources
in promotion, prevention, protection and population health can significantly improve the health
240
outcomes for a given population. In the end, this can reduce the demand for health services and
the pressures on the publicly funded health care system.
The Committee was told and is aware, however, that promotion, prevention,
protection and population health activities do not claim anything like the close focus and high
status that health care has in the eyes of the Canadian public and, obviously, public policy
decision makers. Although it is clear that, collectively, the non-medical determinants of health
have far greater impact on the health of the population than health care, the fact is that the very
positive outcomes from promotion, prevention, protection and population health activities are
generally visible only over the longer term, and thus they are less newsworthy. Because they are
less likely to capture the attention of the general public, they are less attractive politically.
The
Committee
believes that there are enormous
potential benefits to be derived from
health and wellness promotion,
disease and injury prevention, public
health and health protection and
population
health
strategies,
measured primarily in terms of
improving the health of Canadians,
but also in terms of their positive
long-term financial impact on the
health care system.
The Committee believes that there are enormous
potential benefits to be derived from health and
wellness promotion, disease and injury
prevention, public health and health protection
and population health strategies, measured
primarily in terms of improving the health of
Canadians, but also in terms of their positive
long-term financial impact on the health care
system.
The focus on wellness was recently addressed by the Government of
Newfoundland and Labrador in its five-year strategic health plan. The first goal of this plan
incorporates a wellness strategy built on health promotion, illness and injury prevention, health
protection and early child development.296 The Committee applauds such initiative.
The Committee strongly supports the opinion of many witnesses that additional
funding in these fields is essential for Canada to develop healthy public policies that focus on
improving the health and well-being of the population, rather than concentrating only on curing
people when they get sick. Moreover, the Committee believes that the federal government can
and must play a leadership role in this area.
In this chapter, the Committee sets out its findings and recommendations with
respect to the role of the federal government in promoting healthy public policies. Section 13.1
provides information on trends in disease and injury in Canada. Section 13.2 presents data on
the economic burden of disease and injury. Section 13.3 discusses the need for a national
chronic disease prevention strategy. Section 13.4 examines the concerns raised with respect to
public health, health protection and health and wellness promotion. Section 13.5 discusses the
broader context of the determinants of health, and highlights the possibilities of moving toward
healthy public policy in Canada.
Minister of Health and Community Services, Healthier Together: A Strategic Health Plan for Newfoundland and
Labrador, September 2002 (www.gov.nf.ca/health/strategichealthplan).
296
241
13.1
Trends in Diseases297
During the twentieth century, the application of new knowledge and technology
in two key areas – public health (through the provision of clean water and sanitation) and health
care – has significantly altered the pattern of disease. The causes of mortality have shifted away
from acute, infectious diseases to non-communicable (chronic) diseases (see Table 13.1).
Chronic diseases, such as cancer and cardiovascular disease, are now the leading
causes of death and disability in Canada, with accidental injuries the third most common.
However, some infectious diseases once thought conquered – such as tuberculosis – are reemerging as the infectious agents that cause them have developed resistance to antibiotics.
Rapid international transport of foods and people also increases the opportunities for the spread
of infectious diseases.
TABLE 13.1
LEADING CAUSES OF DEATH (AGE-STANDARDIZED)
RATE PER 100,000
1921-25
Cardiovascular and renal disease
Influenza, bronchitis and pneumonia
Diseases of early infancy
Tuberculosis
Cancer
Gastritis, duodenitis, enteritis and colitis
Accidents
Communicable diseases
All causes
1996-97
Cardiovascular diseases (heart disease and stroke)
Cancer
Chronic obstructive pulmonary diseases
Unintentional injuries
Pneumonia and influenza
Diabetes mellitus
Hereditary/degenerative diseases of the central nervous system
Diseases of the arteries, arterioles and capillaries
All causes
221.9
141.1
111.0
85.1
75.9
72.2
51.5
47.1
1,030.0
240.2
184.8
28.4
27.7
22.1
16.7
14.7
14.3
654.4
Source: Susan Crompton, “100 Years of Health”, Canadian Social Trends, Statistics Canada, Catalogue
11-008, No. 59, Winter 2000, p. 13.
Most of the information contained in this section can be found in Volume Two, Chapter Four, “Disease
Trends”, pp. 45-55.
297
242
13.1.1 Infectious diseases
In the early 1920s, heart and kidney diseases were the leading causes of death,
followed by influenza, bronchitis and pneumonia, and diseases of early infancy. Tuberculosis
took more lives than cancer. Intestinal illnesses such as gastritis, enteritis and colitis, and
communicable diseases such as diphtheria, measles, whooping cough and scarlet fever, were also
common causes of death.
Public health programs, combined with the large-scale introduction of vaccines
and antibiotics, have led to a major shift in the pattern of diseases, with a move away from
infectious diseases to chronic diseases. Many infectious diseases persist, however. Indeed, Dr.
Paul Gully, Director General at the Centre for Infectious Disease Prevention and Control
(Health Canada), told the Committee that the death rate from infectious diseases in Canada has
increased since 1980.298 He pointed to seven infectious disease trends that, in his view, threaten
Canadians:
•
Many infectious diseases, such as AIDS and hepatitis C, persist;
•
There are new and emerging infectious disease threats, including mad cow
disease and E. coli, as well as the West Nile Virus;
•
Global travel and migration can quickly introduce new diseases into the
population;
•
Environmental changes, such as global warming, deforestation, and tainted
water, may increase the spread of infections;
•
Behavioural changes, particularly high-risk sexual practices and drug use, can
foster the spread of HIV and other infectious diseases;
•
Public resistance to immunization could cause a resurgence in, for example,
polio and measles;
•
Anti-microbial resistance in infectious organisms may reduce the
effectiveness of traditional curative measures, such as antibiotics.299
13.1.2 Chronic diseases
According to the National Population Health Survey, in 1998-1999, more than
half of all Canadians, or 16 million people, reported suffering from a chronic condition. The
most common were allergies, asthma, arthritis, back problems, and high blood pressure.300
Cardiovascular disease is the leading cause of death in Canada, accounting for
37% of all deaths. Mortality from cardiovascular disease has been declining in Canada since
1970 among both men and women, although more slowly in women. Cancer in its major forms
Dr. Paul Gully, Brief to the Committee, 4 April 2001, p. 2.
Dr. Paul Gully, op. cit., p. 5.
300 Dr. Christina Mills, Brief to the Committee, 4 April 2001, p. 4.
298
299
243
is the second-leading cause of death and is the leading cause of potential years of life lost301
before age 70 (accounting for over one-third of all potential years of life lost). Cancer is
primarily a disease of older Canadians; 70% of new cancer cases and 83% of deaths due to
cancer occur among those who are 60 or older. Death rates from cancer have declined slowly
for men since 1990, but have remained relatively stable among women over the same period.
However, lung cancer rates for women are now four times higher than they were in 1971.
13.1.3 Injury
In 1995-1996, injuries accounted for 217,000 hospital admissions in Canada. By
far the highest rates of hospital admissions due to injuries were among Canadians over the age
of 65. Falls remain an important cause of injury among seniors and children under 12. Among
children, poisoning was the next most important cause of injury-related admission to hospital in
1996. For adolescents and adults under the age of 65, motor vehicle accidents constituted the
second most important cause. The vast majority of injuries are accidental (about 66%).302
13.1.4 Mental health
The National Population Health Survey of 1994-1995 found that approximately
29% of Canadians experienced a high level of stress; 6% of Canadians felt depressed; 16% of
Canadians reported that their lives were adversely affected by stress; and 9% had some cognitive
impairment such as difficulties thinking and remembering.
Work prepared for the
Federal/Provincial/Territorial Advisory Network on Mental Health estimated that about 3% of
Canadians suffer from severe and chronic mental disorders that can cause serious functional
limitations and social and economic impairment, such as bipolar personality and schizophrenia.
This translates into approximately one in every 35 Canadians over 15 years of age.303
Mental stress and disorders leading to mental illness can strike at different
periods in life. Autism, behavioural problems and attention deficit disorder most commonly
affect children. Adolescence is the typical onset of eating disorders and schizophrenia.
Adulthood is a time when depression may manifest itself more obviously. Senior years are
marred by Alzheimer’s and other forms of dementia, although depression is also often identified
in the elderly.
Because of the importance of mental health among Canadians, the Committee
will hold specific hearings and table a separate report to present its findings and
recommendations to the federal government.
The internationally recognized indicator of “potential years of life lost” refers to the number of years of life lost
when a person dies before a speci fied age, say age 75. A person dying at age 25, for example, has lost 50 years of
life.
302 Federal/Provincial/Territorial Advisory Committee on Population Health, Toward a Healthy Future – Second Report
on the Health of Canadians, Ottawa, 1999, p. 19.
303 Kimberly McEwan and Elliot Goldner, Accountability and Performance Indicators for Mental Health Services and Supports:
A Resource Kit, prepared for the Federal/Provincial/Territorial Advisory Network on Mental Health, Ottawa, 2000,
p. 30.
301
244
13.2
The Economic Burden of Illness
The only available estimates on the economic burden of illness and injury in
Canada were published in 1997 by Health Canada; they apply to 1993. That year, the total cost
of illness and injury was estimated to be $156.9 billion, or 22% of GDP. Direct costs (such as
hospital care, physician services and health research) amounted to $71.7 billion, while indirect
costs (such as lost productivity) accounted for $85.1 billion.
As Table 13.2 shows, the diagnostic categories with the highest total costs were
cardiovascular diseases ($19.7 billion or 15.3% of total costs), musculoskeletal diseases ($17.8
billion or 13.8%), injuries ($14.3 billion or 11.1%), cancer ($13.1 billion or 10.1%), respiratory
diseases ($12.2 billion or 9.4%), diseases of the nervous system ($9.6 billion or 7.4%), and
mental illness ($7.8 billion or 6%). Infectious diseases accounted for 2.0% of the total economic
burden of illness ($2.6 billion).
TABLE 13.2
ECONOMIC BURDEN OF ILLNESS BY DIAGNOSTIC CATEGORY, 1993
(IN MILLIONS OF DOLLARS)
Infectious/Parasitic
Cancer
Endocrine/Related
Blood Diseases
Mental Disorders
Nervous System/Sense
Cardiovascular
Respiratory
Digestive
Genitourinary
Pregnancy
Skin/Related
Musculoskeletal
Birth Defects
Perinatal Conditions
Ill-defined Conditions
Injuries
Well-Patient Care
Other
TOTAL
DIRECT
COSTS1
Percent
Cost
1.8
786
7.3
3,222
3.0
1,334
0.6
274
11.4
5,051
INDIRECT
COSTS
Percent
Cost
2.2
1,857
11.6
9,845
2.5
2,086
0.2
173
3.3
2,787
TOTAL
COST
Percent
Cost
2.0
2,643
10.1
13,067
2.6
3,419
0.3
447
6.1
7,839
5.1
16.7
8.6
7.5
5.1
2,252
7,354
3,787
3,326
2,248
8.6
14.5
9.9
3.4
0.9
7,321
12,368
8,393
2,920
786
7.4
15.3
9.4
4.8
2.3
9,573
19,722
12,181
6,247
3,034
4.6
2.0
5.6
0.7
1.2
2,025
892
2,460
305
551
0.8
0.1
18.0
0.4
0.4
690
122
15,328
334
332
2.1
0.8
13.8
0.5
0.7
2,715
1,014
17,788
639
883
4.2
7.1
6.2
1.2
100.0
1,851
3,122
2,741
549
44,130
3.0
13.2
0.0
7.1
100.0
2,517
11,222
0
6,040
85,123
3.4
11.1
2.1
5.1
100.0
4,368
14,343
2,741
6,589
129,253
A total of $27.6 billion in direct costs were not classifiable by diagnostic category.
Source: Laboratory Centre for Disease Control (Health Canada), Economic Burden of Illness in Canada, 1993.
1997, pp. 10-11.
245
13.3
The Need for a National Chronic Disease Prevention Strategy
These statistics suggest that chronic diseases are not only the leading cause of
death and disability in Canada but account for the largest proportion of the economic burden of
illness. Moreover, information given to the Committee indicates that about two-thirds of total
deaths in Canada are due to the following chronic diseases: cardiovascular disease (heart and
stroke), cancer, chronic obstructive lung disease (bronchitis and emphysema) and diabetes. 304
More specifically:
•
Cardiovascular diseases, including coronary artery disease and stroke, are
responsible for 38% of all deaths among Canadians each year, and are one of
the leading reasons for hospitalization.
•
Cancer is the second most important cause of death in Canada, responsible
for 29% of all deaths each year, and accounting for almost one third of
potential years of life lost.
•
Chronic obstructive lung disease is the fifth most common cause of death in
Canada and is the only cause of death that is increasing in prevalence.
Asthma is the most common chronic respiratory disease of children; it is the
leading cause of hospital admission and school absenteeism among children
in Canada.
•
Over one million Canadians live with diabetes. It is a major cause of
coronary heart disease and a leading cause of blindness and limb
amputations. Among Aboriginal Canadians, the prevalence of diabetes is
three times as high as among other Canadians. In total, diabetes accounts
annually for about 25,000 potential years of life lost.
During its study, the Committee was told repeatedly that most chronic diseases
are entirely preventable. Moreover, a report prepared by Terrence Sullivan, Vice President and
Head, Division of Preventive Oncology, Cancer Care Ontario, indicates that many chronic
diseases – particularly cardiovascular disease, cancer, chronic obstructive lung disease and
diabetes – share common causes. More specifically, poor diet, lack of exercise, smoking, stress
and excessive alcohol intake – all lifestyle issues – are recognized as the leading
social/behavioural risk factors for these diseases. These risk factors are also often associated
with other physical and physiological states that elevate the risk of chronic disease – including
overweight/obesity, high blood pressure/hypertension, high blood cholesterol/hypercholesterolemia, and glucose intolerance/diabetes.305 If reduced or eliminated, these
common lifestyle risk factors would greatly lessen the prevalence and economic burden of these
chronic diseases.
The fact that the vast majority of Canadians are exposed to one or more of these
common risk factors306 suggests that the overall health status of the population could be
Advisory Committee on Population Health, Advancing Integrated Prevention Strategies in Canada: An Approach to
Reducing the Burden of Chronic Diseases, Discussion Paper, 10 June 2002.
305 Terrence Sullivan, Preventing Chronic Disease and Promoting Public Health: An Agenda for Health System Reform, August
2002.
306 An analysis from the 2000 Canadian Community Health Survey indicated that 65% of Canadians showed more
than one risk factor for chronic disease.
304
246
substantially improved by a stronger focus on chronic disease prevention, in parallel with
controlling infectious diseases. In recognition of this fact and the potential for joint action,
major national health organizations (Canadian Cancer Society, Canadian Diabetes Association,
Heart and Stroke Foundation of Canada, Canadian Council for Tobacco Control, Coalition for
Active Living, and Dieticians of Canada) have recently come together with Health Canada to
form the Chronic Disease Prevention Alliance of Canada (CDPAC).
In addition to this new strategic alliance, there are also several important nationwide chronic disease initiatives, such as: the Canadian Diabetes Strategy, Canadian Heart Health
Initiative, Canadian Cardiovascular Disease Action Plan, Canadian Strategy for Cancer Control,
and many other federal/provincial/territorial joint initiatives.
However, the Committee was told that there is a need to integrate, coordinate
and strengthen all these diverse initiatives into a national chronic disease prevention strategy.
According to Sullivan, Canada should build from the knowledge, success and failure of the
existing initiatives to push the agenda forward with renewed vigour.307
In addition to better integration of the various current initiatives, there is a need
for:
•
Increased federal leadership, including political leadership and sustained
financial and human resources.
•
Development of a common vision across all the major chronic disease
organizations, leading to a set of specific goals and objectives.
•
Partnerships with the provinces/territories and stakeholders in private sector
and non-government organizations.
•
Surveillance systems for chronic disease and associated risk factors that will
also track progress toward the attainment of strategic goals.
•
Greater investment in prevention initiatives that are tailored to regional
differences.
The national chronic disease prevention strategy should incorporate a
combination of public education efforts, mass media programs and policy interventions. These
interventions should be implemented through multiple settings (primary health care, education
system, workplace, community) and address the need of various priority populations (e.g.,
Aboriginal Canadians, rural communities, women, etc.).
The direct benefits of a national chronic disease prevention strategy would be
substantial, encompassing the avoidance of unnecessary premature disease, enhanced population
health status, improved productivity and reduced health care costs. Estimates are that over a ten
year period the decreased health care costs resulting from reduced utilization of hospital and
doctor services could be as much as 10%.308
307
308
Terrence Sullivan, op. cit., p. 7.
Terrence Sullivan, op. cit., p. 10.
247
The Committee agrees with many witnesses that now is the time for the federal
government to lead a national initiative to reduce the prevalence and economic burden of
chronic disease in Canada. In our view, the federal government is particularly well suited to
assume such leadership, given its long-standing role in health promotion and disease prevention
and its legislative authority with respect to health surveillance and health protection.
A
national
chronic
disease prevention strategy will improve
the health of Canadians and contribute
to the sustainability of the publicly
funded health care system.
The
Committee believes that the Chronic
Disease Prevention Alliance of Canada
can assist with the design and
implementation of this strategy.
The Committee agrees with many witnesses
that now is the time for the federal government
to lead a national initiative to reduce the
prevalence and economic burden of chronic
disease in Canada. In our view, the federal
government is particularly well-suited to
assume such leadership, given its longstanding
role in health promotion and disease prevention
and its legislative authority with respect to
health surveillance and health protection.
While we feel that the
federal government must act as a leader,
it is important to collaborate with provincial/territorial governments, the private sector, and
voluntary health sector partners – if we are to effect the needed changes. Therefore, the
Committee recommends that:
The federal government, in collaboration with the provinces
and territories and in consultation with major stakeholders
(including the Chronic Disease Prevention Alliance of
Canada), implement a National Chronic Disease Prevention
Strategy.
The National Chronic Disease Prevention Strategy build on
current initiatives through better integration and
coordination.
The federal government contribute $125 million annually to
the National Chronic Disease Prevention Strategy.
Specific goals and objectives should be set under the
National Chronic Disease Prevention Strategy. The
outcomes of the strategy should be evaluated against these
goals and objectives on a regular basis.
248
13.4
Strengthening Public Health and Health Promotion
A report produced for the Committee by Dr. Joseph Losos, Director of the
Institute of Population Health (University of Ottawa), states that public health/health protection
often functions silently as the sentinel for health – through monitoring, testing, analyzing,
intervening, informing, promoting and preventing – until something happens unexpectedly. In
such instances (such as: Walkerton, food-borne outbreaks, infectious disease outbreaks,
increasing chronic disease clusters), the crisis and profile of public health incidents quickly reach
major proportions. Perhaps most important, often this occurs at a great cost in human
suffering, possibly death and financial expense for often preventable occurrences.309
According to the Canadian Medical Association Journal, a major problem with public
health interventions is that funding is low, often unstable or inconsistent. The result is that the
public health care infrastructure in Canada is under considerable stress.310
Another major barrier to effective public health is fragmentation: all provinces
and territories have separate public health legislation. The federal government also has direct
statutory responsibilities for regulatory aspects of public health (e.g., disease surveillance, food
and drugs, devices, biologics, some environmental health, consumer products). This welter of
regulatory authority results in complex negotiations among the various “players” and less than
optimal coordinated activity. Such fragmentation limits the effectiveness of public health efforts
and results in a lack of clear accountability and leadership. In the view of many experts, there is
an immediate need for strong federal leadership to rectify this unhappy and less-than-productive
situation.311
Similarly, government funding for health promotion is very low relative to
spending on health care. In addition, health promotion is practised both by governments and
non-government organizations. While most of these efforts have proven effective, their
fragmentation has resulted in a poorly coordinated or integrated health promotion infrastructure.
More important, no health goals have been set nationally for health promotion as there have
been in the United States.312
The Committee believes strongly that programs and policies with respect to
public health, health protection and health and wellness promotion are critical to enhancing the
health of Canadians. We believe that a coordinated and integrated approach is needed and that,
once again, the federal government can and should play a leadership role. We believe also that
more funding is needed in this area. Given its statutory authority with respect to health
protection and its long-standing role in health promotion, the federal government should devote
more funding to health protection and promotion. Therefore, the Committee recommends that:
The federal government ensure strong leadership and
provide additional funding to sustain, better coordinate and
Dr. Joseph Losos, Promotion and Protection of the Health and Wellbeing of the Population – Vision of Federal/National
Roles, 4 September 2002, p.1.
310 “Public Health on the Ropes”, Editorial, and Richard Schabas, “Public Health: What is to be done?”, Can adian
Medical Association Journal, Vol. 166, No. 10, 14 May 2002.
311 Dr. Losos, op. cit.
312 Dr. Losos, op. cit., p. 1.
309
249
integrate the public health infrastructure in Canada as well
as relevant health promotion efforts. An amount of $200
million in additional federal funding should be devoted to
this very important undertaking.
13.5
Toward Healthy Public Policy: The Need for Population Health
Strategies
As described above, the term “population health” is used to describe the
multiplicity and range of factors that all contribute to health. These many factors encompass
both the medical and the non-medical determinants of health. The concept of population health
is not new. Indeed, for almost 30 years, Canada has played a leading role worldwide in
elaborating the concept of population health:
•
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 stressed that a high quality health care system was only one
component of a healthy public policy, which should take into account human
biology (research), lifestyle and the physical, social and economic
environments. The Lalonde report was extremely influential in shaping
broader approaches to health both in Canada and internationally. At the
federal level, it led, among other things, to a variety of social marketing
campaigns such as ParticipAction, Dialogue on Drinking, and the Canada
Food Guide.
•
In 1986, the report Achieving Health for All, released by the then federal
Minister of Health, Jake Epp, led to the initiatives related to Canada’s Drug
Strategy, the Heart Health Initiative, Healthy Communities, the National
AIDS Strategy, etc.
•
In 1989, the Canadian Institute for Advanced Research (CIAR), then headed
by Dr. Fraser Mustard, proposed that the determinants of health do not work
in isolation but that it is the complex interaction among determinants that
can have the most significant effect on health. This work, along with more
recent findings by Dr. Mustard, has, among other things, led to the
development of the joint federal and provincial/territorial initiative on early
childhood development.
•
In 1994, the population health approach was officially endorsed by the
federal, provincial and territorial Ministers of Health in a report entitled
Strategies for Population Health: Investing in the Health of Canadians.
•
In September 2000, all Ministers of Health agreed to give priority to action
on the broader, underlying conditions that make Canadians healthy or
unhealthy.
250
There is increasing evidence on the impact of the determinants of health on the
health status of Canadians, particularly with respect to the socio-economic determinants. For
example, the Second Report on the Health of Canadians313 pointed out that:
•
Low-income Canadians are more likely to die earlier and to suffer more
illnesses than Canadians with higher incomes;
•
Large disparities in income distribution lead to increases in social problems
and poorer health among the population as a whole;
•
Canadians with low literacy skills are more likely to be unemployed and poor,
to suffer poorer health and to die earlier than Canadians with high levels of
literacy;
•
Canadians with high levels of education have better access to healthy physical
environments and are better able to prepare their children for school than
people with low levels of education. They also tend to smoke less, to be more
physically active and to have access to healthier food;
•
Studies in neurobiology have confirmed that experiences from conception to
age 6 have the greatest influence of any time in the life cycle on the
connecting and conditioning of the brain’s neurons. Positive stimulation early
in life improves learning, behaviour and health right throughout the lifespan;
•
Aging is not synonymous with poor health. Active living and the provision
of opportunities for lifelong learning are particularly important in maintaining
health and cognitive capacity in old age;
•
Despite reductions in infant mortality rates, improvements in education
levels, and reductions in substance abuse in many Aboriginal communities,
First Nations and Inuit people remain at higher risk than the Canadian
population as a whole for illness and early death;
•
Men are more likely to die prematurely than women, largely as a result of
heart disease, fatal accidental injuries, cancer and suicide. Women are more
likely to suffer from depression, stress, chronic conditions, and injuries and
deaths resulting from family violence;
•
Older Canadians are far more likely than younger Canadians to have physical
illnesses, but young people report the lowest levels of psychological wellbeing.
Despite the available evidence, no jurisdiction in Canada and no country in the
world has designed and implemented programs and policies firmly based on a population health
approach. The fact is that there remain significant practical obstacles to the design of concrete
programs that can be sustained over the long haul.
In the first place, the multiplicity of factors that influence health status means
that it is extremely difficult to associate cause and effect, especially since the effects of a given
313
Federal/Provincial/Territorial Advisory Committee on Population Health, Toward a Healthy Future - Second Report
on the Health of Canadians, Ottawa, 1999.
251
intervention are often obvious only after many years. Because political horizons are often of a
shorter-term nature, the long timeframe for judging the impact of policy in this area can be a
serious disincentive to the elaboration and implementation of population health strategies.
Furthermore, it is very difficult to coordinate government activity across the
diverse factors that influence health status. The structure of most governments does not easily
lend itself to inter-ministerial responsibility for tackling complex problems. This difficulty is
compounded several times over when various levels of governments, together with many nongovernmental players, are taken into account, as they must be if population health strategies are
to be truly effective.
Although many difficulties are associated with developing an effective population
health approach, the Committee believes it is important for Canada to continue to strive to set
an example by exploring innovative ways to turn good theory into sound practice that will
contribute to improving the population’s health status.
Moreover, the Committee
believes, along with many witnesses, that, The Committee believes, along with many
that
given
its
clear
given its clear responsibility for so many witnesses,
policies and programs that affect health responsibility for so many policies and
(health, environment, agriculture, finance, programs that impact on health (health,
etc.), the federal government should lead the
environment, agriculture, finance, etc.), the
way in population health by coordinating the
federal government should lead the way in
activities of the different departments population health by coordinating the
concerned. Along with Dr. Losos, we
activities of the different concerned
believe the best coordinator would be the
federal Minister of Health. As a first step, all departments.
policies and programs established by the
federal government should be assessed in terms of their impact on the health status of
Canadians. Health impact assessment should become a routine component of all new public
policies and programs at the federal level.314
Ideally, the Ministers of Health in all Canadian jurisdictions would take on the
role of “champions for population health” and advocate health as the major consideration in all
initiatives, irrespective of sector. This would lead to the development throughout Canada of a
truly “healthy public policy.”
In a subsequent report, the Committee will set out its findings and
recommendations on the potential for, and the implications of, healthy public policy in Canada.
314
Dr. Losos, op. cit., p. 5.
252
Part VII:
Financing Reform
253
CHAPTER FOURTEEN
H OW
THE N EW F EDERAL F UNDING
FOR H EALTH C ARE S HOULD B E M ANAGED
In Volume Five, the Committee stressed its conclusion that, as currently
structured, Canada’s publicly funded health care system is not fiscally sustainable. 315
Accordingly, there is a need to undertake major reform in the way physician and hospital
services are funded in order to preserve and enhance the publicly funded health care system, a
system to which Canadians are committed and that has served them so well over the last few
decades.
In Volume Five, the
Committee stated its view that a fiscally
sustainable health care system is one upon
which Canadians can rely both today
and in the future. When considering
the system’s fiscal sustainability, two
interrelated constraints must be taken
into account. The first is the
willingness of taxpayers to pay for the
system. The second is the need for
continued economic growth and the
corresponding need for governments
to keep tax rates at levels that do not
diminish Canada’s ability to generate
investment, create jobs and keep
Canada competitive with other OECD
countries, and particularly with the
United States.316
It is the view of the Committee that a fiscally
sustainable health care system is one upon
which Canadians can rely both today and in the
future. When considering the system’s fiscal
sustainability, two interrelated constraints
must be taken into account. The first is the
willingness of taxpayers to pay for the system.
The second is the need for continued economic
growth and the corresponding need for
governments to keep tax rates at levels that do
not damage Canada’s ability to invest, create
jobs and keep us relatively competitive with
other OECD countries, and particularly with
the United States.
To address the question about the fiscal sustainability of the publicly funded
health care system, the Committee examined, in its Volume Five, current and projected trends in
health care spending.317 We documented the continuing upward pressures on health care costs
due to the rapidly rising costs of drugs and new technology, Canada’s aging population, the high
and increasing cost of health care human resources and growing public expectations. Based on
this information and numerous studies and reports on the increasing costs of health care in
Canada, the Committee concluded that Canada’s publicly funded health care system, as it is
currently operated, is not fiscally sustainable given current funding levels.
This chapter examines the implications of this conclusion. Section 14.1
summarizes the multidimensional pressures that, in the view of the Committee, will put
considerable additional strain on governments’ budgets for health care both in the short and in
Volume Five, p. 7.
Ibid.
317 Volume Five, pp. 7-9.
315
316
255
the long term, and that led us to conclude that more money is needed to sustain the publicly
funded health care system and particularly to effect changes to improve its effectiveness and
efficiency. Section 14.2 provides the Committee’s view on the financing role of the federal
government in sustaining a national health care insurance system. Section 14.3 describes a new
management system that the Committee believes strongly should be applied to new federal
funding for health care.
14.1
More Money Is Needed for Health Care
In Volume Five318, the Committee examined current and projected trends in
health care spending. They are summarized, once again, below.
Data from the Canadian Institute for Health Information (CIHI) show that
health care spending in Canada topped $95 billion in 2000, an increase of 6.9% over the
previous year. After adjusting for inflation and population growth, there was a real increase in
spending of 4.1% between 1999 and 2000.
Data show also that the pace of growth in health care spending is increasing. In
fact, real spending per capita is rising faster today than at any time since the 1980s. There are
real, continuing upward pressures on Canada’s health care costs:
•
Drug Costs: The cost of drugs currently accounts for over 15% of total
(public and private) health care spending. It is forecast to have climbed 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 increase for health
care spending in total (40%).319 New, effective, but very costly, drugs are
expected to enter the Canadian market in the next decade (vaccine against
AIDS, new immunological cure for juvenile diabetes, etc.), further
exacerbating upward pressures on overall drug costs.
•
New Technology: Canada needs to invest more in health care technology
and health information systems. The Committee’s Volume Two indicated
that every $1-billion capital investment in new medical equipment requires an
additional $700 million to cover related operating and maintenance costs. 320
In fact, an estimated $2.5 billion in capital is required to bring Canada’s
investment in health care technology to a level equivalent to that of other
OECD countries (see Chapter Ten). Similarly, estimates suggest that
between $6 and $10 billion (over a six- to eight-year period) is required to
achieve full implementation of a Canadian health info-structure, or between
$1 to $1.25 billion annually (see Chapter Ten).
•
Aging Population: In 1998, 12% of Canadians were 65 or older. That year,
more than 43% of provincial and territorial government spending on health
care went to services for seniors. According to Statistics Canada, by 2010
Volume Five, pp. 6-12.
Volume Two, p. 20.
320 Volume Two, p. 41 and p. 114.
318
319
256
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, rarely if ever previously performed on elderly patients,
are increasingly available to them.321 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 the larger
scheme of things, in dollar terms it amounts to approximately $1 billion
annually in increased health care costs, continuing for decades.
•
Cost of Health Care Human Resources: Labour costs account for about
75% of spending on health care. According to the report of Premier’s
Advisory Council on Health in Alberta (the Mazankowski report), in 2001-02
over half the budget increase for health care went to salary increases in that
province. This trend is likely to be maintained throughout Canada.
•
Health Research: Unprecedented support for health research will lead to
the development of many new technologies and drugs. This year, some
US$40 billion will be spent on health research in the G7 countries, leading to
effective, but costly, technologies in the fields of genomics, proteomics,
nanotechnology, etc.
•
Growing Public Expectations: Many observers have noted that increasing
public demand for physician and hospital services will have a major impact
on future costs. In his interim report, Roy Romanow puts this point very
well: “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.”322 Canadians are more like North Americans than Europeans
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, renewing and reforming 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, $750,000 per team (see Chapter Four).
•
Gaps in the Health Care Safety Net: As pointed out in Chapters Seven,
Eight and Nine of this report, currently there are serious gaps in our health
care safety net, particularly with respect to prescription drugs, home care and
palliative care. Expanding public coverage to reduce or close these gaps in
insurance coverage will require additional government funding.
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).
322 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.
321
257
The Committee was told that even conservative projections of future health care
costs estimate that those costs will increase by at least one percentage point over the increase in
GDP for the indefinite future. Given the publicly funded nature of Canada’s health care system,
these cost pressures will put considerable strain on governments’ budgets, both in the short and
in the long term. This has been well documented by provincial and territorial ministers of health
in their 2000 report of cost drivers 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 2000-2001, up
from 33% in 1992-1993.323 For its part, the Canadian Taxpayers Federation projected that this
proportion will hit 50% as early as 2007 in British Columbia and New Brunswick.324 Similarly,
the Conference Board of Canada estimated that over the period 2000-2020, public per capita
spending on health care (adjusted for inflation) will increase by 58%, compared to an increase of
only 17% in public per capita spending on all other government services and programs.325
This increase in the percentage of government spending devoted to health care
provides the clearest indication of the financial pressures felt by governments charged with
funding health care. A wide range of witnesses, including health care managers, providers and
consumers, expressed deep concerns about rising health care costs and their impact on
governments’ budgets, both in terms of crowding out other government programs such as
education and social services, and imperilling the governments’ overall fiscal stability. This
testimony and many related reports have persuaded the Committee that, in addition to other
necessary reforms, it is essential to invest additional money into Canada’s health care system in
order to renew and sustain it.
In contrast, a recent report by University of Waterloo Professor Gerard Boychuk
contended that there is no fiscal crisis in health care.326 In his view, there is no fiscal crisis in the
sense that Canada’s spending on health care has remained relatively constant when taken as a
percentage of GDP or as a percentage of overall government revenues. This analysis, however,
is presented with a number of caveats. First, it does not consider the projections in health care
costs that clearly indicate that health care spending will increase at a rate higher than the growth
in either GDP or government revenue. Second, Professor Boychuk recognized the fact that
health care is crowding out the provision of other public goods, but considered this as a serious
problem only from the provincial perspective, not from the national perspective. This argument
avoids the fact that although there are two levels of government involved in funding health care,
there is only one set of taxpayers who, no matter where they live, must bear the burden of
increasing health care costs. Third, Professor Boychuk argued that the federal government took
advantage of the switch from the Established Programs Financing (EPF) to the CHST to reduce
its share of health care spending. In his view, publicly funded health care is no longer affordable
from a provincial perspective as a result of reduced federal transfers. The logical conclusion to
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.
324 Walter Robinson, The Patient, The Condition, The Treatment – A CTF Research and Position Paper on Health Care,
Canadian Taxpayers Federation, September 2001, p. 59.
325Glenn 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.
326 Gerard Boychuk, The Changing Political and Economic Environment of Health Care in Canada, Discussion Paper,
Commission on the Future of Health Care in Canada, July 2002.
323
258
this argument would seem, therefore, to be that the federal government should provide more
money for health care.
The Committee does not support Professor Boychuk’s view that the source of
the sustainability crisis is political rather than fiscal. We received overwhelming evidence to
support our conclusion that the publicly funded health care system is not fiscally sustainable
given current funding levels and that, consequently, more money is needed to restructure and
renew Medicare and to close the gaps in the existing health care safety net.
Some individuals and organizations disagree with this conclusion. They claim
that operating the health care system more efficiently would save enough money so that no new
sources of funding would be required. The Committee has always acknowledged the critical
importance of improving effectiveness and efficiency in the management and delivery of health
services. In fact, the restructuring recommendations outlined in Chapters Two, Three, Four,
Six, Ten and Eleven are designed to achieve this objective.
The Committee does not believe that there is sufficient evidence to support the
hypothesis that efficiency gains alone will be enough to obviate the need for additional funding.
Jack Davis, CEO of Calgary Regional Health Authority and former secretary to the Cabinet in
the Government of Alberta echoed this view when he stated:
The belief that some magical efficiency will come along that will generate productivity
levels in our health care system that are beyond anything that exists anywhere on this
planet is naive and unrealistic. 327
Canada’s publicly funded health care system must be restructured and made
much more effective and efficient. But the Committee believes, as it has stated previously, that
responsible planning of public policy must include additional funding for health care, including
funding the cost of restructuring the system.
Given the federal government’s
role in the financing of health care, the
Committee believes strongly that the
government has a critical role to play in
sustaining and renewing health care in Canada.
We acknowledge, however, that, given all the
competing demands for federal government
expenditures (e.g., agriculture, the armed
forces, the environment, urban infrastructure
and so on), any additional funding from federal
sources will have to come from new money, not
from revenue transferred into the health care
envelope from existing sources.
327
Jack Davis (53:59).
259
The Committee wishes to stress that, given all
the
competing
demands
for
federal
government expenditures (e.g. agriculture, the
armed forces, the environment, urban
infrastructure and so on), any additional
funding from federal sources will have to
come from new money, not from revenue
transferred into the health care envelope from
existing sources.
We turn, therefore, 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
these new revenues come from increases in existing taxes, or from new forms of taxation or
other levies? Should they come from individuals and/or businesses and flow to government by
way of taxes or health care insurance premiums or should they come directly from individuals
and/or businesses directly into health care? Jack Mintz, President and CEO of the CD Howe
Institute, raised this question eloquently:
Governments will need more revenues because of the rising public share of health care
costs over time. Therefore, we must think carefully about how we want to fund the public
provision of health care. What is the appropriate way of financing that? This is an
important question that Canadians should be asking themselves, because that will be an
increasing burden for Canadians as a whole. 328
Furthermore, 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 G7 countries and among
the highest in the OECD. The Committee believes therefore that Canadians must balance their
desire for publicly funded health services against both their willingness to pay taxes to fund them
publicly and the need for Canadian tax levels to be set so as to maintain our ability to invest and
create new jobs, keeping us competitive with other OECD countries, particularly the United
States. The Committee’s recommendations on how to raise additional federal funding for health
care are presented in Chapter Fifteen.
14.2
The Financing Role of the Federal Government
Many witnesses emphasized the fact that historically the federal government has
played a major role in financing publicly insured health services. Moreover, public opinion
surveys show repeatedly that Canadians want and expect the federal government to continue to
be a major player in Canada’s publicly funded health care system.
The Committee believes
that, to preserve the spirit of the Medicare
The Committee believes that the federal
program that it pioneered several decades
government, through its financing role, can
ago, the federal government must play a
facilitate, encourage and accommodate the
major role in meeting the serious
provinces and territories in their efforts to
challenges now facing our publicly funded
restructure, reconfigure and renew their health
health care system. We reiterate Principle
Three from Volume Five: “The federal care systems.
government should play a major role in
sustaining a national health care insurance system.”329
The Committee believes that the federal government, through its financing role,
can facilitate, encourage and accommodate the provinces and territories in their efforts to
restructure, reconfigure and renew their health care systems. The Committee is convinced that
328
329
Jack Mintz (62:5).
Volume Five, p. 29.
260
the vast majority of Canadians are looking to the federal government to collaborate with,
support and form partnerships with the provinces/territories and health care providers to effect
needed changes in the health care system. In fact, as discussed in Volume Five, there are many
reasons why the federal government’s role is important330.
First, Canadians strongly support national principles in health care, and they look
to the federal government to play a strong role in setting and maintaining them and to ensure
their application throughout the country. As it now stands, the federal government’s ability to
participate in the development and application of nationwide standards and to recommend
appropriate policies to provincial and territorial governments depends in large part on the size of
its financial contribution.
Second, and some would say most important, 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 fundamental to what many call “the Canadian
way.” From this perspective, Sharon Sholzberg-Gray, President and CEO, Canadian Healthcare
Association, stated:
(…) we would like to add leadership as an additional role for the federal government.
After all, the federal government is the only level of government that can ensure access for
Canadians to comparable services, wherever they live in this country. No one provincial
or territorial government can ensure that. Only the federal government can do that, and it
should take leadership in this area.331
Third, federal funding for health care is particularly critical to reform and renewal
of health care; making changes in the way the health care system is structured and operates will
surely result in the requirement of more rather than less money, at least in the short term.
Fourth,
interprovincial
harmonization with respect to what
services are insured and scope of practice
rules is an important element of a truly
national system. The federal government
has an key role in facilitating such
harmonization (such as, for example, using
financial means to help provincial or
territorial governments to meet national
standards).
The Committee believes strongly that the
money that the federal government transfers
to the provinces/territories for the purpose of
health care should provide it a seat at the
table when the restructuring of the health care
system is discussed. In our view, the federal
government should not give money without
having a say on how that money is spent.
Fifth, the Committee believes strongly that the money that the federal
government transfers to the provinces/territories for the purpose of health care should provide
it a seat at the table when the restructuring of the health care system is discussed. In our view,
the federal government should not give money without having a say on how that money is
330
331
Volume Five, pp. 12-14.
Sharon Sholzberg-Gray (49:11).
261
spent. Canadians rightly expect that, when decisions are made about how their tax dollars are to
be spent, the government to which they pay those taxes should be represented.
Finally, the Committee is also convinced that there must be stability of, and
predictability in, federal funding for public health care insurance. No industry can be expected
to operate effectively if, from year to year, its revenue is subject to significant fluctuations over
which it has no control. In fact, effective planning, an essential element of an efficiently
operated industry, is impossible unless stability and predictability of funding are assured. In
other words, multi-year funding is essential if the publicly funded health care system is to be run
effectively and efficiently.
14.3
How New Federal Funding for Health Care Should Be Managed
Before turning to the Committee’s recommendations with respect to how new
additional federal funds for health care should be raised (see Chapter Fifteen), we first address
the issue of how such new federal revenue should be managed. The Committee believes that
Canadians will be willing to contribute more to public health care spending only if they are
convinced that the money will actually be spent on health care, and that it will be spent wisely.
This requires that the allocation of any new money that Canadians pay to the federal
government for health care be subject to a process that is transparent and by which the
government can be held accountable by taxpayers.
The Committee believes strongly that new federal funding for health care should
be managed according to four distinct but inter-related parameters:
First, increased federal revenue for
The Committee believes that increased
health care must go into an earmarked fund that is
federal revenue for health care must go
separate and distinct from the Consolidated Revenue
into an earmarked fund that is
Fund. We believe Canadians will not agree to pay
separate and distinct from the
increased health care contributions to the federal
government unless they are assured that the money
Consolidated Revenue Fund.
will be spent on health care, and that the money is
truly incremental to the federal government’s existing commitment to health care spending.
This has been confirmed by a recent survey by Pollara,332 which indicated that 75% of Canadians
would be willing to pay more taxes if such revenue were directed to health care, and not flow
into general revenue. Thus, it appears that, for Canadians, health care is unique, different from
other publicly funded goods and services: earmarking funds for health care would ensure that
public funding remains less susceptible to the
The Committee strongly believes that new
vagaries of political decisions with respect to
the allocation of government’s financial federal money given to the provinces and
territories must buy change or reform;
resources.
additional money should not be used to fund
Second, increased federal the publicly funded health care system as it is
revenue for health care must be targeted. The presently structured.
Committee is convinced that new federal
funding must be used for the purposes outlined in this report, particularly those that would
332
Pollara, Health Care in Canada Survey 2002, June 2002.
262
expand public health care coverage (as described in Chapters Seven, Eight and Nine) and those
that will improve the effectiveness and efficiency of the health care delivery system (such as
service-based funding for hospitals, primary health care reform, health care technology,
electronic health records, health research and evaluation, and so on). In other words, new
federal money given to the provinces and territories must buy change or reform; new money
should not be used to fund the operation of the publicly funded health care system as it is
presently structured.
Third, and as a corollary to the
The Committee is strongly opposed to
second point, the Committee is strongly
increased federal funding for health
opposed to increased federal funding for health
care being given to the provinces and territories
being given to the provinces and
under the mechanism of the Canada Health and
territories under the mechanism of the
Social Transfer (CHST). CHST transfers cannot
Canada Health and Social Transfer
be targeted for specific purposes, nor can the (CHST).
provinces and territories be held accountable for
how the money is spent. Similarly, the Committee is equally strongly opposed to the transfer of
additional tax points to the provinces and territories. In the first place, the transfer of tax points
has a very unequal impact on different provinces. Second, once the tax points have been
transferred, the federal government has no authority over how the resulting revenue is spent.
Fourth, the Committee is convinced
that the federal government should be advised
annually on how the money in the earmarked fund
should be spent. This advice should be given in the
annual report produced by the National Health
Care Council, as recommended in Chapter One.
The advice given to the government should be
made public to ensure transparency and
accountability.
And fifth, it is
imperative that all governments be
made accountable for how
additional federal funding for
health care is spent. It is the view
of the Committee that Canadians
must be able to see that the money
is being spent for its targeted
purposes. Accordingly, both levels
of government – federal and
provincial/territorial governments
– must therefore share accountability.
The Committee is convinced that the
federal government should be advised
annually by the National Health Care
Council on the priorities that should be
attached to expenditures out of the
earmarked fund.
It is the view of the Committee that, from a federal
perspective, an annual audit by the Auditor General of
Canada of the earmarked fund should detail how the
money in the fund has been spent; the results of the
audit should be made public.
Similarly, provincial and territorial governments
should be required to report annually to Parliament
and the Canadian public on their utilization of
earmarked health care funds provided by the federal
government.
From a federal
perspective, an annual audit by the Auditor General of Canada of the earmarked fund should
specify how the money in the fund has been spent; the results of the audit should be made
public. From a provincial/territorial perspective, their use of earmarked federal funds must be
263
coupled with a requirement for transparent accountability to show the public that the funds have
indeed been spent for the specific health care purposes to which they were targeted. In order to
do so, provincial and territorial governments should be required to report annually to the
Canadian public on their utilization of earmarked health care funds provided by the federal
government.
Therefore, the Committee recommends that:
The federal government establish an Earmarked Fund for
Health Care that is distinct and separate from the
Consolidated Revenue Fund. The Earmarked Fund will
contain the additional revenue raised by the federal
government for investment in health care.
Money from the Earmarked Fund for Health Care be used
solely for the purpose of health care. Moreover, such money
must be used to buy change or reform: it must be utilized
exclusively for expanding public health care coverage and
for restructuring and renewal of the publicly funded hospital
and doctor system.
The National Health Care Council be charged with the
mandate of advising the federal government on how the
money in the Earmarked Fund for Health Care should be
spent. The Council’s advice to the government should be
made public through an annual report.
The federal government subject the Earmarked Fund for
Health Care to an annual audit by the Auditor General of
Canada. The result of such an audit should be made public.
The federal government require the provinces and territories
to report annually to the Canadian public on their utilization
of federal money from the Earmarked Fund for Health
Care.
If Canadians are indeed willing (as we believe they are) to strengthen the
investment by their federal government in health care, and if federal and provincial/territorial
governments are willing to collaborate in restructuring and expanding Medicare, then the
Committee believes Canada’s publicly funded health care system can be made not only fiscally
sustainable, but also capable of entering a new era based on its increased efficiency, quality,
timeliness, transparency and accountability.
264
CHAPTER FIFTEEN
H OW A DDITIONAL F EDERAL F UNDS FOR
H EALTH C ARE S HOULD B E R AISED 333
As stated in Chapter One of Volume Five as well as earlier in this report, the
Committee has received sufficient evidence, based on both the testimony of witnesses and
various reports, to conclude that Canada’s publicly funded health care system is not fiscally
sustainable. It is, therefore, imperative to invest additional money into our health care system in
order to renew and sustain it.
Additional funding for health care can
come only from the people of Canada, either through
In the view of the Committee, it
the public purse or privately. As shown in Table 15.1, is
imperative
to
invest
public funding can be drawn from general taxation (the
additional money into our health
primary form of health care financing in Canada, care system in order to renew and
Australia and the United Kingdom) or from dedicated
sustain it.
payroll taxes paid by employers and employees and
based on labour earnings (as in Germany and the
Additional funding for health
Netherlands). Public funding may also involve public
health care insurance premiums (as in Alberta and care can only come from the
people of Canada, through either
British Columbia) or an earmarked health care tax (as
in Australia). Finally, public funding for health care
the public purse or privately.
could be generated from taxable health care benefits,
that is, making publicly funded health care benefits received by an individual subject to income
tax.334
Private financing sources discussed at the Committee’s hearings include various
forms of user charges for publicly insured health services, contributions under Medical Savings
Accounts (MSAs) or other similar plans, and private health care insurance. In contrast to
Canada, user charges for publicly insured health services are required in Australia, Germany, the
Netherlands, Sweden and the United Kingdom (amongst other countries). Systems of MSAs are
currently in place in Singapore, South Africa and the United States.
This chapter is based on the testimony received by the Committee as well as on a thorough review of the
literature on this topic. In addition, a paper by Robert D. Brown and Michanne Haynes (July 2002) prepared at the
request of the Committee, entitled Financing Options for Funding and Incremental Increase in Federal Spending on the Health
Sector, provided useful guidance in the writing of this chapter.
334 We are not aware of any country requiring that health care benefits for publicly insured services be taxable,
although a number of proposals of this type have been put forward in Canada.
333
265
TABLE 15.1
SOURCES OF FUNDING FOR HEALTH CARE
SECTOR
•
•
PUBLIC
•
•
•
PRIVATE •
•
SOURCE
General Taxation – which incorporates both direct taxation (personal and
corporate income tax) and indirect taxes;
Earmarked Tax– a tax earmarked for a specific purpose, such as taxable
health care benefits (whereby the health care costs incurred during a year are
added to taxable income);
Payroll Taxes – contributions related to labour earnings and paid by
employees and/or employers;
Public Health Care Insurance Premiums – an amount (flat or income-related)
paid by everyone for the right to be covered under public health care
insurance.
User Charges – which correspond to a form of payment made by a patient at
the time a publicly funded health service is rendered;
Medical Savings Accounts – health care accounts set up to pay for the health
care expenses of an individual or his/her family(a)(b);
Private Health Care Insurance – purchased by individuals or through
employers’ sponsored plans..
(a) Some proposals suggest that MSAs be funded publicly or, as proposed by some in Canada, as a
mixture of public and private sources.
(b) There exists also some other plans involving individual responsibility for some costs but not incurred
at the point of service.
Source: Economics Division, Parliamentary Research Branch, Library of Parliament; Brown and Haynes
(2002).
Private health care insurance could be used to supplement, complement or
replace publicly funded health care. In the event that additional money is not invested into
health care as the Committee recommends in this report, or that government fails to ensure
timely access to needed care, it is likely that there would be great pressure and, as suggested in
Chapter Five, probably a legal obligation on government, to let those Canadians who can afford
to do so purchase private health care insurance to obtain privately delivered health services.
Private insurance would, however,
move away from the single insurer model that the
Committee strongly favours, and would lead to a
parallel private delivery system. The potential
implications for the publicly funded health care
system of allowing private health care insurance in
Canada are not discussed in this chapter but are
reviewed thoroughly in Chapter Sixteen.
266
Private insurance would move away
from the single insurer model that
the Committee strongly favours and
would lead to a parallel private
delivery system.
15.1
The Amount of Increased Federal Funding Required
The Committee believes that the federal government must provide additional
funding for the reform and renewal of the publicly funded health care system. Based on our
calculations, implementation of the recommendations given in Chapters Two through Thirteen,
when combined with a significant contingency amount that reflects the considerable uncertainty
involved in forecasting future costs in the health care field, will require an additional federal
investment of approximately $5 billion annually (see Table 15.2).
The amount of $5 billion shown in Table 15.2 is the Committee’s estimate of the
annual increase in health care costs that would result from expanding public health care
insurance to close the gaps in the existing plans (as described in Chapters Seven, Eight and
Nine) and from investing in measures to make the current hospital and doctor system more
effective and efficient (as described in Chapters Two, Three, Four, Ten, Eleven, Twelve and
Thirteen). This amount is in addition to the current federal contribution to health care (through
the CHST and other programs). It is also in addition to any increase in federal funding that may
be required to support the existing hospital and doctor system, as a transition measure until the
changes recommended in this report can come into full effect.
267
TABLE 15.2
ADDITIONAL ANNUAL FEDERAL INVESTMENT NEEDED TO IMPLEMENT
THE RECOMMENDATIONS IN THIS REPORT
Expansion
and Restructuring
Expansion of Coverage:
(b)
§ Post-Hospital Home Care
(a)
§ Catastrophic Drugs
(b)
§ Palliative Care
Improving Efficiency and Effectiveness:
(c)
§ Health Care Technology (AHSCs)
(c)
§ Capital Costs (AHSCs)
(c)
§ Infoway (EHRs)
(b)
§ Capital Costs (Community Hospitals)
(b)
§ Equipment for Community Hospitals
(c)
§ Primary Health Care Reform
(c)
§ CIHI
Promotion and Prevention:
(c)
§ Health Promotion and Protection
(c)
§ Prevention of Chronic Diseases
Health Care Human Resources:
(c)
§ Medical Schools
(c)
§ Nursing Schools and Allied Professions
(c)
§ AHSCs (Post-Graduate Training)
Research, Evaluation and Reporting:
(c)
§ Research Funded by CIHR
(c)
§ Health Care Commissioner
(c)
§ National System (CCHSA)
Contingency (20%)
TOTAL
Federal Share
(in Millions $)
Additional
Information
550
500
250
Annually
Annually
Annually
400
400
400
150
100
50
50
$2 billion over 5 years
$4 billion over 10 years
$2 billion over 5 years
$1.5 billion over 10 years
$500 million over 5 years
$250 million over 5 years
Annually
200
125
Annually
Annually
160
130
70
Annually
Annually
Annually
440
15
10
1,000
5,000
Annually
Annually
Annually
Annually
Annually
(a)
90% federal funding.
(b)
50/50 federal and provincial/territorial cost-sharing program.
(c)
100% federal funding.
Source: See the previous chapters.
The Committee believes that the total amount of $5 billion per year in new
funding is a realistic sum and an acceptable amount that the federal government, and indeed
Canadians through their taxes, ought to be willing to invest in health care on an ongoing basis.
The amounts shown against each purpose in Table 15.2 are estimates. The
amount spent for the various purposes listed will vary somewhat from year to year depending on
the priority attached to each purpose in any given year. These priorities, and the allocation of
funds to each purpose, should be set on an annual basis by the federal government on the advice
of the National Health Care Council, as described in Chapters One and Fourteen.
268
The new federal investment in health care recommended by the Committee must
be used to support change. It is worthwhile noting that about 30% of the proposed new federal
funding will be spent on expanding public health care coverage and on health promotion and
disease prevention. About 40% will enhance effectiveness and efficiency of the doctor and
hospital system and support increased enrolment in the various health care professions. Some
10% of the proposed expenditures will be invested in health research, outcome evaluation and
performance reporting. We have incorporated a 20% annual contingency to provide the
necessary flexibility in federal investment.
It is also worth
pointing that, out of the $5
billion
in
new
federal
investment, a large proportion
is for transitional costs that will
decrease as efficiency and
effectiveness changes are put in
place. Once the 5-year or 10year period is over, the money
used during the transition
period will be available for
other health care priorities.
The Committee acknowledges that some of its
recommendations – particularly with respect to posthospital home care, palliative care and investment in
community hospitals – require cost-sharing with the
provinces/territories. In our view, these additional costs
will not constitute a significant additional financial
burden for provincial/territorial governments under these
programs, since the federal 50% investment recommended
by the Committee would replace money which some of
the provinces/territories are now spending in these areas.
(…) It is thus fair to say that the Committee’s
recommendations would generate savings of at least $1.5
billion for the provinces and territories.
The Committee
acknowledges that some of its
recommendations – particularly
with respect to post-hospital home care, palliative care and investment in community hospitals –
require cost-sharing with the provinces/territories. In our view, these additional costs will not
constitute a significant additional financial burden for provincial/territorial governments under
these programs, since the federal 50% investment recommended by the Committee would replace
money which some of the provinces/territories are now spending in these areas. It is not
possible, however, given the limited resources the Committee has at its disposal, to evaluate
precisely the extent of these savings to the provinces/territories. Similarly, it is not possible for
the Committee to calculate the increased cost to each jurisdiction for the proposed cost-shared
programs.
More important, in some of the Committee’s recommendations, the federal
money directly replaces funds that the provinces/territories would otherwise have to spend. For
example, the proposed new federal funding in the areas of health care technology, hospital
capital, primary health care reform and human resources –which amounts to some $1.5 billion –
would entirely substitute for investment that provincial and territorial governments would have
to make in order to reform and renew their health care system. It is thus fair to say that the
Committee’s recommendations would generate savings of at least $1.5 billion for the provinces
and territories. This would be in addition to any savings resulting from effectiveness and
efficiency gains from our proposed reform, and the Committee expects these savings to be
substantial once the changes we recommend are all in place and fully operational.
269
15.2
Potential Sources of Increased Federal Funding
From which source should the new federal investment in health care come?
Should the federal government simply increase the rate of one or more of the existing direct and
indirect taxes (general taxation)? Or should the government employ new taxation measures
linked specifically to the funding of health care, such as an earmarked tax for health care, or
make health care benefits taxable as income, or use earmarked payroll taxes or a national health
care insurance premium? Should the federal government also consider an increase in private
financing for health care through user charges, MSAs or other plans involving individual
responsibility for some health care costs?
This chapter examines these questions in detail. It reviews the advantages and
disadvantages of the full range of public and private methods of funding an incremental federal
contribution to health care, including general taxation, earmarked taxation, taxable health care
benefits, payroll taxes, and public health care insurance premiums. It also provides a discussion
of user charges, MSAs and the concept of pre-funding health care.
In considering each of the potential federal revenue sources, the Committee
evaluates each of them according to the same set of criteria. These criteria are equity, efficiency,
intergenerational fairness, stability and visibility:
•
Equity deals mainly with income redistribution and social justice. It may be
defined as the extent to which contributions to the financing of health care
insurance are based on ability to pay (income distribution) as well as the
extent to which access to such insurance is based on need (social justice).
•
Efficiency is concerned with the optimal allocation of resources. A system is
efficient if it creates minimum distortions and disincentives in the rest of the
economy (in terms, for example, of reduced business investment, lower
consumption and living standards, damage to the labour market and job
creation, deterioration in international competitiveness, and so on).
Efficiency can also encompass cost-effectiveness, that is, the extent to which
revenue for health care is generated at the lowest possible administrative and
compliance cost.
•
Intergenerational fairness compares the distribution of the cost burden between
younger and older people or between workers and retirees.
•
Stability refers to the degree of predictability of future funding levels.
•
Visibility denotes the ability of citizens to link their contributions to
government spending on health care (at each level of government) to the
benefits that they receive.
These criteria have helped the Committee to decide which source(s) of funding
appear(s) to be the most appropriate to raise additional federal revenue for health care.
At the outset, the Committee wishes to emphasize that new financing sources
must ensure that the health care system will continue to meet the needs of Canadians in a way
that will neither overwhelm other requirements for government finance nor give rise to an
unacceptable tax burden on citizens or businesses. The additional revenue requirements must
270
also be structured so as to do the least damage to the economy in terms of job creation and
income growth. Moreover, the new revenue sources must make Canadians better aware of the
link between the public health care benefits they receive and the taxes that they incur to pay for
them.
15.3
General Taxation
Currently, federal funding for health care is derived from general taxation.
General taxation is very broad and encompasses both direct and indirect taxes. Direct taxes,
which can be levied on individuals, households or corporations, include personal income tax and
corporate taxation. Indirect taxes, which are levied on transactions and commodities, include,
for example, sales tax, value-added tax and excise taxes.
Currently, none of the direct or indirect taxes that make up federal general
taxation offer much visibility or link between the taxes paid and the services received. Indeed,
this is the primary reason that many Canadians describe Canada’s health care system as being
free. The various federal revenues generated through direct and indirect taxation are currently
collected into one single fund – the Consolidated Revenue Fund. As a result, there is no direct
link between taxation and public health care spending, despite the fact that a substantial part of
government revenues are used to pay for health care costs. This contrasts greatly with
earmarked taxation (see Section 15.4, below) in which the tax revenue corresponding to the
“earmarked” service goes into a designated fund to be used only for that specific purpose.
All forms of direct and indirect taxation have varying implications for equity and
efficiency. Direct taxes levied on individuals are frequently progressive: the amount paid rises
with income so that high-income people pay proportionately more than low-income people.
This leads to a redistribution of income from individuals with higher income to those with less.
Indirect taxes such as sales taxes are usually considered regressive, as the
payments are related to consumption of the taxed good or service: high-income people pay
proportionately less indirect tax as a percentage of their income (although they pay more in
absolute terms). That is, because poorer individuals spend a larger proportion of their income
on consumption than richer persons, the burden of a consumption tax falls more heavily on
them. However, over a lifetime, consumption is roughly proportional to income over a broad
range of earnings; hence, the regressiveness of a consumption tax is not as large as might be
initially thought. Further, various offsetting measures, such as the GST Tax Credit, can reduce
the regressiveness of a consumption tax.
In his brief to the Committee, Robert Evans, Professor of Health Economics at
the University of British Columbia, explained:
Taxes are described as progressive if an individual’s tax liability rises more than
proportionately as income rises, such that higher income individuals not only pay more,
271
but pay a larger share of their incomes. Conversely, regressive taxation results in lower
income people paying a larger share of their incomes in tax.335
The implication of general taxation on equity therefore depends on both the
structure of a country’s direct and indirect tax systems and the relative amounts of revenue
raised by each form of tax. 336 Studies using OECD data suggest that, in countries in which
general taxation funds most health care, the mix of direct and indirect taxes used renders the
overall taxation mildly progressive.337
In 2000, Canada relied on direct taxes for 57% and indirect taxes for 43% of its
total taxation revenue. Data also suggest that the Canadian tax system has become more
progressive over the last decade: in 1993, Canada collected 49% of its tax revenues from indirect
taxes.338
When compared with other OECD countries that use tax financing for health
care, Canada is above average in its reliance on the personal income tax.339 In fact, only
Denmark, Australia and New Zealand rely to a greater extent on the personal income tax as a
percentage of total tax revenues.340 In terms of its reliance on the corporate income tax, Canada
is again slightly above the average of countries with a health care system funded out of general
taxation.341 Finally, Canada is below the average in its use of consumption or indirect taxes,
relative to all taxes.342 Therefore, it could be said that Canada has one of the more progressive
tax systems among OECD countries.
From another perspective, however, the fact that Canada has significantly higher
personal income tax rates than the United States means that Canada is less attractive for skilled,
high-income workers. The higher personal income tax rates also raise the cost of investment
capital in Canada derived from personal savings, and therefore discourage investment,
productivity and future growth. Indeed, the Committee was told:
While a number of factors (higher government debt and social spending) are likely to
mean that Canada will continue to have for some time higher personal tax rates than the
U.S., it is nevertheless good policy to avoid increasing the spread between US and
Canadian rates, and in the long term to reduce these differences. Accordingly, there are
major policy reasons for not imposing a significant increase in personal tax rates and
widening the personal tax gap with the U.S.343
Robert Evans, Brief to the Committee, 3 June 2002, p. 2.
Derek Wanless, Securing our Future Health: Taking a Long-Term View, Interim Report, November 2001, p. 51.
(http://www.hm -treasury.gov.uk/Consultations_and_Legislation/wanless/consult_wanless_interimrep.cfm).
337 Elias Mossialos and Anna Dixon, “Funding Health Care in Europe: Weighing up the Options,” Chapter Twelve
in Funding Health Care: Options for Europe, 2002, pp. 272-300.
338 According to Statistics Canada’s data taken from CANSIM II, Table 380-0022.
339 Caroline Chapain and François Vaillancourt, “Le financement des services de santé au Québec,” in Le système de
santé québécois: Un modèle en transformation, edited by C. Bégin, 1999, pp. 101-121.
340 OECD (2000), Revenue Statistics 1965–1999, Table 11.
341 OECD (2000), Table 13.
342 OECD (2000), Table 27.
343 Brown and Haynes (2002), p. 13.
335
336
272
Similarly, the Committee heard that it would be difficult and inadvisable to
increase corporate income tax to support the incremental costs of increased federal spending on
health care. The base for corporate taxation is smaller than the base for personal income tax or
a payroll tax, and is also much more variable. Furthermore, increasing corporate tax rates would
have a very negative impact on rates of return on capital investments in Canada, and therefore
would discourage both investment and job creation. Even existing businesses could be
influenced to relocate outside of Canada in response to what would be a very significant increase
in tax burdens. Overall, many witnesses argued that the corporate tax is unsuitable for raising
additional revenues to finance health care.
The Committee was told that with an increase in the federal personal income tax
there would be significant costs to efficiency, measured in terms of labour supply, savings and
investment. We were told that a tax on income imposes a “double tax” on savings, since the
income out of which savings are made is subject to income tax, and then the returns on the
savings are themselves subject to additional tax.
Nevertheless, because financing the health care system by general taxation draws
revenue from a wide base, it helps to minimize the distortions taxation creates in the economy.
Furthermore, financing health care through general taxation involves low administrative costs.344
Under general tax-financed systems, as opposed to those financed by earmarked
taxes, decisions about how much should be spent on health care necessarily require trade-offs to
be made among other government spending priorities, such as social programs or tax or debt
reduction. As a result, funding health care through general taxation means that the allocation to
health care is subject to spending negotiations within government. While this provides some
element of accountability, it also greatly politicizes the decision-making process.
Another disadvantage of funding health care through general taxation is that it
can leave the health care system vulnerable in times of economic slowdown or fiscal constraint.
Economic slowdowns result in lower tax revenues and increased pressures to reduce public
spending. This, therefore, negatively affects the stability of health care funding. It should be
noted, however, that all tax revenues fluctuate with the economy and that general revenues tend
to fluctuate less than many specific forms of taxes.
Finally, and perhaps most important, witnesses stressed that direct and indirect
taxation do not have the same impact in terms of intergenerational fairness. Personal income
tax extracts a greater proportion of government revenues from the younger working population
than from retirees. Thus, Canada’s changing demographics, which reflect a rise in the
proportion of retirees relative to the working population, would be associated with a decreasing
tax base and smaller revenues for any given income tax rate. As a result, the use of direct
taxation, particularly personal income tax, to finance the publicly funded health care system
could involve significant subsidization of the health care needs of the elderly by the younger
working population. In this perspective, Jack Mintz, President and CEO of the C.D. Howe
Institute, told the Committee that:
344
Derek Wanless (2001), p. 50.
273
In fact, the OECD has estimated that, as the population ages, the tax/GDP ratio in
Canada will fall by 1.5 points. This is because elderly people, once they retire, tend to
have lower incomes and, therefore, pay less tax than workers. There may be some taxes
that would be better if you were going to fund health care expenditures, because the
majority of health care expenditures are weighted heavily toward the elderly in the last
years of their lives. Therefore, as the population ages and the benefits paid out to the
elderly increase, if you have taxes that are particularly falling on working Canadians
they will have to bear a bigger responsibility for those benefits. 345
In contrast, the Committee was informed that demographic changes have less
impact on government revenue generated through indirect taxation, such as a consumption tax.
Moreover, consumption taxes may be preferable, on the grounds of economic efficiency, to
corporate income tax. David Stewart-Patterson, Senior Vice-President, Policy, Canadian
Council of Chief Executives, stressed that point when he stated:
In considering tax policy, however, we must remember that not all taxes are equal in
terms of their economic impact. As the Department of Finance has estimated, an extra
dollar of revenue raised through corporate taxes may do nine times as much damage to
economic growth as a dollar raised through sales tax. The more Canada chooses to spend
on health care through the public system, therefore, the more it will have to shift its tax
mix toward a consumption base in order to remain competitive. 346
Jack Mintz from the C.D. Howe Institute held similar views:
(…) consumption taxes have been found to have lower distortionary costs to the economy
and they tend to be more efficiently imposed. They are smoother than, for example,
income taxes over the life cycle of individuals because working income tends to peak
during working lives before falling off in retirement years. At the same time,
consumption tends to be lower than income during the years in which people are
accumulating savings, and consumption tends to be high in retirement years relative to
income as that is when people are drawing down assets to consume during their
retirement years. Consumption taxes also tend to be proportional to the consumption of
individuals over a life cycle. One could make it progressive by having a tax credit, such
as the GST tax credits which provides relief, particularly for lower income
Canadians. 347
David Kelly, former Deputy Minister of Health in British Columbia, also
suggested that consumption taxes generate less distortion in the economy:
Jack Mintz (62:6).
David Stewart-Patterson, Brief to the Committee, 17 June 2002, p. 4.
347 Jack Mintz (62:7).
345
346
274
If the decision has been taken to increase funding for health care and the question is
what should be the revenue source, I would do exactly what the B.C. government did a
few months ago when it discovered that it did not have sufficient revenue to cover rising
health care costs – it increased the consumption tax.
(…) I say that for three reasons. First, it raises revenue quickly. Second, we have to
keep our income tax, corporate tax, payroll tax and so on within shooting distance of the
Americans, which significantly constraints our policy flexibility. Third, it is a visible
tax. It would make consumers fully aware of the implications of health care cost
increases. It might bring additional consumer pressure to bear on the cost side of the
equation which, from my point of view, would be healthy.348
To sum up, the decision to consider direct versus indirect taxation as a means of
increasing federal revenue for the purpose of health care will necessarily require that some tradeoff be made between equity, intergenerational fairness and efficiency. The testimony received by
the Committee suggests that the objective should be first of all to ensure that any new tax is as
efficient as possible so that it causes as little damage to the economy (including job creation and
economic growth) as possible, and then subsequently to achieve whatever progressivity is
desired in the system through supplementary measures such as low-income tax credits or highincome surtaxes.
15.4
Earmarked Taxation
Earmarked taxes are taxes from which the revenue is dedicated to a specific use.
Earmarked taxes can be either direct or indirect. An earmarked tax for health care has several
advantages over general taxation. For example, it may reduce public resistance to paying the tax
because it is clearly associated with a use that provides benefits to the public. Establishing
genuine linkage between taxation and spending makes the funding of health care more
transparent and responsive. Another advantage of earmarking taxation is that it makes people
feel more connected to the tax system which, in turn, may increase the pressures on health care
providers and institutions to improve quality and access to services. Earmarked revenues may
also be more stable since they are less susceptible to the vagaries of political decisions with
respect to the allocation of the government’s financial resources.
Many witnesses presented strong arguments in favour of earmarked taxes. In the
view of these witnesses, earmarking taxes for health care is what Canadians want. For example,
Dr. Les Vertesi, Chief of the Department of Emergency Medicine at the Royal Columbian
Hospital (Vancouver), told the Committee:
I believe that the public is prepared to put more money into their public health care
system, but not into taxes that go into general revenue. It is a trust issue. The record on
governments taxing people and then ensuring that money goes into designated services is
not good, or at least certainly the perception is that it is not good. The trust has been
348
David Kelly (59:40-41).
275
broken. People do not want to give money to governments and have it just disappear.
They are prepared to do so if they are assured that the money will go into health care,
and especially into health care in their local area (…). 349
There are, however, a number of disadvantages associated with earmarked taxes.
Not all taxes that bear the name or appearance of an earmarked tax are strictly earmarked to an
identified use in practice. This is particularly true if the revenue from the earmarked tax is
merged together with other tax revenues. This weakens the connection between revenue and
expenditure and consequently undermines the population’s trust that the tax will be devoted to
the named purpose. For a tax to be effectively earmarked, the revenue it generates must go into
a specific, dedicated fund, and not into the Consolidated Revenue Fund.
Earmarking taxes also introduces rigidity into the government budgetary process,
because expenditure on the program for which the tax is earmarked is determined by the
revenue generated and not by policy decisions. Another disadvantage is that the revenue derived
from a single earmarked tax can be cyclical and susceptible to variability in periods of economic
expansion or slowdown.
Also, separating health care from other areas of public spending might lead to
pressure to have other budget items funded separately by earmarked taxes. If this happened in a
number of areas it would make it difficult for the government to generate a large enough
Consolidated Revenue Fund to be able to pay the cost of necessary but less popular government
programs, such as foreign aid. Thus, having a large number of earmarked taxes is simply not
workable.
In Volume Four, the Committee presented an option under which the cost of
publicly funded health care that an individual receives during a year be treated as a taxable
benefit for that year. Thus, the individual would pay income tax on the cost of the health
services provided, subject to an annual maximum. This method of taxation would raise
additional revenue for health care and promote individual accountability for the use of health
care.350 Under this option, which corresponds to one form of earmarked tax, individuals would
be required to add the cost of the health services that they received during the year to their
taxable income. Such an option has been advocated in recent years, particularly by Jack Mintz et
al. (1998),351 Tom Kent (2000)352 and most recently by Mintz, Aba, and Goodman (2002).353
Under the plan proposed by Mintz, Aba and Goodman, individuals would be
charged a tax of 40% of the health care costs they incurred during the year, up to a maximum of
3% of the individual’s annual income. Families with an income of less than $10,000 would be
exempt from paying tax on any service they received through the publicly funded health care
system. Under this scheme, the more an individual used the services of the health care system,
Dr. Les Vertesi (53:62).
Volume Four, pp. 63-64.
351 Jack Mintz, Michael Gordon and Duanjie Chen, “Funding Canada’s Health Care System: A Tax-Based
Alternative to Privatization,” in Canadian Medical Association Journal, 8 September 1998, pp.493-496.
352 Tom Kent, What Should Be Done About Medicare, The Caledon Institute of Social Policy, August 2000.
353 Jack Mintz, S. Aba and W.D. Goodman (2002), “Funding Public Provision of Private Health: The Case for a
Copayment Contribution through the Tax System,” C.D. Howe Institute Commentary – The Health Papers, No. 163.
349
350
276
the higher the individual’s contribution to the system would be in that year, up to the maximum
3% of income.
Mintz, Aba and Goodman argued that, by relating the individual’s contribution
to the actual health services that are used, and by encouraging users to consider the costs,
efficiency would be gained in the use of health care resources. The authors also contended that
limiting individual health care taxes to a maximum of 3% of annual income would ensure that
the costs would remain affordable to the taxpayer and thus no one would be deprived of needed
health services. This would also prevent the costs of health care from imposing a catastrophic
burden on any taxpayer.
Using survey data on health care utilization rates, Mintz, Aba and Goodman
estimated that 62% of Canadians would pay the maximum contribution of 3% of their annual
income in any one year. Overall, this would generate $6.6 billion annually in tax revenue (or
about 16% of total public spending on physicians, hospitals and other health care institutions).
They estimated that it would also lead to a decrease of 13.5% in the use of health services, the
value of which they estimated to be $6.3 billion. The authors believe that additional
administrative costs would be minimal since the contribution would be collected through the
provincial/territorial personal income tax system.
A number of witnesses discussed proposals such as the one by Mintz et al.. For
example, Paul Darby, Director, Economic Forecasting, Conference Board of Canada, stated:
It has a high degree of attractiveness in that it does remove some of the mystery
surrounding the cost of health care to various users of the system. It does have the
advantage of tying those costs, to some extent at least, to payment. I am not sure it
completely gets around the issue of redistribution or the burden perhaps falling on the less
advantaged members of society.354
The option of a taxable health care benefit would help ensure visibility. It would
also improve somewhat the stability of public health care funding. Such an option would have
an impact that in some ways would be similar to direct taxation in terms of efficiency and
distortion in the economy. However, it would increase Canada’s reliance on the personal
income tax, which is already well above that of other OECD countries.
But perhaps most important, the main argument presented to the Committee
against a taxable health care benefit is that some people will have the perception that they would
be paying for health care twice – once through general taxation and once through the additional
income tax they would pay for the specific health services that they would receive during the
year. The argument of “double payment” led the Alberta Premier’s Advisory Council on Health
to decide not to support making health care a taxable benefit.355
The Committee was told that a relatively efficient way of generating new federal
revenue to pay for health care would be to use some portion of a general consumption tax, such
354
355
Paul Darby (59:17).
Mazankowski report, p. 55.
277
as the GST, and have it earmarked for health care. The GST is the major federal consumption
tax in Canada and, according to many witnesses, it is a relatively efficient tax. Because of its
broad and generally non-distorting coverage, many witnesses contended that it would be the
most suitable consumption tax to increase to pay for additional federal spending on health care.
The GST option, however, would be somewhat more regressive than personal
income taxation. Nonetheless, the proposal to earmark an increase in the GST for the purpose
of health care received very broad support during the Committee’s hearings. For example, Paul
Darby explained that:
(…) the Conference Board's position on how to address the financing issues over the next
30 years tends towards consumption taxes, such as the GST. We would tend to try to
avoid taxes on working, which would include income and payroll taxes. We sense that,
at this point, taxes on consumption would probably have the least disincentive effects
among the various tax options one could consider. (…) We would want to see a specific
link between the taxation and the spending on health care, in the hopes that those taxes
would, as a result, be much more politically palatable to the general public.356
Mr. Darby suggested that rebates for low-income Canadians through income
tests, such as the current GST Tax Credit, could be provided for an earmarked and increased
GST in order to improve equity and progressivity. In addition, if the rebates for the increase in
the GST were similar in structure to the current GST rebates, they would add little to the
scheme’s administrative cost.
15.5
Payroll Taxes
In many OECD countries (such as Germany and the Netherlands), public
funding for health care is generated from an earmarked payroll tax. Contributions under this
payroll tax are usually compulsory and shared between the employee and the employer. These
contributions are levied on labour earnings and are held by a body operating at arm’s length
from government (“Sickness Funds”). The predominant attraction for earmarked payroll taxes
(or “social insurance”) in many OECD countries is the independence of the insurer or agency
from government and the perceived greater responsiveness of the insurer to the patient or
consumer.
In Canada, both the federal and provincial/territorial governments currently use
earmarked payroll taxes in one form or another. At the federal level they include: premiums for
Employment Insurance and Canada Pension Plan contributions (the CPP/QPP is both a federal
and provincial responsibility). Provincial payroll taxes include: workers’ compensation
premiums (collected in all provinces) and health care/post-secondary education taxes (levied in
Quebec, Manitoba, Ontario, Newfoundland and the Northwest Territories), with the latter not
generally being firmly dedicated to any specific use.
356
Ibid., (59:5).
278
An earmarked payroll tax as a means of collecting revenue for the purpose of
health care has the advantages previously mentioned for earmarked taxes. For example, it can
be paid into a separate fund. It is highly visible and transparent and, therefore, usually more
acceptable to the public. In other words, higher levels of transparency under a system of payroll
taxes weaken resistance to contribution increases compared with general taxation increases. In
addition, payroll tax revenue is, at least in theory, better protected from annual political
interference, since budgetary and spending decisions can be devolved to independent bodies.
Equally important, levying the tax only on labour income avoids distortions to savings and
investment. Finally, revenue generated from payroll taxes also appears to be more stable. In
this perspective, a recent report states:
In Belgium, where health care is financed about equally from taxation and social
insurance contributions, the deviation of average annual growth was greater for revenue
from government sources than non-government sources. (…) In other words, annual
government spending on health care fluctuated more than insurance-based revenue. (…)
Consequently, relying more on funding from general taxation than on payroll
contributions is likely to make revenue less stable. 357
Earmarking a payroll tax, however, has a number of disadvantages. Because
employers are usually required to contribute to part of the cost of health care insurance, this
results in higher labour costs, inhibits job creation and reduces the international competitiveness
of a country’s economy. Moreover, a payroll tax relies on a more narrow revenue base (labour
earnings). Accordingly, it would require a higher rate of a payroll tax to raise a given amount of
revenue than would a general income tax on all income. This may explain why general tax
revenue is also used as an important revenue source in countries with health care payroll tax
systems. In these countries, general tax funds are usually transferred to health care insurance
funds to cover the contributions of the non-employed population. General tax revenues may
also cover the deficits of public health care insurance funded by payroll taxes.
In contrast to general taxation, a payroll tax may also impede job mobility;
employees may be unwilling to move to a non-covered job (such as self-employment) in some
systems for fear of higher contribution payments or fewer benefits (as in the United States).
The potential negative impact of payroll taxes on industry was one of the
justifications for diversifying funding sources from an employee/employer contribution system
to an income-tax-based system under the Juppé Plan in France. More precisely, France
significantly reduced the employee contribution rate (from 5.5% in 1997 to 0.75% in 2000) and
dedicated its General Social Contribution Tax specifically to health care (the tax rate was
increased from 3.4% to 7.5% of personal income). Italy and Spain went a step further by
shifting completely from payroll tax to a general tax-revenue-financed health care system.
Another criticism of payroll taxes with respect to efficiency is that the various
European Sickness Funds, which are responsible for collecting and managing the contributions
made by employers and employees, have little incentive to control costs because they have the
357
Mossialos and Dixon (2002), chapter twelve, p. 285.
279
ability to raise contribution rates. Also, the existence in some countries of multiple funds and
the lack of integration in purchasing health services often results in high administration costs.
It could also be argued that health care financing via a payroll tax system is
vulnerable to periods of economic downturn, since reduced revenues from lower employment
and freezes in income levels would result in smaller contributions to Sickness Funds.
Furthermore, with the financing burden concentrated on employers and employees, the negative
impacts on certain labour-intensive sectors of the economy could be significant.
Finally, with respect to equity, available evidence from Germany and the
Netherlands suggests that funding health care through payroll tax tends to be regressive. This is
probably because the design of these two systems allows higher-income earners, who already
possess private insurance, to opt out of the public health care insurance plan.
An important element of payroll tax, however, is the smaller impact it has on the
overall Canadian economy when compared to other forms of taxation. Preliminary calculations
by the Department of Finance showed that an extra dollar of tax revenue raised through payroll
taxes cost the economy 27 cents in real loss of output. This is compared to $1.55 in loss of
output for every extra dollar of corporate income tax and 56 cents for personal income tax.
Sales taxes were shown to be the least distorting source of tax revenue, creating only 17 cents of
output loss.358 In the context of international competitiveness, there is still some room for
payroll taxes in Canada: OECD data show that Canada depends less on this form of taxation
relative to other industrialized countries.359
However, a crucial factor with respect to payroll taxes is that, in terms of
intergenerational fairness, payroll tax has an impact similar to but worse then income taxation:
the burden is borne entirely by the younger and working population.
15.6
National Health Care Premiums
A public health care insurance premium is a fixed lump-sum amount paid by
either an individual or a family for the purpose of financing publicly insured health services. In
some systems, health care insurance premiums are fixed amounts paid regardless of income and
independent of usage of the health care system. This form of premium is currently used in both
British Columbia and Alberta, although there are some exemptions for low-income individuals
and families in the two provinces.
This method of funding is considered to be quite efficient for two reasons. First,
the financing burden is spread over a wide base (the entire population) rather than just the
employed, as is the case with most payroll taxes. This means that all sectors of the economy are
treated equally, and due to the flat nature of premium payments, individuals have little incentive
to alter their behaviour (whether to consume more or less, whether to work more or less, etc).
Second, health care insurance premiums do not differentiate between the younger and older
segments of the population, thereby ensuring inter-generational fairness.
Department of Finance. Data presented by the OECD, OECD Economic Surveys – Canada 1997, November 1997,
p. 85.
359 OECD, Revenue Statistics 1965-2000, 2001.
358
280
Whether a person works or not they would still have to pay the amount. This would be
the least distortionary of the types of taxes that could be levied, and the one most
conducive to the demographic issues we will face down the road. 360
A flat health care insurance premium does not affect marginal income tax rates,
as an increase in personal income taxation would, and therefore has a less distorting impact on
the economy in terms of savings and investment.
In terms of equity, flat premiums for public health care insurance would tend to
hit low-income Canadians the hardest, although some low-income relief could be used to soften
that impact. Also, middle-income Canadians would have to pay the same health care premium
as rich ones. Therefore flat premiums are clearly regressive, as they benefit most those with high
incomes. They do, however, benefit those with high health care needs, since they pay the same
amount of premium as those who use the health care system only slightly.
Overall, the equitable characteristics of a system financed by flat premiums
appear to be quite limited. The Committee was informed that, for greater equity, premiums
should be linked to income in some manner and some groups of the population should be
exempted from paying them. The suggestion to use variable premiums adjusted to income levels
was recently made in the Mazankowski report, A Framework for Reform, prepared for the Premier
of Alberta in 2001.
In his brief to the Committee, David Kelly provided a lengthy statement on the
benefits of a national health care insurance premium:
There may well be need for additional federal revenues to support the Canadian health
care system, and a federal health care premium would be one means of raising funds in a
fashion which provides visibility for the federal financial contribution.
(…) The provincial premiums programs which operate in Alberta and British
Columbia raise significant revenue for those provinces. Premiums are fixed amounts
applied universally (payment is mandatory), income-related (reduced or eliminated for
lower income earners), but unrelated to program eligibility (late or non payment does not
result in termination of benefits to an individual or family). Premiums are collected where
possible through payroll deduction, with the balance directly billed to provincial residents.
The administrative costs of collecting premiums by a process separate from the income tax
system are nontrivial.
(…) Were a federal health care premium to be introduced, it would certainly make sense
to collect it through the income tax system, rather than through a separate administrative
procedure. That is, one could provide for deduction at source, quarterly payments, and
annual reconciliation through the existing tax collection structure, rather than invoicing
360
Jack Mintz (62:7).
281
all Canadian families on a monthly or quarterly basis. There are many potential designs
for the structure of a federal premium – it could be a flat rate applied equally to all
residents, or a flat rate with relief for lower income earners as in the two provinces which
levy their own premiums, or a surtax applied proportionally or in some other fashion on
top of the income tax. All these options have their own equity implications. It should be
kept in mind that there is a very substantial element of income redistribution associated
with the financing of Canada’s universal health care program. Any move to finance the
system in part through a premium which is less progressive than existing funding sources
would affect the nature of that income distribution, and so add to the list of value issues
which the Committee must sort through.361
In conclusion, premiums could constitute a visible and equitable means of raising
the money for the purpose of health care, provided that they are structured in a way to ensure
progressivity (that is, premiums should vary in proportion to income).
15.7
User Charges
User charges are usually defined as a form of payment (covering a portion of the
cost of services) made by a patient at the time a health service is rendered. That is, they
represent an up-front charge to the patient. In Volume Four of its health care study, the
Committee described the different forms of user charges:
•
Co-insurance, the simplest form of user charge, requires the patient to pay a
fixed percentage (say, 5%) of the cost of services received. Thus, the higher
the cost of the service, the larger the fee. Many private-sector drug insurance
plans require this method of payment.
•
Co-payment is an alternative to co-insurance. Instead of having to pay a
share of costs, the patient is required to pay a nominal fee per service (for
example $5) which does not necessarily bear any relation to the cost of the
service. The same amount is charged, no matter what the cost of the health
care provided. This form of user charge exists in many countries, such as
Sweden.
•
Under a system of deductibles, the patient is required to pay the total costs of
services received over a certain period up to a certain ceiling, the deductible.
Above the ceiling, costs of services to the patient are covered by the
insurance plan. All users must pay the deductible, which is independent of
the quantity of services received. Again, this form of insurance-based user
charge is required in some countries.362
Some commentators have suggested that user charges of relatively modest size
can be a useful means of discouraging overuse of the health care system, and of creating some
personal sense of responsibility for the use of the system. However, much of the literature with
respect to user charges concludes that these charges deter some individuals from seeking
361
362
David Kelly, Brief to the Committee, pp. 2-3.
Volume Four, p. 62.
282
necessary as well as unnecessary care, and do so in a way that falls disproportionately on the
poor. Professor Robert Evans told the Committee that user charges raise serious issues of
access and equity:
It is well-known and extensively documented that a relatively small proportion of the
population use a very high proportion of health care services, both in any one time period
and over longer times. A recent study in B.C., now being written up for publication,
shows that the five percent of the adult population with the highest use of physicians’
services (measured in dollars of billings) not only accounted for 33.7% of total billings,
but made up 43.5% of hospital admissions and used 69.3% of inpatient days. These
people were generally quite ill, typically with major and multiple problems. There were on
average older – almost half were over 60 – came from poorer neighbourhoods, and had a
death rate nearly eight times that of the general population. For most of them, there
seems to be no realistic prospect of their paying over half of the costs that they generate,
even if such an extraordinarily skewed distribution of financial burden were acceptable to
the general population. 363
It is worth noting that Canada is the
The Committee reviewed the
only industrialized country that prohibits user charges
evidence on user charges in
for publicly insured health services. Despite their use
Canada and concluded that
elsewhere, the Committee reviewed the evidence on
user charges in Canada and concluded in Volume Five
access
to
publicly
funded
that access to publicly funded hospitals and doctors
hospitals and doctors should not
should not depend on the income or wealth of depend on the income or wealth
individual Canadians.364 We explained that most of the of individual Canadians.
spending and waste in the health care system are
beyond patient control; the major expenses, and the
decisions that give rise to these expenses, are incurred or influenced by health care providers on
behalf of their patients. These decisions are not made by the patients themselves. Moreover,
the Committee was told that implementing modest user charges could incur administrative costs
that would nearly equal the revenue generated from such charges.
For all these reasons, the Committee enunciated in Volume Five Principle
Eighteen, which states that while incentives need to be developed to encourage patients to use
the hospital and doctor system as efficiently as possible, such incentives should not include upfront user charges.
Some form of patient payment, however, could be used in implementing the
primary health care reform that the Committee is proposing in Chapter Four. It should not be
labelled as a user charge, but rather as an “orientation fee.” When primary health care physicians
make referrals to specialists, patients do not incur any costs. Should the patient decide to take
an appointment to a medical specialist without any referral, he or she should be liable for part or
all of the cost incurred by this visit. This form of patient payment is required in Denmark.
363
364
Robert Evans, Brief to the Committee, 3 June 2002, p. 6.
Volume Five, pp. 53-54.
283
15.8
Medical Savings Accounts
As described in Volume Three of the Committee’s study on health care, Medical
Savings Accounts (MSAs) are health care accounts, similar to bank accounts, set up to pay for
the health care expenses of an individual (or family).365 They are often established in
conjunction with high-deductible (or catastrophic) health care insurance. Money contributed to
an MSA belongs to, and is controlled by, the account holder, accumulates on a tax-free basis and
is not taxed if used for health care purposes. Unused MSA funds can be utilized for other
purposes to the benefit of the account holder.
MSAs usually involves three levels of payment. First, money in the account is
used for normal medical expenses. Next, if the account is exhausted and the deductible has not
been reached, the user pays the expenses personally. Third, public health care insurance covers
expenses beyond the deductible.
MSA systems are operating in a few jurisdictions, including Singapore, South
Africa and parts of the United States. The general theory behind MSAs is that consumers would
make more judicious and cost-effective decisions if they were spending their own money, rather
than relying on the “free” publicly funded services. As a result, MSAs would limit (if not
eliminate) unnecessary utilization of health services, reduce the pressures on public health care
funding and encourage efficiency.
A number of proposals for MSAs have been put forward in recent years in
Canada. 366 Given the interest of a number of Canadians in MSAs, the Committee reviewed the
literature on the topic and held discussions with various individuals and experts. Based on the
evidence received, we believe that, although MSAs have some interesting elements, they would
not be appropriate in our publicly funded hospital and doctor system.
First, there is no consensus among experts on the impact of MSAs on a country’s
health status and overall health care costs. On the one hand, some maintain that MSAs increase
consumer choice, encourage patients to make more prudent use of health services and reduce
health care spending. On the other hand, others contend that MSAs can realize only small
health care savings at best, segment the risk in the insurance market, drive up costs and have an
adverse impact on health as people, particularly the poor and unhealthy, cut back on necessary
health care. Moreover, the most recent literature suggests that current knowledge of MSAs is
too limited to recommend their incorporation into the Canadian health care system.367
However, the impact on equity is certainly the aspect that is of most concern to
the Committee. Like user charges, MSAs transfer part of the responsibility for health care
spending from government directly to patients. Furthermore, they do so in a manner that falls
disproportionately on the poor and on those who are sick, whether rich or poor. In fact, MSAs
Volume Three, Chapter Seven, pp. 53-63.
See the following documents: 1) William McArthur, Cynthia Ramsay and Michael Walker ed., Healthy Incentives:
Canadian Health Reform in a Canadian Context, The Fraser Institute, 1996; 2) Cynthia Ramsay, “Medical Savings
Accounts”, Critical Issues Bulletin, The Fraser Institute, 1998; 3) David Gratzer, Code Blue – Reviving Canada’s Health
Care System, ECW Press, 1999; 4) Dennis Owens and Peter Holle, Universal Medical Savings Accounts, Frontier Centre
for Public Policy, Policy Series No. 5, July 2000.
367 Samuel E.D. Shortt, “Medical Savings Accounts in Publicly Funded Health Care Systems: Enthusiasm versus
Evidence”, in Canadian Medical Association Journal, Vol. 167, No. 2, 23 July 2002, pp. 159-162.
365
366
284
reduce the subsidy that the well now pay to the poor. A recent study reports that, if MSAs were
implemented in Manitoba for hospitals and physician services, then the sickest 20% of residents
in that province would become personally responsible for over $60 million of health care
costs.368
In Volume Four, the Committee indicated that a system of MSAs might be
contemplated for application in a limited sphere, such as paying for long-term care facilities,
where there are already significant private out-of-pocket charges. However, MSAs should not be
applied in the broader health care field involving presently insured services.
Therefore, the Committee strongly
believes that funding for medically required The Committee strongly believes
that funding for medically required
hospital care and physician services must remain
the responsibility of a publicly funded and hospital care and physician services
administered health care insurance program. This must remain the responsibility of a
is consistent with Principle Four in our Volume
publicly funded and administered
Five, which stated: “Health services covered under
health care insurance program.
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.”369
15.9
Pre-Funding for Health Care
In the context of an aging population, the option of pre-funding health care is
gaining some popularity. Pre-funding involves setting aside funds today to meet all or part of
projected future cost increases in health care, so as to enable Canada to maintain a relatively
stable (or at least more stable) annual ratio of health care spending to GDP. Excess revenues
gathered now for such pre-funding would be placed in a special account, to be made available
later for stabilization purposes.
Unfortunately, the costs of full pre-funding are high, even when the stabilization
is attempted over a period of 30-40 years during which Canada’s population will be getting
significantly older. Accordingly, there may not be the popular will to implement a long term
pre-funding plan now when the need to meet immediate cost pressures in the system is seen to
be urgent. And the question could be raised, as with earmarked taxation, as to why health care
costs only should be pre-funded – what about other costs that will also vary with aging of the
population?
It has been suggested that it may be more practical to consider the pre-funding
of only some elements of overall health care costs, specifically those relating to health services
for the elderly, such as home and institutional care, that are not now publicly funded. Such prefunding might be accomplished through a government plan financed by current taxation or
through private health care insurance coverage. Such a scheme (comparable to MSAs) would
assist individuals to save for future health care costs on a tax-efficient basis, especially if the
Evelyn L. Forget, Raisa Deber and Leslie L. Roos, “Medical Savings Accounts: Will They Reduce Costs?”, in
Canadian Medical Association Journal, Vol. 167, No. 2, 23 July 2002, pp. 143-147.
369 Volume Five, p. 30.
368
285
premiums are deductible and earnings on accumulated funds are exempt from tax. Ultimately,
pre-funding would relieve the publicly funded health care system of some costs that it now
incurs in subsidizing some of those who need such services.
A variant of this approach was proposed by the Clair Commission in Quebec,
which recommended that a separately managed fund be established to pre-fund the costs of
both home and institutional care for individuals no longer able to care for themselves. The
Commission recommended that the fund be financed by a mandatory premium (tax) on
personal income from all sources, and be for the benefit of those (particularly the elderly) whose
inability to care for themselves was long-term (over six months). Such a plan would provide an
improvement in and integration of existing services for long-term disability and yet avoid a rapid
rise in health care costs for an aging population.
This approach has a number of advantages: its financing structure is highly
visible and the funds generated are wholly dedicated. The degree of equity of this funding
method, as well as its impact on efficiency and intergenerational fairness, would depend on the
source of revenue used to raise the money – personal income tax, public premiums or private
health care insurance.
Given that the need to raise additional revenue to fund health care is urgent, the
Committee does not endorse pre-funding. In our view, it would be very difficult to justify
setting aside funds for future needs while substantial sums of money are required now
throughout the publicly funded health care system to undertake its restructuring, renewal and
expansion.
15.10 Committee Commentary 370
Sections 15.3 to 15.9 above have described a wide variety of possible options for
raising $5 billion annually in new federal government revenue; they have also presented in some
detail the advantages and disadvantages associated with each option in terms of five specific
criteria – equity, efficiency, intergenerational fairness, stability and visibility. On the basis of this
information, the Committee reached conclusions about the approaches it favours.
We wish to say, up front, that there is no such thing as a “good” tax. There are,
however, specific objectives that a new tax or revenue-generating initiative designed to pay for a
specific public benefit should meet:
•
The tax should be apportioned fairly and reasonably over the groups that will
be called upon to pay it;
•
The tax should have the least possible adverse effect on economic activity
and growth in relation to the revenues raised;
•
The tax should involve modest administrative costs of compliance for
taxpayers and collection costs to government;
The Committee is indebted to Robert D. Brown, former chairman of Price Waterhouse, and his research
assistant Michanne Haynes, for many of the calculations and revenue estimates presented in this chapter. The
assistance of the Department of Finance in supplying statistical data is gratefully acknowledged.
370
286
•
The justification for the tax should be clearly apparent to the public,
preferably by associating the revenue directly with the benefits of the
spending;
•
The tax should produce revenues that are stable and robust (in the sense that
they will grow at about the rate of GDP), enabling the funds raised to meet
increasing costs in the future;
•
To justify its collection, the tax should be perceived to result in some tangible
improvements to the system and to health care coverage.
On balance, the evidence available on how different revenue sources affect
equity shows that equity is best served when health care is funded through personal income
taxation or consumption taxes, rather than through payroll taxes or fixed premiums. In
addition, from an efficiency viewpoint, international experience indicates that payroll taxation
may affect the labour market more negatively than general taxation, because contributions are
levied only on wages and employers are liable for part of the contribution. Finally, research
shows that, whatever the method of raising revenue, the level of economic activity at any given
time significantly influences the ability of a country to raise money for health care (or for any
other purpose). Moreover, spending on health care has an opportunity cost, and other sectors
may take priority in times of economic contraction or military conflict.
However, a major advantage of both payroll taxation and premiums over existing
income and other general taxation is that they are more visible, transparent and predictable
sources of financing. Earmarked taxation would certainly help in bringing more visibility, and
possibly even greater stability, to a tax-funded health care system.
The Committee is of the view
that increased federal revenue for hospital and
doctor
services
should
not
come
disproportionately from those who are ill. These
services are now perceived to be “free.” The
method of raising revenue should not be
perceived as a “tax on the sick.” For this reason,
the Committee rejects all forms of financing that
call for individuals to pay directly on the basis of
system.
The Committee is of the view that
increased federal revenue for hospital
and doctor services should not come
disproportionately from those who are
ill. The method of raising revenue should
not be perceived as a “tax on the sick.”
their utilization of the hospital and doctor
Furthermore, the Committee believes that the increased federal revenue should
be raised based on ability to pay; that is, to ensure equity, individuals with higher incomes should
pay more than individuals with lower incomes. For this reason, the Committee rejects the
option of a flat national health care insurance premium. But, as we discuss below, we are not
opposed to the option of a progressive health care insurance premium structure.
With respect to direct taxation, calculations done on behalf of the Committee by
Brown and Haynes indicate that it would be necessary to increase the rate applicable to each
taxable income bracket of personal income tax by 1.1 percentage points in order to raise $5
billion in additional federal revenue. Another way to finance an incremental annual federal
spending on health care through the personal income tax would be to impose a 5.7% surtax on
287
all federal tax. The Committee was told that these two options would, however, reverse
approximately one-third of the 2000 federal personal tax cuts provided under the five-year tax
plan and raise marginal tax rates significantly.
Calculations by Brown and Haynes also indicate that it would be necessary to
increase the general rate of corporate tax by 7 percentage points in order to raise an additional
$5 billion in federal revenue. This would, however, reverse all present and scheduled future cuts
in corporate tax, leaving Canada’s rates uncompetitive internationally. This would, therefore,
severely affect the Canadian business sector, employment and the overall economy.
The Committee is convinced that the changes to the Canadian tax structure that
lead to increased revenue should be done in a way that keeps Canada’s tax rates, including
personal income tax rates, relatively competitive with other OECD countries, particularly the
United States. In addition, for the sake of intergenerational fairness, we believe that the working
population should not bear a disproportionate burden of taxation relative to the retired
population. For these reasons, and based on the estimates given above, the Committee rejects
the option of raising funds by increasing personal income taxes or corporate income taxes.
Although there appears to be some
room for a payroll tax from an international
competitiveness perspective, the Committee rejects
this option on the grounds of intergenerational
fairness. It would be unfair to require one segment
of the population – working Canadians – to bear
the costs of increased investment in the publicly
funded health care system. This is particularly true
in the context of an aging population with a
reducing proportion of that population in the
workforce.
It is the view of the Committee that it
would be unfair to require one segment
of the population –working Canadians –
to bear the costs of increased investment
in the publicly funded health care
system. This is particularly true in the
context of an aging population.
Therefore, the Committee concludes that there are two possible ways in which
$5 billion could be raised annually from Canadians and which comply with the set of criteria and
objectives listed above. The first option is a National Health Care Sales Tax. The testimony
received by the Committee suggests that, although this option might be considered mildly
regressive, the benefits gained from an efficiency point of view far outweigh the impact on
equity. In addition, expanded tax credit rebates would greatly reduce the impact of sales tax on
lower-income people. The tax would be collected using the same base as the Goods and
Services Tax (GST) so that its collection would be straightforward. Calculations done for the
Committee suggest that the rate of tax required to raise $5 billion annually would be around
1.5% (precisely, 1.3%). Thus, under the National Health Care Sales Tax option, Canadians
would pay a national sales tax of 8.5%, which would consist of a 7% GST and a 1.5% National
Health Care Sales Tax. The GST tax credit rebate program would be expanded to parallel the
increase in the rate to 8.5%.
The second option involves a Variable National Health Care Insurance Premium.
Under this option, Canadians would pay, through the tax system, a national health care insurance
premium the amount of which would vary with the individual’s taxable income as shown in
Table 15.3. For each taxable income bracket currently used for the purpose of calculating an
288
individual’s federal personal income tax, a flat premium would be charged. The premium would
then increase (indeed double) for individuals in the following income bracket.
TABLE 15.3
ANNUAL FEDERAL REVENUE GENERATED FROM A VARIABLE
NATIONAL HEALTH CARE INSURANCE PREMIUM
Taxable Income
Number of Taxfilers
Level of Premium
Bracket
Paying Premiums
(Dollars)
(Federal Personal
(Millions)
Income Tax Rate)
Up to $31,677
7.9
$0.50/day
(16%)
(or $185/year)
$31,678 to $63,354
5.8
$1/day
(22%)
(or $370/year)
$63,355 to $103,000
1.4
$2/day
(26%)
(or $740/year)
Over $103,000
0.5
$4/day
(29%)
(or $1,400/year)
ESTIMATED TOTAL FEDERAL REVENUE
Estimated Annual
Federal Revenue
($ Billion)
1.341
2.096
0.968
0.622
5.027
1. Taxfilers in the taxable income bracket from $0 to $31,677 with no net federal tax liability (net of
non-refundable tax credits) will not be liable for any health care premium.
2. In addition, taxfilers in this first bracket who do have net federal tax will pay the lesser of $185 or
10% of taxable income not offset by the income equivalent to the amount of the non-refundable tax
credits. This provision is designed to prevent the premium payable by taxpayers in this bracket with
only modest net federal tax from being disproportionate to their income tax. For example, suppose
that a taxfiler has a taxable income of $9,934. The federal tax on this taxable income is 16%, which
amounts to $1,590. But this taxfiler also has $9,000 on which he/she can claim the 16% of nonrefundable tax credits or $1,440. Thus, the net federal tax for this taxfiler is $150 ($1,590 minus
$1,440). For taxfilers in this income bracket, the premium corresponds to 10% of the value obtained
from the difference between the taxable income (e.g. $9,934) and the amounts on which the nonrefundable tax credits are claimed (e.g. $9,000). The taxfiler in the above example has a $150 net
federal tax from taxable income of $934 in excess of the amounts on which the refundable tax credits
are calculated; this taxfiler would thus pay a premium of $93.40 (that is, 10% of $934) instead of
$185, the normal premium for this bracket.
3. There is a total of 15.4 million taxfilers with income less than $31,677 of whom only 7.9 million pay
net federal tax. The average premium for all taxfilers in this bracket is $71. For the 7.9 million with
net federal tax, the average premium is $170.
4. Individual taxfilers in the 22%, 26% and 29% brackets are subject to “notch relief”, so that their
premium will not be more than the premium for the income bracket below theirs, plus 10% of their
income exceeding the bracket threshold. This provision is designed to prevent a taxpayer who
receives income that puts him/her just over the bottom of the next income bracket from facing an
abrupt and steep increase in premium. For example, an individual with income of $33,177 ($1,500 in
excess of the 22% bracket threshold of $31,677) would pay $185 (the premium of the previous
bracket) plus $150 ($1,500 times 10%) for a total premium of $335, instead of the normal premium
of $370 for this bracket.
5. Calculation based on 2001-2002 data.
Source: Robert D. Brown and Michanne Haynes. Based on data provided by the Dep artment of Finance.
289
To ensure that individuals with taxable income only slightly in excess of the
bottom of their bracket are not subject to a significant increase in their premiums, a “notch
relief” provision has been incorporated into the calculation of premiums. This notch relief
provides that the premiums of taxpayers will not be more than the premium of the income
bracket below theirs plus 10% of income exceeding the income threshold for the bracket. Thus,
the Variable National Health Care Insurance Premium is progressive across the entire income
spectrum, but it is virtually flat within each income bracket.371
Although the Variable National Health Care Insurance Premium would be
calculated through the income tax, it is not equivalent to an increase in personal income tax. The
premium has some aspects of an income tax (because it is subject to some variation in incomes),
but in fact it basically varies by taxable income bracket, not income. Moreover, the premium
would have only a very moderate impact on marginal income tax rates, which would rise only at
the “notch points” where the higher premium in the next bracket is phased in. Therefore,
marginal rates would be relatively unchanged and, accordingly, would have much less impact on
personal incentives to earn, save and invest than that which would result from an increase in
personal income taxation.
The Committee understands that it is
up to the federal government to decide which of the
two options, either a National Health Care Sales Tax or
a Variable National Health Care Insurance Premium, is
most appropriate to raise the needed $5 billion
annually. Both options for raising $5 billion annually
in new federal health care revenue have advantages
and disadvantages.
Both options for raising $5
billion annually in new federal
health
care
revenue
have
advantages and disadvantages.
On the one hand, the National Health Care Sales Tax would be simple to
administer, as it would be based on the identical tax base to the GST. In addition, this option
has a built-in growth factor, as sales tax revenue grows with the economy. Since health care
spending is forecast to grow at a rate faster than the growth in GDP, having a built-in growth
factor is important. Moreover, the National Health Care Sales Tax would not be significantly
regressive, particularly since the GST tax credit rebate program would be extended to the new
tax. Nonetheless, a major barrier to any sales tax increase is strong public opposition to such
taxes in general, and the GST in particular.
On the other hand, the Variable
National Health Care Insurance Premium has the
advantage of being progressive as the amount of
premium increases, in stages, with income. Such a
The most important issue is for
Canadians to agree to contribute
$5 billion annually in new federal
revenue for health care.
As indicated in Section 15.4, the Committee rejects the option of a flat annual health care premium because it is
clearly regressive. For example, calculations indicate that it would require an annual flat premium of $425 for every
taxfiler with income over $20,000 to generate $5 billion in revenue. But there are over 136,000 taxfilers who have
income in excess of $20,000 and who pay no tax because of the application of credits such as the Charitable
Donation Credit. For this group, the payment of a flat premium would be a significant additional burden. If the flat
rate premium were modified so that it could not exceed 5% of taxable income in excess of the $20,000 threshold,
then the required annual premium would increase to $500, and there would still be some taxfilers with no net tax
who would be required to pay some of the premium.
371
290
national premium would also be consistent with the way in which individuals usually buy
insurance, namely by paying for it through an annual premium. However, the premium option
has the significant disadvantage that the more steps there are in the premium structure, the
closer the premium is to an income tax increase and, for reasons stated earlier in this chapter, the
Committee is opposed to an income tax increase. Moreover, the fewer steps there are in the
premium structure (hence the less it looks like an income tax), the more regressive this option
becomes.
From the Committee’s perspective, the most important issue is for Canadians to
agree to contribute $5 billion annually in new federal revenue for health care. This is the issue
Canadians need to seriously consider, debate and then decide.
Which of the two options
In choosing between the two options, the
described above is eventually chosen as the
Committee recommends the National
revenue raising mechanism is less important
than agreement to raise the $5 billion. Variable Health Care Insurance Premium.
Nevertheless, in choosing between the two
options, the Committee recommends the National Variable Health Care Insurance Premium.
Therefore, the Committee recommends that:
The federal government establish a National Variable
Health Care Insurance Premium in order to raise the
necessary federal revenue to finance implementation of the
Committee’s recommendations.
15.11 Current Federal Funding for Health Care
The Committee recognizes that the $5 billion in increased spending is not the
entire increase in federal health care spending that will be required in the years ahead. The cost
of the hospital and doctor system to which the federal government now contributes will
continue to grow. The increased revenues required to cover these increasing costs will have to
be funded out of the efficiency savings that result from the restructuring recommendations
proposed in this report, and from the general growth in federal revenues from existing tax
sources.
This raises the question of whether,
in order to substantially improve transparency and
In order to substantially improve
accountability in federal health care spending, the
transparency and accountability in
62% of federal CHST cash transfers that are federal health care spending, the 62%
currently notionally attributed to health care of federal CHST cash transfers which
(according to Finance Canada’s estimation) ought
are currently notionally attributed to
to be paid for through an earmarked tax source (as
health care ought to be paid for
described in Section 15.4 above). This would help
the public considerably in understanding how through an earmarked tax source.
much federal money is spent on health care.
Canadians would thus see a more direct link between the taxes they pay and the health services
291
they receive. It would also greatly help to dispel the widely held perception that health care is
“free.”
One way to do this would be to earmark some of the seven percentage points of
the GST to health care. Calculations done for the Committee indicate tha t it would be necessary
to earmark 3.1 of the 7 percentage points of the GST (or around 45% of the revenue generated
through the GST) to obtain the 62% of current federal CHST cash transfers which are related to
health care.
However, given the need for an increase in the current CHST funding (at least
until the full impact of the Committee’s restructuring recommendations come into effect), it is
probably appropriate that, if an earmarked source is to be used for the current federal cash
contribution to health care, and if the earmarked source is to be the GST, then 3.5 (rather than
the calculated current 3.1) of the 7 percentage points of GST revenue (or 50% of GST revenue)
should be earmarked for health care. This would increase federal base funding for health care by
$1.5 billion. In addition, transparency would be enormously enhanced by earmarking half of
GST revenue to be the federal cash contribution to health care, supplemented by the additional
funding required for implementation of the reforms recommended in this report.
A
significant
advantage of using the GST Using 3.5 of the 7 percentage points of the GST
(rather than the calculated current 3.1 percentage
revenue as the earmarked source is
that it has a built-in escalator: as points) to fund the cash federal contribution to the
the economy goes, so does the existing publicly funded hospital and doctor system
GST revenue. Thus, using 3.5 of
would both create the stable and predictable source
the 7 percentage points of the GST of federal funding the Committee called for in
(rather than the calculated current
Principle Two in Volume Five as well as lead to
3.1 percentage points) to fund the
augmentation of this federal contribution.
federal cash contribution to the
existing publicly funded hospital and doctor system would create the stable and predictable
source of federal funding that the Committee called for in Principle Two in Volume Five372 as
well as lead to augmentation of this federal contribution. Therefore, the Committee
recommends that:
The federal government determine an earmarked revenue
source which would fund the approximately 62% of CHST
currently regarded as being the federal annual cash
contribution to Canada’s national health care insurance
program.
If the GST is chosen as the earmarked revenue source for the current federal
annual cash contribution to the national hospital and doctor insurance program, 3.1 of the 7
percentage points of the GST would be required to meet the current funding levels. In this case,
the Committee further recommends that:
372
Volume Five, pp. 25-28.
292
If the GST is chosen as the earmarked revenue source for
the current federal cash contribution to the national hospital
and doctor insurance plan, then in order for the federal
government to make a significant additional contribution to
funding to the current hospital and doctor system, half of all
GST revenue (or 3.5 of the 7 percentage points) should be
earmarked for health care. (This would be in addition to the
increased federal funding required to implement the
recommendations in this report.)
If the above two recommendations are accepted, then the federal government
would be indirectly contributing at least an additional $3.0 billion a year to the existing public
hospital and doctor insurance program. $1.5 billion would come from increasing to 3.5
percentage points the amount of GST revenue earmarked for health care, while another $1.5
billion would, as discussed in Section 15.1, come from money that the provinces are now
spending and that they would no longer have to spend once the recommendations in this report
are implemented. This amount would then be reinvested in the existing health care system.
If the federal government
also decided to invest the $1 -billion
contingency (as discussed in Section 15.1)
as a transitional payment into the existing
hospital and doctor system while the
efficiency measures proposed in this report
are being put into effect, the total
additional contribution of the federal
government to the existing system would be
at least $4 billion.
The Committee believes it is important to
acknowledge the fact that the health care
costs of the elderly are considerably higher
than the health care costs of younger people,
and that some provinces have a higher
percentage of their population aged 70 and
over than other provinces.
Finally, CHST transfers are currently distributed to the provinces/territories on a
per capita basis. If the health care portion of the CHST is paid from an earmarked revenue
source as recommended above, the Committee believes that a variation should be made to the
way a province’s share of the fund is determined. More precisely, we believe it is important to
acknowledge the fact that the health care costs of the elderly are considerably higher than the
health care costs of younger people, and that some provinces have a much higher percentage of
their population aged 70 and over than other provinces. Accordingly, the Committee
recommends that:
The share of the federal annual contribution to which a
province/territory is entitled for the purpose of the existing
national hospital and doctor program be not only based on
the proportion of its population relative to Canada as a
whole, but also weighted in some way by the percentage of
its population aged 70 years and over.
293
A variety of weighting formulae are possible, and should be explored in order to
improve the fairness of current federal health care contributions to the provinces and territories.
However, a simple formula would be to give triple the weight to each provincial resident aged 70
years and over. This would be of significant assistance to smaller provinces while not
significantly hurting wealthier ones.
294
CHAPTER SIXTEEN
THE
H EALTH
T HE C ONSEQUENCES OF N OT M AKING
C ARE S YSTEM F ISCALLY S USTAINABLE
The previous chapter detailed the Committee’s position with respect to how
additional federal revenue should be raised and administered in order to implement our
recommendations. We believe strongly that their implementation is essential if health care
reform and renewal is to be undertaken, and if this is to be done in a manner that is effective,
transparent and accountable. The Committee is convinced that an additional $5 billion annually
must be invested by the federal government to finance the changes necessary to secure a highquality and fiscally sustainable health care system.
The Committee also
realizes, however, that in a free and
The Committee also realizes, however, that in a free
democratic society, Canadians may and democratic society, Canadians may not be
not be willing to pay more taxes to
willing to pay more taxes to the federal government
the federal government (through the
(through the National Health Care Insurance
National Health Care Insurance Premium as we recommend in this report) to
Premium as we recommend in this
report) to support their national support their national health care insurance system
health care insurance system – – Medicare. Conversely, the federal government
Medicare. Conversely, the federal may be unwilling to impose a tax increase on a
government may be unwilling to reluctant population, even though the increased
impose a tax increase on a reluctant revenue would be spent on health care.
population, even though the
increased revenue would be spent on health care. In this case, the question then arises as to
what the consequences would be. They would include the following:
•
No proposed expansion of public health care insurance coverage to include
catastrophic prescription drug costs, some post hospital home care treatment
and out-of-hospital palliative care would occur;
•
No reform and renewal of the hospital and doctor system would take place
and major health care cost pressures would continue to erode the system;
•
Nor would the essential investments in infrastructure occur, particularly those
in health information management, health care technology and expanded
enrolment in medical and nursing schools;
•
This, in turn, would make implementation of the National Health Care
Guarantee impossible. Given Canada’s relative deficiency in medical
equipment and health care providers to deal with waiting queues,
understandably provincial governments would be unwilling to legislate a care
guarantee if its implementation meant they would have to pay the cost of
sending an ever increasing number of patients to the United States or
elsewhere for treatment;
295
•
A Canadian health infostructure, along with the full deployment of a system
of electronic health records and a system of service-based funding for
hospitals, would not be developed, thus limiting Canada’s ability to evaluate
the cost, effectiveness, quality, performance and outcomes of its health care
system or to develop strategies to increase its productivity.
In short, in the absence of the additional investment the Committee
recommends, the Canadian health care system will continue to deteriorate. The “health care
contract”373 between Canadians and their governments will break if Canadians are unwilling to
pay an additional $5 billion in taxes (the citizens’ part of the contract) so that government can
finance adequately the changes necessary for the sustainability of our publicly funded, universal,
comprehensive, accessible and portable hospital and doctor insurance plan (the government part
of the contract), expanded to cover, in part, out-of-hospital prescription drugs, home care and
palliative care as recommended.
Under these circumstances, it
seems highly probable that, for the reasons The Committee has stated on
discussed in Chapter Five, the courts would decide numerous occasions, and we repeat it
that under the Charter of Rights and Freedoms, here again, that we are in favour of a
government could no longer deny Canadians the
single public funder/insurer for
right to purchase private health care insurance that
hospital and doctor services covered
would enable them to receive and pay for health
under the Canada Health Act.
services in Canada that are also included in the
publicly insured set of services. Thus, a parallel private health care system is likely to emerge.
This is not the outcome preferred by the Committee. We have stated on
numerous occasions, and we repeat it here again, that we are in favour of a single public
funder/insurer for hospital and doctor services covered under the Canada Health Act. The single,
public insurer model was, in fact, the first principle enunciated in Volume Five.374 As a corollary,
private insurance for publicly insured health services should continue to be disallowed, provided
that such publicly insured services are delivered in a timely fashion.
Nonetheless, the Committee believes it is
important to consider the implications of allowing It is the view of the Committee
that private insurance for
private health care insurance to develop, together with
its associated parallel privately funded hospital and publicly insured health services
doctor system. This is the purpose of this chapter.
should continue to be disallowed,
Section 16.1 describes briefly the role of private health
provided that such services are
care insurance in Canada and in selected OECD delivered in a timely fashion.
countries. Section 16.2 provides a summary of the
findings of recent literature on the impact of private health care insurance on costs, access and
quality in the publicly funded health care system. Finally, Section 16.3 sets out the Committee’s
view on the possible development of a parallel private delivery system in Canada.
373
374
Volume Five, p. 61.
Volume Five, pp. 23-25.
296
16.1
Private Health Care Insurance in Canada and Selected OECD
Countries
Currently, the Canada Health Act requires public health care insurance plans to be
accountable to the provincial government and to be not-for-profit. Moreover, the majority of
provinces (Alberta, British Columbia, Manitoba, Ontario, Prince Edward Island and Quebec)
prohibit private companies from insuring services that are covered under public health care
insurance plans.375 In these provinces, private insurers are limited to providing supplementary
health care benefits, such as semi-private or private accommodation during hospital stay,
prescription drugs, dental care and eyeglasses – all services that are not insured under provincial
health care insurance plans.
Four provinces do permit private health care insurance for services that are also
publicly insured (New Brunswick, Newfoundland, Nova Scotia and Saskatchewan). Thus,
patients of opted-out physicians376 in these provinces can substitute private for public health care
coverage. However, provincial legislation that prohibits opted-out physicians from practising
both in the publicly funded system and privately has meant that few opt out. Therefore, few
people purchase private health care insurance.
For example, in Nova Scotia, opted-out physicians cannot bill privately in excess
of the fee specified on the public insurance fee schedule. This creates a disincentive, as
physicians cannot be paid more for equivalent cases working under private insurance than if they
worked within the public plan. As a result, there are very few opted-out physicians and,
consequently, there is little need for private health care insurance to cover publicly insured health
services.
In Newfoundland, patients of opted-out physicians are entitled to public
coverage up to the amount set out in the fee schedule (in other words, patients are entitled to
public funds to subsidize the cost of buying their health services in the private for-profit sector).
Out-of-pocket spending by patients is thus limited to the difference between the fee charged by
the opted-out physician and the publicly scheduled fee; but few physicians have opted out in
Newfoundland and, therefore, there is little demand for private health care insurance.
In New Brunswick and Saskatchewan, patients of opted-out physicians cannot
be subsidized by the public plan as they would be in Newfoundland. Nonetheless, there has
been no significant development of private-sector in health care insurance in these two
provinces.
Overall, the Canada Health Act, together with provincial/territorial legislation, has
prevented the emergence of private health care insurance in Canada that competes directly with
public insurance. It is simply not economically feasible for patients, physicians or health care
institutions to participate in a private parallel system.
Colleen M. Flood and Tom Archibald, “The Illegality of Private Health Care in Canada”, in Canadian Medical
Association Journal, Vol. 164, No. 6, 20 March 2001, pp. 825-830.
376 A physician opts out when he/she chooses to give up his/her rights to bill the public health care insurance plan
and takes up practice in the private sector. Every provincial health care insurance legislation permits physicians to
opt out.
375
297
This contrasts sharply with the situation in other OECD countries, in which
private health care insurance can and does compete with public health care insurance, and
physicians can work in and receive payments from both the public and the private sectors.377
There are two different models of private insurance for health services in these countries. The
first, prevalent in Germany and the Netherlands, involves a system of private insurance and
service delivery that is totally separate from the public system. The second, in place in countries
like Australia, Sweden and the United Kingdom, involves competition between public and
private insurers and interaction between public and private providers.
In Germany and the Netherlands, private health care insurance is voluntary for
those people with relatively high annual incomes (while public coverage is mandatory for those
with middle and lower incomes). The private insurers must accept all those who apply for
coverage and must provide benefits equivalent to those offered under the public plan. Thus,
private insurers cannot “cherry-pick,” i.e., restrict coverage to patients who are healthy and
wealthy, thereby leaving the public sector to pay for patients who are less healthy and wealthy.
The premiums paid for private insurance are risk-related (but subject to strict regulation) and do
not vary significantly for equivalent coverage.
In the United Kingdom, residents can purchase private insurance to cover the
same health services provided in private hospitals as are offered in public hospitals. Although
privately-insured patients in the United Kingdom usually obtain their health services outside the
NHS; they can also be treated in NHS facilities in which “pay beds” are available. Physicians are
permitted to earn up to 10% of their gross annual income from private practice.
In Australia, private health care insurance, as in the United Kingdom, competes
with the public plan. Moreover, the Australian government actively encourages residents to
acquire private health care insurance by subsidizing 30% of its cost. Premiums required under
private health care insurance are strictly regulated and community-rated (i.e., a single premium
applies to everyone, regardless of his/her health status). Privately insured patients may receive
care in either a public or private hospital; in both cases, the public health care insurance plan
subsidizes 75% of the hospital costs, while the remainder is covered by private insurance.
Specialists working in public hospitals can treat patients privately and receive payment both from
private and public health care insurance plans.
Private health care insurance is permitted even in Sweden, which is generally
recognized as being amongst the most socialized of European countries. In Sweden, as in
Australia, government legislation requires that premiums charged by private health care insurers
must be community-rated. Private hospitals do not usually obtain payment from the publicly
funded plan, unless care is provided through contracts with the county councils.378 Physicians in
Sweden are allowed to work in both the public and the private sectors.
The evidence summarized in the Committee’s Volume Three, as well as the
findings of a Canadian study,379 show that the vast majority of care delivered in private for-profit
health care institutions in countries like Australia, New Zealand, the Netherlands, Sweden and
For more information on health care systems elsewhere, consult the Committee’s Volume Three.
This, in fact, is becoming more prevalent in Scandinavian countries under their new health care guarantee.
379 Cam Donaldson and Gillian Currie, The Public Purchase of Private Surgical Services: A Systematic Review of the Evidence on
Efficiency and Equity, Institute of Health Economics (Alberta), Working Paper 00-9, 2000.
377
378
298
the United Kingdom is funded through private health care insurance. Also, physicians practising
in those countries are usually employed in the public sector and top up their incomes by working
in the private sector on a fee-for-service basis. It should be noted, however, that in all these
countries the private for-profit sector is quite small.
The restriction on the role of private health care insurance in Canada as well as
on physician opted-out practice is unique among OECD countries. Pressures to loosen the
restrictions and create a parallel system of private insurance and delivery will increase, however,
if timely access to needed services cannot be assured in the publicly funded health care system.
This observation was already noted in 1996 by Glouberman and Vining when they stated that:
It is obvious that any significant initiatives (whether implicit or explicit) to further ration
publicly-financed health care will encourage increased demand for privately-financed
health care. 380
Jeffrey Lozon, President of St. Michael’s Hospital in Toronto and former Deputy
Minister of Health in Ontario, put this question to the Committee:
When you take the notions of a private insurance system (…) out of the discussion, you
are left inevitably with the question of tax increases, whether dedicated or not. I would
like to raise this: Why not allow individuals to purchase health insurance that would
provide them with another level of care (…)? Why not allow individuals who have the
wherewithal to say, “I do not want to have to wait six months for my hip replacement”,
to buy that service? 381
16.2
Review of Recent Literature on the Impact of Private Health Care
Insurance and Private For-Profit Delivery
Advocates for a parallel private system argue that it will ensure the sustainability
of the publicly funded system (by reducing public cost pressures), improve access to the public
system (by reducing waiting times), and improve quality in the public system (through
competition). They also argue that private health care insurance would give patients access to
greater choice and higher-quality services without compromising the public system.
By contrast, opponents of a parallel private system contend that it will create
“two-tier” health care, compromise equity, increase costs, and reduce quality and access to the
publicly financed system, as those who have the financial means to purchase private insurance
exit to private delivery institutions. They also argue that, with higher pay-per-unit activity in the
privately funded system, personnel is likely to be drawn from the public system, making waiting
times longer in the public system in the absence of an adequate supply of doctors and nurses.
Moreover, they contend that the private for-profit sector “cherry picks” the relatively routine,
uncomplicated (and therefore less expensive) care – elective surgery and the like – and leaves to
380Steven
Glouberman and Aidan Vining, Cure or Disease? Private Health Insurance in Canada, University of Toronto,
1996, p. 61.
381 Jeffrey Lozon (53:64).
299
the public system the complex, emergency and more expensive services, thereby increasing
substantially the unit costs of the public system.
The Committee believes that the truth lies between those two extreme views.
What does the international evidence suggest? A review of recent literature on the subject of
private health care insurance and delivery indicates the following:382
•
In the United Kingdom (as in New Zealand), private health care insurance
has encouraged the development of private health care delivery. In both
countries, physicians can work in the public as well as the private sector;
physicians are usually employed in the public sector and top up their incomes
by working in the private sector on a fee-for-service basis.
•
In the United Kingdom (as in Germany and the Netherlands), private health
care insurers pay much more than does public insurance for the same health
service. For example, physicians can earn three to four times more in the
private sector than in the National Health Service (NHS) for providing the
same service.
•
Private hospitals are well established in the United Kingdom and are regularly
used by the NHS to pick up excess demand when public sector waiting times
get too long (just as some provincial governments use the American private
health care sector to relieve queues in Canada).
•
Patients holding private health care insurance in Australia can select the
physician of their choice for hospital care. Evidence suggests that these
private patients get quicker access to treatments for which publicly insured
patients face a queue. Queue-jumping by wealthy, privately insured patients
is also prevalent in Sweden and in the United Kingdom.
•
In Australia, there has been no change in public-sector waiting times
following the subsidy policy to encourage private health care insurance.
Similarly, evidence from New Zealand and the United Kingdom suggests
that, although long public waiting times tend to fuel demand for private
health care insurance, having it does not reduce the length of public waiting
times.
See the following documents:
Brian Lee Crowley, Private Financing, Private Delivery. Two Tier Health Care?, Presentation to the National Health Care
Leadership Conference Panel, Halifax, 27 May 2002.
Stefan Greβ et al., Private Health Insurance in Social Health Insurance Countries – Market Outcomes and Policy Implications,
Discussion Paper, February 2002.
Jeremiah Hurley et al., Parallel Private Health Insurance in Australia: A Cautionary Tale and Lessons for Canada, Centre for
Health Economics and Policy Research Analysis, McMaster University, Working Paper 01-12, December 2001.
Colleen M. Flood, Mark Stabile and Carolyn Hughes Tuohy, Lessons From Away: What Canada Can Learn From Other
Health Care Systems, Document prepared for the Committee, 30 April 2001.
Colleen M. Flood and Tom Archibald (March 2001), op. cit.
Raisa Deber et al., “Why not Private Health Insurance? 1. Insurance Made Easy”, Canadian Medical Association Journal,
Vol. 161, No. 5, 7 September 1999, pp. 539-542.
Carolyn H. Tuohy, Colleen M. Flood and Mark Stabile, How Does Private Finance Affect Public Health Care Systems?
Marshalling the Evidence From OECD Countries, Paper submitted to the Journal of Health Politics, Policy and Law,
University of Toronto.
382
300
•
Evidence from Australia and the United Kingdom suggests that private
parallel delivery systems tend to offer a limited range of services for niche
markets; they focus on relatively simple, less complex, elective procedures,
shifting the burden of the most expensive cases and patients requiring more
comprehensive care to the public system.
•
In the Netherlands, the government regulates the maximum fees physicians
may charge for the treatment of privately insured patients. This has reduced
the incentives for preferential treatment of privately insured patients
compared to those publicly insured.
•
In the Netherlands, two factors help prevent the health care system from
becoming a “two-tier” system. First, those who purchase private health care
insurance cannot fall back on the public system for some of their health care
needs. Private insurers cannot just skim off the easier kinds of care like
elective surgery (as happens in the United Kingdom); they must cover all
needs. Second, having private insurance does not enable Dutch citizens to
jump queues in the public system. It is seen as contrary to a physician’s
ethical code to select patients with private insurance over other patients;
patients of both kinds are treated side-by-side in the same hospitals.
•
In Germany, privately insured people tend to receive more comprehensive
and faster treatment than do people with public health care insurance.
•
In both Germany and the Netherlands, governments quite extensively
regulate private health care insurance in order to ensure affordable premiums
and limit risk selection by private insurers.
•
In Australia, Sweden and the United Kingdom, people who purchase private
health care insurance do so out of after-tax income and must continue to pay
the same rate of income tax. That is, they pay doubly for health care
insurance through general taxation and private premiums. This contrasts
with the situation in both Germany and the Netherlands, where residents
holding private health care insurance do not contribute to any Sickness
Funds.
•
Data from 22 OECD countries indicate that increases in private spending on
health care are associated over time with decreases in public health care
funding. There appears, then, to be some justification for the concern that
increasing the proportion of private financing will substitute for and dilute
rather than supplement public funding.
On the basis of the
evidence from other countries presented
above, the Committee has concluded
that no country in which a parallel
private health care insurance and delivery
system coexists with a public health care
insurance scheme can serve as a model
On the basis of the evidence available from
other countries, the Committee has concluded
that no country in which a parallel private
health care insurance and delivery system
coexists with a public health care insurance
scheme can serve as a model that should be
adopted, without change, by Canada.
301
that should be adopted, without change, by Canada.
Countries in which parallel private systems compete with publicly funded health
care coverage exhibit a number of problems, including: risk selection and cream skimming; no
reduction in waiting lists in the public sector; queue jumping; and preferential treatment. These
concerns must be appropriately addressed if governments fail, for whatever reason, to provide
funding sufficient to assure timely access to care in our publicly funded Canadian health care
system.
16.3
Committee Commentary
It is the view of the Committee that, in the absence of governments providing
adequate funding, and providers delivering effective and timely health services, to paraphrase
section 1 of the Charter, it would no longer be just and reasonable in a free and democratic
society to deny Canadians the right to purchase private health care insurance. They should not
be denied the right to purchase private supplementary insurance to pay for services they are
unable to access in a timely fashion in the publicly funded health care system.
While the Committee would regard such a development as very regrettable, and
while many Canadians would strongly oppose it, it is important to recognize two facts:
•
first, as indicated in Section 16.2, Canada is the only major industrialized
country which does not have some element of a parallel private hospital and
doctor system;
•
second, the current Canadian system is not nearly as “one tier” as popular
mythology would have Canadians believe.
As a matter of fact, people who can afford it can, and do, go out of Canada
(usually to the United States) to access the health services they want if their only alternative is a
long queue for those services in Canada.
There is also strong anecdotal evidence to suggest that the situation in Canada is
similar to that in Australia, where, in the words of one of the Australian witnesses who testified
before the Committee; “access to public (health) services is usually more easily obtained by
wealthier and more powerful individuals who understand how the system works and have
appropriate contacts in hospital service delivery and administration.”
In addition, provincial Workers’ Compensation Boards in most provinces receive
preferred access to treatment for their clients based on the argument it is necessary to ensure the
client gets back to work quickly (which, of course, saves the Workers’ Compensation Board
money). Moreover, in some provinces, Workers’ Compensation Boards have contracts with
hospitals for a specified number of beds and diagnostic procedures, thus ensuring quick access
to services for WCB patients. They also make direct payments to physicians for services
performed, and such payments do not count toward any provincial cap on a physician’s income.
All these facts are important for Canadians to reflect on as they consider whether
they want the federal government to support or reject the Committee’s recommendation for an
additional $5-billion investment in health care.
302
The Committee realizes that some people will be offended by the Committee’s
raising the potential development of a parallel private system of health care. They are likely to
claim that it is possible for Canadians to maintain the current publicly funded system without
their having to put more money into the system (e.g., the $5 billion proposed by the
Committee). Such critics will probably say that:
•
The current system is inefficient and that restructuring will save sufficient
money to cover the increasing costs of the system. The Committee has
repeatedly acknowledged the critical importance of improving the
effectiveness and efficiency of the management and delivery of health care
(see Chapter 2 of Volume Five and Chapters 2, 3 and 4 of this report). But
the Committee has also repeatedly stated that there is not enough evidence to
support the hypothesis that efficiency gains alone will be sufficient to avoid
having to put large amounts of new funds into the system, particularly if the
growing gaps in the system are to be closed. Furthermore, there is
widespread to near-universal agreement that substantial amounts of
additional money are required to achieve the massive and fundamental
changes necessary to create a genuine health care system, capable of
achieving acceptable standards of efficiency and effectiveness together with
the quality of outcomes we in Canada can, and should, demand.
•
In addition, those who hold the view that efficiency measures only are
required to refinance the health care system gloss over the key fact that
restructuring in any industry costs money - money that has to be spent before
the resulting efficiency savings are realized.
•
The argument will also be made that the additional $5 billion can come from
the federal surplus anticipated over time. This argument, however,
completely ignores the fact that there are several other compelling demands
on any federal surplus, such as agriculture, the Canadian Armed Forces,
infrastructure for Canada’s major cities, and so on. The Committee believes
that the majority of any federal surplus should not be devoted only to health
care or even primarily to health care. More important, since surpluses rise
and fall (as now) with the state of the economy, it would be irresponsible for
government to base the future of the Canadian health care system on the
vagaries of the economic cycle.
Therefore,
the
Committee
categorically rejects the position that the
problems of Canada’s health care system can be
solved in a way that is cost-free to individual
Canadians. We believe that Canadians, through
their federal government, must confront head-on
the choice between putting considerably more
money into the health care system or having the
courts rule in favour of the emergence of a
parallel private system.
303
The Committee believes that Canadians,
through their federal government, must
confront head-on the choice between
putting considerably more money into
the health care system or having the
courts rule in favour of the emergence of
a parallel private system.
Part VIII:
The Canada Health Act
305
CHAPTER SEVENTEEN
T HE C ANADA H EALTH A CT
In Volume One, the Committee traced the evolution of the nation-wide
principles of the Canadian health care system. We stressed the fact that although the delivery of
health care is primarily within provincial/territorial jurisdiction, it does not mean that national
interests are absent. For its part, the federal government established national principles and
contributed to meeting the cost of health care, first through cost-sharing (from 1966 to 1977)
and subsequently by block-funding.383
These national principles are currently set out in the Canada Health Act (the Act),
which was unanimously enacted by Parliament in April 1984. The five national principles of the
Act are:
•
The principle of universality, which means that public health care insurance
must be provided to all Ca nadians;
•
The principle of comprehensiveness, which means that medically necessary
hospital and doctor services are covered by public health care insurance;
•
The principle of accessibility, which means that financial or other barriers to
the provision of publicly funded health services are discouraged, so that
health services are available to all Canadians when they need them;
•
The principle of portability, which means that all Canadians are covered
under public health care insurance, even when they travel within Canada and
internationally or move from one province to another;
•
The principle of public administration, which requires provincial and
territorial health care insurance plans to be managed by a public agency on a
not-for-profit basis. (This principle says nothing about the ownership
structure of a health service delivery institution.)
As explained in Volume One, the Committee considers the first four principles
of the Canada Health Act to be patient-oriented. The fifth principle – that of public
administration – is of a completely different character. It is not patient-focussed but “is rather
the means of achieving the end to which the other four principles are directed.”384 The public
administration condition of the Canada Health Act is the basis for the single insurer/funder
model that the Committee endorsed in Volume Five under Principle One.385
Altogether, the five principles of the Canada Health Act flow from two
overarching objectives for federal health care policy – objectives that the Committee strongly
supports as the primary federal health care objectives. As indicated in Volume Four, these two
objectives are:
See Volume One, Chapter Two, pp. 31-44.
Volume One, p. 41.
385 Volume Five, pp. 23-25.
383
384
307
•
To ensure that every Canadian has timely access to all medically necessary
health services regardless of his or her ability to pay for those services.
•
To ensure that no Canadian suffers undue financial hardship as a result of
having to pay health care bills.386
Each recommendation made in this
report with respect to 1) restructuring of the hospital
and doctor system, 2) establishment of a national
health care guarantee, 3) improvement of the health
care infrastructure, and 4) enhancement of federal
funding for health care, is designed to make progress
toward achieving these two overarching public policy
objectives in ways that are consistent with the
principles of the Canada Health Act. Adopted together,
these recommendations will ensure the long-term
sustainability of Canadian Medicare.
All recommendations put forward by
the Committee in this report are
designed to make progress toward
achieving the two overarching public
objectives of federal health care policy
in ways that are consistent with the
principles of the Canada Health Act.
The Committee’s recommendations relating to the expansion of public health
care coverage are also intended to preserve the primary objectives of federal health care policy,
although we recognize that some of the program characteristics proposed for such expansion do
not comply with the Canada Health Act. This is particularly true with respect to the out-ofpocket payment provisions up to an annual cap/maximum of 3% of family income proposed for
catastrophic prescription drug coverage.
This chapter provides a description
and interpretation of the principles of the Act in
light of the Committee’s recommendations. It is
against the principles set out in the Canada Health Act
and the potential for achieving the two federal health
care policy objectives that the Committee’s
recommendations should be judged.
17.1
It is against the principles set out in
the Canada Health Act and the
potential for achieving the two federal
health care policy objectives that the
recommendations of the Committee
should be judged.
Universality
The principle of universality of the Canada Health Act requires that all residents of
a province or territory be entitled, on uniform terms and conditions, to the publicly funded
health services covered by provincial/territorial plans. Universality is often considered by
Canadians as a fundamental value that ensures national health care insurance for everyone
wherever they live in the country.
Universality does not dictate a particular source of funding for the health care
insurance plan. As a matter of fact, the provinces/territories can and do fund their universal
plans as they wish, through premiums, dedicated or general taxation. By contrast, universal
health care coverage in both Germany and the Netherlands is provided through a system of
dedicated payroll taxes.
386
Volume Four, p. 16.
308
Moreover, universality is not necessarily achieved only through public funding.
For example, universal coverage for health services is guaranteed by both Sickness Funds (public
plans) and private insurers in Germany and the Netherlands. Similarly, the Quebec Pharmacare
program provides universal coverage through a combination of public and private insurance.
Perhaps more important, the principle of
universal coverage does not necessarily mean first-dollar The Committee feels it is
coverage. In fact, countries that provide universal health
important to stress that the
care coverage, like Australia, Germany, the Netherlands principle of universal coverage
and Sweden, permit user charges and extra-billing for does not necessarily mean first
publicly insured services. In Canada, first-dollar coverage dollar coverage.
for publicly funded hospital and doctor services is required
under the provisions of the Canada Health Act that
explicitly prohibit user charges and extra-billing (see Section 17.3, below).
The principle of universality is one the Committee holds dear. It ensures that
access to publicly funded health services is available to everyone, everywhere, and that no one is
discriminated against on the basis of such factors as income, age, and health status. We believe
that universal insurance coverage and the access it provides to the publicly funded hospital and
doctor system has served Canadians extremely well. Accordingly, it should be preserved.
Similarly, the Committee believes
strongly that the broadening of public coverage
recommended in this report should rest on the
principle of universality. In our view, coverage for
catastrophic prescription drug costs, post-hospital
home care and out-of-hospital palliative care must be
provided to all Canadians, when they need them.
17.2
The Committee is of the view
that coverage for catastrophic
prescription drug costs, posthospital home care and out-ofhospital palliative care must be
provided to all Canadians, when
they need them.
Comprehensiveness
Health services that must be covered under the Canada Health Act are determined
on the basis of the “medical necessity” concept under the principle of comprehensiveness. All
medically necessary health services provided by hospitals and doctors must be covered under
provincial/territorial health care insurance plans.
The determination of what services ought to be considered “medically
necessary” is a difficult task. Most Canadians would agree that life-saving cardiac procedures are
medically necessary. Most Canadians would also agree that most cosmetic surgery procedures
do not meet that criterion. The difficulty comes with those services that lie between these two
extremes.
Deciding what health services are to be insured and excluded has always been
part of the way Canadian Medicare has functioned. These decisions are made in each
province/territory by the government after negotiation with the medical profession. That is why
there are differences in what is covered publicly in different provinces/territories. For example,
as reviewed in Volume One, the removal of warts is no longer covered in Nova Scotia, New
Brunswick, Ontario, Manitoba, Alberta, Saskatchewan and British Columbia, but remains
309
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, where patients (or their private supplementary health care insurance) must pay for
this procedure.387
The Committee was told repeatedly that the current process for determining
what is and what is not covered under provincial/territorial health care insurance plans is
conducted in secret by governments, acting with the provincial/territorial medical associations,
with no public input. It is not an open and transparent process. For example, the Canadian
Healthcare Association pointed that:
Unilateral pronouncements from governments of the delisting of services are certainly not
in the best interest of Canadians.
(…) Any discussions or decisions regarding the “basket of services” must be evidence
based and involve an open and transparent process that meaningfully involves all
stakeholders. 388
The Committee shares the view of
the Canadian Healthcare Association and many
other witnesses that transparency requires that the
process of deciding what is, and what is not, to be
publicly insured should be much more open than it
has been historically and is now.
The Committee shares the view of
many witnesses that transparency
requires that the process of deciding
what is, and what is not, to be
publicly insured should be much
more open than it has been
historically and is now.
For this reason, the Committee
enunciated Principle Four in Volume Five, which
states that the determination of what should be
covered under public health care insurance should be done through an open and transparent
process.389 This principle also reflects the views expressed in the report of the Clair Commission
in Quebec and the Mazankoski report in Alberta, both of which recommended that
consideration should be given to reviewing the principle of comprehensiveness of the Canada
Health Act. Both recommended the establishment of a permanent committee, made up of
citizens, ethicists, health care providers and scientists, to review and make decisions on the range
of services that should be covered publicly. Such a review would set the boundaries between
publicly insured and privately funded health services; it would also lead to evidence-based (as
opposed to the current negotiated process) decision making with respect to what services should
be covered under public health care insurance.
The Committee believes strongly that the permanent committee charged with
revising the set of publicly funded health services should be broad-based in membership and not
be composed entirely of experts. We believe that input from those who would be directly
Volume One, pp. 98-99.
Canadian Healthcare Association, Brief to the Committee, May 2002, pp. 3-4.
389 Volume Five, pp. 30-32.
387
388
310
affected by the committee’s decisions – namely, citizens – is essential if the process is to be truly
open and is to have public credibility and acceptability.
The Committee also believes that there should be national standards to define
those services covered publicly in each province/territory. This would bring more uniformity to
public health care coverage across the country. Therefore, the Committee recommends that:
The federal government, in collaboration with the provinces
and territories, establish a permanent committee – the
Committee on Public Health Care Insurance Coverage –
made up of citizens, ethicists, health care providers and
scientists.
The Committee on Public Health Care Insurance Coverage
be given the mandate to review and make recommendations
on the set of services that should be covered under public
health care insurance.
The Committee on Public Health Care Insurance Coverage
report its findings and recommendations to the National
Health Care Council.
As its first task, the Committee on Public Health Care
Insurance Coverage be charged with developing national
standards upon which decisions for public health care
coverage will be made.
It must be recognized that revising the comprehensive basket of publicly insured
health services is not intended to reduce costs. It is intended to improve both transparency and
evidence-based decisions with respect to comprehensiveness of publicly funded health services.
The purpose of such a review is to use clinical, evidence-based, research to ensure that publicly
insured health services are those that are most clinically effective in preventing disease, restoring
and maintaining health, and alleviating pain and suffering.
Another important critique raised with respect to the principle of
comprehensiveness of the Canada Health Act relates to its limited scope of coverage. In Volume
One, the Committee stated that the Canada Health Act is very limited: it is centred on medically
necessary health services provided by hospitals and doctors. Moreover, the Act applies to a
shrinking range because fewer services are provided now in hospitals. Thanks to new
knowledge and technologies, many more health services can be provided safely and effectively
on an ambulatory basis or at home. Hospitals stays are shorter; drug therapy often enables
people to avoid hospital-based care altogether.
311
As shown in Volume Three, there is a sharp contrast between Canada and other
OECD countries in terms of the scope of its public health care coverage. Many countries with a
similar share of public spending in total health care expenditures provide coverage that is much
broader than Canada’s, encompassing such items as prescription drugs (Australia, Germany,
Sweden, the United Kingdom), home care (Germany, Sweden), and long-term care (Germany,
the Netherlands).
As described elsewhere in this report, when services and prescription drugs are
provided outside hospitals, they fall outside the ambit of the Canada Health Act. As a result,
these services are not usually provided cost-free to the patients, nor are they necessarily provided
in accordance with the principles of accessibility, comprehensiveness and universality. 390
Moreover, testimony received by the Committee suggests that, more and more often, individual
Canadians bear heavy financial burdens as a result of incurring very high out-of-pocket
expenditures to obtain these services.
Based on the evidence it gathered throughout its hearings, and as set out in
Chapters Seven, Eight and Nine of this report, the Committee has come to the conclusion that
there is a need to expand public health care insurance coverage to encompass three new
applications: catastrophic prescription drug costs, post-hospital home care costs, and palliative
home care costs.
It is the view of the Committee that
broadening public health care coverage to
encompass catastrophic prescription drug costs,
post-hospital home care costs and palliative home
care costs is consistent with the primary objectives
of federal health care policy. This is particularly true
with respect to catastrophic prescription drug costs
if we are to meet the second objective of federal
health care policy – that no Canadian suffers undue
financial hardships as a result of having to pay health
care bills.
It is the view of the Committee that
broadening public health care
coverage to encompass catastrophic
drug costs, post-hospital home care
costs and palliative home care costs
is consistent with the primary
objectives of federal health care
policy.
The Committee acknowledges that national parameters will have to be developed
for both post-hospital home care and palliative care delivered out-of-hospital. This would be
consistent with the original intent of the national health care insurance program. The
Committee on Public Health Care Insurance Coverage could play a major role in this area.
Therefore, the Committee recommends that:
The Committee on Public Health Care Insurance Coverage
be charged with determining the national parameters
applicable to post-hospital home care and palliative care
delivered in the home.
390
Volume One, pp. 35-36.
312
17.3
Accessibility
The principle of accessibility in the Canada Health Act stipulates that Canadians
should have “reasonable access” to insured hospital and doctor services. However, the Act does
not provide a clear definition as to what constitutes reasonable access. Although originally the
primary concern was to eliminate financial barriers, lately the concern over access to health care
has been associated primarily with the problem of waiting times. There is no doubt that a major
problem of the current health care system is one of timely access. As stated earlier, it is the view
of the Committee that “timely access” describes more accurately what Canadians expect from
the publicly funded health care system than “reasonable access.”
The Committee believes that, since In the view of the Committee, the
governments have the responsibility of providing
National Health Care Guarantee is
funding sufficient to ensure an adequate supply of the
essential services of hospitals and doctors, this the essence of a patient-oriented
system and of the health care
responsibility carries with it the obligation to ensure
“contract” between Canadians and
reasonable standards of access. This is the essence of
a patient-oriented system and of the health care their governments.
“contract” between Canadians and their governments.
It is the view of the Committee that a maximum waiting time guarantee for publicly insured
health services would meet this obligation. For this reason, we have, in Chapter Six,
recommended establishment of a National Health Care Guarantee.
How (and where) does a National Health Care Guarantee fit in the context of
the Canada Health Act? There are a number of possibilities:
1. The health care guarantee could be added as a sixth principle to the Act. As
such, provincial and territorial governments that failed to comply with the
National Health Care Guarantee would be subject to the financial penalties
currently present in the Canada Health Act.
2. The health care guarantee could be appended to the Canada Health Act or
expressed in the preamble of the Act. This excludes the possibility of
enforcement or penalty by the federal government.
3. The National Health Care Guarantee could
be introduced in new legislation, similar to
the Canada Health Act, but subject to
different principles, different enforcement
mechanisms and different penalties.
The Committee has concluded that
the
National
Health
Care
Guarantee would be most effective
if implemented through legislation
distinct from the Canada Health
Act.
The Committee has concluded that
the National Health Care Guarantee would be most
effective if implemented through legislation distinct from the Canada Health Act. A new Act
giving effect to the National Health Care Guarantee would ensure that the definition of timely
access to needed hospital and doctor services is set uniformly across the country and that the
313
federal government plays a major role in this guarantee. Therefore, the Committee recommends
that:
The federal government enact new legislation establishing
the National Health Care Guarantee. The new legislation
should include a definition of the concept of “timely access”
that will relate to such a guarantee.
Another important provision of the Canada Health Act relating to the accessibility
criterion is that insured people have uniform access to hospital and doctor services without any
financial barrier. It is for this reason that user charges and extra-billing are not permitted for
services covered under the Canada Health Act.
However, the question of The question of whether patients should
whether patients should make a financial make a financial contribution with respect
contribution with respect to the new publicly
to new publicly insured health services is
insured health services we recommend is one
The
that should be addressed. The Committee one that should be addressed.
believes that Canada’s public purse cannot Committee believes that Canada’s public
afford first dollar coverage for the broader purse cannot afford first-dollar coverage
range of health services the Committee is for the broader range of health services the
recommending. We have suggested, therefore,
Committee is recommending.
in our proposal for catastrophic prescription
drug cost coverage that individuals make a financial contribution to the cost of the prescription
drugs they take.
Requiring some financial contribution from patients for the expanded set of
publicly insured services is not consistent with the Canada Health Act. Therefore, it is not
possible simply to add “catastrophic prescription drugs” to the current list of medically required
services set out in the Canada Health Act.
The Committee’s proposal to expand
The Committee believes that the
public health care coverage to post-hospital home care
for a three-month period and to insure at home expansion of public coverage to
include catastrophic prescription
palliative care costs appears to be consistent with both
the spirit and the letter of the Canada Health Act. drugs, post-hospital home care
However, the Committee is recommending that this
and palliative care in the home
expansion in coverage be funded through a new cost- must be authorized through new
sharing mechanism totally different from the CHST.
federal legislation, and not under
This additional federal funding will be subject to a
the Canada Health Act.
number of conditions (including accountability and
transparency) that are not currently found under the CHST or the Canada Health Act. Federal
funding for coverage of catastrophic prescription drugs will also be provided through the new
funding mechanism, not the CHST.
For all these reasons, the Committee believes that the expansion of public
coverage to include catastrophic prescription drugs, post-hospital home care and palliative care
314
in the home must be authorized through new federal legislation, and not under the Canada Health
Act (see Section 17.6 below).
17.4
Portability
The portability criterion of the Canada Health Act requires that the provinces and
territories extend medically necessary hospital and physician coverage to their residents during
temporary absences (business or vacation) from the province or territory. This allows
individuals to travel away from their home province or territory and yet retain their public health
care insurance coverage. This portability requirement applies to emergency health services:
residents must seek prior approval from their home province health care insurance plan for nonemergency (elective) health services provided out-of-province.
The principle of portability also applies when residents move from one province
or territory to another: they must retain their coverage for insured health services by the “home”
province during a minimum waiting period in the “host” province that does not exceed three
months. After the waiting period, the new province or territory of residence assumes the
responsibility for public health care coverage.
Canadians are also entitled to portable public health care insurance coverage
when they are temporarily out of the country. Most provinces, however, limit the
reimbursement of the cost of emergency health services obtained outside Canada under their
public health care insurance. For this reason, Canadians are strongly encouraged to purchase
supplementary private health care insurance when they travel in another country.
Within Canada, the portability provision of the Canada Health Act is generally
implemented through bilateral reciprocal billing agreements among the provinces and territories
for hospital and physician services. These agreements are interprovincial, not federal, and
signing them is not a requirement of the Canada Health Act.391 The rates prescribed within these
agreements are those of the host province (apart from Quebec, which pays home-province
rates), and the agreements are meant to ensure that Canadian residents travelling in another
province/territory, for the most part, will not face any user charges at the point of service for
medically required hospital and physician services.
Reciprocal billing is a convenient administrative arrangement. However, it is but
one method of satisfying the portability criterion of the Act. A requirement for patients to pay
“up front” and seek reimbursement from their home province or territory also satisfies the
portability criterion of the Act as long as access to a medically necessary insured service is not
denied based on the patient’s inability to pay.392
Overall, the principle of portability under the Canada Health Act provides
Canadians with peace of mind when they travel within Canada or when they move from one
province/territory to another. Perhaps more important, the principle of portability is closely
The Government of Quebec has not always been signatory to these agreements.
At present, portability does not always apply to Quebec residents as many providers in other provinces will not
treat Quebec residents if they do not pay the medical fees upfront. In many cases, this is not possible and Quebec
residents have been transferred in ambulance for long distances in difficult circumstances back to Quebec.
391
392
315
linked to that of universality and it certainly encourages uniformity in public health care
coverage.
The Committee believes that
portability is an important national principle
that should be maintained when expanding
public coverage to catastrophic prescription
drug costs, post-hospital home care and
palliative care costs.
17.5
The Committee believes that portability
is an important national principle that
should be maintained when expanding
public
coverage
to
catastrophic
prescription drug costs, post-hospital
home care and palliative care costs.
Public Administration
The public administration criterion of the Canada Health Act relates to the
administration of provincial/territorial health care insurance plans for medically necessary health
services. It stipulates that provincial/territorial health care insurance plans must be administered
by a public agency on a not-for-profit basis. The principle of public administration was
underlined in Volume Five under Principle One, which states that there should be a single
funder/insurer – the government – for hospital and doctor services covered under the Canada
Health Act.393
In the view of the
Committee, 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.
In the view of the Committee, 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.
In Volume Five, we explained that a compelling argument for the retention of a
single public funder or insurer for the hospital and doctor system is that Canadians support it
strongly. The Committee agrees that this central element of our system must be maintained,
provided that the system meets appropriate standards for high-quality services delivered in a timely
manner.
Many witnesses told the Committee that giving primary financial responsibility to
a single funder provides the Canadian health care system with a more efficient administration of
health care insurance than is possible under a multi-funder system. They also testified that
Canada’s publicly financed single insurer system for medically necessary health services
eliminates costs associated with the marketing of competitive health care insurance policies,
billing for and collecting premiums, and evaluating insurance risks.
393
Volume Five, pp. 23-25.
316
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 what they feel to be a more
pressing use for their money (perhaps for food, shelter, clothing, etc.). Nor will anyone be
denied necessary care due to their inability to pay.
Yet another important advantage relates to the principle of risk sharing. The
more who share the risk (all Canadians), the lower the cost of insuring against all risks.
The Committee also heard that a single insurer makes a lot of economic sense
for Canadian industry and is an important element of Canadian competitiveness. This point was
put eloquently by Paul Darby, Director of Economic Forecasting and Analysis, Conference
Board of Canada, when he stated:
(…) our largely single payer system has significant efficiency advantages, in general, and
that these in turn help improve our industrial competitiveness. We should not lose these
advantages.394
A single funder model 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 under the Canada Health Act, at least in those hospitals and with those doctors
that care for publicly insured patients.
Up to now, the single insurer model has discouraged the growth of a second tier
of health care that many claim would pose a significant threat to Canada’s publicly funded health
care system. We point out, however, that parallel public and private health care systems exist in
most other industrialized countries.
In Chapters Five, Six and Sixteen, the It is the hope of the Committee
Committee has raised the concern that laws that, in effect,
that Canada’s single insurer
prevent the development of a parallel private system, and
model for hospitals and
hence help preserve the principle of public administration
of the Canada Health Act, may be struck down by the doctors will be preserved.
courts if the publicly funded and insured health care
system fails to provide timely and quality care. Should this happen, the principle of public
administration would have to be revisited.
The Committee believes that, Through
implementation of its recommendations, our publicly funded health care system can provide
timely access to services of very high quality and that Canada’s single insurer model for hospitals
and doctors will be preserved.
As noted in Volume One, it is equally important to understand clearly what the
public administration principle of the Canada Health Act does not mean. This principle refers to
the administration of health care insurance coverage; it does not deal with the delivery of publicly
insured health services. The Act does not prevent provinces and territories from allowing
394
Paul Darby, Brief to the Committee, 3 June 2002, p. 2.
317
private (for-profit and not-for-profit) health care providers, whether individual or institutional,
to deliver, and be reimbursed for, provincially insured health services, so long as extra-billing or
user charges are not involved. This is, in fact, what Canadian Medicare has been from the start –
a national health care insurance program based primarily on the private (both for-profit and notfor-profit) delivery of publicly insured hospital and doctor services.
The Committee is concerned
In Volume One, the Committee noted that it
that the principle of public administration is
poorly understood, particularly because of is important to understand clearly what the
public administration principle of the
the confusion between administering public
Canada Health Act does not mean. This
health care insurance and delivering publicly
principle refers to the administration of
insured health services. We believe that the
federal government, namely through Health
health care insurance coverage; it does not
Canada, should clearly articulate the meaning
deal with the delivery of publicly insured
of “public administration” and make it clear
health services.
that the Canada Health Act does not prohibit
in any way the private delivery, either for-profit or not-for-profit, of publicly funded health
services. This would greatly improve the current debate about health care in this country.
Therefore, the Committee recommends that:
The principle of public administration of the Canada Health
Act be maintained for publicly insured hospital and doctor
services. That is, there should be a single insurer – the
government – for publicly insured hospital and doctor
services delivered by either public or private health care
providers and institutions.
The federal government, through Health Canada, clarify the
meaning of the concept of public administration under the
Canada Health Act so as to recognize explicitly that this
principle applies to the administration of public health care
insurance, not to the delivery of publicly insured health
services.
While the Committee is
convinced that the principle of public
administration must be maintained for the
hospital and doctor system, it would be very
difficult in our view to extend it to the
broader
range
of
health
services
recommended in this report.
This is
particularly true with respect to the
expansion of public coverage against
catastrophic prescription drug costs.
The Committee believes that the expansion
of coverage to include catastrophic
prescription drug costs should be based on a
partnership between the public and the
private sectors.
This is why the
recommendations made in Chapter Seven
are based on the collaboration of public and
private insurers to ensure universal coverage
for catastrophic prescription drug costs.
318
Prescription drug coverage is currently provided by many insurers, ranging from
governments to private insurance companies. In fact, the private drug insurance industry is
already well established in Canada and it appears to be functioning well. The Committee
believes, and has recommended in Chapter Seven, that the expansion of coverage to include
catastrophic prescription drug costs should be based on a partnership between the public and
the private sectors to ensure universal coverage for catastrophic drug costs.
17.6
Committee Commentary
The Committee has no hesitation in saying that in-depth reform of the publicly
funded hospital and doctor system can take place within the five national principles of the
Canada Health Act. We believe that the Act has served Canadians relatively well in terms of
providing universal and uniform coverage for hospital and doctor services. We feel that the four
patient-oriented principles of the Act should be maintained for hospital and doctor services,
while the principle of public administration should be clarified.
However, the Committee believes that Canadian Medicare and the Canada Health
Act must be supplemented by two new pieces of legislation. First, as explained in Section 17.3,
new federal legislation must be enacted to implement the National Health Care Guarantee. This
legislated health care guarantee will improve access to the set of hospital and doctor services that
are currently insured under the Canada Health Act. Second, the Committee’s proposal to expand
public coverage also requires the enactment of new legislation:
•
Coverage for catastrophic prescription drug costs requires the financial
participation of both public plans and private insurers (collaboration that is
not consistent with the principle of public administration of the Canada
Health Act).
•
Coverage for catastrophic prescription drug costs requires that individuals
make a financial contribution to cover part of the cost of the insured service
(this is not consistent with the first-dollar coverage contained under the
principle of accessibility of the Act).
•
Coverage for catastrophic prescription drugs, post-hospital home care for a
period of three months and palliative home care costs will be funded through
a federal funding mechanism that is distinct from the current CHST (the
principles of the Canada Health Act relate to the CHST only).
•
The Committee believes strongly that additional federal funding provided for
the expansion of public coverage must be based on specific conditions
related to transparency and accountability (these principles are totally absent
from the Canada Health Act).
While principles other than those
of the Canada Health Act are needed for the new
programs proposed in the report, the underlying
value related to those services, namely, providing
high-quality services on the basis of need, should
remain. Similarly, access to reasonably comparable
319
The Committee believes that, while
principles other than those of the
Canada Health Act are needed, the
underlying value of receiving services
on the basis of need should remain.
services for all Canadians everywhere in the country must be assured under the legislation
covering the new programs. This comparability requires the development of national standards.
These should apply to all publicly funded services, whether delivered by private for-profit,
private not-for-profit or public health care providers and institutions. Therefore, the Committee
recommends that:
The federal government enact new legislation instituting
health care coverage for catastrophic prescription drugs,
post-hospital home care and some palliative care in the
home. This new legislation should explicitly spell out
conditions relating to transparency of decision making and
accountability.
320
CONCLUSION
Two years ago, at the outset of the Committee’s work, the Committee endorsed
two major public policy objectives for Canada’s heath care system:
•
To ensure that every Canadian has timely access to medically necessary health
services regardless of his or her 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.
Implicit in these two objectives, particularly the first, is the requirement that the
medically necessary services provided under Medicare be of high quality. Clearly, providing
access to services of inferior quality would defeat the purpose of Canada’s health care system.
In addition, the Committee recognized that the value of fairness is also an
important component of Canadians’ views of the health care system. This value of fairness
underlies the patient-oriented principles of a universal, comprehensive, portable and accessible
system that the Committee – and Canadians – strongly support.
But, to Canadians, fairness also means equity of access to the system – wealthy
Canadians should not be able to buy their way to the front of waiting lists in Canada. Repeated
public opinion polling data have shown that having to wait months for diagnostic or hospital
treatment is the greatest concern and complaint that Canadians have about the health care
system. The solution to this problem is not, as some have suggested, to allow wealthy Canadians
to pay for services in a private health care institution. Such a solution would violate the principle
of equity of access. The solution is the care guarantee as recommended in this report.
Based on evidence presented at Committee hearings over the past two years as
well as on public opinion polling data, the Committee is also aware that Canadians believe that
the current system is inefficient. Moreover, Canadians are not prepared to invest additional
money into the system until these inefficiencies are eliminated. The Committee realizes that
changing this public perception of an inefficient system will not be easy. It will require the
introduction of incentives to encourage all the components of the system to function more
efficiently. It will also require that the system function in a much more transparent and
accountable fashion, including in the ways in which public money is spent.
In formulating its recommendations, the Committee also took account of two
additional factors. First, the Committee believes that if the second public policy objective given
above – the no undue financial hardship objective – is to be met, steps must be taken now to
begin to close the major gaps in the health care safety net. While the Committee believes that
Canadians who are genuinely in need of help, and cannot afford to pay for it, should receive the
assistance they need from public funds, this does not mean that what is needed are new firstdollar coverage programs in areas such as pharmacare or home care. In the Committee’s view
prudence requires that any expansion of the current system to begin to close the gaps in it must
be done in small, manageable steps.
321
The second factor
that is reflected in the Committee’s
Anyone proposing a plan to reform and renew the
recommendations is the belief that health care system has an obligation to say how
anyone proposing a plan to reform
their plan of reform will be paid for. The only way
and renew the health care system has
Canadians can develop an informed opinion on the
an obligation to say how their plan of merits of a proposed plan of reform is if they can
reform will be paid for. Moreover,
the payment method must be clearly understand the benefits that will result
described in terms that are from the plan, and what it will cost them to have
meaningful to individual Canadians. the plan implemented.
The only way Canadians can develop
an informed opinion on the merits of a proposed plan of reform is if they can clearly understand
the benefits that will result from the plan, and what it will cost them to have the plan
implemented.
It is for this reason that the
Not to give a revenue -raising plan
Committee has taken the extremely unusual (some
have even described it as unique) step of both would also mean that the Committee
costing our recommendations and putting forward
had failed to meet the test of
a recommended option for raising the new federal
transparency and accountability,
revenue required to implement fully our which it has insisted throughout its
recommendations. To fail to do this would, in our
recommendations must apply to the
view, perpetuate the myth that health care is a
health care system as a whole.
“free” good. This would play directly into the
hands of those who oppose reform. Not to give a
revenue-raising plan would also mean that the Committee had failed to meet the test of
transparency and accountability, which it has insisted throughout its recommendations must
apply to the health care system as a whole.
The Committee understands that the implementation of its set of
recommendations will require considerable behavioral change on the part of all participants in the
health care system. For example:
•
The change to service-based funding will alter the way in which hospitals are
managed. It will make hospital management, and the health care professionals
working in a hospital, much more conscious of which procedures they do
efficiently and which they do inefficiently. It will also mean that hospitals in
large urban areas will face competition from other hospitals and specialist
clinics.
•
The changes involved in primary health care reform will require family
physicians to accept changes to the way they are remunerated (by replacing
straight fee-for-service by a remuneration model that is primarily capitation
with an added component of fee-for-service). It will also require that
modifications be made to the scope of practice rules for all health care
professionals in order to ensure that such rules are not barriers to health care
professionals being able to use their skills to the fullest extent for which they
have been trained.
322
•
The changes involved in primary health care reform will also require that
patients agree to stay with their choice of family physician for a year, unless
they move to a different community. The recommendation to set up a system
of electronic health records will require that patients agree to give the
necessary approval to enable an efficient use of patient electronic health
records. (As explained in Chapter 10, the Committee believes that a system of
electronic health records can be built, and the resulting information system
operated, in a manner that is entirely consistent with the spirit as well as the
letter of privacy laws.)
•
Provincial/territorial governments will need to change a significant aspect of
their approach to the health care system by agreeing to a health care
guarantee, thus accepting responsibility for the consequences of their past
decisions to cut budgets and ration the supply of health care services.
•
Provincial/territorial governments will also have to move away from their
current command-and-control approach to health care by giving regional
health authorities sufficient autonomy and by allowing the system of
incentives, with its associated behavioral change, to generate the desired
results.
•
The federal government will have to agree to the creation of an arms-length
fund, overseen by a Health Care Commissioner and a National Health Care
Council who will advise the government on how money in the fund should
be spent. This advice should be made public, and there should also be an
annual public accounting of how funds earmarked for health care are actually
spent. This is an essential step in restoring public confidence in the system.
•
The federal government will also have to accept that it has a major leadership
role to play in financially sustaining the infrastructure that is essential to a
successful national health care system. Included in this infrastructure are the
nation’s 16 Academic Health Sciences Centres, the national supply of human
resources in the health care sector, technology, information systems and
research.
•
The federal government will also have to accept that it has a major role to
play in financing, and marketing, programs of health promotion and chronic
disease prevention.
Finally, it is important to stress how critical the objectives of greater
accountability and transparency are to the Committee’s views on the kinds of reform that are
needed in the health care system, and the critical role that improved information, at all levels of
the system, must play in implementing these objectives. This increased information is needed
for the following reasons:
323
•
first, to make more transparent the processes by which resource allocation
decisions are made – principally with regard to money, but also including
human resources;
•
second, to enhance the accountability of the people, institutions and
governments that decide what types of services will be covered by public
health care insurance and how much of any particular service will be
provided;
•
third, and perhaps most important, 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, and they have a right to understand the linkages between
funding levels and service levels. Changing the nature of the public debate about health care will
mark a significant step towards gaining public support for restructuring and renewing the
publicly funded hospital and doctor system.
The Committee fully recognizes that its set of recommendations will be subject
to close critical scrutiny. This 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 or her own
unique subset of recommendations.
We ask readers, however, to keep
in mind that no major reform of any large
system, particularly one as complex as the health
care 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.
Insisting on perfection, or attempting to obtain
everything one wants, will doom reform to
failure.
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.
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 some of them, particularly on the hospital and doctor
system. These tendencies, along with a focus on self-interest by those employed in the system,
explain why reform has failed in the past.
Recognizing these dangers, we have worked hard to develop a set of
recommendations we believe to be 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.
324
We trust that those involved
in all aspects of the country’s health care
system, and indeed all Canadians, will
consider the recommendations with the same
pragmatic approach as the Committee, and
that everyone will be prepared to make some
compromises in order to meet our common
goal: having a fiscally sustainable health care
system of which Canadians can be truly
proud.
We trust that those involved in all aspects
of the country’s health care system, and
indeed all Canadians, will consider the
recommendations with the same pragmatic
approach as the Committee, and that
everyone will be prepared to make some
compromises in order to meet our common
goal: having a fiscally sustainable health
care system of which Canadians can be
truly proud.
325
APPENDIX A
L IST
RECOMMENDATIONS
OF
BY
C HAPTER
The Committee recommends that:
CHAPTER ONE:
THE N EED FOR AN ANNUAL REPORT ON THE STATE OF THE HEALTH CARE
SYSTEM AND THE HEALTH STATUS OF CANADIANS
A National Health Care Commissioner and National Health Care Council
New federal/provincial/territorial committee made up of five provincial/territorial and five
federal representatives be struck. Its mandate would be to appoint a National Health Care
Commissioner and the other eight members of a National Health Care Council from among the
Commissioner’s nominees;
The National Health Care Commissioner be charged with the following responsibilities:
§ To put nominations for members to a National Health Care Council before the F/P/T
committee and to chair the Council once the nominees have been ratified;
§ To oversee the production of an annual report on the state of the health care system
and the health status of Canadians. The report would include findings and
recommendations on improving health care delivery and health outcomes in Canada, as
well as on how the federal government should allocate new money raised to reform
and renew the health care system;
§ To work with the National Health Care Council to advise the federal government on
how it should allocate new money raised to reform and renew the health care system in
the ways recommended in this report;
§ To hire such staff as is necessary to accomplish this objective and to work closely with
existing independent bodies to minimize duplication of functions.
The federal government provide $10 million annually for the work of the National Health Care
Commissioner and the National Health Care Council that relates to producing an annual report
on the state of the health care system and the health status of Canadians, and to advising the
federal government on the allocation of new money raised to reform and renew the health care
system.
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CHAPTER TWO:
HOSPITAL RESTRUCTURING AND FUNDING IN CANADA
Service Based Funding
Hospitals should be funded under a service-based remuneration scheme. This method of
funding is particularly well suited for community hospitals located in large urban centres. In
order to achieve this, a number of steps must be undertaken:
§ A sufficient number of hospitals should be required to submit information on case
rates and costing data to the Canadian Institute for Health Information;
§ The Canadian Institute for Health Information, in collaboration with the provinces and
territories, should establish a detailed set of case rates to reduce incentives to up-code.
§ The federal government should devote ongoing funding to the Canadian Institute for
Health Information for the purpose of collecting and estimating the data needed to
establish service-based funding.
§ The shift to service-based funding should occur as quickly as possible. The Committee
considers a five-year period to be a reasonable timeframe for the full implementation
of the new hospital funding.
Service-based funding should be augmented by an additional funding method that would take
into account the unique services provided by Academic Health Sciences Centres, including
teaching and research.
In developing a service-based remuneration scheme for financing of community hospitals,
consideration be given to the following factors:
§ Isolation: hospitals located in rural and remote areas are expected to incur higher costs
than those in large urban centres. An adjustment should reflect this fact.
§ Size: small hospitals are expected to incur higher costs per weighted case than larger
hospitals. An adjustment should recognize this fact.
Capital Support for Hospitals
The federal government provide capital financial support for the expansion of hospitals located
in areas of exceptionally high population growth; that is, areas in which the population growth
exceeds the average rate of growth in the province by 50% or more. Such federal financial
support should account for 50% of the total capital investment needed. In total, the federal
government should devote $1.5 billion to this initiative over a 10-year period, or $150 million
annually.
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The federal government should encourage the provinces and territories to explore public-private
partnerships as a means of obtaining additional investment in hospital capacity.
The federal government contribute $4 billion over the next 10 years (or $400 million annually) to
Academic Health Sciences Centres for the purpose of capital investment.
Academic Health Sciences Centres be required to report on their use of this federal funding.
CHAPTER THREE
DEVOLVING FURTHER RESPONSIBILITY TO REGIONAL HEALTH AUTHORITIES
Regional health authorities in major urban centres be given control over the cost of physician
services in addition to their responsibility for hospital services in their regions. Authority for
prescription drug spending should also be devolved to RHAs.
Regional health authorities should be able to choose between providers (individual or
institutional) on the basis of quality and costs, and to reward the best providers with increased
volume. As such, RHAs should establish clear contracts specifying volume of services and
performance targets.
The federal government should encourage the devolution of responsibility from
provincial/territorial governments to regional health authorities, and participate in evaluating the
impact of internal market reforms undertaken at the regional level.
CHAPTER FOUR
PRIMARY HEALTH CARE REFORM
The federal government continue to work with the provinces and territories to reform primary
care delivery, and that it provide ongoing financial support for reform initiatives that lead to the
creation of multi-disciplinary primary health care teams that:
§ are working to provide a broad range of services, 24 hours a day, 7 days a week;
§ strive to ensure that services are delivered by the most appropriately qualified health
care professional;
§ utilise to the fullest the skills and competencies of a diversity of health care
professionals;
§ adopt alternative methods of funding to fee-for-service, such as capitation, either
exclusively or as part of blended funding formulae;
§ seek to integrate health promotion and illness prevention strategies in their day-to-day
work;
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§ progressively assume a greater degree of responsibility for all the health and wellness
needs of the population they serve.
The federal government commit $50 million per year of the new revenue the Committee has
recommended it raise to assist the provinces in setting up primary care groups.
CHAPTER FIVE
TIMELY ACCESS TO HEALTH CARE
There are no recommendations in this chapter.
CHAPTER SIX
THE HEALTH CARE GUARANTEE
For each type of major procedure or treatment, a maximum needs-based waiting time be
established and made public.
When this maximum time is reached, the insurer (government) pay for the patient to seek the
procedure or treatment immediately in another jurisdiction, including, if necessary, another
country (e.g., the United States). This is called the Health Care Guarantee.
The process to establish standard definitions for waiting times be national in scope.
An independent body be created to consider the relevant scientific and clinical evidence.
Standard definitions focus on four key waiting periods – waiting time for primary health care
consultation; waiting time for initial specialist consultation; waiting time for diagnostic tests;
waiting time for surgery.
CHAPTER SEVEN
EXPANDING COVERAGE TO INCLUDE PROTECTION AGAINST CATASTROPHIC
PRESCRIPTION DRUG COSTS
The federal government introduce a program to protect Canadians against catastrophic
prescription drug expenses.
For all eligible plans, the federal government would agree to pay:
§ 90% of all prescription drug expenses over $5,000 for those individuals for whom the
combined total of their out-of-pocket expenses and the contribution that a
province/territory incurs on their behalf exceeds $5000 in a single year;
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§ 90% of prescription drug expenses in excess of $5,000 for individual private
supplementary prescription drug insurance plan members for whom the combined
total of their out-of-pocket expenses and the contribution that the private insurance
plan incurs on their behalf exceeds $5,000 in a single year.
§ the remaining 10 % would be paid by either a provincial/territorial plan or a private
supplementary plan.
In order to be eligible to participate in this federal program:
§ provinces/territories would have to put in place a program that would ensure that no
family of the province/territory would be obliged to pay more than 3% of family
income for prescription drugs;
§ sponsors of existing private supplementary drug insurance plans would have to
guarantee that no individual plan member would be obliged to incur out-of-pocket
expenses that exceed $1,500 per year; this would cap each individual plan member’s
out-of-pocket costs at either 3% of family income or $1,500, whichever is less.
The federal government work closely with the provinces and territories to establish a single
national drug formulary.
CHAPTER EIGHT
EXPANDING COVERAGE TO INCLUDE POST -ACUTE HOME CARE (PAHC)
When Does PAHC Coverage Begin and End
An episode of PAHC should be defined as all home care services received between the first date
of service provision following hospital discharge, if that date occurs within 30 days of discharge,
and up to three months following hospital discharge.
PAHC Financing Directed to Hospitals
Financing for post-acute home care should be first directed to hospitals.
In order to encourage innovation and service integration, and to enhance the efficient and
effective provision of necessary health care irrespective of the setting in which such care is
received, a service-based method of reimbursement for PAHC should be developed in
conjunction with service-based arrangements for each episode of hospital care.
Range of Services Covered
The range of services, products and technologies (including prescription drugs) that may be used
to facilitate the use of home care following hospital care not be restricted.
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PAHC Funded Through Service Based Funding
Hospitals have the option to develop contractual relationships directly with home care service
providers or with transfer agencies that may provide case management and service provision
arrangements.
Contracts formed with home care service providers should include, in addition to service-based
reimbursement arrangements, mechanisms to monitor service quality, performance and
outcome.
PAHC Programs Should Be Cost-Shared
The federal government establish a new National Post-Acute Home Care Program, to be jointly
financed with the provinces and territories on a 50:50 basis.
The PAHC program be treated as an extension of medically necessary coverage already provided
under the Canada Health Act, and that therefore the full cost of the program should be borne by
government (shared equally by the provincial/territorial and federal levels).
CHAPTER NINE
EXPANDING COVERAGE TO INCLUDE PALLIATIVE HOME CARE
The federal government agree to contribute $250 million per year towards a National Palliative
Home Care Program to be designed with the provinces and territories and co-funded by them
on a 50:50 basis.
The federal government examine the feasibility of allowing Employment Insurance benefits to
be provided for a period of six weeks to employed Canadians who choose to take leave to
provide palliative care services to a dying relative at home.
The federal government examine the feasibility of expanding the tax measures already available
to people providing care to dying family members or to those who purchase such services on
their behalf.
The federal government amend the Canada Labour Code to allow employee leave for family
crisis situations, such as care of a dying family member, and that the federal government work
with the provinces to encourage similar changes to provincial labour codes.
The federal government take a leadership role as an employer and enact changes to Treasury
Board legislation to ensure job protection for its own employees caring for a dying family
member.
A-6
CHAPTER TEN
THE FEDERAL ROLE IN HEALTH CARE INFRASTRUCTURE
Health Care Technology
The federal government provide funding to hospitals for the express purpose of purchasing and
assessing health care technology. The federal government should devote a total of $2.5 billion
over a five-year period (or $500 million annually) to this initiative. Of this funding, $400 million
should be allocated annually to Academic Health Sciences Centres, while $100 million should be
provided annually to community hospitals. The community hospital funding should be costshared on a fifty-fifty basis with the provinces, while the Academic Health Sciences Centre
funding should be 100% federal.
The institutions benefiting from this program be required to report on their use of such funding.
Electronic Health Records
The federal government provide additional financial support to Canada Health Infoway Inc. so
that Infoway develop, in collaboration with the provinces and territories, a national system of
electronic health records.
Additional federal funding to Infoway amount to $2 billion over a five-year period, or an annual
allocation of $400 million.
Evaluation of System Performance
The federal government provide additional annual funding of $50 million to the Canadian
Institute for Health Information. In addition, an annual investment of $10 million should be
provided to the Canadian Council on Health Services Accreditation. This new federal
investment will help establish a national system of evaluation of health care system performance
and outcomes, and hence facilitate the work of the National Health Care Commissioner.
Protection of Personal Health Information
The federal government work to achieve greater consistency and/or coordination across
federal/provincial/territorial jurisdictions on the following key issues:
§ Need-to-know rules restricting access to authorized users based on their purposes;
§ Consent rules governing the form and criteria of consent in order to be valid;
§ Conditions authorizing non-consensual access to personal health information in limited
circumstances and for specific purposes;
§ Rules governing the retention and destruction of personal health information;
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§ Mechanisms for ensuring proper oversight of cross-jurisdictional electronic health
record systems.
Canada Health Infoway Inc. and other key investors structure their investment criteria in such a
way as to create incentives for developers of EHR systems to ensure practical and pragmatic
privacy solutions for implementing the following:
§ State-of-the-art security safeguards for protecting personal health information and
auditing transactions;
§ Shared accountability among various custodians accessing and using EHRs;
§ Coordination among custodians to give meaningful effect to patients’ rights to access
their EHR, rectify any inaccuracy and challenge non-compliance.
Key stakeholders, including the federal, provincial and territorial Ministries of Health, Canada
Health Infoway Inc., the Canadian Institute for Health Information and Canadian Institutes of
Health Research, undertake the following:
§ Rigorous research into the determinants affecting Canadian attitudes regarding
acceptable and unacceptable uses of their personal health information;
§ Informed and meaningful dialogue with key stakeholders, including patient groups and
consumer representatives;
§ An open, transparent and iterative public communication strategy about the benefits of
EHRs.
CHAPTER ELEVEN
HEALTH CARE HUMAN RESOURCES
The Need for Productivity Studies
Studies be done to determine how the productivity of health care professionals can be improved.
These studies should be either undertaken or commissioned by the National Coordinating
Committee on Health Human Resources that the Committee recommends be created.
The National Coordinating Committee for Health Human Resources
The federal government work with other concerned parties to create a permanent National
Coordinating Committee for Health Human Resources, to be composed of representatives of
key stakeholder groups and of the different levels of government. Its mandate would include:
§ disseminating up-to-date data on human resource needs;
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§ coordinating initiatives to ensure that adequate numbers of graduates are being trained
to meet the goal of self-sufficiency in health human resources;
§ sharing and promoting best practices with regard to strategies for retaining skilled
health care professionals and coordinating efforts to repatriate Canadian health care
professionals who have emigrated to other countries;
§ recommending strategies for increasing the supply of health care professionals from
under-represented groups, such as Canada’s Aboriginal peoples, and in under-serviced
regions, particularly the rural and remote areas of the country;
§ examining the possibilities for greater coordination of licensing and immigration
requirements between the various levels of government.
Increasing the Supply of Health Human Resources
The federal government:
§ Work with provincial governments to ensure that all medical schools and schools of
nursing receive the funding increments required to permit necessary enrolment
expansion;
§ Put in place mechanisms by which direct federal funding could be provided to support
expanded enrolment in medical and nursing education, and ensure the stability of
funding for the training and education of allied health professionals;
§ Review federal student loan programs available to health care professionals and make
modifications to ensure that the impact of inevitable increases in tuition fees does not
lead to denial of opportunity to students in lower socio-economic circumstances;
§ Work with provincial governments to ensure that the relative wage levels paid to
different categories of health professionals reflect the real level of education and
training required of them.
The federal government work with the provinces and medical and nursing faculties to finance
places for students from Aboriginal backgrounds over and above those available to the general
population.
In order to facilitate the return to Canada of Canadian health care professionals who are working
abroad, the federal government should work with the provinces and professional associations to
inform expatriate Canadian health professionals of emerging job opportunities in Canada, and
explore the possibility of adopting short-term tax incentives for those prepared to return to
Canada.
The federal government contribute $160 million per year, starting immediately, so that Canadian
medical colleges can enrol 2,500 first-year students by 2005.
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The proposed National Coordinating Committee for Health Human Resources be charged with
monitoring the levels of enrolment in Canadian medical schools and make recommendations to
the federal government on whether these are appropriate.
The federal government should contribute financially to increasing the number of post-graduate
residency positions in medicine to a ratio of 120 per 100 graduates of Canadian medical schools.
The federal government work with the provinces to establish national standards for the
evaluation of international medical graduates, and provide ongoing funding to implement an
accelerated program for the licensing of qualified IMGs and their full integration into the
Canadian health care delivery system.
The federal government phase in funding over the next five years so that by 2008 there are
12,000 graduates from nursing programs across the country, and that the federal government
continue to provide full additional funding to the provinces for all nursing school places over
and above 10,000, for as long as is necessary to eliminate the shortage of nurses in the country.
The federal government commit $90 million per year from the additional revenue the
Committee recommends that it raise in order to enable Canadian nursing schools to graduate
12,000 nurses by 2008.
The federal government commit $40 million per year from the new revenues that the Committee
has recommended it raise in order to assist the provinces in raising the number of allied health
professionals who graduate each year.
The exact allocation of these funds be determined by the proposed National Coordinating
Committee for Health Human Resources.
The federal government devote $75 million per year of the new money the Committee
recommends be raised to assisting Academic Health Sciences Centres to pay the costs associated
with expanding the number of training slots for the full range of health care professionals.
Review Scope of Practice Rules
An independent review of scope of practice rules and other regulations affecting what individual
health professionals can and cannot do be undertaken for the purpose of developing proposals
that would enable the skills and competencies of diverse health care professionals to be utilized
to the fullest and enable health care services to be delivered by the most appropriately qualified
professionals.
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CHAPTER TWELVE
N URTURING EXCELLENCE IN CANADIAN HEALTH RESEARCH
Assuming Leadership in Health Research
Health research and its translation into the health care system be routinely on the agendas of
meetings of federal and provincial/territorial Ministers and Deputy Ministers of Health, and that
the Canadian Institute of Health Research be represented and be involved in setting the agendas
for health research at those meetings. This would greatly help to sustain a culture that supports
the creation and use of knowledge generated by health research throughout Canada.
The federal government set, on a regular basis, national goals and priorities for health research in
collaboration with all stakeholders.
The federal government foster multi-stakeholder collaborations when performing, funding and
using health research. This should contribute to capitalizing on the best available resources while
minimizing overlap and duplication.
The federal government take a leadership role, through the Canadian Institutes of Health
Research and Health Canada, in developing a strategy to encourage the interchange of research
scientists between government, academia and the private sector, including national voluntary
organizations.
Funding Health Research
The federal government, through both Health Canada and the Canadian Institutes of Health
Research, coordinate and provide resources to ensure that Canada contributes to and benefits
from the scientific revolution to maximize the economic, health and social gains for Canadians.
The Canadian Institutes of Health Research and Genome Canada fund research that positions
Canada a s a world leader in the new area of genomics and human genetics so that the health care
system can take appropriate advantage of this new technology to improve the health of
Canadians.
The Canadian Institutes of Health Research play a leadership role in establishing best practices
for addressing the complex ethical issues raised by the use of this new technology in health
research and health care.
The federal government:
§ Increase, within a reasonable timeframe, its financial contribution to extramural health
research to achieve the level of 1% of total Canadian health care spending. This
requires an additional investment of $440 million by the federal government;
§ Recognize that health research is a long term proposition, and therefore set and adhere
to clear long-term plans for funding health research, particularly through the Canadian
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Institutes of Health Research. More precisely, the federal government should commit
to a five-year planning horizon for the CIHR budget;
§ Provide predictable and appropriate investment for in-house health research.
Health Canada:
§ Be provided with the financial and human resources in health research that are required
to fulfill its mandate and obligations;
§ Engage actively in the establishment of linkages and partnerships with other health
research stakeholders.
The federal government, through the Canadian Institutes of Health Research, Health Canada
and the Canadian Health Services Research Foundation, devote additional funding to health
services research and clinical research and that it collaborate with the provinces and territories to
ensure that the outcomes of such research are broadly diffused to health care providers,
managers and policy-makers.
Health Research on Vulnerable Populations
The federal government, through the Canadian Institutes of Health Research and Health
Canada, provide additional funding to health research aimed at the health of particularly
vulnerable segments of Canadian society.
The federal government provide additional funding to CIHR in order to increase participation of
Canadian health researchers, including Aboriginal peoples themselves, in research that will
improve the health of Aboriginal Canadians.
Health Canada be provided with additional resources to expand its research capacity and to
strengthen its research translation capacity in the field of Aboriginal health.
The federal government provide increased resources to the Global Health Research Initiative.
Commercializing the Results of Health Research
The federal government require an explicit commitment from all recipients of federally funded
health research that they will obtain the greatest possible benefit to Canada, whenever the results
of their federally funded research are used for commercial gain.
The Canadian Institutes of Health Research, while not ignoring the social value of health
research that does not result in commercial gain, seek to facilitate appropriate economic returns
within Canada from the investments it makes in Canadian health research, whenever the results
of investments in Canadian health research are used for commercial gain. In doing so, CIHR
should develop an innovation strategy aimed at accelerating and facilitating the
commercialization of health research outcomes.
The federal government invest additional resources to enhance the output of Canadian health
researchers and strengthen the commercialization capacity of performers of federally funded
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health research through CIHR’s innovation strategy. This new funding would be additional to
the current health research investment. In particular, the funding of the indirect costs of
research by the Canadian granting agencies should be made permanent. Health research
performers should be made accountable for the use of these commercialization funds.
Ethics in Health Research
Health Canada initiate, in collaboration with stakeholders, the development of a joint
governance system for health research involving human subjects for all research that the federal
government performs, that it funds, and that it uses in its regulatory activities.
Health Canada, in the development of this ethics governance system, regard the following
components as essential to progress:
§ Work initially on all (health) research that the federal government performs, funds, or
uses in its regulatory activities, to develop an effective and efficient system of
governance that will become accepted as the standard of care across Canada;
§ Give prime importance in the governance system to effective education and training
mechanisms for all who are involved in research and research ethics, with certification
appropriate to their different responsibilities;
§ Develop standards, based on the Tri-Council Policy Statement, the International
Conference on Harmonization guidelines applying to clinical trials involving human
subjects, and other relevant Canadian and foreign standards, against which research
ethics functions or Research Ethics Boards can be accredited or certified as meeting
the levels of function that are consistent with the expectations of Canadians and with
those in other countries;
§ Ensure that the Tri-Council Policy Statement is updated and is maintained at the forefront
of international policies for the ethics or research involving humans;
§ Remove inconsistencies between the various policies under which research involving
humans is now governed, and make Canadian standards consistent with those of other
countries that affect Canadian research;
§ Establish an accreditation or certification process for research ethics functions that is at
arm’s length from government, but clearly accountable to government;
§ Develop the governance system through open, transparent and meaningful
consultation with stakeholders.
All federal departments and agencies require compliance with the standards of the Canadian
Council on Animal Care for:
§ All research that is carried out in federal facilities, and
§ All research that is funded by federal departments or agencies but performed outside
federal facilities, and
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§ All research that is carried out without federal funding or facilities, but that is
submitted to or used by the federal government for purposes of exercising its legislated
functions.
The Protection of Personal Health Information
Regulations such as those proposed by the Canadian Institutes of Health Research receive their
fullest and fairest consideration in discussions about providing greater clarity and certainty of the
law with the view to ensure that its objectives will be met without preventing important research
to continue to better the health of Canadians and improve their health services.
Discussions continue among stakeholders, the Privacy Commissioner, and those federal and
provincial government departments involved with the provision, management, evaluation and
quality assurance of health services.
The federal government, through the Canadian Institutes of Health Research and Health
Canada, together with other relevant stakeholders, design and implement a program of public
awareness to foster in Canadians a broad understanding of:
§ the nature of, and reasons for, the extensive databases containing personal health
information that must be maintained to operate a publicly financed health care system,
and
§ the critical need to make secondary use of such databases for health research and
health care management purposes.
The federal government, through the Canadian Institutes of Health Research and Health
Canada, together with other relevant stakeholders, be responsible for promoting:
§ thoughtful discussion and consideration of the ethical issues, particularly informed
consent issues, involved in the secondary use of personal health information for health
care management and health research purposes;
§ thorough examination of the control and review mechanisms needed for ensuring that
databases containing personal health information are effectively created, maintained
and safeguarded and that their use for health care management and health research
purposes is conducted in an open, transparent and accountable manner.
The Canadian Institutes of Health Research, in partnership with industry and other stakeholders,
continue to explore the ethical aspects of the interface between the sectors with a view to
ensuring that the collaborations and partnerships function in the best interests of all Canadians.
A-14
CHAPTER THIRTEEN
HEALTHY PUBLIC POLICY : HEALTH BEYOND HEALTH CARE
National Chronic Disease Prevention Strategies
The federal government, in collaboration with the provinces and territories and in consultation
with major stakeholders (including the Chronic Disease Prevention Alliance of Canada),
implement a National Chronic Disease Prevention Strategy.
The National Chronic Disease Prevention Strategy build on current initiatives through better
integration and coordination.
The federal government contribute $125 million annually to the National Chronic Disease
Prevention Strategy.
Specific goals and objectives should be set under the National Chronic Disease Prevention
Strategy. The outcomes of the strategy should be evaluated against these goals and objectives on
a regular basis.
Public Health Infrastructure
The federal government ensure strong leadership and provide additional funding to sustain,
better coordinate and integrate the public health infrastructure in Canada as well as relevant
health promotion efforts. An amount of $200 million in additional federal funding should be
devoted to this very important undertaking.
CHAPTER FOURTEEN
HOW THE N EW FEDERAL FUNDING FOR HEALTH CARE SHOULD BE MANAGED
The federal government establish an Earmarked Fund for Health Care that is distinct and
separate from the Consolidated Revenue Fund. The Earmarked Fund will contain the additional
revenue raised by the federal government for investment in health care.
Money from the Earmarked Fund for Health Care be used solely for the purpose of health care.
Moreover, such money must be used to buy change or reform: it must be utilized exclusively for
expanding public health care coverage and for restructuring and renewal of the publicly funded
hospital and doctor system.
The National Health Care Council be charged with the mandate of advising the federal
government on how the money in the Earmarked Fund for Health Care should be spent. The
Council’s advice to the government should be made public through an annual report.
The federal government subject the Earmarked Fund for Health Care to an annual audit by the
Auditor General of Canada. The result of such an audit should be made public.
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The federal government require the provinces and territories to report annually to the Canadian
public on their utilization of federal money from the Earmarked Fund for Health Care.
CHAPTER FIFTEEN
HOW ADDITIONAL FEDERAL FUNDS FOR HEALTH CARE SHOULD BE RAISED
Funding the Recommendations in this Report
The federal government establish a National Variable Health Care Insurance Premium in order
to raise the necessary federal revenue to finance implementation of the Committee’s
recommendations.
Funding Current Federal Expenditures on Health Care
The federal government determine an earmarked revenue source which would fund the
approximately 62% of CHST currently regarded as being the federal annual cash contribution to
Canada’s national health care insurance program.
If the GST is chosen as the earmarked revenue source for the current federal cash contribution
to the national hospital and doctor insurance plan, then in order for the federal government to
make a significant additional contribution to funding to the current hospital and doctor system,
half of all GST revenue (or 3.5 of the 7 percentage points) should be earmarked for health care.
(This would be in addition to the increased federal funding required to implement the
recommendations in this report.)
The share of the federal annual contribution to which a province/territory is entitled for the
purpose of the existing national hospital and doctor program be not only based on the
proportion of its population relative to Canada as a whole, but also weighted in some way by the
percentage of its population aged 70 years and over.
CHAPTER SIXTEEN
THE CONSEQUENCES OF N OT MAKING THE HEALTH CARE SYSTEM FISCALLY
SUSTAINABLE
There are no recommendations in this chapter.
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CHAPTER SEVENTEEN
THE CANADA HEALTH ACT
The federal government, in collaboration with the provinces and territories, establish a
permanent committee – the Committee on Public Health Care Insurance Coverage – made up
of citizens, ethicists, health care providers and scientists.
The Committee on Public Health Care Insurance Coverage be given the mandate to review and
make recommendations on the set of services that should be covered under public health care
insurance.
The Committee on Public Health Care Insurance Coverage report its findings and
recommendations to the National Health Care Council.
As its first task, the Committee on Public Health Care Insurance Coverage be charged with
developing national standards upon which decisions for public health care coverage will be
made.
The Committee on Public Health Care Insurance Coverage be charged with determining the
national parameters applicable to post-hospital home care and palliative care delivered in the
home.
The federal government enact new legislation establishing the National Health Care Guarantee.
The new legislation should include a definition of the concept of “timely access” that will relate
to such a guarantee.
The principle of public administration of the Canada Health Act be maintained for publicly
insured hospital and doctor services. That is, there should be a single insurer – the government –
for publicly insured hospital and doctor services delivered by either public or private health care
providers and institutions.
The federal government, through Health Canada, clarify the meaning of the concept of public
administration under the Canada Health Act so as to recognize explicitly that this principle applies
to the administration of public health care insurance, not to the delivery of publicly insured
health services.
The federal government enact new legislation instituting health care coverage for catastrophic
prescription drugs, post-hospital home care and some palliative care in the home. This new
legislation should explicitly spell out conditions relating to transparency of decision making and
accountability.
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APPENDIX B
L IST
OF
P RINCIPLES
FROM
V OLUME F IVE (A PRIL 2002)
The following principles, enunciated in Volume Five, have guided the
Committee in developing the detailed plan of action outlined in this report.
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.
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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.
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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
A-21
APPENDIX C
L IST
OF
W ITNESSES
1S T SESSI ON OF THE 37TH PARLI AM ENT
Wednesday, April 24, 2002
Ontario Health Services Restructuring Commission:
Dr. Duncan Sinclair, Former Commissioner
Thursday, April 25, 2002
Health Canada:
Marcel Nouvet, Assistant Deputy Minister, Information Analysis and Connectivity Branch
Michel Léger, Executive Director, Strategic Alliances and Priorities Division, Information Analysis and Connectivity
Branch
Wednesday, May 1, 2002
Canadian Institute for Health Information:
Michael Decter, Chairman, Board of Directors
Monday, May 6, 2002
Calgary Health Region:
Jack Davis, President and CEO
As an individual:
Claude Forget, Former Minister of Health, Province of Quebec
Dalhousie University:
Dr. Nuala Kenny, Professor of Pediatrics and Chair, Department of Bioethics
St. Michael’s Hospital:
Jeffrey Lozon, President and CEO
As an individual:
Graham Scott, Former Deputy Minister of Health, Province of Ontario
Royal Columbian Hospital:
Dr. Les Vertesi, Medical Director
Wednesday, May 8, 2002
As an individual:
The Honourable Monique Bégin, P.C.
Thursday, May 9, 2002
Dalhousie University:
Professor Lawrence Nestman, School of Health Services Administration
A-23
Wednesday, May 22, 2002
Canadian Medical Association:
Dr. Peter Barrett, Past President
Dr. Susan Hutchison, Chair, GP Forum
Ontario Medical Associaiton:
Dr. Elliot Halparin, President
Dr. Kenneth Sky, Past President
Ontario Hospital Association:
Mark Rochon, Member, Advocacy Committee
Association of Canadian Academic Health Care Organizations:
Glenn G. Brimacombe, CEO
University Health Network:
Kevin Empey, Chief Financial Officer
Wednesday, May 29, 2002
Capital Health Authority:
Dr. Ken Gardener, Vice-President, Medical Affairs
Ontario Family Health Network:
Dr. Ruth Wilson, Chair
Donna Segal, CEO
Thursday, May 30, 2002
McMaster University – Centre for Health Economics and Policy Analysis (CHEPA):
Dr. Brian Hutchison
University of Guelph:
Professor Brian Ferguson, Department of Economics
Monday, June 3, 2002
University of Toronto, Department of Health Policy, Management and Evaluation:
Professor Raisa Deber
University of British Columbia:
Professor Roberts G. Evans
Canadian Taxpayers Federation:
Walter Robinson, Federal Director
The Conference Board of Canada:
Paul Darby, Director, Economic Forecasting
As an individual:
David Kelly
A-24
Wednesday, June 5, 2002
Canadian Healthcare Association:
Sharon Sholzberg-Gray, President and CEO
Larry Odegard, CEO, Forum
Canadian Association of Chain Drug Stores:
Lori Turik, Vice-President, Public Affairs
Deb Saltmarche, Director of Pharmacy
Thursday, June 6, 2002
Canadian Nurses Association:
Ginette Lemire Rodger, President
Robert Calnan, President-Elect
Canadian Practical Nurses Association:
Kelly Kay, Representative
Wednesday, June 12, 2002
C.D. Howe Institute:
Jack Mintz, President and CEO
Thursday, June 13, 2002
Association of Canadian Academic Health Care Organizations:
Glenn Brimacombe, CEO
St.Michael’s Hospital:
Jeffrey Lozon, President and CEO
McGill University Health Centre:
Dr. Hugh Scott, Executive Director
Applied Management:
Bryan Ferguson, Partner
Fraser Group:
Ken Fraser
Tristat Resources:
Richard Shillington, Principal
Monday, June 17, 2002 (9:00 a.m.)
(By videoconference)
Government of Denmark:
John Erik Petersen, Head of Department, Ministry of Health and the Interior
Dr. Steen Friberg Nielsen, CEO, Top Management Academy
Morten Hjulsager, Head of Department, National Informatics, National Board of Health
Dr. Arne Kverneland, Head of Division of Medical Informatics, National Board of Health
A-25
Monday, June 17, 2002 (12:30 p.m.)
Government of New Brunswick, Department of Health and Wellness:
Cheryl Hansen, Director, Extra-Mural Program
University of Toronto, Home Care Evaluation Research Centre:
Peter Coyte, Co-Director
Hollander Analytical Services:
Marcus Hollander
Canadian Council of Chief Executives:
David Stewart-Patterson, Senior Vice President, Policy
VOLUM E F IVE ( Octob er 15, 20 01 – M ar ch 7, 2002)
Monday, October 15, 2001
University of Manitoba:
Linda West, Professor, Asper School of Business
Frontier Centre for Public Policy:
Peter Holle, President
Western Canadian Task Force on Health Research and Economic Development:
Dr. Henry Friesen, Team Leader
Dr. John Foerster
Dr. Audrey Tingle
Chuck Laflèche
Regional Health Authorities of Manitoba
Bill Bryant, Chair, Council of Chairs
Kevin Beresford, Chair, Council of CEOs
Randy Lock, Executive Director
Manitoba Centre for Health Policy and Evaluation:
Dr. Nora Lou Roos
Women's Health Clinic:
Madeline Boscoe, Advocacy Coordinator
Hospice and Palliative Care Manitoba:
Dr. Paul Henteleff, Chair, Advocacy Committee
John Bond, Member of Advocacy Committee
Margaret Clarke, Executive Director
Canadian Union of Public Employees in Manitoba (CUPE):
Paul Moist, President
Lorraine Sigurdson, Health Care Coordinator
Société franco-manitobaine:
Daniel Boucher, Chief Executive Officer
As a walk-on:
Barry Shtatleman
A-26
Tuesday, October 16, 2001
Saskatchewan Registered Nurses' Association:
June Blau, President
Victorian Order of Nurses:
Bob Layne, Vice-President, Planning and Government Relations (Western Region)
Lois Clark, Executive Director, VON North Central Saskatchewan
Brenda Smith, National Board Member (Saskatchewan)
Community Health Services (Saskatoon) Association:
Kathleen Storrie, Vice-President
Ingrid Larson, Director, Member Relations
As an individual:
Dr. John Bury
Canadian Union of Public Employees (CUPE) Saskatchewan:
Tom Graham, President, CUPE Saskatchewan
Stephen Foley, President, Health Care Council
John Welden, Health Care Coordinator, Health Care Council
Saskatoon Chamber of Commerce:
Dave Ductchak, President
Kent Smith-Windsor, Executive Director
Jodi Blackwell, Research and Operations Director
Arthritis Society of Saskatchewan:
Sherry McKinnon, Executive Director
Joy Tappin, Board Member
Canadian Parks and Recreation:
Randy Goulden, Executive Director, Tourism Yorkton
Métis National Council:
Gerald Morin, President
Don Fidler, Director, Health Care
Wednesday, October 17, 2001
Premier's Advisory Council on Health (Alberta):
The Right Honourable Don Mazankowski, P.C., Chair
Peggy Garritty
Department of Health and Social Services (Nunavut):
The Hon. Edward Picco, Minister
Calgary Health Region:
Jack Davis, CEO
Capital Health Authority:
Sheila Weatherill, President and CEO
Canadian Practical Nurses Association:
Pat Fredrickson, President
A-27
University of Alberta - Faculty of Nursing:
Dr. Donna Wilson
Health Sciences Association of Alberta:
Elisabeth Ballermann, President
Alberta Association of Registered Nurses:
Sharon Richardson, President
United Nurses of Alberta:
Heather Smith, President
Friends of Medicare:
Christine Burdett, Provincial Chair
Tammy Horne, Member
As an individual:
Kevin Taft, MLA
Western Canada Waiting List Project:
John McGurran, Project Director
Primary Care Initiative:
Dr. June Bergman
Alberta Consumers Association:
Wendy Armstrong
Fédération des communautés francophones et acadiennes du Canada :
George Arès, President
National Advisory Council on Aging:
Pat Raymaker, Chairwoman
Alberta Council on Aging:
Neil Reimer, Secretary/Treasurer
Nechi Institute:
Ruth Morin, Chief Executive Officer
Richard Jenkins, Director of Marketing and Health Promotion
Executive of the Alberta and Northwest Conference of the United Church of Canada - Health Advisory Committee:
Louise Rogers
Kent Harold
Don Junk
As a walk-on:
Noel Somerville
Thursday, October 18, 2001
Commission on Medicare, Saskatchewan:
Ken Fyke, Former Chair
Tommy Douglas Research Institute:
Dave Barrett, Chair
Marc Eliesen, Co-Chair
A-28
Market-Media International Corporation:
Joan Gadsby, President
University of British Columbia, Family Practice Residency Program:
Dr. J. Galt Wilson, Program Director - Prince George Site
University of British Columbia:
Dr. John A. Cairns, Dean of Medicine
Dr. Joanna Bates, Associate Dean, Admissions
Health Professions Council:
Dianne Tingey, Member
Gerry Fahey, Research Director
Cambie Surgery Centre:
Dr. Brian Day, Founder
As an individual:
Cynthia Ramsay, Health Economist
Health Association of British Columbia:
Lorraine Grant, Chair of the Board of Directors
Lisa Kallstrom, Executive Director
University of British Columbia:
Dr. John H. V. Gilbert, Coordinator of Health Sciences
University of British Columbia - Vancouver Hospital and Health Sciences Centre:
Professor Charles Wright, Director, Centre for Clinical Epidemiology and Evaluation
University of British Columbia – Centre for Health Services and Policy Research:
Professor Barbara Mintzes
Professional Association of Residents of British Columbia:
Dr. Kristina Sharma
Friday, October 19, 2001
Canadian Medical Association:
Dr. Peter Barrett, Past President
Dr. Arun Garg, Chair, Council on Health Policy and Economics
British Columbia Medical Association:
Dr. Heidi Oetter, President
Darrell Thomson, Director, Economics and Policy Analysis
University of British Columbia, Anxiety Disorders Unit, Department of Psychiatry:
Dr. Peter D. McLean, Professor and Director
Maples Surgical Centre (Manitoba)
Dr. Mark Godley
A-29
Monday, October 29, 2001
Canadian Radiation Oncology Services:
Dr. Thomas McGowan, President and Medical Director
Canadian Taxpayers Federation:
Walter Robinson, Federal Director
Canadian Council of Churches:
Stephen Allen, Member of Commission for Justice and Peace and Co-Chair of the Commission's Ecumenical
Health Care
Buffett Taylor Employee Benefits and Workplace Wellness Consultants:
Edward Buffett, President and CEO
As an individual:
Michael Rachlis
Medical Reform Group:
Dr. Joel Lexchin
At Work Health Solutions Inc.:
Dr. Arif Bhimji, Founder and President; Medical Director of Liberty Health
Gery Barry, President and CEO of Liberty Health
Consumers' Association of Canada:
Jean Jones, Chair of the Health Committee
Mel Fruitman, President
Ontario Association of Optometrists:
Dr. Joseph Chan
Medical Devices Canada (MEDEC):
Peter Goodhand, President
AstraZeneca:
Gerry McDole, President and CEO
Comcare Health Services:
Mary Jo Dunlop
Saint Michael’s Hospital:
Jeffrey Lozon, President and CEO
Association of Ontario Health Centres:
Gary O'Connor, Executive Director
Ontario Medical Association:
Kenneth Sky, President
The Arthritis Society:
Denis Morrice, President and CEO
SMARTRISK:
Dr. Robert Conn, President and CEO
A-30
Canadian Cancer Society:
Dr. Barbara Whylie, Director, Cancer Control Policy
Cheryl Mayer, Director, Cancer Control Programs, Alcohol and Drug Recovery Association of Ontario, and
Addiction Intervention Association
Jeff Wilbee, Executive Director
Tuesday, October 30, 2001
Canadian Institute for Health Information:
Michael Decter, Chairman, Board of Directors
Ontario Hospital Association:
David MacKinnon, President and CEO
Registered Nurses Association of Ontario:
Doris Grinspun, Executive Director
McMaster University Department of Economics:
Jeremiah Hurley, Professor
University of Toronto Public Health Science Department:
Dr. Cameron Mustard, Professor
University of Toronto:
Colleen Flood, Professor
Drug Trading Company Limited:
Larry Latowsky, President and CEO
Jane Farnharm, Vice President, Pharmacy
Canadian Pharmacists Association:
Ron Elliott, President
GlaxoSmithKline:
Geoffrey Mitchinson, Vice -president, Public Affairs
Medtronic:
Donald A. Hurley, President
Canadian Association for the Fifty Plus:
Dr. Bill Gleberzon, Associate Executive Director
Lilian Morgenthal, President
Canadian Association for Community:
Cheryl Gulliver, President
Connie Laurin-Bowie
Margot Easton
Roeher Institute:
Cameron Crawford, President
As individuals:
Clement Edwin Babb
Robert S.W. Campbell
A-31
Wednesday, October 31, 2001
As individuals:
The Honourable Claude Forget
The Honourable Claude Castonguay
André-Pierre Contandriopoulos, Professor, Faculty of Medicine, University of Montreal
Hôtel Dieu Hospital:
Dr. Serge Boucher
Conseil du patronat du Québec:
Gilles Taillon, President
Canadian Chamber of Commerce:
Nancy Hughes-Anthony, President and Chief Executive Officer
Michael N. Murphy, Senior Vice-President, Policy
As individuals:
Jean-Luc Migué
Lee Soderstrom, Professor, Department of Economics, McGill University
Montreal Economic Institute:
Michel Kelly-Gagnon, Executive Director
Dr. Edwin Coffey, Retired Associate Professor, Faculty of Medicine, McGill University, and Former President of
the Quebec Medical Association
Frosst Health Care Foundation:
Dr. Monique Camerlain, President of the Board of Directors
Janet Dunbrack, Executive Director.
Thursday, November 1, 2001
Association des optométrists du Québec:
Dr. Langis Michaud, President
Marie-Josée Crête, Deputy Director General
Clairmont Girard, Advisor
Collège des médécins du Québec:
Dr. Yves Lamontagne, President
Dr. André Garon, Deputy Secretary General
As an individual:
Robert Dorion
Canadian Life and Health Insurance Association:
Mark Daniels, President
Greg Traversy, Executive Vice-President
Yves Millette, Senior Vice-President, Quebec Affairs
Frank Fotia, Vice-President, Group Insurance.
As individuals:
Dr. Margaret Somerville, Acting Director, McGill Centre for Medicine, Ethics and Law, McGill University
Dr. Robyn Tamblyn, Associate Professor, Department of Economics, McGill University
Merck Frosst Canada Ltd.:
Kevin Skilton, Director, Policy Planning
Dr. Terrance Montague, Executive Director, Patient Health
A-32
Association québécoise des droits des retraités (AQDR):
Ann Gagnon, Advisor on Health
Yollande Richer, Vice-President, Communications
Myroslaw Smereka, Director General
Monday, November 5, 2001
Department of Health and Community Services, Newfoundland:
Robert C. Thompson, Deputy Minister
Beverly Clarke, Assistant Deputy Minister
Victorian Order of Nurses (VON Canada):
Patricia Pilgrim, President, St. John’s Branch
Bernice Blake Dibblee, Executive Director, St. John’s Branch
Association of Registered Nurses of Newfoundland and Labrador:
Sharon Smith, President
Canadian Union of Public Employees, Newfoundland:
Wayne Lucas, President
As an individual:
Maud Peach
National Cancer Institute of Canada:
Dr. Roy West, President
Health and Community Services, Newfoundland:
Dr. Catherine Donovan
Weight Watchers:
Marlene Bayers, Regional Manager
Newfoundland Cancer Treatment and Research Foundation:
Bertha H. Paulse, Chief Executive Officer
As an individual:
Karen McGrath, Executive Director of Health and Community Services St. John’s Region
Tuesday, November 6, 2001
Canadian Auto Workers (CAW):
Cecil Snow, President, Nova Scotia Health Care Council
Nova Scotia Association of Health Organizations:
Robert Cook, President and CEO
Insurance Bureau of Canada:
George Anderson, President and CEO
Paul Kovacs, Senior Vice-President, Policy, and Chief Economist
Canadian Coalition Against Insurance Fraud:
Mary Lou O'Reilly, Executive Director
Atlantic Institute for Market Studies:
Dr. David Zitner, Fellow on Health Policy
A-33
Dalhousie University:
Nuala Kenny, Professor of Pediatrics and Chair, Department of Bioethics
Dr. Vivek Kusumakar, Head, Mood Disorders Research Group, Department of Psychiatry
Lawrence Nestman, Professor, School of Health Services Administration
Nova Scotia Valley Caregivers Support Group:
Maxine Barrett
Elizabeth May Chair in Women’s Health and the Environment, Dalhousie University:
Sharon Batt, Chair
Feminists for Just and Equitable Public Policy:
Ms. Georgia MacNeil, Chair Person
Cape Breton Regional Health Care Complex:
John Malcom, CEO
Dr. Mahmood Naqvi, Medical Director, Cape Breton Regional Facility
Capital District Health Authority:
Dr. John Ruedy, Vice-President, Academic Affairs
Dalhousie University:
Thomas Rathwell, Professor and Director, School of Health Services Administration
Canadian Medical Association:
Dr. Henry Haddad, MD, President
Bill Tholl, Secretary General
Dr. Bruce Wright, President of the Medical Society of Nova Scotia
Dr. Dana W. Hanson, President-Elect
Dalhousie University:
Dr. Desmond Leddin, Head, Division of Gastroenterology
Dr. George Kephart, Director, Population Health Research Unit, Department of Community and Epidemiology
Dr. Kenneth Rockwood, Faculty of Medicine, Division of Geriatric Medicine
Cobequid Community Health Board:
Ryan Sommers
Health Canada:
Anne-Marie Leger, Policy Analyst
Wednesday, November 7, 2001
Department of Health and Social Services, Prince Edward Island:
The Honourable Jamie Ballem, Minister
PEI Seniors Advisory Council:
Heather Henry-MacDonald, Chair
Canadian Union of Public Employees, PEI Division:
Bill A. McKinnon, National Representative
Ms. Donalda MacDonald, President
Raymond Léger, Research Representative
Department of Health and Social Services:
Mary Hughes-Power, Director of Acute and Continuing Care
A-34
Deborah Bradley, Manager of Public Health Policy
College of Family Physicians of Canada:
Dr. Peter MacKean, Chairman of the Board
Queen Elizabeth Hospital:
Iain Smith, Drug Utilization Coordinator
PEI Pharmacy Board:
Neila Auld, Executive Director, PEI
Queen’s Regional Health Authority:
Sylvia Poirier, Chair
West Prince Regional Health Authority:
Ken Ezeard, Chief Executive Officer
Department of Health and Social Services:
Dr. Don Ling, Director of Medical Services
Department of Health and Social Services, Prince Edward island:
Rory Francis, Deputy Minister
Bill Harper, Assistant Deputy Minister
Jean Doherty, Communications Coordinator
Southern Kings Health Authority:
Betty Fraser, Chief Executive Officer
Department of Health and Social Services:
Susan Maynard, Senior Health Planner
Kathleen Flanagan-Rochon, Community Services Coordinator
Evangeline Health Centre:
Elise Arsenault, Coordinator
East Prince Regional Health Authority:
David Riley, Chief Executive Officer
Dalhousie University:
Dr. Stan Kutcher, Department Head of the Community Health and Epidemiology/ Psychiatry
Thursday, November 8, 2001
Faculty of Nursing, University of New Brunswick:
Dr. Margaret Dykeman
New Brunswick Health Care Association:
Robert Simpson, Chief Executive Officer
Canadian Association of Chain Drug Stores:
Sherry Porter, Atlantic Canada Representative
Sandra Aylward, Vice President, Pharmacy Services
A-35
As individuals:
Dr. Russell King, Former Minister of Health, Province of New Brunswick
William Morrissey, Former Deputy Minister of Health, Province of New Brunswick
Applied Management:
Bryan Ferguson, Partner
Société des Acadiens et Acadiennes du Nouveau-Brunswick:
Daniel Thériault, Director General
Canadian Snowbird Association:
Bob Jackson, President
New Brunswick Senior Citizens Federation Inc.:
Helen Ladouceur, Member
Eilleen Malone, Member
Catholic Health Association of Canada:
Sandra Keon, Secretary Treasurer; and Vice-President of Clinical Programs, Pembroke Hospital
Miramichi Police Force:
Michael Gallagher, Corporal, Drug Section
Canadian Union of Public Employees, New Brunswick:
Raymond Léger, Research Representative
Federal Superannuates National Association:
Rex G. Guy, National President
Roger Heath, Research and Communications Officer
Union of New Brunswick Indians:
Nelson Solomon, Director of Health
Wanda Paul Rose, Coordinator
Norville Getty, Consultant
Nurses Association of New Brunswick:
Roxanne Tarjan, Director General
Thursday, February 21, 2002
Canadian Federation of Nurses Unions:
Kathleen Connors, President
Canadian Health Coalition:
Dr. Arnold Relman, Former editor of New England Journal of Medicine
Michael McBane, National Coordinator
Federal Superannuates National Co-ordinator:
Rex G. Guy, National President
Roger Heath, Research and Communications Officer
A-36
Thursday, March 7, 2002
Canadian Healthcare Association:
Sharon Sholzberg-Gray, President and CEO
Kathryn Tregunna, Director, Policy Development
Canadian Labour Congress:
Kenneth V. Georgetti, President
Cindy Wiggins, Senior Researcher, Social and Economic Policy Department
VOLUM E T HR EE ( M ay 28, 200 1 – Ju ne 14, 200 1)
Monday, May 28, 2001
(By videoconference)
From the Ministry of Health, Welfare and Sports of the Netherlands:
Dr. Hugo Hurts, Deputy Director, Health Insurance Division, Ministry of Health, Welfare and Sports of the
Netherlands
From the International Institute of Social Studies of the Netherlands:
Professor James Bjorkman
Thursday, June 7, 2001 (9:00 a.m.)
(by videoconference)
Swedish Parliament (Riksdag):
Lars Elinderson, Deputy member, Committee on Health and Welfare
Monday, June 11, 2001
(By videoconference)
German Health Ministry:
Georg Baum, Director General, Head of Directorate Health Care
Dr. Margot Faelker, Deputy-Director, Section Financial Issues of Statutory Health Insurance
Dr. Rudolf Vollmer, Director-General, Head of Directorate Long-Term Nursing Care Insurance
Department of Health – Economic and Operational Research Division of the United Kingdon:
Clive Smee, Chief Economic Adviser
University of Birmingham:
Professor Chris Ham, Director, Health Services Management Centre
London School of Economics:
Professor Julien LeGrand, Richard Titmuss Professor of Social Policy, LSE Health & Social Care
Tuesday, June 12, 2001
(By videoconference)
Australian Institute of Health and Welfare:
Dr. Richard Madden, Director
Australian Health Insurance Association:
Russel Schneider, CEO
A-37
National Centre for Epidemiology and Population Health – Australian National University
Dr. Tony Adams, Professor of Public Health
Health Insurance Commission:
Dr. Brian Richards
Australian Medical Association:
Dr. Carmel Martin, Director
Dr. Roger Kilham
Wednesday, June 13, 2001
Health Canada:
Ake Blomqvist, Visiting Academic, Applied Research and Analysis Directorate, Information, Analysis and
Connectivity Branch and Professor, University of Western Ontario
University of Calgary:
Professor Cam Donaldson, Department of Economics
University of Toronto (by videoconference):
Professor Colleen Flood, Faculty of Law
As an individual:
Claude Forget
University of Toronto:
Professor Mark Stabile, Department of Economics
Professor Carolyn Tuohy, Department of Political Science
Thursday, June 14, 2001
(by videoconference)
U.S. Department of Health and Human Services:
Christine Schmidt, Deputy to the Deputy Assistant Secretary for Health Policy, Office of the Assistant Secretary for
Planning and Evaluation
Ariel Winter, Analyst
Tanya Alteras, Analyst
VOLUM E TW O ( Mar c h 2 1 2 001 - Jun e 7 200 1)
Wednesday, March 21, 2001
Statistics Canada:
Réjean Lachapelle, Director, Demography Division
Jean-Marie Berthelot, Manager, Health Analysis and Modeling Group, Social and Economic Studies Division
Brian Murphy, Senior Research Analyst, Socio-Economic Modeling Group
Canadian Institute of Actuaries:
David Oakden, President
Rob Brown, Manager of Task Force on Health Care Financing
Daryl Leech, Chair, Committee on Health Care
National Advisory Council on Aging:
Dr. Michael Gordon, Member
A-38
Conference Board of Canada:
James G. Frank, Ph.D., Chief Economist and Vice-President
Glenn Brimacombe, Director of Health Program
Thursday, March 22, 2001
C.D. Howe Institute:
William B.P. Robson, Vice-President and Director of Research
McMaster University:
Byron G. Spencer, Professor
University of Ottawa:
Dr. William Dalziel
Wednesday, March 28, 2001
IMS Health Canada:
Dr. Roger A. Korman, President
Canadian Association of Pharmacists:
Dr. Jeff Poston, Executive Director
Health Promotion Research:
Dr. Robert Coambs, President and CEO
Health Canada:
Barbara Ouellet, Director of Home Care and Pharmaceuticals, Health Care Directorate, Policy and Consultation
Branch
Thursday, March 29, 2001
Canadian Association of Radiologists:
Dr. John Radomsky
Thursday, March 29, 2001 (cont’d)
Canadian Coordinating Office for Health Technology Assessment (CCHOTA):
Dr. Jill Sanders, President and CEO
The Fraser Institute:
Martin Zelder, Director of Health Policy Research
As an individual:
Professor David Feeny
Wednesday, April 4, 2001
Health Canada:
Dr. Christina Mills, Director General, Centre for Chronic Disease Prevention and Control – Population Public
Health Branch
Dr. Paul Gully, Acting Director General, Centre for Infectious Disease Prevention and Control
Dr. Clarence Clottey, Acting Director, Diabetes Division, Bureau of Cardio-Respiratory Diseases and Diabetes,
Centre for Chronic Disease prevention and Control
Nancy Garrard, Director, Division of Aging and Seniors
A-39
Dalhousie University:
Dr. David MacLean, Departmental Head, Community Health and Epidemiology
Thursday, April 5, 2001
Health Canada:
Abby Hoffman, Director General, Health Care Directorate – Health Policy and Communications Branch
Cliff Halliwell, Director General, Applied Research & Analysis Directorate, Information, Analysis and Connectivity
Branch
Nancy Garrard, Director, Division of Aging and Seniors
Thursday, April 26, 2001
Canadian Institute of Health Research:
Dr. Alan Bernstein, President
Health Canada:
Kimberly Elmslie, Acting Executive Director, Health Research Secretariat
Statistics Canada:
T. Scott Murray, Director General, Institutions and Social Statistics Branch
Wednesday, May 9, 2001
Canada’s Research-Based Pharmaceutical Companies:
Murray Elston, President
Coalition for Biomedical and Health Research:
Dr. Barry McLennan, Chairman
Charles Pitts, Executive Director
Centre for Excellence for Women’s Health:
Dr. Pat Armstrong
Canadian Genetic Diseases Network:
Dr. Ronald Worton, CEO & Scientific Director
Thursday, May 10, 2001
Health Canada:
William J. Pascal, Director General, Office of Health and Information Highway, Information, Analysis and
Connectivity Branch
Canadian Institute for Health Information:
Dr. John S. Millar, Vice-President, Research and Analysis
Canadian Society of Telehealth:
Dr. Robert Filler, President
Department of Health and Wellness of New Brunswick
David Cowperthwaite, Director of Information System
A-40
Wednesday, May 16, 2001
Canadian Medical Association:
Dr. Peter Barrett, President
Canadian Medical Forum Task Force 1:
Dr. Hugh Scully, President
Federal Provincial Territorial Advisory Committee on Health Human Resources:
Dr. Thomas Ward, Chair
Canadian Nurses Association:
Sandra MacDonald-Remecz, Director of Policy, Regulation and Research
Canadian Federation of Nurses Unions:
Kathleen Connors, President
Ordre des infirmières et infirmiers auxiliaires du Québec:
Régis Paradis, President
Nurse Practitioners Association of Ontario:
Linda Jones
Canadian Radiation and Imaging Societies in Medicine (CRISM):
Dr. Paul C. Johns, Past Chair
The Canadian Chiropractic Association:
Dr. Tim St. Dennis, President
Canadian Society for Medical Laboratory Science:
Kurt Davis, Executive Director
Thursday, May 17, 2001
Canadian Home Care Association (CHCA):
Nadine Henningsen, Executive Director
Canadian Association for Community Care (CACC):
Dr. Taylor Alexander, President
Victorian Order of Nurses for Canada (VON Canada):
Diane McLeod, Vice-President, Policy, Planning and Government Relations, Central Region
Wednesday, May 30, 2001
Health Canada:
Ian Potter, Assistant Deputy Minister, First Nations and Inuit Health Branch
Jerome Berthelette, Special Advisor, Office of the Special Advisor Aboriginal Health, First Nations Inuit Health
Branch
Dr. Peter Cooney, Acting Director General, Non-Insured Health Benefits, First Nations and Inuit Health
Indian and Northern Affairs Canada:
Chantal Bernier, Assistant Deputy Minister, Socio-economic Development Policy and Programs
Terry Harrison, Director, Social Services and Justice
A-41
Assembly of First Nations:
Elaine Johnston, Director of Health
Métis National Council:
Gerald Morin, President
Native Women’s Association of Canada:
Michelle Audette, Interim Speaker and President of the Native Women Association of Quebec
Congress of Aboriginal Peoples:
Scott Clark, President, United Native Nations
Inuit Tapirisat of Canada:
Larry Gordon, Member ITC, Health Committee
Pauktuutit Inuit Women’s Association:
Veronica N. Dewar, President
National Aboriginal Health Organization:
Dr. Judith Bartlett, Chair
Richard Jock, Executive Director
Canadian Institutes of Health Research:
Dr. Jeff Reading, Scientific Director, Institute of Aboriginal People’s Health
Wikwemikong Health Centre:
Ron Wakegijig, Healer
National Indian and Inuit Community Health Representatives Organization:
Margaret Horn, Executive Director
Thursday, May 31, 2001
Health Canada:
Dr. John Wooton, Special Advisor on Rural Health, Population and Public Health Branch
Canadian Medical Association:
William Tholl, Secretary General and Chief Executive Officer
Society of Rural Physicians of Canada:
Dr. Peter-Hutten-Czapski, President
Consortium for Rural Health Research:
Dr. Judith Kulig
Wednesday, June 6, 2001
University of Ottawa:
Professor Martha Jackman, Faculty of Law
University of Calgary: (by videoconference)
Professor Sheilah Martin, Faculty of Law
A-42
Thursday, June 7, 2001 (11:00 a.m.)
Health Canada:
Nancy Garrard, Acting Director General, Centre for Healthy Human Development, Population and Public Health
Branch
Tom Lips, Senior Policy Advisor for Mental Health, Population and Public Health Branch
Carl Lakaski, Senior Analyst, Mental Health, Health Human Resources Strategies Division, Health Policy and
Communications Branch
Canadian Psychological Association:
Dr. John Service, Executive Director
Canadian Alliance on Mental Illness and Mental Health:
Phil Upshall, Coordinator
Canadian Mental Health Association:
Bonnie Pape
Department of Health and Wellness of New Brunswick:
Ken Ross, Assistant Deputy Minister, Mental Health Services
VOLUM E ONE ( Mar ch 2 200 – Septe mber 2 1, 200 1)
(2nd Session, 36th Parliament)
Thursday, March 2, 2000
University of Toronto, Department of Health Administration:
Raisa Deber, Professor
Health Canada:
Dr. Robert McMurtry, G.D.W. Cameron Visiting Chair
Health Action Lobby (HEAL):
Sharon Sholzberg-Gray, Co-Chair
Dr. Mary Ellen Jeans, Co-Chair
Canadian Policy Research Network:
Sholom Glouberman, Director, Health Network
Wednesday, March 22, 2000
Founder’s Network :
Dr. Fraser Mustard
Goldfarb Consultants:
Dr. Scott Evans, Senior Statistical Consultant
Environics Research Group :
Chris Baker, Vice-President
Health Canada:
Wendy Watson-Wright, Director General, Policy and Major Projects Directorate, Health Promotion and Programs
Branch
A-43
Thursday, March 23, 2000
Health Canada:
Sylvain Paradis, Acting Policy Group Manager, Policy and Major Projects Directorate, Quantitative Analysis and
Research Section, Health Promotion and Programs Branch
Liz Kusey, Policy Analyst, Policy and Major Projects Directorate, Health Promotion and Programs Branch
Monique Charon, Acting Director, Program Policy and Planning, Program Policy, Transfer Secretariat and Planning
Directorate, Medical Services Branch
Mary Johnston, Education Consultant, Strategic Policy and Systems Coordination Section, Childhood and Youth
Division – Health Promotion and Programs Branch
Julie MacKenzie, Senior Research Analyst, Strategic Policy and Systems Coordination Section, Childhood and
Youth Division – Health Promotion and Programs Branch
Queens University – School of Policy Studies:
Keith Banting, Director
Thursday, April 6, 2000
University of British Columbia:
Robert G. Evans, Director, Population Health Program
Canadian Centre for Policy Alternatives:
Colleen Fuller
The Fraser Institute:
Martin Zelder, Director of Health Policy Research
Wednesday, May 3, 2000
Health Canada:
Cliff Halliwell, Director General, Applied Research & Analysis Directorate, Information, Analysis and Connectivity
Branch
Abby Hoffman, Senior Policy Advisor
Frank Fedyk, Acting Director, Canada Health Act Directorate, Policy and Consultation Branch
Thursday, May 4, 2000
As an individual:
Tom Kent
University of Toronto:
Michael Bliss, Professor
Wednesday, May 10, 2000
University of Western Ontario:
Ake Blomqvist, Professor
University of Toronto:
Colleen Flood, Professor
Mark Stabile, Professor
A-44
Thursday, May 11, 2000
Canadian Institute for Health Information:
John S. Millar, Vice-President, Research and Analysis
McGill University:
Margaret Somerville, Professor
Alberta University:
Laura Shanner, Professor
Wednesday, May 17, 2000
As an individual:
The Honourable Marc Lalonde, P.C.
Wednesday, May 31, 2000
As an individual:
The Honourable Monique Bégin, P.C.
Wednesday, June 7, 2000
Department of Finance:
Guillaume Bissonnette, General Director, Federal-Provincial Relations and Social Policy Branch
Barbara Anderson, Director, Federal-Provincial Relations Division - Federal-Provincial Relations and Social Policy
Branch
Thursday, September 21, 2000
As an individual:
Graham Scott, Former Deputy Minister of Health, Province of Ontario
v
v
v
OTHER WRITTEN SUBMISSIONS RECEIVED :
Abell Medical Clinic
Alberta Centre for Injury Control and Research
Amgen Canada Inc.
Ancaster-Dundas-Flamborough-Aldershot New Democratic Party Riding Association Executive Committee
Association of Canadian Medical Colleges (ACMC)
Patricia Baird
B.C. Better Care Pharmacare Coalition
Bruce Bigham
Brain Injury Association of Nova Scotia
Robert D. Brown and Michanne Haynes
Canada Health Infoway
Canada's Research -Based Pharmaceutical Companies
Canada West Foundation
Canadian Association of Emergency Physicians (CAEP)
Canadian Association of Internes and Residents
Canadian Blood Services
Canadian Caregiver Coalition
Canadian Cochrane Network and Centre
A-45
Canadian Council on Integrated Healthcare
Canadian Dental Hygienists Association
Canadian Drug Manufacturers Association (CDMA)
Canadian Strategy for Cancer Control
Cancer Care Ontario, Division of Preventive Oncology
Chemical Sensitivities Information Exchange Network Manitoba (CSIENM)
Conestoga College (Pat Bower, Course instructor)
Laurent Desjardins
Faith Partners (Ottawa)
Federation of Medical Women in Canada
Sandra Finley
Dr. Michael Gordon, Baycrest Centre for Geriatric Care
Serena Grant
Health Care Corporation of St.John's
Heart and Stroke Foundation of New Brunswick
Home-based Spiritual Care
Kidney Foundation of Canada
Kids First Parent Association of Canada
Dr. Lee Kurisko
Caterine Lindman
Jim Ludwig
Dr. Keith Martin
Dr. Ross McElroy
Dr. Malcom S. McPhee
Meals on Wheels of Calgary
Medbuy Corporation
Verna Milligan
Moose Jaw-Thunder Creek District Health Board
Dr. Earl B. Morris
Fran Morrison
Multiple Sclerosis Society of Canada
John Neilson
Ontario Chamber of Commerce
Ontario Psychological Association
Roy L. Piepenburg (Liberation Consulting)
Red Deer Network in Support of Medicare
Dr. Robert S. Russell
Society of Obstetricians and Gynaecologists of Canada
Christa Streicher
Thames Valley District Health Council
Elaine Tostevin
University of Ottawa Heart Institute
University of Ottawa Institute of Population Health (Dr. Joseph Losos, Director)
A-46
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