The Health of Canadians The Federal Role
Interim Report
Volume Five: Principles and Recommendations for Reform - Part I
The Standing Senate Committee on Social Affairs, Science and Technology
Chair: The Honourable Michael J.L. Kirby
Deputy Chair: The Honourable Marjory LeBreton
April 2002
CHAPTER ONE:
A REFORM BASED ON FUNDAMENTAL REALITIES
1.1 Canada's Publicly Funded Health Care System is Not Fiscally Sustainable Given Current Funding Levels
1.2 Canadians Want a Strong Role for the Federal Government in Facilitating Health Care Restructuring and Renewal
1.3 There is a Need to Introduce Incentives for all Participants in the Publicly Funded Hospital and Doctor System - Providers, Institutions, Governments and Patients - to Deliver, Manage and Use Health Services More Efficiently.
1.4 Principles to Guide the Restructuring and Financing of Canada's Health Care System
CHAPTER TWO:
PRINCIPLES TO GUIDE THE RESTRUCTURING AND FINANCING OF CANADA'S HEALTH CARE SYSTEM
2.1 Financing (or Insuring) Health Care
2.2 Delivering Health Care
2.3 Evaluating Health Care
2.4 Achieving a Patient-Oriented Health Care System
2.5 The Health Care Contract Between Canadians and their Governments
2.6 Concluding Remarks
CHAPTER THREE:
FINANCING AND ASSESSING HEALTH CARE TECHNOLOGY
3.1 Availability of Health Care Technology
3.2 Financing the Acquisition and Upgrading of Health Care Technology
3.3 Investing More in Health Care Technology Assessment
CHAPTER FOUR
DEPLOYING A NATIONAL HEALTH INFOSTRUCTURE
4.1 Establishing a System of Electronic Health Records
4.2 Evaluating Quality, Performance and Outcomes: the Need for Independent Assessment
4.3 Fostering Accountability
4.4 Ensuring Confidentiality and Protection of Personal Health Information
4.5 Investing in Telehealth in Rural and Remote Communities
4.6 Investing in Tele-Homecare
4.7 Investing in Internet-Based Health Information
CHAPTER FIVE
NURTURING EXCELLENCE IN CANADIAN HEALTH RESEARCH
5.1 Assuming Leadership in Canadian Health Research
5.2 Engaging the Scientific Revolution
5.3 Securing a Predictable Environment for Health Research
5.3.1 Federal Funding for Health Research
5.3.2 Federal In-House Health Research
5.4 Enhancing Quality in Health Services and in Health Care Delivery
5.5 Improving the Health Status of Vulnerable Populations
5.6 Commercializing the Outcomes of Health Research
5.7 Applying the Highest Standards of Ethics to Health Research
5.7.1 Research Involving Human Subjects
5.7.2 Issues With Respect to Research Involving Human Subjects
5.7.3 Animals in Research
5.7.4 Privacy of Personal Health Information
5.7.5 Genetic Privacy
5.7.6 Potential Situations of Conflict of Interest
CHAPTER SIX
PLANNING FOR HUMAN RESOURCES IN HEALTH CARE
6.1 Towards a national strategy for attaining self-sufficiency in health human resources
6.1.1 Shortages of health care professionals
6.1.2 Towards self-sufficiency in health human resources
6.1.3 Increasing the supply of health care providers from Canada's Aboriginal peoples
6.1.4 Dealing with 'The Brain Drain'
6.1.5 The need for a national health human resources strategy
6.2 Health Human Resources and Primary Care Reform
6.2.1 Support for Primary Care Reform
6.2.2 Inter-Disciplinary Education
6.2.3 What model for primary care reform?
CHAPTER SEVEN
TOWARDS A POPULATION HEALTH STRATEGY
APPENDIX A
LIST OF PRINCIPLES AND RECOMMENDATIONS BY CHAPTER
APPENDIX B
Extract from the Journals of the Senate of March 1, 2001:
Resuming debate on the motion of the Honourable Senator LeBreton, seconded by the Honourable Senator Kinsella:
That the Standing Senate Committee on Social Affairs, Science and Technology be authorized to examine and report upon the state of the health care system in Canada. In particular, the Committee shall be authorized to examine:
a) The fundamental principles on which Canada’s publicly funded health care system is based;
b) The historical development of Canada’s health care system;
c) Health care systems in foreign jurisdictions;
d) The pressures on and constraints of Canada’s health care system; and
e) The role of the federal government in Canada’s health care system;
That the papers and evidence received and taken on the subject and the work accomplished during the Second Session of the Thirty-sixth Parliament be referred to the Committee;
That the Committee submit its final report no later than June 30, 2002; and
That the Committee be permitted, notwithstanding usual practices, to deposit any report with the Clerk of the Senate, if the Senate is not then sitting; and that the report be deemed to have been tabled in the Chamber.
After debate,
The question being put on the motion, it was adopted.
* * * *
Extract from the Journals of the Senate of Tuesday, December 11, 2001:
The Honourable Senator Kirby moved, seconded by the Honourable Senator Pépin:
That, notwithstanding the Order of the Senate adopted on
March 1, 2001, the Standing Senate Committee on Social Affairs, Science and
Technology, which was authorized to examine and report upon the state of the
health care system in Canada, be empowered to present its final report no
later than
June 30, 2003.
The question being put on the motion, it was adopted.
ATTEST :
Paul
C. Bélisle
Clerk
of the Senate
The following Senators have participated in the study on
the state of the health care system of the Standing Senate Committee on Social
Affairs, Science and Technology:
The Honourable Michael J.L. Kirby, Chair of the
Committee
The Honourable Marjory LeBreton, Deputy Chair of the
Committee
and
The Honourable Senators:
Catherine S. Callbeck
Joan Cook
Jane Cordy
Joyce Fairbairn, P.C.
Wilbert Keon
Yves Morin
Lucie Pépin
Douglas Roche
Brenda Robertson
Ex-officio members of the Committee:
The Honourable Senators: Sharon Carstairs P.C. (or
Fernand Robichaud, P.C.) and John Lynch-Staunton (or Noel A. Kinsella)
Other Senators who have participated from time to
time on this study:
The Honourable Senators Carney, Cochrane, Lawson, Léger,
Maheu, St. Germain, Sibbeston and Stratton. In December 1999, during the Second Session
of the Thirty-Sixth Parliament, the Standing Senate Committee on Social
Affairs, Science and Technology received a mandate from the Senate to study
the state of the Canadian health care system and to examine the evolving role
of the federal government in health care.
The Senate renewed the mandate of the Committee in the First Session of
the Thirty-Seventh Parliament. The
terms of reference adopted for the purpose of this study read as follows: That
the Standing Senate Committee on Social Affairs, Science and Technology be
authorized to examine and report upon the state of the health care system in
Canada. In particular, the
Committee shall be authorized to examine: (a)
The fundamental principles on which Canada’s publicly funded health
care system is based; (b)
The historical development of Canada’s health care system; (c)
Publicly-funded health care system in foreign jurisdictions; (d)
The pressures on and constraints of Canada’s health care system; (e)
The role of the federal government in Canada’s health care system.[1] In response to this broad and complex
mandate, in March 2001, the Committee re-launched its multi-year and
multi-faceted study. Initially,
the study was to comprise five major phases.
Given the huge amount of testimony it received and the complexity of
many of the issues it confronted, the Committee has decided to add an
additional phase to its work plan. The
report of this sixth phase (Volume Six) will present the Committee’s
recommendations on the financing and restructuring of health care.
Volume Six will also address issues surrounding the growing gaps in
coverage for medically necessary drugs and home care services. Following completion of Volume Six, the
Committee intends to examine several specific health-related issues.
These studies will result in a series of thematic reports.
These thematic reports will deal with: 1) Aboriginal health; 2)
women’s health; 3) mental health; 4) rural health; 5) population health; 6)
home care and 7) palliative care. The
following table provides information on the individual phases and their
respective timeframes: HEALTH CARE STUDY Phases Content Timing
of Report One Historical
Background and Overview
March
2001
Two Future
Trends, Their Causes and Impact on Health Care Costs
January
2002 Three Models
and Practices in Other Countries
January
2002 Four Development
of Issues and Options Paper
September
2001
Five
Principles
for Restructuring the Hospital and Doctor System and Recommendations on
Several Health Care Issues April
2002 Six
Recommendations
with respect to Financing and Restructuring the Hospital and Doctor
System and Closing the Gaps in Drug and Home Care Coverage October
2002
Thematic
Studies Aboriginal
Health, Women’s Health, Mental Health, Rural Health, Population
Health, Home Care and Palliative Care
To
be determined
The first report of the Committee, released
in March 2001, recounted the history of how the federal government helped the
provinces to fund hospital and physician care. It focused in particular on the
initial objectives of the federal government’s involvement in health care
and raised some questions about the future role of the federal government in
light of the changing health care environment (e.g. increased recourse to drug
therapy, hospital out-patient services, home care and community care). This
first report also traced the evolution of health care spending and health
indicators over the past several decades. Finally, it looked at a number of
the myths that are still current concerning the delivery and financing of
health care in Canada and clarified the reality surrounding each of these
myths. The objective of the first report was to provide factual information as
well as to clarify the major current misconceptions that recur in the health
care debate in Canada. The Committee’s second report reviewed
the major trends that are having an impact on the cost and the method of
delivery of health services, and the implications of these trends for future
public funding. In particular,
the report focused on the pressures associated with the changing demographics
of the Canadian population, the increasing use and growing cost of drugs and
technology, and developments in the delivery of health services (e.g. the
increased use of out-patient, home care and telehealth).
The second report also considered issues surrounding health research,
health human resource planning (including the shortage of health care
providers), rural health, disease trends and the health of Canada’s
Aboriginal population. Finally,
it examined how a health info-structure could help improve the delivery of
health services in the future. The third report of the Committee described
and compared the way that health care is financed and delivered in several
other countries (Australia, Germany, the Netherlands, Sweden, the United
Kingdom and the United States), and the objectives of national government
health care policy in those countries. It
highlighted those policies and reforms from which Canada could learn.
The third report also examined briefly the operation of medical savings
account systems (MSAs) in Singapore, South Africa, the United States and Hong
Kong. The Committee’s fourth report outlined
five distinct roles for the federal government in health and health care.
These five roles are: 1) financing, 2) research and evaluation, 3)
infrastructure, 4) population health and 5) service delivery.
For each federal role, a list of objectives was enumerated, some
constraints were identified and a wide range of potential policy options for
reform and renewal were proposed. The
Committee’s fourth report served to launch a public debate on the challenges
and options facing Canada’s health care system. The current report is based on the
testimony gathered during hearings held in the fall of 2001, as well as on
evidence received during the earlier phases.
In total, nearly 300 individuals and organizations told the Committee
which of the options presented in the Phase Four report they liked or
disliked, and why. This fifth report consists of seven
chapters. Chapter One identifies
three fundamental realities in Canada’s health care system. At the end of Chapter One are listed twenty principles which
the Committee believes should guide the restructuring and financing of the
health care delivery system. Chapter
Two provides the Committee’s rationale for each of the principles enunciated
in Chapter One. Chapter Three
summarizes the findings and gives the recommendations of the Committee with
respect to the financing and assessment of health care technology. Chapter Four presents the views of the Committee regarding
health information systems and details its recommendations for deploying a
health infostructure in Canada. Chapter
Five provides the perspectives of the Committee with respect to health
research. Chapter Six presents
the Committee’s observations and recommendations with respect to the
planning of human resources in health care.
Chapter Seven enumerates a number of principles which the Committee
believes should apply to the population health role of the federal government,
with a particular emphasis on Aboriginal health. The Committee’s sixth report, to be
released in October 2002, will focus primarily on presenting a set of
recommendations on how to move from the principles outlined in Chapters One
and Two of this report to a concrete plan of action for restructuring the
hospital and doctor system. The sixth report will also include a specific
proposal for increasing federal revenue, so that it will be possible to
finance the increased federal responsibilities recommended in this report and
to help fund the restructuring of the hospital and doctor system. A
Reform Based on Fundamental Realities
The purpose of this Chapter and Chapter Two
is to present a set of principles which will guide the Committee’s
recommendations on the restructuring and financing of the health care delivery
system[2]
and on the role of the federal government in health care renewal.
These recommendations will be presented in October 2002 in Volume Six
of the Committee’s study, following hearings during which witnesses will
give the Committee their views on how the principles should be applied in
practice. Some of the principles presented in
Chapters One and Two serve as the basis for the Committee’s recommendations
presented in chapters 3 through 6, which deal respectively with health care
technology, health infostructure, health research and human resources planning
in health care. The set of principles reflect key findings
from the first three reports of the Committee’s study on health care
together with the evidence presented to the Committee during extensive public
hearings held across the country in the fall of 2001.
The rationale for each of the principles listed at the end of this
chapter is provided in Chapter Two. It
is worthwhile to note that many of these principles bear a strong similarity
to some of the observations and recommendations made by recent provincial task
forces and commissions on health care. Overall, the set of principles is based on
the recognition of three fundamental realities: ·
Canada’s publicly funded health care system
is not fiscally sustainable given current funding levels; ·
Canadians want a strong role for the federal
government in facilitating health care restructuring and renewal; ·
There is a need to introduce incentives for
all participants in the publicly funded hospital and doctor system –
providers, institutions, governments and patients – to deliver, manage and
use health care more efficiently. The Committee hopes that the principles
presented in this Chapter and Chapter Two will enhance the public’s ability
to understand and give thoughtful consideration to the various challenges
faced by Canada’s health care system. We
also hope that the principles will help move us away from the uniquely
Canadian debate about the role of the private sector in health care and the
appropriate public/private mix. It
is the Committee’s view that the debate is being conducted in a
counterproductive fashion, and is often responsible for diverting attempts at
reforming the health care system. Canadians must recognize that every
Canadian province and territory has mixed public/private sector involvement in
health care, as does every other major industrialized country.
Physicians, for example, are private in the sense that only a
tiny minority are employed by government or its agencies.
In addition, most hospitals are owned and governed by boards
representing the communities they serve (and some by religious orders) and
they operate on a private, not-for-profit, basis.
Moreover, diagnostic laboratories operate in most provinces as private,
for-profit, entities delivering their services to the publicly funded
system, and the great majority of pharmacies are also privately owned. The Committee wants to stress, once again,
the importance for Canadians to be willing to consider new approaches to
delivering health services. It is
only through such consideration that we will be able to develop options that
offer opportunities to sustain Canada’s publicly funded health care system.
In his interim report, Roy Romanow stressed this point very well when
he stated: We need to be clear on what values Canadians want their health system to
reflect in its policies and programs. In the past,
progress on these issues has been extremely
difficult with intransigent positions taken at both ends of the spectrum.
This kind of acrimonious debate does nothing to move us forward to a
broader consensus on the direction we want to take or the steps needed to put
our health care system on a sustainable footing for the future.
We need to be open to new options and ideas, be willing to engage in
open and honest debate about the pros and cons of each new idea, then be
prepared to act.[3] We now turn to a discussion of the three
fundamental realities listed above. 1.1
Canada’s Publicly Funded Health Care System is Not Fiscally
Sustainable Given Current Funding Levels
The debate over health care financing in
Canada revolves around the issue of sustainability.
This concept has taken on several meanings in health care in recent
years. The Committee wishes to
stress that ensuring sustainability does not mean maintaining the status quo
in the structure of health care delivery. Nor does it mean giving every Canadian every health service
right when they want it; sustainability does not mean a perfect system.
We believe that a sustainable health care system is one that
provides an appropriate level of care in response to population needs today
and, in the longer term, it is also one that has the capability to adapt or
adjust to new and evolving realities. Given the current structure of Canada’s
publicly funded health care system, questions relating to the sustainability
and affordability of the system are closely intertwined. This means that the central issue is one of fiscal
sustainability. It is the view of
the Committee that a fiscally sustainable health care system is a
system upon which Canadians can rely both today and in the future, given
government fiscal capacity and taxpayers’ willingness to pay. That is, in
considering whether the current system is fiscally sustainable, one must take
into account two constraints. The first is the willingness of taxpayers to pay
for the system. The second is the need for all governments, for economic
development purposes, to keep tax rates relatively competitive with the OECD
countries, and particularly with the United States. Is Canada’s publicly funded health care
system fiscally sustainable? To
answer this question, it is necessary to assess whether more money is needed,
and whether it is possible to raise it from current sources, given the two
constraints identified above. To begin, then, we need to examine current and
projected trends in health care spending. According to data from the Canadian
Institute for Health Information (CIHI), public and private health care
spending in Canada topped $95 billion in 2000, 6.9% more than the previous
year. Even after adjusting for
inflation and population growth, there was a 4.1% real increase in spending
between 1999 and 2000. The pace of growth in health care spending
is speeding up. In fact, real
spending per capita is rising faster today than at any time since the 1980s.
Moreover, projections suggest that there are real, continuing upward
pressures on Canada’s health care costs: ·
Drug
Costs: Drug costs currently account for over 15%
of total (public and private) health care spending.
They are expected to climb to $14.7 billion in 2000, up 9% from the
year before. The Committee noted
in Volume Two that, between 1990 and 2000, drug spending per capita increased
by almost 93%, more than twice the average for all health care spending (40%).[4]
Original, effective but very costly drugs will be entering the Canadian
market in the next decade (including a possible vaccine against AIDS, a new
immunological cure for juvenile diabetes, etc.) exacerbating pressures on
overall drug costs. ·
New
Technology: Canada needs to invest more in
health care technology and health information systems.
The Committee’s Phase Two report indicated that each $1 billion
investment in new medical equipment requires an additional $700 million to
cover operating and maintenance costs. In
fact, a further $5 billion would be required to bring Canada’s investment in
health care technology to a level equivalent to that of other OECD countries.
Similarly, estimates suggest that between $6 and $10 billion would be
required to achieve full implementation of a Canadian health-infostructure (or
between $1 to $1.25 billion annually).[5] ·
Aging
Population: In 1998, 12% of Canadians were 65 or
older and more than 43% of what provincial and territorial governments spent
on health care went to services for seniors.
According to Statistics Canada, by 2010, seniors will represent 14.6%
of the population, a percentage that rises to 23.6% as the peak of the baby
boom generation enters retirement by 2031.
Expensive procedures, which were not previously performed on elderly
patients, are increasingly being made available to them.[6]
Estimates suggest that the impact of population aging will account for
an additional 1% of total health care costs each year.
Although this percentage appears to be quite small, in dollar terms it
amounts to approximately $1 billion annually in increased health care costs
due to an aging population. ·
Cost
of Health Care Human Resources: Labour costs
amount to about 75% of spending on health care.
According to the Premier’s Advisory Council on Health in Alberta
(usually referred to as “the Mazankowski report”), in 2001-02 over half
the budget increase for health care in Alberta went to salary increases.
Competition for scarce human resources in health care is likely to
maintain this trend, not only in Alberta but across Canada. ·
Health
Research: Unprecedented support for health
research will lead to an explosion of new technologies and drugs. This
year, some $US 40 billion will be spent on health research in the G-7
countries leading to effective but costly technologies in the fields of
genomics, proteomics,[7]
nanotechnology,[8] etc. ·
Growing
Public Expectations: Many observers have noted
that public demand for health care will have a major impact on future costs.
In his interim report, Roy Romanow made this point clearly: “One of
the most significant cost drivers is how our own expectations have grown over
the past few decades. We expect the best in terms of technology, treatments,
facilities, research and drugs, and as a consequence, we may be placing
demands on our governments that are not sustainable over time.”[9]
In fact, Canadians appear to be North American and not European in their
viewpoints when it comes to public expectations. More precisely, 64% of
Canadians are very interested in new medical discoveries, compared to 66% of
Americans and 44% of Europeans. ·
Health
Care Restructuring: Restructuring and renewing
health care will cost a considerable amount of money.
For example, it has been estimated that establishing primary health
care teams in Quebec would cost, on average, $1 million per team. ·
Gaps
in the Health Care Safety Net: As pointed out in
the Committee’s fourth report, there are presently serious gaps in our
health care safety net, particularly with respect to drugs and home care.
For example, a number of Canadians are not protected against the
consequences of having to pay catastrophic drug costs.
Similarly, a significant number of Canadians have limited access to
necessary home care services. If
Canada is to have national standards in health care, and not only in hospital
and doctor care as we do now, more money will clearly be required in the form
of additional government funding in order to expand public coverage and reduce
or close gaps in the health care safety net. Given the publicly funded nature of
Canada’s hospital and doctor system, these multidimensional pressures put
considerable strain on governments’ budgets, both in the shorter and in the
longer terms. This reality was
well documented by provincial and territorial ministers of health in their
2000 report on cost drivers[10]
as well as by many reports tabled with the Committee. For example, a report prepared for the
Ontario Hospital Association estimated that close to 38% of total provincial
program spending went to health care in 2000-01, up from 33% in 1992-93.[11]
For its part, the Canadian Taxpayers Federation projected that this
proportion will hit 50% as early as 2007 in British Columbia and New
Brunswick.[12]
Similarly, the Conference Board of Canada estimated that over the
period from 2000-2020, public per capita spending on health care (adjusted for
inflation) will increase by 58%, while public per capita spending on all other
government services and programs will increase by only 17% over the forecast
period.[13] The percentage of government spending that
is devoted to health care provides the clearest indication of the short-term
pressures felt by governments charged with funding health care.
During the Committee’s cross-country hearings, a wide range of
witnesses, including health care managers, health care providers and health
care consumers, expressed deep concerns about rising health care costs and
their impact on governments’ budgets and on patient care.
Based on this testimony as well as on numerous reports, the Committee
believes that rising costs strongly suggest that Canada’s publicly funded
health care system is not fiscally sustainable given current funding levels. A number of individuals and organizations
have suggested that operating the health care system more efficiently would
save enough money so that no new sources of funding are required.
The Committee has repeatedly acknowledged the critical importance of
improving effectiveness and efficiency in the management and delivery of
health services. In a similar vein, the Fyke Commission in Saskatchewan
remarked that “spending more on the current health care system without
addressing its underlying problems would be irresponsible.”[14]
Indeed, many of the principles presented in the next chapter are designed to
achieve a more efficient system than the one we now have. At the same time, though, we have also
argued that there is not convincing evidence to support the hypothesis that
efficiency gains will be sufficient to avoid confronting the issue of the need
for new funding sources. The
Committee has stated that responsible public policy planning therefore
requires the exploration of additional sources of funding for health care. In the Committee’s view, to do otherwise
would be to put all our eggs in one basket.
This would mean betting the future fiscal sustainability of the health
care system on making changes when there is not yet evidence to demonstrate
that such changes are actually achievable, and there is no reliable indication
of the amount of money that can be saved through restructuring and efficiency
changes. In the Committee’s
view, to make such a bet would be irresponsible. We do, however, understand why some people
prefer to gamble on efficiency changes being sufficient to make the system
fiscally sustainable. Such an assumption evades most of the tough financing
questions, and thereby ducks the most controversial health care issues.[15] In short, prudence, combined with a careful
consideration of the evidence, obliges us to confront the most difficult
health care issue facing policy makers and indeed all Canadians: how should
additional funds for health care be raised?
Should they come from individuals or businesses to government (by way
of taxes or health care insurance premiums) or should they come from
individuals or businesses directly into the health care sector? The Committee
will present its answers to these questions in its October report. Both the report of the Clair Commission in
Quebec and the Mazankowski report insisted that there are limits to government
general revenues and that it will be necessary to diversify the revenue stream
in order to sustain the health care system and respond to the future health
care needs of the population. The Clair Commission stated: To ensure the sustainability of our
system, it must first of all be accepted that (…) the resources that (…)
society can devote to health and social services are limited. This acceptance
leads to two indisputable and inextricably linked obligations: the obligation
to make choices and to perform. (…)Leaders must make choices about
the limits of financial resources and about medical technologies and insured
drugs. Administrators and clinicians must also make choices or, if not, accept
the choices made by others. Finally, each citizen must choose between
solidarity, equity and the risk inherent in the philosophy of “everyone for
himself.”[16] Similarly, the Mazankowski report stressed: If we continue to depend only on
provincial and federal revenues to support health care, we have few options
other than rationing health services. On
the other hand, if we are able to diversify the revenue sources used to
support health care, we have the opportunity of improving access, expanding
health services, and realizing the potential of new techniques and treatments
to improve health. (…)Rather than rationing health
services, we need to look at a variety of options for generating additional
revenue and using that revenue to expand opportunities for Albertans to access
the health services they want and need on a timely basis.[17] The Committee wishes to underline the fact
that the federal government has significantly increased its financial support
to health care in recent years and, consistent with the view expressed by many
witnesses, welcomes this new infusion of funds.
However, it is also important to recognize that the health care needs
of Canadians are great and that their expectations are continually growing.
In addition, the costs of running the hospital and doctor system will
continue to increase for the reasons given earlier. Given all the competing demands for federal
expenditures, the Committee is of the view that any additional funding from
federal sources will have to come from “new” money, and not from revenue
transferred into the health envelope from existing sources. Also, in considering how such additional
funding ought to be raised, we must keep in mind that Canada’s personal
taxes are the highest of the G-7 countries and among the highest in the OECD.[18]
This is why the Committee believes that Canadians are confronted with the need
to balance their desire for publicly funded health services against both their
willingness to pay for them and the need for Canadian tax levels to be
reasonably competitive with those of other OECD countries. Once it is recognized that the publicly
funded health care system does not currently
have sufficient resources to respond to all the demands that are being placed
upon it, Canadians must decide what trade-offs they find acceptable.
There are three basic options: ·
The continued rationing of publicly funded
health services, either by consciously deciding to make some services
available and not others (that is, by delisting some services), or by allowing
waiting lists to continue to grow; ·
Increasing government revenue, either by
raising taxes directly or through other means such as health care insurance
premiums, so that the rationing of services can be reduced or eliminated and
waiting lines shortened; ·
Making some services available to those who
can afford to pay for them by allowing a parallel privately funded tier of
health services, while maintaining a publicly funded system for all other
Canadians. The Committee believes that these are the
realistic choices facing Canadians. There
are arguments in favour of each option. And each option evokes an emotional response from various
groups and individuals. Nevertheless,
the three options given above must be addressed if Canada is to sustain a
health care system of which Canadians can be truly proud. Section 2.5 shows
how each of these options is affected by the principles for restructuring and
refinancing presented in Chapter Two. The testimony from witnesses who argued
that health care spending is rising much more rapidly than government revenues
reinforces the conclusion that Canadians must make choices.
Unless health care spending is to be allowed to crowd out other equally
important spending, Canadians must confront, on an ongoing basis, the
trade-offs inherent in the three options listed above.
The challenge of sustaining Canada’s health care system thus entails
deciding what aspects of health care delivery are to be publicly funded and
how funds are to be raised. In Volume Six, the Committee will present its recommendations
with respect to federal funding of health care. 1.2
Canadians Want a Strong Role for the Federal Government in Facilitating
Health Care Restructuring and Renewal Although the delivery of health care in
Canada is primarily a provincial and territorial responsibility, the Committee
believes that the federal government has a critical role to play in
facilitating, encouraging and accommodating the provinces and territories in
their efforts to restructure and reconfigure their health care systems.
The Committee is convinced that the vast majority of Canadians are
looking to the federal government for collaborative support and partnership in
effecting needed changes in the health care system.
In fact, there are a number of reasons why the federal government’s
role is important. First, Canadians strongly support national
principles in health care, and they look to the federal government to play a
strong role in maintaining them. As
it now stands, the capacity of the federal government to enforce acceptable
standards and to recommend appropriate policies to provincial and territorial
governments depends in large part on the size of its cash contribution. Second, federal funding for health care is
particularly critical during this period of reform and renewal: changes to the
way the health care system operates and is structured will likely result in
more rather than less money being required, at least in the short term. The
Fyke Commission in Saskatchewan made a similar point, noting that “new
funding must buy change, not time, and must buy quality not merely more
volume.”[19] Third, and some would say most importantly,
only the federal government is in a position to make sure that all provinces
and territories, regardless of the size of their economies, have at their
disposal the financial resources to meet the health care needs of their
citizens. This redistributive
role of the federal government is a fundamental part of what many call “the
Canadian way”. Fourth, if fundamental changes are to be
made to the health care system, they should not be made in only one or two
provinces. Inter-provincial
harmonization with respect to what services are insured (and ideally with
respect to scope of practice rules as well) are important elements of a truly
national system. There is an
important federal role in encouraging such harmonization, for example by using
financial incentives or penalties to persuade provincial or territorial
governments to accept national standards. Finally, the Committee wants to emphasize
its strong belief that the amount of money that the federal government
transfers to the provinces for health care ought to ensure that it has a seat
at the table when the restructuring of the health care system is discussed.
The federal government should not just give money without having a say on how
that money is spent. Canadians also want the federal government
to work with the provinces and territories in a spirit of collaboration and
partnership in facilitating health care renewal. They are impatient with blame-laying; they are more
interested in positive results and intergovernmental cooperation. In this perspective, the Committee totally agrees with the
observation made in the Romanow report that now is the time for all levels of
governments to collaborate in health care restructuring: (…) Canadians want both levels of
governments to stop the corrosive and unproductive long-distance hollering and
finger-pointing that currently passes for debate on how to renew the health
care system. They see both levels of government as bearing responsibility for
the problems affecting the system and for finding solutions to them.[20] 1.3
There is a Need to Introduce Incentives for all Participants in the
Publicly Funded Hospital and Doctor System – Providers, Institutions,
Governments and Patients – to Deliver, Manage and Use Health Services More
Efficiently.
There is a need to introduce incentives for
all participants in the publicly funded hospital and doctor system –
providers, institutions, governments and patients – to deliver, manage and
use health services more efficiently. The
Committee strongly believes that significant change in a system as complex as
the hospital and doctor system cannot be achieved through top-down,
centralized, micro-management. The
required changes can only be achieved by establishing an appropriate system of
incentives which will: ·
Introduce constructive competition among
health care institutions; ·
Encourage more effective use of all health
care providers; ·
Encourage more appropriate utilization of
health care technology; ·
Put in place structures that will result in a
better ongoing evaluation of the system as a whole, and of health care
outcomes in particular; ·
Ensure that patients receive timely as well
as quality care, and ·
Encourage patients to make cost-effective use
of publicly funded health services. It is the view of the Committee that the
key to developing an appropriate set of incentives is the separation of the
three functions of financing (or insuring), delivering and evaluating health
care. We are convinced that such
a split is a necessary condition for being able to introduce the kinds of
incentives that will foster a truly patient-oriented health care system – a
system in which the patient receives the most appropriate care, in a timely
fashion, by a qualified provider.
Moreover,
separating the functions of financing, delivering and evaluating health care
will introduce a much greater degree of transparency into the system and
enhance the accountability of all parts of the system, including government. It will also lay the groundwork for greater competition among
health care institutions. The
rationale for such a split, which we believe is critical to any meaningful
reform of Canada’s health care system, was discussed in the Committee’s
hearings as well as in recent reports. In the Atlantic provinces and Western
Canada, as well as in central Canada, the Committee was told that health care
in this country operates in many ways as a “monopoly”, with the government
acting as the sole funder and the sole provider of many health services,
without independent evaluation or competition.
The Right Hon. Don Mazankowski, Chairman of the Premier’s Advisory
Council on Health in Alberta, explained: Alberta’s health care system, like
other systems across the country, operates as an unregulated monopoly.
Government… ·
Defines what constitutes “medically
necessary services” ·
Pays for all insured services provided ·
Provides public insurance and forbids, by
law, the provision of private insurance for these services ·
Prevents, by law, people from obtaining
insured services outside the public system except where there are contracts
with the public system ·
Directly or indirectly administers and
governs care ·
Defines, collects and reviews information on
its own performance.[21] The Committee heard that such government
control over health care makes for an inefficient system that lacks
transparency and accountability: Governments in Canada are seriously
conflicted with respect to health care. Governments
do not only collect health insurance premiums (through taxes or by special
premiums), and maintain responsibility for the delivery of health services,
but also report to themselves on their own effectiveness and efficiency based
on information they have decided to collect.
Furthermore, the same governments then decide what information will be
provided to the public. Governments
must also decide on the interpretation of results – so health services
organizations may regard 80% satisfaction rates as acceptable, when many
industries would fire the management of an organization which regularly
reported that 20% of customers were dissatisfied or that over half of the
employees believe the organization is not a good place to work. The conflict can be reduced or
eliminated by separating the insurance function from the health care delivery
function. (…) Conflict would also be reduced by distinguishing those
responsible for health care system evaluation from those responsible for
health services delivery, and from those responsible for collecting insurance
premiums. Eliminating the conflict that arises
from government acting simultaneously as a regulator, insurer, provider and
evaluator will produce an environment which encourages each sector seek
appropriate information about health care system performance.[22]
In
Volume Three of its study, the Committee reported that many countries faced
with costly, inefficient or unresponsive health care systems have already
embarked on reforms aimed at getting rid of the monopoly characteristics
described above by separating the various health care functions while
maintaining universal access to publicly insured health services.
Examples include Sweden, the United Kingdom and the Netherlands. International evidence suggests that
separating the role of the funder from that of the provider can
contribute to making the health care system more efficient by: ·
decentralizing the decision-making process; ·
introducing more competition; ·
better integrating health services; ·
making possible more effective use of all
health care providers; ·
making possible more appropriate use of
health care technology; ·
putting the patient first, since the funding
follows the patient; ·
ensuring that patients receive timely as well
as quality care. Moreover, separating the role of the funder
from that of the evaluator will help put in place structures that will
result in better ongoing evaluation of the system as a whole, and of treatment
outcomes in particular. This will
enhance transparency and foster accountability in the
use of public funds. For all these reasons, the Committee
believes that the roles of funder (or insurer), provider, and evaluator in the
Canadian health care delivery system should be split from one another.
The set of principles developed in this report is premised on such a
split. The Committee recognizes that a number of
these principles will have to be applied differently in various parts of the
country in order to take into account important regional variations (such as
the size of the population and the number of health care providers and
institutions that exist within each region) and that they will have to be
applied differently for different types of institutions (e.g. community
hospitals and teaching hospitals). Indeed,
much of our next report will focus on how to go from principle to action, and
how to take into account such regional and institutional variations.
Nonetheless, the Committee strongly believes that the set of
principles, taken as a whole, clearly indicate how the hospital and doctor
system ought to be restructured. It is the view of the Committee that the
overall impact of these principles on the health care system will be to effect
a two-stage transformation. More
precisely, the first stage of reform would involve the following
changes: 1.
Split
between the funder (or insurer) and the provider:
While government would continue to be the funder/insurer (as it is now), the
institutions providing publicly funded health services (hospitals and clinics)
would become more independent of government since they would no longer be
subjected to the same degree of government control as they are now. To achieve this, the method for remunerating hospital
services would have to be modified: global annual budgets for hospitals, which
are currently determined by government, would disappear and institutions would
be reimbursed under a service-based funding scheme (which assigns a dollar
value to each type of hospital service and reimburses hospitals for the
specific number and type of services they provide). By having government fund hospitals for each
service, and by having the amounts paid for each service publicly known, the
public would be able to see, for the first time, the direct connection between
the level of funding and the number and types of procedures that are
performed. This would allow the
consequences of decisions about the level of health care funding to become
more open to public scrutiny, as it would become evident what specific
services were affected by various levels of government funding. This has the potential to change the nature
of the health care debate dramatically by having it focus on the number of
patients served and the number and variety of
medical procedures carried out (that is, the outputs and outcomes of the
hospital and doctor system), rather than focussing only on dollars (or inputs)
as the debate does now. Thus, the
funding debate would be broadened and become patient-focussed and
service-focussed, rather than only dollar-focussed as it is now. 2.
Split
between the funder/insurer and evaluator:
Government would continue to have overall responsibility for the quality of
health care delivery, and providers would ultimately be accountable to
government, but the evaluator role would be considerably strengthened. Although it would continue to be funded by government, the
evaluator role would be performed at arm’s length from government. Much
greater emphasis would be placed on measuring the quality of treatments and
services, gauging the health outcomes of various procedures and assessing
system and institutional performance. A
system of independent evaluation, performed by agencies working at arm’s
length from government, would provide much more accurate and objective
evidence-based information about access, outcomes and costs than is currently
available. 3.
“Internal
market”[23]
for hospital services: Once the service-based
funding scheme for hospitals and other institutions is well in place and the
independent evaluation function is being well performed, regional health
authorities would become responsible for the purchasing of services on behalf
of their residents by entering into contracts with hospitals and other
institutions. (If a province so
wished, regional health authorities could also become responsible for
purchasing primary care services). This
type of “internal market” reform, which has already been implemented to
varying degrees in a number of countries, including Sweden, was also recently
proposed in the Mazankowski report in Alberta[24].
Such an “internal market” would foster competition between
institutions for the provision of hospital services and encourage both
cost-effectiveness and efficiency in service delivery. The Committee is aware
that reforms of this type will have to be adapted to the particular
circumstances that prevail in different parts of the country in order to take
into account the number of providers that operate in each region, as well as
factors such as the urban/rural mix. The
second stage of reform would result in
devolution of the purchasing function from regional health authorities (or
from government in provinces where there are no such regional entities) to
primary health care teams.[25]
This would mean that primary health care teams would assume the
responsibility for purchasing health services from institutional providers on
behalf of their patients. An “internal market” among institutional
providers who would compete to sell their services to the various primary
health care teams would thus be established. This would result in a situation similar to the GP
Fundholding scheme in the United Kingdom (for more information, see the
Committee’s Volume Three[26]). In Canada, this form of “internal
market” was recommended by the Health Services Restructuring Commission
chaired by Duncan Sinclair in Ontario[27],
as well as by Jérôme-Forget and Forget[28].
This second stage of reform would also require moving away from the
current fee-for-service remuneration method for physicians toward some form of
blended remuneration involving capitation as well as fee-for-service.
This would also involve the development of multi-disciplinary group
practices and the revision of current scope of practice rules. Devolving the purchasing function to
primary health care teams would also require patients to register on an annual
basis with the primary care group of their choice.
A number of studies suggest that, while this could limit somewhat a
patient’s freedom to choose a provider (primary care provider or specialist)[29],
it would provide for a better integration of health services to the overall
benefit of patients. According to
several witnesses, this would lead to a more patient-oriented health care
system. The Committee heard evidence that under
“internal market” reforms, the overwhelming majority of institutional
providers would continue to be, as they are now, privately-owned,
not-for-profit institutions. However,
nothing would prevent for-profit providers from competing to supply services,
including hospital services, as long as they were subjected to the same
quality control regulations and evaluations as public sector institutions.
Such a structure is entirely consistent with the Canada
Health Act (and is discussed more
fully under Principle Eight in Chapter Two), which does not prohibit private,
for-profit institutions. Having noted this, the Committee wishes to
make it perfectly clear that it is not pushing for the creation of private
for-profit facilities. It is important to understand that the
first stage of reform (the separation of funder/insurer, provider and
evaluator) would have to be done before embarking on the second stage, because
the second stage (the separation of purchaser and provider) requires that
health care institutions know the cost of providing a given service to a
patient. At present, the
information systems that are required to do this are not available in most
institutions, and the current practice of global budgeting is a major factor
that discourages their development. The Committee is convinced that the
separation of the three functions of financing (or insuring), delivering and
evaluating health care is an essential step toward a truly patient-oriented
health care system in Canada – a system whereby the patient receives the
most appropriate care, in a timely fashion, by a qualified provider. Such a split will also introduce a much greater degree of
transparency and accountability by government.
More importantly, the separation makes it possible for a number of
incentives to be introduced into the system – incentives which are intended
to improve efficiency in the use, provision and management of health care
services. While the Committee has not taken a final position on “internal
market” reforms, its current inclination would be to have primary health
care teams act as purchasers of all health services on behalf of their
patients. We intend to review
this proposal carefully and present our final recommendations in Volume Six. 1.4
Principles to Guide the Restructuring and Financing of Canada’s
Health Care System Chapter Two develops the rationale for, and
the implications of, the principles for reform supported by the Committee.
These principles, which form an integrated whole, are listed below. THE
INSURER: 1.
There should be a single funder (insurer) – the government either
directly or through an arm’s length agency – for hospital and doctor
services covered under the Canada Health Act. 2.
There should be stability of, and predictability in, government funding
for public health care insurance. 3.
The federal government should play a major role in sustaining a
national health care insurance system. 4.
The determination of what should be covered under public health care
insurance should be done through an open and transparent process. Health
services covered under the Canada Health Act should remain publicly insured.
Other health services should continue to be funded using a mix of
public and private sources, as they are now. 5.
The federal government should contribute on an ongoing basis to fund
health care technology. 6.
The federal government should increase its investment in those areas of
health and health care for which it already has a major responsibility. 7.
The consequences arising from changes in the level or amount of
government funding for hospital and medical care should be clearly understood
by government and explained to the public, in as much detail as possible, at
the time such changes are made and announced. THE
PROVIDER: 8.
In the first stage of health care reform, the method for remunerating
hospitals should be changed from the current annual global budget to
service-based funding. 9.
Regional health authorities should have the responsibility for
purchasing hospital services provided by institutions within their region. 10.
Primary care renewal should lead to the provision of primary care by
group practices, or clinics, which operate twenty-four hours a day, seven days
a week. 11.
To facilitate primary care reform, the method of compensating general
practitioners should be changed from fee-for-service to some form of blended
remuneration combining capitation, fee-for-service and other incentives or
rewards. 12.
New scope of practice rules and other measures need to be developed in
order to enable all health care providers in the primary care sector to
provide the full range of services for which they have been trained. 13.
In the second stage of health care reform, an “internal market”
should probably be created in which primary health care teams would purchase
health services provided by hospitals and other health care institutions on
behalf of their patients. 14.
A national (not exclusively federal) strategy must be developed to
achieve both an adequate supply and optimal use of health care providers. THE
EVALUATOR: 15.
Accountability and transparency in health care financing and delivery
require the deployment of a system of electronic health records (EHR) that can
capture and translate information on system performance and outcomes. 16.
Measuring treatment outcomes and system performance must become an
essential part of the health information system. Such monitoring and evaluation of the health care delivery
system should be performed independently at the national (not federal) level
and be funded by government. THE
PATIENT: 17.
Canada’s publicly funded health care system should be
patient-oriented. 18.
Incentives should be developed to encourage patients to use the
hospital and doctor system as efficiently as possible.
Such incentives should not include user fees for services that are
deemed to be medically necessary. 19.
Programs that enable people to be responsible for their own health and
to stay healthy must be given high priority. The federal government can play a leadership role in this
regard. 20.
For each type of major procedure or treatment a maximum waiting time
should be established, and made public. When
this maximum time is reached, the insurer (government) shall pay for the
patient to receive immediately the procedure or treatment in another
jurisdiction including, if necessary, another country. Principles
to Guide the Restructuring and Financing of Canada’s Health Care
System
2.1
Financing (or Insuring) Health Care Principle
One There
should be a single funder (insurer) – the government directly or through
an arm’s length agency – for hospital and doctor services covered under
the Canada Health Act. That is, the Committee believes that there
should be a single funder – the government directly or through an arm’s
length agency – for medically necessary hospital and doctor services.
A single-funder system yields considerable efficiencies over any form
of multi-funder arrangement, including administrative, economic and
informational economies of scale. Furthermore,
since a publicly funded hospital and doctor system has become a fundamental
element of Canadian society, the Committee believes that the single funder
should be government, either directly or indirectly (e.g. through a third
party, such as a regional health authority or other arm’s length agency). As a corollary, there should not be private insurance for
publicly insured hospital and doctor services. In addition, numerous witnesses told the
Committee that by concentrating primary financial responsibility in a single
funder, the Canadian health care system would lead to more efficient
administration of health care insurance.
They suggested that Canada’s publicly financed single-insurer system
for medically necessary services delivered under the Canada Health Act
eliminates the costs associated with the marketing of competitive health care
insurance policies, billing for and collecting premiums, and evaluating
insurance risks. Lee Soderstrom, professor at the Department
of Economics, McGill University, described the advantages of a public, single
funder for health care as follows: Available evidence indicates that the
cost of the public insurance would be lower because administrative costs would
be lower with that public plan. These
costs would be lower because the public plan would take maximum advantage of
the economies of scale possible in plan administration.
There would be no need for advertising costs. (…)The evidence understates the
efficiency gains from having a single payer plan.
With the public plan, users avoid administrative hassles when seeking
care. They also avoid a second
major problem all too familiar to Americans with private insurance: the
inevitable, countless administrative difficulties involved in obtaining
reimbursement for bills they have incurred.[30] Similarly, a document tabled to the
Committee by the Atlantic Institute for Market Studies stated: Under
a private insurance-based model, such as predominates in the USA, the
possibility of adverse selection involves high costs that contribute little to
the quality of medical care provided. Pooling
all citizens into a universal health insurance plan can dramatically lower
such costs. The per capita cost
of insurance overhead under the Canadian system, wherein the provinces operate
“single payer” insurance systems, is approximately one-fifth the per
capita cost in the United States where private health insurance is the norm.[31] Another strong argument in favour of public
health care insurance is the fact that very few Canadians can afford not to be
covered. It therefore makes sense
to have everyone covered by a single plan.
A single-insurer system providing universal coverage also means that no
one will deny themselves needed health care because they have a more pressing
use for their money (perhaps for food, shelter, clothing, etc.).
Nor will anyone be denied necessary care due to inability to pay. A single-funder model also implies that
there will not be, within Canada, a parallel, private insurance sector that
competes with public insurance for the funding of hospital and doctor services
covered under the Canada Health Act, at those hospitals and with those
doctors that care for publicly funded patients.
The public funding of the Canadian health care system would still be
done using revenue raised through general taxes, earmarked taxes or public
health care insurance premiums, as is currently the case. Canadians should,
however, still be permitted to purchase private insurance for non-publicly
insured health services and to buy insurance abroad for services delivered
abroad as they do now. Health care institutions would also continue to receive
the additional revenue they currently derive from non-insured benefits and
services. Under
the current Canadian health care system, a provider can be paid from private
sources for the delivery of services that are publicly insured as long as the
provider opts out completely from the public system, taking no publicly funded
patients. Research brought to the
attention of the Committee shows that allowing doctors to function in both the
public and parallel private systems disadvantages patients in the publicly
funded system, both in terms of quality and timeliness of care. Therefore, the Committee feels it is important that the
current restrictions which prevent doctors from operating simultaneously in
parallel public and private systems be maintained. Moreover, the Committee agrees with
witnesses that no one should face excessive financial hardship or possible
bankruptcy because of illness, disease, injury or disability. Access to timely and medically necessary health services
should be available to all, regardless of income.
This does not mean, however, that Canadians should not bear some
responsibility to keep healthy or to contribute to the future sustainability
of the health care system. Rather,
it means that any funding mechanism or financial involvement by individual
Canadians should be equitable and fairly distributed. Incentives designed to encourage responsible use of the
publicly funded health care system by patients are discussed in Section 2.4
below. Principle
Two There
should be stability of, and predictability in, government funding for public
health care insurance. The Committee heard repeatedly that there
is a major lack of stability and predictability in the policies and the
financing of the Canadian health care system.
For example, Lawrence Nestman, professor at the School of Health
Services Administration, Dalhousie University, stated that the high turnover
of ministers of health and their deputies, as well as that of senior civil
servants, has created an atmosphere of unpredictability in federal and
provincial/territorial relationships and in health care policies,
particularly with regard to those policies that are related to funding.[32]
This view was echoed by Jeff Lozon, President of St Michael’s
Hospital in Toronto and former deputy minister of health in Ontario, who said: My first point is perhaps my most
strongly held. It is premised on
the urgent need for predictability and stability of direction in the health
care system, it is driven by the need to shelter the system from the daily
parry and thrust of the political fabric.
One of the least desirable, most difficult and important jobs is the
leadership of the health care system at a provincial level.
Without more stability and certainty, the best reform policies will
fail. Consider the following.
In Ontario, there have been 7 Ministers of Health in the last 10 years,
and 7 Deputy Ministers in that same timeframe.
Based on personal experience, I know that 3 months as Deputy Minister
gives you seniority over half you colleagues, and going beyond one year
constitutes long service! The job expectancy of a Minister of Health is 15 months, and
a Deputy Minister about the same. It
is impossible to take the system forward with that type of turnover, and long
range system planning is impractical.[33] Both Professor Nestman and Mr. Lozon
recommended the creation of provincial non-profit organizations to run the
health care system. In their
models, these bodies would consist of a board of directors appointed by the
government and supported by a staff of experts.
They would exist at arm’s length from the political process and would
replace the current departments of health.
According to Mr. Lozon: In this way, a sense of stability and
direction could emerge distanced from the day-to-day pressures of electoral
politics and would continue to be responsible for high level goals established
by the legislature.[34] Similarly, the Committee was told that health
care funding is heavily dependent on annual revenues to the government and
can fluctuate significantly with changes in the economy.
In his brief to the Committee, Claude Forget stated: Governments have used the health care
sector as their main deficit-fighting tool, and yet the need of those services
is not sensitive to economic cycles. (…) It is difficult to manage a budget
which changes unpredictably in time, largely beyond the control of managerial
intervention.[35] Witnesses also complained about the lack of
strategic and long-term planning to deal with the anticipated and growing
health care cost pressures resulting from an aging population, rising
expectations and costly technology and drugs (see section 1.1 above).
They stressed that stability and predictability in health care funding,
for example in the form of multi-year funding arrangements, is a prerequisite
to undertaking any systemic reform and sustaining public confidence.
This observation was also made in the Romanow report: (…) our health care system has in
recent years suffered from inconsistent and erratic funding. Many key health care decisions – from building new
facilities, to creating new capacity and delivering certain types of services
to targeted populations – require a long planning cycle.
When health care decision makers are obliged to cope with constantly
shifting priorities, or when anticipated resources are reduced or eliminated,
great uncertainty is the first result quickly followed by reductions in
services. This lack of stable,
long-term, predictable funding is jeopardizing long-term planning and, in
turn, eroding public confidence in the system’s future.[36] Many witnesses underlined the important
role the federal government could play in ensuring such stability.
For example, the British Columbia Health Association stressed: A stable funding contribution from the
federal government is essential in order to ensure that our provincial health
care systems can function in an environment that is conducive to undertaking
fundamental changes and implementing required innovations.[37] Similarly, Bill Bryant, Chair of the
Southwestern regional health authority in Manitoba stated: Before
we can undertake dramatic and sustainable reconfiguration of the system, which
we believe is needed, a stable and on-going funding framework must be assured.
Some of the basic infrastructures of our health care system have
suffered serious erosion over the past decade as a result of “stop-and-go”
funding methodologies by both federal and provincial governments. Therefore,
one of the first priorities must be a significant and sustained federal cash
commitment to restore stability to the existing health care system and
ultimately renew confidence in the health care system.[38] The Committee concurs with the witnesses
that there should be stability of, and predictability in, government funding.
It is our view that no industry can be expected to effectively operate
if, from year to year, its revenue is subject to significant fluctuations over
which it has no control. In fact,
effective planning, which is an essential element of an efficiently operated
industry, is impossible unless stability and predictability of funding is
assured. In other words, multi-year funding is essential to running
the publicly funded health care system efficiently. Stability and predictability require that
governments are capable of providing sufficient funding in order to meet
health care needs at all times, including times of fiscal restraint.
This is, of course, easier said than done, given that health care needs
do not vary with economic cycles as government revenues do.
The challenge, therefore, will be to ensure that spending on health
care does not crowd out other vital forms of public spending, including
education, infrastructure, security, and various other social services: Spending on health care cannot be
allowed to crowd out other vital forms of public spending, including
education, infrastructure and other social services.
Our future prosperity and health depend on all of these, and to the
extent that it is crowding out these other forms of spending, tax-financed
health care in its current form is not sustainable.[39] This principle does not, in itself,
prescribe what sources of revenue are to be used by government in order to
guarantee stability and predictability. It
does, however, raise two important questions: ·
First, should earmarked taxes or health care
insurance premiums be used to pay for health care in order to help ensure the
predictability and stability of funding? ·
Second, should some form of arm’s length
agency, as suggested by several witnesses, including Professor Nestman and Mr.
Lozon, be given the responsibility for managing the health care system, in
order to shelter the system from the daily parry and thrust of elected
politics? The Committee will seek views on these
questions before giving the Committee’s answers to them in our October
report. Principle
Three The
federal government should play a major role in
sustaining a national health care insurance system. On a number of occasions, provincial and
territorial governments have called on the federal government to increase CHST
transfer payments in order to help stabilize and sustain Canada’s health
care insurance system. Increasing
the federal contribution to health care would likely require raising the level
of federal taxation. As stated in
Chapter One under Section 1.1, this could prove difficult to implement, as
Canada’s personal taxes are the highest of the G-7 countries and among the
highest in the OECD.[40]
Accordingly, Canadians need to balance their desire for publicly funded
health services with their willingness to pay taxes to support the financing
of those services. A
major concern that was raised during the Committee’s cross-country hearings
was that if we continue to depend solely on the general tax base of
provincial/territorial and federal governments to support health care, we may
end up having to increase the rationing of publicly funded health care
services. For this reason, a number of witnesses suggested we should
diversify the revenue sources used to support health care.
This would serve to improve timely access to health care and/or to
expand the basket of publicly insured health services.
A national health care insurance premium would be an example of an
earmarked revenue source which could be used to support health care. A further issue has to do with whether
provinces and territories should have to account for their use of new or
additional federal funds. The
evidence provided in the Committee’s Phase One report showed that block
transfers inhibit government accountability.[41]
For this reason, a number of witnesses suggested that it would be
essential to establish a mechanism that would allow federal funding to be
targeted to specific purposes, its usefulness and efficacy to be evaluated and
those who spend it to be held accountable.
One such mechanism, recommended by Claude Forget, was that a portion of
personal income taxes be allocated permanently to health care in order to
ensure stability of the financial health care system and that this proportion
be integrated into federal-provincial fiscal arrangements.
The Committee’s recommendations on the funding issue will be
presented in our October 2002 report. The
determination of what should be covered under public health care insurance
should be done through an open and transparent process. Health services
covered under the Canada Health Act
should remain publicly insured. Other
health services should continue to be funded using a mix of public and
private sources, as they are now. The
Committee is of the view that health services covered under the Canada
Health Act should remain publicly insured.
Other health services should continue to be funded using a mix of
public and private sources, as they are now. The Committee concurs with the Canadian
HealthCare Association that now is the time to examine the public private mix
in health care if the federal and provincial governments are to develop sound
public policies. The Association,
which represents provincial and territorial hospital and health organizations
across Canada, stated: It is time for governments, managers,
trustees, providers, researchers and the public to develop and implement sound
public policies to ensure that we achieve the appropriate private-public mix
in our health care system.[42] On an initial basis, the expert panel
should review the broad categories of services currently provided and decide
whether all existing services should be “grandfathered” for continued
public funding. Services that are
not publicly insured could be provided by the public or private health care
provider but would not be paid for by public health care funds.[43] The Committee agrees with the intent of the
above quotation, but disagrees that the panel should be composed only of
experts. We strongly believe that
input from those who would be directly affected by the panel’s decisions –
namely citizens – is essential if the process is to be truly open and is to
have public credibility and acceptability.
Moreover, only such an open process will make possible the essential
debate of what health services Canadians are prepared to pay for through their
taxes. Thus, the Committee concurs with the
Romanow Commission that the public must be involved in the process for
determining publicly funded health services: Canadians need a greater say in
determining what health services should or should not be publicly covered.
Although elected governments must always retain accountability, the
ways in which decisions are currently made, and who is making them are
difficult to understand and often even more difficult to justify.[44] Determining which services should be paid
for publicly and which ones should not – that is, deciding what services are
to be listed and delisted – has always been part of the way that Canadian
Medicare has functioned. That is
why there are some differences in what is covered in different
provinces/territories. As
indicated in Volume One of the Committee’s study, for example, the removal
of warts is no longer covered in Nova Scotia, New Brunswick, Ontario,
Manitoba, Alberta, Saskatchewan and British Columbia, but it remains publicly
insured in Newfoundland, Quebec and Prince Edward Island.
Similarly, stomach stapling is covered in most provinces, but it is not
insured in New Brunswick, Nova Scotia or the Yukon, and patients in these
provinces must pay for this procedure.[45] Revising the comprehensive basket of
publicly insured health services is not intended to reduce costs but to
improve evidence-based decisions with respect to public funding.
However, it is important to stress that there are limits to what the
publicly funded health care system can provide.
To put this simply, public health care insurance cannot do all things
for all people. What is critical,
however, is that the determination of what is to be covered publicly should be
done through an open and transparent process, rather than the current process
in which decisions about what is covered are made in secret by governments
with no public input. This point was emphasized by the Honourable
Monique Bégin, who was the federal Minister of Health at the time the Canada
Health Act was enacted, in a recent speech: …choices are being made every day
without citizens knowing…. the de-listing of services, a completely
secretive process, must be made explicit as a matter of accountability.[46] The
Committee believes that such an open process would create the possibility for
there to be a public debate over whether the population would be prepared to
pay more to government in order to have more services covered under the public
insurance plan. We also believe
that there should be national standards that define those services which are
to be covered publicly in each province/territory. The
federal government should contribute on an ongoing basis to fund health care
technology. During Phase Two of its health care study,
the Committee was told that although Canada ranks 5th among OECD
countries in terms of total spending on health care (as a percentage of GDP),
it is generally among the bottom third of OECD countries in the availability
of health care technology. For
example, Canada lags behind many other countries in terms of access to CT
scanners, MRIs and lithotriptors.[47] Availability is not the only issue with
respect to health care technology. The
“aging” of that technology is also of concern.
For example, information provided to the Committee indicates that
between 30% and 63% of imaging technology currently used in Canada is
outdated. The Committee was told
that the shortage of new technology and the use of outdated equipment impede
accurate diagnoses and limit the quality of treatment that can be provided.[48] The federal government has responded to the
deficit in health care technology. In
September 2000, it announced that it would invest a total of $1 billion in
2000-01 and 2001-02 to assist the provinces and territories in purchasing new
medical equipment. The Committee
welcomes this injection of new federal funds as an important step toward the
acquisition of needed health care technology. However,
the Committee is concerned that there are apparently no mechanisms for
ensuring accountability on the part of the provinces and territories as to
exactly where money targeted towards purchasing new equipment is actually
spent. This is why we strongly believe, as stated under Principle
Three, that a much better accountability mechanism is needed for targeted
federal funds. Overall, the Committee believes that the
federal government should commit to a long-term program of financing for
health care technology. In our
view, such a program should incorporate clear accountability mechanisms on the
part of the provinces/territories on their use of these targeted federal
funds. Chapter 3 of this report
provides our findings and recommendations in this regard. The
federal government should increase its investment in those areas of health
and health care for which it already
has a major responsibility. The Committee believes that the federal
government should demonstrate its commitment to improving the health of
Canadians and provide further investment in those important areas for which it
has a major responsibility, such as health promotion, health protection,
health research, and health information systems and health care technology
assessment. In Volume Four of its
study, the Committee[49]
identified a number of objectives for the federal government in these areas
that it feels should be actively pursued. These include: ·
Fostering the development of a solid base of
innovative health research in Canada that compares favourably with that in
other countries; ·
Laying the foundation for evidence-based
decision-making in areas that affect both well-being and the delivery of
health care, while ensuring the protection of privacy, confidentiality and
security of personal health information; ·
With respect to health protection: strengthen
our national capacity to identify and reduce risk factors which can cause
injury, illness, and disease, and to reduce the economic burden of disease in
Canada; ·
With respect to health promotion and disease
prevention: develop, implement and assess programs and policies whose specific
objective is to encourage Canadians to live a healthier lifestyle; ·
With respect to wellness: encourage
population health strategies that work on the full range of health
determinants. Aboriginal health must be a priority for
the federal government. The
Committee has already stated unequivocally that the health of Aboriginal
Canadians is a national disgrace. The Committee believes that, given its
constitutional responsibilities, the federal government must act immediately
to attack the poor health and socio-economic conditions that plague many
Aboriginal communities. Specific recommendations on health care
technology assessment are presented in Chapter 3. Our recommendations with respect to health information
systems are provided in Chapter 4, while those pertaining to health research
are detailed in Chapter 5. The
issues related to Aboriginal health and health promotion are discussed in
Chapter 7. Principle
Seven The
consequences arising from changes in the level or amount of government
funding for hospital and medical care should be clearly understood by
government and explained to the public, in as much detail as possible, at
the time such changes are made and announced. The Committee believes that the
consequences arising from changes to government funding for hospital and
medical care should be clearly understood by government and explained to the
public, in as much detail as possible, at the time such changes are made and
announced. Transparency and
accountability in government decision-making require that the implications of
funding changes be clearly understood by both decision-makers and the public.
The lack of transparency was also raised in the Romanow report which
stated: “There should be more transparency in terms of how much money is
being spent, by whom, on what basis and with what results.”[50] This principle would apply both to
increases and to decreases in government funding.
Cuts in government funding translate into the rationing of the supply
of hospital and doctor services. In
this case, government must explain what services will be rationed.
In the event that increases in health care spending are necessary,
government must clearly indicate how such increases will be funded and what
impact these increases will have on the supply of health care services. Currently, resources appear to be largely
allocated by negotiation among various groups working in the health care
system. The allocation is not based on systematic knowledge of either the
outcomes of care or access to care or testable predictions of the consequences
of changes in funding. Up to now,
health care organizations and Departments of Health have been unable to inform
Canadians if previous changes in health services delivery have improved, or
harmed, access to and quality of health care.
The deployment of an electronic patient record system, discussed in
more detail in Section 2.4, is the first step towards an evidence-based
decision-making process. The
most important reason for enabling the public to understand the health service
consequences of changes in the amount of funding for hospitals and doctors is
that it will move the debate away from being based strictly on financial data
to a debate about services to be covered, the length of waiting lines, the
quality of outcomes, and so on. This
would move the public debate to where it ought to be – a debate about levels
and standards of services to patients. At
the present time, such a debate is not possible because there is no way in
which the public can translate statements about health care funding into the
one thing which really matters to them, namely what is the impact of various
levels of funding on the health services the public receives, their quality,
and the amount of time they have to wait to receive them. (Note: Readers will find three diagrams
at the end of this chapter that illustrate the reforms discussed by the
Committee in Principles Eight through Thirteen.) In
the first stage of health care reform, the method for remunerating hospitals
should be changed from the current annual global budget to service-based
funding. In Canada, the global budget has been the
dominant funding mechanism for virtually all acute care hospitals for about 30
years. There is good reason for
this, because global budgets have some attractive features. They offer simplified accounting for both hospitals and the
provincial health departments. Perhaps
more importantly for government, they offer a method of cost control. Global budgets, however, have a number of
disadvantages. The first one is a
progressive and permanent loss of information about what things cost.
The Committee was told that it is shameful that in a system as
sophisticated as the health care system, not even senior managers know, for
example, what a simple appendectomy costs. The lack of financial feedback means that
there are no yardsticks to compare performance on any basis, financial or
otherwise. This allows those
hospitals or regions with less efficient practices to imbed those practices
and continue doing what they are doing without any focus on performance.
Second, the Committee heard that global budgets tend to place patients
at the bottom of the list of priorities. Les Vertesi, Chief of the Department of
Emergency Medicine at the Royal Columbian Hospital (Vancouver), suggested an
alternative to global budgets: the Service Based Funding (SBF).[51]
SBF is a form of activity-based remuneration under which a monetary
value is assigned to each type of hospital service and the institution
receives payment only once it has actually provided that service.
According to Dr. Vertesi, SBF would have a number of immediate
advantages, apparent right away after the new mode of remuneration is
implemented: ·
Since it fundamentally changes the
incentives, the vicious cycle of cost escalation would stop; ·
It provides a yardstick that would uncover
less efficient hospitals and regions, so they can be helped; ·
Health departments could develop standards
and monitor hospitals; ·
Waiting lists would decrease; ·
Patient-centred, and patients’ choices
carry weight; ·
Hospitals that know how to provide service at
a competitive price would see some hope again and be able to offer assistance
to others. The health department or regional health
authority would be responsible for setting the value of each hospital service.
The fact that such value determination remains under government control
means that government influence over the direction of change would be
enhanced, not decreased. Instead
of overall funding ceilings, targeted controls would be possible.
Even small changes in the relative values could have a large impact on
the direction and pace of change. Ultimately,
as long as values remain under the control of the government, total funding
cannot exceed what government wants to spend. The Committee heard that such a method for
remunerating hospital services would lead to the development of centres of
specialization for the provision of certain surgeries or treatment of certain
conditions, particularly in large urban centres. Such a change in the delivery of hospital services should be
encouraged because of the efficiencies it brings. This would also contribute to improving the quality of
services. Hospitals or regions with special expertise
should be able to “market” those services to other regions and enter into
contracts with other regions to deliver services. In this way, regions would generate a sufficient volume of
services to allow them to achieve better outcomes. The advantages of specialization for
selected hospital services were acknowledged by Provincial Premiers and
Territorial Leaders who agreed, at their January 2002 meeting, to share human
resources and equipment by developing “Sites of Excellence” in a number of
complex surgical procedures.[52] The
Committee believes that, as much as possible, hospitals should be funded for
the specific services they provide (that is, according to service-based
funding) rather than on the basis of an annual global budget.
Service-based funding appears to be an appropriate form of
remuneration, particularly for community hospitals.
We acknowledge that another form of payment may need to be considered
for teaching hospitals where clinical activities are intermingled with
teaching and research and services are frequently one-of-a-kind.
We are also aware of the concern that remunerating hospitals for each
service performed may lead to over-servicing.
The Committee will discuss these issues in more detail in Volume Six. It is the view of the Committee that
remunerating hospitals according to a pre-established value for each service
provided is essential if the government and the public are to understand the
implications of funding changes on the numbers and types of services that are
feasible under a fixed government health care budget. It is also an essential first step in moving toward a system
in which purchasers and providers are split as described under Principle
Thirteen below. Some might wonder whether it is
contradictory for the Committee to recommend shifting to service-based funding
for hospitals while at the same time advocating moving away from
fee-for-service payments to individual doctors (as we do in Principle 11
below). In other words, why does the Committee propose the adoption
of a form of funding for hospitals that is roughly equivalent to a method of
payment for doctors that it feels should be abandoned? The answer, in the Committee’s view, lies
in understanding the impact that a payment system has under various
circumstances. Both
fee-for-service and service based funding encourage providers (doctors or
hospitals) to increase the volume of services that they deliver.
In the case of doctors, this can lead to placing greater emphasis on
numbers of patients seen rather than on the quality of care.
This is why alternate forms of payment must be introduced for primary
care physicians. In the case of hospitals, however, an incentive to provide
more services is precisely what is needed, given the current waiting lists.
Thus, a shift towards service based funding would prove beneficial. Principles
8 and 11 offer a good illustration of the Committee’s efforts to find the
appropriate incentives to stimulate the types of behavioural changes that the
Committee believes are necessary. The Committee wishes to stress that service
based funding for hospitals, and the separation of the funder function from
that of the institutional provider of services, means that ownership of the
institutional service provider would not be a matter of concern.
We believe that the patient and the funder will be equally well served
no matter what the corporate ownership structure of a health care institution
is, as long as the two following conditions are met: 1.
All institutions in a province are paid the same amount of money for
performing any given medical procedure or service. 2.
All institutions, no matter what their ownership structure is, are
subjected to the same rigorous and independent quality control and evaluation
system (see Principles Fifteen and Sixteen). The first condition ensures that the funder
is indifferent to the ownership structure.
The second ensures that the patient is indifferent, since it ensures
that no institution can put profit above quality of care. The Committee wants to make it clear that
it is not pushing for the creation of private, for-profit, facilities.
Neither do we believe that they should be prohibited, just as they are
not now prohibited under the Canada Health Act.[53]
Moreover, as we said in Chapter One (see Section 1.4), we fully expect
that the overwhelming majority of institutional providers would continue to
be, as they are now, privately owned, not-for-profit, institutions. During the cross-country hearings, a number
of witnesses raised the concern that introducing private sector participation
through contracting out might expose Canada’s publicly funded health care
system to trade challenges. The
report of the Romanow Commission also stated that “our ability to reform and
innovate within the health care system may be affected by the rules of
international trade agreements.”[54] The Committee requested information from
Health Canada and the Department of Foreign Affairs and International Trade on
this issue. Senior departmental
personnel informed the Committee that the federal government has always
maintained the same position with respect to health care and international
trade agreements: Canada’s health care sector is not negotiable. A provision in the North American Free
Trade Agreement (NAFTA) stipulates that Canada preserves its ability to
maintain or establish any measures for a public purpose, including health
care. Similarly, under the WTO
General Agreement on Trade in Services (GATS), the exclusion of “services
supplied in the exercise of governmental authority” from the scope of the
Agreement, combined with the absence of commitments by Canada with regards to
health services, provides the policy flexibility required to preserve our
publicly insured hospital and doctor system.
The same longstanding position is being adopted by Canada in the
context of the negotiations under the Free Trade Area of the Americas (FTAA). Overall, the Committee believes that it has
obtained sufficient assurance from both Health Canada and the Department of
Foreign Affairs and International Trade and is convinced that international
trade agreements do not, and will not, pose a threat to Canada’s publicly
funded health care system. Regional
health authorities should have the responsibility for purchasing hospital
services provided by institutions During the last decades, most provinces
(other than Ontario) have established regional health authorities.
Regional health authorities are responsible for assessing the needs of
the population in a certain geographic area and for setting health care
priorities and assigning resources in line with those needs.
Currently, hospitals and many other health care providers are overseen
by these regional health authorities. One important criticism of regional health
authorities is that their control over spending is limited.
For the most part, regional health authorities receive a budget from
the provincial government which they simply pass to hospitals and other
providers of care. In doing so,
they are not able to direct the priorities and spending for which they are, in
theory, responsible. Neither are they able to reward efficient providers.
In particular, regional health authorities do not have control over the
cost of doctor services, a control that they must have if they are to manage
effectively the health services in their region. The
Committee learned that this problem can be corrected by establishing an
“internal market” in which the regional health authorities are responsible
for purchasing health services on behalf of the residents of their region: With an “internal market”, regional
health authorities hold the purse strings and choose between providers on the
basis of quality and cost, rather than simply funding the decisions of those
using the resources.[55] Such a form of “internal market” has
the potential to introduce competition based on both cost and quality among
hospitals and other institutions. This
also provides the incentives for providers to become more cost conscious and
to make decisions about what to provide, to whom, and at what standard.
Furthermore, such reform has the potential to reconfigure services in a
way that is more in line with population needs. The
Committee believes that devolution of the purchasing function to regional
health authorities is part of the first step in reforming health care in
Canada. In fact, regional health authorities exist in most provinces
and a large percentage of health care spending occurs in and around large
cities, creating the potential for competition among providers.
At the same time, the Committee is aware that this principle will have
to be applied with flexibility so as to take into account the many differences
in the size of the regions, as well as the rural/urban mix they contain and
the number of health care providers and institutions within their
jurisdiction. We believe, however, that, over time, the
purchasing function should be devolved even further – to primary health care
teams – as a way of decentralizing decision-making and providing care that
is more responsive to patients’ needs (see Principle Thirteen).
This would be part of the second stage of reform, as discussed in
Section 1.4. Primary
care renewal should lead to the provision of primary care by group
practices, or clinics, which operate twenty-four hours a day seven days a
week. All recent provincial reports have
recommended the creation of a network of primary care groups. These proposals all share some common features: ·
access 7/24/365 to comprehensive primary
care; ·
“rostering” or enrolment of patients in
the primary care group of their choice on an annual basis; ·
better utilization of the spectrum of health
care providers through interdisciplinary team work; ·
integration and coordination of all health
services through the function of “gatekeeping”; ·
potential for expansion of public health care
coverage; ·
change in the method of remuneration of
physicians (from fee-for-service to either capitation or blended payment). Consistent with the recommendations of
various provincial health care commissions, the Committee believes that
primary care reform should lead to comprehensive primary care being provided
by group practices, or clinics, which operate twenty-four hours a day, seven
days a week. This will enable
patients to have access to primary care always as their initial point of
contact with the health care system. This
will permit a more efficient operation of the primary care sector, and will
take considerable pressure off hospitals’ emergency rooms. The recommendations of these provincial
reports, however, diverged on the extent to which primary care groups should
be responsible for purchasing health services on behalf of their patients.
The Health Services Restructuring Commission in Ontario suggested that,
in addition to providing primary care, primary care groups should also assume
the responsibility for purchasing a wide range of health services on behalf of
their patients including; hospitals, specialists, public health,
rehabilitation centres, long-term care facilities, home care, community care.[56] Although numerous provincial commissions
have all recommended reforming primary care, no single model has been proposed
that could be universally implemented. This
observation was also made by the Romanow Commission: There are an endless variety of
potential models and approaches [to primary care reform], but a common element
in most is that governments would fund these organizations based on some
combination of the number of registered patients, population served, and the
health outcomes achieved. While
steps have been taken in every province to initiate primary care pilot
projects, many argue that, because primary care is the key catalyst to real
change in the health care system, it is time to move past the rhetoric and
pilot projects and into true action.[57] Therefore, flexibility will be required in
deciding how to apply this principle. In
addition, the experience of a number of provinces and territories has shown
that setting up primary care groups is neither easy nor cheap.
Indeed, as explained in Section 1.1, the cost of restructuring is one
of the reasons why the Committee has concluded that the current system is not
fiscally sustainable. Other findings with respect to primary care reform are
discussed in more detail in Chapter Six of this report. To
facilitate primary care reform, the method of compensating general
practitioners should be changed from fee-for-service to some form of blended
remuneration combining capitation, fee-for-service and other incentives or
rewards. Fee-for-service payment is the dominant
form of primary care physician remuneration in Canada.
Almost 90% of family physicians surveyed by the Canadian College of
Family Physicians in 2001 said that they received some proportion of their
earnings in the form of fee-for-service payments,[58]
and that these payments accounted for an average of 88 percent of their total
income.[59]
Although in 1999-00, over 20% of Canadian physicians received some payments
for clinical care through alternate forms of payment, such as salaries or
capitation, in most provinces these alternate sources were the main form of
remuneration for less than 10% of physicians.[60] Under a fee-for-service payment scheme,
primary care physicians are paid a fee for each service they provide to
patients according to a preset schedule of tariffs.
Fee-for-service is a relatively simple and transparent payment method.
It is also fairly easy to administer.
It has the benefit of familiarity in Canada as patients and doctors
alike are aware of how it works. Fee-for-service, however, has a number of
drawbacks. According to many
witnesses, fee-for-service provides the wrong signal or incentive to primary
care physicians, that of “over-servicing”: the more health services
physicians provide, the more income they receive, irrespective of the needs of
the patient receiving the service, the outcomes produced or the cost of
providing the service. Moreover,
because the remuneration is attached to the service, there is no financial
reward for physicians to locate in areas with greater needs as long as they
can satisfy their workload and income expectations by serving lesser needs in
their preferred locations. For these reasons, many provincial
commissions and task forces have identified fee-for-service as incompatible
with promoting the best productive use of the time and skills of primary care
physicians. In addition,
provincial reports pointed out that fee-for-service is also incompatible with
primary care reform. Since
doctors are paid for every service they provide, they have an incentive to
bill for treatments that could be provided more cost-effectively by other
health care professionals. This
has effectively discouraged collaborative and multidisciplinary practices. Health care commissions and task forces at
the provincial level, namely the Health Services Restructuring Commission in
Ontario, the Clair Commission in Quebec and the Mazankowski report in Alberta,
all recommended a system of blended remuneration for primary care physicians
incorporating elements of capitation[61],
fee-for-service and other rewards. This
recognizes the fact that “one size” does not fit all situations: Research to date has not identified one
funding system as ideal; every model has advantages and disadvantages.
Policy makers need to assess their own situation, understand the risks
and benefits of each payment model, and decide for themselves what model best
address the needs of the funders, providers, and the community.[62] The
Committee agrees with provincial commissions and task forces that the method
of compensating general practitioners should be changed from fee-for-service
to some form of blended remuneration combining capitation, fee-for-service and
other incentives or rewards. Blended
remuneration provides incentives for general practitioners both to work hard
and to care for a large number of patients as they do now (through
fee-for-service funding) and to emphasize preventive care and population
health (through capitation funding). However,
since physicians are not all alike in their financial expectations or in their
reaction to various types of incentive, there must be flexibility in the
remuneration system that is used for different group practices. Nonetheless,
the Committee acknowledges that, in order to implement primary care reform, a
move away from current fee-for-service is essential, otherwise there will be
no motivation for family physicians to allow patients to be seen by other
clinic staff members. Most
models of primary care reform require that patients enroll with a specific
doctor or group practice for a pre-determined period of time, usually a year. Implementation of this kind of reform must therefore confront
the perceptions that it limits patients’ freedom of choice and, from a
doctor’s perspective, that it restricts their freedom to practice medicine
as they choose. Since a patient need only sign up with a
family physician for a year (unless the patient moves his/her residence), this
is hardly a significant constraint on patients.
Similarly, encouraging doctors to make full use of the skills of all
the members of their health care team (e.g. by changing the scope of practice
rules so that nurse practitioners can use their full range of skills) is
hardly a serious infringement on physicians’ freedom to practise as they
choose. As well, the Committee is aware that the
issues of how the specialists and physicians employed in teaching hospitals
should be remunerated need to be addressed, and the Committee will do so in
Volume 6 of its study. New
scope of practice rules and other measures need to be developed in order to
enable all health care providers in the primary care sector to provide the
full range of services
for which they have been trained. Issues concerning the scope of practice of
various health care providers are discussed in Chapter 6.
The Committee believes that new scope of practice rules and other
measures need to be developed in order to enable all primary health care
providers to deliver the full range of services for which they have been
trained. It is also the
Committee’s view that there would be significant advantages to these
measures being as standardized as possible across the country. National
standards would also help reinforce Canadians’ belief that their health care
system is national, not provincial, in character. In general, the primary care sector would
function more efficiently, without loss of medical efficacy, if providers such
as nurse practitioners were able to provide the full range of services for
which they have been trained. This
would then free up more time for general practitioners to look after those
patients who require their particular set of skills, experience and
qualifications. In
addition, achieving a better mix of health care providers requires more than
just changing the way they currently practice; it may also require changes to
the way in which they are trained and educated. The Committee understands that changes to
the regulatory approach adopted by self-governing professions is essential to
implement this principle sucessfully. In
the second stage of health care reform, an “internal market” should
probably be created in which primary health care teams would purchase health
services provided by hospitals and other health care institutions on behalf
of their patients. During Phase Three of its study, the
Committee learned a great deal about GP fundholding practices in place in the
United Kingdom. In Volume Three,
we explained that under such Fundholder practices GPs were given a budget from
which to purchase care for their patients, including hospital services,
specialist services, and prescription drugs.[63] The Committee was told that the objective
of establishing such an “internal market” in the United Kingdom was to
overcome a major disincentive, whereby physicians directed a lot of health
care activity and spending but without any financial repercussions for
themselves and without any financial incentive to be concerned about the cost
their decisions imposed on the health care system as a whole.
It was also believed that general practitioners (GPs) would be more
effective purchasers for their patients than a regional health authority: The GP was closer to patients and thus
presumably could effectively meet their needs; the GP was also more able to
negotiate with local hospitals. The
theory was that the need for GPs to keep within budget and patients’ ability
to change doctors would lead to greater fiscal responsibility and improvement
in quality. (…) Fundholding introduced a
financial incentive for those who joined the scheme to be more efficient: they
were able to invest any savings from their budgets in improvements in patient
care or practice improvement. Fundholders could also move funds between
components of the budget, allocating resources as they saw fit. Any fundholders that repeatedly failed to meet the budget
risked losing fundholding status.[64] The Committee was told that an “internal
market” reform along the lines of the GP Fundholding scheme could have great
potential for implementation in Canada. More
specifically, in their 1998 book, Jérôme-Forget and Forget proposed the
creation of group practices (referred to as “targeted medical agencies” or
TMAs), made up of family physicians, specialists and other health care
providers, which would be financially responsible for all the health care
needs of their patients. Jérôme-Forget
and Forget believe that TMAs as purchaser agents may be more cost-effective
and efficient than having this role performed by regional health authorities: The goal of establishing physicians as
the key decision makers in health care delivery is to decentralize medical
decisions and financial responsibility to a level much closer to the patient.
(…), many internal market reforms fall short of this objective by giving
purchasing responsibility to fairly large organizations.
Regional health authorities, (…), are primarily bureaucratic
structures whose size makes it difficult to undertake the negotiation of
contracts with providers on an individual basis. (…) The [international]
experience with large purchasers indicates that they are unable to effectively
promote efficient use of resources without resorting to tight regulation of
physicians’ behaviour – a technique at odds with Canada’s tradition of
physician autonomy. At the other
extreme, a minimum size is necessary to take advantage of professional
interaction among physicians as well as defray the additional administrative
and management costs.[65] The Health Services Restructuring
Commission in Ontario made a similar recommendation.[66]
In their proposal, interdisciplinary health care teams remunerated
mainly through funding by capitation would be given permanent and exclusive
responsibility for all the health care needs of a given population.
In addition, in their role as gatekeepers, these teams would establish
contracts with other institutional providers in the region.
Eventually, they would be given control over the entire health care
budget pertaining to the population on their roster. It must be acknowledged that, although this
network of primary health care teams could be strongly recommended to the
population, it would be impossible to force Canadians to adopt it.
The Committee was told that one way to make it worthwhile for patients
to agree to signing up with a primary health care team would be to introduce a
negative financial incentive that would apply to patients who chose to consult
with doctors who were outside the network of their chosen primary health care
team. Overall, the Committee believes that an
“internal market” in which financial responsibility rests on primary
health care teams should probably be established.
We do, however, understand that some provinces/territories may prefer
delegating the purchasing responsibility to regional health authorities. Once again, the Committee wishes to stress
that flexibility will be required in applying this principle so as to take
into account differences between the regions in terms of the size of their
population, the rural/urban mix they contain and the number of health care
providers and institutions within their jurisdiction. It is our intention to devote more attention to the second
stage of reform in Volume Six. A
national (not exclusively federal) strategy must be developed to achieve
both an adequate supply and optimal use
of health care providers. All national and provincial/territorial
organizations representing health care providers that appeared before the
Committee since the beginning of its health care study insisted that what is
needed is a country-wide, long-term, made-in-Canada, human resource strategy
coordinated by the federal government. Competition
between the different jurisdictions for scarce human resources in health care
is detrimental to the country. It is important to stress that such a
strategy must not be exclusively a federal one, with input only, or even
primarily, from the federal level of government.
It must involve all stakeholders, recognizing that the education and
training of health care providers is a provincial/territorial responsibility. The Committee welcomes the announcement
last fall by the Minister of Human Resources Development about the funding of
two important sectoral studies on the precise human resources needs for
physicians and nurses. We believe
that this is an important step towards the development of a national approach.
Each of these studies will systematically analyze the labour market and
culminate in the elaboration of a strategy designed to ensure an adequate
supply of appropriately trained professionals. The Committee strongly supports the
involvement of all the key stakeholders in producing these studies.
In Chapter 6, we present specific recommendations with respect to human
resources in health care, including the creation of a permanent national
coordinating body on health care human resources. Principle
Fifteen Accountability
and transparency in health care financing and delivery require the
deployment of a system of electronic health records (EHR) that can capture
and translate information on system performance and outcomes. A system of electronic health records (EHR)
is an automated provider-based system within an electronic network that
provides complete patients’ health records, including their visits to
physicians, hospital stays, prescribed drugs, lab tests, and so on, all
collected in accordance with a system of common standards applying to the
data. Many witnesses viewed the
EHR system as the cornerstone of an efficient and responsive health care
delivery system that is able to improve both quality and accountability. Such a system is a necessary prerequisite to a truly
patient-oriented health care system. A
system of EHR is also essential if primary care reform is to be realized. The electronic health record (EHR) is
the cornerstone of an efficient and responsive health care delivery system,
quality improvement and accountability. Without
it, the prospects for a patient-friendly health care system, optimal teamwork,
and efficiency are dim.[67] All levels of government in Canada have
recognized the importance of deploying a system of EHR.
In fact, on September 11, 2000, the First Ministers agreed to work
together to develop an EHR system over the next three years and to work
collaboratively to develop common data standards to ensure compatibility of
provincial health information networks and to ensure stringent protection of
personal health information. The
full deployment of a system of EHR was also endorsed by various provincial
task forces and commissions on health care, including the Health Services
Restructuring Commission report in Ontario, the Clair Commission in Quebec,
the Fyke Commission in Saskatchewan and the Mazankowski report in Alberta. In support of the agreement reached by
First Ministers, the federal government committed $500 million in 2000-01 to
accelerate the adoption of modern information technologies in the health care
system. The Committee was
informed that this money has been invested in a not-for-profit corporation,
known as Canada Health Infoway Inc., that will work with provinces and
territories to create the necessary common components of an EHR over the next
three to five years. We believe
that this has the potential to constitute a major step towards the full
integration of the various health federal/provincial/territorial
infostructures. Considerable agreement exists among the
provinces and territories and other stakeholders that the federal government
should foster collaboration in this area.
The Committee welcomes this collaboration between the federal
government and the provinces and territories and encourages the federal
government to play a leadership role in promoting a system of electronic
health records that is consistent across the country, to the benefit of all
Canadians. Generally, patients want to tell their
medical history only once, to have their tests and care coordinated and made
available to the different health care providers they consult, and to have a
more seamless integration of the health services they need.
This can be achieved with an EHR.
However, Canadians need to have confidence that protective mechanisms
are in place that give access to patient records only to those people
authorized by patients themselves. The EHR system needs to be developed in a
manner that balances the needs of patients for privacy with respect to their
personal health information against the needs of the system to be able to
provide patients with the care that they require. Perhaps the most important benefit to be
gained from the deployment of EHR across the country is access to
evidence-based information that will be used to assess quality of care, system
performance, treatment outcomes and patient satisfaction.
This will foster accountability and transparency in decision-making
regarding health care delivery and policy and promote improvement in the
quality of care. Along
with numerous witnesses, the Committee believes that accountability and
transparency in health care financing and delivery require the deployment of a
system of EHR that will capture and translate information on system
performance and outcomes. It is
our view that measuring outcomes must become an essential part of the health
information system. Despite
advances in recent years, we still do not have nearly enough knowledge about
which procedures and treatments work most effectively, or, indeed, even how
best to measure health outcomes. Moving towards a uniform EHR system will
facilitate the monitoring and comparison of treatment outcomes across the
country. The Committee acknowledges that national
standards are needed, both at the level of information gathering and
processing and for guaranteeing confidentiality and privacy of patient health
information, and reiterates its belief that the federal government can play a
leading role in helping to bring this about.
Our observations and recommendations with respect to health information
systems are detailed in Chapter 4. Measuring
treatment outcomes and system performance must become an essential part of
the health information system. Such
monitoring and evaluation of the health care delivery system should be
performed independently at the national (not federal) level and
be funded by government. As stated above, better information on
access to care, quality delivery, system performance and patients’ outcomes
cannot be achieved without an expanded, long-term investment in information
technology, including an EHR. During
the Committee’s hearings, witnesses stressed that partnerships among the
provinces and territories, and the leverage of federal government funding for
accelerated development, should be pursued. Similarly, a recent report to the British
Columbia Legislative Assembly stated: The federal government should be
lobbied for designated funds to deal with this significant, Canada-wide need
that if properly addressed will improve the functioning of the whole health
care system and the health of all Canadians. The need is urgent.[68] While witnesses agreed that governments
should finance the health information system, many of them were of the view
that governments should not be responsible for assessing health data and
evaluating quality and outcomes. They
explained that, currently, evaluation is done by the same people responsible
for paying for, and for providing, health services.
There is no independent assessment of the outcomes and no external
audit of the impact of the results. In
this regard, the Premier’s Advisory Council on Health (Alberta) stated: Tracking and monitoring outcomes and
providing regular reports to the public is an essential way of improving
quality in health care. However, when government and health authorities
measure and assess their own outcomes and results, it can put them in a
conflict of interest.[69] This Advisory Council recommended the
establishment of a permanent, independent “Outcomes Commission” to track
results, assess outcomes and report regularly to the population. Similarly, in Saskatchewan, the Fyke
Commission recommended the establishment of a “Quality Council”, an
evidence-based organization, working at arm’s length from government.
The mandate of this Quality Council would involve reporting regularly
to the provincial legislature, as well as to the public on a variety of
issues, including: trends in health status, costs/benefits of health care
interventions, clinical practices and clinical errors, evaluation of
technology, equipment and drugs, etc. The
Fyke report stressed that: (…) the Quality Council has the
potential to depoliticize decisions, find creative solutions to long-standing
problems, free the public from the tyranny of anecdote and ill-informed
opinion about the state of care, and reveal where the system provides value
for money and where it does not.[70] The
Committee believes that it is essential to greatly improve the evaluation of
our health care delivery system in order to provide care that is
evidence-based and corresponds to the needs of patients.
We strongly support the view of witnesses and provincial reports that
the roles of the funder and provider should be separated from that of the
evaluator in order to obtain independent assessment of health care system
performance and outcomes. While
such evaluation should be performed at arm’s length from the funder/insurer,
it should be financed by public funds. Moreover, it is the view of the Committee
that such independent evaluation should be performed at the national (not
federal) level. This would allow
for the pooling of expertise, thereby making the most effective use of the
limited human resources that are currently available in Canada, and result in
major economies of scale. In
addition, the smaller provinces, which would not otherwise be able to sustain
a truly effective monitoring and evaluation system, would clearly benefit from
the results of a national evaluation process. The Committee believes that a national
process for evaluating health care system performance and outcomes should be
built on those national organizations that are currently devoted to the task
of performing independent evaluation. More
precisely, this type of evaluation should be carried out at three levels: ·
First, the role of the Canadian Institute for
Health Information should be strengthened.
In addition to its responsibilities in the public health field, it
should take the task of reporting – preferably publicly – on the
performance of all regions and of all institutional providers. ·
Second, the Canadian Council for Health
Services Accreditation would recommend on a regular basis how to correct
deficiencies that were identified in institutions delivering health services.
At present, this review is voluntary but it should be made mandatory. ·
Finally, the Citizens’ Council on Health
Care Quality would be responsible for advising on the development of quality
standards and policy to promote improving the quality of health care
institutions. The
extent of the authority devolved to each of the three organizations described
above would have to be specified. For
example, does each organization rely exclusively on public pressure and moral
suasion, or should they be able to compel providers who do not meet agreed
quality standards to implement changes? There
are clearly many jurisdictional issues to be resolved, regardless of the exact
mandate of such national
evaluative bodies. But this is an issue that must be tackled – it can no
longer be ignored. 2.4
Achieving a Patient-Oriented Health Care System Principle
Seventeen Canada’s
publicly funded health care system should be patient-oriented. In a quality-focussed system, the first
priority should be to ensure that individuals get the kind of health care they
need and that they be given the tools and support they need to stay healthy. In Canada currently, the health care system
is organized around facilities and providers, not individual Canadians.
People are expected to fit into the system and get service when and
where the system can provide it. In other countries, changes have been made
to put more focus on patients. This
includes introducing health charters or care guarantees to ensure that people
get the care they need within a certain period of time and of acceptable
quality. This also includes
establishing a system in which funding follows the patient. It is the view of the Committee that
patients, at all times, must be at the centre of the health care system.
Services should be coordinated around their needs for safe, timely and
effective care. Ideally, the goal
should be an integrated, cost-effective system characterized by closer working
relationships between hospitals, long-term care facilities, primary care, home
care, public health, etc. However, putting patient needs at the
centre of the health care system does not mean that anything the patient
wants, the patient should get. Services
provided by the health care system must be based on evidence that they are
safe, effective, necessary and affordable. The
Committee believes that Canadians are entitled to health care that is safe,
effective, patient-oriented, timely, efficient, equitable and affordable.
In our view, the set of principles we have developed will lead to a
better integration of the whole range of health services into a continuum of
care in which the focus is really on the needs of patients. Incentives
should be developed to encourage patients to use the hospital and doctor
system as efficiently as possible. Such
incentives should not include user fees for services that are deemed to
be medically necessary. In Volume Four of its health care study,
the Committee recalled that, when a national Medicare program was first
debated, there was a suggestion that there should be an element of patient pay
in health care. The term
“patient pay” was used to mean that patients ought to pay something
somewhere in the system. Volume Four identified different forms of
patient payment including user charges, premiums, medical savings accounts,
income tax on health care, etc.[71]
During its cross-country hearings, the Committee heard many concerns
about establishing user charges paid at the point of service.
On the one hand, we were told that user charges for publicly insured
health care at the point of service reduce demand, and that they do so in a
way that disadvantages those with low income. On the other hand, witnesses stressed that
the most expensive decisions that are made about patient care are those made
by physicians, and are therefore not the responsibility of the patient. In fact, most of the spending in the health
care system and most of the waste in
the system are beyond patient control; the major expenses, and the decisions
which give rise to these expenses, are incurred by health care providers on
behalf of their patients. These
decisions are not made by the patients themselves. Finally, witnesses pointed out that
implementing modest user charges could incur such administrative costs that
these costs would nearly equal the revenue generated from such charges. The
Committee believes that incentives should be developed to encourage patients
to use the hospital and doctor system as efficiently as possible. Such
incentives should not include user fees that discourage access to medically
necessary health services. Nor
should such incentives discourage patients from receiving the treatment that
health care providers believe they require.
Access to hospitals and doctors should not depend on the income or
wealth of individual Canadians. Studies have shown that the application of
universal user fees does this and they should therefore not be used in Canada. Nevertheless, ways need to be found to
encourage patients to use the health care system responsibly. One such way that has been proposed many times in the past is
to provide each Canadian with an annual accounting of the amount of money that
has been paid, on their behalf, for the health services they have received
during the year. Other potential
incentives need to be explored. Making
the patient aware of the costs of health services or removing the impression
that they are all free is the logic behind many proposals.
The philosophical principle behind these proposals is that if patients
are knowledgeable about health care costs, they will understand the inherent
pressures in the system and access it only when it is genuinely needed.
They will also have a better understanding of the issue of fiscal
sustainability in health care. The Committee believes that the key point in creating a
cost-effective, sustainable health care system is not to discourage the use of
the system, but to encourage appropriate use and to encourage people to take
better care of their health. Principle
Nineteen Programs
that enable people to be responsible for their own health and to stay
healthy must be given high priority. The
federal government can play a leadership role in this regard. In 1974, the then federal Minister of
Health, Marc Lalonde, released a working document entitled A New Perspective on the Health of Canadians.
This report recognized the impact of individual behaviour on health
outcomes, and stressed that individual Canadians should assume greater
responsibility for their health. Since then, many other reports have
underscored the importance of encouraging Canadians to stay healthy.
According to the report by the Premier’s Advisory Council on Health
in Alberta, this is the first step towards sustaining Canada’s publicly
funded health care system: It sounds like just good common sense,
but perhaps the best way to sustain [the] health care system over the longer
term is to take steps to enable people and communities to stay healthy.[72] During Phase Two of its study, the
Committee was informed that the total cost of illness was estimated at $156.4
billion in 1998[73].
Witnesses suggested that the economic burden of illness could be
reduced by investing more in health promotion, disease prevention and
population health. They stressed
that many diseases, and most injuries, can be prevented. However, they pointed out a strong tendency
for government to focus on curing diseases, rather than on their prevention.
For example, clinical treatment has been the most common chronic
disease strategy and there has been only a limited will on the part of
government to expend resources on health promotion and disease prevention.
Outcomes of such programs are generally visible only over the longer
term, and are therefore less attractive politically than money invested in
health care facilities, such as hospitals. Witnesses indicated that the federal
government’s role with respect to health promotion, disease prevention and
population health is a well established one.
Moreover, the federal government has been recognized as a leader
worldwide in elaborating the concept of population health.
The role of the federal government in the fields of health promotion,
disease prevention and population health is addressed in Chapter 7. For
each type of major procedure or treatment, a maximum waiting time should be
established, and made public. When
this maximum time is reached, the insurer (government) shall pay for the
patient to receive immediately the procedure or treatment in another
jurisdiction including, if necessary, another country. A report tabled with the Committee
suggested that a monopolistic, non-competitive environment, combined with no
cost of service at the point of service, contributes to growing waiting times
for publicly insured health services: (…) in a system in which health
services are free at the point of consumption, queuing is the most common form
of rationing scarce health care resources.
And since patient satisfaction plays no part in determining incomes or
other economic rewards for health care providers and administrators in the
public system, patient’s time is treated as if it has no value.
There are no penalties in the system for making people wait.[74] The following case was recently brought to
the Committee’s attention. An
MRI done on April 19th, 2001, revealed that a patient had two
herniated discs in his neck. As
his condition was not improving, on May 24th of the same year he
was placed on a waiting list for surgery.
His condition was classified as ‘elective but urgent’, a category
that includes most of the hospital’s cancer surgery, with a guideline of
surgery within 2 weeks. As of
January 18th, 2002, that is, 8 months after being placed on the
waiting list, the patient still had not undergone his surgery, and still does
not know when it will be performed. The Committee was told that this case
illustrated what is called a ‘static queue.’
It is a waiting list that does not move because the people who are on
it are always being bumped by more urgent cases.
These higher priority cases occur at a faster rate than the queue is
able to handle. The surgeon who
was to treat the patient in question had 96 patients on his waiting list
(about average for the four neurosurgeons on staff at the hospital), of whom
74 were graded elective but urgent, and could not guarantee a firm date for
surgery for any of them. It appeared that the only way for the
patient in question to move to the top of the list was for his condition to
deteriorate. It was not enough
for him to be in constant pain and unable to work.
Were he to experience actual paralysis, he could then be admitted
through the emergency ward, and have his surgery within a few days.
Otherwise there was no way to accelerate his surgery without denying
someone else with an even more urgent case. In spite of significant investments in the
health care system in the past few years by all levels of government, public
perception is that waiting times for selected services are continuing to grow.
There is sufficient anecdotal evidence in support of that impression to lead
to increasing worry on the part of Canadians that the health care system may
not be there when they need it. On
many occasions witnesses told the Committee that, if there is one thing
Canadians should be able to expect from their publicly funded health care
system, it is access to health services when they need them.
Clearly, a truly patient-oriented health care system is one in which
needed care is provided in a timely fashion. In Sweden, the government enacted a “care
guarantee” to ensure timely access to necessary health care.
This guarantee established a maximum waiting time for diagnostic tests
(90 days), certain types of elective surgery (90 days), and consultations with
primary care doctors (8 days) and specialists (90 days).
Sweden has also put in place a system where waiting times for major
procedures are posted daily on a website.
People can check the website and choose to go to the hospital with the
shortest waiting times as long as they are prepared to travel and to use the
next available physician. Based on a review of the Swedish
experience, the report of the Premier’s Advisory Council on Health in
Alberta recommended the establishment of a care guarantee of 90 days for
selected services. According to
the Advisory Council, this guarantee would provide an incentive for health
care providers and regional health authorities to take appropriate action to
manage and shorten waiting lists. Their
report stressed that patients may need to give up their preference for a
specific physician or hospital if they want to be treated within the 90-day
period. In addition, if regional
health authorities are unable to provide service within this period, they
would have to consider other options, such as getting the service from another
region. Services could be
arranged from either a public or a private provider. The Committee was told that the current
lack of accurate information on waiting lists is a major impediment to the
development of a care guarantee in Canada.
There is, in fact, no standardized data on waiting lists in Canada.
However, the Committee was told about a pilot project funded by Health
Canada (through its Health Transition Fund) which, according to many
witnesses, provides potential for effective management of waiting lists for
elective health care. This pilot
project – called the “Western Canada Waiting List Project” or WCWL –
led to significant progress in the development of valid and reliable tools for
evaluating and managing waiting lists in five clinical specialty areas:
cataract surgery; general surgery (including breast cancer, colorectal cancer,
inguinal hernia, and laparascopic cholecystectomy); hip and knee replacement;
MRI scanning; and children’s mental health. The standardized waiting list developed by
the WCWL is based on an assessment of a patient’s overall urgency (pain,
suffering), clinical findings (x-rays, co-morbidity, psychopathology), as well
as on an assessment of the impact of the disease on the patient’s quality of
life. The Committee was told that
this approach represents a fair and consistent way to rank-order patients
waiting for needed elective care. It
both promotes better use of health care resources and is patient-oriented. The Cardiac Care Network in Ontario uses a
similar methodology in the management of access to cardiac surgery in that
province. The use of such
priority scoring systems has the potential to yield a significant improvement
to the health care system, as it has with heart patient cases in Ontario. In the Committee’s view there are two
main causes to the growing waiting list problem in Canada. First and foremost
are the shortages of all types of human resources as well as of many types of
diagnostic equipment. Second, there is a need to improve the management of
waiting lists. With regard to this second cause, it is
clear to the Committee that more needs to be done to ensure the effective
management of waiting lists. In the same spirit that it supports all efforts
to improve the efficiency of the system, the Committee welcomes attempts to
find better ways to manage waiting lists so that patients in the greatest need
are tended to first and that wherever possible waiting times are kept to a
minimum. However, the Committee feels it is
extremely important to recognize that better management of waiting lists will
not, on its own, suffice to resolve the waiting line problem. This is because
the more significant cause of the problem is a lack of human, technological
and infrastructural resources, that has resulted from a series of decisions on
the part of governments who have attempted to control costs over the past
decade by reducing expenditure in these areas. Beginning in the early 1990s, funding for
the education and training of many categories of health care professionals was
cut, as a way of reducing future as well as current health care expenditures.
More generally, massive cuts in public spending on health care
were made, especially during the first half of the decade. As a
consequence, there is today a severe shortage of both people and equipment to
meet the growing health care needs of the population. One reason that this kind of cost-cutting
has been attractive to government, and that they have been able to implement
it relatively easily, is that, to date, government has not had to bear the
costs that result from its decisions. Instead, these costs have been largely
borne by patients who face longer waiting times and by the front-line
professionals who have seen their conditions of work deteriorate and their
ability to provide care diminish. The
Committee believes that, for each type of major procedure or treatment a
maximum waiting time must be established, and made public.
When this maximum time is reached, the insurer (government) shall pay
for the patient to immediately receive the procedure or treatment in another
jurisdiction including, if necessary, another country (the United States).
The point at which the waiting time guarantee would kick in for each
procedure would be based on an assessment of when a patient’s health would
deteriorate irreversibly as a result of waiting for the procedure. Waiting
times would be established by scientific bodies using evidence-based criteria. Since government has responsibility for
ensuring the adequate supply of the essential service of hospitals and
doctors, this responsibility carries with it the obligation to meet reasonable
standards of patient service. This is the essence of a patient-oriented system
and of the health care contract between Canadians and their governments.[75]
A maximum waiting time guarantee of the type described in Principle Twenty
would meet this obligation. Were it implemented, this guarantee would mean
that government would have to shoulder the responsibility for not delivering
needed care in a timely fashion. Increased waiting times would no longer
represent a cost-free option for government, since they would be required to
pay to have patients be treated in other jurisdictions. The Committee feels that this would
introduce a powerful incentive for government to deal with waiting times that
exceed the agreed upon limits. It would also constitute a major step in
re-establishing the health care contract between citizens and their
government. (The exact nature of this contract is discussed in the next
section.) In closing the discussion of Principle
Twenty, it is worth making the observation that using diagnostic and hospital
facilities in the United States may be the most economical way of meeting the
care guarantee. To meet maximum
waiting times within Canada, it will be necessary for the health care system
to have some excess capacity or redundancy in order to cover peak periods of
demand for service. Whether it is
cheaper to build such excess capacity in Canada or purchase it from the United
States is an issue that will need to be studied if a care guarantee is
implemented. The Committee acknowledges that a care
guarantee can only be implemented and enforced once consensus is reached on
the definition, estimation and management of waiting times/lists.
We believe that it is absolutely imperative that Canada move forward
immediately with the setting of maximum waiting times for major categories of
treatment. It is the next
critical piece of work that needs to be addressed. The Committee acknowledges that the care
guarantee will cost money, particularly if many patients have to be sent to
the United States for treatment because they have exceeded the maximum waiting
time for the treatment they require. We have already noted in Section 1.1 that
the current hospital and doctor system is not fiscally sustainable, and it is
clear that it will be even less so when the costs of the care guarantee are
added on to existing costs. Nonetheless, The Committee regards the care
guarantee as an essential component of the health care contract between
Canadians and their governments. The Committee recognizes, as it has said
several times in Chapters 1 and 2, that new sources of federal and
provincial/territorial funding will be needed in order to implement the
changes the Committee proposes. The Committee will discuss its specific
federal funding proposals in its October report. 2.5
The Health Care Contract Between Canadians and their Governments In Volume Four, the “Issues and Options
Paper”, the Committee endorsed two major public policy objectives for
Canada’s publicly funded hospital and doctor system: ·
To ensure that every Canadian has timely
access to all medically necessary services regardless of their ability to pay
for those services, and ·
To ensure that no Canadian suffers undue
financial hardship as a result of having to pay health care bills.[76] The pursuit of these objectives has
involved a “contract” between Canadians and their governments – federal,
provincial and territorial. The
nature of this contract is that Canadians have agreed to pay taxes to their
governments who have then used the money to fund a universal, comprehensive,
portable and accessible hospital and doctor insurance plan.
Since the funder of the plan is government, the plan is described as
being publicly administered.[77]
(The principles of universality, comprehensiveness, accessibility, portability
and public administration are the five principles of the Canada Health Act.) The contract requires governments, acting
as insurers, to meet the two policy objectives stated above. In particular,
the contract requires governments – federal and provincial/territorial –
to provide Canadians with access to publicly insured, medically necessary,
hospital and doctor services in a timely fashion. The problem Canadians face today is that,
increasingly, timely access to all medically necessary services is not
provided. Principle Twenty is
designed to address this problem by forcing governments to meet reasonable
standards of patient (customer) service, either in their own jurisdiction,
elsewhere in Canada or, if necessary, in the United States. Meeting reasonable
patient service standards is an essential part of the health care contract
between Canadians and their governments. It is part of the bargain. Another possible approach to making
governments fulfill their part of the contract would be to use a patient’s
charter of rights as the means of enforcing maximum waiting time standards.
Such an approach would be consistent with the Charter of Rights and
Freedoms in that it would use the courts to enforce rights, in this case the
right to timely treatment. Such an approach has been used with mixed success in
Australia, New Zealand and the United Kingdom (see Section 7.5 of Volume Four
of the Committee’s study). However, the Committee prefers the simpler
and less legalistic approach of Principle Twenty.
In choosing this approach, we acknowledge (as indicated in our
discussion following Principle Twenty) that this would require that Canadians
agree to pay for the improved, and more timely, access to service.
If they so agree, then Canadians would, in effect, be choosing the
second of the three options the Committee outlined at the end of Section 1.1.[78] If, after public discussion, Canadians
decide that they are not willing to pay more for hospital and doctor services,
or if the insurer (government) decides not to implement the care guarantee as
described in Principle Twenty, then the result would be that the first of the
three options in Section 1.1[79]
would have been selected, with continued rationing of services and continued
lengthening of waiting times. Under this circumstance, where there is no
maximum waiting time guaranteed by the public insurer, the question must be
asked: should Canadians who may find that their health is deteriorating while
waiting for medically necessary care, have the right to buy private health
care insurance to protect
themselves against excessive waiting times, and to receive treatment in
Canada? That is, should Canadians who can afford to do so have the right to
purchase privately a care guarantee for service delivery in Canada? (Canadians
already have the option of buying insurance to cover the costs of treatment
provided outside Canada, namely in the United States. Such insurance products
are now on the market in Canada.) While the Committee hopes that this issue
will never arise because the insurer will fulfill its part of the health care
contract by meeting the policy objective of “timely access to all medically
necessary services”, it is important to recognize that the question raised
at the start of the preceding paragraph will have to be addressed if Principle
Twenty is not fully implemented. If this question is answered in the
affirmative, then the third of the options presented in Section 1.1[80]
would have been selected. There are two themes which run through the
set of principles presented in this chapter.
The first is the need to restructure hospital and doctor care in order
to make it operate more efficiently. The
second is to make information about the system, its costs, its waiting times,
its performance and its outcomes, available to the public in order to improve
transparency and make decision-makers – funders and providers – more
accountable to the public. Both these themes are designed to
re-establish the health care contract between Canadians and their federal,
provincial and territorial governments. This
involves, on the one hand, having Canadians understand where their health care
dollars are being spent and why more money is needed in order to make the
system fiscally sustainable. On
the other hand, it involves pushing government to operate the system more
efficiently than it is now and to improve service delivery under the contract
by, among other things, putting a cap on the length of waiting time for
various procedures. These themes are driven, in part, by an
important observation about Canadians’ attitudes towards the health care
system, made by Darrell Bricker and Edward Greenspon in their recent book, Searching
for Certainty.[81]
Based on extensive public opinion polling by Ipsos-Reid, Bricker and Greenspon
conclude that Canadians will not support additional spending to close the gaps
in the health care safety net until they see compelling evidence that the
current health care contract with their governments is being honoured. In
other words, the current system must be perceived by the public to be working
reasonably well – that is, public confidence in the system must be restored
– before Canadians will support its expansion. The two themes of improved efficiency and
increased transparency and accountability are designed to restore the
confidence of Canadians in the health care system. Only once the twenty
principles the Committee has outlined in this chapter have been implemented
can Canada proceed to expand public coverage of health care services. The
Committee believes that any such expansion will have to be done not by
launching new universal programs, but by closing the gaps in the safety net,
in particular with respect to drug therapy and home care. The need to close these gaps is clearly
illustrated by the fact that hospitals and doctors now account for only 46% of
total health care expenditures.[82]
Contrary to popular belief, and unfortunately contrary to most political
rhetoric, Canada does not have a national health care system. Rather, it has a
national hospital and doctor system, which now accounts for less than half of
all health care expenditures. Given the objectives of health care policy,
as stated at the beginning of The Committee believes that restructuring
Canada’s publicly funded health care system in order to make it more
efficient is necessary to ensure its long-term fiscal sustainability.
It is our view that the experience of other countries with respect to
internal markets in health care can be instructive in deciding what the
elements of this restructuring should be.
We believe that restructuring health care in Canada must be based on
devising a set of incentives that will lead all participants to change their
behaviour in ways which will benefit the system as a whole and patients in
particular. Our list of twenty
principles is intended to achieve this. For example, implementation of Principle
Seven[83]
would give government an incentive to think carefully about the health care
consequences of making changes to budgets for funding hospital and doctor
services. Once Canadians are able
to translate budget dollar amounts into service levels and numbers of
procedures to be paid for, they will then be able to evaluate more clearly the
appropriateness of the size of the health care budget and to engage their
government in a meaningful discussion, including a discussion on whether they
were willing to pay more taxes (or health care insurance premiums) in order to
improve levels of services. Currently,
such a discussion is not possible because Canadians do not have the
information that would enable them to translate budget levels into levels of
services delivered to patients. Similarly, Principle Eight[84]
gives institutions incentives to operate more efficiently by putting them in
competition with one another. There
may be a need to develop a specific set of incentives which are targeted at
the managers of health care institutions (and perhaps even at their trustees
or directors) and another set of incentives for the health care providers they
employ. These questions will be
further explored in the Committee’s October 2002 report. Principle Eleven[85]
introduces incentives for behavioural change on the part of primary care
providers that would lead to a more efficient primary care sector.
In fact, experience suggests that when providers/institutions are given
responsibility for decisions on health care spending, they tend to provide the
right treatment in the most cost-effective manner. Finally, Principle Eighteen[86]
provides incentives for patients to use the health care system efficiently.
This principle could, for example, require the imposition of a
surcharge on patients who choose to seek treatment from providers outside of
their chosen primary health care team. In every part of our system of incentives,
there is a critical need for appropriate and timely information.
Principle Fifteen ensures that a system of electronic health records,
linking all health care providers, will make the “right information”
available in a timely fashion to the appropriate provider and provide a better
way of allocating resources to the benefit of patients. As was stated in the introduction to this
section, and as was illustrated above, the theme of providing more information
to the public also runs through our twenty principles.
This information is needed for three reasons: ·
first, to make more transparent the processes
by which resource allocation decisions – principally with regard to money,
but including human resources as well – are made; ·
second, to enhance accountability on the part
of the people, institutions and governments who make decisions about what
types of services will be covered by public insurance and how much of any
service will be provided; ·
third, and perhaps most importantly, to
change the public debate from a debate about dollars to a debate about
services and service levels. Canadians
have a right to debate the question of whether they are willing to pay more
for improved levels of service. Canadians
have a right to understand the linkages between funding levels and service
levels. Changing the nature of
the public debate about health care will be a significant step towards gaining
public support for restructuring the publicly funded hospital and doctor
system. Ultimately, this will lead to restoring public confidence in the
system so that we can move on to closing the gaps that remain in the publicly
funded health insurance system. There is also a need for improved
accountability throughout the system. Under Principle Thirteen, the
introduction of an “internal market” in Canada’s publicly funded health
care system would enhance the accountability both of health care
providers/institutions and of governments. Principle Twenty – the care guarantee
principle – would make government accountable for meeting the timely access
to treatment condition of its health care contract with Canadians. The Committee has developed its twenty
principles in recognition of the fact that Canadians want health care to be
delivered equitably to all, based on need, not on income.
In addition, consistent with our patient-oriented view (Principle
Seventeen), our list of principles has been designed to address the primary
concerns of Canadians with respect to the quality (Principle Sixteen) and
timely provision of health services (Principle Twenty). It is important to stress that the set of
principles that the Committee has outlined in this chapter form an integrated
whole. If one of these principles
is rejected, then it may make the implementation of other principles in the
set impossible. A clear example is provided by the
relationship between the first (single funder) and the last (care guarantee)
principles. Should government
refuse to introduce a waiting time guarantee (or should the public not wish to
pay the additional funding that would be required to make the care guarantee a
reality), it then becomes necessary to ask whether individuals should be
allowed to buy private insurance that would enable them to have access to
treatment by using a privately funded care guarantee. However, to allow people
to purchase private insurance that would be used to pay for medically
necessary services once the pre-defined waiting period has been exceeded would
contradict Principle One which stipulates that there should be a single funder
or insurer for all medically necessary hospital and doctor services. The Committee does not advocate the
introduction of private insurance and its preferred option is for all its
principles to be accepted and applied. But
it is necessary to be aware of the fact that if the set of principles is not
embraced as a whole, then the rejection of one principle could very well lead
to the undermining of others. In this case, the rejection of Principle Twenty
could lead to Principle One being abrogated as well. The Committee fully recognizes that its set
of principles will be subject to close critical scrutiny.
That is entirely understandable in such a value-laden public policy
issue as health care. In fact, it is likely that each reader of this report
will support his/her own unique subset of the principles. We ask readers, however, to keep in mind
that no major reform of any large system, particularly one as complex and
deeply personal as the hospital and doctor system, is ever perfect.
There is no perfect solution. Everyone
involved will have to be prepared to compromise in order to make reform work
for the benefit of all Canadians, and reforms will have to be tailored to the
specific circumstances that prevail in the different regions of the country. Insisting on perfection, or attempting to
obtain everything one wants, will doom reform to failure. Similarly, reform will fail if people insist on addressing
all health care problems before beginning to make progress on the hospital and
doctor system. These tendencies,
along with an excessive focus on self-interest by those employed in the
system, explain why reform has failed in the past. Recognizing the dangers, we have worked
hard to develop a set of principles which we believe are pragmatic, middle of
the road in ideological terms, workable and that will lead to substantial
improvements in the hospital and doctor sectors of the health care system.
We believe that a steady pace of reform is the way to make the
restructuring and renewal of Canada’s health care system possible. We
trust that those involved in the sector will consider the principles with the
same pragmatic approach as the Committee and that everyone will be prepared to
make some sacrifices in order to meet our common goal: having a fiscally
sustainable health care system of which Canadians can be truly proud. Figure 1 Figure 2 Figure 3 [1] Debates of the Senate
(Hansard), 2nd Session,
36th Parliament, Volume 138, Issue 23, 16 December 1999. [2] While the Committee
usually refers to the “health care system”, we acknowledge the fact that
Canada currently has 13 similar, but not identical, interconnected systems,
one in each province and territory. [3] Commission on the Future
of Health Care in Canada (Roy J. Romanow, Commissioner), Shape
the Future of Health Care, Interim Report, February 2002, p. 4. [4] Volume Two, p. 20. [5] Volume Two, p. 41 and p.
114. [6] For example, cardiac
procedures (e.g. PTCA) performed on the elderly are increasing by 12%
annually; joint surgery (e.g. knee replacement) is increasing at an annual
rate of 8%; renal dialysis is increasing by 14% a year (at a cost of $50,000
annually per patient). [7] Proteomics is the
systematic analysis of all protein sequences and protein expression patterns
in tissues. Genes encode proteins that perform all of the fundamental
activities within cells. Proteins are the molecular machines that carry out
genetic instructions. Abnormalities in protein production or function have
been connected to many diseases and health conditions. [8] Nanotechnology is
molecular manufacturing or, more simply, building things one atom or
molecule at a time. A nanometer is one billionth of a meter (3 - 4 atoms
wide). Nanotechnology proposes the construction of novel molecular devices
possessing extraordinary properties. The possibilities include microscopic
computers, billions of times faster than today’s, that could control
machines patrolling our bodies as artificial immune systems, and machines
that could repair cells on a molecular scale, perhaps stopping or reversing
the aging process. [9] Commission on the Future
of Health Care in Canada (Roy J. Romanow Commissioner), Shape
the Future of Health Care, Interim
Report, February 2002, p. 25. [10] Provincial and
Territorial Ministers of Health, Understanding
Canada’s Health Care Costs – Final Report, August 2000. [11] TEAQ Associates, Getting
the Right Balance : A Review of Federal-Provincial Fiscal Relations and
the Funding of Public Services, prepared for the Ontario Hospital
Association, December 2001, p. 21. [12] Walter Robinson, The
Patient, The Condition, The Treatment – A CTF Research and Position Paper
on Health Care, Canadian Taxpayers Federation, September 2001, p. 59. [13]Glenn G. Brimacombe, Pedro
Antunes and Jane McIntyre, The Future Cost of Health Care in Canada, 2000 to 2020 – Balancing
Affordability and Sustainability, The Conference Board of Canada, 2001,
p. 21. [14] Caring
For Medicare, p. 73. [15] Volume Four, pp. 51-52. [16]
Commission d’étude sur les services de santé et les services sociaux
(Michel Clair, Commissioner), Emerging Solutions – Report and
Recommendations, January 2001, p. v. [17] Premier’s Advisory
Council on Health (Right Hon. Don Mazankowski, Chair), A
Framework for Reform, report to the Premier of Alberta, December 2001,
pp. 52-53. This report is also
referred to as “the Mazankowski report”. [18] This fact is well
documented in a report by Statistics Canada, “Recent Trends in Taxes
Internationally”, in Perspectives on
Labour and Income, Catalogue No. 75-001-XIE, Vol. 2, No. 1, January
2001, pp. 36-40. [19] Caring for Medicare,
p. 79. [20] Shape
the Future of Health Care, p. 4. [21]Premier’s Advisory
Council on Health (Alberta), p. 21. [22] Atlantic Institute for
Market Studies, Brief to the Committee, 6 November 2001, p. 5. [23] The term “internal
market” was first used in reference to reforms undertaken in New Zealand
and Great Britain during the 1990s that sought to introduce greater
competition among health care providers (both public and private) in the
context of a system that retained a single insurer. [24] Premier’s Advisory
Council on Health (Alberta), see footnote 1. [25] A recent review of the
various possible types of “internal market” reform can be found in Cam
Donaldson, Gillian Currie and Craig Mitton, “Integrating Canada’s
Dis-Integrated Health Care System – Lessons from Abroad”, C.D. Howe Institute Commentary, April 2001. [26] Volume Three, pp. 37-44. [27] Health Services
Restructuring Commission (Duncan Sinclair, Chair), Primary
Health Care Strategy – Advice and Recommendations to the Honourable
Elizabeth Witmer, Minister of Health, Government of Ontario, December
1999. [28] Monique Jérôme-Forget
and Claude E. Forget, Who is the
Master? – A Blueprint for Canadian Health Care Reform, Institute for
Research on Public Policy, 1998. [29] Once enrolled, patients
would have to remain with their designated primary health care team for a
specific period, usually a year, unless they changed their place of
residence. Similarly, enrolled patients do not have direct access to a
medical specialist; they must be referred to the specialist (gynaecologists,
paediatricians, etc.) participating in the group practice.
The primary care physician or team acts as the gatekeeper to the rest
of the system. [30] Professor Lee Soderstrom,
Brief to the Committee, 31 October 2001, p. 4. [31] Brian Lee Crowley and
David Zitner, Operating in the Dark:
The Gathering Crisis in Canada’s Public Health Care System, Atlantic
Institute for Market Studies, November 1999, p. 9. [32] Professor Lawrence
Nestman, Three Proposals to Improve
Federal-Provincial Relations in the Health Services Field, Brief to the
Committee, p. 1. [33]Jeffrey C. Lozon, Brief to
the Committee, 29 October 2001, p. 4. [34] Ibid.,
p. 5. [35] Claude Forget, Canadians’
Health: The Role of Government, Brief to the Committee, 31 October 2001,
pp. 7-8. [36] Shape
the Future of Health Care, Interim Report, pp. 4-5. [37] Health Association of
British Columbia, Brief to the Committee, October 2001, p. 3. [38] Bill Bryant, Brief to the
Committee, 15 October 2001, p. 1. [39] Premier Advisory Council
on Health (Alberta), p. 31. [40] Statistics Canada,
“Recent Trends in Taxes Internationally”, in Perspectives on Labour and Income, Catalogue No. 75-001-XIE, Vol. 2,
No. 1, January 2001, pp. 36-40. [41] Volume One, pp. 5-30 [42] Canadian Health Care
Association, The Private-Public Mix in
the Funding and Delivery of Health Services in Canada: Challenges and
Opportunities, Policy Brief, 2001, p. 3. [43] Premier’s Advisory
Council on Health (Alberta), p. 45. [44] Shaping
the Future of Health Care, p. 18. [45] Volume One, pp. 98-99. [46] The
Hon. Monique Bégin, “Revisiting the Canada Health Act (1984): What Are
the Impediments to Change?” delivered at The Institute for Research on
Public Policy 30th Anniversary Conference,
February 20, 2002, p. 6. [47] Volume Two, p. 38. [48] Volume Two, p. 39. [49] See Volume Four, pp.
19-24. [50] Shape
the Future of Health Care, p. 27. [51] See his Broken
Promises: Why Canadian Medicare
is in Trouble and What Can Be Done to Save It (unpublished manuscript). [52] Specialized hospital
services include for example paediatric cardiac surgery and gamma knife
neurosurgery. [53] As the Honourable Monique
Bégin and others have pointed out, there are many misconceptions
surrounding the ‘public administration’ provision of the Canada
Health Act (see footnote 77 below). On this point see as well the Myths
and Realities section of Vol. 1 of the Committee’s study, p. 98. [54] Shape
the Future of Health Care, p. 44. [55] Cam Donaldson, Gillian
Currie and Craig Mitton, “Integrating Canada’s Dis-Integrated Health
Care System – Lessons from Abroad”, C.D. Howe Institute Commentary, April 2001, p. 8. [56] The Mazankowski report
acknowledged and supported the movement towards primary care reform along
with a change to primary care physician remuneration, but was of the view
that the purchasing function should remain within regional health
authorities. Accordingly, the
report recommended that a portion of the budget for physicians be allocated
to regional health authorities which would then contract with them for
primary care services. Similarly,
both the Clair Commission in Quebec and the Fyke Commission in Saskatchewan
stressed that regional health authorities should organize and manage primary
care group practices, contracting with or otherwise employing all providers
including physicians [57] Share
the Future of Health Care, p. 34. [58] Canadian Institute for
Health Information (CIHI), Canada’s Health Care Providers, 2001, p.
73. [59]
Hutchison, Brian and Julia Abelson and John Lavis, “Primary Care in
Canada: So Much Innovation, So Little Change,” in Health Affairs,
Vol. 20 No. 3, May-June 2001, p. 117. [60]
CIHI, op. cit., p. 74. [61] Capitation refers to a
payment system in which a health care unit receives an annual payment for
each individual to whom the unit is responsible for providing service. The
amount of the payment may depend on the age and medical history of the
individual, but not on the number of service calls the individual makes to
the unit during the year. [62] Canadian Health Services
Research Foundation, Integrated Health
Systems in Canada: Three Policy Syntheses – Questions and Answers,
July 1999, p. 2. [63] Volume Three, pp. 37-44. [64] “Integrating Canada’s
Dis-Integrated Health Care System”, p. 13. [65] Who
is the Master?, p. 111. [66] See its report, Primary
Health Care Strategy, op. cit., pp. 34-40. [67] Saskatchewan Commission
on Medicare (Kenneth Fyke, commissioner), Caring
for Medicare – Sustaining a Quality System, April 2001, p. 68. [68] Select Standing Committee
on Health, Patients First: Renewal and
Reform of British Columbia’s Health Care System, Report to the British
Columbia Legislative Assembly, December 2001, p. 29. [69] Premier’s Advisory
Council on Health (Alberta), p. 68. [70] Saskatchewan Commission
on Medicare, p. 81. [71] Volume Four, pp. 61-65. [72] Premier’s Advisory
Council on Health (Alberta), p. 14. [73] Volume Two, p. 49. [74] Operating
in the Dark, p.8. [75] See section 2.5, below. [76] Volume Four, p. 16. [77] In a recent speech, the
Honourable Monique Bégin, who was the federal Minister of Health when the Canada
Health Act was introduced, said the following about the public
administration conditions of the Canada Health Act: “Public
administration” does not mean what the public believes it means. It is
most misleading…[I]n Canada, the funding/financing is public but … the
delivery of services is private, in that physicians are not civil servants
and hospitals have boards, not deputy ministers. The program criterion of
the legislation reads as follows: “(…) the health care insurance plan
(hospitals and doctors) of a province must be administered and operated on a
non-profit basis by a public authority (…) responsible to the provincial
government (…)” … Op. cit. p. 6. [78] At the end of Section
1.1, having established that the current health care system is not fiscally
sustainable, this report said that there are three basic options from which
Canadians must choose as they deliberate about the future of our health care
system. These are: (1) the continued rationing of publicly funded health
services, either by consciously deciding to make some services available and
not others (that is, by delisting some services), or by allowing waiting
lists to continue to grow; (2) increasing government revenue, either by
raising taxes directly or through other means such as health care insurance
premiums, so that the rationing of services can be reduced and waiting lines
shortened; (3) making services available to those who can afford to pay for
them by allowing a parallel privately funded tier of health services, while
maintaining a publicly funded system for all other Canadians. [79] See preceding footnote. [80] See footnote 78. [81] Searching
for Certainty,
Inside the New Canadian Mindset, by Darrell Bricker and Edward
Greenspon, [82] CIHI, December 2001. [83] Principle Seven reads: The
consequences arising from changes in the level or amount of government
funding for hospital and medical care should be clearly understood by
government and explained to the public, in as much detail as possible, at
the time such changes are made and announced. [84] Principle Eight reads: In
the first stage of health care reform, the method for remunerating hospitals
should be changed from the current annual global budget to service based
funding. [85] Principle Eleven reads: To
facilitate primary care reform, the method of compensating general
practitioners should be changed from fee-for-service to some form of blended
remuneration combining capitation, fee-for-service and other incentives or
rewards. [86] Principle Eighteen reads:
Incentives should be developed to
encourage patients to use the hospital and doctor system as efficiently as
possible. Such incentives
should not include user fees for services that are deemed to be medically
necessary. The Committee report is available in
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INTRODUCTION
INDIVIDUAL PHASES AND PROPOSED TIMEFRAMES
CHAPTER
ONE:
CHAPTER
TWO:
Principle
Four
In
this perspective, the Committee agrees with the report of the Clair Commission
in Quebec and the Mazankowski report in Alberta that consideration should be
given to reviewing the principle of comprehensiveness of the Canada
Health Act. Both reports
recommended the establishment of a permanent committee, made up of citizens,
ethicists, doctors and scientists, to review and make decisions on services
that should be publicly insured. Such
a review would lead to evidence-based decision making for public health care
coverage. Such a review would
also set the boundaries between publicly insured and privately funded health
services:
Principle
Six
Principle
Eight
Principle
Nine
within their region.
Principle
Ten
Principle
Eleven
Principle
Twelve
Principle
Thirteen
Principle
Fourteen
Principle
Sixteen
Principle
Eighteen
Principle
Twenty
Section 2.5, the phrase “all medically necessary services” should be
applicable to the full range of health care services and not just to hospital
and doctor services. This implies that some expansion of coverage – to close
gaps in the health care safety net – is required if the objective of
Canada’s health care policy is to be met.
Current Structure of Publicly Funded Health Care Insurance*
Phase One Reform – The Introduction of Service Based Funding for
Hospitals
Phase Two Reform – Primary Care Groups Purchase Services on Behalf of
their Patients
Doubleday Canada, 2002.