The Health of Canadians – The Federal Role
Interim Report
Volume Four – Issues and Options
A 21st Century Context for Health Care Policy
The constitutional and fiscal constraints discussed in section 4.6 are not the only contextual factors that must be taken into account as we examine the options for health care reform in Canada. Health care is a service sector industry, and the very shape and form of many such industries have undergone significant changes in the closing years of the 20th century.
Indeed, it is possible to trace the outlines of what a 21st century service sector looks like. Three main characteristics stand out for our purposes:
- The development of larger organizational units that allow for economies of scale, along with the ability to provide customers with the 7/24/365 service which they are increasingly demanding (service seven days a week, 24 hours a day, every day of the year).
- The emergence of specialized organizational units, that focus on providing a limited range of services, but deliver them very efficiently and with higher quality than units that provide a wider range of services.
- A strong focus on the consumer, since repeated market research studies have shown that consumers are demanding more than ever before: they want both timely service and high quality service.
The current organizational structure of the health care industry in Canada does not reflect any of these three characteristics. Indeed, one of the witnesses at the Committee hearings described the primary care sector as structured like a 19th century cottage industry rather than a 21st century service industry because it consists largely of individual businesses (physician practices). The fact that these are not clustered together into group practices means that providing more extensive services, such as making care available 7/24/365, is impossible.
Also, specialization of the health care industry into service units that can deliver a narrow range of services has generally not occurred. There are, of course, a number of exceptions, including laser eye clinics and a very limited number of specialized hospitals, such as the Shouldice Hospital in the Toronto area which only performs hernia operations (and is reimbursed at the regular provincially insured rate).
The major delivery system in the health care sector in Canada remains the unspecialized general hospital. While these will always be needed, it is also important to investigate the benefits that could arise by making specialized delivery units a more important part of a modernized health service delivery system. This, of course, requires a major trade-off between quality of care and accessibility to health services.
With respect to the third characteristic of a 21st century service sector industry – a strong focus on timely and high-quality customer service – little has been done. In fact, long waits for certain kinds of treatment is the complaint most often voiced by Canadians with regard to the health care system. This is obviously not timely service.
By remaining fixed largely on the quantity of inputs (particularly on the amount of public money going into the system, and on the number of physicians and nurses) rather than on quality measures of system outputs, attempts at evaluating the functioning of the health care sector remain at odds with the customer service orientation of a modern service industry. Yet, using money spent as a measure of the quality of a health care system is clearly erroneous. The United States has the highest per capita spending on health care, but, when measured in terms of many health indicators such as infant mortality, life expectancy and potential years of life lost, it can been seen to have one of the lowest quality systems of any OECD country.
Measurement of system outputs or outcomes are just being developed, and inter-provincial comparisons of system performance are only now starting to be published by the Canadian Institute for Health Information. The whole field of outcome measurements is in its infancy, not only in Canada but elsewhere as well. Much remains to be done.
The Committee believes that many of the problems facing the health care sector can be successfully addressed only if the industry is prepared to transform itself into a 21st century service industry, rather than remaining mired in a 19th century structure and outlook. As part of its role dealing with the health care infrastructure (see Chapters 10 and 11), the federal government could provide assistance to encourage this transformation.
5.1 Reforming Primary Care: A Step Toward a 21st Century Structure
Although not a direct federal responsibility, the way in which health services are organized for delivery within each province has a direct impact on the overall efficiency and effectiveness of the health services Canadians receive. For this reason, the Committee believes that it is important to take into account the changes that are expected to occur in the near term with regard to primary care reform. Furthermore, changing the way primary care is delivered opens up other potential changes to the health care system and hence other options for reform. (More information on primary care reform is provided in sections 8.2.2, 8.5 and 11.4.)
The need for significant changes to the way primary health care is delivered has been the principal thrust of the recommendations of a number of provincial health care reviews, notably the Sinclair Commission Report in Ontario, the Clair Commission Report on health care delivery in Quebec and the Fyke Report on health care delivery in Saskatchewan. In fact, the importance of changing the way primary care is delivered is so widely established that the federal government agreed, in September 2000, to contribute $800 million to help the provinces achieve reform of the primary care sector.
For the federal government, the issues relating to primary care fall mainly under its role in contributing to innovative health research and enhancing the health care infrastructure, but they also touch on its other roles as well.
In the first place, decisions concerning the optimum use of public resources have important implications for the overall level of funding required to sustain our health care system. For example, if the organization of group medical practices allowed patients to access their family physician’s group practice seven days a week (as recommended in both the Clair and Fyke reports), this could lead to a decline in the use of expensive emergency wards in hospitals, with potential savings for the system as a whole.
Similarly, many of the reforms being mooted for the primary care sector touch on the extent to which health promotion and disease prevention (the population health federal role) should be integrated into the delivery of health services.
Moreover, if primary care reform includes moving physicians from a fee-for-service payment system to a capitation payment system, or to a mixture of capitation and fee-for-service, then more options for modernizing the health care system would become possible, including the expansion of the number of services that are covered by public health care insurance. For example, physiotherapy services, chiropractic services and potentially even drug therapy could be supplied by a health care unit remunerated under a capitation or a combined capitation and fee-for-service scheme.
Such a system would also help ensure that everyone receives treatment in the most efficient way possible. Primary care reform involves not only changing the way in which physician services are provided, but also altering the way in which an individual’s initial contact with the health care system is handled. For example, under a capitation remuneration scheme, it becomes possible for a nurse practitioner to handle certain cases that would otherwise have to be handled by a physician under fee-for-service payment systems.
For all the reasons outlined above, the Committee feels it is important that the federal government continue to play a role in assisting the provinces and territories in the restructuring of primary care delivery. In fact, we believe that primary care reform is one of the most critical steps that need to be taken in order to modernize Canada’s health care system.
5.2 Health Care: Different from Other Goods and Services
It is important to note that, while the health care industry must adapt to the reality of a 21st century service sector industry, one fact remains: health care does not respond to market incentives as do other goods and services. In the terms used by economists, health care is subject to a number of "market failures". In a free marketplace, resources are allocated according to the law of supply and demand. The resulting price levels ensure optimal allocation of resources when certain conditions related to supply and demand are met. However, these conditions are largely absent in the area of health care.
More precisely, there are three key differences between health care and other goods and services. The first market failure in health care relates to the lack of "consumer sovereignty". While individuals initiate the first contact with the health care system, it is providers who then determine the volume of diagnostic tests, visits to specialists and the needed prescription drugs. In other words, an individual cannot obtain hospital surgery or radiation therapy without the recommendation of a licensed provider. Thus, resource allocation in health care is not a simple function of the interaction between supply and demand as it is in a free marketplace. In fact, health care providers can affect demand in a way that is impossible in just about any other industry.
Second, there is a problem of "asymmetry of information" between the health care provider and the consumer because consumers are generally unable to determine for themselves the type of health services they need. Health care providers have a very large advantage over consumers in that they have the professional knowledge to determine what is best for their patients. Therefore, in a free health care market, this asymmetry of information leaves open the possibility of exploitation of consumers by providers. Health care providers can be placed in a situation of conflict of interest if they recommend care at the same time as they make their own living from it.
The third market failure relates to the "uncertainty of illness". Marketable goods – such as food and shelter or TVs and VCRs – can be properly budgeted for. This contrasts sharply with health care. Because illness is unpredictable, the demand for health care is likewise uncertain. Individuals cannot easily determine in advance an optimal pattern of health care use in a given year as they might do for food. More importantly, health care costs can also be enormous. Very few people can manage health care costs on their own.
Health care insurance, either public or private, is the response to such uncertainty. In Canada, as in many other OECD countries, governments have favoured public health care insurance over private insurance. The reason is that private insurance is also subject to market imperfection. The sources of failures in private health care insurance markets include adverse selection, moral hazard, and economies of scale.
Moral hazard and adverse selection are somewhat distinct, but they have similar implications for private insurers in that they both relate to a private insurer only agreeing to insure "good risks". "Moral hazard" refers to the fact that individuals are more likely to purchase insurance if they think they are more likely to use services. "Adverse selection" refers to the fact that insurers seek to avoid individuals most likely to cost them money. In response to both situations, private insurers may either refuse to provide coverage or charge higher premiums. Therefore, in a private insurance market, individuals with health problems may face higher premiums or reduced coverage. Similarly, economically disadvantaged individuals would have to assume a relatively higher proportion of health care costs for an equivalent set of premiums. This contrasts with public health care insurance, which guarantees access to insurance, regardless of the individual’s state of health and ability to pay.
In addition, there are inherent economies of scale in the field of insurance. While some costs (such as the payment of claims) depend on volume of business done, others (such as rate setting) are the same regardless of the number of people insured. In general, large insurers will face relatively lower costs than small carriers. A single insurer (or single payer), for whom claims payments and data handling are centralized, greatly benefits from these economies of scale through relatively low administrative costs. When the single payer is public, even more administrative costs may be eliminated if no premiums are collected and the required funds are drawn from general government revenue.
Overall, market failures and considerations of equity and fairness explain much government involvement in health care. As stated above, many countries including Canada have preferred a stronger role for the public sector in the field of health care insurance. Countries that permit private health care insurance, such as Australia, the Netherlands and Sweden, also control the private market to a great extent by regulating the level of premiums, co-payments and deductibles that can be charged by private insurers.
Observations on Choosing Among Options
6.1 The Need to be Financially Realistic in Choosing Options
The Committee’s primary objective in undertaking a study of the role of the federal government in the health and health care fields was to help launch a public debate on the policy options that the federal government should choose in order to effectively address the challenges it faces in these areas. This report is the Committee’s vehicle for launching this debate.
In the remaining sections of this report we outline a series of options that are available for responding to the challenges confronting the health care system in Canada. These options are based on the evidence gleaned from the Committee’s hearings as well as from the documentation made available to the Committee. While we do not claim to have produced an exhaustive inventory of options, the Committee did hear from a wide range of stakeholders and experts and was able to canvas a broad range of opinions. Hence, we believe that our range of options covers the spectrum of opinions reasonably well.
As we have already said, we hope that when choosing their preferred option, readers of this report will be explicit about the public policy objective their preferred option is designed to help achieve. We also hope that readers will take into account the linkages among options. In some instances choosing one option may make the choice of other options impossible, or at least very difficult, while other options, in contrast, might in fact achieve the desired objective only when selected together.
In addition, the fiscal constraints described previously clearly have an impact on the set of options which, when taken together, are feasible (unless, that is, the set of options also envisages new sources of funding). Therefore, if readers of this report foresee any expansion of services in the health care field, it is incumbent on them to also state a preference for how such an expansion should be funded.
6.2 The Desirability of a Non-Ideological Debate
It is the Committee’s hope that the way in which it has set out these options will help to focus the debate on reforming Canada’s health and health care policies and programs around realistic options for change. In this spirit, it is worth highlighting a few general observations about the state of this debate in the country today.
It is clear to the Committee that it is absolutely essential that the debate progress beyond political rhetoric. In considering options with respect to the current system, we raise some issues that are usually dismissed out-of-hand in any discussion of reform of the Canadian health care system. We raise them not to be deliberately provocative, but because we believe that Canadians can no longer avoid tough choices by resorting to simplistic statements about how the current system works, many of which are only partially true. We believe that maintaining a long-term sustainable health care system is too important for issues affecting that system not to be discussed openly and rationally. Of course, individual positions on these issues will very much depend on everyone’s personal set of values. Indeed, it is precisely because these issues are value-laden that they provoke emotional and ideological responses.
It is important to look at experience acquired elsewhere in the world, since many other health care systems share similar characteristics to Canada’s. International comparisons show that there are many feasible ways of balancing public and private involvement in the health care field that respond not only to the health care needs of people at large, but also make sense from an overall economic point of view. Clearly, this debate over how to balance public and private sector participation in health care is central to the future shape of the health care system in the coming years.
A second overarching dimension to the health care debate that overlaps with the public/private one concerns the overall level of spending that Canadians feel is appropriate. We currently devote about 9.5% of GDP to health care from both public and private sources. A few countries (Germany, Switzerland and the United States) spend more, while many spend less. Deciding on an appropriate level of spending as a percentage of GDP, setting it as a goal, and then figuring out how to divide that total amount between public and private sources are among the issues that Canadians need to resolve.
There are a number of competing imperatives, however. On the one hand, the cracks and strains inflicting our system are increasingly evident along two important fault lines: concerns over timely access to treatment and issues relating to the training, recruitment and retention of human resources in the health care field. Neither of these is a simple issue on its own, and the fact that they are inter-related and overlap with other complex issues make them extremely difficult to address. But there is an urgency to addressing them: health care providers are increasingly refusing to assume the brunt of responsibility for shoring up the system, and individual Canadians are becoming frustrated and angry as stories of unnecessary suffering caused by delays in getting care regularly appear in the press.
On the other hand, however, Canadians are rightly wary of further restructuring of the system simply to deal with the immediate pressures. The cost-cutting measures undertaken by every level of government in the 1990s succeeded in reigning in the escalation of health care spending (at least until the end of the decade). But it is arguable that the various stresses these cost-cutting measures placed upon the system are an indication that we are now living with the consequences of these decisions. Furthermore, Canadians are right to remain proud of the system that has been built over nearly four decades, and prudence therefore dictates that reform be thoroughly debated and, only then, implemented carefully.
6.3 The Value of Understanding the Experience of Other Countries
Readers may find some consolation in the fact that Canadians are not alone in confronting complex health care issues. Everywhere in the world health care policy is thoroughly intertwined with the political, social, and even cultural life of each country. In Sweden and the United Kingdom, for example, major health care reforms were undone when another party with a considerably different political ideology replaced the government that put the reforms in place. As a result, many experiments in reforming health care systems have been abandoned before adequate time has been given to see how effective the reform would be. Others have been abandoned for ideological reasons even though they were successful!
Canadian experience has not been quite the same, largely because all major political parties support the current system and, as a result, have been unwilling (some would say fearful) of experimenting with changes to it. Nevertheless, as Claude Forget, a former Minister of Health in Quebec and an acknowledged expert on comparative health care systems, told the Committee that international experience should alert us to the dangers of a public system that is held hostage to the vagaries of political life, and that therefore fails to sustain a pragmatic, managerial approach to problem solving. It is safe to say that we have not yet found a way to encourage these kinds of approaches, and even that some aspects of our current legislative framework actively inhibit the type of experimentation that is required.
There are also many unknowns that could influence the shape of Canadian health care in the future. One of these is the eventual impact of various international and regional trade agreements. In Europe, for example, competition law that applies to all members of the European Union forbids monopolies, even in the health care and services sectors. This has put pressure on national legislatures to ‘open up’ their health care systems, and there are numerous experiments with forms of market incentives and competition that have been introduced into systems that remain predominantly publicly financed. It would therefore seem to be important for Canadians to adopt an open-minded approach to health care reform, and to consider the full range of available options, rather than to reject some of them out-of-hand.
The Canada Health Act,
Timely Access to Treatment, and Fairness
It is a constitutional fact that, generally, health care is a matter of provincial/territorial jurisdiction. The federal government is not responsible for the administration and delivery of health care except to specific sub-groups of the population. In point of fact, Canada does not have a national health care insurance plan, but an interlocking set of 10 provincial and 3 territorial health care insurance plans.
However, through its financial contribution to provincial and territorial health care systems and its enforcement of the Canada Health Act, the federal government has helped shape public health care insurance plans across the country. To a great extent, the Act ensures that Canadians, no matter where they live, receive a reasonably comparable level of health care with relatively uniform terms and conditions.
The conditions imposed by the Canada Health Act are linked to the funds that are transferred by the federal government to the provinces and territories to assist them in providing public health care insurance. The Act dictates the terms upon which these federal cash transfers will occur. It does not regulate health care delivery.
There seems to be a consensus among experts consulted by the Committee that the Canada Health Act is constitutional, in that it does not interfere with the every day business of managing health care delivery and administering public health care insurance plans. It is worth noting that the constitutionality of the Act has never been challenged since its inception, some seventeen years ago. Nevertheless, the Committee’s expert witnesses agreed that test cases on the constitutionality of the Act are likely to arise in the next few years.
Some implications of the Canada Health Act, however, remain difficult to assess. It is not always clear what the Act does, and more importantly, what it does not do. More specifically, three main issues have been raised about the Act. First, do Canadians have a right to health care, and if such a right exists, can it be found in the Canada Health Act? Second, to what extent, if any, are private health care provision and private health care insurance permissible under the Canada Health Act? And third, is "reasonable access" under the Canada Health Act meant to ensure that Canadians have timely access to needed health care services?
To examine these questions, the Committee convened a panel of constitutional lawyers, supplemented by the excellent constitutional expertise of some members of the Senate who do not normally sit on the Committee. The results of the panel discussion, which are summarized below, have provided the Committee with some guidance in the development of proposals to address the three issues mentioned above.
7.2 Do Canadians Have a Right to Health Care?
As indicated above, the Canada Health Act specifies the conditions under which federal transfers are channelled to provinces and territories that comply with a set of terms and conditions. The Act does not make any mention, either explicitly or implicitly, of a right to health care. However, repeated public opinion polls have shown that there is a general perception among the Canadian public that there is a right to health care. So, when all is said and done, is there a legislated right to health care in Canada?
The Charter of Rights and Freedoms, as part of the Constitution of Canada, sets out those rights which are considered fundamental to Canadian society. The most likely sources of a Charter right to health care are to be found in sections 7 and 15 of the Charter. These sections state:
7. Everyone has the right to life, liberty and security of the person and the right not to be deprived thereof except in accordance with the principles of fundamental justice.
15. (1) Every individual is equal before and under the law and has the right to the equal protection and equal benefit of the law without discrimination and, in particular, without discrimination based on race, national or ethnic origin, colour, religion, sex, age or mental or physical disability.
Health care is not explicitly mentioned in the Charter. Thus, such a right, if it exists, would have to be found by the courts to be implied from the interpretation of one of the Charter rights. Experts told the Committee that the right to life necessarily implies the right to health and, therefore, the right to health care. Thus, a case can be made that the Charter guarantees Canadians an implicit right to health care. Justice Bertha Wilson also expressed this view when she stated: "(…) government has recognized for some time that access to basic health care is something no sophisticated society can legitimately deny to any of its members." This is why experts told the Committee that they expected cases on the right to health care to arise in the next few years.
Information provided to the Committee by Professor Martha Jackman suggests that the Canada Health Act does not prohibit the provision of private health care. Rather, it discourages the provinces, under threat of losing federal funds, from permitting health care providers to bill patients directly for amounts over and above what they receive for such services under provincial health care insurance plans. That is, it discourages so-called extra-billing.
Similarly, in order to obtain their full CHST cash contribution, provinces and territories must not allow hospitals to impose user charges on patients for insured hospital services. Thus, the Act only dictates the terms upon which federal cash transfers to the provinces will occur.
As such, the legislation does not prevent private, or for-profit, health care providers and institutions from delivering and being reimbursed for provincially insured health services, so long as extra-billing and user charges are not involved. The Act does not prevent the provinces from allowing private health care providers, whether individual or institutional, to operate completely outside the publicly funded health care system. Health care providers and facilities may opt out of the provincial plan and bill patients directly for the full cost of services provided, without any penalty being imposed on the province under the Canada Health Act. In these cases, patients are not eligible for reimbursement under provincial plans. Moreover, the Canada Health Act also effectively prevents individuals from purchasing private health care insurance to cover the cost they would incur in receiving service from a provider who had opted out of a provincial health care plan.
The Canada Health Act is intended to discourage the cross-subsidization of health care providers and facilities that provide medically necessary services funded partially by public health care insurance and partially by the patient. According to the federal government, this discourages the growth of a second tier of health care, which, it claims, could pose a significant threat to Canada’s publicly funded health care system. (It should be noted, however, that parallel public and private health care systems exist in most other industrialized countries.)
Currently, some private clinics appear to be operating in a manner which is arguably quite close to the edge of the letter, and certainly to the spirit, of the Canada Health Act. A private MRI clinic, which treats both publicly funded and private patients, is viewed by the federal government as being consistent with the letter of the Act apparently because the government does not consider the person who performs the MRI to be a "doctor". Indeed, in some cases a technician, based on a recommendation from a physician carries out the MRI and the results subsequently go to a physician. Thus, the MRI service is not subject to the Act.
However, some would insist that this arrangement nonetheless confers an unfair advantage on patients who are able to pay for a private MRI. Once the physician has the results of the diagnostic test, according to this argument, patients are able to join the waiting list for the next procedure required by their treatment much faster than if they had waited in line for the public MRI. This situation, which is called "queue jumping", may undermine the principle of accessibility of the Canada Health Act which states that access to medically necessary health services should be based on need – not on means – and on uniform terms and conditions.
The federal government is monitoring this issue. In September and October 2000, Allan Rock, the Minister of Health, sent letters to the Alberta and Quebec governments in order to obtain more information with respect to MRI clinics operating in these two provinces. No decision has been made yet with respect to the compliance of both provinces with federal legislation.
The Canada Health Act requires provincial health-care insurance plans to be accountable to the provincial government and to be non-profit, thereby effectively preventing private health care insurance plans from covering services that are included under the publicly insured plan in the province. Private insurers are limited to providing supplementary health care benefits only, such as semi-private or private accommodation during hospital stays, prescription drugs, dental care and eyeglasses.
Overall, the Canada Health Act, along with provincial/territorial legislation, has prevented the emergence of a private health care system that would compete directly with the publicly funded one. It is simply not economically feasible for patients, physicians or health care institutions to be part of a parallel system.
This raises the following question: if a right to health care is recognized under section 7 of the Charter, and if access to publicly funded health services is not timely, can governments continue to discourage the provision of private health care through the prohibition of private insurance? To paraphrase Section 1 of the Charter of Rights and Freedoms: is it just and reasonable in a free and democratic society that government ration the supply of health care services (through budgetary allocations to health care) and, simultaneously, effectively prevent individuals from purchasing the service in Canada?
The answers given to this question by the panel of constitutional experts were mixed. They stressed that this issue is not only a legal question. It is, above all, a question of fairness. Is it fair to deny someone, who could afford to purchase a health service, the right to make such a purchase? Conversely, is it fair to those Canadians who do not have the means to purchase health care to allow others to do so? Where one considers fair in this matter is something for readers of this report to decide for themselves.
What is clear, however, is that any option for the reform of current arrangements that includes a private sector that is able to compete effectively with the publicly funded sector would require substantial modifications to the Canada Health Act.
7.4 Timely Access and Waiting Times
The principle of accessibility of the Canada Health Act stipulates that Canadians should have "reasonable access" to insured health services. However, the Act does not provide a clear definition as to what constitutes reasonable access. Lately, the issue over access to health care has been associated with the problem of waiting lists and waiting times – that is, the problem is one of timely access. "Timely" is, of course, a subjective word. What is timely to one person may be an eternity for another, particularly where illness is involved. Nevertheless, the Committee believes that "timely access" describes more accurately what the public expects from the health care system than "reasonable access".
The problem of waiting lists is not unique to Canada. In the course of its international comparative study, the Committee learned that many countries – including Australia, Sweden and the United Kingdom – experience waiting line problems, and that in several countries people wait somewhat longer than they do in Canada.
Although there is no doubt that some Canadians wait too long, the lack of accurate information on waiting lists remains a major problem. In fact, there is no standardized data on waiting lists. Nor is there a uniform method for establishing and maintaining waiting lists in Canada or any agreed "scientific" rules for when patients should be placed on a list, or a definitive consensus on how long patients should be allowed to remain on waiting lists.
Obviously, there is an urgent need to implement an appropriate process for developing and managing waiting list information. In the meantime, however, Canadians are quite unhappy with the amount of time they have to wait to see a specialist, obtain a diagnosis or to receive treatment as an in patient or out patient. This unhappiness grows as both perceived and real waiting lines grow.
Since we do not have consistent and coherent data across the country, we cannot paint a precise picture of all of the factors that contribute to the lengthening of waiting lists. We do know, however, that some waiting lines are better managed than others. The Cardiac Care Network of Ontario, for example, manages its waiting lines well. For other illnesses, waiting lines are not managed nearly as well. In addition, the length of waiting time depends on where a patient lives in the province.
Throughout the Committee’s hearings, a number of questions were raised with respect to this problem:
- What can be done about the lack of reliable information on waiting lists?
- Could renewing outdated diagnostic and clinical equipment shorten waiting lists?
- How do shortages of health care personnel affect the length of waiting lists?
- Does the absence of competition among health care providers exacerbate the problem of waiting lists?
- Does the absence of firm commitments to guarantee treatment within a specified time frame mean that waiting lists are allowed to grow unchecked?
- Could waiting times for publicly funded services be shortened by introducing or increasing access to private care for those who wish to pay?
Clearly, the problem of waiting times and waiting lists is a complex one, touching many other issues. The shortage of human resources, the lack of medical equipment, and the insufficiency of information will be addressed in subsequent parts of this report. However, at this point it is worth noting some of the observations that are often made about the problem of timely access.
First, if waiting lines are caused by a shortage of physicians and other health care providers, as evidence before the Committee strongly suggests they are, at least in part, then allowing a private parallel system will not reduce the total waiting time between the two lines, and may even make the public waiting lines worse. This is because, in this case, the bottleneck is the number of service providers and not the number of medical facilities, such as equipment or hospital beds, so increasing the latter will have no effect on the total length of the waiting line, and siphoning off a finite number of health care personnel to service private patients will mean that fewer are available to care for the public ones.
Second, even if the supply of human resources is not the problem, experience from other countries shows that allowing the creation of a parallel private system does not shorten the waiting lines in the public system. Among the reasons for this is the fact that health care providers (e.g. physicians) and/or patients use the waiting lists for somewhat less urgent cases than they might otherwise have done.
Suppose, for example, that the current rule for deciding that a patient goes on the waiting list for a cataract operation is that the patient has lost 50% or more of the sight in an eye. Experience in other countries has shown that introducing a parallel system could cause ophthalmologists to start putting people on the waiting list for a cataract operation when they have, for example, lost only 30% of their sight. Therefore the publicly funded waiting list actually grows with the establishment of a parallel private system.
Third, opponents of the creation of a parallel system reject what they usually call "a two tier" system, that is, a system in which patients in the private system receive expedited service or qualitatively superior care. Here it is advocates of a single system who invoke the "fairness" argument. They argue that health services should be provided exclusively on the basis of need, and that the introduction of a second-tier of care that would only be available to the minority of the population with the personal resources to pay for them, goes against the principles of equity and fairness. This criticism suggests that Canada does not have any elements of "a two tier" system at the present time. Is this true?
People who can afford it can, and do, already go out of Canada (usually to the United States) to receive the medical services they require if their only alternative is a long waiting line in Canada. There is also, strong anecdotal evidence that suggests that the situation in Canada is similar to that in Australia where, in the words of one of the Australian witnesses who testified before the Committee: "access to public (health) services is usually more easily obtained by wealthier and more powerful individuals who understand how the system works and have appropriate contacts in hospital service delivery and administration".
In addition, provincial Worker’s Compensation Boards in most provinces receive preferred access to treatment for their clients on the argument that they need to ensure the client goes back to work quickly (and not, incidentally, to save the WCB money). In some provinces, the Boards have contracts with hospitals for a specified number of beds and diagnostic procedures ensuring quick access. They also make direct payments to physicians for the services performed and these payments do not count toward any cap on a physician’s income which may exist in the province.
All this suggests that the Canadian system is not nearly as "one tier" as most Canadians believe, or as most government spokespersons claim. Whether this constitutes an argument for a more open "two tier" system is an issue for readers of this report to decide. (See sections 7.5.1 and 8.6 for further comments on a two-tier system.)
7.5 How Can "Timely Access" to Health Care Be Ensured?
There are many ways in which the problem of timely access might be tackled, ranging from changes that do not alter the structure of the current health care system to those that entail substantial structural modifications.
The changes that might be made without changing the structure of the current system include:
- Increasing the quality of screening by family physicians to ensure that referrals for specialized services, including diagnostic tests, are given only to patients who really need them;
- Providing information to family doctors and their patients about the specialists with the shortest waiting periods;
- Establishing specialist group practices to share the workload and increase the hours during which service is available.
Another option, which involves a certain amount of systemic change, and which has been used very effectively in Sweden, is to introduce incentives into the system to encourage greater efficiency, particularly in the hospital sector.
In Sweden, in 1992, the national government introduced the "care guarantee", which established a maximum waiting time not exceeding three months for diagnostic tests, certain types of elective surgery (treatment for coronary artery disease, hip and knee replacements, cataract surgery, gallstone surgery, inguinal hernia surgery, surgery for prolapse and incontinence). Subsequently, maximum waiting line guarantees were introduced for consultations with primary care doctors (8 days) and specialists (3 months). If the maximum waiting time was reached, the patient was given the money to go elsewhere in Sweden, or to another country, to obtain the required medical service. The money to pay for this treatment came from the county government (roughly equivalent to a provincial government as far as health care is concerned) which in turn took it out of the money that would otherwise have gone to the offending hospital. The care guarantee was responsible for a substantial reduction in waiting, to the point where waiting lists "ceased to be a political issue".
Note also that in the Swedish model there is no second tier of patients. Everyone is treated the same with regard to the "care guarantee."
The national government has also enacted legislation giving patients the right to choose their family doctor and the hospital in which they receive treatment. Prior to this reform, patients requiring hospital treatment could only receive it in the hospital to which they were assigned, that is, the hospital serving the area where the patient resided. When a patient elects to receive care in a hospital other than the one to which he/she was originally assigned, a specified sum of money can be transferred from the budget of the assigned hospital to the treating hospital. County councils thus have to pay for services provided to their residents by another county council. The general publicattach great importance to the enhanced freedom of choice under the new legislation. Many observers also claim it has produced a major change in the way patients scheduled for surgery are treated, as an incentive is created for each hospital to attract patients from other ones, or to prevent patients from going elsewhere.
An in-depth assessment of the results of Sweden’s experience with the "care guarantee" would have to take into account all the dynamics that are particular to that country and its culture, but it is nonetheless interesting to note that when there was a change in government and the newcomers eliminated the "care guarantee", waiting periods lengthened.
Clearly, people respond to certain types of incentives by being more productive and operating organizations more efficiently, and this has nothing to do with whether the organization is in the public or the private sector. Virtually all hospitals in Sweden are public sector institutions.
The Swedish example thus raises the issue of whether the Canadian system should be modified to allow, or even encourage, competition between hospitals. And, if so, should all hospitals continue to be public institutions (or more precisely private not-for-profit institutions) or should private, for-profit hospitals or clinics be allowed to compete with public ones? (It must be noted that the conditions of the Canada Health Act would still be met even if all hospitals in a province were private institutions, as long as it remained a single payer system.)
If private, for-profit medical institutions are allowed, standards would have to be put in place to ensure the quality and safety of patient care received at the institution. This is clearly not an insurmountable task, since private hospitals exist in every major industrialized country. (Canada is the only major country with a 100% publicly funded hospital system.)
Also, conditions might have to be placed on the types of procedures such private sector institutions could carry out (for instance, joint replacement would probably be acceptable but heart bypass surgery might not). Thus, these private institutions would most likely be highly specialized clinics (like the Shouldice Hospital or laser eye clinics), each offering a very limited range of services, but doing so efficiently precisely because they are specialized.
One potential option would be the Swedish "care guarantee" model with private clinics competing with each other and with public hospitals when the maximum waiting period for a procedure has expired.
A second option, which would involve more systemic change, would be to allow patients to go to the private clinic before the expiry of the maximum waiting time allowed under the "care guarantee". In such a situation, patients would have to pay the entire cost of the procedure out of their own pockets (unlike the Swedish "care guarantee" option in which public funding would pay the cost at the end of the maximum waiting period.). Presumably, as well, people would be allowed to purchase insurance to cover the cost of paying for the service in a private clinic. Thus, one would have what is usually called a " two tier " system – similar to the two tier systems that exist in virtually all other industrialized countries (see Section 8.6 for further observations on a two tier system).
7.5.2 Patient’s Bill of Rights
A final option to address the problem of timely access would be to introduce a Patient’s Bill of Rights.
In recent years, the patient’s bill of rights or the patient’s charter, as it is known in some jurisdictions, has been introduced in response to increasing concerns about the quality and timeliness of health care. New Zealand, for example, has developed a Code of Health and Disability Services Consumers’ Rights. Australia also has a form of patient’s charter. As part of the agreements under which Australian Commonwealth government funds are transferred to State and Territorial governments for publicly funded hospital services, the latter have developed Public Patients’ Hospital Charters that outline a number of rights in relation to hospital services, including the right to:
- receive treatment on the basis of health needs, regardless of financial or health insurance status;
- have access to public hospital services regardless of place of residence in Australia;
- be treated with respect, compassion and consideration of privacy, taking into account the patient’s background, needs and wishes;
- participate fully in health care decisions including admission, discharge and arrangements for continuing care;
- have a clear explanation of proposed treatment including risks and alternatives, before agreeing to the treatment;
- give informed consent (except in exceptional circumstances) before a procedure is carried out, including consent to participation in undergraduate health professional teaching or medical research;
- withdraw consent or refuse further treatment;
- have access to personal medical records;
- confidentially of personal information, unless otherwise provided by law;
- receive interpreter services where there is difficulty communicating with staff;
- comment or complain about health care and to be advised of the procedure for expressing concerns.
In some American states, laws also provide for patients’ bills of rights in relation to the provision of health care services and cover many of these same issues.
In the United Kingdom, in an effort to reduce the number of complaints about long waiting periods for medical services, to alleviate concerns about the quality of care and the manner in which patients were being treated under the National Health Service (NHS), the government introduced the NHS Patient’s Charter in the early 1990s. Comprised of individual rights and service standards (known as expectations), the NHS Patient’s Charter dealt with access to health services and medical records, patient privacy, participation in medical research and the provision of information to patients.
The Charter standards (expectations) related to the manner in which services were provided and covered matters such as maximum waiting times for certain types of surgery, outpatient appointments, transfers to a hospital bed upon admission through an emergency department, ambulances and assessment upon arrival at an emergency department.
The NHS Patient’s Charter was criticized on a number of fronts, however, and a review in the late 1990s concluded that a national charter should be replaced by local charters developed in hospital trusts, primary care groups and other community health services dealing directly with patients. Although the notion of a new national charter was rejected in the review, the concept of minimum standards for waiting times to provide timely access to health care was not. Such standards (for example, two weeks for referral to a specialist for a first time referral for chest pain for suspected angina, no more than a 26 week wait for outpatient treatment) are now contained in a new document – an NHS Guide – that replaced the NHS Patient’s Charter.
Even though there are issues surrounding the effectiveness of patients’ charters, it is widely accepted that such bills of rights/charters promote the rights of health care consumers. It has been suggested that a patient’s bill of rights/charter that includes standards or entitlements for timely access to appropriate diagnosis, treatment and hospital care could introduce a measure of accountability to consumers into the Canadian health care system, and make sure that the focus for the delivery of health services was on the patient. Patients would know what they could expect from the system. Armed with this information, they can make health care decisions about what is acceptable or unacceptable in their particular situation.
Adopting a bill of rights/charter at the provincial level would allow the standards or entitlements to be adapted to provincial circumstances and might even inject a degree of competition into health care delivery. Regional health authorities could even adopt their own version of such standards. This being said, however, given the national nature of Canada’s health care system, many Canadians would not want to see wide discrepancies among provincial standards. It may therefore be appropriate for the federal and provincial/territorial governments to participate in the development of minimum standards for timely access to health care that would serve as the basis for provincial patients’ bills of rights/charters.
There still remains the issue of how to overcome concerns about the effectiveness of patients’ bills of rights/charters. Some type of monitoring and complaints intake and review process would be required.
As a further incentive to ensure that patients’ bills of rights/charters are adopted, the federal government could make federal transfer payments to provinces and territories conditional upon the creation of provincial/territorial patient’s bills of rights/charters along with appropriate monitoring and enforcement mechanisms.