Proceedings of the Standing Senate Committee on
Social Affairs, Science and Technology
Issue 13 - Evidence, May 4, 2000
OTTAWA, Thursday, May 4, 2000
The Standing Senate Committee on Social Affairs, Science and Technology met
this day at 11:04 a.m. to examine the state of the health care system in Canada.
Senator Michael Kirby (Chairman) in the Chair.
The Chairman: Before turning to our two witnesses, we have one short item to
Senator Fairbairn: There is a desire to get the subcommittee on veterans'
affairs up and running, and I should like to move that the committee be
established under the chairmanship of Senator Meighen.
The Chairman: Do you have a list of members?
Senator Fairbairn: This is a five-member committee. It will include Senator
Meighen, Senator Atkins, Senator Kirby, Senator Pépin and myself.
The Chairman: Is there a second for that motion?
Senator Gill: I second the motion.
The Chairman: Any comments? No? I declare the motion passed. We do not need a
motion in the Senate. Thank you.
We have a panel of two witnesses this morning. First is Mr. Tom Kent, whom we
describe on the material we have circulated to you as a former federal deputy
minister. In fact, if we had wanted to do a long history of Mr. Kent's
background we would have included everything from being the editor of the
Winnipeg Free Press to having been a senior policy advisor to Mr. Pearson. He
was kind enough when I took over the Institute for Research on Public Policy to
agree to be the first editor of policy options and, indeed, to have shared an
office and a secretary with me at Dalhousie in the late 1970s. Certainly, he is
an individual who has been involved in a great many things in Canada that have
been truly historical. He is here today because he was the senior policy person
at the time that medicare began.
The other person on our panel is Professor Michael Bliss, who is a professor
of history at the University of Toronto. Many of us have read many of the things
that Mr. Bliss has written and have heard him many times on radio and
television. May I say, as a free piece of advertising for him, if you have not
seen his lengthy commentary piece on the politics of new Canada and old Canada
that was in the paper two days ago, I would urge to you read it. It is a very
insightful analysis of the current political scene.
Essentially, senators, we have before us someone who has made history and
someone who has written about history. They will each begin with an opening
statement and then we will be free to ask them questions on any subject, but
particularly with a view to trying to understand the background of what the
expectations of government were when they started the national medicare system
back in the late 1960s.
Mr. Tom Kent: The subject, as I understood it, was how we came to have public
health care insurance, which I shall call medicare for the sake of brevity.
Certainly, some early history is now necessary for a complete study, which you
The number of Canadians who knew life before medicare will very soon be, if
it is not already, a minority. Of course, how life was before was the essential
reason medicare developed. As you all know, before that, treatment could be a
financial disaster even for well-to-do people, and many poorer people just did
not get care when it was needed. The aim of public policy was quite clearly and
simply to change that situation to make sure that people could get care when it
was needed without regard to other considerations.
I do not think there is very much for me or Mr. Bliss to say that the
committee does not already know. I will therefore try to be brief, which is
always difficult. I will also try to relate the history a little bit to the
I will make a point about perspective, first. There is a lot of discussion
about medicare as if it were sort of abnormal, new or strange still. In fact, of
course, compulsory health insurance began in Germany 117 years ago, and in a
good deal of Europe it was established before the First World War. It entered
the Canadian national political picture not all that much later, in 1919, when
the national Liberal convention resolved that the federal government should
institute, in conjunction with the provinces, an adequate system of insurance
against unemployment, sickness, dependence in old age, and other disabilities.
Naturally, that was to be done, insofar as was practicable, having regard to
Canada's financial position.
The period between the world wars was not conducive to social development
here or anywhere else. By 1945, as everyone knows, the determination to build
reformed societies was strong everywhere. Wartime experience and what government
can do had destroyed, for a generation, the essential proposition of
laissez-faire that private is good and public is bad. They destroyed it, I say,
for a generation. In Canada, that reformist mood was strong at the national
political level. I think it is fair to say that if Canada were, by some strange
misadventure, a unitary state, we would have had medicare very soon after 1945.
As you know, the federal government did, at that time, make extensive proposals,
but the provinces -- Ontario and Quebec in particular -- regarded them as
political aggression and would not have anything to do with them.
I would draw a slight parallel to the situation today. If the public will
could be directly expressed across Canada, the political pressure to fix the
present problems of medicare would be overwhelming. As it is, the federal and
provincial levels of government have different agendas. They blame each other
and they posture, and as a result we face the frequent Canadian problem of how
to achieve collaboration despite the politics of federalism.
After 1945, the federal government went slowly on social reforms but
certainly did not give up on them. There were a number of important steps. To
understand that, it is perhaps important to remember what only a minority of
people do. At that time, Canadian public attitudes were much closer to those in
Western Europe than they were perhaps to American or indeed British public
attitudes. In fact, I recall a conversation that took place early in the 1950s
with the then secretary of state for external affairs, Mr. Pearson. He said to
me that in international discussions he usually felt most at home with the
Scandinavians. I will not press that point too far as a policy determinant. I do
think it is an important strand in understanding the public attitudes of that
Partly because of those attitudes, medicare moved on, and of course economic
growth greatly increased the confidence of the country to do new things.
Saskatchewan bravely led the way. As a result, the views of the provinces
shifted and, indeed, some of the provinces helped to pressure the federal
cabinet into hospital insurance in 1957. That was a partial measure towards
medicare. Some people saw it as a way to head off the pressure for total
medicare. Others saw it as a step on the way.
I must say that as a step on the way, it proved to have very serious
disadvantages that are common in that kind of compromise. The treatment in
hospital was free, while seeing the doctor at home, or in an office, was still
expensive. Naturally, there was a considerable over-expansion of hospitals. We
have been very slow to deal with that situation. Indeed, 40 years later we are
still dealing with it, in some cases rather painfully and clumsily. I am afraid
that the clear lesson of that experience has not been very well learned.
I groan, frankly, when I hear talk, in federal circles in particular, of
separate financial support for home care or pharmacare or whatever is the hot
button. That would make a political splash, but that sort of division of the
total health care service would be disastrous. Health care of high quality can
be efficiently delivered according to need, but only if there is coordinated
management in the community of the comprehensive services -- the components of
the whole health care system. Separate bags of money are certainly not the way
to reform health care.
It has been said that in 1957 I suggested an alternative to hospital
insurance as the way to medicare. I think it would have been a better
compromise, but it was not taken seriously. I will not waste your time with it
It is important that the Liberal Party, having moved very shortly after 1957
into opposition, promptly did treat hospital insurance as a step to full
medicare. That was expressed somewhat vaguely as things tended to be in the
resolutions of the 1958 Liberal Party conference. However, the seed germinated
and in the January 1961 national policy rally of the Liberal Party,
comprehensive, universal health care was given pride of place in the policy
resolutions. I would say that that was the decisive point when the die was cast
for nation-wide medicare. The rally, I remind you, preceded the Saskatchewan
Medical Care Insurance Act that was greeted by a doctor's strike in July 1962. I
think it was also the resolution of the Liberal Party that stimulated the
appointment by the then government, in the summer of 1961, after the rally, of
the Hall commission, the Royal Commission on Health Services, which eventually
reported three years later.
I have made a set of convention resolutions that were decisive; of course, we
all know that often convention resolutions are not by any means binding on
political leaders. However, in this case, the commitment to health care was made
central to the formal policy statements of the signature of Mr. Pearson, which
were the Liberal Party's platform for 1962 and 1963. That still left a lot to be
done, of course. Mr. MacEachen struggled with a lot of opposition in order to
get the Medical Care Act passed in 1966 and even more opposition within his own
ranks to get it implemented in 1968. Still, I would say that from 1961 onwards,
it was reasonable to be confident that medicare would come; the questions were
when and in what form.
Of course, the answers turn essentially on the federal-provincial
relationship. Provincial programs, as health programs must be, can add to
national medicare, or whatever, only if they are the same in some of their main
features, and that will not happen without a federal contribution. In the case
of the Medicare Act, the amount was effectively fixed already by hospital
insurance. Essentially, 50 per cent of the costs were covered by the federal
government. There was no possibility of introducing the doctors' part of
medicare on any lesser formula.
However, how were 50 per cent of the costs reckoned? Hospital insurance had
been based on provinces signing agreements that required them to give quite
detailed undertakings and be involve in a good deal of federal vetting of what
they did. There were objections of principle to that as an intrusion of
jurisdiction and a distortion of provincial priorities. Certainly, also very
important to both provincial and federal governments, it was very tiresome to
administer. Resentment was raised to a fevered pitch, not by the hospital
insurance program but by another piece of legislation, the technical and
vocational training programs, which were a horror of detailed federal
regulations as a condition of extensive cost sharing.
The effect of that was that the whole report was not as helpful as we had
hoped it would be. As you know, it made the case for complete medicare with
enormous force and conviction, but it assumed that it could be done by
repetition of the same kind of cost sharing as had been used for hospital
insurance. That, of course, was impossible. In the federal proposal of 1965 to
the provinces there had to be found a different way of securing federal
participation in a scheme that, though it comprised ten provincial medicare
programs, would be consistent on a nationwide basis. That formula, as you all
know, was that the federal government would contribute 50 per cent to the cost
of medicare programs that conformed to certain basic principles --
comprehensive, universal, portable, and publicly administered. The provinces did
not have to sign agreements or submit to federal supervision. The provinces were
never entirely happy with the details of that scheme, in part for very good
reasons, in my view, but so far they have all gone along with what has been, up
to now, fairly consistent nationwide medicare.
However, the 1966 act proved to have flaws. It did not clearly rule out
charges and extra billing. That was corrected, of course, in the health act of
1984, which consolidated the hospital and medical provisions, defined the four
principles more clearly, and added a fifth, accessibility -- that is to say,
access not to be impeded by any charges.
I must comment on the issue of two-tier health care, which is now so
frequently raised and which of course the issue of extra billing involved. This
issue is sometimes a straw man. People often talk as if medicare meant that
people are prevented from buying their own health care. Of course that is
nonsense. People with money can and always will be able to buy what they want.
That is "separate" medicine; it is not two-tier medicine. Two-tier
would be quite different. It means that some facilities and personnel can
provide two levels of care: one without charge to the patient, and the other,
though also tax-financed probably in large part, with supplements and priorities
that are privately financed.
It is that second tier that would destroy the democratic principle in health
care. It would draw resources from tax-provided care, diminish its range and
quality and remove the basic objective that care be provided, as far as
possible, according to need and not for other considerations.
As yet, the main attack on medicare has not come from
"two-tierdom," from Mr. Klein or from anyone else. It has come over a
good many years from federal governments. Medicare was not built on principles
for the provinces alone. It was also built on federal principles, and the
crucial federal principle was its commitment to share in the costs of the
provinces. That commitment has been increasingly dishonoured ever since 1977,
and in 1995 it was completely tossed aside. In 1997, as you know, the form of
financing was switched in part to a transfer of taxes instead of a cash
transfer. That had its merits, but at the same time the opportunity was taken to
decouple the total from provincial health costs and relate it instead to the
GNP. Subsequently, by unilateral federal decisions, that relation was
increasingly diminished, and finally, with the CHST, the Canada Health and
Social Transfer, all vestige of a formula was removed. The transfer became an
arbitrary sum determined entirely according to federal financial and political
Political pressure has since led to some restoration of the original cuts,
but there has been no restoration of the principle of federal commitment. It is
said that more money will be available if and when the provinces agree to
improvements in medicare and so on. That is the technique of going nowhere by
insisting on putting the cart before the horse.
For better or worse, delivering health care is provincial business. There
will be collaboration and there can be national consistency if there is federal
financial help. However, what is significant is not so much the amount of that
help but that, if there is to be the planning of efficient, comprehensive health
care, it must be based on an assurance of financing. Part of that financing must
be federal if we are to have consistent national programs, and it is important
that that federal share be committed in relation to provincial costs.
I emphasize that it is not the exact amount of that transfer that is
important but rather that the amount be based on provincial costs, not on
federal whims or federal convenience. That basic decision to return to some
firmly assured type of federal contribution is absolutely essential to
maintaining and improving health care across this country. I would say that it
is even more important, if that is possible, for another reason: it is essential
to restore federal integrity to the intergovernmental collaboration that is
crucial to the working of our federalism. If that is done, if there is a clear
recommitment of firmly assured federal share of costs, then, in my view,
although the medicare problems will remain tough, they will be in no way
The Chairman: Thank you, Mr. Kent.
Please proceed, Professor Bliss.
Professor Michael Bliss, University of Toronto: Thank you very much for
inviting me to appear before your committee. I commend the committee for holding
these hearings. If this is not the top item on our national agenda it is very
close and it will not go away. However we differ, holding a serious discussion
in which there are no sacred cows about health care and its future is exactly
what we hope our legislators will do.
I was asked to appear on fairly short notice but I was able to prepare a
brief that is a revision of an historical presentation I made last year to an
OMA conference. You have copies of that. It covers some of the same ground that
Mr. Kent did. I must say that to talk about the history of health care in the
presence of Tom Kent is like speaking learnedly about floods while sitting next
I want to comment on only four aspects of my brief. The first and possibly
most important thing I have to say is about the context of our intense concern
for health and health insurance. Historically, over 100 years we have invested
so many resources in health care and we have won so many battles against
disease. The history of modern medicine is a history of great triumphs. We have
utterly destroyed some of the greatest and most devastating plagues known to
humankind. Smallpox, for example, does not exist. With the antibiotic revolution
of the 1940s, we were able to defeat TB and many other terrible diseases.
Medical science takes us from one victory to another. We are, by all accounts,
the healthiest peoples in history. Every generation is becoming healthier, and
that is wonderful progress.
The trouble is that, with all our progress, health care costs do not go down.
We find ourselves in the strange paradox that the healthier we become, the more
we spend on health. That is unusual when you make comparisons with other perils
that we manage to conquer over time. A hundred years ago I suppose the ordinary
family was terrified of two things: ill health and fire -- being burned out. In
the last hundred years, for the most part the fear of fire has diminished in our
society as we have developed fireproofing techniques, and the cost of fire
insurance has shrunk to a very minor part of most of our budgets. The cost of
health care, however, does not shrink. It just keeps growing. This realization
is absolutely essential as we look to the future.
There are no savings, long-term, in health care. You cannot do it. The reason
is the problem of human mortality. All your victories against ill health are
simply temporary victories or postponements, because we have not changed human
mortality by one iota. It is 100 per cent, give or take a little bit depending
on what you think of Elvis. It will not change. In effect, our problems are
increasing because of our success. I refer to the problem of health care as
almost perfectly analogous to the problem of keeping a snowman from melting. You
get the easy victories in January and February, but then you push the problem
into March and April. The cost becomes higher and higher. The more success you
have, the more problems you have. In the 21st century, we are facing the problem
of an aging population that is aging because we have been so successful.
However, it is building up more and more health care costs. That is a trap in
which we find ourselves and there is absolutely no way out of it.
Some of the ethicists on the frontiers talk about euthanasia, but I find that
profoundly dissatisfying. That is the context within which all of our talk about
health insurance and its future must be seen. In the past, it was not seen
terribly clearly. In Mr. Kent's days, when they did the projections about health
care costs, they did not see, 30 years on, that we would have a
$180-billion-a-year industry. Only nowadays are we doing the projections on into
2020. The people particularly in the provincial ministries are saying that in
another 20 years, with the projected increases in health care costs, our
provincial governments will become gigantic HMOs that will happen to have a few
other departments that go along with them. This is an enormous problem.
Let me turn now to the history here. Mr. Kent has given you the background,
the deep interest in health insurance, which goes back to the 19th century. In
Canada, there was certainly a long run up to medicare. I point out in my brief
that concern for health insurance existed before there was a CCF or NDP. It was
the Liberal Party that first committed to national health insurance in 1919. We
have a very odd and checkered background. The first doctors' strike in Canada
was in Winnipeg, in 1933, as doctors went on strike to try to force the state to
pay them for looking after the indigent because they were doing so much health
care for free. In the early days, there was a deep physician interest in health
insurance, because for many of them it would mean that they would be paid.
I endorse Mr. Kent's view that, in the years after World War II, Canadians
thought that the public policy issue of health insurance probably could be dealt
with effectively only by the state. There was not a golden age of private health
insurance in Canada. The issue is partly analogous to the pension issue, when it
was seen that there was a serious problem with low-income people saving for
their retirement and only the state had the resources to provide pension
entitlements to the aged. Similarly, although private health insurance developed
rapidly in the 1950s and 1960s, the private industry began running into all the
problems that still plague private health insurance in the United States. There
is a bias for private insurers to pick healthy people. There is a problem of
whether you will have first dollar coverage or comprehensive coverage, and so
While some politicians in the 1960s -- for example, John Robarts in Ontario
-- did think that it was possible to work out a private/public mix in health
insurance, a large number of people bought into the view that probably the whole
problem had to be handled by turning it over to the state where the state
becomes the insurer of everyone. I defer to Mr. Kent's account of how they
produced medicare in 1968.
In my brief, I quote from the Hall commission, which said, in 1964, that it
was time that Canada moved to a situation in which the fruits of health science
are available to Canadians without hindrance. I think that is a nice concept.
In the 1960s, removing the hindrance meant removing the financial barriers.
That was a great breakthrough in social policy. Many of us remember the kind of
golden age of Canadian health care that existed from about 1968 to the early
1970s, when it was seen to be a free good to all of us. We suddenly went into
our doctors' offices and there were no more bills. Patients were wonderfully
happy and physicians were wonderfully happy because they were being paid 100
cents on the dollar. It looked as though all the health care you wanted was
available without any cost.
The most important part of the story is the 1970s, when, very quickly, the
public insurers realized they had a huge problem because they had given blank
cheques to Canadians and their health care providers. In the 1970s, the problem
of paying for health insurance quickly became the most serious thing that
ministries of health, both provincial and federal, had to face. Immediately, the
question of how to contain health care costs came to the fore, and a whole cadre
of experts and health care economists grew up to try to give advice to state
insurers on how you could stop the escalation of costs. We remember the 1970s of
stagflation, in which the overall costs of Canadian social programs began to be
a terrible burden on governments. The Trudeau government felt the full force of
it. It responded in many ways and provincial governments responded in many ways,
but they began to try to squeeze the providers of health care, the hospital
system and the physicians in order to try to hold down costs.
The providers responded the way anyone else does when they are squeezed: They
began to look for alternatives. The medicare system of 1968 was a pluralist
system that allowed for the freedom of providers to practise outside the system.
You could opt out; you could extra bill. It was not surprising, then, in the
1970s, that, as the provincial governments began to squeeze the medicare fee
schedule, more and more practitioners opted out. By the end of the 1970s and
early 1980s, a kind of re-privatization occurred in health care. Many people saw
the public system as a penny-pinching system and they wanted to work in the
private sector where there was more freedom, more protection of incomes, and
more possibilities for innovation.
By the early 1980s, we were seeing across the country serious problems in our
medicare system. So many specialists had opted out that, in large parts of the
country, it was impossible to have access to certain specialists under medicare.
That was particularly true in obstetrics and gynaecology. The issue of
accessibility became very important. The Trudeau government finally decided that
the only way to protect the public health care system was to close off the
That was the essential decision that led to the Canada Health Act. There are
various ways of phrasing this. The exact language used is fraught with
connotations. The state set out to protect the accessibility of the system by,
in effect, outlawing private health care in essential medical and hospital
services. To put it another way, the Canada Health Act was a legislative wall
that created a state monopoly in medicare. The crumbling of the medicare system
appeared to be inevitable without that kind of legislative bulwark.
We have had 16 years of experience since then. What has happened? The
inexorable mounting of health care costs simply continues. The pressure on the
state system has continued. The protection provided by the Canada Health Act
allowed cost controls to be brought into the state system without the kind of
fear seen in the 1970s because the providers could not go anywhere else.
We have had more experiments with cost control, the most significant of which
has been the belief by some health care economists that you could reduce demand
for health care by limiting the supply of physicians and nurses and other health
care providers. You will undoubtedly hear the view that health care is a strange
industry in which suppliers create demand. If the system graduates a new doctor,
he or she will generate patients. That led to the decision in the early 1990s to
limit the supply of physicians. That decision, among others, will lead to huge
problems in the future.
History does change. In the 1960s, we brought in private health care in an
era when the state was seen as the collective instrument for solving our major
social problems. We had great faith in the capacity of government in the 1960s.
You will remember that we brought in the Canada Pension Plan at about the same
time. The provinces were interested in automobile insurance. The state was
moving to get user fees out of university education. We talked about the next
step as the guaranteed annual income. That was an era of enormous optimism.
I suggest that, in the last 30 years, we have lost some of our faith in the
capacity of the state to manage social issues, to manage problems, to manage
enterprises, better than the private sector. In many areas of our social policy,
we have agreed that the private sector has flexibility and nimbleness, and that
market forces give signals and allocate resources more effectively than state
We have realized -- and this is very important -- that health care is, above
all, about individuals taking responsibility for their own health. They cannot
rely on their physicians to look after them. They cannot rely on anyone else.
Fundamentally, health care is about individuals making decisions about their
lives and their lifestyles.
At the end of the century we must face the question of whether we have taken
the state approach to health insurance about as far as it can go. In the face of
the ongoing and inexorable pressures, must we finally admit that our state
monopoly and the problems entailed have become a hindrance to giving Canadians
the full benefits of health science?
You have been getting political flak about the health care system in the last
few years because Canadian citizens have decided that, in fact, it is the public
health care system that is beginning to be a hindrance. When they go to
hospitals or ER wards or to look for specialists, someone is getting in their
way. That "someone" is increasingly seen to be the provincial
ministries, the planners and the politicians who have been trying to put the
brakes on spending and who will not allow a private alternative.
To fulfil the promises of the Hall Commission in the 1960s to minimize
hindrances to health care, we must ask whether it is time to allow the entries
into the private sector that will keep the system expanding and keep us doing
the best we can in what is ultimately a Sisyphean task.
The Chairman: I want to thank the two of you for the both provocative and
Before turning to other senators, may I ask the two of you to respond to the
last point raised by Professor Bliss? Tom Kent raised it in a different context
when he made a distinction between what he called two-tier medical care versus
separate medical care.
In light of the state monopoly that prevents opting out, essentially, is it
possible to go from our present system to one that ensures accessibility
regardless of income, as per the Canada Health Act objective, while at the same
time increasing the flexibility described by Professor Bliss, and which Mr. Kent
suggested might be possible?
The minute the question is raised about whether Canada can have a mixed
public-private system, most witnesses will say that within a two-tiered system
all the good doctors would go to the privately funded sector. Therefore, the
quality of care would become a function of income. I am simplifying the
argument, but that is what the argument is.
I wonder, Mr. Kent, if you wish to comment. First, do you think we need to go
from the state monopoly to a more mixed system? If so, how do we get there while
meeting the accessibility objectives of the Canada Health Act?
Mr. Kent: First of all, there are two distinct issues. In my view there can
be no question of legislating out of existence a private sector, if people want
to pay for the whole cost of health care for themselves and if they can find
physicians and surgeons and so on willing to provide that health care at a cost
that these, obviously by definition, relatively well-to-do people are prepared
to pay. It is not a question of whether or not there should be a private sector.
It is a question of whether it is possible to mix in operation the public health
care with a system whereby people can buy extra services on top of what they get
tax-financed, and, in effect, provided within the ambit of the public system.
The answer to that, surely, is not, if you want, equal access unrelated to
whether you have money in your pocket or not.
To look at the history, when the Liberal rally, in 1961, so firmly committed
the Liberal Party to health care, it was with a provision. It was that the costs
that an individual thereby incurred through the tax system, would indeed become
a charge through the tax system directly to the individual. The value of the
services that you obtained from public health insurance would become a part of
your statement for income tax purposes, within limits, and so on, so that it
would never be overwhelming in any one year for any individual or family, and it
would mean that people who paid little or no tax would pay nothing for their
health care, but people who had relatively large incomes, had a significant tax,
would pay something.
That, if you like, is a mixing of private and public financing, which
personally I very strongly supported at the time. It was never carried through.
In other words, what I am saying is that I agree that there is not a rigid line
between a complete state monopoly, entirely state financed and entirely tax
financed, and, on the other hand, a private health insurance system.
The public health system can be made to work in conjunction with some
different financial incentives, some user charges, provided that they are
related to income, are not absolute amounts, and so on. Given the reality of the
problems that Mr. Bliss spoke about, that, arguably, health care by its nature
is likely to cost more and more, just because of its success, certainly we must
be flexible in devising ways of dealing with that situation.
The Ontario government has just taken one very sensible step in this
direction, one that I have favoured for a long time, which is that we begin at
least to qualify the fee-for-service principle by providing an extra incentive
for doctors to practice in groups, which would do an enormous amount to take the
strain off the hospital emergency system.
There is scope for a great deal of flexibility. I would repeat, though, that
I do not think that you will get successful answers to that unless the federal
government's recommitment to a share in the costs of this increasingly expensive
system is reaffirmed.
Mr. Bliss: When you turn to the situation in other countries, you will find
that most other countries in the world manage to have private and public systems
coexisting, and you will soon quickly get beyond the bogeyman that the only
alternative for Canada is the American system.
When you think about accessibility, and private and public, I urge you to
think about what we do in public education. We have a wonderfully accessible
public education system at the elementary and secondary levels. It is accessible
to virtually all Canadians in every part of the country. It coexists in
virtually every province with private options. It is my view that that is an
extremely healthy coexistence because of the competition for excellence between
private and public. If any province tried to outlaw private school systems,
there would be a huge outcry of people complaining about their lack of freedom,
but we have done this with health care.
It is fascinating that you ask the question of whether, if we have a private
health care alternative, it will siphon off all the best personnel. When we
write the history of health insurance in Canada, we will talk about the cadre of
people who grew up in the 30 years after 1968 to defend the status quo, and the
very large number of experts who began to have a vested interest in socialized
medicine in Canada, and the skills with which they tried to argue against any
change; and we will notice, for example, that whenever anybody suggested that
privatizing some services would be useful, the health insurance establishment
said, "This shouldn't be done, because private sector health care is far
less efficient than public sector health care, because it has a profit motive,
and so the public sector will be more efficient and more effective in every
On the other hand, when you propose allowing the private sector, the very
same people reverse their argument and say we cannot allow the private sector
because the private sector will become so effective and so efficient that the
public sector will be starved. In other words, when it is useful for
argumentative purposes, they say that in any competition the public sector would
win, but then they reverse themselves and say the public sector cannot possibly
compete with the private sector.
Of course, the gem of truth in what they say is that we are still in the
situation we were in back in 1983 or 1984, where, if you threw it open right
now, a large number of medical personnel would move into the private sector to
increase their incomes. The reason is that we have huge shortages of supply,
because we have made absolutely the wrong planning decisions about health care
We bought a bill of goods from planners who thought they could read the
market and the future and they have made ghastly mistakes in cutting back on the
numbers of physicians and nurses -- there is another problem with nurses -- that
will have enormous implications in the next few years. If we think things are
bad now, they will get worse because of our shortages of supply.
I hesitate to use the words "flood the market," but I do believe
that the single most urgent need in the country is to produce more health care
personnel to meet the demands of Canadians. If that means spending more money,
spending more of our GNP on health care, that is fine. I have no problem with
We have made public and private systems work within education, partly because
there are many teachers. They balance out. All the good teachers do not go into
the private system. The public system has wonderful education. My children all
benefited from the public system and got it for free. Why pay those extra fees
if the public system works? The challenge in health care is to make the public
system as good as any private system.
Senator Fairbairn: May I say that it is a treat to have both of you here. At
this point in our hearings, not only are you giving us a much appreciated
history lesson, but you are also getting right at some of the issues that
clutter our minds going into this.
Mr. Kent said something to the effect that, if the public had its way, we
would probably have changes more easily; we are now clearly in the grip, and
coming from Alberta I feel in the grip, of the politics of federalism, which are
very much involved in the situation in Alberta.
In this country we politicians have simplified our system when we deal with
the public. We talk about medicare; we talk about the five principles and that
we will live and die by them; but, if you are talking in terms of flexibility,
that narrows it somewhat when you consider how much change has taken place, as
you have said, Mr. Bliss, through drugs, through science, and everything else.
We are no longer in quite as narrow a situation as we were back in the 1950s and
1960s, when this all began.
We often use the term "health care" rather than
"medicare," and that brings me to an element related to aging. I refer
to the demographics of our aging society, which I do not believe governments
anywhere in this country have done anything to plan for in the last many years,
when it has been very obvious. In respect of the health system, no longer do we
just go to the doctor, get diagnosed, go to the hospital, get dealt with and
then that is it. It is not that way any more. Now you go home. That makes that
part of the health care system for Canadians absolutely fundamental and
Mr. Kent, you said that you thought that it would be a disaster to split off
home care, and have it settled with separate bags of money on its own. I
personally would agree with that. The problem is that along the way we have
failed, I think, to put in the connecting links that make home care part of the
overall health care dimension.
I wonder if the two of you could comment on that, because it is something
that we have already been hearing from witnesses, that that end piece, so to
speak, is very scary. Perhaps that is one of the reasons why the public,
although they may not want state monopoly on all of this, are often not looking
at their provincial governments, when they become afraid, but are looking at the
federal government for reassurance and some vision on this. I would like to have
your comments on that.
Mr. Kent: The only way to deliver health care both fairly, with access and so
on, and efficiently is to organize it at a community level, with a coordinating
responsibility in a health organization area, which is responsible for the
allocation of resources to the various forms of services, including home care,
I agree that we have under-provided ourselves with doctors and so on, but
what we have above all under-provided ourselves with are nurses. It is the role
of the nurse in community care that probably is really the worst feature of our
health system, at the moment. It is also important that the medical profession,
in the narrow sense, play a major role in that community arrangement, and that
services be available on a community basis 24 hours a day, seven days a week, at
the home and office level, on the telephone, and, above all, now. People should
not need to go to the emergency ward of a hospital whenever they think there is
something wrong with them.
The thing must work as a whole if it is to be efficient. Looking after health
is not just health care. It is the prevention of foolish activities, of ill
health, as far as one can, and influence against them. It is essential, I say
again, that that be seen as a whole and not as some separate services for home
came or this, that and the other. We made that mistake in the hospitals. We made
it for understandable reasons, but it was a great mistake.
I should like to talk, if the opportunity arises, a little bit about the
relationship of this to the public-private mix, but that is separate from your
direct question, and I hope I have responded to that.
The Chairman: Go ahead and make your comment, because I was going to ask you
a question about the public-private mix in any event. Go ahead, and then we will
turn to Mr. Bliss.
Mr. Kent: I would first say to Mr. Bliss that certainly there is a
public-private mix in education, but if you choose to send your sons to Upper
Canada College, you do not get any tax help for that.
Mr. Bliss: Yes.
Mr. Kent: I do not know how anyone could oppose separate system in that
sense. In our sort of society, nobody is going to say that, so long as some
people are very much better off than others, then those who are very much better
off should not be free to buy their own health care, their own education for
their kids, or whatever they want. That is not the issue.
The issue is whether, given that we have, have chosen to have, and are going
to maintain in some form, a public system essentially, then that public system
in itself must be entirely tax financed -- not financed by a mixture of tax
financing with add-ons that you can buy as an individual if you can afford them.
If you do that, then you will bleed the provision for people who cannot afford
the add-ons, because there is just no avoiding the fact that, if you have the
two-tier system, then certainly the resources of doctors and so on are going to
be bled off from the public system. It is just absolutely unavoidable. If you
give extra care to some people for a fee, then there are going to be fewer
doctors and fewer nurses working for the people who cannot afford those extra
If we had lots of doctors and lots of nurses, obviously this would not be a
serious problem. However, we do not, and we are not going to be able to afford
them. Certainly we will need to continue to spend somewhat more of our GNP on
health, probably, but we want to limit the extent to which that happens.
I would say again that the type of user fee related to income through the tax
system that many of us suggested four years or something ago, is a desirable
feature of the system. It is a pity that it was never incorporated. We certainly
provided that the assurance of federal support is there, and it ought to be
possible to agree on a more flexible, in some respects, and a narrower range of
services to be included in the definition of "comprehensive care."
Certainly, there have been things done within the tax finance system that ought
never to have been done -- cosmetic surgery and so on.
There is ample room for improving a public system without in any way
jeopardizing the existence of a private system, if people want to have it and
can afford to have it. Some people will work in such a system, but you cannot
mix the public system with user charges made as a condition of service, as
distinct from some recovery through the tax system, which is a very different
way of doing things.
Mr. Bliss: In respect of the private system, if some of us wanted to found
the health care equivalent of an Upper Canada College, such as a private
hospital that offered emergency services, and we wanted to be free to charge
anything we liked, in most parts of Canada that would be illegal because of the
constraints imposed on the provinces by the Canada Health Act. We, in Canada in
1984, outlawed health care acts between consenting adults. I think it was a
remarkable limitation on the freedom of our people and only the doctors realized
what was happening, but they were so discredited for so many other reasons that
nobody paid them any attention.
Here is where there may be a fundamental disagreement with Mr. Kent. When I
listen to him, I detect the "planner's" ambivalence -- the same
ambivalence that the current government has displayed: "There is a problem
with the system. It is not working properly. How do we fix it?" There is a
temptation, when a planner is faced with a problem, to suggest that the answer
is: "We have to extend our control." Therefore, in health care, since
the system is in trouble, perhaps we should expand health care into home care,
and into pharmacare, because in that way we could have more and more control
over the whole system. It is the same problem that the price controllers ran
into during the war and again in the 1970s -- that you just have to keep
expanding your reach because otherwise you get nibbled away.
If we have learned anything about socialist economics, socialized planning,
and planning in general in the 20th century, it is that this is a mug's game. It
does not work. In Canada, some people are saying, "Well, we should take
over pharmacare and put this all on a managed, administered basis." In
effect, what they are suggesting is that it be turned over to the same people
who are currently failing to plan the current system, on the assumption that
somehow they will get it right the next time. I say that, if we have learned
anything in the 20th century about managing economies, it is that we have to go
the other direction and let market forces operate as best we can.
It is scary, yes, it is scary. The problem is that old age and death are
scary. We have ourselves impaled on the fear dilemma. Whenever we talk about
trying to change the way we organize and fund our system, many of our citizens,
and you can perfectly understand it, get worried that they will not be able to
get health care.
It is easy to understand the exasperation of Mr. Klein because of the
protests that he has faced. He feels that he is trying to improve things, but
people are frightened. That is a very powerful problem and there are no easy
answers to it.
Senator Carstairs: Because people are watching on television, I think it is
important that we make sure that there are some clear facts here. While there
isn't any public funding to attend Upper Canada College, there is public funding
to attend St. John's Ravenscourt School in Winnipeg; 50 cent dollars is what you
get in that province.
Mr. Bliss: They pay to go where?
Senator Carstairs: St. John's Ravenscourt in Winnipeg, which is the
equivalent private school, I would suggest, to Upper Canada College. There is,
then, that mix out there within the public-private school system. However, I
would carry that analogy a little further, because we have a growing private
school system in Canada, and it is growing faster than the public school system,
I would suggest, because people feel frustrated with the public system. People
fell frustrated with the public system in Manitoba because the fastest growing
expenditure in the province in education is not for textbooks, but is for
The second highest expenditure growth, in terms of percentage, is for special
needs students. Those students used to be paid for out of the social service
budget, but now they are being paid for out of the education budget. We have an
increasing number of youngsters who have attention deficit disorder and are now
in the public school system. Parents are saying, "I don't want my child in
that class, so I am going to move into the private school system."
With respect to health care, what concerns me, therefore, is that, if there
is an attempt to mix the two health care systems, people will be driven into the
private system. I would suggest that that will lend a deteriorating quality to
the public system.
My understanding of the Canada Health Act is that there could be private
hospitals in Canada, provided that they did not receive public monies and
provided that the doctors working in those private facilities did not take any
public patients; if they wanted to opt out and not accept any government money
whatsoever, they could, in fact, continue to function, even under the Canada
Mr. Bliss: Perhaps that is so in Manitoba. My understanding of Ontario and
other provinces is that their fees would be fixed at the same levels as the
public system compensates for. They could not charge above a certain level.
Mr. Kent: I will comment on that, if I may. We must be clear that the
ultimate responsibility for the education system and the health system lies with
the individual province. Many provinces do, in fact, effectively prohibit a
separate, private health system, just as those provinces also ensure that the
private education system is entirely private, and does not get public subsidies,
which is the situation in Ontario.
The situation in this respect is not, as I understand it, legally the
consequence of the Canada Health Act. There is nothing in the Canada Health Act
that in itself prohibits separate, private medicine. What is prohibited, and in
my view certainly should remain prohibited, is the mixing of the two. A mixing
of the two would be disastrous for the accessibility, the quality, and the
efficiency of the public health system.
The Chairman: Why? You make a categorical statement that the mixing of the
two would be disastrous for the public sector. What is the evidence for that
statement? What logic leads you to that conclusion?
Mr. Kent: We are clear that we are talking about two-tier medicine, as I
define it: that is to say, there is an extra charge that is paid directly to the
physician, or whatever, for services additional to those non-insured services,
although the insured services remain entirely tax financed.
Let's take a concrete example: a patient can have a cataract operation, a
lens replacement, within the public system entirely tax financed. However, in
the private eye clinics that have developed, you can get what is alleged to be a
better quality lens, provided you pay $200, $300 or $400 for it. If we make it
financially attractive to the doctor who is practising within the public system
to provide additional services for an extra fee, obviously he will pay more
attention to those opportunities than he would to the work within the public
We all know that most doctors work very hard. We also know that there are
lazy doctors who do very well without working very hard within the public
system. If there is an incentive and we are able to combine the two, then
clearly the quality of effort within the public system will deteriorate. That is
a dogmatic statement, but it is also an obvious one. How can one not be dogmatic
on that point?
Mr. Bliss: There are other ways of establishing the mix. The University of
Toronto is a mixed public-private institution that takes in money both ways.
However, I can see some of Mr. Kent's arguments.
The education model and what Senator Carstairs said is interesting. In most
provinces, those systems have managed to coexist for 100 years, so that if we
have problems now, we may find ways to work them out. People in education are
now saying that perhaps the way to resolve the public-private split is to go to
vouchers in which the state, in effect, gives people money and they decide which
schools they favour. Of course, the Americans are experimenting with this in a
The health care equivalent of vouchers appears to be the medical savings
accounts that people are talking about. On this very evening, David Gratzer will
be getting the Donner prize for public policy for his book Code Blue: Reviving
Canada's Health Care System, which advocates medical savings accounts. I read it
on the way up here this morning. It is an interesting and fascinating idea. I
hope your committee will study the new ideas in the book because they may help
us through our dilemmas.
Senator Carstairs: Interestingly enough, he is a graduate of a private
school, St. John's-Ravenscourt. Perhaps that has something to do with his
overall view of how society should work.
Mr. Bliss: I just assumed creative ideas come out of Manitoba.
Senator Carstairs: My question to you, Mr. Bliss, has mainly to do with your
statement, which I think is absolutely correct, that some planner made a
decision that we had too many physicians and, therefore, we should cut the
number of doctors being trained in our medical schools. When I went back and
reviewed the so-called planning argument, it was that at the same time we would
change the way in which health care was delivered. We would introduce a system
of nurse practitioners who could then pick up those things that doctors do that
quite frankly they do not need to do. For example, they do not need to give
inoculations, nor do they need to do 90 per cent of the blood pressure readings,
and so on.
Why is it that we look at a planning document such as that and leap into the
simple solution offered, but we never seem to look at all of the other
recommendations the planner has made in order to make that simple solution work?
Mr. Bliss: Again, that is the planner saying, "You have to buy the whole
package. If one chink in it goes, then, sorry, the whole thing is done and it is
not my fault."
When you talk about nurse practitioners, you raise a whole raft of other
issues that are nicely summarized in your assumption that the planners could
tell us what we needed. We do not need these things. This is the 21st century.
Who will tell me what my health care needs are? Who will tell my wife and my
children? Surely, in one of the wealthiest societies the world has ever known,
for a bunch of planners to say that they will give us medical personnel who are
not as well trained -- that is, nurse practitioners -- because they do not think
we have the needs that we think we do is a recipe for impossibility. People in a
modern society simply will not accept that. Again, that is part of the notion
that planners can tell us our health care needs and tell us that we are
overusing the system.
Anyone who knows the dynamics of illness and the relationship between
patients and physicians knows that the system is so much more complicated than
the health care economists can begin to understand. We have made huge mistakes
and have been misled by the people who say, "You do not need these
things." Historically, it is particularly ironic because one of the
rationales for the introduction of first-dollar health insurance was to get
people to go to their physicians more often. The evidence was that when we put
financial barriers in the way, people would not go when they really needed to
go. As soon as those barriers were removed and the people started going to the
doctor, then there were complaints that they were going when they did not need
to go. That is the problem. The planner's world rests on all sorts of
assumptions. If one turns out to be wrong, then we have got ourselves into a
Senator Gill: Sixty years ago, universality became necessary for some
systems. A little later, it was decided to provide amounts for old-age security,
and a great deal has been done in this regard.
It seems to me that there was a lack of information, that people did not know
that some services existed. We have established systems, structures and
administrations. Over time, a number of steps between the patient and the care
required increased. Today, people have to go through a number of steps before
they get a service.
Given this, why not proceed as is being done in education, where everything
is now accessible? If people need help, they get help through the tax system or
There are no longer any limits on the health care system, and we have to find
some solutions. The solutions should enable people to make decisions about their
own health care and get financial assistance if they need it.
The health care system should be more tailored to individual needs. We should
try to find ways of giving people access to health care services in somewhat the
same way as is done in education.
Mr. Bliss: I agree with everything you have just said, senator. Yes, we must
individualize the system. The model of education is an interesting one, as is
the model of other countries that have experimented with a public-private mix.
We must get away from our obsession with the United States, where they have a
set of particular problems. We do not need to go down the American route. There
are other ways we can go. I do not know whether Scandinavia is still the way to
go, or whether we should look to our friends in New Zealand, Australia, France
or Germany. Unfortunately, Britain is a poorer society than Canada, and their
public-private balance still does not seem to work properly.
Mr. Kent: Most people do not make market decisions, and never have made
market decisions about health care. They do not know enough about what it is
that they are buying. They are dependent on the view of physicians and health
care advisers. If they had to pay those advisers, they did not go to them if
they could not afford it. If they do not have to pay, they do go.
The issue is not that I or Michael Bliss or anybody is in a position of
choosing what he should have as a health care, making his own decisions about
health care. People need a health care system of some kind to go to. The issue
is whether or not the access to that system, whether you call it a market system
or a public system, is provided on some organized basis.
In the private health systems, nothing is more organized than the managed
care systems in the United States. The issue, as I see it, is simply how the
access to the system is determined. Obviously, the nature of the system is
controlled, to a very considerable degree, by how one arrives at the access.
The idea that some set of planners or other group is going to make all the
right decisions is nonsense. All the right decisions and detail can only be made
by the medical profession, taking that in the broad sense: the medical
professions. That is why it is so important that an efficient service be one
that is delivered as a whole, whether it is hospital, doctor's office, home
care, whatever, by the organized medical professions in a community.
Obviously, that can be done only within a clearly defined degree of public
financing. That in turn certainly limits the range of the services that can be
provided within the system. There are other separate services that some people
may or may not be able to buy for themselves. Fine.
However, the basic system is either public or private. It is a system in any
event, and if there is to be fair access to it then it is going to be public.
Senator Gill: I agree that we should continue to use specialists to get
medical information of all types. Moreover, access to this ever-growing body of
information has been greatly improved since medicare came into being.
Thirty or more years ago, we did not know about the beneficial or harmful
effects of the food we ate. Now there is information on cans about the
nutritional value of the ingredients they contain. In addition, I used to think
that sugar was good, because it produced energy, but I know today that it can be
harmful, because sugar is converted into fat.
Mr. Kent: Certainly, it is one of the positive developments. Much more is now
known about the ways to be healthy. I see my 50-year-old sons running in
marathons and things, which nobody at the age of 50 would have thought of doing
in my day. They are a lot healthier than I was at that time.
The quality of the information is better. To the extent that the information
has improved, then we are less dependent than we were on the advice of doctors,
or whatever. However, that does not alter the fact that when it comes to what we
do about our hearts or eyes or whatever, we need medical attention. The issue is
the terms on which the public as a whole will have access to that medical
attention, using again "medical" in the broad sense.
The Chairman: I am going to put three questions on the table, and you can
both respond to them. Two of them are historical to assist us in understanding
how we got to where we are.
As I listened to Professor Bliss describe some of the problems, it struck me
that a huge piece of the problem was the decision made in the mid-1960s to move
to fee for service rather than salary. It was fee for service that originally
drove people to opt out. It was fee for service that then ultimately led to the
Canada Health Act.
The first question would be whether you could enlighten us on why we ended up
at fee for service, which it seems to me if we were starting out today is not
the way we would go?
The second historical question, trying to understand the intent of the people
who started medicare, has to do with what I would call the quality question. If
ones says that we would provide what the Canada Health Act would call all
medically necessary services, there are a variety of different ways you could do
that. For instance, a gall bladder operation can be done by cutting the body
open or there can be a laparoscopy. Artificial hips can be aluminium or ceramic,
which costs considerably more money. Mr. Kent was talking about cataract
operations; well, they can be done with a laser or with the old-fashioned
Was the intent of the founders of medicare to provide medical service that
would solve a problem, or was it to provide medical service at the leading edge
of technology? In other words, there is a decision between making medical
services free versus making the highest possible quality of medical services
My third question goes back to some comments Mr. Kent made. I, too, have been
a very big fan of the notion of raising additional money for health care by
effectively having the government issue a T4 slip based on the dollar value of
medical services consumed by a family or by the individual taxpayer, provided,
of course, it was capped so that you avoided the disaster scenario. That is a
very progressive way of paying for it.
That raises money but does not deal with the fundamental problem, which is
supply, that is to say, the availability of doctors. None of that is affected by
effectively changing the tax system to make it a more equitable way, or a more
progressive way, of raising funds for medical care.
I understand why Mr. Kent favours that system. I do also, but it is a taxing
system, and does not fundamentally deal with the supply question. Would you
comment on whether I am I correct that that is simply a funding mechanism and
does not deal with any of the other problems?
Mr. Kent, would you begin by responding to the first two questions, because
you were involved in the fee for service decision, and the question of what
relevant quality people thought they were providing at the time medicare was
Mr. Kent: The position to accept fee for service was seen at the time, I
think it is fair to say, as a matter of absolute necessity. A doctors' strike in
Saskatchewan influenced this. There seemed to be no possibility of a smooth
transition to publicly financed, tax financed health care unless it was on a fee
for service basis.
The Chairman: I want to be sure that I understand. Was it an absolute
necessity because it was the only practical way to solve the problem or because
it was the best public policy?
Mr. Kent: Clearly, it was not the best public policy.
The Chairman: Did people understand that, even then?
Mr. Kent: Certainly. In fact, early on, before any decisions had been made,
in about 1959 or 1960, I personally could not understand why priests,
professors, and teachers could be paid by salary but it was somehow impossible
to imagine that doctors should be paid by salary. Nonetheless, that was
unquestionably the entrenched attitude of the profession, and to propose
medicare on any other basis would, at the time, have been impossible. I think
that many of us hoped that there would be some transition to a more salaried
service. That has happened to some extent.
The Chairman: The current Ontario experiments are, in fact, designed to try
to move more people in that direction.
Mr. Kent: That is correct, and I think it will continue. I wrote a memorandum
about that, a short while ago, urging that that was the way to move away from
fee for service and, in time, towards a more salaried service. I do not think
there was any question that it was the right decision at the time. This has
occurred, not primarily because of the sins of the planners, but because of the
reluctance of politicians to come to grips with problems before they need to. We
have been much slower than we might have been to make the gradual transition
from fee for service to a more civilized system.
In respect of the quality issue, I have to say that I do not think the issue
was faced as sharply by any of us as, in retrospect, it might have been. It must
be remembered that nobody, at that stage, anticipated the decline in fertility
of the Canadian people. That is the real point about the aging population. It is
not primarily that people are living longer, though they are to some extent;
rather, it is, above all, that fewer people are being born. That has thrown out
many of the calculations of what lay in the future, in a way that I do not think
either the market system or the public system clearly anticipated in time.
The assumption was that, if public health insurance was established, then
that would, indeed, encourage, rather than discourage, progress in the
development of better health care, and that it would remain true, as the whole
intent of the system was, that, as the quality of health care improved, the
extra quality and the more sophisticated techniques, and so on, should be
available primarily on the basis of need. If somebody had a poor heart, so to
speak, early in life, then it was terribly important that the best possible
operation be performed for that person early in life. It was perhaps less
important that those sophisticated techniques be used in the cases where the
chances of long-term recovery were less good. There was obviously no
anticipation that the very best of health care could always be provided in every
case of every possible need.
The Chairman: Would you agree that that is the current public expectation?
Mr. Kent: No. We can, perhaps all too easily, say what the public attitude is
because, obviously, every individual would like the best for himself. However, I
do not think there is a public expectation as a matter of policy that the very
best should be provided irrespective of the degree of need in every case. It is
likely that most of us magnify our own needs as opposed to other people's.
Regarding the T4 slip issue, I still think that that is of fundamental
importance, not because it would, as you say, contribute greatly to the supply
problem. However, we should remember that doctors, perhaps more than most of us,
are aware of the significance of income tax. If their patients were having to
contribute, through the tax system, directly to a significant extent to what the
doctor recommended for them, then the tendency to misuse the fee for service
system for unnecessary services would be somewhat weakened on the supply side,
as well as on the demand side.
The Chairman: I want to press you on your question of need. Forget whether
opinion polls would show that average Canadians think that they should be
entitled to the best quality of care -- they certainly think that they, as
individuals, should be entitled to the best quality of health care, although
they are not sure that everyone else should be -- and deal with the concept of
need. I am puzzled about that concept of need. Here is my problem: Do you
attempt to take the same route, for example, as the State of Oregon? I am just
picking them as an example because they have attempted to define need, whereby,
for instance, for people past a certain age, and it is somewhere in the
eighties, a hip replacement will not be done? Their view is akin to what you
were saying: if someone needed a heart operation in their 30s, that was of
greater need than someone who happened to be substantially older. Are you saying
that the people who developed the original policy for medicare had at least
reflected on the notion that there might be this allocation of services based on
need? I ask that because my sense is that that is about the most politically
impossible thing to do explicitly. Now, we may well do it implicitly. We do it
implicitly by rationing systems; we do it implicitly in all kinds of ways. There
are public rules respecting speed limits and there are other things that are
designed to minimize the number of accidents but not eliminate them. Therefore,
we have implicitly, whether we like it or not, put a cost on the value of human
life and the value of human injury. It is one thing to do it implicitly, where
you cannot identify the decision-maker and the particular consequences. It is
another to do it explicitly in the way that I heard you suggesting. Am I right
Mr. Kent: There is no question that the driving concept of the time was that
financial consideration should be removed from the assessment of need. It should
be unrelated to finances. That was the politically driving motivation and, I
hope, the surviving one.
There was, at the decision-making level at that time, the assumption that it
was to take place in an environment where the quality of medical services was to
improve. The federal government, before medicare was introduced and before
hospital insurance was introduced, put a lot of money into medical education,
hospitals and medical research. Therefore the assumption was that there would be
improvements in the level of service, but I do not think that there was a
failure to know in one's heart, or one's mind, that various kinds of rationing
are inevitable. Nothing can be done without rationing. You cannot hold a
committee meeting without rationing time, and so on and so forth. Any system,
public or private, is going to use a degree of rationing. There is no question
about that. Obviously, for the reasons that you have given, no politician is
going to say a great deal about that in very explicit terms. There is no reason
why he should, because the decisions, in detail, are going to be made within the
system, when it is set up, essentially by the doctors. In other words, it is a
system in which doctors make those decisions according to a reasonable
assessment of comparative need and not according to funds.
Mr. Bliss: I agree with that. Medicine has moved so far and so fast in 30
years that these issues were not being discussed at that time. Hip operations
were not available; they could not be done. There was a sense in the 1960s that
we could meet our health care needs. However, we have found that that is not the
Yes, rationing will be a problem. My answer to a rationing dilemma is: Let us
do everything we can to avoid it by pouring more and more resources into health
care, both public and private, because I think that is a good cause. It is
better to do that than to spend them on BMWs. Let the state provide more hip
replacements and if the state is near the limit of its resources, it can reduce
the queues by letting private people do hip replacements.
I do not understand the complexities of the tax system. I think that the tax
issue also shades into the medical savings account issue and the voucher issue.
That is what we hire experts to tell us about.
Regarding fee for service, I am a salaried professor at the University of
Toronto. However, if one of my students called me up at three o'clock in the
morning for advice on his exam, I would tell him to go away.
Senator Carstairs: So would the doctor.
Mr. Bliss: Similarly, if the university said to me, "You cannot take a
fee for anything you write in The Globe and Mail," maybe I would say,
"Well, I will leave," or "I want a higher salary, if I have to
give my fees to the university."
The Chairman: Or perhaps "I will not write for The Globe and Mail."
Mr. Bliss: There is being on salary and being on salary. It seems to me that
the idea of abolishing fee-for-service medicine is another panacea, another sort
of planner's way out. One would be saying that the system is not working, so we
must bring these doctors under the tight control that putting them on salary
involves. Mr. Kent said that it was desirable public policy, but it was not
practical back then. It strikes me that impractical public policy is never
desirable. You could not do it; but say you had done it; it is hard to get one's
mind around the idea that, if we had our whole medical profession on salary
these days, as salaried civil servants, we would have a better, more effective,
more efficient health care system. I just find that inherently implausible.
I think there are good reasons for fee-for-service medicine. In truth, in
North America we have a long history of contract medicine in which doctors did
agree to service rosters of patients in contract with a lumber company to be
their doctor for a dollar a head. That never seemed to work terribly well. One
of the reasons is that the patients, of course, will, if anything, up their
demands on the physicians. The physicians have no incentive to respond to the
demands and there is a clash between the provider and the client.
Technically, it was also unpopular in Canada in the 1950s, because rostering
in the U.K. under the national health system seemed very unpopular, at least in
the eyes of North American doctors. I think that the idea of experimenting, of
paying a doctor a high enough salary -- yes, he or she will abandon fee for
service. You can do it, but you may find, in fact, that it is certainly not
going to help your costs at all.
It may be part of a pluralist application, but the idea that you could ever
go over entirely to abolishing fee for service strikes me as utterly utopian.
The Chairman: I thank the two of you for what has been an absolutely
fascinating history lesson. We really appreciate your taking the time to do so.
This has been wonderful.
I say to my colleagues, particularly in light of the comments that the two
witnesses have made this morning, that our session next Wednesday will feature
three people who have recently completed a not yet published study of the
comparative medical systems in Western Europe and Australia and New Zealand, and
how they compare and differ from the Canadian system. That will be our session
The committee adjourned.