This research paper will present literature in review on critically assessing the main arguments of the heated debate on the publicly versus privately financed health care system in Canada. Indeed a lot of contention has been raised in the last few years over the subject of so called “two-tier” healthcare. Although, universal healthcare is very cherished in Canada, there is a growing sentiment that introducing a private system will alleviate the burden on the public system.
An important part of this essay will assess the central arguments epitomized by the protagonists of the two-tiers system, specifically in the “Framework for Reform, Report of the Premier’s Advisory Council on Health, 2002” A particular focus will be assessing the rationale of the pro-public funding because it is consonant with the core of the main central arguments.
The current discourse on a possible introduction of a two-tiers health care system represents one of the most dangerous social projects since it would substantially erode the very fabric of the Canadian society, Canadian identity and the Canadian traditional values. One of the central argument of the protagonists of the two-tiers system is based on assumption that the system is no longer financially viable and requires a massive financial injection, which cannot be provided by the federal government and is uneasy to increase the funding to the provinces.
However there is a merit in this argument. Overall provincial/territorial government expenditures on health have increased substantially over the past two decades, from about $11 billion in 1977/78 to almost $56 billion in 10 years. 1 Furthermore, it is expected that the national spending will exceed $100 billion per year in 2012. 2 The situation is indeed alarming in respect to the drug costs, which are expected to grow substantially over the next decade. Across the country, drug costs are expected to rise from $4 billion today to over $15 billion by 2026/27.
3 To understand Canada’s Health Care Costs better, the Provincial and Territorial Ministers of Health summarised three categories of the main factors that are expected to contribute to increasing health care costs. 4 First, the basic cost drivers, including population and aging, inflation and rising costs of labour and facilities. Secondly the cost accelerators – including emerging and new technologies, new drugs and genetically specific drugs, increased incidence of chronic and new diseases, declining productivity gains, and rising consumer expectations5.
Genetic research, for example, has the potential to uncover many of the underlying molecular causes of certain illnesses, but the research is expensive and the treatments will be as well. And thirdly the impact of system change and reform , counting structural changes, changes in how services are delivered, the scope of services provided, roles of providers, information systems, research and continuous improvements in the quality of health services.
6 Based on this reasoning, the proponents of pro-privately financed health system stressed on the inevitability of a radical, dramatic change of the very nature of the entire health care system which would be in no position to face the challenges of the new demographic dynamics (population growth and aging) compounded by increasing costs of new technology, new treatments, new drugs, new equipment.
7 Furthermore, the shortages of trained staff in all aspects of the health system will strain existing resources and make it difficult to deliver the services people want and expect. In this context of a rather bleak forecast for the Canadian public health care system, the remedies could only be, if a substantial funding is poured into the system, which would come from the very users of the health system.
Alberta’s approach outlined in the “A Framework for Reform, Report of the Premier’s Advisory Council on Health, 2002”, can be noted that one of the critical elements in its comprehensive move towards two-tiers system is to link health care premiums to actions to stay healthy, providing tax credits or other tax incentives, or using medical savings accounts or some other form of co-payment to give people more control over their own health care spending. 8 On the other hand suggestions were brought forward that there should be penalties for people who do not look after their own health and personal well being.
9 In spite of this, it seems that the most important issue remains the access to the health care system. To take the province of Alberta for example, the waiting period is indeed an alarming feature of the Canadian health care crisis in some cases seriously threatening the lives and the health of Canadians. Waiting times for access to radiology for certain cancers (breast and prostate cancers) have increased to between 2 and 6. 5 weeks for breast cancer and between 7 and 9. 5 weeks for prostate cancer while waiting times for chemotherapy range from 4.
5 to 10 weeks. 10 The number of people waiting for open-heart surgery went down by 2. 5% between March 2000 and March 2001. The number of surgeries done in the province went up by 8%. Waiting times ranged from 11 days for urgent inpatients to 15 – 18 weeks for planned outpatients11. Aside from urgent cases, the waiting times are longer than targets set by the province. The number of hip and joint replacements has gone up by 7% between March 2000 and March 2001, but the number of people waiting for those surgeries has gone up by 33%.
Therefore people wait an average of two to six months, and for some people, the wait is much longer. 12 Another argument is in the “obsolete” nature and structure of the Canadian health care system being a government monopoly resembling to what some observers link to as a command and control system. 13 Some of the criticism related to the obsolete and non-flexible constitution of the Canadian health system is associated with the following shortcomings of its mandate as well as operations.
It defines what constitutes “medically necessary services”, Pays for all insured services provided; Provides insurance and forbids, by law, the provision of private insurance for these services; Prevents, by law, people from obtaining insured services outside the public system except where there are contracts with the public system; Directly or indirectly administers and governs care; Defines, collects and reviews information on its own performance14
According to The Interim report of the Standing Senate Committee on Social Affairs, Science and Technology, Canada’s health system –is structured like a 19th century cottage industry rather than a 21st century service industry. 15 The Canadian system has been very slow even to catch up with the change in the last 20 years16. Moreover this situation creates an environment where there is no competition and no incentive to provide the most efficient and effective services available.
The system is organized around facilities and providers, and not individual Canadians, who ultimately are left without a choice about very important decisions in respect to their health and lives. The final argument related to the acute crisis due to shortages of various health providers and consequent “brain drain” of family practice physicians and specialists, nurses, nurse practitioners, who ultimately leave to the U.
S. These shortages affect the entire spectrum of health providers including, mental health practitioners, pharmacists, medical laboratory technologists, rehabilitation therapists, dentists, dental surgeons, chiropractors, podiatrists, and so on. A new privately financed health care system with strong economic incentives for the health providers are believed to be the adequate remedy for this serious crisis.
One of the main points of view is based on the assumption that universally accessible, publicly funded Health Care that offers quality services to all has been engrained into the national identity of this country for the past four and a half decades. Such values include “accessibility, and equity fairness,” meaning equal access to the public Canadian health services. Perhaps as important as the national identity, the Canadian approach to health insurance also clearly distinguishes Canada from the United States 17.
The fact that Canada has developed such a different system suggests that, despite outward appearances, Canadians are a separate people, with different political and cultural values. Even better, the Canadian system has worked, and compared to most other systems worked relatively well, while the American alternative has not. 18 To further understand the core Canadian values engrained into the Canadian health system, it is essential to look into the roles of the federal government, the ten provinces, and the three territories that have key roles in the health care system in Canada.
The federal government is responsible for setting and administering national principles, standards and laws for the health care system, such as the Canada Health Act. To a large extend this framework outlines the very nature of the Canadian society based on universal values of social inclusion, fairness, concern and care. Our system of universal public insurance for health care is by considerable margin Canada’s most successful and popular public program.
We think of it not just as an administrative mechanism for paying medical bills, but as an important symbol of community, a concrete representation of mutual support and concern. It expresses a fundamental equality of Canadians in the face of disease and death and a commitment that the rest of us will help as far as we can….. Medicare becomes an evocation of the soul of the country. 19 Canadians want to preserve the core Medicare values of universal coverage, access based on needs and fairness.
Canadians want committed leadership and financial support from the federal government for health care. In a recent public survey by Ekos Research Associates, nearly 80% of those polled said they wanted the federal government to either maintain or increase its role in the health care sector, while fully 89% said Ottawa and the provinces should work together to improve the health care system. 20 Canada’s universal medical care system was designed from the bottom up, by provinces and for provinces.
It can be said that the notion of a “national – Canadian” health care system, is somewhat imprecise but rather constituted by ten distinct provincial systems, modified to the requirements of their citizens and to their unique political values21. To qualify for federal support, the provinces are required to meet five principles: comprehensiveness, universality, portability, accessibility and public administration22.
These elements ensure that all essential services are covered; that everyone is covered and can receive care in any province; and that health care is administered by a non-profit public agency. All these elements become fundamentally important in keeping this vast and diverse country together. The provincial governments are responsible for managing and delivering health services, planning, financing, and evaluating the provision of hospital care, physicians and allied health care services, and managing some aspects of prescription care and public health.
If one assumes that in the future there will be a Canadian two-tier system, this change will ultimately result in a major disparity as having one system that is better then the other, attracting the best doctors and the best equipment, and that those who can’t afford private or do not wish to pay will only be able to obtain second-rate healthcare leaving the public sector short handed and with inferior staff.
It is largely believed that “Privatization” in Canada, in the sense of moving back to more payment by users and private insurance would lead to higher overall costs (particularly administrative costs and fees), lower efficiency, and greater inequality of both access and cost bearing. It is a way of re-starting the historic cost expansion, by shifting the burden from governments, who have had some success at cost control, to users and employers, who have had none23.
Furthermore, any shift from public to private financing, by whatever means, will necessarily transfer costs from those with higher to those with lower incomes, and from the healthy to the ill. Mr. Speaker, good health is priceless. But good health care does have a price. New technologies, new drugs, new treatments have created much better health and higher costs. An aging population increases demand and, therefore, costs. We will have to spend more. And we will have to do it responsibly. But, Mr.
Speaker, the costs of health care are not rising because we have a public system. In the United States, the cost of private insurance premiums for employer sponsored plans rose by 11 percent in 2001 and is projected to rise by another 13 percent this year. The sick and the poor often have to pay the highest premiums. The issue is not whether we will pay more as a society for health. We will. It is about the type of society we want. Either it is one where individuals assume risk without regard to ability to pay as in the United States.
Or it is a society where through government we spread risk and spend collectively because health is a fundamental human right. We, on this side of the House, prefer the Canadian way. Where cost is shared by the entire population through a public health care system. If our costs go up we will have to pay for them. And I know that Canadians will be prepared to pay that cost. But we will do so collectively as a society. 28 In addition, private payment, selectively discourages use by those with lower incomes, improving access for those with higher incomes.
This is why, governments are better able than private payers to contain costs and warn that although private payment systems open up larger income opportunities, but not necessarily more care, and not better health29. Public spending on Medicare, states Evans, is not absorbing an increasing share of either national income or public revenue; on the contrary, its share has been falling in recent years 30. Claims that Canada must increase private financing because no more public money is available is simply false, continues Evans, thus portraying a political choice as an economic inevitability.
Private payments could yield additional financing, but the burden would be heavily concentrated on a small proportion of the aged-population chronically ill, and low-income. Privatization of the health care system in Canada represents one of the most dangerous projects in the recent years, targeting not only the foundation of these essential services, but moreover the very foundation of the Canadian society as a whole, the Canadian identity, and the Canadian traditional values which Canadians cherish and embrace so profoundly.
1 Understanding Canada’s Health Care Costs, Provincial and Territorial Ministers of Health. August 2000. p. 12
2 Understanding Canada’s Health Care Costs, Provincial and Territorial Ministers of Health. August 2000. p. 12
3 Understanding Canada’s Health Care Costs, Provincial and Territorial Ministers of Health. August 2000. p. 12
4 Understanding Canada’s Health Care Costs, Provincial and Territorial Ministers of Health. August 2000. p. 12
5 A Framework for Reform, Report of the Premier’s Advisory Council on Health, December 2002, p. 27
6 A Framework for Reform, Report of the Premier’s Advisory Council on Health, December 2002, p. 27
7 A,, E. van Doorslaer, H. van der Burg et al. Equity in the finance health in twelve OECD countries, Journal of Health Economics Vol. 18. # 3, p. 291-314
8 A Framework for Reform, Report of the Premier’s Advisory Council on Health, December 2002, p. 27
9 A Framework for Reform, Report of the Premier’s Advisory Council on Health, December 2002, p. 27
10 Gibbins, Roger, 1999, Taking Stock: Canadian Federalism and Its Constitutional Framework, in How Ottawa Spends 1999-2000, edited by Leslie Pal, Toronto, Oxford University Press, p. 190-199
11 Gibbins, Roger, 1999, Taking Stock: Canadian Federalism and Its Constitutional Framework, in How Ottawa Spends 1999-2000, edited by Leslie Pal, Toronto, Oxford University Press, p. 190-199
12 Gibbins, Roger, 1999, Taking Stock: Canadian Federalism and Its Constitutional Framework, in How Ottawa Spends 1999-2000, edited by Leslie Pal, Toronto, Oxford University Press, p. 190-199
13 A Framework for Reform, Report of the Premier’s Advisory Council on Health, December 2002, Framework. p. 21
14 A Framework for Reform, Report of the Premier’s Advisory Council on Health, December 2002,
15 A Framework for Reform, Report of the Premier’s Advisory Council on Health, December 2002
16 Health Care Forum: Canada v. U. S. An Exchange Between Malcolm Gladwell and Adam Gopnik”, in Mark Charlton and Paul Barker (eds. ) Crosscurrents – Contemporary Political Issues, 4th edition ( Nelson 2002), pp. 369 17 Gibbins, Roger, 1999, Taking Stock: Canadian Federalism and Its Constitutional Framework, in How Ottawa Spends 1999-2000, edited by Leslie Pal, Toronto, Oxford University Press, p. 197-199 18 Robert G.
Evans, Two Systems in restraint: Contrasting Experiences with Cost Control in the 1990s, in David Thomas (ed), Canada and the United States: Differences that Count, 2nd ed pp. 21
19 Robert G. Evans, Two Systems in restraint: Contrasting Experiences with Cost Control in the 1990s, in David Thomas (ed), Canada and the United States: Differences that Count, 2nd ed pp. 21 20 Fuller Colleen: “Canada’s Health care Crisis: More and more health care services being privatized The Canadian centre for Policy Alternatives,” Monitor, March (1998).
18 Oct 2002 http://www. policyalternatives. ca/publications/articles/article127. html 21 Mitchel Stacey “The Canadian Health Care System” Policy Makers ( 2000) 18Oct 2002 http://www. newrules. org/equity/CNhealthcare. html
22 Mitchel Stacey “The Canadian Health Care System” Policy Makers ( 2000) 18Oct 2002 http://www. newrules. org/equity/CNhealthcare. html
23 Robert G. Evans, Two Systems in restraint: Contrasting Experiences with Cost Control in the 1990s, in David Thomas (ed), Canada and the United States: Differences that Count, 2nd ed pp. 44
28 Government of Canada, The Canada we Want Speech from the Throne to open the Second Session of the thirty-seventh Parliament of Canada 10 Oct 2002. 15 Oct 2002. http://www. sft-ddt. gc. ca/vnav/03_e. htm
29 Fierlbeck, Katherine, 2002. Cost Containment in Health Care: The Federalism Context, in Federalism, in Democracy, and Health Policy in Canada, McGill-Queen’s University Press, p. 168
30 Fierlbeck, Katherine, 2002. Cost Containment in Health Care: The Federalism Context, in Federalism, in Democracy, and Health Policy in Canada, McGill-Queen’s University Press, p. 168