Canada health care system

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Is the Canada Health Act a Barrier to Reform?

Despite spending more on health care than the majority of developed countries with universal-access health-care systems, Canada performs poorly in international comparisons of the performance of health systems. Canada’s health policies also differ from those of other nations with universal-access health care—in particular, those that have the developed world’s best performing universal systems—in a number of ways. These include policies affecting private involvement in the insurance and delivery of core medical services, patient cost-sharing, dual practice by physicians, and activity-based funding for hospitals. Evidence of how Canada’s health-care system underperforms coupled with concerns about its fiscal sustainability in the future suggest the need for policy reform.

Canadian health-care policy, including decisions about what services will be provided under a universal scheme, how those services will be funded and remunerated, who will be permitted to deliver services, and whether those services can be partially or fully funded privately is determined exclusively by provincial governments in Canada. However, the federal government influences provincial decisions to a significant degree by exercising its federal spending power through the Canada Health Act (CHA), a financial act that defines the terms and conditions under which provincial governments will retain access to their full portion of the Canada Health Transfer, valued at $37.2 billion in 2017/18.

The analysis presented in this publication suggests the CHA raises a significant financial barrier to a number of health-policy choices that would align Canada’s approach to universal health-insurance policy more closely with those of the developed world’s best performing universal systems. Some of these policies—for example, cost sharing by patients—are explicitly disallowed by the CHA and enforced by the threat of non-discretionary financial penalties. Some policies are only explicitly disallowed under certain conditions: for example, private parallel insurance sharing the cost of medically necessary services with the public insurance plan, but not necessarily otherwise.

Most of the policies pursued by the more successful universal health-care systems are, however, not explicitly disallowed but may be interpreted by the government of the day to contravene certain aspects of the CHA. For example, a parallel and fully independent private insurance system, for-profit hospitals, and dual practice by physicians are not explicitly prohibited by the CHA, so long as care provided in the public scheme remains accessible to all under uniform terms and conditions without cost sharing. Nevertheless, each of these could potentially, although not necessarily, be interpreted by the government of the day as contravening certain criteria of the CHA.

A key concern with the CHA, therefore, is its vagueness about a number of policy options that might be pursued by provincial governments. Only about user charges and extra billing is the CHA reasonably clear on what is, and what is not, permissible if provinces wish to retain access to their full portion of the Canada Health Transfer. Outside these areas, and even to some extent within them, the CHA’s vagueness leaves determinations of permissibility for a range of policies up to the federal government of the day, creating not only a present lack of clarity for provincial policy makers but also questions about what might be disallowed in future by governments with a different view of a particular policy. It is not surprising, then, that provinces appear to have taken a risk-averse approach, with a number of common provincial policy choices going well beyond what is explicitly required by the CHA for full access to federal cash transfers.

To the extent that the federal government is interested in seizing the opportunity to replicate in health care the success of the welfare reform of the 1990s, it would need to reform the CHA, remove ambiguity to minimize uncertainty and the potential for politically motivated interpretations of the act, decentralize decision making by encouraging provinces to be less reliant on federal transfer payments, and allow greater policy flexibility for provincial governments, which are directly accountable to patients and payers. Doing so would bring greater accountability to the health-care system and free the provinces to innovate and experiment with policies commonly found in other countries with more successful universal health-care systems. The likely result would be improved timely access to quality care regardless of a patients’ ability to pay.

Canadian health care—big bills, terrible system

Private for-profit hospitals comprise 39 per cent of hospitals in Australia and 43 per cent in Germany.

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How Canadian Health Care Differs from Other Systems

Canada has one of the most expensive universal health-care systems in the developed world. However, there is an imbalance between the value Canadians receive and the relatively high amount of money they spend on their health-care system. Of particular concern is the fact that Canada has significantly fewer physicians and acute-care beds, and also ranks poorly for the availability of important medical technologies like MRIs and CT scanners. Of course, the most spectacular failure of Canada’s health-care system is manifested in the form of wait times, which have become a defining feature of the Canadian health-care experience.

These failures have little to do with the notion of universal health care or spending. Not only does Canada rank among the top spenders on health care internationally, but provincial governments within the country have been increasing spending at unsustainable rates for years. There are several other countries around the world that share the goal of ensuring universal access to health care regardless of the patient’s ability to pay; and generally, with similar or lower health expenditures, they perform on par or better on most indicators of performance. A comparison of health policies that compares Canada’s with those in eight other high-income OECD countries with universal health care (Australia, France, Germany, the Netherlands, New Zealand, Sweden, Switzerland and the United Kingdom) reveals significant differences.

Canada is the only country of the nine where private financing for medically necessary services is disallowed and where the private sector is for the most part shut out of delivering medically necessary treatment. The ability of outpatient and inpatient specialist physicians to practise both in publicly funded universal settings and in private settings is also severely restricted in Canada in contrast to the other countries. Canada and the United Kingdom are the only two countries among the nine where patients are not expected to share directly in the cost of medically necessary treatment. Finally, Canada is the only country in the cohort that relies almost exclusively on prospective global budgets to fund its hospitals in contrast to other countries that are increasingly moving towards payment based on some measure of activity.

Clearly, the policies that characterize Canada’s health-care system stand in stark contrast to those pursued by other—arguably more successful—universal health-care systems. These differences, coupled with evidence of how Canada’s health-care system underperforms, suggest the need for policy reform.

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Comparing Performance of Universal Health Care Countries, 2017

Comparing the performance of different countries’ health-care systems provides an opportunity for policy makers and the general public to determine how well Canada’s health-care system is performing relative to its international peers. Overall, the data examined suggest that, although Canada’s is among the most expensive universal-access health-care systems in the OECD, its performance is modest to poor.

This study uses a “value for money approach” to compare the cost and performance of 29 universal health-care systems in high-income countries. The level of health-care expenditure is measured using two indicators, while the performance of each country’s health-care system is measured using 42 indicators, representing the four broad categories: [1] availability of resources; [2] use of resources; [3] access to resources; [4] quality and clinical performance.

Five measures of the overall health status of the population are also included. However, these indicators can be influenced to a large degree by non-medical determinants of health that lie outside the purview of a country’s health-care system and policies.

Expenditure on health care
Canada spends more on health care than the majority of high-income OECD countries with universal health-care systems. After adjustment for “age”, the percentage of the population over 65, it ranks third highest for expenditure on health care as a percentage of GDP and eleventh highest for health-care expenditure per capita.

Availability of resources
The availability of medical resources is perhaps one of the most basic requirements for a properly functioning health-care system. Data suggests that Canada has substantially fewer human and capital medical resources than many peer jurisdictions that spend comparable amounts of money on health care. After adjustment for age, it has significantly fewer physicians, acute-care beds, and psychiatric beds per capita compared to the average of OECD countries included in the study (it ranks close to the average for nurses). While Canada has the most Gamma cameras (per million population), it has fewer other medical technologies than the average high-income OECD country with universal health care for which comparable inventory data is available.

Use of resources
Medical resources are of little use if their services are not being consumed by those with health-care demands. Data suggests that Canada’s performance is mixed in terms of use of resources, performing at higher rates than the average OECD country on about half the indicators examined (for example, consultations with a doctor, CT scans, and cataract surgery), and average to lower rates on the rest. Canada reports the least degree of hospital activity (as measured by discharge rates) in the group of countries studied.

Access to resources
While both the level of medical resources available and their use can provide insight into accessibility, it is also beneficial to measure accessibility more directly by examining measures of timeliness of care and cost-related barriers to access. Canada ranked worst on four of the five indicators of timeliness of care, and performed worse than the 10-country average on the indicator measuring the percentage of patients who reported that cost was a barrier to access.

Quality and clinical performance
When assessing indicators of availability of, access to, and use of resources, it is of critical importance to include as well some measure of quality and clinical performance in the areas of primary care, acute care, mental health care, cancer care, and patient safety. While Canada does well on four indicators of clinical performance and quality (such as rates of survival for breast and colorectal cancer), its performance on the seven others examined in this study are either no different from the average or in some cases—particularly obstetric traumas and diabetes-related amputations—worse.

The data examined in this report suggests that there is an imbalance between the value Canadians receive and the relatively high amount of money they spend on their health-care system. Although Canada ranks among the most expensive universal-access health-care systems in the OECD, its performance for availability and access to resources is generally below that of the average OECD country, while its performance for use of resources and quality and clinical performance is mixed.

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Comparing the performance of different countries’ health-care systems provides an op-portunity for policy makers and the general public to determine how well Canada’s health-care system is performing relative to its international peers. Overall, the data ex-amined suggest that, although Canada’s is among the most expensive universal-access health-care systems in the OECD, its performance is modest to poor.

This study uses a “value for money approach” to compare the cost and perfor-mance of 28 universal health-care systems in high-income countries. The level of health-care expenditure is measured using two indicators, while the performance of each country’s health-care system is measured using 42 indicators, representing the four broad categories:

  • availability of resources
  • use of resources
  • access to resources
  • quality and clinical performance

Five measures of the overall health status of the population are also included. However, these indicators can be influenced to a large degree by non-medical determinants of health that lie outside the purview of a country’s health-care system and policies.

Expenditure on health care
Canada spends more on health care than the majority of high-income OECD countries with universal health-care systems. After adjustment for age, it ranks third highest for expenditure on health care as a percentage of GDP and fifth highest for health-care ex-penditure per capita.

Availability of resources
The availability of medical resources is perhaps one of the most basic requirements for a properly functioning health-care system. Data suggests that Canada has substantially fewer human and capital medical resources than many peer jurisdictions that spend comparable amounts of money on health care. After adjustment for age, it has signifi-cantly fewer physicians, acute-care beds and psychiatric beds per capita compared to the average OECD country (it ranks close to the average for nurses). While Canada has the most Gamma cameras (per million population), it has fewer other medical technologies than the average high-income OECD country with universal health care for which comparable inventory data is available.

Use of resources
Medical resources are of little use if their services are not being consumed by those with health-care demands. Data suggests that Canada’s performance is mixed in terms of use of resources, performing higher rates than the average OECD country on about half the indicators examined (for example, consultations with a doctor, CT scans, and cataract surgery), and average to lower rates on the rest. Canada reports the least amount of hospital activity (as measured by discharge rates) in the group of countries studied.

Access to resources
While both the level of medical resources available and their use can provide insight into accessibility, it is also beneficial to measure accessibility more directly by examining measures of timeliness of care and cost-related barriers to access. Canada either ranked last or close to last on all indicators of timeliness of care, but ranked in the middle on the indicator measuring the percentage of patients who reported that cost was a barrier to access.

Quality and clinical performance
When assessing indicators of availability of, access to, and use of resources, it is of criti-cal importance to include as well some measure of quality and clinical performance in the areas of primary care, acute care, mental health care, cancer care, and patient safety. While Canada does well on four indicators of clinical performance and quality (such as rates of survival for breast and colorectal cancer), its performance on the seven others examined in this study are either no different from the average or in some cases—particularly obstetric trauma and diabetes-related amputations—worse.

The data examined in this report suggests that there is an imbalance between the value Canadians receive and the relatively high amount of money they spend on their health-care system. Although Canada has one of the most expensive universal-access health-care systems in the OECD, its performance for availability and access to re-sources is generally below that of the average OECD country, while its performance for use of resources and quality and clinical performance is mixed.