Canadas Health Care System: A Guide to the Perplexed

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Canadas Health Care SystemA Guide to the
Perplexed

• Steven LewisAccess Consulting Ltd., Saskatoon
  SKCentre for Health Policy StudiesUniversity
  of Calgary
• Council of State GovernmentsMidwest Chapter
  MeetingRegina, SKAugust 2, 2005

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The Simple Explanation is Likely to be Wrong

• Canadas health care system is not easily
  categorized
• It is particularly misunderstood by many
  Americans of all political stripes
• Like all national systems it is unique in some
  respects and generic in others
• There are nuances and exceptions to most rules
• The following is a 20 minute primer on what is
  true and what is not about Canadian health care

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There Is No Canadian Health Care System (Except
Sort Of)

• Health care is constitutionally assigned mainly
  to the provinces
• There are 13 provincial/territorial health care
  systems united by
• The Canada Health Act
• Federal funding contributions
• Portability of coverage
• Fed. Govt. is responsible for health care of
  Status Indians and Inuit, armed forces, RCMP
• Federal influence largely depends on how much
  money its willing to send to provinces

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The Nature of Universal Health Insurance

• The Canada Health Act mandates no-fee physician
  and hospital care for 100 of eligible residents
• These core programs are funded through the
  general tax system
• It is partly a public service like education,
  partly an insurance model
• Jurisdictions publicly finance a range of other
  services at their discretion
• Employers insure some of these other services at
  their discretion

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How 8 Provinces Organize the System

• Province divided into geographic regions
• Regions governed by a board responsible in most
  cases for
• Acute care
• Long term residential care
• Community care
• Public health
• Mental health
• Funded globally on some variant of a needs-based
  formula

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of regional health authorities, 2004
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Note Comparability not strict
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Regionalization (continued)

• Main goals of regionalization
• Integrate the components of care
• Capture efficiencies (right service, right place,
  right time)
• Improve population health by addressing
  disparities
• Ensure a fair distribution of services based on
  needs

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The System Is A Public-Private Mix

• About 70 of total health spending is publicly
  financed (vs. 44 in US)
• Almost all hospital care
• Almost all physician care
• About 50 of prescription drugs
• The public portion is lower than the OECD average
  of about 75
• Ottawa finances either 15 to 17, or 30 to 32
  of total public spending (its a long story)

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Is It State-Run Medicine?

• No.
• Almost all care is provided by
• Not-for-profit privately owned institutions
• Physicians who are private contractors to the
  public system
• Other health care providers who are not
  government employees
• Government essentially
• Funds
• Legislates and regulates
• Occasionally delivers programs directly

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Basic Qs and As

• Can Canadians choose their doctors?
• YES
• Do Canadians have access to as much high-tech
  diagnostics as Americans?
• NO but the gap is closing somewhat
• Do Canadians wait longer for care than insured
  Americans?
• YES
• How much longer?
• Most non-urgent surgery is done within 3-6
  months 3-5 wait a year or more

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Basic Qs and As (contd)

• How come a few wait so long?
• Until recently no one really managed the
  systemthats changing quite rapidly
• What of GDP goes to health care?
• 10.2 Canada 15.3 US
• Are Canadians healthier than Americans?
• YES
• Are Canadians thinner than Americans?
• YES, but were fatter than Europeans

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Annual Growth, Total Health Spending, Canada,
1976-2004, Constant Dollars
SourceCIHI, NHEX Trends 1975-2001, Table B.1.4
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Cost Comparisons Canada vs. US

• Per capita spending on health care 2002)
• US 5300 US
• Canada 2900 US (_at_ .80)
• Admin. costs per capita, 1999, US
• US 1059
• Canada 307(Woolhandler et al NEJM
  2003349768-75)
• Cost of bypass surgery US vs Can. hospitals
• 82 higher in US
• No difference in clinical outcomes(Eisenberg et
  al Arch Int Med 20051651506-13)

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Cost Comparisons (contd)

• Cost of hospital day 2002, US
• US 2434
• Canada 870
• Total malpractice costs per capita, 2001, US
• US 24
• Canada 8(Anderson et al., Health Affairs
  200524903-14)

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Private Medical Care Is Not Illegal in Canada

• Physicians can opt out of the public system in
  any province
• The Canada Health Act prohibits extra billing of
  patients for medically necessary services
  delivered by doctors and hospitals
• BUT the only penalty for allowing it is that the
  total amount charged will be deducted from
  Ottawas payments to the province
• The Auditor General of Canada says the CHA is not
  vigorously enforced
• Private clinics are proliferating in BC, Alberta,
  and Quebec

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Recent Trends and Issues in Canada

• 2000 to 2004 Ottawa and provinces negotiated 3
  Health Accords
• Ottawa has committed 6 - 8 billion in new
  funding annually with escalator clauses built
  into agreement to cover inflation
• Agreement to improve
• Wait times
• Pharmacare
• Home care
• Primary care

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Landmark 2005 Supreme Court Decision

• Quebec law (and that of 6 other provinces)
  prohibits private insurance for physician and
  hospital care
• Quebec patient claimed law violated his Charter
  Rights because he waited a year for a hip
  replacement
• Supreme Court overturned 2 Quebec courts and
  agreed with plaintiff
• Has led to renewed debate on future of
  single-tier, universal system

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Albertas Third Way Reforms

• 11-part policy statement to improve health care
• Controversial element formally allow marketing
  of upgraded services to patients willing to pay
  (e.g., fancier hip prostheses)
• Lends government legitimacy to health regions and
  physicians seeking enhanced income
• Critics charge this erodes the principle of a
  single-calibre system for all

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Problems in Canadian System

• Slow uptake of information technology and
  development of electronic health record
• Late recognition of need to manage and reduce
  wait times
• Performance measurement and accountability remain
  underdeveloped
• Difficulties in getting providers to work in
  rural and remote areas
• Slow pace of primary care reform
• Shortages of providers (though causes and impact
  not entirely clear)

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The Future

• Spending will increase in real terms indefinitely
  by 3-4
• Some provinces will allow or promote more
  private, for-profit involvement in both the
  publicly financed system and elsewhere
• Unclear whether primary care reform will
  accelerate or atrophy
• Drugs and some technologies will be major cost
  drivers
• Unclear whether determinants of health will be
  addressed given expansion of health care

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Contact Information

• Steven LewisAccess Consulting Ltd.211 4th
  Ave. S.Saskatoon SK S7K 1N1Tel. (306)
  343-1007Fax [phone]E-mail
  Steven.Lewis_at_shaw.ca