Table of Contents
Problem
Background and Significance of Study
Summary
Review of the Literature
Historical Framework and Rationale
Summary
Current Perspective
Alternatives to the Current US System
Conclusions / Recommendations
Summary Opinion
Special Thanks
Questions/Responses
References
Style Manual
Statement of the Problem
Purpose
The purpose of this paper is to examine the general
structure and organization of the Canadian Health Care
System and comment as to whether it is a viable model for
the United States. In addition, there are responses to
questions concerning the general quality of care in a
Canadian facility based on the opinion of a 14 year resident
American employed in the Canadian Health Care System.
Background and Significance of Study
In his special report, Korok (1986) reports that
the Health Security Action Council (HSAC) of Washington, DC,
supported largely by organized labor, but also representing
women's, senior citizens', and farm organizations as well,
has long promoted the need for a national health care
program, and has recently issued a new " Call for Action ".
Its publication, A National Health Care Program ..Now,
states : " Some say that we cannot afford a comprehensive
national health care program. We are convinced our country
cannot afford not to be without such a program. Under the
present chaotic approach to health care, costs soar, health
dollars buy less and less, and increasing numbers of
Americans are priced out of the system. "
It cites Canada as a precedent: " Canada's successful
national health plan covers everyone and costs one fourth
less (of the Gross National Product) than the US now spends
for health services. The US, while leaving tens of millions
unprotected, spends 300% more per capita than the United
Kingdom for health services. "
33 million Americans now have no Health Insurance.
The infant mortality rate is on the rise for the first time
in a decade. In 1972, 700,000 children were struck from
Medicaid, and since 1981, 567,000 senior citizens have lost
their eligibility.
Summary
The Health Care System in the US is in crisis. Pressure
of some type must be applied to the existing system to bring
the costs and the intent back into line with its Hippocratic
origins. The medico-industrial complex that is currently
evolving may not be the vehicle to bring these needed changes
about.
The Canadian Health Care System seems to be more well
equipped to accomplish this goal with access denied to none
and a rational national utilization of existing state of the
art technology.
Review of the Literature
Historical Framework and Rationale
Letouze (1986) discusses the Canadian health care system
from its beginning. According to the provisions of the
British North America Act of 1867, it is the responsibility
of the individual province to provide health service
benefits. The federal government is responsible for any
health matters that transcend provincial boundaries. It is
also the duty of the federal government to protect the
general population against epidemics, to control the quality
of food and pharmaceutical products, and also to provide
health services to the native peoples. Because of the
separation of provincial powers, there are ten separate
systems, but since they are essentially the same, they all
may be described as a true national program.
This program is based on the principle of advance
payment. It is universal in scope and no way connected to
occupation, age or income of the individuals. It is paid for
from public funds on both the state and federal level, with
no contributions coming from private donors. Individual
needs determine the nature and extent of the care that is
provided. Health service providers are still largely
independent, in spite of the number of controls.
Beneficiaries may choose the doctor and or hospital that they
want with no reduction in the benefits.
After the Second World War, the creation of a public
medicare system became a matter of national importance. In
1945, one of the first plans by the federal government was
rejected because it removed completely the ability of the
provinces to tax individuals and private companies. This was
too high a price to pay for the individual provinces.
Saskatchewan, in 1946, was the first political entity in
North America to establish an obligatory public hospital
insurance plan. British Columbia and Alberta soon followed.
When Newfoundland entered the Confederation in 1949, it
already had a hospital system which was managed and
subsidized by the provincial government. By the end of the
1940's, four of the ten of the Canadian provinces had public
programs covering hospital expenses.
The federal government soon took steps to establish a
true national program. Constitutionally, the government was
prohibited from administering a program directly so it
started what was to become known as the National Health
Grant Program, which comprised ten types of grants to be
given for different projects, such as professional education
and public health research. This program cleared the way for
a true National Health Program.
At the 1955 Federal-Provincial Conference, Ottawa
offered to contribute to the financing of a medicare system.
The outcome of this conference was the first version of the
Hospital Insurance and Diagnostic Services Act of 1957.
Insured services included care given to patients in both
general and chronic care hospitals, with coverage eventually
being extended to outpatient services. In order to qualify
for this program, provinces had to meet a number of
requirements, such as universal coverage and accessibility to
insured services for all citizens under similar conditions.
The Medical Care Act of 1966, which now included
physician care in the office, came into effect in 1968 and
provided extended coverage to the rest of Canada. Under
this new formula, Ottawa agreed to pay the provinces 50% of
the national average per capita, multiplied by the number of
insured residents per province. Physicians were reimbursed
on a fee-for-services basis, the value of each consultation
being negotiated by the organizations representing the
physicians and the various governments involved. The funding
used to finance these programs came mostly from taxes
collected by the two levels of government.
Two major problems that occurred with this system.
Provinces were not using the money allocated for health care
for health care, they were using it for what they thought was
more important. Also the general condition of the health
care program was deteriorating. In November of 1981, the
Honorable Allan MacEachen, then the Minister of Finance, made
the following statement, " The Government of Canada proposes
that the national standards for health care be clarified and
an effective mechanism for their maintenance be developed in
consultation with the provinces, for incorporation into new
federal legislation by March 31, 1983 ". On May 26, 1982,
the Honorable Monique Begin unveiled
those proposals that would eventually be incorporated into
the New Canada Health Act. Canadians were to read about this
new federal position in the document entitled Preserving
Universal Medicare: A Government of Canada Position Paper.
This piece of legislation sought to integrate the two
existing acts and define more clearly the basic principles of
the medicare system in Canada. Special stipulations were
provided to ensure that the provinces would respect the new
underlying principles.
Essentially, the new legislation was designed to
eliminate the practice of direct user fees (extra billing
by physicians and user fees in hospitals) for the insured
health services. Philosophical differences generally condemn
these practices because they impede the general distribution
of health care and they undermine the basic principle of
universal accessibility. They are forbidden in Quebec and
physicians in British Columbia have agreed not to use them.
The remaining provinces vary in the enforcement efforts
to minimize the extra billings. .
In spite of strong opposition, the New Canada Health
Act was proclaimed on April 17, 1984, and came into effect on
July 1st of that year. The Act stipulates that the federal
government would withhold from the money that it gives the
provinces, an amount equal to the total direct extra charges
collected for the provision of medical and hospital services.
This money would be put into an escrow account and repaid in
three years when the provinces halted the extra billing
procedures. This is an improvement over the originally
proposed legislation that would have completely eliminated
the funding.
Summary
The Canadian Health Care System is not perfect, but
on the whole, it seems to provide a better that average level
of health care to all of its citizens and is financially more
prudent that the existing chaotic systems in the US. Extra
billing is a problem that each individual province must
approach, or deal with the loss of funding from the federal
government.
Current Perspective
Vayda (1986) discusses the current perspectives
on the Canadian Health Care System.
To qualify for the federal cost sharing the provinces must agree
to the following terms of reference:
1. Universal Coverage, on uniform terms and conditions,
" that does not impede or preclude, either directly or indirectly,
whether by charge to insured persons, or otherwise,
reasonable access to insured persons. "
2. Portability of benefits from province to province.
3. Insurance for all medically necessary services.
4. A publicly administered non-profit program.
This systems financing is accomplished by the use of
progressive tax revenues, with three of the provinces
maintaining a "premium" that is paid monthly by all insured.
Since the government pays all of the bills (>90%), any
increased costs mean higher taxes or reduced benefits,
neither of which is a popular option.
While the federal government directly contributes 50% of
the costs of Health Care Program, it has no direct control
over cost increases or no direct political credit for its
contributions. As a result, the federal government enacted
the Federal-Provincial Fiscal Arrangements and Established
Programs Financing Act of 1977. This Bill ( C-37 ) reduced
direct federal contributions to 25% of the 1975 - 1976
expenditures, and tied all future increases in the Federal
contributions to increases in the Gross Domestic Product.
At the same time the Federal government reduced individual
and corporate taxes to allow the provinces to increase their
individual and corporate tax rate to make up for the losses.
Despite the additional financial burden, the provinces
have not reduced benefits. They have attempted to reduce
inpatient beds, reduced the annual increase in operating
budgets to less than the annual percentage rate of inflation,
and attempted to limit the increase in physician fee
schedules.
Alternatives to the Current US system
Congressman Ed Roybal, Chairman of the House Select
Committee on Aging, is fashioning a bill for the US that is
patterned after Canada's. A recent draft of the US bill
indicates that it would cover most hospital, medical , and
laboratory services, preventive care, prescribed drugs and
long term care managed by an independent government agency.
It would be supported by its own trust fund.
Private insurance would be available, but only to
increase coverage vis a vis Canada's program. Beneficiaries
would be responsible for a 20% coinsurance of up to $500.00
per year for skilled care and nursing home costs, and 25%
coinsurance, up to a maximum of $1000.00 per year for non
skilled, long term care. Government would waive the
copayments for the poor. US health would pay doctors and
hospitals prospectively set fees. Increases in the rates
would be tied to the GNP and would be considered payment in
full, except for coinsurance and deductibles.
Conclusions/Recommendations
Despite problems with extra billing and allocation of
new technology, Canada's Health Care System can serve as a
viable model for our US Health Care system. Their system
has outperformed our by maintaining a smaller increase in
percentage of the GNP over the last decade. The current
US percentage is 10.5% and the current Canadian percentage is
8.4%. This type of performance is achievable in Canada for
the following reasons:
1. Their population is one tenth as large.
2. Their are only ten provinces, not fifty.
3. Their population is used to being told what to do and doing it.
4. They have a seemingly higher level of social commitment to their fellow man.
We cannot do any thing about the difference in
population or number of states, but we could reduce the
number of regions to a manageable number, say ten; with each
composed of five states. If we removed the existing welfare
system, i.e., stopped paying people for not working and used
this funding as a source, the general population would be
more likely to accept it.
One of the reasons why health care costs have risen as
high as they have is because the US public does not have
to pay for it directly. They are isolated from the price
increases by the third party payors. If the US tax payer
faced an increase every time that the Community hospital
wanted a CAT scanner, there would be a alot less of them!
Summary Opinion
I believe that the US should adopt, within the next ten
years, some type of a national health care program. It
should be patterned after the Canadian system, providing
medical, hospital and longterm care. The revenues that
support the hospitals should be funded by a federal and
regional fund, tied to increases in the GNP. Private
insurance should only be available for adjunct coverage to
this program. Employers who now use insurance as a
benefit could still provide their employees increased
coverage or they could pay the deductibles on the basic
coverage. Existing health insurance companies could be used
as brokers and or facilitators of this new plan.
Unless some type of change occurs in the newly evolving
medico-industrial complex, I believe that within the next
generation, for profit health care will overtake and destroy
our once humanitarian institutions.
Special Thanks
Special thanks to Ms. Margie Pellin of Etobicoke, Ontario,
who is employed as an X-Ray Technician in the 832 bed
St. Joseph's Hospital.
1. Name? Margie Pellin
2. Job Title? RT 3, or X-Ray Technician
3. Years in job? 14
4. In your opinion, are their any major differences in the
quality of care delivered in the US vs Canada?
No, the nursing care is all provided by R.N.'s, at least at my hospital.
5. In your opinion, are their any major differences in the types of care
delivered in the US vs Canada?
No, we have inpatient and outpatient emergencies just like you do.
6. Do you have a problem with people using your ER as a clinic?
Yes, and sometimes the staff doctor will just tell the people that they
are not sick enough (in so many words) and tell them to go to their family Doctor the next day.
7. Is there a large percentage of your patient mix that is indigent?
No, the indigents are almost all downtown, geography is the biggest determining factor.
8. In your opinion, are their any major differences in the technology used in the delivery of care?
Not in the quality of the technology, but perhaps in the quantity. We don't have a CAT
scanner at every hospital like you do, our utilization is much different.
9. In your opinion, are their any major differences in the quality of training in the US vs Canada?
The training in Canada is much more comprehensive academically, much better than in the States.
I had more clinical experience and less didactic.
10. If money were no object and you could have elective surgery, say a tonsillectomy, where would you have it done?
Probably in Canada where I know the people doing the work. As far as I'm concerned,
there is little or no difference in the quality of the care delivered.
Korcok, Milan. US Groups eyeing merits of Canadian style national health program. Canadian_Medical_Associates Journal. 135, 9-1-86, 536-531.
Letouze, Daniel. The Canadian Health Care System at the Crossroads. World_Hospitals. XXII,No.1 3-86, 7-13.
Vayda, Eugene. The Canadian Health Care System: An Overview. Journal_of_Public_Health_Policy. Summer 1986, 205-210.