Depending on one’s ideological perspective on debates about public versus private financing of health care, the Canada Health Act (CHA) is either heaven or hell. For advocates of privatized medicine, the CHA is an infernal document, which stands in the way of profit-making and greater opportunities for the rich to buy better health care without have to support similar access for the poor. For advocates of single-tier health care, the principles of the CHA are sacred commandments to be guarded at all cost. I will argue that the CHA in fact leaves us in a state of limbo—neither heaven nor hell—and that it is in need of reform.

Many Canadians seem to believe that the CHA provides and protects rights to health care. The fact that it does no such thing is moot; a government proposing to tinker with the fundamentals of one-tier Medicare will be short-lived in its aspirations and/or political tenure.  Although this is good news for those who favour universal public health care (and I count myself among them) the reality is that our unwillingness to revisit the CHA has frozen in time a system that is not serving Canadians nearly as well as it should.

The CHA does not require provinces to deliver an equitable and efficient health care system but instead as a proxy requires first-dollar coverage for most hospital and physician services. This 1960’s view of health care does not include universal coverage for prescription drugs nor care provided by nurses, pharmacists, and others in patients’ homes or long-term care settings. The promise of “comprehensiveness” in the CHA in particular is an illusion: the CHA only covers 40% of total spending and outside the hospital, a much smaller proportion. As hospital and physician proportions of total spending decline, the CHA-mandated core becomes increasingly irrelevant. Intolerable waits and over-crowded emergency rooms are directly attributable to our failure to have adequate planning for long-term care and home care. Our totemic attachment to the CHA has laid the groundwork for these regressive developments. Were the CHA focused directly on patients’ needs and a high-functioning health care system, this would set the stage for a rational conversation about our priorities—a conversation that isn’t held hostage to 1960’s preconceptions about where health care is delivered and by whom.

That being said, within the CHA there exists much flexibility (or weakness, depending on your perspective). The CHA does nothing to inhibit provinces developing high-performing health care systems, but there is little in the Act to stimulate this either. The CHA only has teeth in requiring first-dollar coverage for services provided by doctors or in hospitals, and it is these provisions that have privateers like Brian Day, founder of the Cambie Surgery Centre in British Columbia, saying that Canada and Cuba are kissing cousins. But the very existence of private clinics and the plethora of for-profit providers that exist both within and outside of publicly-funded Medicare (diagnostic clinics, private long-term care homes, “wellness” clinics, cosmetic surgery clinics, IVF clinics, etc.) reveal the enormous flexibility (or weakness…again, it depends on your perspective) of the CHA.  The CHA has an Alice-in-Wonderland approach to the definition of “medical necessity”; leaving it undefined and thus what is “medically necessary” is what is publicly funded; ipso facto services provided in private clinics and paid for privately are not “medically necessary”.

Requiring first-dollar coverage for medically necessary hospital and physician care does inhibit a flourishing two-tier system for services like hip and knee replacements, cataract surgeries, etc. But that is all the CHA does and it could do so much more.  The common factor among high performing health care systems – like the U.S. Veterans Affairs, Kaiser Permanente, and the county of Jönköping in Sweden – is a commitment to strong management of their respective health care systems. These systems deliver high quality, integrated care and focus on both prevention and cure. Similarly, strong management in England has conquered wait times, reducing waiting times from up to several years down to a maximum of 18 weeks and providing universal access to primary care within 48 hours.

The CHA could be reformed to support similar success stories here in Canada, and in particular to drive provinces to reform their own systems, where there is now great resistance to change. In order to drive reform, the public needs to know a lot more about the quality and safety of their health care systems and the extent to which it actually serves their needs and improves their health. To drive positive reform the CHA could require that provinces demonstrate that their systems are both efficient and equitable, and should require public reporting of quality, safety and access indicators – across the board. But leaving either the federal or provincial governments to decide whether or not their performance is sufficient is like leaving the fox to guard the chicken coop. The federal government should transfer core funding to provinces but there should be an additional funding component to be administered by a completely independent agency tasked with assessing whether provincial systems are delivering patient-centered care that achieves goals of access, quality, safety, and comprehensiveness. This envelope of funding need not be large – merely sufficient so that a provincial government has some incentive to obtain it. This discretionary fund should only be paid out according to which of these indicators are met and such indicators/performance requirements should be based on research evidence and international best-practices   The independent agency must decide this – not federal or provincial governments.

Provinces may boom and bluster about how this kind of transparency and reporting would be unacceptable, but it is in their long-term interest to take on this new deal. Merely improving the CHA won’t be a miracle cure but renewing it as a core element of a new discussion of federalism, conditionality, and oversight could be very helpful. Upon the fulcrum of a reformed CHA, provinces could drive improvements throughout their own respective systems and begin the slow process of rescuing Medicare from limbo. Canadians are frequently defined in the popular press as rapacious consumers of medical care, lining up for their third hip operation, their fifth MRI of the day, or an optional stent. This is a convenient way to blame Canadians for a system that is not meeting their needs. For the sums that are being spent, Canadians should demand and should receive so much more from their health care system.

Dr. Colleen M. Flood is the Canada Research Chair in Health Law & Policy, Faculty of Law at the University of Toronto

When considering whether our health care system offers universal accessibility, we often think of elements such as physician availability and hospital waiting times. But you might expect that two patients in two different parts of Canada, with the identical disease, would receive the same drug treatment. Too often, that isn’t the case.

My experience as a cancer patient, and later as a patient advocate, tells me that Canada simply doesn’t have equal and timely access to effective medications that offer similar outcomes.

You can look at access in a few ways.

At the end of 1995, I was diagnosed with metastatic colorectal cancer, which later went to my liver and lungs. Prognosis – a 30% chance of surviving five years. It’s 15 years and many treatments and surgeries later, and for the last eight I’ve had no recurrence of cancer.

In my case, to obtain the necessary best care, I first had to go to New York State at my own (and great) cost. Later, I entered into a lengthy legal battle to get my costs reimbursed, as the standard of care that was medically required wasn’t available in Canada in a timely manner. Eventually, the Quebec Superior Court ruled in my favour, in a judgment that’s still used as a precedent for reimbursing out-of-country health care.

The reality is that even within this country, the availability and use of drugs can vary tremendously. The same drug may well not be administered or reimbursed in the same manner across jurisdictions.

First, equal access. With oncology drugs, for one, products that are reimbursed on one provincial formulary might not be on another. Why? Because given the added benefit, a province might deem the drug too expensive to cover. So even if there’s a medical consensus on a drug’s effectiveness, there’s no national standard on its application.

You can always buy the drug if your insurance covers it or if you have the money for it. But that’s restricting access. Shouldn’t evaluations by each jurisdiction and the criteria for reimbursement be based strictly on the drug’s merit and clinical practice guidelines?

Equal access is denied in another fundamental way. Some drugs are used as a first line of treatment, others as a second line drug, third line drug, etc. But a cancer drug that’s a first line treatment in one jurisdiction could be considered a second line treatment in another, and reimbursed that way. If your physician thinks you should be getting a different drug, in a different manner than it’s reimbursed, you have a problem.

Next, timely access – getting the drug you need when you need it.

Again, Canada falls short. For one, it generally takes Health Canada longer to approve drugs than it does the FDA in the U.S. But even after drugs are approved in Canada at the federal level, the timing for access is hardly the same across the country.

The Common Drug Review (CDR) conducts an objective review of the clinical and cost effectiveness of drugs, and provides formulary listing recommendations to the publicly funded drug plans in Canada (except Québec). Yet each health authority still has to sign off, and they’re not bound by the CDR recommendation. That leads to great inequities.

For cancer drugs in particular, the Pan-Canadian Oncology Drug Review (launched in fall 2010 everywhere except Quebec) will perform a similar role as the CDR. Currently, each province conducts its own review of new cancer drugs, which results in differences in the formulary listings of drugs and their financial coverage. But again, the decisions of this new review body won’t be binding.

There are other major disparities across Canada when it comes to equal and timely access to drugs. Drugs can be reimbursed differently depending on whether they’re administered orally in intravenously. Cycles of treatment can also be capped in different ways. Will you receive drugs that extend survival or drugs that benefit quality of life? It depends, in part, on your jurisdiction.

This is a matter of individual rights. If you’re struck with an illness, do you have the right to expect the very best care wherever you live? Should that care be available in a consistent manner?

The solutions are complex. The Canada Health Act talks about the importance of “reasonable access” to health services. But define “reasonable”. That’s subject to debate.

The fact remains, however, that the Canada Health Act doesn’t legislate equality. Until governments address this problem, patients in Canada – often without even knowing it – will continue to face barriers to the care they need.

Barry Stein is the President of the Colorectal Cancer Association of Canada, a patient advocate, an attorney, and a cancer survivor.

The federal government today intervenes massively in provincial jurisdictions, and in particular in health and education, two areas where it has no constitutional legitimacy whatsoever.

This is not what the Fathers of Confederation had intended. The objective of the 1867 Act was not to subordinate provincial governments to a central authority. But rather to have sovereign provinces within the limits of their powers, dealing with local matters that directly affected citizens; and a sovereign federal government within the limits of its own powers, dealing with matters of general national interest.

During the 20th century however, this fundamental principle was gradually pushed to the wayside. We saw everywhere the growth of the state, the rise of central planning, of command-and-control Keynesianism and of government interventionism.

In Canada, government activism grew both in Ottawa and in the provincial capitals. Predictably, federal planners decided that Ottawa had to have its say on all kinds of social issues, despite the fact that these matters were the responsibility of the provinces in our Constitution.

At first, it was done in the proper manner – by amending the Constitution. This is why after the Privy Council ruling in 1937 which said that Ottawa had no authority to establish an unemployment insurance program, the BNA Act was amended to allow it. In 1951, old age pensions were established in the same way.

However, several other programs, from family allowances to grants to universities and hospital insurance were set up which clearly did not respect the constitutional division of powers. Some of these programs are direct transfers to individuals and tax measures. While others, such as the health and social transfer programs, are money sent by Ottawa to the provinces, to the tune of nearly 40 billion dollars today.

This intrusion into provincial jurisdiction was accomplished by the so-called federal spending power. No constitutional provision to legitimize this federal spending power was ever adopted. The Supreme Court of Canada has never explicitly recognized this power either.

I believe we should bring back the balanced federalism envisioned by the Founders.

This would be done by putting an end to all federal intrusion into areas of provincial jurisdiction. Instead of sending money to the provinces, Ottawa would cut its taxes and let them use the fiscal room that has been vacated. Such a transfer of tax points to the provinces would allow them to fully assume their responsibilities, without federal control.

Since the Séguin Commission, set up a decade ago by the Quebec government, the debate has focused mainly on the fiscal imbalance, the discrepancy between the fiscal resources of the federal government and the growing financial responsibilities of the provinces. This problem was solved in large part by our government when we increased the social and health transfers to provinces in our 2007 budget. But this has not solved the legislative imbalance, which is the heart of the matter.

As we saw last summer during the premiers’ meeting in Winnipeg, the provinces have already started to pressure Ottawa to increase health transfers when the ten-year health agreement expires in 2014. If transfers do not increase as fast as provinces want them to, you can be sure that the debate over the fiscal imbalance will be back in the news three years from now.

This is a recipe for permanent discord. The provinces act like special interest groups who would rather get money from the central government than increase their own taxes. But at the end of the day, the money comes from the pocket of the same taxpayer.

It also guarantees confusion and a lack of accountability. Despite the existence of the Canada Health Act, it is provincial governments that are mainly responsible for managing the health care system. But the debate over federal funding makes it difficult for the average citizen to see who is responsible for what.

Why do we have waiting lines for surgery, overcrowded emergency rooms and not enough family doctors? Is it because of bad provincial management or because of insufficient federal funding? Each level of government can blame the other to score political points.

There would no longer be any ambiguity if each province stopped depending on federal transfers and raised the amount of money necessary to manage its own programs.

A one-size-fits-all solution imposed on everyone from the centre precludes experimentation, kills innovation and makes it awfully difficult to extricate oneself from failed policies.

On the contrary, the genius of federalism is that we can try more than one type of solution to solve public policy problems. Freed from federal conditions and unable to shift the blame to another government, provinces would be more inclined to experiment. Especially in finding better ways to deliver health care services.

Maxime Bernier is the MP for Beauce.

Hockey and the beaver, the maple leaf and the RCMP, the Rockies and Niagara Falls – all made the list when the Dominion Institute conducted a national survey a few years ago, asking citizens what defined Canada. Amidst the people, places and things, one ideal finished high up the rankings too. It was the principle of universal health care.

To many people, our health care system symbolizes Canadian values. The Canada Health Act (CHA) clearly lays out the vision for universality and accessibility. But is the system as equitable as Canadians would like to think?

The CHA sets the conditions for federal funding to support provincial and territorial health insurance plans. The question is whether all Canadians receive equal health care or equal capacity to receive that care. By many measures, the answer is clearly no.

Take the issue of “reasonable access” to health services. The CHA says that one of the primary objectives of federal health care policy is “to facilitate reasonable access to health services without financial or other barriers”.

Whether we’re doing so depends in part on how you define “reasonable access”? Across Canada, for instance, there are very different concentrations of health care providers. Can people who live in urban and rural centres each have the same “reasonable access”?

That disparity is a reality of Canada’s geography, but it is not the only inequity when it comes to health care services.

While the CHA is concerned with how the system is financed, it does not specify how health care should be organized and delivered. Which means standards of care across the country can differ greatly.

The fact is that health care delivery is a provincial and territorial responsibility. As federal legislation, the CHA outlines broad objectives and principles, and the requirements that jurisdictions must fulfill in order to qualify for federal contributions.

Still, different jurisdictions can have significantly varying results in areas such as key health indicators for their population, or wait times, or health care spending per capita.

Jurisdictions have their own benchmarks, and many are exemplary. But health care standards simply are not the same throughout all parts of Canada.

Should they be?

In effect, we do not have a national health care system; we have a series of individual health care systems. Think of what would happen if we were to have a single national standard of care.

What if, for example, federal funding was tied directly to health status and health outcomes?

Perhaps it’s time to revisit the method of transfer payments. Imagine if, under the CHA, the financial levers were used to ensure a uniform standard for access to physicians, or for spending on health prevention and promotion. Reforms like that could have a profound impact on countless health indicators.

Is it time for the federal government to adopt a “pay for performance” model when it comes to financing the health system? Basically, the different jurisdictions would still operate their own health care – but with funding linked to the ability to meet national standards for that care, and to certain efficiencies.

Whatever changes are needed to improve our health system, and to achieve a sense of equilibrium in care delivery, one thing is clear: no province or territory can do it alone.

The public health care system is seen as a sacred trust in Canada – a sacred national trust. The emphasis on national also means that none of these changes can be made without not only the participation but the leadership of the federal government.

By developing a consensus on health care standards – essentially, by emphasizing the “Canada” in the Canada Health Act – we could move closer to achieving the main goal of our health care policy. And that, as set out in the CHA, is “to protect, promote and restore the physical and mental well-being of residents of Canada”.

Whether or not this is feasible, it certainly seems fair. And it’s probably what all those Canadians surveyed were thinking about when they named universal health care as a national symbol.

Kim Furlong is Director, Federal Government Affairs and Mo Amin is Director, Health Economics and Payer Planning for Amgen Canada.

Polls suggest that most Canadians strongly support the five principles laid out in the 1984 Canada Health Act — universality, accessibility, portability, comprehensiveness and public administration. While the Act has achieved iconic status, it only defines insured health services as “hospital services, physician services and surgical dental services provided to insured persons”. These are the only services subject to the five principles in the Act. It is also often suggested that the strict interpretation and application by the provinces and territories of its definitions and principles impedes modernizing medicare.

As patients receive less of their health care in hospitals, which is covered by the Act, and more in home and community settings, which is not, the Act’s authority is diminishing. In 1984, physician and hospital services represented 57% of total health spending, compared to 42% in 2009.

Although Canadians report that they are highly satisfied with the care they receive once it is delivered, they all too often have to wait for services such as diagnostic tests and surgery. Justifiably, they are not only increasingly concerned about long waits for services covered by the Act, they also worry about the financial costs of care that falls outside medicare, such as out-of-hospital pharmaceuticals and home care.

For all of these reasons, the Canadian Medical Association (CMA) believes that it is time to update the five principles of medicare laid out in the Canada Health Act and to add two more principles: patient-centred and sustainability. The overall goal would be to better focus the health care system on patients’ interests.

Below are the modernized principles for Canada’s health system as recommended by the CMA:

Universality
All Canadians must have access to the full range of necessary health care services regardless of ability to pay. This fundamental commitment to equity must include meeting the needs of vulnerable populations who may not be able to access services due to geographical, socio-economic and demographic barriers.

Accessibility
All Canadians must have timely access to the full array of health care services over their lifespan, from primary care, including health promotion and illness prevention, through institutionally-based secondary and tertiary care, to community- and home-based services that promote rehabilitation and health maintenance, to palliative care. There should be clear, measurable wait-time targets/benchmarks for access to care, with publicly-funded alternatives available when timely care is not locally available to patients in need.

Comprehensiveness
All Canadians must have access to the full complement of health services, with incentives in the system to encourage illness prevention and optimum health while addressing the factors affecting health and disease. Comprehensive prescription drug coverage is a critical part of this continuum. A defined set of nationally comparable, publicly funded core services should be available to all Canadians. Access to medically necessary health services across the country should be monitored for comparison purposes.

Portability
All Canadians should be covered within Canada, even if they are outside their home province or territory. This principle must apply to all levels of necessary care.

Public administration
Services must be appropriately, efficiently and effectively delivered. Care must be well-coordinated among providers and between levels (i.e., physician to hospital, hospital back to home, etc.), and supported by a secure electronic health information system.
Timely, high-quality care should be rewarded with incentives, such as activity-based funding of hospitals (i.e., payment on the basis of services provided), and pay-for-performance measures for health care providers, based on valid measures. The system would use both public and private service providers.

The system must be able to demonstrate good value for money. Accountability mechanisms and performance measurements must be in place for monitoring and managing system performance at all levels with regular public reporting required. Societal health goals and targets will be set and monitored. Health care providers and the community will be actively involved in system decision-making.

Patient-centred
The system must be patient-centred, providing seamless access to the continuum of care in a timely manner, based on need and not the ability to pay. Such care would take into consideration the individual needs and preferences of the patient and his/her family, and treats the patient with respect and dignity.

Sustainability
The system must be properly resourced in a sustainable manner. It must be resilient, capable of withstanding or accommodating demand surges and fiscal pressures. It must have the capacity to innovate and improve. Monitoring and documentation of emerging health needs and the burden of illness must be undertaken on an ongoing basis. Strategies must be developed and implemented to meet those needs properly.

Whether one considers the Canada Health Act iconic or incomplete, there can be no doubt that the federal government must reinterpret its vaunted principles so that they can meet the needs of Canadians in the 21st century. This is the next logical step in the evolution of Canadian medicare.

Dr. Jeffrey Turnbull is the President of the Canadian Medical Association.

The growth of government spending on health in Canada is financially unsustainable through public means alone.

In six out of ten provinces, government expenditures on health are projected to consume 50 percent of total available provincial revenues by 2034 (Skinner and Rovere, 2009). When federal transfers are removed, 6 provinces are already spending over 50 percent of provincial own-source revenues (Skinner and Rovere, 2009). In fact, in 2009 public health spending consumed over 70 percent of New Brunswick and Nova Scotia’s provincially sourced revenues.

Faced with this economic reality, provincial governments are under pressure to either raise taxes or reduce the scope of publicly insured benefits under medicare, as they have done in the past. But, tax increases are bad for the economy and rationing is bad for patient health.

If health spending is to become sustainable without damaging the economy or jeopardizing patient health, governments must allow a greater scope for private financing of health care, and health care consumers must be directly responsible for a greater portion of the cost of the medical goods and services they use. These reforms would introduce economic incentives that would discourage unnecessary use of the health care system, encourage cost-efficient substitution choices between medical treatment options, and promote the efficient allocation of medical resources.

Yet, the Canada Health Act (CHA) is an obstacle to private financing in health care. The act financial penalizes provinces that allow user fees, extra billing and other forms of private payment for hospital and physician services, by reducing federal transfers that support health spending in the provinces (Canada Health Act, 1985).

In an international context, the anti-private financing policy of the CHA is an anomaly. Canada is one of only four countries in the OECD that does not require some form of patient cost sharing for medically necessary health care services. Canada is the only OECD country that bans parallel private health insurance (OECD, 2010).

The primary resistance to cost sharing for medically necessary services in Canada is the belief that low-income individuals would be deterred from using health care services to the detriment of their health. The underlying assumption is that the rich would have access to high quality health care while the poor would not, and the health of low income families would suffer as a result. However, the results from the RAND study indicate that such criticisms are mostly groundless. The RAND Health Insurance Experiment is the seminal study on the effects of cost sharing for medical services on health care utilization and health outcomes. RAND found that while cost sharing reduced overall utilization, it did not generally increase unfavourable clinical outcomes except among small populations of patients with chronic conditions that could be more efficiently insured with a targeted subsidy, rather a universal 100 percent subsidy for the whole population (Newhouse et al., 1993).

In addition, OECD countries that require patient cost-sharing, exempt low income individuals from paying user fees. Provinces could introduce similar policies and exempt patients with chronic conditions and low-income families based on a means-test.

While Quebec flirted with the idea of introducing a health care deductible (in the form of a retroactive user fee) earlier this year due to unsustainable growth in provincial health care spending, the province capitulated because of political pressures. All of the provinces are facing unsustainable growth rates in government health care spending and will therefore be forced to make unavoidable tough choices on how to finance provincial health care services going forward. Instead of cutting services and/or raising taxes, provincial governments should look to their international counterparts for alternative ways of financing medically necessary services.

The only way this can be achieved is if the federal government temporarily suspends enforcement of the CHA. The provinces should be free to engage in five-year, population-wide comprehensive trials of the policies that are currently banned by the CHA. This would allow each province to determine empirically whether the health insurance system would improve if policies similar to those currently being used throughout the OECD were permanently adopted.

Mark Rovere is Associate Director of Health Policy Research at the Fraser Institute.

References:
Canada Health Act [CHA] (R.S., 1985, c. C-6). Act current to October 3, 2010.
Newhouse, J. P., and The Insurance Experiment Group (1993). Free for All? Lessons from the RAND Health Insurance Experiment. Harvard University Press.
Organisation for Economic Co-operation and Development [OECD] (2010). OECD Health Data 2010. Statistics and Indicators for 32 Countries.
Skinner, Brett, and Mark Rovere (2009). Paying More, Getting Less: 2009 Report. Fraser Institute.