Who’s Responsible for the Health of Canada’s Health Care System

“Our health outcomes, with a few exceptions, are among the best in the world and a strong majority of Canadians who use the system are highly satisfied with the quality and standard of care they receive. Medicare has consistently delivered affordable, timely, accessible and high-quality care to the overwhelming majority of Canadians on the basis of need, not income.”

So reads A Message to Canadians prefacing the November 2002 report entitled Building on Values: The Future of Health Care in Canada released by the Commission on the Future of Health Care in Canada and initiated by Commissioner Roy Romanow. A decade has passed since this optimistic report was issued. Where does Canada’s health-care system stand today? The answer lies in a discussion of how Canada’s health-care system itself functions.

Health-care systems are very complicated entities in any country and Canada’s is no exception. The Commonwealth Fund’s June 2010 report entitled International Profiles of Health-Care Systems discusses how the Canadian system works at its most basic level. The report explains that: “All Canadians receive health coverage through Medicare, yet there is no single Canadian health system — rather, each province is responsible for delivering care within its borders according to a broad set of principles laid out in the Canada Health Act and in accordance with any intergovernmental funding agreements.” Canada’s Medicare delivers publicly-funded insurance coverage to Canadians for services provided by hospitals for essential, non-cosmetic procedures by physicians. Medical procedures and treatments that are not covered by Medicare are generally covered through a combination of publicly-funded programs and private insurance (most often delivered through an employer).

Health-care delivery has become the largest public expenditure item for the provinces and territories. The Ontario government, for example,  spends approximately 40 per cent of its total budget on health. But it is by examining the national figures themselves, rather than the percentages on a province-by-province basis, that one can better understand the magnitude of the Canadian health-care system and why it remains such a large expenditure item. Currently, Canadian public health-care costs exceed $140 billion annually. But this has not always been the case.

Until the mid-20th century, Canadians paid for health care either out of their own pocket or through their employer with the costs varying substantially from province to province and procedure to procedure. However, in 1947, Saskatchewan Premier Tommy Douglas, leader of the Co-operative Commonwealth Federation (CCF), unveiled Canada’s first provincial hospital insurance program. By 1962, the CCF had evolved into the New Democratic Party and the hospital insurance program had, with the help of the recently formed NDP government of Saskatchewan, expanded significantly. The foundation for Canada’s future public health-care system was established. A mere four years later, Liberal Prime Minister Lester B. Pearson brought national health care to Canada with the Medical Care Act of 1966. Through that legislation, the Pearson government set out a national Medicare system that did not usurp the provinces’ independent delivery of health care. It did so by requiring half of the funding to be provided by the provinces themselves and the other half by the federal government. This funding formula persisted until 1977 when another Liberal Prime Minister, Pierre Elliott Trudeau, would replace it with the current block funding method whereby the provinces receive a lump sum of money from the federal government to provide health care for their citizens but with limited oversight of how that money is actually spent.

In April 1984, the Trudeau government passed the Canada Health Act which, instead of specifying the details on health-care delivery, identified guidelines to be followed by the provinces and territories in order to receive their full share of federal funding. It also abolished the lucrative practice of “extra billing” and allowed every dollar that was exclusively spent on health-care delivery to be matched by the accumulation of a dollar from the transfer payments distributed by the federal government.

By the year 2000, demand for health-care services had grown substantially due to the increased stress placed on the system by the large population of aging baby boomers, by the rising cost of medication and by an abundance of inefficiencies in the system itself, ranging from unusually long wait times for procedures to the delivery of services in less appropriate and more expensive settings than required. In 2004, Paul Martin’s Liberal government sought to develop a focused solution to the system’s many problems in what came to be called the 2004 Health Accord. However, when the First Ministers’ meetings were over, it became clear that the 2004 Health Accord had focused predominantly on securing more funding for the existing system rather than on promoting the structural reforms required to make it run more efficiently. Subsequently, the Martin government spent a further $41 billion on health care for the period between 2004 and 2014, which would be indexed at a rate of 6 per cent per annum.

Today, eight years later, the 2004 Health Accord will soon expire. The current Conservative government’s approach to Canadian health care has been more province-centric and territory-centric than that espoused by the earlier Liberal governments. The Harper government has often framed its approach to health care as being reflective of the “Open Federalism” it espouses. Indeed, the Conservative Party of Canada’s platform states that: “In the spirit of open federalism, when renewing the Health Accord we will respect the fact that health care is an area of provincial jurisdiction and respect limits on the federal spending power.” And the government recently revealed that it will “respect limits on the federal spending power” by putting more of the health-care system back into the hands of the provinces and territories. Further, it will reduce federal health-care spending by an estimated $31 billion, according to the new long-term health-care funding plan intended to revamp the rules for transferring federal health-care dollars to the provinces via the Canada Health Transfer (CHT).

But less money earmarked for health-care spending does not automatically translate into a weakened health-care system and increased spending can also evaporate without demonstrable improvements in health care. Returning to the initial question of where Canada’s health-care system stands today reveals that, comparatively speaking, it does not lack funding. As recently as 2009, Canada was the sixth largest health-care spender amongst Organisation for Economic Co-operation and Development (OECD) countries on a per capita basis and as a percentage of GDP. Nevertheless, according to the Conference Board of Canada, “Canada maintains its ‘B’ grade and 10th-place ranking among the 17 peer countries.”

There are definitely areas in the system that are overdue for improve-ment because of societal change. Demographic shifts are placing an increasing and unprecedented level of stress on the system. Perhaps the most significant change is the massive increase in aging baby boomers who are projected to account for about 25 per cent of the population by 2036 and all of whom will be over the age of 65 by then. This creates a problem since, as The Globe and Mail’s national affairs columnist and health-care analyst Jeffrey Simpson points out: “When Medicare came into play around 50 years ago, the average Canadian was 27-years-old, but now the average Canadian is 47-years-old and aging. The current Canadian health-care system is struggling to come to terms with this and to address the challenges that a steadily aging population presents.”

In light of the demographic shift and its consequences, Simpson stresses the importance of refocusing Canada’s health-care system from one concerned primarily with providing acute care delivery to one that emphasizes the importance of chronic care delivery. Since an aging population is more likely to experience diseases like Alzheimer’s, glaucoma and diabetes as well as heart and stroke, more prominence must be attached to these conditions in terms of research, teaching and treatment. Dr. Andrew Padmos, Chief Executive Officer of the Royal College of Physicians and Surgeons of Canada (the body that specializes in training and the oversight of competence for Canada’s physicians and surgeons), concurs with Simpson about the need to place greater attention on treating chronic diseases. On this subject, Dr. Padmos states that: “There is an increasing importance of dealing with chronic disease. Chronic diseases are weighing down the health-care system with unforeseen expenses, often inadequate care and duplication of effort.”

The “duplication of effort” referenced by Dr. Padmos and the redundancies that often plague the delivery of efficient medical care to Canadians will be examined when considering the value of health-care service for money spent. Wendy Nicklin is the President and CEO of Accreditation Canada, an organization which functions at arm’s length from the federal, provincial and territorial governments and which develops and implements the standards that enable a health-care organization or provider to assess and improve its performance. She states: “There is currently too much overlap, redundancy and, therefore, inefficiency in our current health- care model due to an inability to share medical records and information amongst different institutions and practices and, not surprisingly, these inefficiencies result in more cumbersome and more expensive health-care delivery.” Nicklin is adamant that a more comprehensive data-sharing process achieved through greater use of digital medical health records will play a substantial role in reducing much of the existing overlap and duplication. Yet, she notes that: “Digital or electronic health records are no panacea to our system’s redundancy problem, especially since many of the existing electronic health record databases that are scattered across Canada are incompatible with each other and therefore prevent data-sharing of patients’ records.”

And when it comes to boosting efficiency and improving the Canadian health-care system, no analysis would be complete without a discussion of the virulently divisive, yet often misunderstood, topic of the private delivery of health-care services and the role it could play in Canada’s health-care model. Dr. Anna Reid, President of the Canadian Medical Association (CMA) — the organization that advocates on behalf of Canada’s health-care providers and practitioners — points out that: “Our system is no longer designed to be patient-centered and no longer revolves around the patient, as it should.” That discussion must also be pursued. Similarly, accountability to taxpayers will be examined by evaluating the role and the effectiveness of the medical oversight bodies that are tasked with ensuring that the current model remains efficient, focused and effective in the 21st century.

At the end of the day, Canadians should know who is watching the health of their health-care system.