08-Medicare and the Funding of Health Care in Canada

Question 1

What is Medicare?

Answer 1

A public-funded single-payer system that provides through hospitals and physicians services deemed medically necessary without financial cost to insured persons.

Physician and hospital care is free at point of service

Question 2

Where was the first provincial public plan for hospital insurance in Canada?

Answer 2

In 1947, Saskatchewan created the first public hospital insurance program. It covered all residents at no cost to the patient. This effectively reduced the perceived cost of healthcare drastically which resulted in lots of demand

Question 3

How did the federal government react to Saskatchewan’s public healthcare system?

Answer 3

The Hospital Insurance & Diagnostic Services (HIDS) Act was enacted in 1957. The federal government agreed to pay 50-50 of healthcare expenses made by the provinces. This was done to incentivize other provinces to kickstart their public hospital insurance programs.

All provinces ratified by 1961.

Question 4

When was the public hospital insurance program expanded to include physician services outside of a hospital?

Answer 4

Saskatchewan unveiled the first provincial public medical care insurance in 1962. .

Question 5

What was the Saskatchewan Doctors Strike?

Answer 5

In 1962, Physicians went on strike as they wanted to maintain autonomy and be paid well by the healthcare system. They were successful and became independent contractors that did not directly work for the health care system

Question 6

What was the Hall Commission and what was the result?

Answer 6

In 1964, The Hall Commission recommends public-funded health care that covers all essential medical procedures. Prescription drug coverage was on the menu, but even today, there is no universal coverage of drugs.

Question 7

What program, in combination with HIDS created what we call today Medicare?

Answer 7

This was the Medical Services Act, and it was a national medical service program to compliment HIDS. All of the provinces signed on by 1972. Other services, including most prescription medicines, remain outside funding formula to this day

Question 8

In response to rapidly expanding healthcare budgets, what act did the federal government enact to control spending?

Answer 8

In 1977, the federal government introduced the Established Programs Financing Act and it eliminated the 50-50 cost-sharing program between the provincial and federal governments. It introduced block funding, and it meant that provinces received a single payment for health and post-secondary education. The total amount received depended on population and GNP changes. This effectively meant that the federal government paid less for Medicare-funded services, and provinces were left to make tough budget cuts snd charge extra fees to patients

Question 9

How did the government respond to provinces charging extra fees following changes to federal funding in 1977?

Answer 9

The Canada Health Act was enacted in 1984 and it discouraged user fees and extra billing by threatening provincial governments to reduce the amount of funding in Federal transfer payments.

This act summarized and reaffirmed the principles of Medicare as indicated in HIDS and Medical Services Acts

Question 10

What are the principles of Medicare?

Answer 10

1. Publicly Administered
2. Comprehensive
3. Universal
4. Accessible
5. Portable

Question 11

What replaced the Established Programs Financing (EPF) Act?

Answer 11

In 1995, the Canada Health and Social Transfer (CHST) replaces the EPF and other federal social supports. The federal government also made major cuts to cash transfers made to the provinces/territories.

Question 12

What happened to the Canada Health and Social Transfer (CHST)?

Answer 12

In 2004, the CHST was divided into the Canada Health Transfer (CHT) and the Canada Social Transfer (CST).

Question 13

What are some of the most recent developments in the health care system?

Answer 13

A study that looked into Pharmacare recommended a Medicare-type funding model in 2019.

The Canada Dental Benefit is about to come into effect on December 1st, 2022 and it will offer low families that have no dental coverage up to $650 per child.

Question 14

What is the most important concern in the healthcare policy debate in Canada?

Answer 14

It is funding. How much should we spend? What should be paid for by public funds? What role does the private sector play in Canadian healthcare?

Question 15

Are healthcare costs hyperinflationary?

Answer 15

True, the healthcare budget increases 3% faster than inflation.

Question 16

How much did Canada spend on healthcare in 2021?

Answer 16

$308 billion, which comes out to $8,019 per capita. This chunk of money represents 12.7% of the national GDP

Question 17

How much of 2021’s healthcare budget was spent on COVID-19 response funding?

Answer 17

7%, and this does not include personal and private spending

Question 18

What is the main consequence of ballooning public spending on healthcare?

Answer 18

Over time, non-healthcare publicly funded activities like infrastructure receive increasingly smaller amounts of money.

Question 19

Does higher spending on healthcare necessarily equate to significant increases in life expectancy or quality of care?

Answer 19

Increasing spending in countries like Canada does not show a proportionate increase in life expectancy or quality.

Question 20

What share of total healthcare spending does the private sector represent?

Answer 20

30% of all health care spending in Canada, and it is largely financed through private insurance and out-of-pocket payment from patients.

Question 21

Does the Canada Health Act of 1977 allow private insurance to pay for healthcare services that are otherwise covered by Medicare?

Answer 21

No, private insurance is only available for services not covered by Medicare, such as prescription drugs, and services provided by non-physician healthcare providers in the community.

Question 22

What is the Chaoulli Decision?

Answer 22

In 2005, the SCC striked down Quebec’s law prohibiting private health insurance for medically necessary physician and hospital services. This decision allowed private insurance to help the public system when it is inadequate.

Question 23

What was the goal of Cambie Surgery Centre vs. the Government of British Columbia?

Answer 23

This case aimed to have the same result as the Chaoulli Decision in British Columbia. The Cambie Surgery Centre wanted to allow private insurers in B.C. to pay for services available under the public health system.

They also wanted to challenge the rule of exclusivity by questioning whether doctors can concurrently charge privately and publically for medical services.

Question 24

Why follow the Rule of Exclusivity?

Answer 24

There are concerns that physicians may recruit less complicated cases to their private clinics from the public system. This effectively means that the public system would be relegated to poor or complex patients, resulting in increased health care costs and wait times.

Two-tiered health care systems are great for people with resources, not so much for the poor and this is why physicians are not allowed to dabble between public and private billing.

Question 25

What is the Rule of Exclusivity?

Answer 25

Physicians are not required to participate in Medicare and if they choose to go down this route, they can only do private billing. If physicians participate in Medicare, then they can only do public billing. Physicians cannot concurrently receive payments from Medicare for some patients and privately for others.

Question 26

What was the result of the Cambie case?

Answer 26

The BC Supreme Court dismissed the case and its appeal in 2020 and 2022 respectively. It is now being appealed to the Supreme Court of Canada.