Provinces need flexibility regarding reforms to provincial health care
Troy Media – by Jason Clemens and Nadeem Esmail
Immediate economic concerns such as the threat of another recession, U.S. economic sluggishness, and the ongoing European crises continue to preoccupy Canadians. These issues should not, however, prevent the federal government from continuing reforms to one of the country’s principal longer-term problems: Health care.
Recently, the federal government explicitly encouraged the provinces to experiment to solve agreed-upon problems in health care. This encouragement was supported by the extension of the Canada Health Transfer agreement to 2025 with no additional regulations or stipulations imposed by Ottawa as a condition of the grant.
However, a challenge remains: The Canada Health Act (CHA). The CHA is a financial act that provides the terms and conditions under which a province is entitled to its full federal cash transfer for health care.
Unfortunately, the CHA is incompatible with a number of policy options that have been successfully implemented in other countries with universal health care. If the provinces are to proceed with meaningful reform, the CHA will have to be revised to accommodate such reforms.
Canada’s universal health care system differs from other industrialized countries with universal health care in several significant ways. Other developed nations with universal health care rely on private competition for delivering health care services coupled with direct financial incentives for patients and providers, which results in better decision-making and ultimately better universal access to care. While policies vary from country to country, differences include cost-sharing, allowing private parallel health care, employing privately-owned and operated surgical facilities and hospitals to deliver universally accessible care, and using independent insurers to operate the universal insurance scheme.
Welfare reform in the 1990s provides a framework for health care reform now. Then, the federal government gave the provinces a block grant for welfare, and removed most federal standards in order to free the provinces to experiment and innovate in the delivery, regulation, and financing of social assistance.
Providing the provinces with greater freedom to deliver and finance health care does not require abolishing the CHA. Indeed, it’s worth recognizing a number of aspects of the CHA that should not be changed. Specifically, the principles of universality (section 10), inter-provincial portability (section 11), and comprehensiveness (section 9) should all be retained in their current form. No changes are needed in these sections in order to allow provinces to explore policy options that other nations have employed in the pursuit of high quality, cost-effective, universal access health care.
Some sections of the CHA do, however, need to be revised in order to remove impediments for the provinces to experiment with policy options consistent with the overarching goal of Medicare that have proven their efficacy and worth in other comparable jurisdictions.
For example, section 8, which contains the requirement for public administration, requires a single, non-profit insurer, thus preventing competition and alternate forms of ownership and operation of the insurer. We recommend it be revised to allow provinces more flexibility to determine how the provincial health insurance plans are operated and regulated.
Section 12 covers accessibility and is one of the more problematic sections of the CHA in terms of limiting provincial reform options. It is also intimately related to sections 18 through 21. These sections disallow the use of extra-billing and user charges. We recommend repealing these prohibitions based on their successful use in other universal health care countries.
We also recommend that Section 12 focus on accessibility for those experiencing low-income by encouraging the provinces to shelter such people from the burden of user fees, co-pays, or other financial contributions. Such a change balances the need for introducing co-pays and other user fees with our collective preference to shelter those experiencing low-income from such financial burdens.
There is little disagreement that health care is one of the most pressing public policy issues facing the country. The federal government has taken some productive first steps in reforming the transfer payments and accordant conditions attached to them. However, the federal government must now revise the Canada Health Act in order to provide the provinces with greater clarity and flexibility regarding reforms to provincial health care based on observed successes in other universal health care countries.
Jason Clemens and Nadeem Esmail are co-authors of First, Do No Harm: How the Canada Health Act Obstructs Reform and Innovation, which was recently released by the Macdonald-Laurier Institute (www.macdonaldlaurier.ca).