HAH 6260

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HAH 6260 Health Services Organization and Policy

• Class 1 History and overview of the system,
  funding, delivery, legislation, etc.

Professor Monique Bégin
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Five dimensions to explore

1. Defining the Canadian health care system(s).
2. Origins constitution, history, legislation.
3. Financing, delivery, allocation of resources.
4. Health care spending and outcomes.
5. Issues.

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1. Defining the health care system(s)

• In reality, there are 13 systems, with both
  common features and variations between and within
  the 10 provinces and 3 territories.
• The federal government has basic national
  standards/rules and contributes .
• The provinces oversee, plan, manage, etc., and
  pay the lions share.

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The system(s) is made of

• What Canadians used to call medicare the 2 old
  historical agreements between the feds and the
  provinces to cover for all hospitals costs and
  doctors visits and nothing else.
• But with time, we came to say medicare or the
  health care system to refer to all things
  health undertaken by each of the province,
  EXCEPT pharmacare, homecare and denticare.
  Medicare is in need of a redefinition.
• In addition to the governments, there are many
  other players professional associations,
  industries (pharmaceutical, medical devices),
  service agencies, NGOs, and

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also world players, for example

• World Health Organization (WHO) (Geneva). The
  Director General is Dr. Gro Harlem Bruntland,
  former Prime Minister of Norway.
• Regional components of WHO
• Pan American Health Organization (PAHO) for the
  Americas (Washington)
• Regional Office for Europe (Copenhagen), etc.

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and even other players with broad mandates

• Organization for Economic Cooperation and
  Development (OECD) (Paris) also studies health
  systems
• World Bank (Washington, Paris, Tokyo)
• International Monetary Fund (Washington)
• International Labour Office (ILO) (Geneva)

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This is why WHO says that health systems matter

• Health systems consist of all the people and
  actions whose primary purpose is to improve
  health. They may be integrated and centrally
  directed, but often they are not. () They have
  contributed enormously to better health, but
  their contribution could be greater still,
  especially for the poor. Failure to achieve that
  potential is due more to systemic failings than
  to technical limitations. It is therefore urgent
  to assess current performance and to judge how
  health systems can reach their potential.

Source The World Health Report 2000, WHO,
Geneva, 2000, p.1
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The system is the sum total of

• the interactions between all the players in
  Canada, three in particular Health Canada and
  the federal government the provincial Ministries
  of Health and their respective governments and
  organized medicine. No one really is in charge
  of the system, which rests on the constantly
  renegotiated equilibrium of these key players.

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It is also a formidable business proposal

• 100 billion (public private)
• 4 5 annual growth
• 350,000 workers
• 30 regulated professional groups
• 228,000 nurses
• 57,000 practicing physicians
• 2,275 health executives

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The one player that is missing

• The PATIENT and the public in general, both as
  citizens and as taxpayers. The only voice they
  have is through a general election.
• This is a major imbalance in the power structure,
  the dynamics of reforms, and the accountability
  mechanisms of our health care system.

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2. Origins constitution, history, legislation.

• The Constitution of 1867, by default so to speak,
  makes HEALTH a PROVINCIAL responsibility. This
  did not change with the 1982 patriation of the
  Constitution.
• History and the spending powers (given by
  constitution to the feds) involved the federal
  government, as well as their direct
  responsibility for veterans and Natives health,
  for drugs administration, etc.

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Important notice!

• So health care is of provincial jurisdiction.
• But we should not forget that the Constitution
  (1982), under its equalization provisions,
  obliges the provinces to provide reasonably
  comparable levels of public service for
  reasonably comparable levels of taxation.

Through federal taxes, the richer provinces
help the poorer ones, for a level playing field.
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Where does medicare come from?

• Beginning of the XXth century our immigrants
  from countries of Europe (Germany 1 million)
  bring with them a political culture and a union
  movement experience with a sense of the common
  good. (Bismarck -1815-1898 -, Germany first
  health care system)
• 1919 further to the 1st World War, on the
  platform of the Liberal Party of Canada.
• ()

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the 2nd World War, and after

• 1945 the Reconstruction Conference (fed-prov).
  The Minister of Health of Canada, Brooke Claxton,
  proposes the National Health Grants Program.
  Opposed by Ontario (George Drew) and Quebec
  (Maurice Duplessis).
• 1948 re-submitted by the new Minister of Health
  of Canada, Paul Martin, Sr. The provinces
  approve! (Seed money towards a comprehensive
  health insurance program.)

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In the meantime, Saskatchewans CCF government

• 1947 Premier T.C. (Tommy) Douglas decides to go
  it alone and passes The Saskatchewan Hospital
  Services Plan.
• 1957-58 the federal Liberal gov. (Paul Martin,
  Sr.) follow with a 50-50 offer, and its accepted
  by all! Hospital Insurance and Diagnostic
  Services Acts (HIDS)
• ()

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... and then the second step

• 1962 Saskatchewan pioneers again, despite a
  dramatic doctors strike The Saskatchewan
  Medical Care Insurance Plan.
• 1964 Mr. Justice Emmett Halls Commission, set
  up by Diefenbaker, reports to the Pearson
  government recommends a national medicare
  program.
• 1966 the feds create The Health Resource Fund to
  help build hospitals and purchase equipment.
• 1967 the federal Minister of Health, Allan
  McEachen (Liberal), succeeds with The Medical
  Care Act.
• By January 1971, all provinces have medicare
  (despite a bitter specialists strike (1970) in
  Quebec).

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The last 30 years are about

• Changing the funding mechanisms, from
  cost-sharing (50-50) (CAP) to block funding
  (EPF).
• Re-enforcing the 5 old conditions by the Canada
  Health Act (1984) (which replaced HIDS and the
  Medical Care Act).
• Modifying the transfer of funds the Canada
  Health and Social Transfer (1996) replaced EPF
  and CAP.

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3. Financing, delivery, allocation of resources

• Financing who pays for what services?
• Delivery who delivers what services?
• Allocation how are resources allocated to those
  delivering services?

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We keep speaking of our public health care
system, but

• If we look at the three components
• financing/funding
• delivery
• allocation of resources
• we must ask the question
• Which exactly are public? (What is the status of
  those who do it and with whose money?)

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In clarifying this point,

• we recognize that health care systems are not
  uni-dimensional
• we contribute to a better public debate, with
  less emotion
• we will correctly diagnose where and what the
  problems are, coming up, hopefully, with
  effective solutions.

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Health care system models

• National Health Service (Beveridge model)
  universal coverage for residents, financed by
  general taxation, with national ownership/control
  of factors of production.
• Social Insurance (Bismarck model) universal
  coverage within social security, financed by
  employer/employee, with a combination of
  public/private ownership.

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and, finally

• Private Insurance (Consumer Sovereignty model)
  individual or employer-based purchase of private
  health insurance coverage, financed via
  individual and/or employer contributions, with
  private ownership of factors of production.

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In the 29 OECD countries (Europe ),

• The diverse health care systems are remarkably
  similar in objectives and incentives.
• Health care systems are not recipes that can be
  imported/exported. They are the product of
  particular history and political culture.

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Health care system models
Public Financing Private Financing
Public Delivery National Health Service U.K. , Sweden, etc. ------------------
Private Delivery Social insurance, like Canada Various private insurance regimes, USA
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Reality check

• We have to speak of private delivery of
  services in Canada because physicians are
  individual entrepreneurs not civil servants,
  and so on (nurses are hospital employees, which
  are corporate entities separate from their
  provincial governments, etc.).
• It remains that medicare is entirely paid for
  with public funds, even if hospital food, laundry
  or lab work are done in the private sector.

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Why?...

• Because of the general taxation base we use for
  funding the system,
• and
• Because we dont directly control all the factors
  of production.

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N.B. Despite the words used, Canada is more of a

• BEVERIDGE model country than one of Social
  Insurance model one.

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Financing of health care in Canada

• General taxation (personal income, corporation,
  sales, VAT)
• Specific taxes (payroll taxes, excise taxes on
  specific goods)
• Premiums
• User charges (co-payments, deductibles)
• Charitable contributions

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and allocation of resources

• The provincial government allocates
• The budgets for hospitals
• for continuing care
• for public health
• for mental health, rehab services
• the global budget for physicians fees (each
  provincial medical association allocates it in
  turn by specialty, etc.)

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In closing Merit goods vs. Market goods

• It is our political culture, not our
  socio-economic organization as a country, that
  distinguishes us from our neighbour to the South,
  the United States.
• This is most reflected in our attitude towards
  health care they consider health as a market
  commodity, while we consider health as a common
  good.

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4. Health care spending and outcomes

• 100 billion in total (2001)
• ??? billion in 2005, 2010, 2015, etc.

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Dividing the total health care
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The total bill is split between

• Public spending
• 73 in 2001, i.e. 73,000,000,000.
• Federal government, provincial/territorial
  governments, Workers Compensation Boards, social
  security/social assistance programs.

• Private spending
• 27 in 2001, i.e.
• 27, 000,000,000.
• Private insurance plans (mostly
  employment-based),
• out-of-pocket.

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Public/private by categories
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OECD countries spending on health care

• Since 1980, the median for these nations health
  care expenditures as of GDP stayed around 7-8.
  In 1999, it was 7.9. That year, Canada was the
  the fourth highest spender at 9.3, equal with
  France.
• Exceptions are
• those below this benchmark UK, Spain, Finland
  and Japan
• those above Canada/France, Germany, Switzerland,
  the USA
• In 1999, the USA were at 12.9 of GDP.

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Are health expenditures rising?

• At first glance, yes.
• With the private share increasing faster than the
  public sector of health expenditures.
• But, taking a closer look
• (Cf. graph distributed)

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What if we take inflation and population growth
into account?

• Then, if we adjust for inflation and population
  growth, health expenditures have decreased a bit.
• (Cf. graph distributed)

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5. Issues

• What do Canadians think of medicare?...
• Consistently the most cherished government
  program of all it serves them well.
• Also the most worrisome right now should be at
  the top of the public agenda.
• 48 consider that medicares five principles are
  not respected.

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and what do others think of us?

• Canada has a narrower universal coverage base
  than OECD countries
• Is one of the biggest spenders on health care
  (OECD)
• Very good on life expectancy (WHO)
• Very poor on efficiency we ranked overall 30th
  in 2000 (WHO)