The Development of Canada's Health Care System

Canadians pride themselves on having universal health care. However, there are a lot of legislative and regulatory components that allow provinces and the federal government to provide health services to all Canadians. The Canada Health Act (1984), which took almost 40 years to develop, is the foundation of Canada’s health care system [1]. The five principles of the Canada Health Act: portability, accessibility, comprehensiveness, public administration, and universality, promote equity in access to the highest level of care for all Canadians. Despite the availability of public health care, there are opportunities for private health. In fact, in some provinces, most physicians run private clinics that bill the provincial government instead of citizens, giving Canadians “free health care” [2]. Despite the availability of universal health care, there are still many inequities that exist within the system, requiring a deeper look at the health care system overall.

The Canada Health Act, adopted in 1984, went through a long journey to get to where it is today. It all started with Saskatchewan’s Premier, Tommy Douglas, who led the development of a public hospital insurance programme in 1947 [3]. This inspired the Government of Canada to develop the Hospital Insurance and Diagnostic Services Act in 1957. This act allowed the Federal Government of Canada to financially support provincial health care expenditures by up to 50% [3]. Fast forward to 1961, every province in Canada had some sort of public insurance plan with the foundation of universal access to hospital services. In 1962, Saskatchewan again revolutionised healthcare in Canada by covering physician services in their public health insurance, also known as Medicare. This action motivated the Government of Canada to adopt the Medical Care Act in 1966, which allowed cost-sharing between federal and provincial governments of up to 50% of all medical services provided by physicians outside of hospital settings [3, 4, 5]. Within six years, all provinces and territories in Canada extended their public health insurance plan to include physician services [5]. Finally, in 1979, a review of Canada’s health care services identified that the current public insurance plan inadvertently created a two-tiered system of public and private services resulting in some Canadians being denied service [5]. This threatened the universal accessibility of care and the principles of health equity for all Canadians [5]. To address this issue, the Federal Government replaced the Federal Hospital and Medical Insurance acts with the Canada Health Act in 1984, the same act in place today [5].

The Canada Health Act was built upon five principles: portability, accessibility, comprehensiveness, public administration, and universality. The principle of portability stems from providing all Canadians with provincial public health care insurance both within Canada and abroad. Accessibility provides all Canadians with reasonable access to all insured services without out-of-pocket payments from patients. Comprehensiveness enforces the responsibility of the province to include all medically necessary services [1]. The inclusion criteria for medically necessary services defined in the Canada Health Act are as follows: “...to include medically necessary services for the purpose of maintaining health, preventing disease, or diagnosing, or treating an injury, illness, or disability” [6]. Public administration ensures that provincial insurance programs are accountable for the spending of financial resources. The provincial governments have the responsibility to determine the needs of their citizens and allocate enough funds to support programs according to their needs [1]. Lastly, the universality principle ensures that public health insurance covers all medically necessary hospital and physician services. This is where the term “free health care” derived from [1].

Just to be clear, health care services in Canada are not free, even though we may not have to pay for doctor visits, certain prescription drugs, and surgical procedures – there is still an exchange of money involved. This money comes from our taxes. It is estimated that a family with two parents and two children will cost the government approximately $11,786 per year in all health care expenditures [7, 8]. Each province has different rates for each health care service, and the prices are determined by the provincial health insurance plan. For example, in Ontario, doctors will bill Ontario Health Insurance Plan (OHIP) every time they see a patient or perform certain medical procedures. Once OHIP reviews and processes the billing request, doctors will receive payment, this is also called the fee-for-service model [9]. The fee-for-service model is the most common in Canada; however, there are two alternative payment models: capitation, and mixed payment models. Capitation payment methods take into account the entire list of patients enrolled at one time instead of paying per visit. The mixed model payment method is a combination of both fee-for-service and capitation methods [10].

As outlined above, medically necessary services are covered by the provincial and federal governments, leading many to consider it as socialised medicine. However, Canada’s health care system is a mix of public and private models in three layers of financing, to provide Canadians with universal health insurance or Medicare [11]. Layer one represents the publicly funded services; this layer includes the medically necessary hospital, diagnostic, and physician services [11, 12, 13]. These are the “free” services that many Canadians are familiar with, as they are “free” at the point-of-care in Ontario, physicians bill the provincial government instead of patients for these types of services [2]. The second layer involves a mix of public and private insurance for services such as “outpatient prescription drugs, home care, and institutional long-term care” [11, p. 1721]. Although many patients may still have to pay out-of-pocket, there are provincial and insurance programmes available to reduce the cost of prescription drugs, making this layer a mix of public and private care. Lastly, the third layer consists of entirely private services, that patients pay for out-of-pocket, or through private insurance. These types of services include dental care, outpatient physiotherapy, certain medications, and vision/hearing care [11]. Although some services may be covered by provincial insurance plans, such as Workplace Safety Insurance Board (WSIB) in Ontario if the injury is work-related, these are not universal throughout Canada, and often requires private insurance.

Altogether, public health care spending represents 70% of health care financing in Canada, with private insurance, and out-of-pocket payments taking up 15% each [11]. However, these expenditures only look at a limited set of health indicators. Layer one represents only medically necessary hospital, diagnostic, and physician services, the Canadian health care system misses an opportunity to address social determinants of health (SDOH) to improve the health of Canadians. Furthermore, layers two and three of the financing system require many out-of-pocket expenses in private insurance payments or co-pay, reducing the accessibility, and thus the equity of the health care system.

According to the World Health Organization (WHO), SDOHs are the conditions in which people are born, grow, work, live, and age, and the wider set of forces and systems shaping the conditions of daily life [14]. These forces and systems include economic policies and systems, development agendas, social norms, social policies and political systems. Canada prides itself for its universal healthcare, that is supposed to provide affordable access to healthcare for all citizens. However, not everyone enjoys the benefits of this policy. The indigenous population of Canada in particular, are often disproportionately affected by socioeconomic inequities. Diseases that have been well controlled in the general population, such as asthma, arthritis, diabetes, and obesity were found to be higher amongst First Nations adults living off reserve, First Nations adults living on reserve, in northern communities, and Métis adults, than  non-Indigenous adults [15]. Obesity is also higher among the Indigenous populations, which is a risk factor for chronic illnesses such as diabetes and hypertension [15]. An example that can help corelate heath and socioeconomic conditions is nutrition. Lack of proper healthy food sources can be directly linked to various debilitating mental and physical diseases [16]. Food insecurity was found to be three times higher among Inuit, First Nations living off reserve, and Métis adults, compared to non-Indigenous adults [16].  A combination of the devastation left by colonial practices, and the current prejudices and discrimination experienced by indigenous communities cause the perpetuation of social inequities among them [16].

Despite some of the difficulties in equity and addressing some of the upstream determinants of health through the SDOHs, Canada’s health care system allows for universal coverage of medically necessary services. This means that regardless of income status, ethnicity, race, gender, and sexual orientation, all Canadians can receive quality health care and support based on their needs to improve health and wellbeing. Because of this, Canada has one of the best health systems in the world, however, to achieve complete health coverage, Canadians still need to use a mix of public and private health services that includes government coverage and out-of-pocket expenses.

References

1. Canada Health Act of 1984. R.S.C., 1985, c. C-6. Available from https://laws.justice.gc.ca/eng/acts/C-6/page-1.html.

2. HealthForceOntario. Compensation, Incentives, and Benefits. [Internet]. 2015. Available from http://www.healthforceontario.ca/UserFiles/file/PracticeOntario/TiPS/TiPS-CIB-EN.pdf

3. Turner G. The hospital insurance and diagnostic services act: its impact on hospital administration. Can Med Assoc J. 1958. 78(10):768-70.

4. Government of Canada. Canada’s Health Care System [internet]. Ottawa: Government of Canada; updated 2019 Sep 19]. Available from: https://www.canada.ca/en/health-canada/services/health-care-system/reports-publications/health-care-system/canada.html.

5. Health Canada. (2015). Canada Health Act: Annual Report 2014-2015. [Internet]. 2015. Available from: https://www.canada.ca/content/dam/hc-sc/migration/hc-sc/hcs-sss/alt_formats/pdf/pubs/cha-ics/2015-cha-lcs-ar-ra-eng.pdf.

6. Canadian Nurses Association. (2000). The Canada Health Act. [Internet]. 2015. Available from: https://www.cna-aiic.ca/~/media/cna/page-content/pdf-en/fs01_canada_health_act_june_2000_e.pdf.

7. Barua B, Palacios M. Fraser Institute. Health care in Canada costs a typical Canadian family more than $11,000. [Internet]. 2014. Available from: https://www.fraserinstitute.org/sites/default/files/health-care-in-canada-costs-typical-canadian-family-more-than-11000.pdf.

8. Longhurst A. Policy Note. How (and how much) doctors are paid: why it matters. [Internet]. 2019. Available from: https://www.policynote.ca/how-and-how-much-doctors-are-paid-why-it-matters/.

9. Ontario MOHLTC. Ontario Health Insurance Plan. [Internet]. 2019. Available from: http://www.health.gov.on.ca/en/pro/programs/ohip/sob/.

10. Tu K., Cauch-Dudek K., Chen Z. Comparison of primary care physician payment models in the management of hypertension. Canadian Family Physician 2009, 55(7):719-27.

11. Martin D, Miller AP, Quesnel-Vallée A, Carron NR, Vissandjée B, Marchildon GP. Canada’s universal health-care system: achieving its potential. The Lancet. 2018, 391: 1718-35.

12. Health Canada. Canada’s Health Care System. [Internet]. 2019. Available from https://www.canada.ca/en/health-canada/services/health-care-system/reports-publications/health-care-system/canada.html#a8.

13. Born K, Laupacis A. Healthy Debate. Public and private payment for health care in Canada. [Internet]. 2011. Available from https://healthydebate.ca/2011/07/topic/cost-of-care/publicprivate.

14. World Health Organization. Social determinants of health. [Internet]. n.d. Available from https://www.who.int/social_determinants/en/.

15. Public Health Agency of Canada [Internet]. Key Health Inequalities in Canada: A National Portrait – Executive Summary [updated 2018 May 28]. Available from https://www.canada.ca/en/public-health/services/publications/science-research-data/key-health-inequalities-canada-national-portrait-executive-summary.html.

16. Rao TS, Asha MR, Ramesh BN, Rao KS. Understanding nutrition, depression and mental illnesses. Indian J of Psych. 2008, 50(2):77–82.