In Depth

Health care

Public vs. private health care


Last Updated December 1, 2006

Does private health care exist in Canada today?

It's a crucial part of the system.

Canada spent an estimated $142 billion on health care in 2005, or $4,411 per person, according to Health Care in Canada 2006, a report released by the Canadian Institute for Health Information. After taking inflation into account, this amounts to almost three times what was spent in 1975.

Of that, just over $98.8 billion was spent by governments delivering public health care. About $43.2 billion was spent on private health care.

What is public health care?

Depending on who you ask, it's either what defines Canada – or it's the greatest impediment to ensuring that Canadians get quick access to the kind of medical services they deserve.

Provincial Health Care Legislation

Health care legislation and its enforcement in Canada varies from province to province. Some provinces, like Nova Scotia, currently have no additional provincial legislation (for example to discourage extra billing), and follow the rules of the Canada Health Act. The province is, however, planning public consultation to develop health care legislation.

Other provinces, like British Columbia and Saskatchewan, have provincial health legislation that reinforces the Canada Health Act. This includes provisions forbidding extra billing for facilities or materials and a cap on what can be charged for services if a doctor opts out of the insured system. These rules do allow doctors to practice outside the provincial system, but often, as in BC, require them to charge the same or less than what the government would pay for the services under the insured system. The enforcement of this legislation, however, has recently come into question.

The incidence of health care providers practicing outside a provincial system is on the rise. Provinces like Quebec have seen significant growth in private, for-profit clinics. These clinics allow those who are willing to pay for services to obtain them without the usual wait times, which is in direct violation of the Canada Health Act.

Provinces such as Ontario have recently moved to strengthen the public system. Bill 8 - passed in June of 2004 - is designed to close loopholes that allow queue-jumping and extra billing, make health care providers accountable and establish an independent Ontario Health Quality Council to report on the health care system.

In reality, it's probably something in between.

Public health care is governed by the Canada Health Act. It's designed to make sure that all eligible people in the country have reasonable access to insured health services on a prepaid basis, without direct charges at the point of service.

Simply put, if you break your leg chasing the Canadian dream, you have the right to get fixed up without opening your wallet – except to pull out your provincial health insurance card.

The act is also designed to make sure that the delivery of health care is pretty consistent across the country. Ottawa has found that the best way to do that is by attaching conditions to the cash it transfers to the provinces to cover health care.

Among those conditions are that health care must be:

  • Portable.
  • Universal.
  • Accessible.
  • Free from extra charges (for insured services).

By portable, Ottawa means if you move from one province or territory to another, you won't lose your coverage. This doesn't mean you can go looking for health services in another province or country because the waiting list at home is too long for your liking. It does, however, mean that your out-of-province in-laws will be covered if they suddenly fall sick while on their annual visit.

Under the universality criterion, all insured residents of a province or territory must be entitled to the insured health services provided by the provincial or territorial health care insurance plan. Doesn't matter if you're rich or poor. You can't buy your way to the front of the line.

By accessible, the CHA means "insured persons in a province or territory have reasonable access to insured hospital, medical and surgical-dental services on uniform terms and conditions, unprecluded or unimpeded, either directly or indirectly, by charges [user charges or extra-billing] or other means [e.g., discrimination on the basis of age, health status or financial circumstances]."

What is private health care?

Anything beyond what the public system will pay for. For instance, should you have to spend some time in the hospital, the public system will cover the cost of your bed in a ward, which usually has three other patients. If you want a private room, the extra charge will come out of your pocket, unless you have extended health coverage either through your employer or through a policy you have bought yourself.

Need an ambulance ride? Expect to receive a bill. If you have extended health care coverage, your insurance company will likely pick up the tab.

Dr. Albert Schumacher, former president of the Canadian Medical Association estimates that 75 per cent of health-care services are delivered privately, but funded publicly.

"Frontline practitioners whether they're GPs or specialists by and large are not salaried. They're small hardware stores. Same thing with labs and radiology clinics �The situation we are seeing now are more services around not being funded publicly but people having to pay for them, or their insurance companies. We have sort of a passive privatization."

Most cosmetic procedures are not covered by the public system. If you're contemplating undergoing a cosmetic procedure, by the way, you might want to take a close look at your cosmetic surgeon's credentials. Almost any doctor in this country can call him/herself a cosmetic surgeon – and start operating – even if that person was not a surgeon before.

There are no regulations in Canada governing who can – or can't – perform cosmetic surgery. Most procedures are not monitored because they are done in a doctor's office.

Are there other forms of private health care?

There are a few privately-run hospitals in the country, whose services may or may not be covered by health insurance.

Shouldice Hospital in Toronto opened in 1945 – before Canadians were covered by universal health care. Dr. Edward Earle Shouldice developed a unique method of repairing hernias and demand for the services of his staff quickly spread beyond Canada's borders. The hospital remains private today. Residents of Ontario who have a valid health card are covered by the provincial health-care system for the cost of surgery. If you're from outside Ontario, you will probably need extended – private – health coverage to get reimbursed.

Several privately-run clinics have opened across the country as well, offering CT scans and MRI services. Most have contracts with their provincial governments. The idea was to take pressure off the limited resources of hospitals. The clinics are paid by the province to provide their services.

Several clinics opened in Ontario after the then former Conservative government signed contracts with four companies. The companies were allowed to provide 40 hours of testing per machine per week. Physicians associated with the clinics are paid on a fee-for-service basis by the Ontario Health Insurance Plan to read the test results for OHIP-covered patients. While the clinics are allowed to take private customers after hours, they cannot sell MRI or CT scans to anyone who walks in off the street. You have to have a doctor's referral.

The clinics operate on a for-profit basis. The Canadian Health Care Coalition argues that clinics like these lay the groundwork for a private, parallel for-profit health-care system in Canada.

"The proliferation of investor-owned private, for-profit clinics and facilities acts like a viral infection in the body of Canada's public health-care system," the coalition said in a news release following the September 2004 First Ministers Conference on health care. "The for-profit health care virus cannot exist without feeding off and damaging public bodies."

Shortly after beating the Conservatives in Ontario's 2003 election, the Liberal government promised to shut down the private clinics and buy the machines.

However, in 2006, the Conservatives were elected federally on a platform that pushed for a mix of public and private health care, provided that health care stays publicly funded and universally accessible.

There are other signs of a shift toward more private health care.

In December 2006, B.C.'s first private emergency clinic opened in Vancouver. The Urgent Care Centre plans to offer emergency care on a user-fee basis, which raises questions about how it will operate legally under the Canada Health Act.

The provincial government authorized B.C.'s Medical Services Commission to send inspectors to the clinic. Health Minister George Abbott said if they find evidence the law is being broken, the commission would seek an injunction to shut down the clinic.

As well, the Canadian Medical Association elected a new president in August 2006: Vancouver physician Dr. Brian Day, a surgeon and private clinic owner who says he wants to see more private options for health-care services that are currently public. His main opponent was Dr. Jack Burak, also from B.C. and a staunch defender of Canada's public health-care system.

What's the difference between private health care and two-tier health care?

Again, depends who you ask. Private health care exists. It broadens coverage available under the public system, which was designed to guarantee all Canadians basic health coverage. Currently, private health care does not mean that you can move to the front of the line because you can afford to pay more.

Proponents of expanding private health care to offer more health-care choices argue that if you have the means, you should be able to purchase health care services and get around unreasonably long waiting lists. They argue the public system will be maintained and that more choice does not mean one system for the rich and one for those who can't afford to pay extra.

Dr. Arnold Relman, professor emeritus of medicine and social medicine at Harvard Medical School and emeritus editor-in-chief of the New England Journal of Medicine, appeared before the Senate committee studying health care in February 2002.

He warned against relying on the market – or greater "consumer choice" – to control health-care costs and improve quality.

"While there is much to be said for making more information available to people about their health care," Relman said, "it is a fundamental misconception to imagine that sick patients can or should behave like ordinary consumers in commercial transactions, selecting the services and prices they want. Health care is totally different from most goods and services, and that's why we have medical insurance and why sick people need the professional and altruistic services of physicians and other providers."

Schumacher argues further privatization will not spell the end of medicare as we know it.

"People worry that if doctors can go private, then they're going to quit the public system. I would argue the opposite. If a doctor can take part of their practice private, they're less likely to leave because they're not tied solely to the government's fee schedule."

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