Healthcare System in Canada

I

Introduction

Healthcare System in Canada, network of providers, institutions, and insurers that care for the health of Canadians. In Canada, healthcare is delivered by private institutions—hospitals and physicians—that are not controlled directly by the government. This private delivery system is combined with a publicly financed health insurance system that is paid for by the provincial and federal governments. (In this article, the use of the term “provincial” refers to both provinces and territories, since territories and provinces play the same role in the healthcare system.) This health insurance system is known as Medicare.

Each province in Canada has a separate health insurance system funded by provincial government revenues and contributions from the federal government. The federal government provides funding in a lump sum based on the province’s population.

II

Provincial Systems and the Federal Government

The Constitution Act of 1867 made the provinces responsible for matters of health policy (see Constitution of Canada). As a result, instead of national health insurance, Canada has ten provincial and three territorial health insurance systems. Although the federal government has a strong presence in the health sector, the provinces are primarily responsible for healthcare. Each province and territory has its own statute that regulates its healthcare system. The provincial governments administer health insurance programs and make decisions about funding hospitals and reimbursing physicians. Most provinces fund their health insurance out of general revenues and do not impose a specific health tax on individuals or businesses. Only Alberta and British Columbia levy healthcare insurance premiums for their public insurance. Health insurance is an expensive operation, and provinces spend from 30 to 35 percent of their total budget on healthcare.

The federal government contributes to the provincial systems as part of the Canada Health and Social Transfer (CHST), a block grant that includes the federal contributions to healthcare, higher education, social assistance, and other social services. The federal government also links the provincial healthcare systems together with a set of principles, commonly referred to as national standards. These standards were articulated in the Canada Health Act, which the Canadian Parliament passed in 1984.

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Under that law, provinces must ensure that their healthcare systems respect five criteria: (1) public administration—the health insurance plans must be administered by a public authority accountable to the provincial government; (2) comprehensive benefits—the plan must cover all medically necessary services prescribed by physicians and provided by hospitals; (3) universality—all legal residents of the province must be covered; (4) portability—residents continue to be covered if they move or travel from one province to another; and (5) accessibility—services must be made available to all residents on equal terms, regardless of income, age, or ability to pay. In the 1980s and 1990s the federal government began to contribute a lower percentage of provincial health insurance funding. In response some critics questioned the extent to which the federal government could continue to expect the provinces to uphold the national standards of the Canada Health Act with less funding.

In addition to setting standards and providing funds for the provincial health systems, the federal government is required by the constitution of Canada to provide healthcare to military personnel and veterans, members of the Royal Canadian Mounted Police, and inmates of federal prisons. The federal government is also directly responsible for the health needs of aboriginal Canadians living on reserves. The federal government promotes public health through activities such as prenatal nutrition programs and youth antismoking campaigns. It also maintains laboratories for disease control and product safety.

III

How the Public System Works

A

Patients

When a legal resident of Canada needs medical care, he or she presents a provincial health card, usually a plastic identification card similar to a credit card, to a physician or hospital. Patients choose their physicians, although a general practitioner may refer them to a specialist. If patients require immediate care without an appointment, they can seek admittance to any hospital emergency room or community health clinic. There, the severity of their medical need determines how long they will wait to see a nurse or doctor. Healthcare provision in Canada is based on medical need rather than the ability to pay; consequently, there are often waiting lists for some elective procedures, such as cataract surgery; nonemergency surgery, such as hip replacement; and diagnostic services, such as the use of magnetic resonance imaging (MRI). In addition, medical specialists are often less available in rural and remote areas.

B

Physicians

The majority of Canadian doctors provide care in private practice and apply for admitting privileges at one or more nearby hospitals. Most doctors provide care on a fee-for-service basis. In that arrangement the doctor is paid for each service provided to the patient, rather than earning a set salary or a set amount for each person under his or her care. The fee-for-service format is especially common among specialists and doctors who see patients outside of the hospital. The fee-for-service arrangement allows the physician to decide what care to provide independent of the influence of administrators or insurers. The licensed physician is reimbursed for his or her services through a provincial agency that negotiates a fee schedule with the provincial medical association.

Not all doctors are paid by the fee-for-service format; some are paid a fixed wage, either an hourly wage or a salary. Emergency room doctors, for example, are often paid on an hourly basis. Doctors in their residency (early years of specialty training) in teaching hospitals are generally paid on a salaried basis. In Québec, a small number of general practitioners choose salaried positions in community health and social clinics. In most provinces, specialist salaries are capped at a certain level of income.

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