Value through Innovation19 April 2014

Healthcare system - Demographics raise the funding question

The healthcare system in Canada, formed in accordance with the provisions of the Canada Health Act and publicly funded, is mostly free at the point of use.

The government assures the quality of care through federal standards, but is not involved in the day-to-day work of physicians and care staff, and collects no kind of information about patients’ health status. Such data is treated as confidential by physicians providing treatment. Canada’s province-based healthcare systems, which Canadians also call Medicare, are cost-effective partly because of their administrative simplicity.

In the individual provinces (10 provinces and 2 territories) physicians are responsible for handling insurance claims against the provincial insurer. Private insurance accounts for only a minimal part of the overall healthcare system and is in some cases illegal, as it contravenes the Canada Health Act. Competitive practices are kept to a minimum, thus maximising the percentage of revenues that go directly towards healthcare provision and patient care.

Tax-funded
In general, the system is funded from taxes. A health card is issued by the respective provincial ministry of health to everyone who enrolls for the program and everyone receives uniformly good care according to need. There is no need for a variety of insurance plans, as the public system covers virtually all significant requirements, including pregnancy and infertility. Dental and eye examinations and interventions may not be covered in all provinces, but are often covered by insurance employers inprivate companies take out for their employees.

In some provinces, private supplemental plans are available for those who desire private rooms if they are hospitalised. Cosmetic surgery and some forms of elective surgery are not considered essential care and are generally not covered by the public healthcare system.

Maximum prices set
Such costs must be paid out-of-pocket or by private insurers. Health coverage status is not affected by the loss or change of jobs, as long as premiums are up to date, and there are no lifetime limits or exclusions for preexisting conditions.

Publicly-funded medicines are provided for the elderly or needy,or through private insurance that employers take out for their employees. A ceiling for drug prices is set by a federal body, the Patented Medicines Pricing Review Board (PMPRB), The PMPRB can determine upper limits for the launch price of a medicine and set the times at which price increases are made and the extent of the increase.

Proud of the system
With a view to controlling cost, the federal government negotiates medicine prices with suppliers. People are free to chose their family physician who refer patients to a specialist , if this is considered necessary or the patient has requested to see a specialist. Preventive care and early detection are considered important and yearly checkups are recommended.

Many Canadians see their healthcare system as part of the Canadian social fabric that should not be tinkered with.

Having healthcare that is not linked to one’s income is something that many Canadians are proud of and something that many people around the world envy. However, with an aging population and increased pressure on governments, a public debate is taking place in Canada that has thrown up the following questions.

What types of social services are absolutely necessary? What should these services look like? And, more importantly, how can we continue to fund healthcare, given the mounting pressure on already fatigued taxpayers.