By Gregory P. Marchildon
Healthcare Quarterly
Vol 8, No 4, 2005
Abstract:
There has been considerable speculation about the potential impact of the Supreme Court of Canada’s judgment in Chaoulli v. Quebec. Even if those who are most friendly – or most hostile – to Canadian medicare are exaggerating the impact of the decision, its impact will be large. While the decision does not strike down any existing single-payer medicare system in any province, including Quebec’s single-payer system, it is certainly capable of becoming the Magna Carta for two-tier medicare through future judicial interpretation and extension. In any event, it has already become the battering ram of choice for medicare’s most tenacious opponents.
In recent years, the critics of medicare have become more vocal about what they invariably describe as the monopoly of single-payer health care, often comparing Canadian healthcare to the command economy of the former Soviet Union. This perception is not only misleading – it is fundamentally wrong on a number of counts.
In the first place, Canadians are awash in choices when it comes to medicare. We have the freedom to choose our physician. Within our respective provinces and territories, we are free to choose our health institutions – one hospital over another, one clinic over another, depending on our personal preferences. And in contrast to the imagery of a single government bureaucracy perpetuated by the critics of medicare, almost all of our physicians are independent professionals working on fee schedules or contracts freely negotiated with provincial and territorial governments. Many of our clinics are private (not-for-profit as well as for-profit) and the majority of our hospitals are either private not-for-profit institutions or part of regional health authorities that have varying degrees of managerial autonomy from government. This contrasts sharply with the history of the National Health Service in Britain, in which hospitals and their employees all became part of a central government bureaucracy.
In the second place, medicare refers to a quite narrow range of health services – mainly hospital, diagnostic and physician services that are provided on a universal basis and without direct payment by the patient. These services constitute about 43 per cent of total healthcare expenditures in the country. Almost all other healthcare, including home care, nursing home care, prescription drugs, vision care and alternative medicines, are outside the medicare basket. In other words, the so-called monopoly covers less than one-half of Canadian healthcare and does not at all apply to mixed and private sectors of healthcare – sectors in which private insurance, user fees and direct payment are the rule rather than the exception. Moreover, the mixed and private sectors – comprising over 50 per cent of health expenditures – have contributed far more than the public sector to the high rate of growth in healthcare expenditures over the last decades.
Finally, we have always permitted two small exceptions to our single-payer medicare regimes – one private, the other public. On the private side, no one is prohibited from purchasing private health services as long as they pay out-of-pocket for those services from providers who have chosen to be non-participating members of a provincial medicare scheme. On the public side, workers’ compensation health benefits predate medicare and were legally excluded from the operation of the Canada Health Act and provincial medicare laws. Of the two, at least until the Chaoulli decision, the public tier of workers’ compensation has been more problematic in terms of its damage to the principle of universality by allowing a segment of the population preferential access to medicare services, occasionally through non-participating physicians and private facilities.
In contrast, the private exception based upon private payment never really developed in Canada for a number of complex reasons, particularly the refusal of provincial and territorial governments to subsidize private care or encourage physicians to work both sides of the public-private street at the same time. Although I know it is contentious to do so, I would add that the generally high quality of Canadian medicare has also prevented a large private market from developing. At any rate, the very few Canadians who have wanted such services have always been free to purchase them in the United States, where a ready market for privately purchased services has always existed because of the truncated nature of public health insurance in that country.
This brings us to the nub of the Supreme Court’s decision. Despite the lack of evidence, opponents of Canadian-style medicare, including Dr. Jacques Chaoulli, have long argued that the inability to purchase private insurance for medically necessary health services has been the key factor in preventing a viable second tier from emerging capable of competing with publicly administered medicare for customers (Coffey and Chaoulli 2001). They often point to examples such as Australia, where public and private hospital and physician services co-exist. Of course, they conveniently ignore the fact that the Australian government has had to provide a huge public subsidy in the form of a 30 per cent deduction for private insurance premiums to keep the private system in business, an experience that seems common in countries with such two-tier systems. In other words, public funds are often diverted to the wealthier members of society in order to prop up the private tier where it exists.
Proponents of medicare have long argued that to preserve the universality of a system, with access based solely on need, government needs to discourage the emergence of a separate “upper” tier of care based on ability to pay. Most governments in Canada have done so because they wanted to prevent major exceptions to the principle that access should be based on urgency of need. They have also done so to prevent a parallel private system from robbing the financial and human resources needed to run a top-notch public system. To protect their single-payer systems, different provinces have selected different and various means to discourage a second private tier. These means include: not allowing non-participating physicians to charge more than the medicare fee schedule; refunding patients only the medicare portion of fees paid to non-participating physicians; and in the case of six provinces (British Columbia, Alberta, Manitoba, Ontario, Quebec and Prince Edward Island) prohibiting private health insurance for medicare services.
In Chaoulli, the Supreme Court decided that Quebec’s prohibition on private health insurance is contrary to the Quebec Charter of Human Rights and Freedoms when an individual’s lengthy wait for medicare services seriously compromises the health of that individual. The court provided little guidance, however, in helping governments, health organizations and physicians know at what point a waiting time is too long. Moreover, little or no consideration was given to the fact that many provincial governments and health organizations, through initiatives such as the Western Canada Wait List Project and the Saskatchewan Surgical Care Network, have focused their efforts at understanding and shortening wait lists. Indeed, while the degree of success varies across and within provinces, there has been considerable progress in reducing waiting times in many parts of the country in the last couple of years.
Contrary to the majority view of the court, which seemed to swallow the monolithic, monopoly view of the world, medicare is actually a highly local system depending on the management and decisions of individual physicians, hospitals and regional health authorities. It is up to these organizations, under a publicly administered framework provided by the provincial government, to balance the many priorities, from urgent to elective care, and from sickness care to illness prevention and health promotion. We must ask ourselves whether the court’s concern with one waiting list problem in one city in one province is going to end up dictating the priorities of health organizations and governments throughout Canada, even further tipping the balance in favour of downstream illness care and away from prevention and promotion efforts that will keep us all healthier (and at less cost) in the long run.
So, what next?
In the face of this decision, those governments that support medicare should act now rather than waiting for the inevitable offensive driven by the powerful interests supporting the radical privatization of Canadian medicare. Individuals and groups within those provinces can strengthen the resolve of these governments by expressing their support for universal medicare, their opposition to allowing a private upper-tier of care, and initiating their own litigation to support the principles of medicare.
Those provinces that have prohibited private insurance should consider amendments that clarify the reasons for prohibition and the merits of a single-tier system of medicare. The legislative debates will force everyone to make their positions and assumptions clear and will provide an opportunity for medicare-friendly governments to set out the evidence supporting a single-tier system. Once enshrined in law, each government’s legislative intent will have to be taken into consideration in future court rulings.
The provinces that have not previously prohibited private insurance have at least two options open to them. They can re-examine the combination of measures they have used in place of an outright prohibition on private health insurance to protect the integrity of their single-payer systems, and the extent to which their circumstances may be similar to, or different from, the provinces with express prohibitions. They can then amend their own medicare laws to make clear their legislative intent to continue to preserve the integrity of their single-payer systems.
Although unlikely because of the inherent cautiousness of the advice given by health bureaucracies to their political masters, it would be interesting to see at least one provincial jurisdiction carefully draft a new law prohibiting private health insurance for the express purpose of having it tested in the courts, perhaps through a reference case. I am quite sure that it would be relatively easy in such a case to demonstrate the broader point that the policy measures relied upon by any government to protect medicare are better determined by governments accountable to the public through the democratic process than by the courts.
The federal government could also take some long overdue action to enforce the Canada Health Act. There is a reason that Montreal has the largest number of private MRI clinics in the country – a market has been created because of the extremely long waiting lists in the public sector and the willingness of participating physicians to encourage their more well-off patients to jump the medicare queue by getting a private MRI. If the federal government had forced this issue into the public domain years ago through a (temporary) reduction in its transfer payments, the Quebec government might have better ensured timeliness of care through the public system and not relied so surreptitiously on its private release valve. In more general terms, while it is up to individual provinces to decide on how best to administer (and protect) their respective single-payer systems, the federal government needs to continue to ensure that it is effectively discouraging major exceptions to the fundamental principles of public administration, universality, comprehensiveness, portability and accessibility.
Finally, I would like to offer some unsolicited advice to Premier Klein of Alberta, given his comments following the Chaoulli decision. If he truly believes that the founding principles of medicare are fundamentally flawed, then this court decision should finally give him the courage of his convictions. If he truly believes that Albertans endorse his vision, then he should immediately introduce a two-tier system. He can bypass the Canada Health Act by simply refusing federal health transfers in the future. If Saskatchewan was able to go it alone for years when it first introduced medicare, then surely oil-rich Alberta can now afford to go it alone. Albertans could then pay directly out-of-pocket or indirectly through private health insurance for a portion of their medicare services. Access for the majority would be based mainly on “ability to pay,” while access for the very poor (often defined as those on welfare) would be determined by a safety net type medicare program. Where the working poor fit into this picture is a little harder to determine but all Canadians outside Alberta would have a home-grown point of comparison on how the systems stack up against each other.
In the 1960s, this option was called Manningcare because Premier Ernest Manning was convinced of its merits compared to the universal medicare model. Personally, I would be confident that single-tier medicare would prove itself more efficient, effective and equitable in the comparison, just as it has done so relative to the American system. Whether a majority of Albertans would willingly go along with Premier Klein on this trip back to the past is highly questionable. Indeed, I suspect the majority of Albertans remains as opposed to a two-tier system as all other Canadians, a stubborn fact that explains the gap separating Klein’s bravado from his government’s timid actions on the ground.
We all know that the demand for healthcare services is potentially limitless. After protracted debates almost a half century ago, we decided that, at least for medicare services, rationing should be based upon urgency of need rather than ability to pay. Though the majority of Canadians continue to support that democratic decision and the founding principles of medicare, the Supreme Court through its Chaoulli Magna Carta is doing its best to force us back to the drawing board again.
About the Author
Gregory P. Marchildon, is Canada Research Chair and Professor Graduate School of Public Policy, University of Regina and Fellow, School of Policy Studies, Queen’s University. Email: greg.marchildon@uregina.ca.
References
Coffey, J. Edwin and J. Chaoulli. 2001. Universal Private Choice: Medicare Plus. Montreal: Montreal Economic Institute.
