Healthcare Systems in Canada

Learning Objectives

• Health care financing methods need exploration
• Health care systems' organization, management, and funding require discussion, specifically focusing on the Canadian context
• Regulation aspects are important for outlining
• Health care systems as products of social contexts need examination

Principal-Agent Relationship

• In Taxi-Passenger relations there is usually a clear outcome
• Doctor-Patient relationships are similar, but with less clear outcomes
• Patients must trust doctors to act in their best interest

Health Care Context

• Within healthcare, patients are principals
• Doctors or caregivers are agents, making decisions on the patient's behalf

Profession Characteristics

• Professions are self-regulated
• Professions control training, licensing, disciplining, and earnings
• Members take a public oath to work in the public interest
• Professionals are often paid a fee rather than a wage or salary

Health Care Regulation

• The healthcare system is regulated
• Patients cannot freely choose anyone for care
• Interaction with organized occupations and professions is a must

Types of Care

• Informal care involves an implicit contract in a pre-established relationship, with duties that are not always clearly outlined
• Formal care involves an explicit contract between an agent and patient with clearly outlined duties to be performed
• Ideas about implicit and explicit contracts for care vary across cultures

Health Care Services

• Healthcare differs since patients suffer from natural causes
• Suffering, naturally caused conditions, and what is considered pathological are all social constructs
• Healthcare is governed by socially constructed rules
• These rules determine where and how care is provided
• The rules also manage the patient-caregiver relationship

Segall & Chappell Findings

• Social class differences exist in health
• The Canadian Sickness Survey was conducted in 1960
• Welfare is a key measure
• Social gradient means societal relative positions correlate to health
• Differential Exposure vs. Differential Vulnerability are factors
• Direct vs. Indirect Effects are also key factors

Health Care Relationship Characteristics

• Licensure eliminates uncertainty in care relationships and determines who can work as a health care professional
• Health Insurance uses a third-payer relationship to redistribute money from an insurance pool to pay for services
• Contractors and Funding refers to someone who organizes patient care, manages money, and monitors quality

Health Care Financing: Health Care Insurance

• People pool resources together for healthcare costs when needed
• Actuarially fair premium is the average cost contribution made by each person
• Healthcare insurance ensures payments for necessities while receiving healthcare
• Health insurance generally covers treatments regardless of cost
• Most people benefit with health insurance

Health Care Financing: Coverage vs Co-payments

• Health insurance may lead to seeking more services than required
• Moral hazard problem increases costs for everyone when some seek excessive care
• Co-payments allow paying for extra care, reducing the risk of moral hazard
• Co-payments are best for predictable treatments controlled by the patient (eg: Eye exams)

Health Care Financing: Public vs. Private

• Universal coverage; everyone in a designated group must enroll
• Voluntary coverage describes private health care insurance, enrollment is optional
• Healthcare systems combine public and private coverage.
• System being a monopoly vs. competition in care provision is a key distinction

Competitive Market Revenue Collection

• Health insurers charge based on the likelihood of people becoming sick
• Sicker people pay more than the healthy
• Some markets regulate insurance charges for affordability reasons
• Public plans charge a flat rate or sliding scales based on income
• Higher income earners pay more and lower income earners pay less
• Higher income earners may opt out or vote for less coverage, possibly disadvantaging the poor

Universal Health Care

• Core medical and hospital services are covered by taxation-based, publicly funded programs for eligible Canadians
• The services are free at the point of care
• Access to health care based on need, not ability to pay as a fundamental Canadian value

The 1945 Health Insurance Proposals

• The action imperatives included:
• The depression
• Health status
• Organized Action
• The Royal Commission on Dominion-Provincial Relations
• Public opinion
• Party Rivalry
• Mackenzie King's Views

The Evolution of Health Insurance

• Modern insurance plans originated in informal schemes
• The schemes were used by those excluded from formal plans
• There was a difficulty raising enough money to pay for medical treatments
• Saskatchewan introduced plans in 1947 by Tommy Douglas
• The plans intended to pay for hospital services
• Federal government-shared costs due to resistance from physicians, hospitals, and businesses
• The plans included and the second one was in 1962 to cover physician fees
• Plans were created in 1984, prevented extra billing by physicians and hospitals, and provided full coverage with no out-of-pocket expenses

Tommy Douglas

• Tommy Douglas grew up in Winnipeg, MB
• He nearly lost a limb to osteomyelitis for lack of funds for care
• He became the Social Democratic Premier of Saskatchewan
• He implemented universal public health insurance in Saskatchewan, the first such jurisdiction in North America
• This ultimately led to the Canada Health Act (1981)

Canada Health Act

• The act outlines conditions for provincial and territorial plans to get federal funding
• The conditions included portability, universality, accessibility, comprehensiveness, and public administration

Services Not Covered in Canada

• Prescription drugs
• Long-term care and rehabilitation
• Dental care
• Eye care

Health Care Funding in Canada

• Health insurance is paid through general government revenues
• Taxpayer, corporation, duties, and sales tax contributions go to a general pool
• Some of the money in this pot is used to pay for health care
• Taxes are linked to personal income, so the rich pay a greater share of health care costs than the poor
• Some services that aren't covered by public health insurance, are sometimes covered by Employers via a collected pool of resources

Regulation of Health Care: Competitive vs Public

• Competitive Market:
  • Insurers must be cost conscious
  • Insurers must attract providers to satisfy customer needs
  • There can be high insurance premiums
• Public Market:
  • Monopoly can ration care
  • Voters influence government care type
  • Wait times can be shorter depending on where money is spent

Regulation of Care Providers

• Licensed providers are authorized to practice health care
• Licenses increase public trust, based on exams
• Licenses can get revoked if breached
• Licenses theoretically ensure quality; it's hard to prove it can improve
• Licensure restricts mobility due to varying license requirements
• Licensure may increase cost of health care and protect practitioners from foreign competition
• Licensure determines a practitioner's scope of practice

Evidence-Based Medicine (EBM)

• EBM monitors whether providers are working on behalf of patients
• Care outcomes are measured against recommendations in EBM literature

Paying Providers

• Hard to monitor providers, so payment incentives are used
• Co-payment schemes used by private insurance companies entice consumers to pick a practitioner
• Public insurance providers struggle to monitor practitioners
• Public insurance Providers only have one source for costs, the government

Financial Incentive Goals

• Productivity:
  • Rewards providers for seeing more patients
  • This can result in increased services and decreased prevention
• Quality and Prevention:
  • A sum of money is given to providers for the patient
  • May get the provider to cherry-pick only healthy patients to maximize profit
• Equality of Services:
  • Providers are paid to give care to whoever needs it
  • Too much time spent with patients could decrease productivity

Payment Schemes

• Payment to physicians is typically through traditional methods
• Physicians in solo practice charge for services and hire staff
• Not-for-profit hospitals earn what they need to function reinvest surplus, while For-profit hospitals distribute profit to shareholders.
• Proprietary clinics are owned by groups of physicians in specialized practice, and this is where profits go

Patient Preferences

• Partnership with Health care; have a say
• Convenience
• Timeliness
• Access or use of E-Patients platform

Changing Funding and Care Models

• Hospitals are paid depending on the diagnosis rather than through indiscriminate billing.
• Hospitals are moving toward specialized care
• There is a trend towards early patient discharge
• Financial incentives promote multidisciplinary action
• Multidisciplinary teams can encourage physicians to join

Regional Authorities in Canada

• Most Canadian provinces have experimented with regional models for planning, managing, or funding regional authorities
• These regional Authorities can be quasi-public institutions
• Responsibilities vary across their catchment area

Summary Points

• Health systems serve to regulate, finance, and pay for services
• Public and private health systems coexist
• The construction of insurance plans and health systems is the product of society
• Changing practices and ideas in health systems can be difficult
• Health systems are living organisms influenced by ideas