Rethinking the scope of health care in Canada: a renewed federal role

by Dr. Mark Stabile. Posted November 30, 2015


How Canada ensures it provides a universal, affordable, and high quality health care system that accommodates technological innovation and changes in delivery over the next few decades is a particularly important challenge. The increasing concerns about adequate financing, demographic shifts, and inequality both within and across generations only add to the complexity of the discussion. With a new federal government with an ambitious policy agenda, this summit is not just well-timed, it is a critical part of the conversation.

The recently elected federal liberal government campaigned on strengthening Canada’s publicly funded health care system.  It rightly pointed out that while Canada’s healthcare system remains a point of pride for Canadians, there are a number of areas, including financing prescription medications, home care and mental health, where Canadian Medicare lags behind many countries in the OECD.

The Comprehensive Care Canadians Need

The current conception of medically necessary care in Canada excludes many services necessary for especially vulnerable Canadians. A number of health policy advocates and scholars (including me at times) have called for the federal government to consider providing pharmacare, additional services for the elderly, and support for disadvantaged Canadians. Elements of all of these are critical to providing comprehensive care.

Canada has failed to keep up with the changing nature of health care delivery.  This failure can perhaps be explained by the way our system is organized around methods and places of delivery. Disruptions to traditional ideas of delivery have taken many forms:  prescription drugs now treat many conditions, technologies take care out of the hospital or doctor’s office, and people wish to communicate with health care providers and the health care system in a variety of new ways.  As health care has evolved, Canada’s health care system has passively privatized, as new forms of delivery are predominantly paid for privately (through private insurance or out of pocket). A consequence of this passive privatization is that the system is not as equitable or universal as we might like it to be. Indeed, it has left many residents of Canada behind.

Maintain the Integrity of the Public System

Now is the time for the federal government to play a leadership role in updating the design of Canada’s healthcare system: to modernize it to meet its goals of both improving the health of Canadians and protecting Canadians from the economic consequences of poor health and medical costs. And to do so in a way that promotes equality and universality.  The federal government should protect the boundaries of the public system by providing the legislative (and perhaps financial) foundation for a more comprehensive and equal health care system. A reconceived and comprehensive publicly financed system would have the benefit of helping define the ongoing role of the private sector at the same time, and so potentially avoiding future challenges to the integrity of our public system.

This would be a huge advance in the role of the federal government.  Rather than simply transferring money, the federal government could encourage healthcare innovation that improves the way in which we treat the healthcare needs of the Canadians.

We need to clarify the role and scope of the publicly financed portion of the health care system. That is, we must clearly define what the public benefit will cover and for whom.  In the absence of such streamlining, the healthcare system cannot be expected to achieve its goals, and the private system cannot step into an optimally helpful supplementary role. Knowing what healthcare was used to be easier. Care performed in hospitals or by doctors was considered to be a core benefit available for all.  If a doctor didn’t do it, it wasn’t medicine.  The task is considerably more difficult now.

For Canada’s system to keep pace we must put in place a systematic way of evaluating what is appropriate for public funding. Going beyond the questions of how, by whom or where the care is delivered seems to me to be our best chance of having our publicly financed institutions evolve along with the technology of health care delivery and system management.  Any framework that tackles this project of evaluating what we want to fund will also have to consider what we do for people who want more, better or faster service. How do we tackle the private side of health care financing?  In part, I’d suggest, by getting the public side right.

Moving into the Future of Healthcare

Whether through medications or “disruptive” technology,  or other as-yet unforeseen  avenues, new ways of treating people, preventing disease and of interacting with the health care system will continue to multiply in the years to come.  How, therefore, do we design a public benefit that recognizes this fluidity and unpredictability?

First, we should note that while health care technologies change rapidly, the underlying health needs of the population change much more slowly and in more predictable ways.  We have many of the same diseases and health problems that we had fifty years ago, even if the way we treat them has changed several times over those decades.  Therefore, we should design the public benefit around these health needs, not around providers, or treatments. The question shouldn’t be: should insulin be covered or should services by psychologists be covered (at present neither are universally covered in Canada). Rather, the system should be framed so that funding is targeted at diabetes and mental health disorders, and the most effective treatments for those conditions.  If we agree that chronic conditions such as diabetes and mental health are among our health care needs (and I think most of us would agree they are), then the most effective way of treating them should be publicly financed.

Healthcare Needs Should Define Treatment

Of course, it is not the case that our health care needs do not change at all. They do, although much more predictably and more slowly than health care interventions. We can predict, for example, that our long term care needs will increase as the population ages.  What is more difficult to plan for is what exactly long-term care delivery will look like in 20 years.

We are then left with dealing with the concept of “most effective.”  Ongoing advances in both technology assessment and “best practices” development among physicians offer reasons to be optimistic (examples would include NICE in the UK and the Israeli Medical Basket committee as far as technology assessment is concerned, and places like Intermountain Health and the Mayo Clinic as far as best practices implementation among physicians is concerned). There are models out there for effectiveness assessment that we can look to for ways to improve , in other words. Most effective does not mean newest or more expensive. Sometimes more effective treatments will even cost less.  What’s most important, however, is that by focusing on effectiveness we need not be restricted to those methods of treatment that we currently envision as part of the health care system.

A Plan for Moving Forward

So what does all of this mean? In my view, the federal government should re-conceive the requirement for federal funding and for compliance with the Canada Health Act so that all eligible residents are provided with a benefit that covers a comprehensive set of health care needs, not specific services. Advisory panels (these could be national and would reflect the required expertise) would determine the most effective way of treating these needs on an ongoing basis and provinces would then be expected to cover these forms of treatment as part of their commitment to Medicare.  In this way the federal government would take on a leadership role in defining what universal health care coverage ought to mean in Canada. And while the federal government would not deliver most care, it would continue to assist in providing the funds to finance it.

It would no longer be the case that entire areas of essential health care like prescription medications would be left to the private sector. Private financing that alters the incentives in the public system (for example, by covering services like essential medications or treatments that complement doctors and hospital services) should be discouraged.   Because the standards of care provided in the public system are established based on the latest expertise and evidence, they should lead to a relatively high level of quality.  Therefore, the private domain would be defined by treatment for which there are more (cost-) effective options or for items that we do not consider part of the broad essential needs of a population. This sounds limited, but the scope for non-essential health care is in fact broad and so it is likely that the market would continue to thrive. The public domain, however, would be defined by the best evidence on how to meet a broad set of communally agreed-upon population health needs.

There will, of course, be some who perceive any private financing as inequitable. There will likely always be treatments that, while not cost-effective or evidence based, appeal to people who have the resources to purchase them.  Allowing for avenues for individual choice in pursuing these options (we already allow for executive health care services in Canada where individuals or corporations pay for a much more exhaustive set of preventative health services) seems to me a reasonable compromise in a free society with a strong commitment to public benefits. But if we get the public system right, privately financed care will only mean the kinds of differences in access that we tolerate in a market society; it will not add to inequalities in health and quality of life. And safeguarding equality in these essential areas should be our primary goal.

Mark Stabile is Professor of Economics at the University of Toronto, Sciences Po, and INSEAD (as of 2016) and a fellow at the Martin Prosperity Institute at the Rotman School of Management. From 2007 to 2015 he was the founding director of the School of Public Policy at the University of Toronto. He is a member of the advisory board for Canada 2020.