Clif Cleaveland

My next two columns will examine health-care systems in Canada and Germany. I will look for ideas that might have relevance as the United States searches for answers to complex issues in health-care access and affordability.

Canada spends slightly less than 10 percent of its gross domestic product on health care. The cornerstone of the Canadian system is Medicare, which is financed and administered by the federal government and its 13 provinces and territories.

According to the Health Canada Web site, the mission of Medicare is “to ensure that all residents have reasonable access to medically necessary hospital and physician services on a prepaid basis.”

The push for universal access to health services began in Canada’s western provinces in the early years of the 20th century. Soon after World War II, several provinces enacted programs of governmental support for health services despite stormy political debate and opposition from physicians.

On one occasion, physicians in Saskatchewan staged a strike to protest governmental health insurance. National legislation in 1957 provided prepaid hospital care and support for laboratory and diagnostic radiology services. A 1966 act mandated governmental payment for physician services. Physicians were permitted to bill for additional care.

In 1984, the Canada Health Act abolished extra billing and set in place the current publicly administered system. The national government provides approximately one-third of Medicare’s funding and sets the standards for health care. Provincial and territorial governments provide the balance of funding and manage the delivery of health care within their boundaries. Each province establishes and manages a yearly budget for health care services.

Acute hospital care including inpatient medications and inpatient and outpatient physician services are provided with no deductibles or co-payments. Individual provinces may add additional services, such as broader services for children and seniors, and coverage for certain costly, outpatient medications. Differences among provinces are generally small.

Health insurance cards are issued to eligible residents by provincial governments. The cards are honored across Canada. Health-care providers are linked electronically to provincial health ministries, which process claims submitted by hospitals and physicians. No money changes hands at the point of service. No bills are sent. Charges for services are submitted. Providers typically receive payment at two-weekly intervals. This system provides substantial savings in administrative costs. A 2003 study estimated that 16.7 percent of health-care spending in Canada was consumed by administrative costs versus 31 percent in the United States.

Canadians may purchase private insurance to cover services not covered by Medicare. Such insurance might provide coverage for private hospital rooms, elective plastic surgery, nursing home care, outpatient dental and eye services and outpatient prescriptions. A medication program, Pharmacare, provides coverage for outpatient prescription drugs for seniors for a basic fee.

Each province licenses physicians and regulates residency positions in the university hospitals within its jurisdiction. Primary care in Canada is usually provided by family practitioners. Pediatricians and occasionally dermatologists may also provide primary care. To achieve a desirable 50-50 ratio of primary care to specialty physicians each province regulates both the number and type of residency training positions in consultation with postgraduate programs. Unlike the United States, the variation in incomes between primary care and specialty physicians is relatively small.

There are no privately owned hospitals within Canada. Each province regulates the hospitals within its jurisdiction, using the power of the budget to determine what new technologies each may acquire.

Medicare enjoys overwhelming support among Canadians. One recent poll determined that the health-care system was the leading benefit of residing in Canada.

The system is not without critics. Medicare has several well-recognized problems. While the system works well in providing emergency and acute care, lengthy waiting times for such elective services as joint replacement and cataract surgery have plagued Medicare for years.

Recent lawsuits in Quebec have resulted in significant shortening of these intervals. Canada’s population is aging. Older persons require more health services. Like all nations, Canada faces rapidly increasing costs for new medical technology. Against this backdrop, Canadians worry about the sustainability of Medicare over coming decades.

Malpractice litigation is not a great concern in Canada. All Canadian physicians are insured by a single insurance company which they own. Contingency fees are not allowed unless an attorney can justify them in front of a judge. Most cases are deemed too complicated for juries and a tried before judges. Punitive damages are small in comparison with those in our country.

Medicare emerged as a consequence of unique cultural, political, and economic forces operative in Canada over the past century. I find the administrative simplicity and the approach to medical litigation particularly appealing. Canadian Medicare deserves further study by our policy-makers.

For further information, consult the Health Canada Web site, www.hc-sc.gc.ca. Contact Clif Cleaveland at cleaveland1000@comcast.net.

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