Enough talk, it's time to fix health care in Canada

A recent op-ed in the Globe and Mail urged Canadians to reconsider the “outdated” idea that a “single high-quality public-health system can be funded out of general tax revenues.” Indeed, the authors caution readers about the limitations of indefinite tax hikes, and suggest it might instead be time to consider some aspects of a mixed health-care model, and perhaps even require patients to share the cost of treatment. However, to meaningfully implement these common-sense reforms—particularly patient cost-sharing—Ottawa must first get out of the way.

Let’s be clear, Canada’s health-care system is failing patients. In 2022, the wait between a specialist visit and treatment reached its peak at 27.4 weeks, while the latest data from 2020 show Canada performing poorly on physician (28th of 30) and bed availability (23rd of 28) compared to other universal systems worldwide.

The usual remedy offered by Canadian governments is to increase health-care spending. However, international data suggest that that additional spending is not the answer. Canada already has one of the most expensive systems in the developed world (when measured as a share of the economy), ranking 1st out of 30 universal health-care systems. And as the authors of the Globe and Mail op-ed correctly note, “Canadians are already among the highest taxed citizens in the world.”

So, what’s to be done?

One solution proposed by the authors is to consider adopting a means-tested copay. Currently, patients in Canada are fully covered for the costs of insured medical services—that is, they’re not asked to pay out-of-pocket directly for any portion of their physician or hospital care. This contrasts with the majority of countries (22 of 28) in the developed world that, like Canada, maintain universal access health-care systems.

Perhaps more interesting from the Canadian perspective—France, the Netherlands and Switzerland are just a few examples of universal systems that perform better than our own on several key metrics including measures of timely access to care. Each one of these countries generally expect patients to share the cost of treatment through the use of deductibles (an amount individuals must pay before insurance coverage kicks in), co-insurance payments (the patient pays a certain percentage of treatment cost) and copayments (the patient pays a fixed amount per treatment).

The French universal system requires co-insurance and a nominal fee for family physician visits, including outpatient and hospital care. In the Netherlands, citizens are generally required to pay a deductible before their universal coverage kicks in. Switzerland uses a blend of a personally chosen deductible before coverage kicks in, and a co-insurance rate (usually 10 per cent paid by the patient, with insurance covering the remainder) up to a second threshold, after which insurance covers the full cost of care.

While the proposal of cost-sharing (e.g. deductibles, co-insurance, co-payments) will certainly generate a strong backlash from the defenders of the status quo in Canada, there’s a good reason for their use.

Empirical work has shown that cost-sharing can reduce the use of outpatient care without necessarily resulting in adverse health consequences for a population. Importantly, countries with universal schemes that employ cost-sharing also offer generous protections to ensure specific groups are not disproportionately impacted and retain their ability to access care. Some of these include limiting the maximum amount that can be spent out-of-pocket in a given year or by exempting some populations (e.g. children, pregnant women, low-income individuals, seniors) from cost-sharing entirely.

Despite the potential of cost-sharing, the Canada Health Act (CHA) explicitly prohibits any user fees or extra billing for medically necessary care. In fact, any provinces that implemented these tools would face dollar-for-dollar reductions or an all-out loss of federal transfers for health care. The result is a disincentive for provincial experimentation outside a narrow range of options. Canada’s provinces are effectively locked in an underperforming status quo.

For some Canadians, the consideration of the use of policy tools such as cost-sharing would represent an unprecedented peering into the very heart of our social contract. However, it’s clear that the status quo is unsustainable and its high time we considered meaningful reform based on the experiences of other countries. Canadians deserve more than endless apologetics for a system that has, for years, been characterized by high cost and underperformance.