Health and Public Policy

Recommendations to First Ministers

IRPP Task Force on Health Policy September 7, 2000

Why Canadian Medicare is in Need of Reform

Public Concerns

Canadians are  worried about  their  healthcare system.

Blurring entitlements and shifting costs from government to individuals are key concerns for the Canadian  public. As some services  move from  the  hospital to  the community and  the home, which services should  Canadians expect  to be fully covered  by  Medicare?

Which coverages are reduced, and which services are no longer insured  by our public system? Why are drugs and home care covered in some  provinces but  not in  others? These are all  legitimate questions.

Canadians are experiencing both a growing personal burden of assuming the responsibility of caregiver for family members with acute and chronic care needs as well as a growing financial burden for  drugs, home care and  long-term  care.

There are several  roots to  this erosion  of faith. These  include:

  • A theoretical definition of Medicare that no longer relates to the actual health care that¬† Canadians are receiving and¬† have come¬† to expect;
  • Crisis mongering in¬† the media;
  • Conflicting visions of what constitutes the optimal approach to meeting the healthcare needs of Canadians among federal and¬† provincial governments as well¬† as¬† between¬† these governments and¬† the public;
  • A lack of clear goals in the health system; ¬†and,
  • A lack of clear lines of accountability between the public and the providers and managers of health

These perceptions reflect very real problems that must be addressed. Canadians on waiting lists are  not  imagining their anxieties. Delays in  diagnostic imaging and  radiation therapy are  real. Many smaller communities lack  health  resources.

The problems fall into four clusters:

  • The absence of excellence as¬† the standard sought¬† for the system;
  • The respective goals and modes of accountability of the federal and provincial governments for the overall planning and organization of the healthcare system;
  • The management of healthcare services delivery in communities across ¬†Canada;


  • The stability of healthcare services with¬† regard¬† to both funding and ¬†leadership


After nearly a  decade  of cost  cutting, some  Canadians  have  lowered  their  sights from  an excellent healthcare system to one that merely meets minimum standards. This is unfortunate. Canadians should  demand and  expect  excellence, not mediocrity.

Greater Accountability

The paradox of  Canadian  Medicare  is  this: it  is, in  essence, a federal commitment  to  uphold basic principles in health services, which are then  managed  by  the  provinces/territories and funded by both them and  Ottawa. The significant  shift  in  the share  of  healthcare funding between the federal and  provincial/territorial governments in  the last  decade  has resulted in very real  differences in  perspective  between  the federal and  provincial/territorial governments as to their respective jurisdiction and their entitlement to define healthcare programs.

Meanwhile, the system lacks clear goals and is not sufficiently accountable to the public. While  the original  principles of  the  Canada  Health  Act remain valid, they are no

longer sufficient to address the new realities and emerging challenges of health services delivery. Nor do  principles substitute for  strategic and  long-term  planning  to anticipate  the growing pressures on  healthcare delivery and  the changing healthcare  needs of  Canadians.

A notable example that is generating increasing alarm among healthcare professions across  Canada is  the future of  health  human resources, which  have  been inadequately

planned and managed. To be  sure, shortages of some  health  personnel are global. But  others are domestic and preventable through better planning of  health  professional  education and better management of health human  resources. Rigidities  in  collective  agreements  prevent labour force restructuring and re-skilling. Unlike other industries, the failure to resolve these issues remains an obstacle to creating a more effective workforce and better, more satisfying healthcare jobs.

At the provincial level, even with the advent of regional health authorities in most provinces, the decision-making structure in health services remains too centralized/micro-managed. Local  healthcare organizations lack  the flexibility and incentive  to  manage  well. A paralysis results, with  far  too  many decisions requiring  ministerial involvement.

There are also tensions between governmental and public objectives: Governments are trying to eliminate their deficits and citizens/taxpayers want lower levels of taxation, objectives  that  have  driven cost  cutting in  all government services, including health care.

The Management of Healthcare Services Delivery

Medicare  as  defined  under  the  Canada  Health  Act includes  the services  provided  by  doctors and hospitals. However, the movement from hospital-based care to a greater emphasis on home and community care has eroded insured services. To date, governments have not addressed  this issue  with  respect  to either continuity of funding or continuity of service  delivery.

Quality health care today requires a complex and interdependent relationship among patients and healthcare professionals and among the various types of health services: hospital care, home care, long-term  care, rehabilitation and  palliative care. In all  of  these instances,

quality and timely care is dependent on effective interpersonal and inter-organizational communication and  shared  information systems.

In reality, Canadians do not  have consistent access either within or  between  provinces to this range of healthcare services to  meet  their  needs. Organizational and information barriers among providers of  care and  financial limits on  insured services constrain  access  to an appropriate  range  of services.

For example, all provinces cover the drug costs of in-patient care, but few provide comprehensive coverage of the drug costs of out-patients or recipients of home care services. Evidence  across  Canada  would  suggest  that  substantial  costs  have  been  transferred  to patients as in-patient care has declined as a  portion  of  total care. Likewise, home care coverage  is  uneven across  Canada, placing  both financial and  home care  burdens on patients and their families.

As research discoveries and information technology expand the horizons of knowledge, both for the healthcare practitioner and the public, an issue of increasing concern is the linkage between research and decision making in the health system. Experience suggests that the management  of services is shaped  more by  history and  politics  than it is by empirical evidence.

Greater Stability

Quality health¬† care in¬† the¬† 21st¬† century requires a significant, continuing investment¬† in the physical plants and equipment that¬† provide¬† direct¬† patient care, and¬† unprecedented investment in diagnostic and information technology to support this care. However, the¬† Canadian¬† health-care system has lagged dramatically relative to other countries in making these necessary investments. Under-investment is evident in capital plant¬† and¬† technologies, particularly¬† diagnostic imaging; it is also a problem in information technologies and management. The health system is less “wired” than¬† banking and other sectors of ¬†the economy.

Medical research is yet another victim of under-investment. This has been addressed partly through the creation of the Canadian Institutes of Health Research (CIHR). However, Canada still  trails other nations in  health  research spending.

Stability is not, however, simply an issue of funding. Health Ministers and their senior officials, Deputy Ministers of Health, represent an essential leadership group within the Canadian healthcare system. Yet, turnover within this group has reduced their average length of service as Ministers and Deputy Ministers to less than two years. Only First Ministers can address this source of instability. Over the past forty years, Canada has been well served  by the stability and  tenure in the key positions of Minister and Deputy Minister of Finance. It is time for First Ministers to seek the same stability in the two key health posts. Consideration should be given to appointments of Deputy Minister for five year renewal  terms. As well, First  Ministers should endeavour  to keep their Health Ministers in place for five years, barring adverse electoral consequences. A decade of renewal will require stable leadership  to review and  modernize important partnerships.

The IRPP Task  Force  on  Health Policy  has focused  on a variety of  potential solutions to deal with these complex challenges of excellence, accountability, renewed partnership and sustainability. Our specific ideas are set out in the remaining papers in this series. Before considering those ideas, it is important first to review the current  and  future  rules of  the  health policy game, and, second, to underline the need for a  new  vision  in  health  policy  for  First Ministers and  all Canadians.

New Rules for Healthcare Services

For over 15 years, the healthcare debate in Canada has been framed by the five principles of the Canada Health Act (1984). More recently, the forces of changing technologies, expanding public expectations and the fiscal crisis of the 1990s have challenged these five principles. Moreover, many Canadians believe  the principles of the CHA are no longer fully adhered  to in health services  delivery.


Universality Accessibility

Comprehensiveness Portability

Public Administration

These  principles have  served  Canadians well but  they need  to be reinterpreted. Public expectations have changed since  1984. What if  we  modernized  the healthcare  system by  having the courage  to review  the old  rules? What would  the new  rules look like?

The old health system in Canada  has featured  endless, annoying  battles  between provider groups (doctors, healthcare unions) and provincial governments. As well, the federal-provincial war over funding and the assignment  of credit and  blame  has been loud and long. The roots of these battles are structural in nature. They are built  into  Medicare’s inherent tension between providers and payers and among levels of government. A broader set of principles will not eliminate conflict, but it could lead to a  more reasoned  debate. In addition, broader principles  may  enable  the  system  to  better  meet  the  concerns  of  citizens in areas such  as  timeliness and quality.

The following is¬† our¬† proposed “Medicare Plus”¬† set¬† of rules:

Universality ‚ÄĒ Acknowledged as the number one priority for Canadians in¬† our healthcare system, universality equates eligibility for ¬†health¬† services¬† with¬† citizenship. Often termed the “solidarity principle” in European countries, universality in Canada means that all citizens and most residents are covered for necessary health services. The definition of health services¬† has evolved¬† to include¬† medically¬† necessary¬† physician¬† and hospital interventions as well as some coverage¬† for¬† drugs, medical¬† devices and¬† home care services.

Accessibility ‚ÄĒ Access on the basis of medical need rather than ability to pay remains fundamental to the Canadian approach. Moreover, access is gradually being redefined as “timely access to needed services” in light of the emergence¬† of¬† waiting lists for essential services. What is a reasonable waiting time for a given service? Access is also a dimension of Canada‚Äôs geography. What services should be made available in what areas? How we deal with the costs of patient travel when services are not readily available is yet another¬† emerging issue.

Comprehensiveness ‚ÄĒ Medical necessities are no longer restricted to traditional notions of hospital-based care. In a world of increasingly successful drug treatments and alternative¬† modes of¬† delivering health services, we¬† have an¬† opportunity to redefine¬† the “package.” With home care coverage and adequate drug coverage, the Canadian health system would¬† have a¬† much¬† more solid claim¬† to comprehensiveness.

Portability ‚ÄĒ Portability remains a viable principle within our system. However, there needs to be a reinforcement of the reality of coverage that is transportable across Canada. At present, portability is sometimes uneven. Citizens are less than clear on the rules outside their home provinces and some provinces are¬† not¬† reimbursing patients in a¬† timely way. And as Canadians continue to “connect” with the global community, there is reason to consider restoring minimum public coverage for out-of-country travel.

Public Administration ‚ÄĒ We need public governance and public policy direction and standards for health care, but not necessarily public management. What is¬† the right¬† mix of direct¬† public versus private¬† management? How should¬† public administration be¬† interpreted¬†in¬† the new context? Regional¬† health authorities have¬† been¬† established in¬† nine provinces, and large multi-site hospital organizations are increasingly common. These health organizations, accountable to the public, are outsourcing many functions to the private sector. In the non-clinical areas of laundry, food services and building maintenance, this process has been controversial largely with bargaining units. But the public remains wary of for-profit sector involvement¬† in¬† clinical¬† areas. For¬† instance, Alberta‚Äôs Bill¬† 11¬† generated¬† considerable¬† unease and controversy with the public. While the bill is acknowledged to be fully within the CHA definition of public administration, its passage¬† has opened a¬† debate about¬† the full definition of¬† public versus private¬† health care.

Quality ‚ÄĒ We need new rules to include the quality of health services as a¬† fundamental and measurable aspect of the delivery of care. We understand quality to include not¬† only how a service is¬† delivered¬† but also its appropriateness to¬† the needs of¬† the patient and the outcome for that patient. Quality needs to be¬† benchmarked¬† to¬† leading¬† international standards.

Accountability ‚ÄĒ The healthcare system must be transparent and accountable to the public as well as to governments, for resources used and results achieved. The public health component¬† needs to¬† be “ring-fenced” to¬† protect funding and¬† to ensure its accountability.

These new rules of the game respond to public concerns, changing technologies and the realities of health care in the 21st century. A vital Medicare system needs to retain  the  best of its past and evolve in response to the new requirements Canadians are making of it.

Vision vs. the Lowest Common Denominator: A Choice for First Ministers

An unfortunate reality¬† of¬† Canadian¬† federal-provincial¬† relations in¬† health¬† policy¬† is¬† that¬† good ideas are often lost in the heat of battle. Witness the current debates during which headlines proclaim that ‚Äúhome care is off the table‚ÄĚ or a ‚Äúnational drug plan is off the table.‚ÄĚ Eventually, with enough vetoes by various provinces, only the dollar amount of the Canadian Health and Social Transfer (CHST) is left on the table. While this may satisfy the ‚Äúdeal-at-any-cost‚ÄĚ mentality, which¬† often seizes complex negotiation¬† processes, it¬† will not serve¬† Canadians well. Political agendas are capable¬† of greater¬† statesmanship¬† and visionary leadership.

An alternative would be to start with a shared vision. Most governments have issued visions of broad health policies in recent months, visions that are very similar across  Canada. All of them  feature greater  emphasis on  prevention and  wellness. Each  of  these statements also foresees the modernization  of  healthcare  services. Translating  these  broad  visions  into robust  healthcare systems is  the  task for  political leadership. Canadians are very  concerned that, without renewal, healthcare services will  not  be  there  to  meet  their needs.

A new agreement to review Medicare, inspired by these statements of vision, will be more difficult  to reach, but it  will  meet future needs much  more effectively  than a  narrow financial  deal. Achieving the right  agreement  will  require a longer  negotiation process following an initial framework agreement. But our governments have had success over the years in multi-stage  processes of setting a framework for  negotiation first, then  taking the  time  to work out the details. Such a process, transparent to the public, may actually lead to more informed  choices and  better outcomes.

A key framework commitment and a process for arriving at a fully reformed health-care system would be a compelling step forward. Health Ministers and senior officials could work on the details and report regularly to First Ministers. In 12 to 18 months, our governments could achieve a long-term  national  plan  for  healthcare reform.

A necessary framework for this process would set out the common vision of all governments, including the main areas  of  renewal  and  the  mandate  of  those  engaged  in  the process. The  details of  expanding into  new  programs  may require lengthy negotiations.

However, commitment to the principle of expanded coverage would be a good starting point. Commitment to a vision, to certain basic principles and to a timetable for negotiation would indeed  be  a  major first  step in  the full renewal  of Medicare.

Canada can and should excel in health and health services. We have a global reputation for excellence in health care and universal access to care in the health field. But can we rebuild  the reality  that supports this reputation?

Returning Local Initiative to Health Services

Clarifying Local, Provincial and Federal Roles

Canada is an¬† enormous country, happily¬† diverse¬† and¬† becoming¬† more so. But¬† this¬† diversity comes at a price. In health care as in other¬† public services, ‚Äúone size fits all‚ÄĚ poorly. Yet, equity and¬† solidarity¬† demand¬† adherence¬† to¬† principles¬† derived¬† from¬† common¬† Canadian¬† values and based on shared expectations of service standards. These imperatives can all¬† be¬† met¬† by allocating responsibility and authority according to the principle of subsidiarity, i.e. the level of governance that is both closest to the people and best able to deliver a given service should be responsible¬† for¬† that service.

The Canada Health Act requires that health insurance plans be administered by the provinces and territories and carried out on a not-for-profit basis¬† by¬† a¬† public authority. In practice, the¬† provincial/territorial governments have¬† interpreted¬† the¬† principle of ‚Äúpublic administration‚ÄĚ to mean much more than that. Certainly, partial responsibility for the management¬† of¬† services¬† has¬† been¬† devolved¬† to¬† local¬† or¬† regional¬† authorities in¬† nine¬† of¬† 10 provinces. And in Ontario, the exception to this rule, some devolution in health services management¬† has been achieved¬† through¬† multi-site¬† hospital organizations.

Nonetheless, too many key decisions continue to be  made  in  the  provincial  departments of health. Healthcare providers and Canadians in general are frustrated by distant anachronistic (micro) management from above, according to extensive and detailed rules and regulations. Central approval is still required for  any significant  allocation  of resources.

Purchasing an MRI machine, opening a new clinic or focusing resources toward a community‚Äôs particular healthcare needs all require the minister‚Äôs signature ‚ÄĒ which¬† too often comes late or¬† not at all. The result has undermined the¬† once¬† deep¬† and¬† still¬† essential commitment¬† of local, volunteer ¬†decision-makers to find innovative¬† ways of¬† meeting the needs of¬† their community. The authority of local governance and¬† management are¬† also¬† undermined.

To  ensure  the  continued  health  of  Medicare, we  must  renew  our  commitment  to local initiative and autonomy. We must reallocate  to local or  regional  bodies  the responsibility and the corresponding authority for managing and  operating  the  healthcare services  needed  by  the  people in their communities.

This goal would be better achieved if all tiers of authority in health services had a clearer understanding of their roles. As an example, these many roles and responsibilities could  be  disentangled and clarified  in  the following manner:

Local/Community/Regional Health Organizations (hereafter, health organizations) made up of elected and/or appointed  representatives of populations of not less  than  100,000  people1 should:

  • Coordinate the operations of all¬† healthcare service¬† providers in¬† a given¬† region to ensure the provision of high-quality care necessary to meet the community‚Äôs healthcare needs;
  • Purchase the services required¬† to¬† meet¬† those¬† needs with funds derived from provincial/territorial¬† governments; and,
  • Discharge clinical and fiscal accountability for health outcomes and¬† the status of the¬† population

Provincial and territorial governments should:

  • Clearly articulate and communicate a vision of¬† what¬† their¬† healthcare systems are to That vision would permeate all healthcare operations in each province/territory and include establishing qualitative and performance standards and¬† expectations for¬† healthcare services;
  • Develop policies¬† to ensure adherence¬† to¬† the overarching national principles (referred¬† to below) and¬† to achieve¬† the provincial/territorial vision of health¬† care;
  • Establish and¬† maintain¬† data standards and¬† health¬† information¬† management systems, preferably in co-operation with the federal and other provincial/territorial governments;
  • Ensure accountability for the operation of¬† the¬† healthcare system¬† in accordance with¬† legislated policies;
  • Oversee health¬† professional¬† education¬† and¬† highly specialized¬† health¬† services¬† that for reasons of quality and economy of scale should be provided in one or very few facilities in a province or territory (or, in¬† some instances, be¬† shared¬† with¬† other provinces¬† or territories);
  • Devolve responsibility and authority for¬† the¬† direction, operation and management of all¬† other healthcare services¬† to¬† health¬† organizations that ‚Äúprovide¬† or arrange¬†to provide a coordinated continuum¬† of services¬† to a¬† defined¬† population and accept) clinical and fiscal accountab(ility) for the outcomes and the¬† health status¬† of¬† the¬† population served‚ÄĚ2; and,
  • Provide funding to health organizations commensurate ¬†with¬† their responsibilities.

The federal government should:

  • Together with provincial and territorial governments, develop consensus on and interpret the values of¬† the¬† Canadian¬† people regarding¬† health care, ensure that these values are reflected in the overarching principles that guide legislation and frame the delivery of service, and make certain that they are applied equitably everywhere;
  • Provide sufficient funding to the provincial/territorial governments to enable adherence to those¬† principles applicable¬† to healthcare services throughout the country;
  • Either directly or¬† through an independent advisory¬† body, ensure¬† that all agents in the delivery of health services strive for¬† excellence ‚ÄĒ¬† whether in¬† services, research or¬† the¬† health industry;
  • Take responsibility for¬† and fund¬† directly¬† health¬† and healthcare services within its own jurisdiction, such as fostering health research¬† and¬† its application, providing health¬† services¬† to Aboriginal¬† populations and¬† regulating drug safety/efficacy; and,
  • Accept responsibility for¬† and fund such¬† healthcare¬† programs as the federal, provincial and territorial governments may jointly agree are best offered on a country-wide basis.

This clarification of responsibility and authority for health services does not represent a  hierarchy of roles. Rather, we seek  to differentiate and  disentangle roles,  to  make sure  that individuals in  need  of  health services and  the communities in which they live understand clearly who is responsible for what when it comes to providing health and  healthcare  services.

Building on Local Initiative and Integration

The reallocation of  responsibility  and  authority from  provincial/territorial  departments  of health to regional health organizations for the management and operation of  healthcare services is a powerful and appropriate strategy to enable Medicare to meet  the challenges of  the 21st century. If we are to continue to meet the healthcare needs of Canadians, the myriad of individual services and  programs available  to  patients must  be  integrated into a single local/regional  health  management  body  to  enhance the efficiency and appropriateness of services provided.

Empowering  health  organizations offers several advantages:

  • The ‚Äúbasket‚ÄĚ of healthcare services can be adjusted to meet local¬† needs and The health organizations would have to adhere¬† to national principles and to provincial/territorial system-wide qualitative and performance standards. Also, particularly sophisticated or capital intensive services (e.g., paediatric heart transplants, radiation therapy) should continue to be managed provincially or, in some cases, on¬† an¬† inter-provincial basis;
  • Those in charge are known¬† by and¬† directly available and accountable¬† to the people affected;
  • Accountability for regional trade-offs is in the hands of those receiving and providing services;
  • A sense of ‚Äúownership‚ÄĚ of¬† healthcare services is re-established among ¬†regional consumers and¬† providers (stakeholders);
  • Management is¬† more effective;
  • Innovation, experimentation and regional variation is encouraged and rewarded; and,
  • The results in terms of¬† health¬† outcomes can¬† be¬† compared and successful initiatives applied generally¬† (and¬† unsuccessful ideas avoided).

While partial devolution to such  health  organizations  has  been  in  place  in  most provinces for many years, its extent from province to province is highly variable. The populations of the regions to which devolution has applied range from very small (as in Prince Edward  Island)  to  quite large  (the  Capital  Health Authority in Alberta, for example).Geographic areas encompassed by these health organizations also vary widely: cities, thinly populated  rural areas and  remote regions.

Recent  decentralization  to regional  health  bodies has not yet, however, produced optimal results in terms of health outcomes, satisfaction of the people served, efficiency of resource  utilization, or in  terms of  recruitment and  retention of  providers. In  part, this is due  to  the fact  that in  no  province  has responsibility and authority for a  full spectrum of healthcare services been assumed by these regional bodies. For example, every province has retained central authority over the negotiation and management of payments to  physicians, one of the key levers affecting the operation of many other components of the  healthcare system. Moreover, in  most  provinces, cancer and  mental  health  services remain centrally administered, as are support  programs for  pharmaceuticals. Therefore, the ability of  regional health bodies to make a difference  has been limited by an absence of control over  many  key variables.

Reallocation  of authority and  responsibility for  the  management/operation of services must  be all  or  nothing. Incomplete devolution of responsibility for common  services  perpetuates their duplication, sustains the incidence of patients falling through the cracks, and allows continued fragmentation of  the continuum  of care. In large  part, the assessment  to  date of the results of regionalization has been frustrated by the absence throughout of common standards on such fundamental data as the nature of patient/provider identifiers and encounters, diagnoses, and outcomes. We still lack effective systems to collect, store, measure, analyze, distribute and share  health  information.

To be effective, the reallocation of responsibility and authority should apply to populations large  enough  to share  the financial risks  of  providing the full spectrum of health services (apart from highly specialized services that excellence requires be provided centrally or shared by two or more regions). Yet, they should be small enough  to  engage  a sense  of  responsibility or stakeholding in  the  people receiving and  providing those  services. Members of the regional health organization must be  truly accessible and accountable to the  population served.

Local initiative and commitment built Canadian healthcare institutions, hospitals, and public health service before Medicare. It is  essential  that local initiative  be  strenghtened as a vital aspect  of  the renewal  of  our healthcare system.


  1. Based on insurance  principles of risk-sharing.
  2. M. Shortell, R.R.Gillies, D.A.Anderson, K.M.Erickson and J.B.Mitchell, Remaking Health Care in America: Building Organized Delivery Systems, Jossey-Bass Inc., San Francisco. 1986, p. 7.

Galvanizing Medicare through Accountability

To galvanize  our publicly funded healthcare system  we  must ensure  that greater accountability permeates it at every level. Each and every decision-maker should know what his/her roles  and responsibilities are, and should be fully accountable for his/her decisions. This involves disentangling the blurred  lines  of  responsibility  by  reallocating  roles  between  local/regional health organizations (hereafter health organizations), the  provincial governments and  the federal government as described in the previous paper. However, we must also establish clear mechanisms through which decision-makers are made accountable to each other and to  the Canadian public. 1

Provincial Accountability

Canada‚Äôs Medicare system is unique in the world for including everyone within the same system for¬† the delivery of¬† hospital and¬† physician¬† services and largely¬† precluding the ability¬† to get¬† faster¬† or¬† better¬† care in¬† a¬† supplementary¬† private system. This¬† means all voters, rich or poor, have a common interest in protecting Medicare. Presently, the provincial governments, through¬† their departments of¬† health, micro-manage¬† their¬† healthcare systems. The primary accountability mechanism for health services, therefore, is through the ballot¬† box. But¬† while answering to¬† the electorate at¬† the polls is a good¬† mechanism ¬†for ensuring accountability for ‚Äúbig-picture‚ÄĚ performance, it does not enhance accountability for the multitude of decisions that have to be made to ensure an equitable and efficient system. Joan¬† Citizen is¬† not likely¬† to shift¬† her vote in a¬† provincial election ¬†because¬† her local¬† hospital has not streamlined its information systems or¬† because¬† more resources than¬† is¬† optimal are¬† devoted¬† to ‚Äúme-too‚ÄĚ drugs or¬† because a¬† local gynecologist¬† performs far more caesarians¬† than are¬† medically indicated. We¬† need¬† other¬† mechanisms of accountability for¬† these various decisions.

Responsibility for managing the system on a day-to-day basis should be devolved substantially  to  health  organizations for  the following reasons:

  1. There is a conflict of interest¬† when¬† the¬† manager of¬† the system is also the supervisor or regulator. It is better to clearly separate these functions so as to create a tension ‚ÄĒ a system of checks and balances ‚ÄĒ that serves the public interest.
  2. The relatively short length of service of provincial deputies and ministers means that institutional governance  expertise cannot  be  acquired and utilized.
  3. We can develop better and more refined accountability mechanisms for devolved local health  organizations than is possible for central departments.
  4. The enhanced flexibility achieved through smaller management bodies and the greater accountability of these health organizations enable the system to aim for excellence, not just in national or  provincial  terms, but in  every community.

Ensuring Accountability of Health Organizations

The provinces must retain the role of supervision and regulatory oversight of health organizations.  However, the  day-to-day  management  responsibilities  should  be  devolved. This  being said, international experience has demonstrated that devolution alone will not be sufficient to bring about real change. Measures are needed to ensure that the new decision-makers are accountable. How do we structure the system so  that  health  organizations  have  both  the incentives and the tools  to do  the best  possible job  on  behalf of  the people  they serve? We want to make sure that we do  not add just another layer  of bureaucracy. Health  organizations must be  made to be  true agents for  positive  change.

Devolution of budgetary responsibility for a broad range of health care is especially important. None of  the existing health  organizations across  Canada have  budgets for  the broad  range  of  care  (i.e. physician  care, drugs, hospital services, etc.). They cannot make the best decisions that will match healthcare needs with healthcare services. Health organizations also  need  the flexibility  to  determine  how best  to ensure  the delivery of care, whether through public hospitals, for-profit providers, or new reimbursement  mechanisms for  family doctors.

Performance Agreements

Health organizations should be accountable to the provinces for achieving measurable health goals and healthcare service standards, set by the provinces in negotiation with them. The aim of every health organization should be nothing less than excellence in¬†health care. Accountability¬† measures adopted¬† to¬† monitor¬† their¬† progress should reflect that goal¬† of¬† excellence. We¬† envisage¬† this goal as¬† having short-, medium- and¬† long-term objectives. For example, Alberta may negotiate with one or more health organization to implement a ‚Äėtelehealth‚Äô program over the following year¬† to¬† improve access¬† for¬† those¬† in¬† rural areas and¬† reduce waiting¬† times for¬† particular¬† oncology services, e.g., to¬† 1¬† month from 2 months. Alberta may also negotiate with its health organizations to put in place¬† over¬† the course of the next five years programs that will decrease Aboriginal infant mortality to the Canadian average. Thus, the regional bodies will¬† be accountable¬† to¬† the¬† province for¬† the performance and the direction it takes, but they retain significant discretion as to how to achieve the goals. Funding for health organizations should be structured to¬† reflect¬† their success at achieving the goals set by government. They should be required to report publicly on their progress at 6-month intervals. These reports should be¬† tabled in¬† the provincial legislatures and¬† be¬† subject¬† to an annual audit.

Performance goals¬† and¬† standards for¬† health¬† organizations should¬† be¬† made¬† public for all to see¬† ‚ÄĒ¬† in¬† governing legislation¬† and¬† in¬† transparent¬† performance agreements. This¬† will make monitoring easier, by the provincial government and by the people served. Moreover, if goals are clearly and publicly articulated, it is¬† difficult¬† for¬† both governments and local¬† boards to ignore those goals in the spotlight of public scrutiny. The difficult question is what¬† goals should¬† be specified and¬† what¬† weight¬† should¬† be accorded to each.

Much can be learned in this regard from countries like the United Kingdom and New Zealand where, over the course  of  the  last  decade, goal-setting and  performance agreements have been implemented in  the  healthcare sector. There is  no  point in  reinventing the wheel; we should harvest what lessons we can from other nations.

Accountability through Choice in a Public System

If health organizations have incentives to  make the best  decisions  possible, we  would expect to see them develop a variety of innovative arrangements with healthcare  providers. A climate of rewarding initiative and good performance should prevail throughout the integrated regional health  community. To  this  end, funding should  follow  the  patient, wherever  possible, as  he or she chooses his  or  her own  healthcare  provider  or institution.

We would hope to see, for example, experimentation in primary care by way of further devolution of budgetary responsibility  to groups of family  doctors and community nurses, similar to the GP Fundholding initiatives and Primary Care Trusts in the UK. Health organizations could finance groups of family doctors and nurses by way of  an  annual  risk-adjusted payment  per patient enrolled  with  them. With  that sum  the group  would be responsible for financing a range of care (primary, drugs, diagnostic, perhaps elective surgery) for each  of  their  patients. If  patients were  unhappy with  their chosen doctor/nurse group, they could shift  to another group, taking with  them  their  risk-adjusted share of  public  funding. We  view  this  type of initiative as improving accountability  through choice  within a publicly funded system. If implemented properly, we believe this could be a powerful mechanism for  positive change.

Of course, a number of problems must be surmounted to ensure positive effects from allowing choice within¬† a¬† publicly funded system. These ¬†include ‚Äúcream-skimming‚ÄĚ, the potential lack of competition on the supply side, and gaps in information that prevent people from choosing wisely. These¬† problems are¬† not, however, beyond¬† the bounds of¬† human ingenuity to solve and, again, much can be learned from other jurisdictions. Moreover, the significance of¬† these¬† problems varies considerably depending on¬† the specific healthcare¬† market¬† in question. For example, in addition to experimentation with choice in primary care, we also expect to see experimentation with choice in a sector like home care, where there is a competitive¬† market¬† on the supply side.

Accountability to Citizens and Patients

Health organizations need to be accountable not only to the province but also to the people  they serve in their communities. How  do  we  enhance accountability in  this  regard? There is no  magic solution, but  there are a  number of  possibilities that should  be considered.

A Patients‚Äô Charter ‚ÄĒ Health organizations should be required to publish and disseminate a statement of patient rights, expectations and responsibilities with regard to the appropriateness, quality and timeliness of care. These Patients‚Äô Charters, enacted by the provincial governments following consultations with¬† the¬† health¬† organizations, should¬† include¬† contact names and numbers for patients to call if they feel their Charter entitlements are not being realized. Health¬† organizations should also¬† be¬† required¬† to¬† report¬† annually¬† on¬† how¬† the¬† different¬† hospitals and other providers are¬† performing in¬† terms of¬† meeting these¬† entitlements.2

Health Care Ombudsperson ‚ÄĒ While every healthcare institution and health organization should have in place dispute resolution processes, each province should also consider establishing a¬† healthcare ombudsperson. This¬† person should be¬† responsible for¬† monitoring adherence to the Patients‚Äô Charter, hearing complaints regarding all¬† aspects of¬† publicly funded¬† healthcare services ‚ÄĒ¬† whether¬† with¬† regard¬† to¬† the actions of healthcare providers or health organizations ‚ÄĒ and should have the authority to order redress to patients as required.

Election ‚ÄĒ Election of the members of health organizations could enhance their accountability to citizens if the elections are taken seriously and if the electoral¬† process can¬† be structured to prevent vested interest groups from monopolizing the membership. Given the need to ensure that the management of the bodies is highly skilled, a mixed board of appointed and¬† elected¬† members might¬† be appropriate.

Mandatory¬† Consultation¬† ‚ÄĒ¬† Genuine consultation with¬† the citizens in¬† the community served can improve accountability and¬† help ensure¬† that¬† the priorities and¬† decisions of ¬†the¬†bodies are reflective of local values. The primary emphasis should be on consultation with citizens rather than interest groups. The performance agreements with the province could require reporting on the results of such consultation and¬† the¬† development ¬†of strategic¬† plans to¬† meet¬† local¬†concerns.

Accountability of Health Care Providers

Health care providers are centrally important to our healthcare system. Ensuring a high standard of ethics and professionalism on¬† the¬† part¬† of¬† providers is essential. Healthcare providers will be accountable¬† to the health¬† organizations for¬† their¬† performance. However, direct accountability mechanisms between healthcare providers and patients are also vital. Self-regulation by various¬† healthcare¬† professions¬† to¬† enforce codes of¬† ethics and¬† professional standards and the¬† deterrent impact¬† of¬† medical¬† malpractice suits are¬† means to achieve such accountability. We¬† would¬† recommend legislation¬† to protect¬† healthcare providers who ‚Äúwhistle-blow‚ÄĚ on substandard performance or decision-making, be it by other providers, hospitals, or health organizations. One leading-edge example from¬† Montreal¬† hospitals is¬† the¬† mandatory disclosure to¬† patients, by¬† the staff and¬† the institutions, of all¬† errors or instances of¬† malpractice¬† that occur.


  1. The specific accountability of the federal government and enforcement of the  Canada  Health  Act is the subject of a separate This paper will focus on accountability at the provincial and health organization levels of  governance.
  2. Please see A  Patients’  Charter, in  this series of papers.

A Patients’ Charter

Several recent  trends in  our  healthcare system  point  to an  emerging need  to  define  precisely and enforce quality-of-service standards for individual patients. The rising level of general education and the exploding  universe  of  readily available  information about  health  matters encourages close questioning of health professionals by patients and their families and even self-diagnosis. Moreover, rigorous  methodologies are  being adopted for  the  evaluation  of  drugs as well as medical and surgical procedures. Such methodologies can now be applied systematically rather than haphazardly, as they have been in the past. Overall, our potential to improve patient care and  quality of service  has  never  been greater.

Public disenchantment  with  the  Canadian  healthcare system  has generated great interest in a formal commitment to the entitlements and responsibilities of all patients in our healthcare system in  the form  of a Patients’ Charter. This idea  has been  met with  enthusiasm as  well as a significant  measure of scepticism. Broad  declarations of  principles cannot, by themselves, change the values and behaviour of the entire Canadian health establishment. These types of statements have an uncanny ability to end up being little more  than  nice words for  public consumption rather  than  practical realities for patients.

A Patients‚Äô Charter can and should be more. Properly defined, a Charter can be the embodiment of a genuine societal commitment to¬† high¬† standards of individual care. To¬† be sure, an¬† effective Patients‚Äô Charter cannot¬† be created instantly. The¬† necessary¬† requirements are numerous and will be difficult to achieve. But the potential benefits require us to try. The process of creating a Patients‚Äô Charter should always be seen as work-in-progress ‚ÄĒ a system striving toward excellence. It is a new frontier, a better future to be built.

The five principles of  Medicare, while important as national statements, cannot serve  as  the kind  of service  quality standards we  need  in  a  Patients’  Charters. The five  principles are intended as conditions for federal contributions  to  provincial  program  expenditures. In contrast, a  Patients’  Charters would  refer  to individuals’ entitlements under  those programs. More  precision is required at  the level of  the individual patient.

It is also important that Patients’ Charters be adopted at  the  provincial level  to allow for an adaptation of the entitlements of patients to the particular circumstances of each province. Only then can they be useful instruments to hold provincial programs accountable.

Conditions For A Successful Charter

An effective Patients’ Charter  must  be  built  on  the following four pillars:

  1. Change in health  services organizations;
  2. A selective focus on the quality  of services;
  3. A determination  to commit incremental resources; and,
  4. An effective  appeals

Several provinces already have introduced some of these elements into their healthcare systems. Some statutory statements of general entitlements can be found in  some  provinces; others have implemented appeals processes through ombudspersons and the like. These initiatives provide a  useful base  on  which  one can  build. However, much is left  to be done.

Cultural Change In Health Services Organizations

First¬† and foremost, healthcare organizations need¬† to¬† undergo cultural¬† change. Several decades of almost exclusive public funding of core health services and the stress placed on financial retrenchment have pushed the organization of health services into ever¬† closer conformity with a hierarchical-bureaucratic model. Community institutions ‚ÄĒ such as hospitals that existed¬† well before¬† Medicare¬† was¬† put in¬† place ‚ÄĒ¬† have lost¬† power. The patient-physician relationship has been weakened. Governments ‚ÄĒ and¬† the¬† Canadian¬† public ‚ÄĒ¬† must¬† realize¬† that¬† health care, and¬† especially¬† not-for-profit health care, depends for its success on the initiative and institutions of civil society. This initiative is difficult to sustain in¬† an¬† overly centralized administrative structure.

Delivering high quality personal services is something with which bureaucratic organizations ‚ÄĒ public or private ‚ÄĒ have always struggled. The single¬† payer feature¬† of our core¬† healthcare system¬† is a¬† quasi-monopoly in¬† provincial¬† hands. Provinces have a duty, then, to offer¬† patients an¬† effective¬† means to offset¬† the restriction ¬†of choice¬† that comes with the public monopoly. Provinces should make¬† room¬† for¬† incentives and¬† sanctions, and empower providers with effective management opportunities and meaningful choices for patients. With this newfound room to manoeuvre, managers could effectively manage; with¬† meaningful patient choice, the system¬† could¬† then respond¬† to¬† those it¬† is designed¬† to served.

The introduction of a Patients’ Charter would refocus the delivery of healthcare services on  the  patient and  on  the quality of  these services in  each and  every community. Thus, with a new emphasis on outcomes for patients rather than processes, the current tendency to centralize decision-making and standardize practices across a province would shift to a regionally-managed  system  flexible  enough  to  be  customized  to  the  needs of  particular regions and  individual patients.

A Selective Focus With Regard To Quality Of Services

Quality of service issues have rightly attracted the attention of the media and fuelled concern among the public. A commitment through a Patients’ Charter could help focus attention and resources. Examples of  such  issues include:

  • Medical conditions for which¬† the timeliness of¬† treatment¬† has a¬† material impact on outcomes, such as cancer, spinal cord trauma or strokes, or¬† on¬† quality of life, such as¬† hip¬† replacements or cataract surgery;
  • Situations in which¬† patients must¬† have all¬† the information¬† they need¬† to make treatment decisions. This is a particular issue for major procedures in¬† which¬† there are different therapeutic options, for which there is significant variation in the performance or experiences of¬† different¬† individual¬† health¬† professionals, or¬† with which¬† there is a greater-than-usual¬† degree¬† of risk; and,
  • Instances in which¬† minimal standards of care cannot¬† be¬† Even informed consent is insufficient to justify the provision of certain services in substandard conditions. Some services, for example, require a high volume of procedures to sustain¬† the skill set¬† essential¬† to minimal quality.

A  Patients’ Charter would  have  the benefit  of focusing the  measurement of  quality on individual encounters with the system  rather  than on aggregate  numbers. As important as is public health promotion and prevention, a Patients’ Charter is directed to individual entitlements, not  those  of a community at large.

There is much to be said  in favour of keeping these  provincial  Charters to a short list  of well-chosen items, at least initially. A Patients’ Charter would have to overcome  the inherent  scepticism  of  most  people regarding  public statements of good intentions. If such a Charter is to help in any way, it will require a very substantial commitment of resources to service  delivery and  implementation processes.

Blanket¬† entitlements covering all¬† personal¬† health services¬† provided¬† to individuals would not be well advised either. Hundreds of millions of contacts between patients and professionals occur every year. Most¬† are¬† of a¬† minor¬† nature (e.g. visits¬† to a¬† physician¬† for a sore throat) and take place in a context that provides a reasonable measure of protection¬† to¬† the patients. Moreover, legal liability is not an empty concept. If¬† one¬† were¬† to attempt¬† to spell out in¬† detail¬† precise¬† entitlements for such an immense field, one¬† would¬† be forced into myriad details ‚ÄĒ an impossible task.

A Determination To Commit Incremental Resources

A Patients’ Charter will force governments to allocate greater resources to our healthcare system. Defining entitlements, by itself, can  do little  to improve  upon  the present situation. Additional resources must be made available to enable the system to live up to the entitlements defined  in  the Charters.

Presently, there is agreement  that  needed investments would  be  substantial. For example, to ensure timeliness in  service  delivery  where  there are  random  fluctuations from day to day in the need for services, a degree of excess capacity is required. The greater those variations and the shorter the maximum  tolerated  waiting  time, the greater  is  the  needed excess capacity. Moreover, if genuine informed consent is to become more than an  empty gesture, more resources in information systems and  education  are  required. Finally, defining and applying minimum  standards  means retiring substandard  facilities  and  equipment, replacing some of  them, upgrading others, retraining healthcare  professionals  and, in  the meantime and perhaps indefinitely, paying for transferring patients to high quality services when needed.

An Effective And Simple Appeals Channel

Without the extra resources committed to these issues, defining a Patients’ Charter will only make the gap between promise and performance more obvious and may well increase litigation. But litigation is expensive and  only  those  with  resources are able  to  pursue a case.

But  what are  the alternatives to litigation?

Public administration is one of the defining characteristics of the Canadian  health-care system. The natural enforcement mechanism is the political process. Yet, many would doubt  that a Patients’ Charter could  be  effectively enforced  through such  devices as Question Period in federal or provincial legislatures. In Canada, this avenue is further handicapped by citizens’ confusion about the roles of the federal government and the provinces  in  health care.

The  most compatible redress  mechanism  would  be simple, relatively inexpensive administrative appeals at the local and provincial levels, perhaps through an ombudsperson responsible for monitoring the system’s adherence to the principles of Medicare and the entitlements of  patients under  the  provincial Charters.

In summary, a Patients’ Charter would be an important mechanism to improve health care services.

Federal-Provincial Roles and Responsibilities: From Adversaries to Partners

While health care is a matter of provincial jurisdiction, the federal government has been  a partner in this area for at least 50 years. Mackenzie King’s 1945 Reconstruction Conference offered assistance  towards a  national, universal  healthcare  program. Federal legislation later codified the foundations of Canadian  Medicare: the  Hospital Insurance and  Diagnostic Services Act (1957) and  the  Medical  Care Act (1966), replaced in  1984  by the   Canada Health Act (CHA) . Nonetheless, with few exceptions, in our healthcare system, the provinces are primarily  responsible  for  planning and  administering  health  services in  Canada and  provide  the lion’s share  of  the funding for  these services.

In  the  past  few  decades, this federal-provincial  partnership, which  had  served Canadians  rather  well,  has  steadily  deteriorated  to  the  point  of  being  dysfunctional. Canadians now witness almost daily childish, sterile bickering between the two levels of government  as  to who-paid-how-much-for-what-when. Meanwhile, serious challenges confront Medicare. Citizens’ entitlements to services, for which they pay dearly through their taxes, have been eroded.

A renewed partnership is urgently needed. We recognize that tensions and conflicts will always exist in a federation. Nevertheless, mechanisms must be designed to help our governments cooperate  to ensure  the delivery of  high-quality care  to all  Canadians.

New Rules for a New Partnership

The first rule requested by both levels of government is for accountability for the dollars spent. This is  not, it  must  be  said, simply a  matter of  getting political credit  as the source of  the funding for an  essential  public service. There is  also  an  important underlying  principle  of governance  that  makes  this form of accountability absolutely essential.

Every citizen is entitled to a clear and direct  link  with all levels of government, not just  for services delivered  but also  for services funded.  Thus, it is  important  that both  the provincial and federal governments be able to account fully for how the taxpayers’ healthcare  dollars  are spent.

A second rule would be optimum efficiency and functionality. Which level of government can best serve the common good within  the context  of  the structural changes facing healthcare systems in the 21st century? Understanding that health care remains a provincial jurisdiction and that the natural role  for  the federal government is  the supportive  one of facilitator, a  realignment  of roles and  responsibilities as  well as of  modes of interaction  is  in order.

The search for optimal efficiency and functionality requires us to address the following questions:

  • How can we¬† ensure¬† that¬† Medicare ‚ÄĒ a coast-to-coast¬† network of¬† 13 health insurance systems ‚ÄĒ¬† remains¬† truly national?
  • Can anything be done to alleviate the burden¬† of¬† healthcare costs and cost¬† control as it¬† now falls directly on¬† the provinces?
  • Are there components of¬† the¬† healthcare system¬† in¬† which the federal government could¬† participate¬† more directly?

Renewing Medicare

The first objective on everyone’s  mind  should  be  excellence  in  health  care. All  decisions regarding the roles to be played by the various levels of governance should be made with  this  goal in mind. Of course, providing high-quality care to all  Canadians and  building a  health system  that  strives for  excellence  necessitates a  healthier federal-provincial partnership.

All Canadians and all governments repeatedly agree on the core values expressed through  the five  principles of  the  Canada Health Act:

  • Universality ‚ÄĒ a province‚Äôs entire¬† population¬† must¬† be¬† entitled to the provincial plan¬† on¬† uniform terms;
  • Accessibility ‚ÄĒ persons must have access to all insured services, while reasonable compensation to physicians and¬† hospitals must¬† be provided;
  • Comprehensiveness ‚ÄĒ the¬† provincial ¬†plan¬† must insure¬† the full spectrum of medically necessary¬† hospital and¬† physician services;
  • Portability ‚ÄĒ persons moving to another province or traveling in Canada or abroad must be covered at either host/home province depending on existing agreements; and,
  • Public administration ‚ÄĒ plans¬† must¬† be administered and operated on a ¬†not-for-profit¬† basis by a¬† public authority.

While all provincial governments support the  CHA, they strongly  resent  the  perceived, and at times real, interference from Ottawa in their way of doing things. Meanwhile, Health  Canada is  becoming increasingly frustrated in  trying to apply  the  principles of the Canada  Health Act.

The CHA, during its first years, succeeded in eradicating extra-billing to patients by physicians and user fees by institutions. But during the last decade it has not  been able  to meet  the  new, subtle and complex challenges  to  Medicare. In  truth, if quasi-automatic enforcement mechanisms have worked in the past for simple and clear breaches of the Act, only long, complex and highly politically loaded processes are available to address today’s complex  challenges  to Medicare.

Besides conflicting political ideologies, three main drawbacks explain this state of affairs: a decade of unilateral federal budgetary cuts to provincial transfers; ambiguity over the meaning of the five principles of Medicare; and the very nature of the beast ‚ÄĒ federal intrusion in¬† an¬† area¬† of provincial jurisdiction.

On funding, Ottawa can¬† and¬† should¬† commit¬† itself¬† to¬† stability¬† of¬† funding in¬† health care. To improve accountability to taxpayers, the federal government should introduce a new finance bill¬† that¬† would separate all funds (tax¬† points and cash)¬† transferred¬† to¬† the¬† provinces for¬† healthcare¬† purposes from¬† the¬† funds allocated¬† to¬† other social¬† services¬† ‚ÄĒ¬† a¬† CHST¬† II¬† of sorts. It would make for a healthier relationship if the tax points ‚Äúlost‚ÄĚ by¬† Ottawa to the benefit¬† of¬† the¬† provinces were¬† once and for all¬† withdrawn from¬† the equation and¬† the debate. Future contributions should¬† be¬† made¬† through cash¬† transfers only.

With regard to defining further the principles of Medicare, Ottawa and the provinces, possibly  with citizens’ participation, should reinterpret  each  of  the five  principles of Medicare. Moreover, a corresponding operational checklist of what is appropriate and what is not  under these  principles should  be created. The lack of definition of  these  principles has been the root cause of  much of  the ambiguity regarding how  provinces can alter  their  modes of delivering services while remaining  within  the  parameters of  the  CHA. Specifically, the federal and  provincial governments should consider  the  meaning of  the  principle  of public administration. What should the relationship be between the public and private sectors in  our  healthcare system?

The¬† task¬† of¬† reinterpreting these¬† principles is¬† undoubtedly a formidable one ‚ÄĒ one that will require bold political leadership. But it is a responsibility that must be taken up¬† by¬† our governments. These principles, once clearly defined, should be widely¬† disseminated in plain language.

Many¬† Canadians ‚ÄĒ citizens, as¬† well as administrators and¬† health¬† professionals ‚ÄĒ would like¬† to see¬† other principles, such as¬† quality and accountability, added¬† to¬† the list¬† to create a¬† truly modern healthcare system. In¬† the longer¬† term, the¬† CHA should be monitored by a national¬† health¬† council, jointly appointed¬† by¬† Ottawa and¬† the¬† provinces and¬† operating at arm‚Äôs length from the governments. The council could, for example, be mandated to present detailed report cards on the performance of¬† the system¬† in¬† terms of¬† the¬† health¬† status of Canadians, adherence to the principles of Medicare and the provincial Patients‚Äô Charters. The council‚Äôs role could¬† be¬† undertaken¬† by existing bodies such as¬† the¬† Canadian Institute for Health Information and¬† the¬† Canadian Institutes of¬† Health Research, for¬† example.

Recognizing that the financial and operational responsibilities related to the CHA are overwhelmingly provincial, the  role  of  the federal  government  in  this component  of  health care  must be  one of facilitator and  honest  broker between  the provinces. Through stable funding to which  it  would commit itself, the federal government  would  enable  the  provinces to better plan for  the future needs of  their  healthcare systems. Armed with  the reinterpretation of the five principles of Medicare (to  which all governments will  have agreed) and aided  by the arm’s length national health council, the federal government would also be in a much stronger position  to  monitor adherence  to  the  CHA. Enforcement  through  penalty is, of course, always an option, but the federal government should commit to using this instrument only in  extreme cases.  Otherwise, negotiation and  mediation should  be  the  preferred  means of  enforcing  the CHA.

This task is fundamentally important to ensuring that Canadians continue to enjoy an effective, fair and universal system for  health  services. Harmonizing 13  ever-evolving  provincial healthcare programs will require  constant  attention. Certainly, with  its share  of  total spending  having  been  dramatically  reduced  in  the last  few  decades, the federal  government will have  to be creative in  devising mechanisms through which it can retain its national role.  But  this is an important task, and one  that  is essential.

More Comprehensive Services

The first areas in which enhanced services should¬† be¬† considered¬† are¬† home care and¬† pharma-care. With day surgeries and earlier hospital discharges, it has become evident that we should seriously consider making a continuum of homecare services and programs available to all Canadians on an equitable and universal basis. This entitlement should be an intrinsic part¬† of their healthcare insurance. Although an array¬† of¬† homecare services¬† has¬† developed across¬† the land ‚ÄĒ be¬† they for-profit¬† or¬† not-for-profit¬† services provided¬† by¬† the¬† private or public sector ‚ÄĒthe regional disparities in terms of access and entitlement to homecare services are simply not acceptable.

Home care will require new funding from governments, a formal policy framework and  the associated  accountability mechanisms.

There is more than one way of protecting Canadians from the ever-increasing burden of  drug costs, the Quebec model being one  worthy of study. As a  matter of  principle, a national pharmacare program should be universal in the coverage achieved, equitable, and efficient. An alternative would be greater standardization and harmonization of provincial drug plans. National standards negotiated among governments would govern these plans. Together, governments need  to  plan and finance broader, fairer coverage  for  drugs.

It must  be  made very clear, however, that any funding for additional programs such  as the ones outlined above cannot come at the expense of present funding levels of core services or  the  natural increase  of  those levels  of funding to account  for inflation and demographic changes.

Long-term care, another much needed spectrum  of institutional and individual services, is  a  separate  issue. With  the aging  of  the  population, the issue  becomes  urgent  and involves major  expenditures that governments  may or  may  not  be  able  to  handle  on  their own. Canadians would  benefit from  discussing different  ways of  tackling the  problem. One that comes to mind is the model adopted by Germany in which long-term care is funded by workplace premiums.

Our healthcare system¬† will¬† not¬† achieve¬† excellence as an¬† integrated system without the pervasive use of information technologies on the one hand ‚ÄĒ from basic wiring to standardization and conversion of files, software development and training ‚ÄĒ and appropriate state-of-the-art medical technologies on¬† the¬† other. We¬† consequently¬† recommend consideration of the¬† creation¬† of¬† a¬† joint¬† federal-provincial¬† Health Technology¬† Resources Fund, as¬† a source of capital investments, to¬† be¬† re-assessed¬† after its first¬† 10¬† years of operation.

A National Approach to Pharmacare

Pharmaceuticals and Health Care

Pharmaceuticals are integral to modern health care. Their innovation and use in¬† the 20th century transformed¬† the¬† health¬† of¬† populations around¬† the¬† world. Drug therapy is a growing¬† part of care¬† at¬† every stage¬† of¬† health¬† care: primary, emergency, acute, outpatient, home and¬† long-term ‚ÄĒ not to mention self-care¬† by individual consumers. Drug technology, though¬† expensive and time-consuming to produce, continues to offer advances in every facet of medicine. With genomic research¬† in¬† its infancy, pharma-technology will continue¬† to¬† transform¬† health care in the¬† 21st century.

Multinational firms, some with  a  substantial  presence  in  Canada, dominate  the research, production, marketing and  distribution  of  drugs. Unlike  other  parts of  the  health-care system, the distribution and use of drugs are strongly affected by private sector competition among pharmaceutical firms and their marketing strategies. Increasing emphasis is being placed  on consumer choice and access. The  marketing of  new  drugs is increasingly focused on  consumers as  well as physicians.

The average cost of individual drug therapies, and the total cost of prescribed and non-prescribed  drug consumption  has been increasing dramatically in  Canada, as in  other developed countries. In fact, drug care costs have risen faster than any other facet of health care. In  Canada, these costs now  exceed  the amounts spent  on  physician services.

The increased use of drugs has been an important element of change elsewhere in the system. It has made possible many outpatient and day surgery procedures, reducing dramatically the requirement for  hospital beds, and it  has enabled  psychiatric patients to live  outside institutions.

While drug therapy has become an essential part of the system, it¬† has not been¬† treated as a fully “medically¬† necessary” service¬† under¬† Canada’s Medicare¬† system. Equity and access¬† have¬† been¬† public policy concerns for¬† decades, and¬† there is an increasing sense¬† of unfairness¬†in the system as drug therapy increases in cost and frequency but remains outside publicly insured¬† core services.

Another key issue is the need for better management of drug use in order  to deal with over-prescription and patient non-compliance. And cost-containment by all drug consumers (institutions, individuals and insurance plans) is of major concern. All these issues intersect  with concern about  the patchwork of  public and  private insurance programs  that exist to fund prescription drugs. Presently in Canada, the cost of pharmaceuticals is borne by individuals, employers and  provincial  governments in  roughly  equal measure.

A final, important opportunity is that reform of pharmacare could make an important contribution  to the disentangling of  healthcare financing in Canada.

Insurance Patchwork and Other Issues

Canada and the United States stick out among OECD countries in not having comprehensive national drug insurance programs. In  several countries, the coverage  of  their  national  programs is 100 percent, or nearly so, of the total population (e.g. Britain, France, Italy, Australia, New Zealand, Sweden, Denmark, Norway, Netherlands). Nowhere do  the  national  plans cover  the full costs of drugs to the patient. Some come close, at 90 percent in the  Netherlands and  UK, but  the  norm  is a  more  evenly  balanced  co-payment  such  as France  at  54  percent  and Australia at 50  percent. In  Canada as a whole, about 25  percent of the population are covered  by public plans, which pay about 48 percent of the total drug bill.

Canadians are covered by a patchwork of public and private plans. The  federal  government covers full costs for status Indians, military personnel, penitentiary inmates and veterans. Provinces  and  territories cover  costs  for  social  assistance  recipients, and  all  cover  seniors to some degree, but with as much as a tenfold difference among provinces in the cost to patients of co-payment or user fee requirements. Provincial plans tend  to cover  more of  the costs for specific drugs for certain diseases and conditions (e.g. AIDS, cancer, cystic fibrosis) but  there are  significant  gaps across provinces.

Many employed Canadians are partially covered not by  public  plans but  by  private ones, financed mostly through payroll taxes (i.e. employer and employee contributions). The result is that  Canadians who  do  not  work full-time, or  who are self-employed, tend  to  have no coverage, and  those  with coverage  face  significant  charges. In  total, there is a weak link between  pharmacare need and insurance  coverage.

Across Canada, the out-of-pocket costs for patients have been increasing, a result of reducing in-hospital care, where drugs are free to patients, and changing policies to contain costs. This cost  shifting may be  effective for  health institutions but  has  the effect  on consumers of decreasing equity and access. Drugs are increasingly important to healthcare therapies but, increasingly, a financial burden  to individual  Canadians.

The Need for a Coordinated Approach

The multiplicity of drug plans and regulatory regimes across Canada hinders a comprehensive approach to overall cost containment. It may also reduce effective strategies for better pharmaceutical use. Really effective cost containment will require sufficient buying and regulatory power to  match  the clout  of  the large pharmaceutical firms.

Other strategies for cost¬† containment include ¬†regulatory¬† price cuts and aggressive bulk-purchasing: both are likely to be more effective if pursued by larger, single purchasers. A recent¬† innovation adopted in¬† some¬† provinces is a¬† reference-based¬† pricing system. In this approach, all¬† effective¬† drug therapies in¬† a¬† reference class¬† (e.g. arthritis control) are compared regardless of similarity in pharmaceutical terms ‚ÄĒ and only the most cost-effective is approved for Some¬† have¬† also¬† advocated a¬† national drug formulary, i.e. a single, national regulatory process for determining which drugs will or will not be covered by insurance plans.

Demand management for drugs is another key way to contain costs and provide more effective use. The link to primary care reform  is compelling. Drug plans integrated  with  primary care can ensure access  while  simultaneously  promoting cost  control and  more  appropriate  use. This approach is  now in  place in  the UK and is  being tried in  the Netherlands.

A National Approach to Pharmacare

Over the long-term, Canada must address pharmacare. Drug technology is a major driver of system change, including the scope of institutional care, the role  of  the consumer/patient, and the demand for healthcare services. Three key and inter-related issues have emerged that governments must  deal with:

  • Controlling drug costs and¬† providing incentives for¬† more appropriate¬† drug use;
  • Ensuring healthcare equity and access are not being eroded by drug cost-shifting to individuals; and,
  • Harmonizing and strengthening the regulation of¬† public

In our view, the status quo can neither effectively contain drug costs nor prevent equity/access gaps from  widening.

Significant organizational issues will need to be overcome to implement a national approach  to  pharmacare. These issues include: addressing  the compulsory retention of employer plans; a mechanism for a  regulatory updated formularies based  on  best  evidence; cost efficiency; and the appropriate cost burden on individuals. Quebec’s experience provides important lessons for  pursuing a  national approach  to a  universal  drug plan.

Attention should also be paid to how to ensure drug plans contribute to primary care reform  objectives, in  particular, to  ensure  physicians are  more sensitive  to  the costs and benefits of  the  drugs available for use.

In the initial phases of hospital and physician insurance, employees and individuals retained some financial responsibilities that pre-dated a larger public role. Our goal is not to shift the financial burden from employers to taxpayers. Our goal is to make the burden on individuals much more equitable. The  overall cost  of  pharmaceuticals in  Canada will continue  to rise, but  the burden  will  be more equitably borne.

Moving to a solely federal drug plan may prove too radical for the current state of federal-provincial relations. A second option would be  the development of national standards   to be accepted by each provincial drug plan. Chief among these standards would be universality. All  Canadians would  be covered.

The current level of cost-sharing between patients and governments would be made the same across Canada. Considerations would be given to a premium-based approach supplemented by cost sharing. Employers would continue  to  contribute  to  pharmaceutical expenses.

Whatever the details of the chosen program, the reality is that new federal financial support is  essential  to  ensuring all  Canadians equitable access  to pharmaceuticals.

Charting a New Course Toward Excellence in Health Care

As governments engage in the debate about how best to reform  our  healthcare system, Canadians should urge them to strive to achieve nothing less than the highest international standards of excellence in health care. At present, minimum thresholds of adequacy are too often seen as acceptable outcomes for our system. Our system has great potential, but it is severely underperforming.

Thoughtful Canadians reject the notion¬† that¬† we¬† should¬† celebrate¬† the¬† limited¬† outcomes which have come to characterize our system‚Äôs performance. As a country, we can and should do better. Most Canadians continue to express faith that excellence in health care is achievable in a publicly funded system. Health is of such vital concern to¬† everyone¬† that excellence in¬† health care¬† must¬† be¬† more than our desire ‚ÄĒ it¬† must¬† be¬† our goal.

The five principles of the Canada Health Act express the values of Canadians and their support for a  publicly-funded system. But  none  of  these  principles refers explicitly to quality.

Indeed, many inferior health¬† systems around¬† the¬† world¬† would¬† be¬† entirely consistent¬† with¬† the five principles of the Canada¬† Health¬† Act. Canadians familiar¬† with¬† these¬† healthcare systems would reject them, and rightly so, because standards of excellence and¬† quality are¬† not assured. The issues of quality and excellence ‚ÄĒ which encompass the notions of appropriateness and timeliness ‚ÄĒ are a matter of great and urgent importance to all Canadians. So should it be for governments as they seek¬† to¬† maintain and¬† build¬† public confidence in¬† the system.

Healthcare Excellence as a Canadian Brand

As governments seek  to improve our healthcare system, our principal goal  must  be  to  meet the  highest international standard  of excellence. Our publicly funded  healthcare system  is our most cherished social program and has been elevated to the status of a defining Canadian value. That value is best preserved  by an  unrelenting commitment  to international standards of excellence.

As Canada’s flagship social program, our healthcare system has the potential to establish  Canada’s brand as  the one  to emulate for  quality of life  and commitment  to excellence.

This would help ensure that Canada retains its status at the top of the United Nations World Development Index and improve our current seventh  place  position in  the  World  Health Organization’s  measurement of  overall  health system attainment.

A National Strategy

Our federal and provincial governments  must  coordinate  efforts  to achieve  excellence. The federal government, for its part, would act as a facilitator, catalyst, consensus builder and coordinator in  this effort. In  partnership  with  the provinces, two specific tasks should be  led  by Ottawa. The first task would consist of providing the infrastructure  necessary for  determining and applying international benchmarks. The second would see  Ottawa fund  experiments  to explore and evaluate different ways to achieve appropriateness and excellence of health care. These experiments would then serve as an example for wider application  throughout  the system by  the provinces.

We  foresee a joint strategy that  would  push all governments  to:

  • Provide a bold declaration of the collective¬† will¬† to¬† move¬† Canada‚Äôs¬† healthcare system to the highest international standards of excellence, and to move beyond the intermittent and episodic efforts to fix and fund one or other problems in the system.
  • Elaborate a more constructive long-term¬† Key¬† elements to¬† be addressed include:
    • Availability and training of¬† health¬† human resources;
    • Required upgrades in facilities and equipment to meet international benchmarks;
    • Organizational structures, management, measures, outcomes and accountabilities; and,
    • Appropriate levels¬† of funding.
  • Measure and report on the performance of Canada‚Äôs healthcare system, evaluated against international¬† standards,¬† trends¬† and¬† These¬† would¬† be dynamic, not static measures. For example, current research investment¬† by¬† the National Institute of Health in the United States is $18 billion per year, versus Canadian research¬† investment¬† of $550¬† million¬† per year.
  • Encourage differentiation¬† and¬† experimentation among the¬† different provincial healthcare systems and¬† regional¬† health¬† organizations: not¬† every¬† province or health¬†organization necessarily should or could be the best in everything at the same time. As a¬† matter of¬† principle, best¬† practices would¬† be shared and exported.
  • Define outcomes and¬† measurements, including consumer A mechanism for the evaluation of excellence, such as a peer review process, must be developed. This¬† mechanism¬† could¬† be¬† based¬† within¬† an¬† existing¬† healthcare¬† body such as¬† the¬† Canadian Institute for¬† Health Information or¬† the¬† Canadian Institutes¬† of¬† Health Research, or a joint¬† venture of¬† the two.
  • Develop a Canadian¬† healthcare¬† management and¬† health industries If Canada can achieve global standards of excellence, it follows that¬† other countries and purchasers will want¬† access¬† to¬† that knowledge. A sweeping and comprehensive strategy to put Canada‚Äôs healthcare systems at the forefront of the global knowledge-based economy has the potential to provide substantial dividends¬† that can¬† be¬† reinvested¬† here at¬† home to improve the health of¬† Canadians.

Healthcare Management and Industries Sector

Health care is one of the largest  sectors of employment in  the  Canadian  economy. The  publicly funded system contributes greatly to the health of the population. A healthy workforce is essential  for  a  healthy  economy  but, beyond  that, Canada’s  publicly  financed  healthcare system provides a competitive advantage to Canadian industries by greatly reducing the amount employers pay for  employee  health  benefit packages.

Canadians make a substantial ongoing investment ‚ÄĒ $80 billion per year ‚ÄĒ in our healthcare system. Strategies to¬† develop¬† the¬† export¬† of¬† healthcare services and¬† management and to expand our production of goods and services that stem from the health sector are the¬† best¬† way¬† to get a¬† return on¬† our investment. We¬† think a ¬†target¬† of¬† 20¬† percent, or¬† $16¬† billion per year generated¬† by¬† this industry sector, is a¬† reasonable goal.

Industry sub-sectors that show  promise  include:

  • Information technology (digital and¬† satellite applications);
  • Healthcare delivery services;
  • Healthcare management;
  • Knowledge management systems: including data collection, transmission and security, and software development;
  • Biotechnology: genomics (artificial¬† organs, drug development, );
  • Imaging systems; and,
  • Nanotechnology

Canada should not be afraid to aim for excellence. We have  the necessary expertise.  All  we  need  now is  the leadership and collective commitment  to  make excellence a reality.

Lessons for Canada from Other Nations

Many nations look to Canada for leadership in health services. Perhaps it is time Canada looked  to other nations for insight  and lessons.

Canada shares with most other OECD nations an experience of public sector retrenchment in  the  healthcare sector in  the  1990s, and a current sense  of  public concern about levels of public funding for health care. During the 1990-97 period, the average rate of increase in real  per capita  public expenditures in  24  OECD  nations slowed  to  2.6  percent, after  the decade  of  the 1980s in  which such  expenditures had increased  on average  by about 4 percent a year. This braking of public expenditures was reflected in a decline in the public share of total health expenditure: the OECD  mean in  this regard  declined from  75.7  percent to 74.7 percent between 1990 and 1997. The impact of this retrenchment is reflected in public opinion. In  a  recent  seventeen-nation  public opinion survey, which  included 11 OECD nations, majorities ranging from 68 percent in Germany to 91 percent in Britain supported increased public spending on health care. The level of support for increased spending  was inversely correlated with changes in the public share over the previous decade: that is, support for increased  public spending was generally  higher in  those countries in  which  the public share of  total health  expenditures had  declined  most severely.

In Canada, these trends have been particularly sharp. Canada was one of only four of 24 OECD¬† nations in¬† which¬† real¬† public¬† health¬† care¬† expenditure¬† actually¬† declined¬† over¬† the¬† 1990-1997 period ‚ÄĒ the average annual change in real per capita public expenditure in that¬† period¬† was¬† (- 0.4) percent. The¬† public share of total health ¬†expenditure in¬† Canada declined from¬† 74.6¬† percent in 1990 to 69.8 percent in 1997. And the effect on public opinion has been dramatic. Canadian respondents showed the largest¬† drop among five¬† nations surveyed¬† between¬† 1988 and 1998 in the proportion believing that the healthcare system works well and that only ‚Äúminor changes‚ÄĚ are required to make it work better ‚ÄĒ from 56 percent in 1988 to 20 percent in 1998.

The effect  of  the contraction  of  the  public sector in  Canada  was  exacerbated  by  the design of  the  Canadian system. Uniquely among  OECD  nations, the  boundary  between  public and private finance for health care in Canada is drawn along sectoral lines. Medical and hospital services are covered under a universal single-payer system of first-dollar coverage, while  other goods and services fall into a realm in which methods of financing are mixed and varied, and in which  private  finance  plays  a  large  role.  This  sectoral  division  between  public  and  private finance contrasts with  other systems in  which  private finance  takes the form  of co-payments for publicly-insured services, or of a system parallel to the public system, or of coverage for population groups ineligible for public coverage. Because medical and hospital services are exclusively publicly insured in Canada, it was  those sectors that  bore  the  brunt  of  public restraint. And because those services have traditionally been perceived to be at the core of the system, the effect  of fiscal constraint  on  public confidence in  the system  was amplified.

If Canada achieved a greater degree of fiscal constraint than did most other OECD nations in the 1990s, it did so without adopting the types of healthcare reform that other nations did. Beyond  regionalizing  hospital governance structures (in  all  provinces but Ontario), Canada made very few changes to the structures of healthcare delivery or finance. Other nations, meanwhile, made a variety of changes that fell into the following categories.


A number of countries, notably Britain and New Zealand, tried to introduce elements of competition into their publicly owned and managed hospital systems by breaking up established hierarchies into ‚Äúpurchaser‚ÄĚ and ‚Äúprovider‚ÄĚ components and¬† requiring¬† purchasers¬† to contract for services with providers¬† who¬† were¬† expected¬† to compete for¬† purchaser contracts. These ‚Äúinternal markets‚ÄĚ were still publicly financed. These reforms also allowed private providers to compete¬† for¬† public contracts.

In¬† other nations, competition among insurers within an¬† overarching framework¬† of universal coverage was encouraged. The most prominent example was undoubtedly the failed ‚Äúmanaged¬† competition‚ÄĚ proposals¬† of¬† the¬† Clinton¬† administration¬† in¬† the¬† United¬† States. But social insurance systems in Germany and the Netherlands also moved toward ‚Äúmanaged competition‚ÄĚ as regulatory frameworks were changed to allow social insurance funds to compete with each other (and, in¬† the case¬† of¬† the Netherlands, with¬† private insurers as ¬†well).

Verdict: The actual impact of these¬† competition-based¬† reforms¬† has¬† been¬† less¬† than might have been expected from their initial design. ‚ÄúInternal markets‚ÄĚ in Britain and New Zealand have resulted in more¬† explicit¬† negotiations between¬† public¬† purchasers and ¬†health care providers, but competition between providers has been limited as established networks have¬† persisted in¬† the process of implementation. Too¬† little attention has been¬† paid¬† to¬† the¬†accountability of¬† the¬† purchasing bodies. As for¬† managed competition among insurers, ¬†that¬†too has been limited by the difficulties of developing feasible risk-adjustment mechanisms ‚ÄĒ although important strides in¬† that¬† direction are¬† being¬† made, especially in Germany.

Implications for Canada: The original structures into which these competition-based reforms were introduced were quite different from those that¬† prevail in¬† Canada. In Britain and New Zealand, the starting point was a system in which¬† hospitals were¬† owned and¬† managed¬† by the state, and the move to establish hospitals as entities incorporated separately from funding authorities was arguably a move toward the model already prevailing in Canada. As for competition among insurers in¬† Germany and¬† the¬† Netherlands, those reforms built¬† on¬† the¬† model of multiple social insurance funds, financed by compulsory employer and employee contributions, that has prevailed in a number of European countries since¬† the late¬† nineteenth¬† century. That contrasts with single-payer systems, financed by general taxation, that exist in Canada and other nations. Experience with these reforms can thus not be¬† directly¬† translated¬† into¬† the¬† Canadian context. Nonetheless, there is something to be learned from experience with competition-based reform. ‚ÄúPurchaser-provider‚ÄĚ negotiations¬† have¬† demonstrated¬† the¬† potential¬† merits of¬† more explicit¬† agreements in¬† encouraging purchasers to be¬† more sophisticated and¬† providers to¬† be more accountable. Value-for-money, quality and¬† access can¬† all¬† be¬† enhanced¬† through¬† more explicit agreements. And the advances in risk-adjustment formulae, developed to facilitate competition among insurers, can¬† be adapted¬† to other forms of¬† population-based funding.

Changing Provider Incentives

Competition-based reforms were¬† intended¬† to¬† provide¬† both¬† purchasers and¬† providers¬† with greater efficiency incentives. But they were not the only types of reform directed at changing provider incentives. Another had to do with extending the ‚Äúagency‚ÄĚ role of physicians by providing physicians with fixed budgets from which they were to purchase goods and services as agents for their patients. British GPs who opted to become ‚ÄúFundholders‚ÄĚ were given budgets from¬† which¬† to purchase a range¬† of hospital and community services for¬† their¬† patients, with the savings to be re-invested in their practices. In Germany, regional associations of physicians have¬† been given¬† budgets for¬† prescription drugs.

Verdict: Policies aimed at changing provider incentives by internalizing costs  to groups  of physicians have been among the most successful of the reforms of the 1990s. The British Fundholding experiment attracted a majority of GPs on a voluntary basis and has now been extended on a  universal  basis in  the form  of Primary  Care  Commissioning Groups. Germany’s regional  prescription  drug budgets have  constrained  the rate  of increase  in the drug component of healthcare expenditures, although other elements of the German system have  made for relatively high  drug  prices.

Implications for  Canada: The success of the British Fundholding experiment  has  important implications for primary care reform in  Canada. The attractiveness, for  both  patients and physicians, of empowering general  practitioners  to  make a  broad  range  of  purchasing decisions on behalf of their patients, was demonstrated by the way in which this initially voluntary option gained acceptance and was then universalized and made compulsory. Although the process of universalization will bear careful watching, the British experience suggests that Canada could considerably accelerate experimentation with  primary care reform  pilot  projects.


A number of¬† nations¬† have¬† instituted¬† policies aimed at¬† increasing¬† the accountability of¬† health care purchasers and/or providers, through changes in governance structures or through¬† the provision¬† of¬† information, or¬† both. In¬† Britain, for¬† example, the¬† chief¬† executives¬† of ¬†provider trusts are now held¬† explicitly accountable for¬† the quality of care¬† within a framework of ‚Äúclinical governance‚ÄĚ established after 1997. A¬† variety of¬† quantitative¬† performance¬† measures related to service provision are published for each hospital trust. At¬† the¬† national level, the¬† National Institute of Clinical Excellence (NICE)¬† has been¬† established¬† to¬† undertake¬† technology assessment and¬† the development¬† of clinical guidelines.

Verdict: Various approaches to enhanced accountability are still very much under development and have yet to be fully implemented, tested and evaluated. Performance measures have¬† so¬† far¬† been¬† heavily¬† weighted¬† toward ‚Äúprocess‚ÄĚ measures such as waiting times rather than ‚Äúoutcome‚ÄĚ measures. The implementation of performance measurement schemes continues to be bedeviled by difficulties of controlling for¬† differences in case¬† mix¬† in¬† a¬† way¬† that is¬† transparent and¬† understandable¬† to a¬† broad¬† public. Nonetheless, the¬† drive for information-based accountability mechanisms is likely to continue and indeed to accelerate¬† in¬† most nations.

Implications for Canada: Canada has the potential to be at the forefront of the cross-national drive to improve information-based accountability mechanisms if key gaps  that  exist at  present  are  addressed. Important  elements of  an  information-based  accountability system are already in place in Canada in the form of the extensive databases generated for administrative purposes by provincial health insurance plans and hospital management as well as a growing analytic capacity through university-based centres of excellence  in  health  services research and national bodies such as the Canadian Institute for Health Information and the Canadian  Health  Services  Research  Foundation. These  bodies  are  still  in  their  formative stages, however, and need further development. Significant data gaps need to be overcome, particularly with  regard  to  primary and community care. Standardization of  data is also  an important issue. And perhaps most important, more work needs to be done in developing a coherent framework to guide  the collection  and  assessment  of  data, on  the  model  of  the National Accounts. Only then will we be able to transform the information we have gathered into knowledge  we can use.


Integrating long-term  care  and  sub-acute  care  with  the  acute  care  system  in  a  way  that ensures patients receive the level of care most appropriate to their needs is a thorny problem with which all nations are wrestling. The particular budgetary and organizational barriers to integration vary across nations as a result of the different ways in which  structures of  health-care delivery and financing have evolved; in  no  nation are  the interfaces  between  levels and types of care  barrier-free. As a  recent  symposium in  the journal Health  Affairs noted, all nations are struggling to find a balance between family, marketplace and state in achieving this integration. Two  reforms  worthy  of  particular  note  are  those  of  Germany and  Japan, which have adopted universal programs of long-term  care  based  on  a social insurance  model  of financing, funded through  payroll levies.

Verdict: The German and, especially, the Japanese reforms are too recent to be evaluated, but they bear watching. In different ways both try to¬† balance coordination and¬† universality with a substantial degree of consumer choice ‚ÄĒ¬† Germany, for¬† example, allows for¬† a ‚Äúcash option‚ÄĚ that patients can¬† draw in order to reimburse family members for¬† the provision¬† of care. Costs of the German system appear to have been contained. In Japan, fears of cost escalation¬† have¬† been expressed based on¬† past experience.

Implications for Canada: The German experience, which has influenced the Japanese approach, also raises important questions for Canada. Should Canada consider a form of universal coverage for long-term care, financed separately from Medicare  on  the one  hand and from  public  pensions on  the other?

In conclusion, a look at other nations can put the current sense of healthcare crisis in Canada in perspective. The fiscal contraction of the 1990s was particularly sharp in  Canada, and  particularly alarming to  Canadians, but it  does not  place  them on another  planet than other industrialized nations. And as Canadian governments turn to considerations  of  reinvestment, they can also take guidance from experience elsewhere. No reform can be transplanted from one nation to another and simply be expected to take root and flourish in a different context. Nonetheless, experiences in other nations suggest that reform efforts could be focused fruitfully, for  example, on changing the incentives faced  by  providers, particularly  at the level of physician groups, and on developing a new fiscal framework to facilitate the integration  of long-term  care  with acute care.

The members of the IRPP Task Force on Health Policy are:

Michael Decter (chair) is an economist, author and public speaker on matters of health policy. He currently serves as Chair of the Canadian Institute for Health Information. Previously, he served as Ontario’s Deputy Minister of Health and as Cabinet Secretary in the Government of Manitoba.

Minister of National Health and Welfare from 1976 to 1984, Monique Bégin was the Dean of the Faculty of Health Sciences at the University of Ottawa from 1990 to 1997, before being named Professor Emeritus. A sociologist, Monique Bégin is now a Visiting Professor at the Health Administration Programme at the University of Ottawa.

Colleen Flood, Assistant Professor in the University of Toronto’s Faculty of Law, is associated with its School of Health Services Administration. She specializes in the legal, economic and public policy dimension of healthcare systems. Her research interests include accountability in health care and governance issues surrounding regional health organizations. Most recently, Dr. Flood published International Health Care Reform: A Legal, Economic and Political Analysis (Routledge, 2000).

From 1971 to 1981, Claude Forget served the province of Quebec in various policy-making roles, first as Assistant Deputy Minister of Health and, later, as Minister of Health and Member of the National Assembly (MNA). Since 1982, he has been acting in the private sector as a consultant corporate executive businessman. In 1998, he co-authored, with his wife Monique J√©r√īme-Forget, Who is the Master? a book proposing fundamental overhaul of the financing and organization of the Canadian health system.

Henry Friesen is Chairman of the Board of Directors of Genome Canada and, until July 2000, was President of the Medical Research Council of Canada. During his term as President, Dr. Friesen was instrumental in changing the culture of this organization and oversaw its transformation into the Canadian Institutes of Health Research. Between 1973 and 1992, Dr. Friesen was a Professor and Head of the Department of Physiology at the University of Manitoba.

Maureen Quigley, Principal of Maureen Quigley and Associates Inc., specializes in the facilitation of planning and change processes, with particular emphasis on restructuring healthcare and health policy development. On these issues, she has worked extensively with the Ontario Government and with organizations in every sector of health care across Ontario. Ms. Quigley has also held senior policy positions in the Government of Ontario and the Municipality of metropolitan Toronto.

Now retired, Duncan Sinclair chaired Ontario’s Health Services Restructuring Commission.A long-time faculty member at Queen‚Äôs University, Dr. Sinclair served in a number of senior administrative capacities including Vice-Principal for Health Sciences and Dean of Medicine. Dr. Sinclair has also served on a number of boards, commissions and committees including the National Forum on Health and the Premier‚Äôs Council on Health,Well-Being and Social Justice.

Carolyn Tuohy is a Professor of Political Science at the University of Toronto. Her area of research and teaching interest is comparative public policy, with an emphasis on social policy. Dr. Tuohy has served on a variety of governmental commissions in Canada and is currently a member of the Research Council of the Canadian Institute for Advanced Research. She is at present Deputy Provost of the University of Toronto. Dr Tuohy’s most recent book is Accidental Logics: the Dynamics of Change in the Health Care Arena in the United States, Britain and Canada (Oxford University Press, 1999).

For immediate distribution – Thursday, September 7, 2000

Montreal ‚Äď The Institute for Research on Public Policy (IRPP) today will release the report of its Task Force on Health Policy. Chaired by Michael Decter, the Task Force was convened in the late spring to study, beyond the narrow issue of funding, specific reforms to give Canadians a public healthcare system that is truly the very best it can be.

In eight short policy papers, the IRPP Task Force on Health Policy tackles issues such as excellence and accountability in health care, a disentanglement of the roles and responsibilities of each level of governance, a return to local initiative, and a renewed focus on serving the needs of individual patients. Task Force members recommend the following priorities for First Ministers to consider:

  • Making excellence in health care the primary objective of all healthcare programmes ‚Äď a goal that should be measured according to the highest international standards;
  • Initiating a joint process by which Ottawa and the provinces would reinterpret the five principles of Medicare to account for the changes that have occurred in healthcare services since 1984;
  • Adding the principles of quality and accountability to the five existing principles of Medicare;
  • Committing to specific entitlements and responsibilities of all patients in the form of a Patients‚Äô Charter;
  • Enhancing patient choice through experiments such as vouchers for homecare services;
  • Devolving administrative and budgetary authority to regional health organizations to enhance flexibility and encourage innovation;
  • Committing to stable funding for healthcare services;
  • Ensuring stable leadership in health care by extending the tenure of ministers and deputy ministers of health;
  • Considering extending the definition of ‚Äúcomprehensiveness‚ÄĚ to include new services such as drugs and home care, without necessarily binding new programmes to the Canada Health Act;
  • Committing to a long-term reinvestment plan in health research, information technology and infrastructure; and,
  • Learning from experiments in healthcare reform taking place elsewhere around the world.

In presenting their report to First Ministers, members of the IRPP Task Force on Health Policy aim to outline issues that merit the attention of decision-makers, consider potential challenges and benefits of certain proposals for reform, and encourage an informed public debate on the future of Medicare.

‚ÄúThe improvement of health care services is not a short-term or a once-in-a-while event,‚ÄĚ noted Task Force Chairman Michael Decter. ‚Äú Modernizing health services must be an ongoing part of how modern societies move forward.‚ÄĚ

Members of the IRPP Task Force on Health Policy are:

  • Michael Decter (Chair), Chairman of the Canadian Institute for Health Research and former Deputy Minister of Health in the province of Ontario;
  • Monique B√©gin, Visiting Professor at the Health Administration Programme at the University of Ottawa and former federal minister of health;
  • Colleen Flood, Assistant Professor of Law at the University of Toronto and author of International Health Care Reform: A Legal, Economic and Political ¬†Analysis;
  • Claude Forget, Former minister of health in the province of Quebec and coauthor of Who is the Master? A Blueprint for Canadian Health Care Reform;
  • Henry Friesen, Chairman of the Board of Directors of Genome Canada and former president of the Medical Research Council of Canada;
  • Maureen Quigley, Principal of Maureen Quigley and Associates and a specialist in health services restructuring and health policy development;
  • Duncan Sinclair, Former Dean of Medicine at Queen‚Äôs University and former Chair of Ontario‚Äôs Health Services Restructuring Commission; and,
  • Carolyn Tuohy, Deputy Provost and Professor of Political Science at the University of Toronto and author of Accidental Logics: The Dynamics of Change in the Health Care Arena in the United States, Britain and Canada.

The report, along with a letter from Task Force members addressed to first ministers, was sent to first ministers, ministers of health and deputy ministers of health earlier today.

IRPP President Hugh Segal was impressed with the recommendations made by the Task Force.

‚ÄúIt is quite an honour for IRPP to have individuals of such talent and experience commit to our process of finding innovative ways to fix Medicare,‚ÄĚ Segal said. ‚ÄúI am confident that their contribution will enrich the public debate on healthcare

‚Äď 30 ‚Äď

Founded in 1972, IRPP is an independent, national, nonprofit organization whose mission is to improve public policy in Canada by generating research, providing insight and sparking debate that will contribute to the public policy decisionmaking process and strengthen the quality of the public policy decisions made by Canadian governments, citizens, institutions and organizations.

More generous cash-transfer benefit would improve access to essentials, says IRPP report
More generous cash-transfer benefit would improve access to essentials, says IRPP report