The Canadian Medicare plan is a joint venture between the Canadian Federal Government and the provinces/territories. As the responsibility for health under the Canadian constitution belongs to the provinces/territories, Medicare programs are delivered by them. The Federal government establishes the principles and guidelines under which the programs are delivered and funding is shared. Through this arrangement, physician and hospital services are delivered in an essentially uniform manner to most Canadians.

Other programs, not directed by federal legislation, but rather by the provinces themselves are also in place to cover drugs and other health services. Some examples will be given in sections that follow. In addition, there are employer health insurance plans and private insurance policies available to individuals, but these are not described in the pages that follow.

While the Canadian Medicare plan has worked well for most Canadians since its inception, in recent years the system has been strained primarily due to changing demographics and rising costs. These stresses need to be addressed to keep the system in good health (if I may pun). This report is not meant to be a scholastic or comprehensive description of Medicare in Canada, but to provide an overview of the federally legislated national hospital and physician services and the additional health programs of the Province of Ontario.

In the rest of this article where the term 'provinces' is used this should be taken to mean 'provinces and territories'. The Yukon for example is a territory.

We can trace the Canadian Medicare system that we know today, back to 1948. The person credited for beginning the movement to establish a healthcare system for all Canadians was the Premier of the Province of Saskatchewan, Tommy Douglas (an interesting aside - he was Keifer Sutherland's grandfather). His government - the Canadian Cooperative Federation (CCF) - introduced universal hospital insurance for residents of Saskatchewan in 1948 and government insurance for physician services in 1957. In 1964 the Federal Government followed both actions by establishing the legal basis for a national hospital insurance program and a medical-services insurance program. The author of a pivotal federal government sponsored report, Justice Emmet Hall, recommended medicare for all of Canada and by 1972, all of the provinces had agreed to join the plan. A nationwide medicare program for hospital and physician services was established and available to all Canadians from that time.

The legislation provided for the transfer of funds from the Federal Government to the provinces to help pay for medicare programs. Initially the Federal Government agreed to a 50-50 split in funding with no cap, but in the mid 1970s the agreement was changed to block funding . With this change the provinces were now required to spend a set amount on healthcare without specific direction from the Federal Government.

The Canada Health Act passed in 1985 is Canada's current Federal Health Insurance legislation. When it passed it received the unanimous consent of the House of Commons and the Senate. The Act replaced the preceding acts which had paved the way for the introduction of medicare and is the legislative basis of the current medicare program. This Act retained and entrenched the criteria and basic principles contained in the earlier legislation. This 1985 revised legislation included an important provision aimed at eliminating extra billing charges to patients, a practice which had arisen in some provinces. This occurs if a physician charges an insured person for an insured service that is in addition to the amount that would normally be paid by the provincial health insurance plan. These charges to a patient are now discouraged by being subject to dollar for dollar deductions from the federal transfer of funds to the provinces.

Insured health care services are defined as medically necessary hospital services, physician services and surgical-dental services provided to insured persons.

Hospital services include in-patient and out-patient services such as standard or public ward accommodation, nursing services, diagnostic procedures (blood tests, catscans, MRIs, X-rays, drugs administered in hospital and the use of operating rooms, case rooms, anaesthetic facilities etc.

Physician services are defined as "medically required services rendered by medical practitioners". These are generally determined by physicians, in conjunction with their provincial and territorial health insurance plans. Insured surgical-dental services are those provided by a dentist in a hospital when a hospital setting is required to properly perform the procedure.

Most people who live in Canada are eligible for coverage provided by the insurance programs, although some categories of resident may be subject to a waiting period, which must not exceed three months. People covered under other Federal or provincial legislated programs such as members of the Canadian forces, Royal Canadian Mounted Police, inmates of federal penitentiaries and those on provincial workers' compensation are not included.

If a Canadian is ill and goes to doctor, he/she will be treated at no out-of-pocket cost. If he/she needs to go to hospital for emergency treatment, or hospitalization for minor or major surgery then he/she can relax (at least financially). There will be no charges.

Extended health care services covered by the Canada Health Act are certain aspects of long-term residential care and the health aspects of home care and ambulatory care services.

The funding of medicare in Canada is quite complex. Some services are publicly insured as directed by the Canada Health Act, but some are not and this varies from province to province. Private insurance pays for all or part of certain services. Provincial governments raise money for healthcare from a variety of sources - income tax, sales taxes, employer healthcare premiums, and payments from the Federal Government. In Ontario for example, employers (but not employees) are required to pay a tax based on the value of their employees wages.

The federal government directly supports healthcare in the provinces through the Canadian Health and Social Transfer program. It also provides general funding to less wealthy provinces, for example the Atlantic Provinces, through equalization payments that assist them in providing core services. Table 1 outlines who pays and who spends it.

Healthcare spending from both public and private sources as a percentage of Gross Domestic Product is shown in Figure 1. Canada is in the top third of the advanced industrial countries in the world in per capita healthcare spending. Unfortunately there is no simple correlation between healthcare spending and the health of a given population. For example, the United States spends more on health than Canada as a percentage of Gross Domestic Product but it is not evident that one population is healthier than the other. Canadians have a greater life expectancy, 78.6 years versus 75 years for a typical American.
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Figure 2 shows how healthcare spending in Canada has changed over time. Real health expenditures, spending corrected for inflation, increased steadily until the early 1990s when they slowed down for a few years due to decreased provincial government spending. Spending picked up again in 1997 primarily due to the addition of new covered services such as prescription drugs and long-term care.. An aging population and costly medical technology are other factors increasing healthcare costs. Worth noting is the increasing degree in which health care costs dominate provincial budgets. For Ontario, health costs accounted for 43% of total spending in 2000/01 which is somewhat higher than the 37% average for all provinces. These increased costs are of concern to the provinces and major efforts are being undertaken to contain them.

Coverage

Although healthcare coverage for hospital services and physician services under the Canada Health Act are similar across the provinces and territories some slight differences in coverage do exist. This is related to the interpretation of what is "medically necessary".

In Ontario some services that might be considered as non-essential are covered, for example, acupuncture is a covered service as are some physiotherapy and chiropractor services.

The greatest divergence of health services across provinces relates to payment for the costs of drugs and other health costs not outlined in the Canada Health Act.

In Ontario there is a good plan for the cost of drugs for seniors. A wealthy Ontario senior, could send his/her chauffeur to the pharmacist to pick up a prescription at no out-of-pocket cost whatsoever (with minor exceptions). There are also fairly good plans in Ontario for persons and families with very high drug costs. However for normal drug costs Ontarians if they are not covered through their employers or private insurance are required to pay their drug costs. The Ontario systems are discussed in more detail in the next section.

While everyone in Manitoba has some coverage under the government Pharmacare plan, that level of coverage varies from person to person. For persons with an income greater than $15,000 (Can) the annual deductible is 3.15% of income. Below $15,000, the deductible is 2.1% of income. For families, the deductible is based on the combined income of the parents with an allowance of $3000 for spouse and each child. For example, the deductible for a family of 4 - two parents and two children - the deductible would be 3.15% of (50,000-9000) or $1291.50. There is also a program for individuals with exceptionally high drug costs.

In the Province of Prince Edward Island only seniors and social welfare recipients have any drug coverage at all. So pharmacare systems are a hodgepodge across the country. This inequity is recognized as a problem.

The Ontario Ministry of Health and Long Term Care is the Provincial government department responsible for health programs. OHIP is the program which implements the requirements of the Federal Canada Health Act. OHIP covers a wide range of health services. There are no premiums for Ontario coverage. You are eligible to join the program if :

It is a comprehensive service. In addition for persons covered by OHIP, the Ontario government funds and operates two other major healthcare services - a drug program and a long term care service.

This program provides drugs, specified in the provincial formulary of drugs, to residents age 65 and over. Low-income seniors pay $2 for each prescription; single seniors earning over $ 16,000 per year pay the first $100 of their yearly prescriptions and married seniors whose combined income exceeds $24,000 per year also pay the first $ 100. Most prescription drugs are on the Ontario provincial formulary, but the province controls this and some drugs may not be listed on the formulary. Ontario residents who are not over 65 years of age are responsible for their own prescription drug costs. Many of these are paid through employee benefit programs. However there are additional programs for special circumstances to assist people with drug costs. One of these is the 'Trillium Program' which provides assistance to people, regardless of their age who have high drug costs in relation to their income. There are additional programs for payment to persons with specific illnesses requiring special drugs or drugs not listed on the provincial formulary.

The Trillium Drug Program provides assistance for large prescription drug expenses for Ontario residents (OHIP eligible) of any age. Persons taking advantage of this program must disclose details of their income and individual insurance benefits. Coverage through private plans must be exhausted before benefits are paid through this program. A deductible of $2 for each prescription applies after the annual deductible has been satisfied. The deductible is a calculation based upon total annual family income. Table 2 shows some examples of the deductibles that apply.

This program covers out patient drugs for the treatment of specific conditions. It is available to people who are in OHIP and have one of the conditions specified. The program covers:

The program does not have any deductibles or co-payments. If the patient meets the criteria for coverage, he/she does not have to pay for any portion of the treatment.

Another program, which goes by the name "Section 8" provides special coverage for drugs not covered by the normal Ontario Drug Benefit Program. This would cover new drugs not yet listed on the provincial formulary or alternative drugs if in the prescriber's opinion it is the only treatment available to improve a patient's health. The patient may be required to pay some part of the cost.

The provision of long-term care is not covered by the Canada Health Act. It is a provincial responsibility and so it varies widely from province to province. The Ontario program is the responsibility of the Ministry of Health and Long Term Care. The strategic approach involves two linked major programs. These are known as Community Services and Long Term Care.

Ontario has established, across the province, a total of 43 Community Care Access Centres (CCACs). These centres are governed by independent, incorporated, non-profit, boards of directors. The boards are accountable, through service agreements, to the Ministry of Health and Long Term Care. Board membership represents a broad mixture of the community along with a balance of health and social service perspectives. They are responsible for:

Visiting Services are health and support services provided in the home to enable people to remain in their own homes or to return home more quickly from hospital or to delay or prevent the need for admission to hospital. These services are provided to Ontario residents of all ages and are 100% funded.

The eligibility for CCAC purchased services depends on the following criteria: that a person be insured under the OHIP plan, the service is needed, adequate treatment can be provided at home and cannot be provided on an out-patient basis. The residential home must be suitable for the treatment and the person's family or other appropriate persons must be willing and able to participate in the program as required. Services may be provided on a long-term basis, for individuals who have a chronic illness, or to persons with disability who may require services to maintain a level of functioning or be a candidate for admission to a long term care facility. One of the key functions of a CCAC is to determine eligibility and authorize admissions to long-term care facilities.

An additional and important CCAC service is the School Health Support Service. This is to provide the services which enable disabled or handicapped children to access and take part in all the programs possible in the publicly funded education system.

There are three types of publicly funded long-term care facilities: nursing homes, municipal homes and charitable homes for the aged. Although each of these have different historical developments and are subject to differing legislation, they are all regulated by the province in similar manner in terms of the services they must provide and the funding they receive. Only how nursing homes are operated, controlled and funded will be described.

Ontario's long-term care facilities provide for people who are not able to live independently. Those unable to live in their own homes - even with the assistance of community support services, in-home professional care and the availability of 24-hour nursing services -have personal care available to them in long-term care facilities.

These facilities are required to provide accommodation, nursing care, programs and services in accordance with residents' needs and preferences in a manner that promotes and supports their autonomy and their involvement in any decision making process about their own care. It is expected that care and services will be provided in a manner, which fully promotes residents' rights and respects their dignity.

The core programs are described below:

All long-term care facilities are required to provide the following programs and services to meet the needs of residents:

These are the basic requirements. There are provincial standards established for the operation of the facilities. Additional services may be provided for a fee if agreed to in writing by the resident

Long-term care facility operators must sign a contract - a Service Agreement - with the Ministry of Health in order to receive provincial funding. This agreement, apart from enumerating the established standards, includes standards for recording, reporting, auditing and corrective actions that may be taken by the Ministry of Health. Once the Service Agreement has been signed, the Province will begin to provide operating subsidies.

Long-term care facilities receive funding from the government based on residents needs. Residents require differing levels of attention and treatment. Annually a professional reviews the care level required for each resident and this assessment is used in the funding calculation.

The fee structure for residents of long-term care facilities is the same throughout Ontario and is regulated by the Province. As required by the legislation, all long-term care facilities must provide basic accommodation for at least 40% of all the residents in the facility. The remaining 60% may be accommodated at private and semi-private rates. The maximum levels for private and semi-private rates are set by the Ministry of Health. Long-term care facilities are reimbursed for municipal and other taxes. Financial assistance is available to those residents in basic accommodation who, based on their net disposable income, cannot afford to pay the basic accommodation rate.

Admission to the long-term care facilities is handled by 43 Community Care Access Centres across the province. Any persons wishing to apply for admission to a long-term care facility must, by law, be assessed by one of these centres

A majority of Canadians, including the author, would reply yes to the question regarding the success of the program. Politicians of all stripes know that it would be foolhardy to tamper too drastically with the provisions of the medicare system. Canadian medical technology and expertise compares favourably with that of most advanced Western countries. In situations where speedy medical attention is necessary, it is provided. Medical problems in a family that would probably have caused financial hardship in the USA, seldom occur in Canada. The Ontario community-based programs make sense, and actions like making flu shots free to all, are good preventive medicine approaches.

Of particular concern of many Canadians is the possible emergence of a two-tier medical system, namely the emergence of private purchased services, outside of the national system. Canadians see healthcare as a fundamental human right and are worried that the availability of healthcare that can be purchased by the affluent would result in the deterioration of the present system as has happened in the United Kingdom. Arthur Schafer, director of the Centre for Professional and Applied Ethics at the University of Manitoba, writing in the Globe and Mail of September 20, 2002 warned, "When the upper and middle classes opt to go private, the public system loses its most powerful advocates".

However, there are problems emerging with the system, which, in the writers view, are caused by several factors. Federal and provincial squabbling, which is a common occurrence in the Canadian federal system, prevents quick response to emerging difficulties. There has been a chronic lack of funding. This has been particularly severe during the period in which governments - both federal and provincial - have been bringing the country back to fiscal health (i.e. operating at a surplus rather than a deficit). There also may be a lack of personal accountability in the system, which might be remedied by some form of deductible payment by those who can afford it. (Current federal law prohibits this)
The Federal government is aware of these emerging problems and has established a Commission, headed by the former premier of Saskatchewan, Roy Romanow, to find solutions. A good deal of the information in this report is drawn from the interim report of this commission. Hopefully the final report of the Commission, to be published later this year, is expected to provide guidance for further improvements in the system. Some of the problems that have been earmarked for discussion are:

The Canadian Consumer's Guide to Health Care; Sharon Lindenburger, 1998

Healing Medicare; Managing Health System Change The Canadian Way: Michael B. Decter; McGilligan Books, Toronto, 1994

Operating in the Dark; Lisa Priest; Doubleday Canada Ltd.

Code Blue; Reviving Canada's Health Care System; David Gratzer; ECW Press of Montreal and Toronto, August 1999.

Canada Health Act Overview: Health Canada;
http://www.hc-sc.gc.ca/medicare/chaover.htm

Canada Health Act (R.S.1985,c.C-6)
http://laws.justice.gc.ca/en/C-6/text.html;

Interim Report of the Romanow Commission
http://www.healthcarecommission.ca;

Various Reports of the Ontario Ministry of Health and Long-Term Care

OHIP Facts;
http://www.gov.on.ca/health/english/pub/ohip/services.html

Long-Term Care;
http://www.gov.on.ca/health/english/program/ltc/ltc_mn.html

Community Care in Ontario:
http://www.oaccac.on.ca/aboutFunctions.php

What is the Ministry of Health and Long-Term Care;
http://www.gov.on.ca/health/english/ministry/about.html

Ontario Drug Benefits Facts;
http://www.gov.on.ca/health/english/pub/drugs/trillium.html

Toronto General Hospital; How To Pay For Needed Medication
http://www.tthhivclinic.com/pay.htm

Coping With Your Financial Concerns When You Have Breast Cancer; Willow Breast Cancer Support & Resource Centre; Trillium Drug Program.
http://www.willow.org/Financial%20concerns/Fin_trillium.htm