The Canadian Health Care

System
An Acute Care System Living in Chronic
Care World

Overview of Health Care in Canada

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Genesis
The Birth of Medicare in Canada Canadas Constitution
Section 91: The responsibilities of the Federal
Government

Section 92: The responsibilities of the Provincial

Governments.

Part 1 the right to change the Act with respect to the powers
given to the provincial legislatures.

Part 2 provincial taxes (i.e., provincial sales tax)

Part 4 hiring, paying, and supervising provincial employees

Part 2 regulation of trade between countries

Part 2a employment insurance

Part 6 establishing and maintaining provincial jails and juvenile

detention centres

Part 3 raising money by any method of taxation

Part 7 establishing and maintaining hospitals

Part 4 the postal service

Part 8 organizing and setting up municipal governments

Part 5 the census and keeping of national statistics

Part 9 licensing of shops, bars, and auctions

Part 6 the armed forces and defence

Part 7 determining the salaries of politicians and all employees

of the federal government

Part 10 interprovincial communication and transportation (e.g.,

ships, railways, canals)

Part 13 civil and property rights

Part 14 enforcement of provincial laws and penalties for

violations

Parts 9-13 matters related to the seas and Great Lakes such as
lighthouses, fishing, coastal boundaries and ferries between
provinces

Parts 14-20 matters related to banking, the printing of money,

the organization of new banks, and the setting of interest rates
for borrowing

Part 21 bankruptcy, whether individual or business

Part 22 inventions and patents

Part 24 Indian affairs, reserves, and land claims

Part 25 citizenship, immigration, and deportation

Part 27 criminal law

Part 28 federal jails and penitentiaries

Genesis
The Birth of Medicare in Canada
Step 1 - Medicare: Hospital focused, with a purely financial role for the Federal Government
Health Care began in the provinces, first in Saskatchewan in 1947 and then in Alberta and
British Columbia in 1950. However, this was not full health care. It pertained only to hospitals.
In 1957 the Federal Government passed the Hospital Insurance and Diagnostics Act. This
provided reimbursement (effectively, cost-sharing) for one-half of the Provinces and Territories
costs for a specified list of hospital and diagnostic services.

Step 2 - Out of Hospitals

In 1962 Saskatchewan introduced legislation to cover all Doctors services including those
provided outside of hospital - in the province at no charge to the patient.
In 1966 the Federal government expanded on the Hospital Insurance and Diagnostics Act to
bring it in line with the Saskatchewan approach: one half of the cost of all Doctors services,
inside or outside of hospitals would be reimbursed by the Federal government.

Step 3 Expanding the Rules and Codifying the Financial Transfer

In 1984 the Canada Health Act comes into force, with 6 principles
1996 Canada Health and Social Transfer (CHST) covered medical and social program
transfers.
By 2004 the health component was segregated into the Canada Health Transfer (CHT) with
the intent of improving traceability of transfers

Context
The Birth of Medicare in Canada
The system that was designed in the 50s and
60s was designed to meet the health care
requirements of the day. At this time,
Canadians:
Lived much shorter lives
Had fewer chronic conditions (in part,
because acute health events like heart
attacks and accidents were much more
prevalent. Many more died before they
had time to acquire chronic conditions)
Smoked much, much more.
Our system was designed for an acute care
world we now live in a chronic care
world, and our system has not adapted to
meet the requirements.
Also, during this time our population moved to
the cities in huge numbers

Context
Smoking Prevalence: 1965 - 2012
1965:
62% of Men
37% of Women
50% overall

2012:
19% of Men
14% of Women
17% overall

Context
Life Expectancy and Quality of Life (1/5)

Since 1921 we have

seen significant
extension of life
across the
Canadian
population.
Of note: there has
been almost no
change in life
expectancy once
you make it to 90
years of age.

Context
Life Expectancy and Quality of Life (2/5)

Since 1921 infant

mortality has fallen
from 25% to less
than 1%, and the
number of people
living to 90 has
increased
By 2011 fewer
people were dying
before 76 than ever
before, and more
were living long
lives than ever
before

Context
Life Expectancy and Quality of Life (3/5)

Since 1921:
Death before age 4 has
dropped off significantly.
Life expectancy between
5 and 74 has increased
Life expectancy over 75
has increased
significantly

Context
Life Expectancy and Quality of Life (4/5)

Life expectancy has increased

due to improved treatment for
chronic diseases:
Cancer
Respiratory diseases
Circulatory diseases
Due to advances in acute care
technology and reduction in
violent crime rates, life
expectancy has increased for
both

Context
Life Expectancy and Quality of Life (5/5)
Moderate disability and
severe disability rates are
effectively steady across
ages groups.
Functional health drops*
off significantly starting at
65 years of age. This is
happening as life
expectancy is
increasing.
* Functional health is
measured using a scoring
system based on selfreported performance on
eight key health
attributes: vision,
hearing, speech,
mobility, dexterity,
feelings, cognition and
pain.

The Things Often Forgotten about the Birth of Medicare.

The Birth of Medicare in Canada
Saskatchewan Strikes (1962):
The Provincial bill to cover all doctors expenses in Saskatchewan was
met with significant resistance from the medical community.
The medical establishment (advocacy and licensing) heavily resisted
plans for socialized medicine.
The propaganda campaign was extensive:
Denounced as socialist or communists
People were told they would not be able to choose their own
doctors.
Compulsory abortion!
Bureaucrats will condemn you to a mental institution!
Foreign practitioners will come to your town!
Some priests were openly advocating violence to resist changes.

The Things Often Forgotten about the Birth of Medicare.

The Things Left Out

Things not covered:

Physio,
Most After-Care
Eye Care
Dentistry
Pharmaceuticals we
are the only country in the
world with single-payer
system that does not have
some form of publicly
funded pharmaceutical
insurance (exceptions:
federal persons, Quebec)

The Current Legislation

The Canada Health Act
The Canada Health Act (CHA) provides the framework for Health in Canada.
Violations of the CHA can be levied against the Provinces for violations. This has
only happened twice, and both times the sums were <$10m.

The Principles are:

1. Public Administration: the health system in each Province will be publicly
administered.
2. Comprehensiveness: this typically means everything in a hospital, though this
varies between provinces.
3. Universality: everybody gets the same access to the system.
4. Portability: if you move Provinces, your card from your Province-of-Origin
needs to be accepted for services
5. Accessibility: people need the ability to access the system. This is of
particular concern when talking about urban / rural divisions.

The Funding Model

Medicare Costs, Growth, Trends

Lets get to the Costs!

The Breakdown: what are
we paying for? How much
for hospitals? How much for
drugs, etc.
Cost Growth
International comparison

The Funding Model

Where Canadian Tax Dollars Go

The Funding Model

Growth, Trends.

The Funding Model

Health Spending as a Proportion of Provincial / Territorial Budgets

The Funding Model

Cost Drivers

The Funding Model

Cost Drivers

Population isnt the Grey

Tsunami that some have
indicated in terms of cost growth.
However, the shift in
demographics should give us
pause to reconsider what our
system delivers.

Total: 7.0%
2.7%
0.9%

Total:
3.3%
0.9%

1.0%

1.1%

0.9%
Total:
2.4%
1.2%

2.4%

2.5%
-1.2%

1.3%
-0.9%

Total:
0.9%
2.0%
1.1%
1.7%
-1.7%

Canadian Ins titute for Health Information.

The Funding Model

International Context

Questions?

The Coming Health Challenge

Shifting Demographics, Evolving Challenges
Preventable Disease
Smoking
Obesity and obesity related
conditions:
Diabetes
Heart disease
Types of cancer
Early onset of preventable
disease
Combination of easily
available high-calorie /
nutrition poor food and
increasingly sedentary lifestyle
Aging Population
Elderly people and seniors
have many challenges,
statistically speaking:
Multiple, chronic
conditions
Pharmaceutical
consumption
Quality of life / disability
free life

The Big Ideas

Options for Reform, Modernization, and Potential Cost Savings

Health HR

Expand the number of

accredited Nurse Practitioners
and Physicians Assistants
(incentive programs,
opportunities for employment,
modernizing health HR model).

Paying for Outcomes

Revisit the funding model for

provision of care.
Explore re-admittance, recovery,
quality-of-life, or other measures
to quantify effectiveness.

E-Health / IT

Primary Care Model

Harness IT for e-health records

for patients, diagnostic results.
Harness IT to measure hospital
performance across wards and
across regions.

Invest in primary and secondary

care facilities.
Reduce burden on hospitals, and
realize major cost savings.

National Pharmaceutical
Purchasing

Long-term and palliative care

Explore federal government

acting as national drug
purchaser for all provinces.
Harness economies of scale to
contain cost growth.

Move chronic patients from

acute care facilities.
Increase quality of care, reduce
cost inefficiencies.

Health Human Resources

The Patient Experience
Doctors perform a vital gatekeeper function in the
Canadian system.
However, we should revisit
how that role is executed,
and the mix between GPs
and other alternative forms
of service delivery:
Nurse Practitioners

After Care

Surgery

Specialists:
OB/GYN
Oncologist
Respirologist
Cardiologist
Etc

Physicians Assistants

Ambulance

Doctor visit /
clinic

Interface with
Dr:
GP/Family
ER Doctor
GATEKEEPER

Prescriptio
ns

Specialized
Treatment
s

E-Health and Electronic Health Records

The Patient Experience
Having a single patient file that is
developed and maintained using electronic
means has a number of benefits:
Single point of recall: history, previous
treatments, allergies, etc, through your entire
life
A single file would allow any physician to see your
history and understand your file, and things you may
have forgotten
Limit adverse drug reactions: build a database of ALL
the medication a patient is taking. Adverse drug
reactions cost the system millions is unnecessary
hospitalization.
Provide the baseline for analytics: having a mass of
data will allow researchers to extract an exponentially
larger amount of data about effectiveness / dangers
of certain treatments.

It also carries some risks:

Privacy
Monetization of human health profiles

Primary Care Model

Reduce Costs, Improve Care
Moving patients out of hospital will reduce the
costs of care, and provide the opportunity to
improve care.

~$1600 day
(depending on
Province and
hospital)

Hospital care is very expensive, and is often

used improperly:
Bed-blockers is common term used to describe people,
typically seniors with multiple comorbidities, that are
put into hospital because there are not long-term care
or primary care facilities available.

Primary Care facilities are community based

care facilities that focus on low-intensity,
frequent care: it is a question of preventing
untreated/under-treated conditions from
getting worse, and avoiding future
hospitalization.
As the population ages, this becomes essential
to reducing cost and reducing trauma,
disconnection and displacement of patients

~$200 day
(depending on
Province and care
delivered)

Paying for Outcomes

Reduce Costs, Drive Outcomes
Health care is currently paid for by formulary. For
each procedure, the physician invoices the
government. For example (figures are notional):
Check-up - $200
Repairing broken wrist - $1200
Appendix surgery - $5000

This model incentivizes the delivery of services to

patients, though does not explicitly emphasize
overall health.
In small settings and as part of pilot projects, there
has been emphasis on paying for outcomes:
$XX,XXX for reducing the overall obesity of a doctors patient
roster
$XX,XXX for reducing heart disease risk, or number of
smokers.

Main challenge: this model does not scale well to an

overall systems, and does not apply well to acute
care (car accident victims, etc.).

Pharmaceuticals Bulk Purchasing or National Plan

Reduce Costs, Ensure Accessibility
The sickest 20% of the population and account for
80% of all health spending. This also applies to
pharmaceuticals, where those 65 years of age and
over spend approximately 2.3X more on
pharmaceuticals than the 45-64 demographic.
65+: $1,778 per capita on drugs.
47-64: $774 per capita on drugs
Many provinces cover all drug costs for citizens
aged 65 and over.
Canadas 65+ population is expected to double
by 2036, comprising 1 in 4 Canadians.
Non-adherence is as high as 31% in some
provinces (not taking, or taking fractional doses)
Driven by affordability
Can result in re-admission to hospital to treat
symptoms drugs were intended to treat.
Provinces are already cooperating on bulk purchasing
(Council of the Federation). However:
No integration of formularies
Not targeting highest growth drugs
Only realizing ~%3 of total drug costs

Long-term and palliative care

Reduce Costs
Long-term care is considerably less expensive
than hospital care (see previous slides on
primary care)
Long-term care typically consists of a mixed
living / care environment that looks more like a
home or community than a place where care is
delivered, and nothing else.
Moving mostly seniors out of hospital and
into long-term care will:
Significantly reduce costs for hospital visits
Reduce hospital wait times
Improve overall patient care for those in
long-term care.
Palliative care is much cheaper than hospital
care, but that isnt the most compelling
argument.
Dignity and comfort for end of life care, in
addition to being cheaper than keeping
people in hospital, is a much more humane
option.

Summary
Todays Challenge
Cost Growth will continue: health cost growth drives options, none of them desirable:
Without reform, cost growth will continue.
As costs grow, taxes either need to go up, deficits need to rise, or Governments need
to make cuts / constrain their policy options in order to meet health care spending.
Technology is not being adequately harnessed
Individual technologies are highly effective in acute / tactical application.
We have no health enterprise system to manage records and other research
data.
Google, Amazon, Wal-Mart and every other multi-national corporation can harness
this technology. We MUST find a way to overcome the privacy issue.
The Very nature of our model needs to be revisited
Our model is still based on some aspects of the Acute model.
We live in a Chronic care world.
Aging Demographics
We are living at lot longer.
This creates new challenges for the delivery model for health care.