PUBLIC & PRIVATE HEALTH CARE IN CANADA

1. PUBLIC & PRIVATE HEALTH CARE IN CANADA before the Canadian Pension & Benefits Institute Winnipeg - June 15, 2007 by Norma Kozhaya, Ph.D. Economist, Montreal Economic Institute

2. Possible private contribution • Possible private contribution in the health care sector: • Out-of-pocket financing • Private insurance • Private provision of publicly funded services • PPP • I will focus more specifically on the role of private insurance

3. Context • Canada is the only OECD country that prohibits the possibility of private insurance for medically required services (through provincial legislation). • Canada is also one of the « biggest spenders » on health care • What are the results? Value for our money?

4. Financial sustainability • Health care spending accounts for more than 10% of our GDP (70% public, 30% private) • With inflation taken into account, per capita public health care spending doubled in 30 years (CIHI).

5. Financial sustainability • More than 33% of total provincial government revenues are spent on health care • In Quebec: 44% of provincial program spending goes toward health care in 2006 compared to 35% in 1990.

6. Factors driving growth: Population aging (the share of the elderly in the population 14% today, 23% in 2026) Technology New drugs Growth Projections for Canada: Increase of 4% of GDP by 2040, (CD Howe), 4,2% in 2050, (OECD) Financial sustainability

7. Cost Health care spending in OECD countries with universal access as %/GDP (2003, 8th)

8. Cost and results Different measures of health care system performance; two are of particular relevance for Canada: • Access • Waiting time

9. Cost and results Number of doctors per 1000 inhabitants (24th)

10. Cost and results Public spending per capita and waiting times in Canada 1993-2005 Source: Fraser Institute; Canadian Institute for Health Information

11. Private health insurance • Private health insurance plays varying roles in OECD countries and fulfills different functions within health care systems. • Five categories of insurance, from the most comprehensive to those complement to the public system.

12. Private health insurance • Among the five categories of insurance, only one, supplementary insurance, is already established in Canada for uninsured services. • Three of the other four are unlikely to be offered, even following the Chaoulli ruling, because of the legal obstacles that remain.

13. Private insurance: new opportunities Duplicate insurance • Individuals remain insured with the public system while paying for the option of being treated in a parallel private system, with no commitment of public funds to cover this care • Exists notablyinFinland, Italy, U.-K., Australia, Ireland

14. Private insurance: new opportunities • For greater overall financing. • For more capacity to treat patients (more beds, more equipment, more operating rooms, etc.) • To create more work in the private sector for existing medical staff, underused in the public system because of salary caps and quotas.

15. Private insurance: new opportunities • To repatriate thousands of doctors and nurses working abroad. • Without private insurance, only the wealthiest Canadians could obtain private treatment, often outside Canada, paying directly from their pockets

16. Other possible private contribution • User fees (exist in 78% of OECD countries). (Need to change the Canada Health Act eventually) • Private provision of publicly funded services (Sweden, France, U.-K.)

17. Public opinion Question: Would you find it acceptable or not if the government were to allow those who wish to pay for healthcare in the private sector to have speedier access to this type of care while still maintaining the current free and universal healthcare system?

18. Conclusion • It’s not part of Canadian values to let people suffer on waiting lists. • The private sector does not threaten the public sector as OECD countries experience shows.