December 2001
Insuring Against the Canada Health Act
by Nadeem Esmail
The Canada Health Act (CHA) specifically and explicitly forbids any private insurance scheme which would insure services already provided by Canada's national health care plan. This system of care forbids Canadians from seeking alternative expedited care without bearing the entire cost. If Canadians want to buy private care in the US, or expedited care in Canada, they need to have the money or the political clout to get it.
With waiting lists in Canada hovering around 16.2 weeks (Walker, 2001, p. 37) (from referral by a general practitioner through to meeting with a specialist until final treatment is begun), people are forced to wait for care or find it somewhere else at their own expense. The CHA forbids insurance schemes that could provide individuals with expedited or private care when necessary and according to their own individual needs. That is too bad because, given the opportunity, some Canadians would no doubt insure themselves against waiting lists in the event of a catastrophic, or even just a troubling illness.
How do we know this would actually happen? Great Britain offers proof. The British have created a solution that does just that; it insures people against long waiting lists for medical care. Britain has two separate health care systems, a public system with relatively low costs and rationed care (waiting lists), and a privately financed system with higher prices for the user and reduced rationing. To protect the many who may want better care but can't afford the costs of complete private health care insurance, some insurance providers are bridging the gap between the two tiers and providing a low-cost alternative to waiting.
In recent months in Britain, Norwich Union has begun to offer a number of insurance schemes with lower premiums (when compared to the insurance for comprehensive private care), which require that care be expedited in the public system (National Health Service or NHS) if the waiting time between a visit with a specialist and medical treatment is six weeks or more. These schemes allow for a visit with a private specialist prior to the waiting list consideration—which in Canada is 44 percent of the total waiting time from general practitioner to treatment—as well as private diagnostic services (which can be up to 12 weeks long in Canada) such as MRI and CT scans. After the patient visits a private specialist and receives private diagnostic care, the doctor gives the insurer an assessment of the waiting period from specialist to treatment at that time. If the list is longer than six weeks, care will be provided immediately by a contracted public provider.
Interestingly, the Workers Compensation Boards (WCB) in Canada, who are conveniently exempt from the CHA, provide expedited care for patients in Canada by using a mix of public and private institutions (in British Columbia, the WCB contracts with 3 public hospitals in Campbell River, Dawson Creek, and Terrace, as well as 10 private institutions). A scheme like the Norwich Union Trust Care 6 (which provides expedited care in public institutions through a contract agreement with the care providers) could attempt to do what the WCBs have done; contract with public institutions to expedite care to insured individuals.
An insurance scheme that protects an individual's right to receive care in a relatively short time span would be highly valuable to any Canadian needing medical treatment. In Canada, the six-week threshold is exceeded in 64 percent of the 12 specialties in the 10 provinces that The Fraser Institute surveys each year. Such an insurance scheme could enable Canadians to skip the waiting times from general practitioner to specialist which, as mentioned, are approximately 44 percent of the total waiting time in Canada, and eliminate the wait for diagnostic services almost entirely, all without requiring that patients leave the country or even their own province to get the care they need.
The beauty of this idea is that it is unlikely that these insured patients would put an extra burden on the current diagnostic service providers and specialists in Canada. At present, most MRI clinics shut at 5:00 p.m. With an insurance company's payments as an incentive, these clinics would likely remain open later into the night to take advantage of the profits. Private MRI clinics have already begun operating in a number of provinces, and the possibility of more such private diagnostic facilities is significant, given the opportunity for profits. The same incentives would be present for specialists as well, who may also provide after- hours care if they could earn more by doing so.
Some may argue that these insurance schemes are too costly and will be unaffordable for Canada's poor. The cost of these insurance schemes, however, need not be prohibitively high. Norwich Union's Trust Care 6 package costs approximately £27.32 per month (Cdn$49.79, based on Purchasing Power Parity) for an average 30-year- old living in a major city, and £54.64 (Cdn$99.58, again based on Purchasing Power Parity) for a family of four. This expenditure adds up to just less than what the average individual in Canada spends on alcohol, tobacco, and games of chance, which is $50.65, on average (Statistics Canada, 2000). The cost of Trust Care 6 rises to £49.39 (Cdn$90.01, based on Purchasing Power Parity) per month for a city- dwelling 60-year-old, which can be seen as a very small amount for an individual in ill health. While the costs may be different given Canada's waiting times and other considerations, the foregoing is illustrative of the sort of costs that might apply.
The Canada Health Act may not be serving Canadians well. The reforms required to evolve the health care system in Canada from one characterized by long waits to a patient-focused, individualized system are not being enacted. The health care discussion in Canada often revolves around who pays the bill, not around what system design would be most beneficial. In the meantime, patients are forced to wait. They don't have a choice, the Canada Health Act makes sure of that. Maybe it's time we thought more about how we can enable patients to make the best choices for themselves.
References
Statistics Canada (2000). Spending Patterns in Canada 1998. Ottawa, ON: Statistics Canada.
Walker, Michael, with Greg Wilson (2001). Waiting Your Turn: Hospital Waiting Lists in Canada, 11th ed. Critical Issues Bulletin. Vancouver, BC: The Fraser Institute.
Nadeem Esmail (nadeeme@fraserinstitute.ca) completed his B.A. in Economics at the University of Calgary, and his Masters in Economics at the University of British Columbia. He is a Health Policy Analyst at The Fraser Institute.
info@fraserinstitute.ca
4th Floor, 1770 Burrard Street, Vancouver, BC, Canada, V6J 3G7
Tel: (604) 688-0221 Fax: (604) 688-8539 Book Orders: 1-800-665-3558 ext. 580
You can contact us at the above email address for any comments or information requests. Please report any dead links or technical problems.