Canada's Health Care System Needs an Injection of Cash, Says Panel

by Lakshmi Gopal on  August 23, 2011 at 2:09 AM Health Insurance News
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It is imperative to discuss the whole range of alternative ways to fund the health care system in Canada, said a report by a Canadian Medical Association on Monday.
 Canada's Health Care System Needs an Injection of Cash, Says Panel
Canada's Health Care System Needs an Injection of Cash, Says Panel

It further warned that the Canadian health care system may be at risk of "privatization by default" if Canadians continue to refuse to debate alternative models for health care financing and delivery.

Canadians must "look again to the mix of public and private elements" and be open to discussing new ways of funding services in a bid to improve access to care, according to The Report of the Advisory Panel on Resourcing Options for Sustainable Health Care in Canada.

The report also calls for increased provider competition and less micromanagement of the health system by government. It was crafted by a six-member blue-ribbon panel appointed by the CMA to recommend means to improve governance of the health care system and to generate resources to ensure the system's sustainability.

"Canada faces the pressure of rising demand and limited resources — but so do other developed countries, many of whom are navigating that challenge more successfully while spending less than Canada," the report states. "What distinguishes them from Canada is their more flexible and open approach."

Part of the problem is that many Canadians fear changing the system means "throwing out everything we value" in favour of adopting a "US style" health care model, the report explains.

But demand can be managed without the wholesale privatization of the health system — as it is in many European countries that are outperforming Canada in terms of wait times, out-of-pocket costs and health outcomes — by using innovative payment mechanisms and competition among providers under a publicly determined system of pricing, the report argues.

"At present, apart from Medicare services, individuals either pay privately for all or a large part of supports across the continuum of care, or forgo them for cost reasons. This is inequitable and also creates the wrong incentives, as individuals naturally turn first to the services for which they do not pay anything, even though other interventions might be faster, better for them and less costly to society as a whole."

"It is time for Canadians to examine the flaws in this model, and to look at other countries that are able to underwrite a wider range of care, generally at lower cost to individuals and to society over all. Such mechanisms as user fees, franchise and various insurance schemes are widely used elsewhere by governments across the political spectrum. Their value is not just in the revenue they provide to help fund the system, but in creating the right incentives for better care."

The funding mechanisms could be used alone or in tandem with raising taxes and cutting spending on other government programs, the report adds.

Provider competition is another crucial element of other national health care systems that Canada should embrace, the advisory panel argues. "This is not privatization, but rather a framework that allows a range of providers — public-sector, private-sector and non-profit — to compete in carefully controlled conditions. Services would be funded by government and still subject to government control."

Such a framework for "provider competition" must include "continuing provision of medically necessary services at no cost to patients, competition based on standards of quality as well as price, a level regulatory playing field that applies to public, private and non-profit providers and ensures appropriate minimum standards, licensing and other protections; and transparent criteria for requests for proposals, determination of prices and the awarding of contracts," the report adds.

Source: Medindia

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