PUBLIC & PRIVATE HEALTH CARE IN CANADA by Norma Kozhaya, Ph.D. Economist, Montreal Economic Institute before the Canadian Pension & Benefits Institute Winnipeg - June 15, 2007
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
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?
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).
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.
Financial sustainability 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)
Cost Health care spending in OECD countries with universal access as %/GDP (2003, 8th) Switzerland Germany Greece Iceland France Belgium Norw ay Canada Portugal Austria Sweden Asutralia Netherlands Denmark OECD average Hungary Italy Japan New Zealand United Kingdom Spain Luxembourg Czech Republic Finland Ireland Poland Slovakia Korea 5,5 5,9 6,5 11,5 10,9 10,5 10,5 10,4 10,1 10,1 9,9 9,8 9,6 9,3 9,2 9,1 8,9 8,7 8,3 8,2 8,0 8,0 7,9 7,9 7,7 7,5 7,4 7,2 0,0 2,0 4,0 6,0 8,0 10,0 12,0 14,0
Cost and results Different measures of health care system performance; two are of particular relevance for Canada: Access Waiting time
Cost and results Number of doctors per 1000 inhabitants (24th) Iceland Greece Slovakia Netherlands Czech republic Italy Belgium Switzerland Norw ay Austria Ireland France Portugal Hungary Sweden Denmark Spain Germany Australia Poland Luxembourg New Zealand South Korea Finland Canada United Kingdom Japan (2002) Turkey 1,4 1,7 2,1 2,3 2,3 2,6 2,5 3,0 2,9 2,9 2,9 2,8 2,8 3,7 3,7 3,7 3,6 3,6 3,5 3,4 3,3 3,2 3,2 3,1 3,1 3,0 4,3 4,2 0,0 1,0 2,0 3,0 4,0 5,0
Cost and results Public spending per capita and waiting times in Canada 1993-2005 3000 19 constant 2005 dollars 2500 2000 1500 17 15 13 11 9 7 weeks 1000 1993 1999 2005 5 Source: Fraser Institute; Canadian Institute for Health Information
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.
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.
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 notably in Finland, Italy, U.-K., Australia, Ireland
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.
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
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.)
Public opinion 65% 52% 42% 33% 6% 1% CANADA YES NO DON'T KNOW QUEBEC 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?
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.