Question

Today in saskatchwan, there are a number of publically-funded hospitals that refuse to provide medical services on religious grounds. All canadians have the equal right to access to health care. Discuss this issue as is stands in saskatchewan and the rest of canada and provide some possible solutions to the problem. What are some possible pitfalls that come with your solutions? Is there a place for health in the delivery of health services?

Answer 1

Questions whether private healthcare services in Canada is illegal or not is by surveying the health insurance legislationso f all provinces. The survey revealed multiple layers of regualtion that seem to have as their primary objective preventing the public sector from subsidizing the private sector, as opposed to the rendering privately funded practice illegal. THe absence of siggnificant private sector is probably best explained by the prohibitions on the subsidy of private practice by public plans, measure that prevent physicians from topping up their public sector income with private fees.

Concenrs have been increasing about access and quality of hospital and physician services within Canda's public healthcare system. At the same time there has been increasing criticism of the alleged illegality of private medical practice. Constraints on the ability to obtain private insurance coverage for services that ostensibly are covered by public sector but that patients would prefer to buy privately . People may prefer to buy such services becuase of a desire to avoid public sector queues or to obtain services of higher quality than those avaiable in the public systems. in other situations services must be purchased privately because a determination has been made within the public system that the patient does not need the service.

Opting in and opting out
Before describing the constraints on direct billing and extra-billing, we want to clarify the concept of opting out. A Canadian physician may, at any time, choose to give up his or her rights to bill the public plan and take up practice in the private sector. Although there are differences in terminology (e.g., “non-participation,” “non-enrolment,” “practising outside the Act,” “not subject to the agreement”), every provincial plan permits physicians to opt out.3,4,5,6,7,8,9,10,11,12,13 In Manitoba, Nova Scotia and Ontario the financial incentive to do so is significantly dulled because opted-out physicians cannot bill more than they would receive if they were working within the public plan. In every other province, opted-out physicians can set their fees at any level. However, as the status disincentive row in Table 1 shows, all of the remaining 7 provinces except Newfoundland and Prince Edward Island have in place measures that prohibit the public purse from subsidizing the private sector. In other words, patients of opted-out physicians are not entitled to any public funds to subsidize the cost of buying their services privately.

Direct billing
Direct billing, whereby physicians collect payments from patients rather than from the public plan, may adversely affect access to health care services, as patients must bear the up-front cost of the care and then seek reimbursement from the public plan. Thus, in all but 4 provinces, opted-in physicians are prohibited from billing their patients directly.14,15,16,17,18,19 Only in Alberta, New Brunswick, Prince Edward Island and Saskatchewan can opted-in physicians bill patients directly at any time for insured services.

In the other 6 provinces, physicians must give up their rights to be paid from the public plan for the period during which they want to bill patients directly. This is accomplished either by opting out of the public plan entirely or, as in British Columbia, by electing to receive payment from sources other than the public plan without completely opting out of it.20 There is a narrow exception to the latter option in British Columbia and Newfoundland, where opted-in specialists who provide services to patients who were not referred to them by another opted-in physician may bill those patients directly up to the level of the public tariff.21,22

Extra-billing
Extra-billing is a system whereby a physician charges his or her patients an additional fee or extra charge for services covered by the public plan. Thus, the physician receives not only the payment from the public plan, but also whatever extra he or she is able to bill the patient. In this situation, the patient would either pay that additional cost out of pocket (a user charge) or would have private insurance to cover the additional cost (subject to other legal restrictions). From the physician's perspective, the attraction of extra-billing is the ability to set his or her own price without restriction and to have that price partially subsidized by the public plan.

Provincial prohibitions on extra-billing are required by section 18 of the Canada Health Act.23 If a province allows extra-billing, then (pursuant to section 20 of the act), the federal government must “claw back,” dollar for dollar, the amounts charged through extra-billing in the province and may, under section 15 of the act, withhold further sums. The federal government has on several occasions clawed back transfer payments on a dollar-for-dollar basis because of extra-billing in a province (e.g., Alberta, Manitoba, Newfoundland and Nova Scotia).24

In complying with the Canada Health Act, the provinces use 2 basic types of measures to deter extra-billing, and most provinces use a combination of these measures. The first type of measure we term here a “direct prohibition,” for it makes extra-billing an offence. The second type we term “elimination of public subsidy.” This sort of measure indirectly deters extra-billing by eliminating any public insurance for the services supplied by opted-out physicians and for the services supplied by opted-in physicians who try to extra-bill. Thus, patient demand for the services supplied by these groups of physicians is diminished, because patients must pay for these services with wholly private funds.

Direct prohibition

All provinces except 2 (New Brunswick and Prince Edward Island) specifically prohibit extra-billing by opted-in physicians. In other words, opted-in physicians cannot bill patients more than they or the patient would receive from the public plan, including amounts for non-insured goods or services they provided in connection with the insured services.25,26,27,28,29,30,31,32,33 Alberta34 and British Columbia21 provide for a narrow exception to this latter prohibition, whereby an opted-in physician may charge more for non-insured goods or services provided in connection with the insured medical services if, in the view of the public plan's administrator, the physician has “reasonably determined” that materials or equipment related to a publicly insured service are necessary for the provision of that service.

If opted-in physicians in those provinces that explicitly prohibit extra-billing nonetheless choose to do so, they may be subject to a range of penalties, including fines, suspension from participation in the public plan and even disciplinary proceedings before professional regulatory bodies.35,36,37,38,39,40,41,42 For instance, in Alberta, physicians who extra-bill are subject to fines of $1000 for the first occurrence and $2000 for the second and subsequent occurrences. In addition, depending on the number of infractions, Alberta physicians are subject to a range of additional measures, ranging from written warnings and referral to the professional regulatory body to an order that the physician is deemed to have opted out of the public plan.35

The other 2 provinces (New Brunswick and Prince Edward Island) do not directly prohibit extra-billing by opted-in physicians and instead rely solely on the disincentive to private practice that occurs because of the lack of any public subsidy. This system is explained more fully in the next section.

Three provinces (Manitoba, Nova Scotia and Ontario) not only directly prohibit extra-billing by opted-in physicians, but also explicitly prohibit opted-out physicians from charging more privately than they could get from the public sector.27,29,30,31 In essence, this is a form of price regulation of the private sector. In Ontario, for example, the legislation31 reads as follows:

A physician or an optometrist who does not submit his or her accounts directly to the Plan under section 15 or 16 of the Health Insurance Act or a dentist shall not charge more or accept payment for more than the amount payable under the Plan for rendering an insured service to an insured person

In the other 7 provinces, opted-out physicians are free to bill whatever fee they wish. However, in Alberta and British Columbia, this freedom is subject to 2 narrow exceptions. In Alberta, physicians cannot extra-bill for services rendered in an emergency,43 and in British Columbia, they cannot extra-bill for services rendered in public hospitals or community care facilities.44

Elimination of public subsidies

There are 2 methods by which provinces eliminate public subsidy of the private health care sector: status disincentives and price disincentives. Five provinces (Alberta, British Columbia, New Brunswick, Quebec and Saskatchewan) deter physicians from opting out (and thus from billing at prices higher than those paid by the public plan) by making any public coverage of their services contingent on whether or not they are opted-in.45,46,47,48,49 We describe this approach as a “status disincentive,” and it is discussed further in the section “Status disincentives.” Prince Edward Island takes a slightly different approach and does not specifically prohibit extra-billing. Instead it denies any payment from the public plan to patients whose physician charges more than the amount payable under the public plan.50 In addition to using status disincentives, New Brunswick also denies any public funding for the services of physicians who attempt to extra-bill.51 We describe the measures taken in New Brunswick and Prince Edward Island as “price disincentives,” and they are discussed further in the section “Price disincentives.”

Three provinces (Manitoba, Nova Scotia and Ontario) do not explicitly prohibit public subsidy of private health care. Instead, they expressly prohibit extra-billing by all physicians and diminish any financial incentive to shift to the private sector by preventing physicians from charging fees higher than those payable in the public sector.27,29,30,31

In the remaining province, Newfoundland, opted-in physicians may not charge patients more than the amount payable under the public plan, but opted-out physicians are free to do so. Moreover, patients of opted-out physicians are still covered by the public plan, up to the plan limits, even if those physicians charge them a fee greater than the amount payable under the public plan.

Status disincentives
Five provinces (Alberta, British Columbia, New Brunswick, Quebec and Saskatchewan) use status disincentives to deter physicians from opting out and charging more than what is payable under the public plan. The status disincentives make public coverage of the physicians' services contingent on whether or not they are opted into the public plan.45,46,47,48,49 Opted-out physicians in these provinces may charge any fee they wish (subject in Alberta and British Columbia to the narrow exceptions noted above). However, patients in these provinces are not covered by the public plan for any services rendered by opted-out physicians. For example, the Alberta legislation52 provides that:

(2) No resident may receive the payment of benefits from the Minister for insured services provided in Alberta to the resident by a physician or dental surgeon unless the physician or dental surgeon who provided the insured services was opted into the Plan when the insured services were provided.

(3) Notwithstanding subsections (1) and (2), the Minister may pay benefits for insured services provided in Alberta to a resident by a physician or dental surgeon who was opted out of the Plan if the insured services were provided in an emergency.

However, the Alberta legislation does not define “emergency” for the purposes of this section.

Price disincentives
Two provinces (New Brunswick and Prince Edward Island) use price disincentives. These are measures that eliminate public coverage for otherwise publicly insured services where the treating physician, regardless of whether he or she has opted out, charges more than the amounts payable from the public plan. The New Brunswick plan deems such services to be “uninsured services,”51 whereas the Prince Edward Island scheme directly disentitles patients from any coverage if their physician charges them more than would be payable under the public plan.50 The Prince Edward Island scheme still pays for the services of opted-out physicians, if their fees are equal to or less than the public tariff. However, given that a physician would presumably wish to opt out so as to be able to charge more than is allowed under the public plan, the Prince Edward Island scheme effectively eliminates any public subsidy of opted-out physicians.

Newfoundland
Newfoundland is the only province that, with respect to opted-out physicians, uses neither direct prohibition nor elimination of public subsidy to deter a privately financed sector. Opted-in physicians may not extra-bill, but opted-out physicians are free to bill patients whatever they wish.28 However, unlike the situation in other provinces, patients of opted-out physicians are still entitled to public coverage up to the amounts set out in the public tariff.53 In this respect, Newfoundland is distinct from the other provinces, although, as mentioned above, Prince Edward Island patients can collect a public subsidy if their opted-out physician does not charge them more than the public plan tariff.

Prohibitions on private insurance
The final aspect of public health insurance that we reviewed was limitations on the availability of private insurance to cover the kinds of services covered by provincial insurance plans. Prohibition of private insurance for hospital and physician services that are covered by a public plan (but for which there may be long waits or concerns about quality) dampens the demand for opted-out physicians and physicians who extra-bill by limiting patients' ability to finance those services. If neither public nor private insurance covers services provided by opted-out physicians and those who extra-bill, the market for those physicians' services is restricted to patients who can afford to pay out of pocket.

Six of the 10 provinces (Alberta, British Columbia, Manitoba, Ontario, Prince Edward Island and Quebec) prohibit contracts of private insurance to cover the kinds of services that are publicly funded.54,55,56,57,58,59 All of the provinces that prohibit private insurance do so by prohibiting any person from entering into a contract that covers publicly insured health services. Four of these provinces (British Columbia, Manitoba, Ontario and Prince Edward Island) also explicitly void any part of an insurance contract that covers the kinds of services covered by the public plan.

In the 4 provinces that permit private insurance (New Brunswick, Newfoundland, Nova Scotia and Saskatchewan), patients of opted-out or extra-billing physicians can substitute private for public coverage. However, in Nova Scotia opted-out physicians are limited to billing privately only as much as the public plan allows. Thus, only New Brunswick, Newfoundland and Saskatchewan allow private insurance to cover all or part of the costs of opted-out physicians' services. Thus, in 3 of the 10 Canadian provinces, the availability of private insurance creates greater economic opportunities for physicians to practise outside the public plan and charge whatever fees they wish. Nonetheless, we have not seen the growth of a significant privately funded sector in these provinces.

All provinces allow for private insurance coverage of hospital and physician services that are not “medically necessary.” Action by the provinces to delist certain hospital and physician services, deeming them no longer medically necessary, potentially increases the role for private insurers. Such an increased role of course depends on private insurers finding it profitable to extend coverage to these kinds of services. Much more important, however, is the growing role of private insurers in covering goods and services not protected by the Canada Health Act (e.g., drugs needed outside of hospitals, medical equipment and home care). As an example of the growing importance of these sectors, total (public and private) spending on drugs in 1998 accounted for 14.8% of total health care spending (public and privated), whereas only 13.9% was devoted to physician services.60 A form of passive privatization has occurred as technology and fiscal concerns have shifted care out of the hospital setting and beyond the bounds of the Canada Health Act, such that private spending on health care now accounts for more than 30% of total health care spending. This mix of public and private financing varies drastically depending on the service in question. For example, 69.1% of all monies spent on drugs come from the private sector, whereas only 1.2% of spending on physician services comes from the private sector. Thus, the present prohibitions on private insurance, which target only hospital and physician services, are becoming less important as other kinds of care, such as drug therapy, gain in importance.

Conclusion
In our survey of health insurance legislation and regulations, we found that regulation of physicians' ability to practise in the privately funded sector is complex and diverse across Canada's 10 provinces. We found multiple layers of different kinds of regulation that seem to have as their primary objective not to make private practice illegal but rather to prevent the development of a private sector that depends on subsidy from the public sector.

It is important to recognize that, in every province, physicians are free to opt out of the public plan. In all but 3 provinces, opted-out physicians can charge whatever fee they want, whereas in the remaining provinces — Manitoba, Nova Scotia and Ontario — physicians are prohibited from charging fees greater than the amounts payable under the public plan. In these 3 provinces, private practice is not illegal but is subject to a form of price cap.

Rather than invoking a form of price cap, Alberta, British Columbia, New Brunswick, Quebec, Saskatchewan, and Prince Edward Island prevent the public sector from subsidizing the privately financed sector. Thus, in Alberta, British Columbia, New Brunswick, Quebec and Saskatchewan patients who use the services of opted-out physicians receive no public monies to aid them in buying these services. In addition, New Brunswick does not provide any public monies for the services of physicians who attempt to extra-bill. Prince Edward Island takes a somewhat different approach and eliminates public coverage for otherwise publicly insured services where the treating physician, regardless of whether he or she has opted out, charges more than the amounts payable from the public plan.

All but 4 provinces prohibit private insurance from covering the kinds of services that the Canada Health Act protects (i.e., medically necessary hospital and physician services). In New Brunswick, Newfoundland, Nova Scotia and Saskatchewan there is no prohibition on private insurance, yet there has been no development of a significant private sector. As mentioned, Nova Scotia does not permit any physicians, whether opted in or out, to charge more than the public plan rates;

Newfoundland is the outlier among the provinces. Although opted-in physicians may not extra-bill in that province, opted-out physicians are free to bill patients whatever they wish,28 and the patients of opted-out physicians are entitled to public coverage up to the amounts set out in the public tariff.53 Moreover, there is no prohibition on private insurance covering the kinds of services the public sector is meant to cover.

Arguably, Canada already has a 2-tier health care system because of the rigid division between medically necessary hospital and physician services (enshrined and protected in the Canada Health Act) and other kinds of goods or services for which there is significant private financing, such as drugs and home care. To the extent that Canada is successful in preventing a 2-tier system for medically necessary hospital and physician services, some insights can be gained from considering the features of other countries that have 2-tier systems. In countries such as the United Kingdom and New Zealand, private insurance is available for the kinds of hospital and physician services that the public service is meant to cover.61 It is worthwhile noting, however, that despite the availability of private insurance, the private sector focuses only on elective care and not on expensive acute care such as cardiac care, oncology, and accident and emergency services. What seems to distinguish nearly all of the Canadian provinces (except Newfoundland) from these countries is the fact that physicians must opt in or out of the public plan and thus are effectively prevented from working in both the public and private sectors. In the United Kingdom and New Zealand, physicians are usually employed in the public sector and top up their incomes by working in the private sector on a fee-for-service basis.

We conclude by noting that in Canada, the absence of a private system is not due to the illegality of private health care per se. Private insurance for the kinds of medically necessary hospital and physician services that the public service is meant to cover is illegal in only 6 provinces. However, there has been no development of a significant private sector in New Brunswick, Newfoundland, Nova Scotia or Saskatchewan, all of which permit private insurance coverage without any restriction on the extent of the coverage, although as noted Nova Scotia is the only province among these 4 that caps the fees of all physicians (whether opted in or out) at the public plan rates. Rather, the lack of a flourishing private sector in Canada is most likely attributable to prohibitions on subsidization of private practice from the public plan, prohibitions that prevent physicians from relying on the public sector for the core of their incomes and turning to the private sector to top up their incomes.