What can the UK teach Canada about private health care?

Posted on Thursday 27th March 2014

Tom Daniels, Health Services Management Centre

Tom Daniels, PhD student, HSMCEstablished shortly after the NHS, Canadian Medicare has been evolving since the 1950’s, with its current principles and structure lain in place by the Canada Health Act of 1984. The act, and preceding legislation which attempted to establish universal coverage in Canada, was met with opposition from a number of quarters, not least the physicians themselves who felt that their ability to earn was being threatened. Now, 30 years on, battles over who should provide care, and how, continue to rage.

Under the 1984 act, responsibility for the majority of health care provision remained under provincial jurisdiction. The act simply stated/restated the five criteria (accessibility, universality, public administration, comprehensiveness and portability) that provincial health insurance acts/programs must meet in order for federal funding transfers to continue. The majority of funding, however, continued to come from the citizens themselves who made payments to the provinces for ‘insurance’ against expenses for ‘medically necessary’ treatments. Provision of services continued to be carried out by a patchwork of provider organisations and self-employed physicians who claimed a ‘fee for service’ from the respective provincial government. This structure remains largely in place today.

Contrary to popular belief, the provincial health insurance acts did not make it illegal for physicians to work privately but they did prevent them from charging a public ‘fee for service’ if they were engaged in privately funded work- forcing them to be entirely ‘in’ or ‘out’ of the public system. The acts also prevented patients from taking out insurance for services that were provided under the public system but, again, in theory, if they had the money and could find a willing physician, they could pay for these services themselves.

Ever since the inception of public health care in Canada, there has been an undercurrent of discontent amongst those physicians wishing to carry out privately funded work. Under the same constitution of 1867 that underpinned the 1984 act, and brought universal health care as a right to Canadian citizens, these physicians argued that members of the public should have the right to purchase private insurance and treatments in order to reduce waits. Chaoulli won a famous victory in Quebec, forcing the provincial government to allow some private insurance, and a similar case is currently ongoing in British Columbia, but the legal arguments are endless and there is no resolution in site. As things stand, providers such as the Cambie Surgery Centre in Vancouver continue to provide private access to services unchecked and will continue to do so until there is a resolution one way or another.

Unlike in Canada, private practice has existed alongside NHS provision since its inception and has begun to compete for NHS services as the market has opened up in recent years. Given this experience, what can the Canadians learn from the UK?

The first, and perhaps most important lesson, is that private provision can positively enhance public services; it is not necessarily a threat to them. Public providers in Canada should not be concerned by private competition but should see it as an opportunity to increase standards and promote the quality of their services. Private provision may also help to alleviate waiting time pressures. If private providers do enter the public market in the long term then contracts must reflect the nature of the case mix. If public providers are left to continue to treat complex cases then they should be rewarded fairly for this. Private provision must be regulated properly to ensure the same quality standards across the board and avoid the potential for hidden charges/ double billing etc by private providers.

The interface between the private and public sector must be managed well. Patients will inevitably need to move between the two systems and this should be done fairly and without detriment to any individual. Likewise, clinicians would be well served to have experience in both sectors and knowledge of treating a wide range of cases; facilitating smooth transition would help to provide this experience as well as ensuring that staff shortages within either sector are avoided. Lastly, provincial governments should act quickly to ensure that any private provision happens on their terms. Continued legal challenges will result in the current stalemate lasting for many more years. The spectre of private provision is not going away and if provincial governments allow the current situation to continue indefinitely then Canadians will end up with the worst of both worlds- an under-regulated, shadow-private system and an overstretched public system.

The NHS cannot always claim to have managed the integration of private providers into the market well. There are certainly areas of good practice but these are outnumbered by tales of poorly handled tendering processes, undelivered contracts and NHS providers left to pick up the pieces. Canada has a chance to embrace and make the most of the opportunities offered by private sector collaboration, if it learns from some of the NHS’ successes and failures then it may just be able to do that.

Tom Daniels is a third year PhD Student, researching public involvement in health disinvestment decision making. Tom is studying on a joint programme between the University of Birmingham and the University of British Columbia, Vancouver.