O Canada,

Health Care Myths
from the Great White North

A talk by Karen S. Palmer MPH, MS, California Physicians Alliance (CaPA), San Francisco, January 13, 1999


(Karen Palmer has lived with one foot on either side of the Canada/US border since 1984. She spends part of every year in the U.S. and part in Canada, and she participates in the health care systems of each country as both a patient and a policy analyst. She holds graduate degrees in international health and health policy, and is a passionate advocate for universal health care. She is also on the board of Physicians for a National Health Program. When in Canada, she lives in Alberta, and in the US she has lived in California, Hawaii, and currently in Utah)



I have been asked to talk to you about how health care works in Canada. Some might ask why I bother telling people about how health care systems work in other countries. If I knew, for a fact, that the majority of Americans were happy with the way health care works in the US, I would probably keep my big mouth shut about the way it works in other countries. But polls show that the majority of Americans are not happy with the state of health care here. A 1999 Harris Poll showed that 82% of the public and physicians support fundamental change in the health care system. A 1999 Kellogg Foundation survey found that 85% think that the expense of health care in this country is created by insurance bureaucracy and 79% think health care should be a right.

In fact, we know that the US is the only industrialized country in the world that doesn't guarantee at least some form of health care to all of its citizens or legal residents. So, it seems that people are at least curious about how we might improve the health care system in the US, and that ís where I come in.

In a sense, the entire debate comes down to whether you think health care is a right or a privilege. If you think that it is a privilege, and that it should be rationed on the basis of ability to pay, then you are presumably happy with the way things are and this talk will only irritate you. But if you, like most Americans, think health care is a right and that everyone deserves care irrespective of ability to pay, then you might be
interested in what I have to say.

I am not here to tell you that we should copy Canada's system in its entirety, or that Canada is better than the US. I am here to tell you that Canada's system works, with some recent exceptions, for all Canadians and that there are things about it that could work in the US. Bashing Canada's health care system seems to be a favorite pastime, but uncritical analysis of anecdotes serves no real purpose. I encourage you to use the same critical thinking skills with which you would analyze the diagnosis and care of a patient, that is, look at peer reviewed literature, and ignore anecdotes when real data tell you otherwise.

I will first spend a little time talking about how health care works in the US, then I'll describe the architecture of the Canadian health care system along with some of the amazing-but-untrue myths about Canada's system, and finally we'll open it up to your questions.

As you know, there are 44 million uninsured Americans. This is about 17% of the population. This doesn't seem like a lot until you realize that although the percentages are small, it is still a lot of real people. For example, 44 million is more than the combined populations of Canada (29,964,000) plus Norway (4,370,000) plus Sweden (8,901,000).

It is also about the same as the combined populations of Australia (18,289,000) plus New Zealand (3,640,000), plus Sweden (8,901,000), plus Norway (4,370,000), plus Denmark (5,210,000), plus Ireland (3,621,000) which together sums to 44,031,000.

When you add in the under-insured, you are talking about 1/3 of the population in this country.

By contrast, virtually 100% of the eligible population in other developed countries, including the countries I just named, has publicly funded insurance.

The number of uninsured occurs despite the fact that health care spending per capita in the US is nearly double that of other country in the world. Per capita expenditures in the US were $3,898 as compared to $2,065 in Canada, and Canada's health care expenditures as a percentage of GDP were 9.6% making it 5th in the world, as compared to 14% in the US, the highest in the world. Even with all the money that is spent on health care in the US, we still have big problems and rationing of care despite an enormous surplus in resources.

The Canadian system began in the province of Saskatchewan in 1947, and by 1957 there was also federal legislation for coverage of hospital and related diagnostic services. By 1961, Saskatchewan had expanded its legislation to include the costs of physician services as well, and the federal government followed suit in 1968 with federal legislation covering physician services. By 1971 every Canadian was covered by the hospital and medical insurance plan in their home province.

I am sorry that we don't have time to go into the details of this early history, as it is terribly interesting. The early evolution of Canada's health care system is one of mudslinging and passionate debate between physicians, patients, and the government. It was not an amicable process. There were huge protests in the streets, many of the doctors in Saskatchewan went on strike, and the government responded by flying in physicians from England to replace the striking doctors. It was a time of tremendous unrest and conflict, but this is often the way with change. I think that people now-a-days forget the strife that surrounded the early years of Canada's health care system, but I think that it is important to remember that we didn't just sit around over polite tea and biscuits and sign universal health care legislation. Nor will change be easy in the
US. Suffice it to say that health care in Canada, as in the US, was, and remains, a hotly debated topic.

Today, Canada has a publicly financed and privately delivered health system that is best described as a set of 10 provincial and 3 territorial health insurance plans. It is very important to note that health care is constitutionally under the jurisdiction of the provincial governments, and not the federal government. The management and delivery of health services is the responsibility of each individual province or territory. These provinces and territories plan, finance, and evaluate the provisions of hospital care, physician and allied health care services, some aspects of prescription care, and public health. The system is referred to as "national" health insurance in that all provincial and territorial hospital and medical insurance plans are linked through adherence to national principles set at the federal level.

The federal government's role in health care financing is as follows: it collects the tax money that pays for the bulk of the system, and then transfers it back to the provinces. The only condition for getting the federal portion of that money back is that each province must ensure that the health care system that it designs meets the conditions of the Canada Health Act, which we will discuss in a moment.

The Canada Health Act (CHA) was passed by Parliament in 1984 in response to threats to accessibility of care. It provides the basic framework within which the provincial insurance plans must operate to qualify for full federal health contributions. To ensure that hospital and physician services are made available to all legal residents of Canada on the basis of need and not ability to pay, the Act stipulates five principles. In contrast to Clinton's Plan which was over 1,000 pages long, the entire Canada Health Act is a mere 14 pages in length.

Let me go through each of these points: Public administration, comprehensiveness, universality, accessibility, portability

The health insurance plan of a province must be administered and operated on a non-profit basis by a public authority accountable to the provincial government. For example, in the case of Alberta, the Minister of Health administers and operates the Alberta Care Insurance Plan on a non-profit basis to provide benefits for health services to all residents of Alberta.

There is a single payer in each province that pays claims for all services covered under the plan. The total costs to administer claims for Canada's public system eats up about 1% of all health care expenditures. In the US, Medicare claims administration costs take about 2-2.5% (US pays on a per hospital stay basis rather than lump sum budgeting as in Canada.) Total administrative costs in Canada including hospital administration and physician's office costs is about 14% of total spending, as compared to about 25% in the US. Some US insurance costs can devour nearly 1/3 of the dollars spend on health care. Because less money is spend on administration in Canada, Canadians actually get more
physician and hospital services than Americans.

"Single Payer" is simply a financing mechanism and it means that there is only one payer in each province for all insured claims. It is impossible to buy, and illegal to sell, private insurance for any services covered under the public plan.

General hospitals are typically structured as nonprofit corporations but are funded largely by annual global budgets determined through negotiations with the provincial ministries of health.

Doctors don't have a big billing department, but rather a staff person who electronically submits the bills, of which nearly 100% are paid as submitted within 30 days. Of course, there are probably clever and fraudulent claims in Canada too, but with a single payer, if a doctor's claims are more than 2 standard deviations from the statistical mean, this becomes apparent and a physician may be asked to explain the unusually high number of claims.

When I was in graduate school in Hawaii, Governor Michael Dukakis taught a health policy course. We didn't agree on things like employer mandates, but we had fun arguing about it. At the end of the course, he decided that he wanted to visit Canada, and so we went to Vancouver to talk with Robert Evans (a brilliant health economist) and others. We visited a large metropolitan hospital and the governor asked to see the "billing wing". We took him to a small room about the size of my kitchen and pointed to the small staff who made up this "billing wing". The Governor was amused.

The plan in each province must insure all medically necessary hospital and physician services. Medical necessity is central to the Canada Health Act (CHA), but it is not defined by the Act; this is left to the discretion of the provinces in conjunction with the medical profession. There is no "benefits package" per se. If you, your physician, and the standards of practice in your community determine that something it medically necessary, then it is covered. There are some things that are specifically not covered: for example, routine circumcision of normal newborns was de-listed in Alberta a few years ago so it now costs $60 to have a routine circumcision. Now if you were to subsequently require a medically necessary circumcision, then that would be covered. Insurance and summer camp physicals, telephone advice, fiberglass casts unless medically necessary, private rooms unless medically necessary, and eyeglasses, are not covered in most provinces by the single payer, but many physicians do not charge for things like filling out forms or telephone consults. Most people have supplemental private insurance through their employers that covers anything that isn"t covered by their provincial program.

In addition to what must be covered under the Canada Health Act, all provinces also provide a wide-range of additional services ranging from chiropractic to massage therapy to naturopathic care. The provinces are free to design their health plans as they want, provided they meet the 5 requirements of the Canada Health Act.

Drug coverage varies from province to province. In-hospital drugs are covered in all provinces, but only four provinces offer nominally universal Pharmacare plans. In the rest of the provinces, out-patient prescriptions are publicly insured only for senior citizens, social welfare recipients, and persons with certain communicable and/or chronic diseases. Most Canadians have some form of employer-based supplemental private insurance that covers prescription drugs and/or dental services.

Everyone who is a legal resident of Canada is entitled to the same health care. You don"t even have to be a citizen, just a legal resident. When you are born, you registered in your province and you get a health care card. If you legally move to Canada from somewhere else, you are entitled to health care. Everyone who is a legal resident has a health care card. Here is mine.

So long as you remain a legal resident of the province, meaning that you are "ordinarily present" there for 183 days out of a 12-month period, you are entitled to care. There are lots of exceptions that allow you care when you live out of Canada; you can be gone for a year if you are traveling, so long as you show intent to return, and you are covered if you are a full-time student anywhere in the world.

Interestingly, Ontario recently went through the expense of making everyone get picture ID"s to stem the problem of Americans coming across the border and borrowing health care cards. A few years ago, there were more health care cards in existence in New Brunswick than there were legal residents of the province. It turns out that folks from Maine were going to Canada for care with fake health care cards.

Three decades of research (which I dont have time to describe today) generally confirm that by creating a system built on the principle of universal access to comprehensive medical services, Canada appears to have created a commendably level playing field.

(As brief summary of that research is as follows: Studies of Medicare in the 1970s suggested that the burden of medical costs has become more equitably distributed through a marked shift in the use of services from people with higher incomes to those with lower incomes. Two important studies in the 1980s used data from the Canada Health survey to show that the use of physician services and hospitals was determined by medical need and sociodemographic characteristics rather than by income. These conclusions have been confirmed in the 1990's by 2 studies that used the General Social Survey to document that variation in self-assessed needs is an important factor in variations in physician and hospital use, whereas income is not. Finally, if any doubt remains about the equity of health care in Canada, a scholarly glance across the border reveals that economically disadvantaged people in Canada enjoy far better access to hospitals, physicians, and mental health services than do their counterparts in the US (as cited in Shortt, S., CMAJ 1999, 161:823-4.)

At a systemic level, Canadian health care seems resolutely fair. This isn"t to say that there aren't cracks in equitability. For example, it does happen that
sometimes personal contacts can get you faster care, but that is no different than any where else in the world.

Accessibility means that the plan must provide reasonable access to insured hospital and physician services without barriers. Additional charges to insured patients for insured services are not allowed ñ they were effectively banned by the CHA. I say effectively because the legislation is very cleverly crafted in that is says that you can extra-bill if you want, but for every dollar that you extra-bill, the federal government will withhold one dollar of the federal transfer money.

No one may be discriminated against on the basis of income, age, health status, gender, or any other reason. If you are admitted to hospital, you may well share a room with someone of a different socio-economic status or a different ethnicity. When we are sick, we are all equal and the system treats us equally.

Since Canada has some very remote areas, there are issues of access in those areas. (Remember there are more people in California than in all of Canada, and the Canadians are spread over an area bigger than the entire US!) (yes, really) Physician supply to those remote areas has always been a challenge and there are all sorts of incentive programs to attract physicians to those areas. But that is the same in the US, where we also have health professional shortage and medically underserved areas.

Anyone can go to any doctor, anywhere, anytime. Generally, the first contact is with a primary care physician, which means a family practitioner. Pediatricians, internists , and ob-gyns aren't really generalists in Canada, rather, they are considered specialists. When necessary, primary care doctors refer you to the specialist of their choice, or of your choice if you have a preference. Once you have been referred to a specialist, that doctor can become your primary care doctor for the problem that took you to the specialist in the first place. If you are referred to a cardiologist, you will continue to see that cardiologist (or a different one if you don't happen to like that one) for your cardiovascular problems. You don't have to go back to your primary care provider every time you need to see your cardiologist.

You don't generally go to a specialist without first having seen a generalist. Physicians here sometimes express concern about this, but the truth is that is works in Canada since the specialists have more than enough work with legitimate referrals. They don't need patients coming in whose problems don't require their specialty skills. Many HMOs in the US now require a referral for specialty care, since it isn't generally cost effective for people to self-refer to specialty care.

Residents of Canada are entitled to coverage when they move to another province or when they travel within Canada or abroad. If you travel within Canada, there is reciprocity with the other provinces and your home province is billed for your care. If I live in Alberta and I break my leg skiing in BC, I can receive services in BC that are billed back to Alberta.

All provinces have some limits on coverage for services provided outside Canada. Due to the high cost of medical care in the US, most Canadians vacationing here purchase supplemental insurance since Canada will generally not pay for out-of-country care in excess of what it costs in Canada.

If you need some sort of specialty care that is unavailable in Canada, you can apply to the province to have your treatment fully covered in the US or in Europe or wherever you need to be. This doesn't happen often. For example in Alberta last year (between April 1, 1998 and March 31, 1999) there were only 97 applications for out-of-country specialty care of which 65 were approved. The patients that were refused were refused because they were seeking experimental care, or because the service was available elsewhere in Canada, or because the proposed treatment used a technique that was slightly different but no more effective than what was available in Canada. The patients who receive approved out-of-country care generally had rare diseases for which there are few specialists in the world.

That, in a nutshell, is now the system works. However, there are lots of myths about how the system doesn"t work, so lets take a look at some of the stories that are floating around.

In the 1990s, there was a decision to restrain both federal and provincial expenditures due to a history of deficit financing and national indebtedness, and so the funds available for health care and other social programs were not increased on a yearly basis for a few years. These cuts occurred after years of pro-market conservative governments who lowered corporate taxes and jacked up interest rates to slay inflation, thereby increasing the value of the debt.

The cuts have received a tremendous amount of negative press both in Canada and the US. Nurses, physicians, and other health professionals and hospital administrators across Canada have done a remarkable job of transforming practices without conspicuous adverse effects on patient outcomes.

However, their tolerance for change has been stretched. The wave of hospital cutbacks and closures has profoundly disturbed the public and has been the basis of a very emotional debate in the country. In my hometown, for example, they closed the Holy Cross Hospital where I, and most of my childhood friends, were born. The hospital was old, the demographics of the neighborhood had shifted from residential to commercial, and it was time, but it was a painful and emotional experience for everyone and it made big press.

Some argue that the cuts were too broad and too deep, but it forced a restructuring of the entire system. In Alberta, the first province to restructure health care, the cuts are over and there is now a budget surplus that is being put back in to the health care system. Interestingly, while there was a lot of complaining about the cuts, people continued to receive medically necessary care, and physicians were generally able to get services for their patients based on urgency of need. But every time someone waited even a few weeks for specialty care, it made the press in both countries. Ontario is in the midst of restructuring its system, and we can expect to hear more media anecdotes, so stay tuned and don"t believe everything you hear.

In 1998, the federal government achieved a balanced budget and, responding to public pressure, pledged an end to the cuts in the provincial transfers for health care. In 1999, the federal budget included an additional 11.5 billion dollars for health care over the next five years. This dramatic increase in federal financial support for health care is the largest single new investment the government has made since coming to office in 1993. Together with growing value of the Canada Health and Social Transfers, federal support is expected to reach a new high by FY2001-02, surpassing where transfers stood prior to restraint. Most provinces have also achieved a stronger fiscal position, thus growth in public spending is inevitable in the future. So there is good news.

There is no formula to tell us exactly how much money the system ought to have. The "perfect" answer depends on such things as the health goals of the population, how efficient we want the system to be, how much we think is fair and reasonable compensation for health care providers, how much we want to pay in taxes, and whether more money spent on health care will result in improvements in health status.


I have a whole talk on this myth alone, but I"ll give you the highlights.

The issue of allegedly higher taxation in Canada has been repeatedly used to impede the implementation of a single payer health care system in the U.S. Opponents in the U.S, and some in Canada, argue that taxes in Canada are much higher than in the U.S. and that this is a reason to forget about single payer for the U.S. There is widespread perception among some Canadians and many Americans that Canadians are being taxed to death.

Comparative tax data studies are full of contradictions in methodology and, unfortunately, we don't have time to go into them. Let's look at a simple comparison of tax rates for the US and Canada. The Canadian Center for Policy Alternatives looked at Federal Tax Brackets in both Canada and the US for 1999.



Both Canada and the US have rising marginal tax rates (marginal rate is the rate paid on the last earned dollar of income).

The bottom bracket for US taxpayers is 15% on the first $25,350 of income. This is similar to the Canadian rate of 17% on the first $29,590.

In the second bracket, the US marginal rate rises to 28% for incomes between $25,351 and $61,400. Canada's marginal rate rises to 26% on income between $29,591 and $59,180.

In the third bracket, the US marginal rate rises to 31% for income between $61,401 and $128,100, while Canada's rises to 29% for income over $59,181.

The US has two additional tax brackets that apply to high income earners. From $128,101 to $278,450, the US marginal tax rate rises to 36%, and all income over $278,451 is taxed at the top rate of 39.6%. The top federal rate in Canada stays at 29% all the way up, but the federal government also levies a 5% surtax on tax payable in excess of $12,500, effectively raising the top federal marginal tax rate to 31.3%.

When compared to the OECD average, or the European average, Canada's tax rates are low, even though they are higher than the U.S.


Tax Revenue as a percentage of GDP, 1996


Personal Income Tax 

Corporate Income Tax

Social Security 

Taxes on Goods
and Services

 Other Taxes

 Total Tax Revenue








 United States







 European Union







 OECD average







Source: OECD Revenue Statistics, 1965-1997 (Paris: OECD, 1998 as cited by David Robinson, Canadian Association of University Teachers, www.caut.ca).


But this comparison doesn't give us the complete picture because it leaves out the social benefits, such as family allowances, tax credits, and health care that workers in different countries receive. The average after-tax and after-transfer income of Canadian workers is equal to about 82% of their gross pay as compared to the OECD average of 85%, and the US average which is .1% lower than Canada!

Most surprising is that despite shouldering a slightly higher overall tax load than Americans, Canadian workers at the end of the day enjoy about the same share of their gross pay as their southern neighbors.

And of course, Canadians are arguably even better off because they have already paid for the costs of medical care in taxes (which may have to be borne privately by American families if they are among the 44 million individuals without health care coverage or among the insured who pay co-pays, deductibles, and premiums.) A recent study by Standard and Poor's DRI concluded that if the costs of private-sector health and education services, which are principally publicly-funded in Canada, are added to the US tax bill, there is no difference in the overall tax burden.


Gee, sounds like an HMO. If you fear oversight of how you practice medicine, I can assure you that your worst fear is already here.

In Canada, the government has no direct say in who gets medically necessary care or when they get it. That is left up to the doctors. There is no HMO-like pre-authorization by a clerk who is practicing medicine without a license. You and your doctor decide what you need with no daily intrusion from an over-seer.


There are no waits for urgent care, or primary care, and there are reasonable waits for most specialist care, but there is some concern about certain elective surgery waits.

We honestly don't know what is happening with waits system-wide. There may be serious problems of excessive waiting times for some procedures in some jurisdictions, at some times; or there may not. We simply have no reliable systems in place with which to assess what are, at the moment, still largely self-reported claims.

A recent Health Canada reports tells us that, with rare exceptions, waiting lists in Canada, as in most countries, are non-standardized, capriciously organized, poorly monitored, and in grave need of retooling. As such most of those currently in use are at best misleading sources of data on access to care, and at worst instruments of misinformation, propaganda, and general mischief.

"With few exceptions, our current understanding of the 'wait list situation' in Canada is so totally dependent on data of suspect quality, data drawn from a variety of ad hoc sources, data based on inconsistent definitions, data used for a variety of purposes, and data overseen by no one, that it is little wonder that we find so much confusion." There may be situations where more money would provide more than short-term palliation, but to date there is no evidence to support any such claim (Health Canada Study June 1998).

To address this problem, Health Canada has now funded the Western Canada Waiting List Project, which will systematically study the issue of waiting lists. A new rating system, beginning in fall of 2000, will be based on objective clinical assessment of each patient's medical need and expected benefit, rather than on the order they went on the list or the surgeon they have selected.

Now, having said all that, there are some areas where we do know about waits. For example, in Ontario there are waits of up to a month for radiation therapy for breast and prostate cancer patients due to a lack of radiation therapists and medical physicists, and a larger number of cancer patients in an aging population. This isn't really about money since the provinces are offering to send patients across the border, all expenses paid. Rather, it is an issue of the supply of specific specialists and bad long-term planning in the past. It takes 10 years to train a radiation oncologist and at least 2 years to train a radiation therapist. But if we knew that the incidence and prevalence of cancer were increasing, why didn't we plan for that? Because, in their typical shortsightedness, some provinces did not heed the predictions of cancer experts. I have no good answer other than to say that planning for health services tends to take place in the short-term with forecasts for 2-3 year periods, and sometimes this just doesn't work.

By the way, in Alberta they are opening up 48 positions to train diagnostic imaging techs, and they are importing a radiation oncologist from Australia.

By and large, Canadian cancer patients fare better than their American counterparts. Studies by both the US General Accounting Office (Keller, 1997), and Canadian researchers (Gorey, 1997) have shown that Canadian survival rates are superior for most cancers, and that Canadians get more bone marrow transplants than in the US.

As troubling as these specific waits are for Canada, we must not forget that in the US there are millions of people who don't even get diagnosed in time, let alone treated, because they don't have health insurance, they can't get into the specialist for a consultation, or their plans limit care. The free-market system in the U.S. is no panacea for the problem of waiting for care.


Over the past couple of years there have been some "bed shortages". One of the reasons is that during the recent restructuring of health care, new calculations on the number of beds needed were made using US-based data. It turns out that US for-profit hospitals have cut to the bone the numbers of beds needed, and that same number of beds appears to be too few for Canadians.

In 1996, Canadians had 5.4 beds per 1,000 population as compared to the US which had only 4.2 beds. The average length of stay in Canada was 12.2 days, as compared to 8.0 in the US.

Last winter in Calgary, there was a big deal made about the bed shortage and how health care was underfinanced. Well, it turned out that it was flu season and there were some pretty sick people who suddenly needed to be admitted. The hospitals failed to plan accurately and didn't recruit enough nurses soon enough to open enough beds. Of course, the system responded and more beds were opened, but things like this are big in the press.

This winter, with the worst flu in 10 years, Alberta is not being caught again. It developed a solution of integrated health care delivery wherein public health immunization programs worked with hospitals, nursing homes, and home care to make sure that 90% of seniors in nursing homes and 70% in the community were immunized, that home care is available for patients well enough to leave the hospital, and that patients are distributed around the city so that no one hospital gets overloaded. In other words, a system-wide approach to the stress of flu season.

Another very serious factor that contributes to the "bed shortage" is that there is a real long-term care problem in most of the country. Long-term care patients are taking up acute care beds until long term care can be found. The good news is that the system is responding by putting more money into long-term care solutions. For example, Ontario recently created 7,000 new long-term care beds with another 13,000 planned for future years.


We are losing some doctors, but we are gaining others. Doctors are a highly mobile group of professionals, and it is nothing new that some are leaving for a variety of reasons. Of course we hear from some who have left to come to the US, and they often times make the press with their war stories, but these are anecdotal incidents and don't represent the trend. When I speak to American physicians, they invariably begin the conversation with "was at a meeting and I met a Canadian doctor who left because it is so bad up there". I usually reply, sarcastically, that I even heard that some Canadian died last year in hospital! Again, let's look at the data.

CIHI's (Canadian Institute of Health Information) figures reveal that, as reported in 1997, there were fewer physicians leaving Canada in 1998. Approximately 569 physicians left the country in 1998 compared to 659 in 1997, a drop of 14%. While the total number of physicians leaving fluctuates from year to year, the proportion of those leaving to the total physician supply has remained stable at approximately one to two per cent since the 1980s.

The number of physicians returning to practice in Canada increased by 41% from 227 in 1997 to 321 in 1998. The 321 returning physicians represented 0.6% of the total physician supply for 1998. In other words, they come and they go.

In 1997, 49% of the physicians in Canada were specialists and 50% were family physicians. This split has remained relatively constant for the last 20 years.

Last year my sister had eye surgery for near sightedness ñ when she met the surgeon he introduced 2 physicians who had come to Canada to learn the technique. Expecting physicians from some far away country, she was amused to learn that they were from the Mayo Clinic.

It is true that some specialists have left for allegedly greener and more profitable pastures in the US. It is also true that they often times return to Canada after they have received their specialty training or after they can no longer live with the moral conflict of denying care to their patients.


There may or there may not be enough doctors and determining the right number of doctors is a tricky art. Those who think the system is underfunded say that we have cut back on the number of slots in medical school to save money. There are now calls by medical school deans for an increase in slots, but some health care researchers say that there are several other factors involved that won't all be solved by making more doctors. They argue that the apparent under-supply of doctors is really more an issue of mal-distribution since more physicians want to practice in large urban centers than in rural areas. Producing more physicians may do nothing to correct the maldistribution and we may still end up with a cry for more doctors when what we really need is a re-distribution of doctors and more incentives for them to practice in rural areas or other specialties.

The apparent sudden doctor shortage may also be caused by physicians who are retiring early, or by physicians who restrict the range of services they offer, or the number of patients in their practice, or the hours they work. For example, family doctors still deliver most babies in Canada, but some of those doctors are limiting the size of their practice or are no longer delivering babies. Others are only practicing part-time because of lifestyle choices. With an aging population, there are increasing demands in the number and nature of services provided to seniors, and this limits the number of patients that can be seen in a day. As independent practitioners, doctors are completely free to see as many or as few patients as they want, and to provide or not provide whichever services they want, to practice wherever they want, and to limit the number of hours they work. But there are consequences to these decisions.

Real shortages do exist in anesthesiology and laboratory medicine, where in 1998 only 10 doctors decided to pursue careers in this area. And real shortages do exist in some of the smaller provinces including the Maritimes, and in rural areas. However, this has little to do with the single payer mechanism for financing the health care system and is certainly no different than in the US.


There are no solid data on cross-border health care traffic where the care is paid out-of-pocket and not reimbursed by the provincial payers. If someone goes to the US for care and it isn't paid for by the province, there is no way to track that care. There are anecdotal reports of Canadians coming to the US for care, as there are in the other direction, but to date there are no solid studies of how much this goes on.

Sometimes, we send patients to the US because we have had periodic capacity glitches in some provinces, and since there are US facilities that are grossly underutilized with empty beds and unused equipment, we are able to negotiate very competitive rates and it makes sense to send a few patients for care while we retool and improve capacity. This makes more sense for some patients than waiting. If you go out of country for specialty services that are not available in Canada, and if those services are deemed not experimental and are medically necessary, then the provinces will fully fund your care.

Sometimes, people come to the US for care because they perceive that their problems are more urgent than they are. I can cite one case where an 80-year-old man decided that he had to have his prostate removed even though his doctor thought it prudent not to do this. The man insisted on coming to the US for the surgery where money will buy just about anything. The press loves these stories.

I know of another case where a woman was diagnosed with lupus 9 years ago but has been symptom free. However, she recently saw a new doctor who insisted that her lupus was now "systemic" and he wanted her to go for routine tests to a nephrologist and a rheumatologist. Since there was no urgency to her care, she was told that she would have to wait 3 months to see these specialists in Canada. Remember, she was symptom free and not suffering in any way. She mentioned her "waiting problem" to a friend in the US and he insisted on paying for her to go to the Mayo clinic for evaluation. Her family doctor told her that there was no urgency in her case, but why turn down a free trip to the Mayo
clinic. However, this woman told everyone she knew, including my sister, that she was going to the states because of "the waits". When I spoke to her, she admitted and said that it wasn't really the waits but that she didn't want to disappoint her friend by refusing his kind offer. I spoke with her again last Sunday after her visit to the Mayo Clinic. For $2,400 she learned that her doctors in Calgary were right, that her Lupus is mild, that she should be monitored annually, and that she has mild arthritis in her wrists. Nothing that she didn't know before she left.

If you are on vacation out-of-country and you get sick, the provincial payer will pay for care anywhere in the world at the same rate as in Canada for physician services, but for hospital services, most provinces will only pay $100 per day for in-patient and $50 per day for out patient services. So, most people now buy private travel insurance, especially if they are planning a trip to the US. There are a lot of what we call "snowbirds" in Canada, seniors who flock to Florida, Arizona and Hawaii during the winter. If they receive health care in the US that is insured in Canada, they submit their claims when they return and the claims are paid at Canadian rates. Those who oppose one-tier universal health care like to count these vacationing seniors in the hemorrhage of Canadians coming to the US for care.

Canada is also gaining patients from the US, but these data have not been sufficiently analyzed to know how much of this is really happening. We know anecdotally that in the states that border on Canada, Americans come to Canada for care.

I recently read that U.S. athletes are traveling to Canada to take shock-wave therapy for career-threatening athletic injuries. Apparently, this new treatment, which originated in Germany, is not available in the US and so many American athletes come to Canada where it is available.

Apparently, Canadian clinics started providing the treatment a year ago, but the U.S. FDA hasn't yet approved it. Usually it is the other ways around, with Canada using the US as its canary in the coal mine, waiting to see if a certain procedure is really efficacious or just another way to make (or lose) money.


Wrong on both counts. Most physicians are self-employed practitioners who work in independent or group practices and they enjoy a high degree of autonomy. Some doctors work in community health centers, hospital-based group practices, or in affiliation with hospital out-patient departments. They are not employees of the government and are not accountable to the government in any way, shape, or form. Physicians are accountable to their patients and to their professional organizations.

More than 90% of private practitioners are generally paid on a fee-for-service basis and submit their claims directly to the provincial health insurance plan for payment.

The fee schedule is negotiated between the provincial single payer and the provincial medical association with equal representation from both sides. There is only so much money in the health care budget and the pricing of the various services in the fee schedule is negotiated by representatives of the various specialties. In Alberta, for example, the Alberta Medical Association has the right to determine the level of payment for all physician services. (AHCIP statistical supplement). Negotiations have frequently been acrimonious, with occasional withdrawal of nonessential medical services during disputes and unilateral imposition of settlements by provincial governments (Naylor). But at least
Canadian physicians have a strong say in their fees, as opposed to in the US where physicians who participate with certain insurance carriers must take it or leave it.

There are several ways the provinces impose limits on the health care budget, and this is a moving target that is always being revised. Some provinces impose negotiated global caps on total medical expenditures. BC, for example, occasionally uses a few "rationed access days" wherein physicians close their offices and no elective surgeries are performed to make sure that the budgets are not exceeded. Last year there were 13 "rationed access days" in BC, and this is when some physicians took their vacations or a long weekend. Doctors were still on call for emergencies and the government promised to increase funding in the future so as to avoid this situation next year.

Other provinces have "soft" caps wherein the global budgets are re-evaluated and expanded on the spot if there is a good explanation, like an epidemic, for the cost over-runs. In Alberta, for example, an annual budget (of $719.7 million) for physician services (paid through the AHCIP) was established through a negotiated agreement between the Minister of Health and the Alberta Medical Association in 1995. Two years ago, the total expenditures exceeded this amount by over $70 million. This difference was made up by depletion of the "reserve pool" and "fee stabilization funds" along with additional funding from the government.

The trend is toward get rid of the global caps, and instead use billing thresholds above which additional billings are discounted, though these caps are set so high that most physicians never reach these thresholds.

There is also talk in some provinces about capitation, especially for primary care.

A recent example of the power of physicians to control funding decisions was the Alberta Medical Association's "Patients First" public awareness campaign in 1995 which drew feedback from more than 50,000 Albertans who responded to the "Tell Us Where It Hurts" campaign aimed at getting public input about how the health care system was working. Based on this input from the doctors, about two weeks after the campaign began, the minister of health announced that funding cuts planned for 1996-97 to the regional health authorities would not proceed.

Of course it doesn't always work that way. Doctors in Ontario went on strike in 1984 to prevent passage of the part of the Canada Health Act that effectively banned extra-billing for medically necessary care. In this case, the doctors lost and, thankfully, the Canada Health Act passed.


Doctors are still are the second highest paid group of professionals, second only to Supreme Court justices. When you look at salaries, you must also look at malpractice costs, the value of student loans, and the overhead costs of running your office. These are all significantly lower in Canada than in the US.

Physician salaries:

The 1995/96 data are averages for all physicians in the country and show that full time FPs grossed an averaged $208,942 , Medical Specialties averaged $235,040, and Surgical Specialties averaged $ 301,294.

In Alberta, 2 Family Practitioners and 107 specialists grossed over $500,000 and 29 physicians received over $1 million in payments. They aren't starving.

A total of 4,282 Alberta physicians billed the AHCIP in 1997-98. The average payment per physician was $182,425 (a 5.1% increase over last year and the median payment was $153,644 a 3.7% increase). A total of 228 part-time physicians received under $10,000, and 29 full-time physicians received over $1 million in payments.

For Family Practitioners, the average payment was $149,541 (a 4.7% increase over last year). (median = $147,378. Only 2 general/family physicians received over $500,000 in payments.

For the 1,883 specialists, the average payment was $224,441 (median = $171,697). Additionally, 107 specialists received over $500,000 in payments, (5.7% of specialists).

As many as 29 doctors earned more than $1 million gross, including 1 pathologist, 22 radiologists, 1 rehabilitation medicine specialist, 3 eye surgeons and 2 internal medicine specialists.


Not true. Contrary to popular belief, physicians are completely free to "opt-out" of the provincial insurance plan and to bill all patients directly for their services. Very few do this - in Alberta there is one opted out doctor, and in BC there are none since it would mean setting up a costly billing system. However, there is no government control to stop a doctor from opting out and billing privately.


Actually this is true only so far as it is the government who represents the people, and it is the people who pressure the government to put more or less money into health care. Over the past 30 years, through taxes, the federal government has partially supported provincial health plans by a number of complicated financing mechanisms including direct cash payments and tax transfers from the federal to the provincial governments, (and so-called equalization payments designed to smooth out the interprovincial differences in average per capital income and concomitant tax bases.) As of 1995, at the federal level, elaborate formulas are used to decide how much of the federal budget is spent per capita on health through the Canada Health and Social Transfer payments. The balance of the health care budget comes from each provincial treasury. Budgets are developed at both the provincial and federal levels, and every year the governments present their budgets, they are debated publicly in parliament, and decisions are made.


Research awards are smaller in Canada than in the US, but what this fails to consider is the fact that some US universities like Stanford take about 40% of the grant in overhead. The awards have to be bigger in the US to account for this large chunk that disappears into administrative costs. Universities in Canada generally take zero in overhead, so the awards are smaller.

Although there are fewer researchers in Canada, there are world-class scientists. A recent report in Nature documented the impact (with respect to quality, not quantity) of research carried out in various categories by researchers in several countries. Under the heading of "Clinical Medicine", Canada is second only to the US in its international impact, ahead of England, France, Germany, Australia, and Japan.


No system is perfect. But it generally works for Canadians.

Some of the real problems in my opinion are as follows:


Health system reform in Canada continues to reflect a balancing act between nation uniformity driven by federal funding and regional pluralism arising from provincial administrative autonomy (Naylor, health affairs May/June 99). But this has been ever thus and is no different in any other confederation such as the US or Australia. Constitutionally, the provinces are responsible for health, but the feds control a substantial portion of the money. The provinces are always trying to wrestle more of that control away from the feds, but if the feds didn't hold part of the purse strings, the provinces would have no incentive to obey the Canada Health Act and the feds would have no way to enforce it. There has to be federal control of certain things to make a country a country; otherwise it looses the common thread that binds it.


There are increasing threats in the direction of privatization, but so long as we have the Canada Health Act and so long as we enforce it, and so long as we adequately fund the system, it is a hard road for those who lean toward free-market medicine.

It is important to note that when you hear about privatization, this is not so much about private financing of the health care system in the form of private insurance (although there are some who would love to introduce private insurance), but rather delivery of services in privately owned hospitals. This is a real issue in Alberta right now as there is a group that is lobbying to convert its private clinic to a hospital so that it can provide orthopedic surgeries requiring overnight stays. The enabling legislation that would be necessary to allow a private hospital for insured services is being challenged by many people including the federal minister of health who is forcing the province to answer some tough questions. I tend to think that much of the talk about privatization is really an attempt to pressure the governments into putting more money into health care. But even though the health care cuts over the past years have shaken public confidence in one-tier medicine, the data show that those who really do want two-tier medicine are in a vast minority.

One of the best things that could happen to Canadian health care would be for the US to get universal coverage and get rid of the perverse notion that the free-market can work to provide equitable health care based on need. The free market enthusiasts, and we have them too, are very persuasive and seem to be determined that the capitalist class should be free to opt-out of contributing to a public system based on progressive taxation. Their strategy is to break the social solidarity that currently exists in the country by demanding tax cuts, thereby underfunding the public system and convincing people that we need two-tier medicine. The Fraser Institute in BC is an ultra-conservative right wing free-market-at-all-costs think tank, and their non-peer reviewed reports are very damaging. If you dissect their methodology, you find that their studies have serious methodological flaws.

The free market can't meet the conditions of the Canada Health Act. It won't work because the conditions necessary for a market, don't apply to health care. Even the managed competition plan conceived by Alain Enthoven and the Jackson Hole Group required massive government regulation, as do all pro-market reforms. And, contrary to the rest of free-market theory, it further presumes "regulators with the wisdom, public-mindedness, and incorruptibility of philosopher-kings (Kuttner). Read Robert Kuttner's book "Everything For Sale" for a beautiful description of the limitations of the free-market as it applies to health care.


We do need a better way of allocating some elective surgical services based on urgency of need. The current chaotic and unorganized way in which we put people in line for certain elective procedures is causing some folks to think seriously about two-tier medicine. The "waiting" issue needs to be sorted out soon so that waiting times are no longer perceived as a threat to the system.


Even with the restructuring in health care in the past few years, Canadians remain confident that health care is alive and well and most want to fix the problems in the public system and share the costs equitably. Polls conducted on December 6, 1999 by PricewaterhouseCoopers showed that 92% of those who had used the health system in the past year said they were satisfied with their care, and the majority said they were "very satisfied." 60% stated that the public health system is sound and requires only some fine-tuning. 86% stated that the wait for medical tests was acceptable 83% felt the wait for a specialist was fine.

It just isn't as bad as it has been made out to be.

Health watch