How to modernize the Canada Health Act to generate revenue

Before delving into whether the Canadian Health Act (CHA) represents a significant obstacle to employing the sorts of policies commonly found in other successful countries with universal health care funding; and, if so, to what extent. It is imperative to ask “Why” the question needs to be asked in the first place. If the present situation is both financially sustainable and able to deliver timely access to quality care regardless of a patients’ ability to pay, than the need for reform is less clear. However, this is not the case, as empirical evidence suggest that there are a number of ways in which the Canadian healthcare system is failing and that there is cause for concern for its overall sustainability [1]. In Canada, healthcare system funding has reach a crisis point not only our health care costs continuing to rise, but there are increasing conflicts about how these funds are allocated. As of 2019, the total expenditures reach to264 billion dollars which is a 4.2% increase from previous years. Canada's healthcare system is predominately fund with a 70:30 approach, with 70% funding coming from the public sector and the remaining 30% from the private sectors [8]. Provinces are exploring different policies and create new one to improve the safety, efficiency and efficacy of care, including patient based payment for hospitals to increase ‘volume’ of hospital care, targeted pay-for-performance programs to reduce wait times and alternative payment plans for physicians. These funding policies are designed to change the incentives of providers and health car organizations [5].

So lets simplify things for a moment to examine the healthcare in Ontario in terms of how it works and how is it funded. The healthcare system in Ontario can be very daunting to say the least, and to be honest most people do not quite understand how it works and how it is funded. We all pay our taxes, but exactly what happens next, and where does the money go and how does it impact our healthcare system. Well, from our income, we get taxes taken off which goes to the Ontario Government (with some being allocated to others such as municipalities and federal government) and than to the Ministry of Health and Long term care (MOHLTC) [4,7].

The role of the MOHLTC is to create the legislative landscape for Ontario’s healthcare system to operate. In Ontario, when we pay our taxes, nearly 39% of each dollar is given to the MOHLTC and put towards out publicly funded healthcare system. They collect the money and than disperse it accordingly amongst eight main segments of operating expenses [4].

With an aging population and an already large number of seniors who are entering our healthcare system, it is crucial to find alternative measures to make our healthcare sustainable. As healthcare professionals, we are invested on preventative medicine, portico care, examining the social determinants of health and psychosocial aspect of health by providing non-clinical services, and trying to figure out how to help the needs of the healthcare system at a cheaper setting.

Perhaps by now, you asking yourself, what is the Canadian Health Act (CHA) and how does this fit all together. The CHA “ is Canada’s federal legislation for publicly funded health care insurance. The Acts sets out the primary objective of Canadian health care policy, to which is to protect, promote and restore the physical and mental well-being of residents of Canada and to facilitate reasonable access to health services without financial or other barriers”[2]. In section 18-21 of the CHA prohibits user fees and extra billing for ‘medically necessary’ services, a term used to identify when the services must be funded by provincial health insurance plans [4]. So, like most of you, this seems reasonable and appropriate Act; protecting the public and providing accessible healthcare for all. However, the province of Saskatchewan has a new legislation for private MRI clinics, which offer for those who can afford (and not to mention it cost thousands of dollars) for quicker diagnoses and return to the public system for treatment services. In addition to, the province of Quebec also passed a legislation which will allow private clinics to commence extra billing for “accessory fees” [3]. Once upon a time, Saskatchewan and Quebec would have been in violation to the Act. Now-a-days, a two-tier care an extra-billing offered to the public is seen as a strategy for saving medicare. Sadly, for those who cannot afford to pay out of pocket are left to wait, preventing early detection and delay in treatment services [3].

Another example is the seniors in long-term care facilities who have fallen into the quagmires of “who pays for them” attitude. Generally speaking, Provinces provide the oversight and some funding, however it is the supplemented fees from seniors and their families in these long-term care facilities. Some long-term care facilities have turned to for-profit providers to assist in funding them. Unfortunately, it is the seniors who get left behind due to provincial budgets are thin [4,6]. The pandemic of COVID-19 gave precedence to hospitals, public health sectors and infection prevention and control programs, again leaving behind the vulnerable seniors in our long-care facilities. And it wasn’t until the rise of COVID-19 cases escalated in these facilities that the Council of Canadians recently launched a petition,which had already garnered thousands of signatures, calling on the federal government to work with provinces to bring all long-term care facilities not public hands administer under the CHA [6]. From these examples, it demonstrated flaws within our CHA. For change to happen we need to modernize our co-existing policies, update of CHA and start to thinking out side the box to improve the healthcare system from a financial perspective. Let’s save while not cutting into the healthcare system [4].

The most common healthcare funding method in Canada is global budgets, where a fixed payment amount is allocated to a provider to cover expenses. In most Canadian provinces, healthcare services are regionalized and local or regional health authorities hold primary responsibility for delivering healthcare services. In most provinces, governments allocate funding to health authorities through a global budget, and many health authorities in turn, use global budgets to fund specific groups of services. In Canada, most hospitals, long-term care facilities, publicly-funded rehabilitation facilities and mental and public health programs are funded under global budgets. Funding amounts are typically based on factors such as historical budget, inflation and politics and are provided irrespective of the number of patients of level of demands on resources. Global budgets can be an effect means to control healthcare expenditure growth through the use of spending "caps" and they also provide financial predictability for administrators and policy-makers. A weakness of global budgets is that, under the impetus to meet budget targets, providers often restrict access to services. Moreover, global budget provides minimal incentive for innovation or to improve efficiency of care. Since global budgets do not provide opportunities for increase revenue and do not promote coordination across services in settings, creating a fragment healthcare system that is often associated with inefficiencies and reduced quality of care [9].

Changes to modernize the CHA stems from making changes to our policies, whilst meeting the needs for all people in the healthcare system. Moreover, optimal change for increasing funding in the healthcare system is moving away from the silo mind frame, to collaborating on all levels; community, provincial, federal and globally [10,11]. It is important to understand that changing policies of public and private institutions can help solve health-related problem like generating revenue. Furthermore, it is also important to know how those changes are influence and what our role can be in helping to bring improvements in revenue through advocacy [10]. It is imperative for the consideration to incorporate non-conventional solutions in the CHA to assist in generating revenue into the healthcare system. These may include but is not limited to: bringing care model innovations to market, transforming cost centers into profit centers and generating royalties from the pharmaceutical industry [11]. A more sophisticated approach, often describe as "bundle care," aims to encourage collaboration across sectors to better manage transition in a way that benefits the healthcare system to lower overall cost, while maintaining exceptional care. Funding innovations is the key insight into the relation between cost and quality, which is that, although high-quality care may ultimately cost less, costs and benefits of improving quality are often spread out over time and across a range of individuals and organizations [10,11].

"Today’s challenge for health system executives is to plan for a future in which operating margins face continuing compression and non-operating margins rely on an aging bull market. Getting it right will be important for patient care for decades to come."

References

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