Private Funding for Medically Necessary Health Care Services?

Private Funding for Medically Necessary Health Care Services? Research Paper Prepared By: Lauren Scott Nova Scotia Association of Health Organization...
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Private Funding for Medically Necessary Health Care Services? Research Paper

Prepared By: Lauren Scott Nova Scotia Association of Health Organizations

July 2005

Private Funding for Medically Necessary Health Care Services? Research Paper

Background This research paper is intended to inform the direction of a position statement the Nova Scotia Association of Health Organizations (NSAHO) intends to develop on the issue of private funding for medically necessary health care services. A number of recent events have reinforced the need for NSAHO to have a comprehensive position on this issue. Namely, the recent Supreme Court of Canada decision that ruled that Quebec’s ban on private health insurance for medically necessary services was illegal. While this decision only applies to Quebec, the rest of the country can expect to face similar challenges. Closer to home, Nova Scotia Health Minister Angus MacIssac has indicated that the province is developing legislation around private clinics. It is not clear exactly what will be in the legislation, but it will apparently contain safety standards for private clinics and identify “the methods by which insured services may be performed outside of the current hospital setting.” There will be public consultations on the proposed legislation and NSAHO needs to have a position ready in order to respond. It is important to define what this research paper is examining. This paper is not interested in private clinics offering uninsured services (i.e. plastic surgery) nor is it considering the private delivery of services that are funded by the public system. Rather, this paper is narrowly focused on whether individuals should be able to pay privately (either out-of-pocket or through the purchase of private health care insurance) for medically necessary services that are now funded exclusively by the public system. NSAHO Statements on Private Health Care and Related Issues The beginnings of NSAHO’s position on this issue can be found in our submissions to various committees; including the House of Commons Standing Committee on Finance, the Commission on the Future of Health Care in Canada and the Standing Senate Committee on Social Affairs, Science and Technology. A single, more comprehensive document which deals with the issue in the broader context is required to enable us to respond more rapidly and consistently to these matters as they arise. NSAHO

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The following are comments or summaries of comments NSAHO has made on private health care and related issues: Canadian Values •

• • •

Canadian values must be at the heart of any debate about the future of the Canadian health care system and that equality of access is the predominant Canadian value (NSAHO submission to the Senate Standing Committee on Social Affairs, Science and Technology, 2001). Access to health care should be based on need, not ability to pay (NSAHO submission to the Commission on the Future of Health Care in Canada, 2002). Collective responsibility (caring for and about each other versus each person for his or herself) is a Canadian value (NSAHO submission to the Commission on the Future of Health Care in Canada, 2002). The principles of the Canada Health Act (CHA) remain consistent with Canadians’ values and, therefore, these principles must be upheld (NSAHO submission to the Commission on the Future of Health Care in Canada, 2002).

Public Health System Equals an Economic Investment •

In the global market place, access to a publicly funded health care system translates to increased global competitiveness for Canadian businesses and is a major incentive for international corporations to locate in this country. If we are unable to sustain this system, the cost of insurance coverage will default to employers and employees, which would in fact constitute an increase in taxation and diminish Canada’s economic advantage internationally (House of Commons Standing Committee on Finance, 2001).

Private Delivery of Publicly Funded Services •



Health services can be efficiently and effectively delivered by private agencies in a publicly funded system when these arrangements have sound accountability mechanisms in place, which are open and transparent. Prior to commencement of these arrangements it is important to ensure that all parties understand what the standards of quality are and what is expected of them (NSAHO submission to the Senate Standing Committee on Social Affairs, Science and Technology, 2001). It is important that we…. o Establish clear expectations; o Develop explicit quality standards, based on best practices; and

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o Create transparent reporting mechanisms for reporting on performance. (NSAHO submission to the Commission on the Future of Health Care in Canada, 2002). Must also embrace new ways of doing things. Here, in NS, the private sector has been an important player in the delivery of publicly funded health services; and NSAHO believes that there will be a continued role for the private sector within a publicly funded health system (NSAHO submission to the Commission on the Future of Health Care in Canada, 2002).

Parallel Private System •





“Let me begin by saying unequivocally that NSAHO supports a publicly funded health system that provides access to a broad range of comparable health services to all Canadians” (NSAHO submission to the Commission on the Future of Health Care in Canada, 2002). Prior to making a decision as to the viability of private financing, it is important to further assess the potential impact as it is not yet clear what the implications are for access, as well as our global competitiveness (NSAHO submission to the Senate Standing Committee on Social Affairs, Science and Technology, 2001). We are concerned with the prospect of a parallel private health system running in competition with our public system. Such a move could well siphon off scarce resources and severely affect access to health services, especially in rural parts of the province. It is absolutely critical that we maintain and strengthen the public governance of the Canadian health system (NSAHO submission to the Commission on the Future of Health Care in Canada, 2002).

These comments should be kept in mind throughout the subsequent discussion to guide the reader in determining what NSAHO’s position should be on private funding for medically necessary services. What are the Goals? In order for NSAHO to determine what its position should be, it must be decided what the goals are and whether allowing a greater role for the private sector will achieve them. For example, are the goals: • • • •

to increase the number of people receiving services; to reduce individuals' waiting time; to decrease costs (to whom? governments, individuals?); or to increase efficiency and effectiveness

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And will moving to a larger role for the private sector help us to achieve these goals? Discussion of Current System Canada Health Act The Canada Health Act sets out five principles – public administration, comprehensiveness, portability, universality and accessibility. Provinces must comply with the principles as well as ensure there is no extra billing or user fees charged in order to receive full federal funding. If a province is found to be noncompliant, they can be subjected to a dollar for dollar reduction in their federal entitlement. The Act only applies to medically necessary hospital and physician services (Kirby, V. 6, 2002). Hospital and physician services were the most costly prior to the development of Medicare; not to mention, these were the main services offered by the health system. Therefore, these were the sole focus of the program. This is no longer the case. Much of the care that was once provided in hospitals is now provided in the community. And, the type of individuals seeking care has changed; much of the care being given in hospitals is to the elderly with pre-existing chronic illnesses (Rachlis, 2000). Opting Out Physicians can choose to opt out of the public system at any time. This means they are no longer eligible to receive public funds for their services and they must bill their patients privately. A physician is either completely in the public sector or completely in the private sector, a physician is not permitted to work in both. However, this applies only to medically necessary services. Physicians are allowed to provide services that are not publicly insured and bill privately for them, while remaining in the public system. However, most provinces have put in place either legislation or other mechanisms to discourage physicians from opting out. For example, there would be more of an incentive for physicians to opt out if there was a private insurance market. There are very few people who can afford health services without some form of public or private insurance. However, purchasing private health insurance for medically necessary hospital and physician services is illegal in six of the ten provinces. In the four provinces where it is not illegal, there is still not a strong private sector as other mechanisms have been put in place to prevent public funds being used to subsidize the private sector. For example, Nova Scotia, Manitoba and Ontario do not allow physicians to charge more privately then they would be reimbursed from the public plan. This serves to mitigate the motivation to opt out (Flood, 2001).

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Newfoundland is the exception. Newfoundland “uses neither direct prohibition nor elimination of public subsidy to deter a privately financed sector”. In fact, physicians who opt-out can bill patients any fee of their choosing. The public system will provide coverage for these patients up to the amount covered by the public plan and the individual is responsible for covering the remainder. Canada in Comparison to Other OECD Countries Canada’s total health care spending in 2003 (9.9% of GDP) was slightly higher than the average (8.6% of GDP) in OECD countries. However, total health care spending as a percentage of GDP is lower in Canada than in the United States (15%), Switzerland and Germany (more than 11%) and Norway and France (10.1-10.5%) (OECD, 2005). Seventy per cent of health spending came from the public sector in Canada in 2003. It is important to note that this is actually lower than the OECD average of 72 per cent. In Canada, this was a decrease of over 4 per cent from 1990 (public spending was 74.5%). The share of public spending was over 80 per cent in Denmark, Norway, Sweden, the United Kingdom and Japan in 2003 while it was very low in the United States (44%) and Mexico (46%) (OECD, 2005). According to the Canadian Health Care Association the “OECD average for public spending as a percentage of GDP” is 6.1 per cent. Canada’s public spending as a percentage of GDP is 6.9 per cent, which is slightly above the OECD average but so are France at 7.7 per cent, Sweden at 7.8 per cent and Germany at 8.6 per cent (CHA, 2005). In comparison to other OECD countries (excluding the US), Canada does not cover as broad a range of health care services through the public health care system. For example, pharmaceuticals and medical aids are often covered in other universal health care plans (Okma, 2002). In other OECD countries, such as the UK and New Zealand, physicians are permitted to work in both the public and private systems. In Canada, as previously mentioned, physicians must make the choice to opt in or out of the public system (Flood, 2001). Co-payments and user fees are also common in other jurisdictions whereas they are not in Canada. Canada depends on private insurance and out of pocket payments for those services not covered by the Canada Health Act (Romanow, 2002). Arguments for an Expanded Role for the Private Sector What has lead to a call for an expanded role for the private sector? The rise in health care costs and lengthy wait times have given rise to the sentiment that the

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Canadian health care system is in crisis and is no longer affordable or responsive in its current structure. It is believed by some that more involvement by the private sector would resolve these issues. These proponents claim that not only would those who could pay receive faster service, but those waiting in the public system would as well because there would be fewer people waiting in the public sector (Gordon, 1998). Efficiency and effectiveness are often believed to be better in for-profit providers as they bring the principles of competition into the mix. Focus on the consumer is also improved with more choice and competition (Romanow, 2002). In addition, there are those who argue that the “principles of universality and equitable access conflict with a patient’s right to choose to pay privately and with a physician’s choice to provide preferential treatments to those payers” (Gordon, 1998). Services such as food preparation and laundry, otherwise known as ancillary services, are frequently provided by for-profit organizations. There is usually competition between these types of organizations enabling the contractor to select another service provider if they are unhappy with their current quality of service. Romanow (2002) concluded that Canadians also seem to be comfortable with this role for the private sector. It is also known that universal coverage can be maintained even when there is a larger role for the private sector. Many OECD countries have universal access through public funding but have a variety of arrangements with the private sector (Okma, 2002). The Conference Board of Canada (2004) did a study of the top performing countries in terms of health care and all of them had a public/private mix. They found that,”There is no single equation that gives the optimal balance between low-cost and high quality health care. Switzerland’s system gives the private sector a prominent role and is expensive. Sweden’s system is primarily publicly funded and performs with a high level of coordination, regulation and communication. Both countries surpass Canada in high performance.” Countries can also spend less on health than Canada and still out perform us, such as Spain, who spends significantly less than Canada. The Standing Committee of Social Affairs, Science and Technology (2001) found similar results. They even go so far as to suggest that there is a possibility that the participation of the private sector enables a country to provide more extensive health care coverage. Sweden Consider Sweden as an example of a public/private mix success story. The Conference Board of Canada (2004) ranked its health system performance as

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second overall. Sweden’s system is 85 per cent publicly funded. Sweden even spends less than Canada in per capita funding. Co-payments are required to receive health care services. However, social assistance is provided to those who are deemed to have insufficient income to cover the co-payments. Everyone has equal access to services. Similar to other countries, Sweden faced rising costs in the 1990s and was willing to make the tough decisions to bring costs under control. Beds were cut in both acute care and psychiatry and the health care workforce was cut back, while at the same time improvements were made in outpatient care. These actions have brought cost increases back to a manageable level (Conference Board of Canada, 2004). Other methods used to control costs include the requirement for prescribing of generic drugs. If an individual wishes to use another medication they must pay the cost differential themselves. Sweden also monitors prescribing patterns to ensure that the regulation is being followed (Conference Board of Canada, 2004). No one has to wait beyond a predetermined time limit for a particular health service. Sweden has a health care guarantee whereby patients will be offered service elsewhere if they have to wait too long. In fact, there are no waiting times for diagnostic procedures (Conference Board of Canada, 2004). Sweden also has electronic health records both in the hospital setting and primary care centres. Even though Sweden has one of the oldest populations and one of the longest life expectancies, they have been able to control costs associated with an aging population by putting in place programs to support seniors. There is a high doctor to patient ratio (higher than in Canada) and even though wages for health care professionals are lower than those found in Canada, providers are happy due to their good working conditions (Conference Board of Canada, 2004). Private Health Insurance If the private sector is to be given a larger role in the Canadian health system Canadians will need to have the option of purchasing private health insurance to cover medically necessary hospital and physician services. For individuals to legally purchase private health insurance in Canada, legislation would need to change. As previously mentioned, in six of the ten provinces purchasing private health insurance to cover medically necessary services is illegal (Flood, 2001). The Standing Senate Committee on Social Affairs, Science and Technology (2002) found that federal legislation would need to change as well; namely, the public administration principle of the Canada Health Act.

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Supporters of allowing the purchase of private insurance for medically necessary services indicate that the benefits are that it can enhance patient choice, increase competition and improve efficiencies in the public sector. It is also intended to decrease waiting times. In order to obtain these benefits, one must consider the problems associated with private health insurance and put in place means to mitigate them. Research done in the US found that insurers “virtually always denied coverage to individuals with certain diseases (e.g. AIDS and heart disease) and often would not cover pre-existing conditions such as …glaucoma and asthma”. Overall, private health insurers are likely to select those individuals with the lowest risk which leads to problems with efficiency. And of course, one of the greatest concerns of all is care based on the ability to pay and not need. This raises the question of whether there is really equal access (Deber 1, 1999). Deber (1, 1999) defined two significant issues for private insurers if they are to remain competitive: 1. they must limit their risk by selecting those least likely to need expensive health services; and 2. they must limit the amount they will cover. Deber (2, 1999) conducted research on whether insurance companies in Canada would be interested in providing insurance for a parallel private health system. The respondents “felt that proposals for parallel private plans within a competitive market are incompatible with insurance principles as long as a well functioning and relatively comprehensive public system continues to exist, the maintenance of a strong public system was both socially and economically desirable.” Their companies were only willing to provide services that would ensure their organizations profitability. However, there are methods that can be used to mitigate some of these issues: • • • • •

Require private insurers to use a community premium, which means all individuals are charged the same premiums regardless of their health status and uniform deductibles (Crowley, 2002; SSCSAST, 2002). Require private insurers to accept all individuals who apply for insurance regardless of health status (Crowley, 2002). Require all persons to purchase health insurance whether from the public or private system, similar to auto insurance (Crowley, 2002). Require private insurers to cover the same services as the public sector (SSCSAST, 2002). Put in place quality standards and monitor the quality of care and whether individuals are receiving the appropriate coverage. Although, this should apply to the public sector as well.

There are different models of private health insurance used in OECD countries.

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In Germany and the Netherlands, private insurance and private delivery is completely separate from the public system. There are regulations in place to prevent private insurers from only accepting low risk individuals; they must accept everyone who applies. Private insurers are required to provide the same benefits to their clients as the public system does to prevent insurers only covering the low cost, high volume services. However, insurers are allowed to charge premiums that are based on how “risky” individuals are but this too is regulated and most people pay similar amounts for similar coverage. Purchasing private health insurance is voluntary for individuals over a predetermined income threshold (SSCSAST, V.6, 2002). Australia, Sweden and the UK take a different approach by structuring their system to allow competition between private and public insurance and public and private providers (SSCSAST, V.6, 2002). In the UK, individuals with private insurance generally receive their care in private hospitals. Although they can receive service in the NHS, in hospitals where beds are available to private clients – called pay beds. Private insurance covers the same services as the public health insurance plan. Ten per cent of physicians’ incomes can be earned from the private sector (SSCSAST, V.6, 2002). However, the amount of time physicians are permitted to practice in the private sector is not closely monitored or enforced. Australia, takes a different approach, the public health care insurance plan pays 75 per cent of the cost of care for a privately insured individual regardless of whether that care is given in a public or private hospital. The private insurance provider is responsible for covering the rest. The Australian government actually subsidizes people to purchase private insurance by providing 30 per cent of the cost (SSCSAST, V.6, 2002). Some countries, such as Australia and Sweden, require by law that all individuals be charged the same premiums (community premiums) regardless of how “risky” they are to insure (SSCSAST, V.6, 2002). The Standing Committee on Social Affairs Science and Technology found that the private for-profit sector in the above mentioned countries was not extensive. Arguments Against an Expanded Role for the Private Sector The US spends more on health care than other OECD countries but clearly does not provide universal health care coverage. The costs are due to higher labour, administrative and malpractice insurance costs (Strategic Policy and Research Intergovernmental Affairs, 2001). Consider that in the United States 500,000 bankruptcies a year can be attributed to medical bills (Rachlis, 2000). Not to mention, per capita public spending on health care was higher in the US than in

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Canada “despite the fact that between 37 and 41 million Americans have no health coverage and most other Americans or their employers face substantial deductibles, fees and premiums” (CHA, 2001). It is not clear that the involvement of the private sector lowers costs. In the US, recent research has established that care in a for-profit hospital costs on average 19 per cent more than in a non-profit facility. While the US is not always the best example, it has also been found that when the NHS uses private clinics to try and clear the public wait lists it costs 40 per cent more than if the services had been provided in the public system (Pindera, 2005). In fact, evidence consistently indicates that the single payer model is the most cost effective. Administrative costs are lower and there is more bargaining power (Deber 1, 1999; CHA, 2001). Private for-profit organizations must make a profit. There is also a concern that through bundling of services in the private sector there will be more out-of-pocket expenses (Evans, 2000). It is also recognized that the Canadian publicly funded health care system is an economic advantage and helps to make Canada competitive (CHA, 2001). The incentive the current system provides for international corporations to locate in Canada should not be underestimated. Industry has indicated that it is less costly to do business in Canada because of lower health care costs for employees. “It costs US companies $3,100 per employee for the kind of health care Canadian companies can provide for $450” (The Star as quoted in CHA, 2001). If the current system is changed to create a role for private insurance it must be anticipated that the costs for purchasing private insurance will in all likelihood be shared between employers and employees, significantly diminishing our current economic advantage. Some evidence indicates that the efficiencies that are seen in a mixed system of public and private health care are due to competition rather than the presence of the private sector (Deber, 2002). And as the health care system focuses on improving cooperation and integration are the principles of competition what should be introduced into the mix? As previously noted, the expansion of the private sector is intended to allow individuals who can pay to receive faster care. This is supposed to remove people from the public wait list enabling those in the public system to receive faster care as well. However, there is already a shortage of health care professionals. If health care professionals are drawn into the private system it is difficult to see how this will decrease public sector waits. More staff will need to be trained, at public expense (Sanmartin et al., 2000). In the UK some of the longest wait times in the public system are found for hips, hernias, haemorrhoids, cataracts and gynaecologic problems, which also happen to be the procedures that the private sector focuses on providing. Regions with

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the longest wait times in the public system also have the highest rates of private surgery. It has been suggested that as physicians work both in the public and private sectors they have a financial incentive to keep their public wait list lengthy in order to encourage those patients who can afford to pay to purchase the service in the private sector (Sanmartin et al., 2000; Evans, 2000). In the UK, the waiting time for a barium enema in a public clinic is up to three months, compared with three days in a private clinic (Kent, 1999). This is not exclusive to the UK. Evidence on cataract surgery in Manitoba and Alberta, where physicians could perform cataract surgery in both the public and private sector, found that those who worked in both sectors had longer waiting times compared to those who only worked in the public sector (Sanmartin et al., 2000; CHA, 2001). Therefore, some countries prevent health care providers from practicing in both sectors (Flood, 2001). However, this once again brings up the issue of a shortage of health care personnel. It must also be realized that the private sector is most likely to provide high volume, less complicated procedures rather than cardiac surgery for example. This leaves the most expensive services to the public sector (Flood, 2001). Not to mention, if a medical error or some post operative infection were to occur the private sector is unlikely to be able to provide follow-up care. Therefore, the public system is likely to be required to provide care to these individuals without ways to recover the costs from the private facility (Romanow, 2002). If the private sector is to cover the more complex procedures evidence indicates that it must be required to do so by law or with heavy public subsidies (Flood, 2001). Efficiencies may not be “real” efficiencies as savings may be the result of operating in a non-unionized environment, meaning staff receive lower wages and benefits (Evans, 2000). Allowing people to privately purchase diagnostic services such as MRIs enable individuals to queue jump in the public system, which is inconsistent with the principles of fairness and equal access. Romanow (2002) concluded that allowing the private sector to become more involved in direct health service was not the best option for the future of health care in Canada. He argued that it is difficult to judge the quality of services and problems with the care may take a long time to become evident. There are also fewer options to choose from if the service is of poor quality. Similar to Romanow, the Standing Committee on Social Affairs, Science and Technology (v.6, 2002) concluded that “private insurance… should continue to be disallowed, provided that such publicly insured services are delivered in a timely fashion” (SCSAST, 2002). This decision was based on the following information, which supports the findings of other studies previously mentioned:

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In the UK and New Zealand private insurance encouraged development of private health care delivery. Physicians work in both the public and private sectors but mostly in the public sector and use their work in the private sector to top up their income. • In the UK, Germany and the Netherlands private health care insurers pay much more for the same health services than the public sector. For example, physicians can earn three times more in the private sector for the same service. • The UK regularly uses private clinics to pick up excess demand when public sector waiting times get too long. • In Australia, evidence indicates that those with private insurance get quicker access than those using the public system. This is also prevalent in Sweden and UK. • In Australia, there was no decrease in public sector waiting times after the government started subsidizing private health insurance. Interestingly, similar evidence from New Zealand and the UK “suggests that although long public waiting times tend to fuel demand for private health care insurance having it does not reduce the length of public waiting.” • Evidence from Australia and the UK indicate that private parallel delivery systems tend to offer a limited number of services, which are less complex and elective. Essentially this leaves the public system with the most complex and therefore expensive services. • In the Netherlands, the government regulates the maximum fees physicians may charge for treatment of privately insured patients. This has reduced the incentives for preferential treatment of privately insured patients. • In the Netherlands, two factors help prevent the development of a two tier system by prohibiting those who purchase private insurance from using the public system. The private sector must cover all of their needs. • In Germany it also appears to be true that those who are privately insured tend to receive more comprehensive and faster treatment than do people with public health care insurance. • In Germany and the Netherlands governments regulate private health care insurance in order to ensure affordable premiums and limit risk selection. • Data from 22 OECD countries indicate that increases in private spending on health care are associated over time with decreases in public health care funding. The Standing Senate Committee on Social Affairs, Science and Technology decided “on the basis of evidence from other countries …that no country in which a parallel private health care insurance and delivery system coexists with a public health care insurance scheme can serve as a model that should be adopted without change by Canada. Countries in which a parallel private system competes with publicly funded health care coverage exhibit a number of problems including risk selection and cream skimming, no reduction in waiting lists in the public sector, queue jumping and preferential treatment.”

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Identifying the Real Problems The question remains whether private health care will be the answer to the problems Canada’s health care system is currently experiencing. Think back to what the goals are, to decrease waiting lists, decrease costs, increase efficiency? Does the research indicate that private health care can mitigate these issues? It has been suggested that, “the debate over the role of private clinics is now being driven entirely by ideology and not by the business of whether it is, indeed, more or less costly for the public sector or the private sector to deliver health services“ (Pindera, 2005). Research suggests that the reason that there are long waits is due to insufficient funding, poor wait list management, inappropriate referrals (in other words individuals are on wait lists who should not be) and excessive compensation of health care professionals (McFarlane, 2005). Inappropriate use of current resources is also an issue. For example, it has been found that almost all terminal cancer patients die in acute care. This is not the best place to provide that type of care. The Edmonton Regional Palliative Care Program was able to bring about a 75 per cent reduction in the use of hospital beds by terminal cancer patients (Rachlis, 2000). Studies have repeatedly shown that the elderly are often using acute care beds when they would receive more appropriate care at home or in a long term care facility. The way in which the Canadian health care system is organized is inappropriate to meet the changing needs of today’s patient/client (Rachlis, 2000). As long wait times are one of the driving forces behind the call for more private sector involvement, consider what we know about wait lists in Canada: • •

no standardized method of prioritizing individuals on waiting lists; no auditing of wait lists (studies completed in other jurisdictions indicate that 20 to 50 per cent of those waiting either do not want the surgery, have already had it, have died or are on more than one waiting list); and • no understanding of how long people actually have to wait as there is no standardized way to measure wait times. (Rachlis, 2000). Alternative Solutions Even if the private for-profit sector is given a larger role within the Canadian health care system there remains other actions that should be taken to achieve those goals discussed earlier.

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In terms of reducing waiting times (Sanmartin et al., 2000): • Reduce demand for the service by: o auditing wait lists o reassessing patients on the wait list periodically • Prioritize patients awaiting the service by: o ensuring those with the most need are in the highest place on the queue o prioritizing across lists • Reorganize patterns of care by: o putting in place practices that will minimize missed appointments (one study found in the UK that prior notification by patients of their intent to miss an outpatient appointment would have reduced waiting times from 6 months to one week) o Sending patients to clinicians who have shorter wait lists o Reducing the amount of specialist physician follow-ups by using other providers “Advance directives in nursing homes have the potential to reduce hospital use by over 60 per cent and overall health care costs by one-third” according to Rachlis (2000). If the elderly who experienced falls were given a brief intervention at the time they receive care, hospital use could be reduced by over 50 per cent (Rachlis, 2000). The Standing Senate Committee on Social Affairs, Science and Technology called for the implementation of a Health Care Guarantee (similar to what was described as being in place in Sweden). Every major procedure or treatment would be evaluated to determine what is the longest a person could safely wait to receive that service. These predetermined times would be made public and if an individual’s wait were to exceed what is defined as acceptable the public system would pay for that person to receive the service in another jurisdiction. The Standing Senate Committee on Social Affairs, Science and Technology believed this was the best alternative to a parallel private system. Conclusion In order to determine NSAHO’s position on whether Canadians should be permitted to purchase medically necessary services (those services currently paid for exclusively through the public system) with private funds (out-of-pocket or private health care insurance), it first must be determined what is to be achieved by creating a greater role for the private sector (i.e. more choice, more autonomy, faster service, reduced costs, higher efficiency and effectiveness). Then determine if the evidence indicates that these objectives are best met through more private sector involvement or other methods. And, most importantly of all, what fits best with NSAHO’s vision for the Canadian health care system and our organizational values.

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References Canadian Health Care Association. But What Does the Evidence Really Say? 2005. Canadian Health Care Association Policy Brief. The Private-Public Mix in the Funding and Delivery of Health Services in Canada: Challenges and Opportunities. CHA Press, 2001. Conference Board of Canada. Challenging Health Care System Sustainability Understanding Health System Performance In Leading Countries. July 2004. Crowley, B., Ferguson, B., Zitner, D., & B. Skinner. Definitely Not the Romanow Report: Achieving Equity, Sustainability, Accountability and Consumer Empowerment in Canadian Health Care. Atlantic Institute for Market Studies. December 2002. Deber. R. Delivering Health Care Services: Public, Not-For-Profit, or Private? Commission on the Future of Health Care in Canada. Discussion Paper No. 17. August 2002. Deber, R., Gildner, A., & P. Baranek. Why Not Private Health Insurance? 1. Insurance Made Easy. Canadian Medical Association Journal. September 7, 1999. Deber, R., Gildner, A., & P. Baranek. Why Not Private Health Insurance? 2. Actuarial Principles Meet Provider Dreams. Canadian Medical Association Journal. September 7, 1999. Evan, R., Barer, M., Lewis, S., Rachlis, M., & G. Stoddart. Private Highway, One-Way Street: The Deklien and Fall of Canadian Medicare? Centre for Health Services and Policy Research. March, 2000. Flood, C. & T. Sullivan. Supreme Disagreement: The Highest Court Affirms an Empty Right. Canadian Medical Association Journal. July 19, 2005. Flood, C. & T. Archibald. The Illegality of Private Health Care in Canada. Canadian Medical Association Journal. March 20, 2001. Gordon, M., Mintz, J. & D. Chen. Funding Canada's Health Care System: A TaxBased Alternative to Privatization. Canadian Medical Association Journal, September 8, 1998. Health Canada. Canada Health Act Overview. Http://www.hcsc.gc.ca/medicare/chaover.htm

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Kent, H. New Zealand Embraces a Parallel Private System – and a Growing Gap Between Rich and Poor. Canadian Medical Association Journal, September 7, 1999. McFarlane, L. Supreme Court Slaps For Sale Sign on Medicare. Canadian Medical Association Journal. July 19, 2005. OECD. How Does Canada Compare. OECD Health Data 2005 Okma, K. What is the Best Public-Private Model for Canadian Health Care? IRPP May 2002. Pindera, L. Increasing Private Delivery of Publicly Funded Services? Canadian Medical Association Journal. January 18, 2005. Rachlis, M. M. Modernizing Medicare for the Twenty-First Century. BC Health Innovation Forum. British Columbia Ministry of Health and Ministry Responsible for Seniors. 2000. Romanow, R. Building on Values The Future of Health Care in Canada. Commission on the Future of Health Care in Canada. November, 2002. Sanmartin, C., Shortt, S., Barer, M., Sheps, S., Lewis, S. & P. McDonald. Waiting for Medical Services in Canada: Lots of Heat, but Little Light. Canadian Medical Association Journal. May 2, 2000. Standing Senate Committee on Social Affairs, Science and Technology. The Health of Canadians - The Federal Role Volume Six - Recommendations for Reform. October 2002. Standing Senate Committee on Social Affairs, Science and Technology. The Health of Canadians - The Federal Role Interim Report Volume Four - Issues and Options. September 2001. Standing Senate Committee on Social Affairs, Science and Technology. The Health of Canadians - The Federal Role Volume Three - Health Care Systems in Other Countries. January 2002. Strategic Policy and Research Intergovernmental Affairs. Health Care Systems: An International Comparison. May 2001.

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