By Yanick Labrie
Yanick Labrie from the Montreal Economic Institute looks at the role of private health care in Quebec. —Produced as part of the MUHC-ISAI's 2008 program
Québec’s health system has attracted particular attention since the Chaoulli decision, rendered by the Supreme Court of Canada in 2005. The Court ruled that, given the state’s inability to treat some patients within a reasonable delay, the prohibition on private health insurance for care monopolized by the public system violated rights to life and security of person guaranteed by the Québec Charter of Human Rights and Freedoms. The decision has had fewer practical consequences than anticipated, as the government decided to interpret the ruling rather narrowly. But it has sparked a reexamination of the health care system in many parts of Canada, especially as it seems that wait times for care are not improving despite the increased resources devoted to the health sector. The average wait in Québec between GP referral and specialist consult increased from 7.3 weeks in 1993 to 19.4 weeks in 2007, according to the Fraser Institute’s 2007 Waiting Your Turn report.
Since its inception in 1999, the Montreal Economic Institute (MEI) has published a number of studies examining the current workings of the health care system and looking at possible reforms that draw on experience in other countries. The present article provides an overview of Québec’s health sector based on some of the Institute’s recent work.
The current scope of the private sector
Contrary to what many people believe, there is already significant private participation in the health sector. In Québec, the Canadian Institute for Health Information estimates private spending on health care at $9.5 billion, or $1,236 per capita, in 2007. Private spending represents 28.3% of Québec’s total health care spending, which is similar to the average of Canadian provinces (29.4%); 38% of private spending goes towards medications and 32% to services not covered by the public system, such as dentists, optometrists, massage therapists, physiotherapists, psychologists, etc.
What can be paid for privately?
Not all health services are covered by the public system and the Québec government can exclude designated services. Some services are denied coverage because they are not considered medically necessary (cosmetic surgery, acupuncture, psychoanalysis, corrective eye surgery, etc.), while others are covered only for specific groups, defined by age or economic status (for example, dental care is covered for children under age 10 and people receiving social assistance). It is also possible to pay, within the public system, for greater comfort (private room, laundry, cafeteria service) or better quality (a fibreglass cast costs about $50, whereas a traditional plaster cast is free). Still other services (ultrasound, CAT scans, MRI, etc.) are covered only when provided in a public hospital. Long waits for MRI in public hospitals help explain the existence of a private market for this service, with no fewer than 15 scanners (half of the 32 private MRI machines in all of Canada ) in use in private facilities in Québec.
Who can provide private services?
All Québec physicians have the right to opt out of the public health insurance plan, which enables them to charge patients directly. This option has been open since the creation of the public plan, but only about 150 doctors out of a total of 19,000 have chosen this route. Patients who wish to consult an opted-out physician must pay the costs directly out-of-pocket, as private insurance is illegal. The law adopted in response to the Chaoulli decision allows private insurance for just three types of surgery (hip replacement, knee replacement and cataract removal), although the government could decide to enlarge this list. Part of the reason so few doctors decide to opt out is that the separation of public and private systems is strictly maintained and physicians who participate in the public plan are expressly forbidden from receiving private payment for publicly insured services.
Recently, a number of new companies with fairly controversial practices were established in Québec. Medecina offered clients appointments with specialist physicians (from either the public or private system) within 72 hours, at a cost of between $100 and $300. The company stated that the physicians in its network were filling unforeseen cancellations. A private surgery centre, Rockland MD, was charging “facility fees” despite the fact that several of its doctors were in the public system. Investigations by the Régie de l’assurance maladie du Québec concluded that these practices were illegal and the companies involved were forced to alter them. More recently, a Montreal public hospital (Sacré-Coeur) negotiated an agreement that would allow its doctors to use Rockland MD’s nurses, equipment and operating rooms.
The MEI will continue to examine the economic and legal characteristics of our health system and those of other OECD countries to see what changes could by made to improve productivity, with or without modifications to the Canada Health Act. Some of our questions include: whether there exists excess capacity among our human and material resources that could be channeled into increasing private delivery options; whether there is a basis for allowing private insurance for some medically necessary services but not others; and to what extent the Québec population would accept a system that allowed people who paid to receive faster treatment than was available in the public system*. A better understanding of these issues will help assess the possibilities available to Québec society at this juncture.
* A September 2006 Léger Marketing poll commissioned by the MEI found that 50% of Canadians and 60% of Quebecers would accept the province allowing those who wanted to pay for private care to obtain faster service, as long as the public system was maintained.
The Stockholm model
Canada is one of the rare countries in the world that maintains a public monopoly on the provision of health services considered medically necessary. The existence of a parallel private system is the norm in virtually all OECD countries, including France and Sweden.
The MEI began studying models in other countries and focused especially on reforms undertaken in Sweden in the 1990s. In Sweden, local governments are largely responsible for managing the health care system. Stockholm, the capital and largest administrative region, was the first to undertake major reforms. In 1992, the regional government established a program through which public sector employees could take on the independent management of some service units. In 1998, all public medical services (except emergencies) were put on the market in an open bidding process. Today, more than 200 small and medium-size health care providers have replaced the monopoly state provider. Many of these were created by nurses who, unhappy with the poor working conditions and modest salaries of the public system, leapt at the opportunity to launch their own companies. As well, one of Stockholm’s seven hospitals was privatized in the late 1990s, and has since become the most efficient and least costly hospital in the city, with productivity 10% to 15% higher than in other hospitals.