INTRODUCTION
Most Canadians receive medical treatment through what is colloquially known as “Medicare on the provinces and territories.” The Canada Health Act of 1984 serves as its guiding legislation, and the program is national in scope. 81 The Romanow Report from 2002 found that Canadians hold “basic values that assure national health care insurance for everyone, wherever they live in the country” regarding having access to publicly funded health services.
About 70% of Canadians’ medical expenses are covered by Medicare, while the private sector pays for the remaining 30%.
Prescription medicines, vision care, and dental work are services often not covered by Medicare; therefore, the remaining 30 percent represents those costs. 65–75 percent of Canadians have supplementary health insurance due to the aforementioned factors; many obtain it through their employers or utilize secondary social service programs related to extended coverage for families receiving social assistance or vulnerable demographics like seniors, minors, and people with disabilities.
The Canadian Institute for Health Information (CIHI) estimates a moderate annual rise in healthcare costs of about one percent due to Canada’s aging population by 2019. Sixty-nine percent of Canadians reported being in excellent or very good physical health in the 2020 Canadian Perspectives Survey Series (CPSS), up from 60 percent in the previous year. Self-reported rates of tobacco usage, physical inactivity, poor diet, and excessive alcohol use were all above 80 percent among Canadian adults in 2019. Canada’s adult obesity prevalence is among the highest in the OECD, contributing to roughly 2.7 million cases of diabetes (types 1 and 2 combined). Sixty-five percent of deaths in Canada can be attributed to just four chronic diseases: cancer (the leading cause of death), cardiovascular disease, respiratory illness, and diabetes.
According to the Canadian Institute of Health Information, healthcare spending in 2021 totaled $308 billion, or 12.7% of GDP. Compared to other OECD countries, Canada’s health-care system has the fourth-highest per-person costs. Since the early 2000s, Canada’s health performance has been comparable to or better than the OECD average. On OECD metrics, Canada routinely achieves better-than-average rankings for wait times and access to care, scoring about average for care quality and resource use. Canada’s healthcare system was placed 11th out of the 11 most developed countries in the Commonwealth Funds 2021 assessment. A greater infant mortality rate, a higher frequency of chronic diseases, longer wait times, low provision of after-hours care, and a lack of prescription medications and dental coverage were flaws of Canada’s system.
Private sector funding
The Canada Health Act (CHA) regulates private sector funding. It establishes rules for provincial/territorial health insurance plans to receive full federal government transfer payments. Service providers cannot charge insured individuals for CHA-covered services (medically necessary care provided by hospitals or physicians). Several provinces have outright bans on these types of payments.
About 30 percent of overall health spending “consists mostly of health expenditures by households and private insurance corporations” in the private sector. In 2018, the private sector covered 31% of all healthcare costs. Private insurance and individual household budgets constitute the bulk of this category.
The private sector spends about two-thirds of this total on medications and medically-required services like dental and vision care. The government pays for only a fraction (10%) of these services. Private insurance firms accounted for 41% of all healthcare spending in 2017. Personal expenditures amounted to $49.0 billion, or 49% of total private sector expenditures.
According to a 2006 in-depth CBC documentary, while the Canadian system is largely publicly funded, the vast majority of its services are provided by private businesses. In 2006, most medical professionals did not get an annual salary but were paid a charge per visit or service. Doctor Albert Schumacher, a past president of the Canadian Medical Association, claims that “about 75% of Canadian health care services are given privately but subsidized publically.”
“Medical professionals who treat patients directly, be they primary care physicians or specialists, are typically not paid a salary. They are local hardware shops of a modest scale. The same holds for radiology and pathology labs. More and more services that used to be publicly supported are being provided at the expense of individuals or their insurance providers. In a sense, privatization has become passive.”
Doctor Albert Schumacher, as quoted by CBC on December 1, 2006
The provinces and territories have the authority to set regulations for and license private medical facilities. Private clinics are permitted to charge at or above the agreed-upon fee schedule for services rendered to uninsured patients or for treatment of uninsured patients. Anyone who is not a Canadian resident, not covered by workers’ compensation or vehicle insurance, or offering uninsured services may fall into this category. Those who advocate for a larger part of private funding have voiced opposition to this clause.
Canadian healthcare policy
The primary objective of the Canadian government in terms of healthcare 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,” as stated in the Canada Health Act (CHA) of 1984. The federal government ensures that all Canadians have “reasonable access to the medically essential hospital, physician, and surgical-dental services that necessitate a hospital” by sending money to provinces and territories through the Canada Health Transfer (CHT).
In his widely cited book from 1987, Malcolm G. Taylor explains how the current system that provides healthcare to “Canadians based on need, regardless of financial circumstances” came to be through negotiations between the federal government and the provinces over “issues of jurisdiction, cost allocations, revenue transfers, and taxing authorities.”
Monitoring and measuring healthcare in Canada
Regarding healthcare in Canada, the Health Minister is in charge of Health Canada, the ministry in charge of public policy and its implementation. This contributes to keeping Canadians, who are “among the healthiest in the world as measured by longevity, lifestyle, and effective utilization of the public health care system,” in good shape.
Health Canada is a federal agency that regularly releases nationwide healthcare surveys. Patients who require services that are not considered life-threatening are seen at the earliest available appointment in their facility of choice on the next available date and time.
The Canadian Health Services Research Foundation (CHRSF) was established as part of the 1996 federal budget in response to the country’s desire to modernize its healthcare system by funding joint research efforts between “provincial governments, health institutions, and the private sector.”
The Canadian Institute for Health Information (CIHI) is a nonprofit organization that receives funding from Canada’s federal, provincial, and territorial governments to disseminate healthcare information to the public. The Canadian Institution for Health Information (CIHI) was established in 1994 to serve as a “coordinating council and an independent institute for health information” across the nation in response to the National Task Force on Health Information’s 1991 report, “Health Information for Canada.” In 1994, the Management Information Systems (MIS) Group and the Hospital Medical Records Institute (HMRI) merged to become the CIHI.
The effectiveness of healthcare services is assessed, and recommendations for enhancement are included in the reports. Despite having equal levels of education and immigration, regions with similar characteristics were shown to have varying degrees of efficiency in health care provision. Based on the findings, the death rate might be reduced by 18%-35% if improved system efficiency was prioritized. The research found that if physician leadership was supported and the involvement of healthcare professionals was facilitated, significant efficiency benefits might be achieved. By enabling regions to identify the needs of their general population and more effectively meet those needs through the target-specific allocation of funds, as well as by facilitating the exchange of information and interaction between health providers and government officials, the study further suggested that flexible funding would help improve regional care.
For the past 24 years, beginning in January 2021, the CIHI has published an in-depth study updating “National Health Expenditure Trends” that contains data tables.
Other areas where CIHI has conducted research include hospital care, organ, and joint replacements, health system performance, seniors and aging, health workforce, health inequality, quality and safety, mental health and addictions, pharmaceuticals, international comparisons, emergency care, patient experience, residential care, population health, community care, patient outcomes, access and wait times, children and youth, and First Nations, Inuit, and Métis.
In 2003, the Health Council of Canada (HCC) was founded as an independent national institution to evaluate and report on Canada’s healthcare system as part of the First Ministers’ Accord on Health Care Renewal.
From 2005 to 2014, the HCC published 60 studies covering healthcare access and wait times, healthcare for elders, indigenous peoples, pharmaceutical management, primary healthcare, and healthcare in the home and community.
Private health insurance
In Canada, private health insurance is typically offered by an employee’s place of employment.
A compound annual growth rate (CAGR) of 6.4% between 1988 and 2016 translated to “health care spending from private insurance of $788 per capita” in 2016.
Seventy-five percent of Canadians had supplementary private health insurance in 2004, according to an OECD assessment.
Out-of-pocket expenses
Individuals’ out-of-pocket spending increased by 4.6% yearly from 1988 to 2016. As of the year 2016, it was $972 for each individual.
Major healthcare expenses
Spending on hospitals increased from $45.4 billion to $51 billion in 2009, or 28.2% of all health care spending, followed by pharmaceuticals at $30 billion, or 16.5% of total spending, and medical services at $26 billion, or 13.4% of total spending.
Between 1975 and 2009, the percentage of health care spending that went to hospitals and doctors fell while spending on drugs rose. The cost of drugs has climbed rapidly among the top three medical expenditures. Drugs cost more than doctors combined in 1997. In 1975, the three largest categories of healthcare expenditures were hospital care ($5.5B; 44.7%), physician care ($1.8B; 15.1%), and drug expenditures ($1.1B; 8.8%).
In 2018, hospitals incurred the highest healthcare costs at 26.6%, followed by pharmaceuticals (including prescription and over-the-counter medications) at 15.3% and physician services at 15.1%.
Hospitals
As in previous years, hospitals accounted for the largest share of healthcare spending in Canada in 2018, at 26.6% of the total.
In Canada, hospital treatment is provided through establishments supported by the government. Most public hospitals must stick to their budgets because they are considered separate institutions incorporated under provincial corporations. The 1990s saw a widespread trend of hospital mergers, which reduced competition in the healthcare industry.
In 2010, the OECD found differences in care provision among Canada’s provinces. The study also discovered a disparity in hospital admissions based on population size and province. Because of a shortage of medical professionals and facilities, the hospitalization rate tends to be greater in less populated provinces.
Pharmaceuticals
As of 2018, pharmaceuticals accounted for 15.3% of Canada’s overall healthcare budget, second only to physician services.
Public drug program spending in 2019 was $15 billion, an increase of 3% over 2018, per the CIHI report published in December 2020. The cost of diabetes medication accounted for nearly 26% of the total rise in drug spending. The treatment of hepatitis C was the second leading cause of rising medicine prices in 2018. This dropped by 18% in 2019 as fewer people used these medications. For chronic inflammatory diseases, including rheumatoid arthritis and Crohn’s disease, public spending on biologics climbed from 9% to 17% in 2019.
In terms of yearly health expenditures, medicine has consistently ranked second behind hospitals since 1997, when they first overtook the cost of physician services. Between 1975 and 2009, the percentage of health care spending that went to hospitals and doctors fell while spending on drugs rose. The cost of drugs has climbed rapidly among the top three medical expenditures. Drugs cost more than doctors combined in 1997. In 1975, the three largest categories of healthcare expenditures were hospital care ($5.5B; 44.7%), physician care ($1.8B; 15.1%), and drug expenditures ($1.1B; 8.8%).
The House of Commons Standing Committee on Health reported in April 2018 that “spending on medications delivered outside hospitals accounted for 85% of overall drug expenditures in 2017,” citing data from 2016.
All “medicines utilized within the hospital setting…out of hospital drug expenses are paid for by private insurance and individuals, as well as by provincial health insurance for specified population categories,” according to the Canadian Health Act (CHA). “43% of out-of-hospital medicine” is covered by public provincial and territorial health insurance, “35%” is covered by private insurance, and the remaining “22%” is paid by individuals out of pocket.
The government regulates drug prices to be consistent with the international mean.
FAQs
Can you get private healthcare in Canada?
Canada is unusual among developed nations because its healthcare system is privately based. Despite Canada’s publicly financed healthcare system, 75% of healthcare services are provided privately.
How much does private healthcare cost in Canada?
How much extra money do you need to pay monthly for private or supplementary health insurance in Canada? Families in Canada spend $4,000 annually on private or supplementary health insurance.
Is private healthcare free in Canada?
However, all U.S. citizens and permanent residents have access to no-cost hospital and doctor visits at the time of service. Provinces and territories often give limited coverage to specific populations to help them pay for excluded services like outpatient prescription medicines and dental care.
Check out our other articles