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13 March 2014March 13, 2014

For a Universal and Efficient Health Care System: Six Reform Proposals

Research Paper proposing six concrete ideas for reforming Quebec's health care system that are inspired by the experience of OECD countries

For a Universal and Efficient Health Care System: Six Reform Proposals

There are some especially important lessons to be drawn from the experiences of Germany, England, Denmark, France and Italy, all countries whose health care systems are based on the principle of universal care. In this publication, the MEI is proposing six concrete ideas for reforming Quebec's health care system that are inspired by the experience of these countries. These reform proposals, which are all interrelated, would likely lead to substantial improvements both to the quality of care provided to patients and to their access to that care.

Media release :: Provincial election campaign - To the different political parties, the MEI proposes six reform ideas for a universal and efficient health care system

The State of Quebec's Health Care System in Numbers

 

Related Content

Pour un système de santé mixte (Le Journal de Montréal, March 13, 2014)

Market solutions should be used to improve health care (The Gazette, March 21, 2014)
  Interview (in French) with Yanick Labrie (ARGENT business news network, March 13, 2014)

Research Paper prepared by Yanick Labrie, Associate Researcher at the Montreal Economic Institute.

SUMMARY


Quebec’s public health care system is becoming increasingly costly for taxpayers. Since the early 1980s, health care spending has outpaced the growth of the economy. Taking inflation into account, public health care spending per capita in the province of Quebec has risen by more than 90% in 30 years, to reach nearly $4,000 in 2013.

Long waiting lists now seem to be a structural characteristic of the system. The median wait time between visiting a general practitioner and getting treatment by a specialist has more than doubled in the past twenty years, from 7.3 weeks in 1993 to 17.8 weeks in 2013. According to studies conducted by the Commonwealth Fund, Quebec has been dead last for several years in international rankings of a dozen developed countries in terms of wait times in the emergency room and to see a doctor.

These access problems are aggravated by the inability of a substantial segment of the population to find a family doctor. In 2012, nearly 25% of the Quebec population still had no regular doctor. As a result, many patients are forced to show up at an emergency room for health problems that could have been treated more effectively and less expensively in a doctor’s office.

Since the beginning of the 2000s, several working groups and commissions have proposed reforms aiming, among other things, to make more room for the private sector and for competition in Quebec’s health care system. Despite these recommendations, it is clear that patients still have very few options when it comes to health services. The provision of treatments considered “essential” remains largely monopolized by the public sector. As for the role of private health insurance, it is limited solely to the coverage of services that are not insured by the public plan.

No other industrialized OECD country imposes as many restrictions upon its citizens in the field of health care. In fact, the existence of a mixed public-private health care system is the norm in almost all OECD countries. It is apparent that countries that allow a lot of room for the for-profit private sector in the provision of care and that promote competition between the various care providers generally achieve better results than either Quebec or the rest of Canada in terms of accessibility and service quality.

There are some especially important lessons to be drawn from the experiences of Germany, England, Denmark, France and Italy, all countries whose health care systems are based on the principle of universal care.

In this publication, the MEI is proposing six concrete ideas for reforming Quebec’s health care system that are inspired by the experience of these countries. These reform proposals, which are all interrelated, would likely lead to substantial improvements both to the quality of care provided to patients and to their access to that care.

1) Promote freedom of choice for patients and competition between care providers
2) Promote the emergence of a true private hospital market
3) Increase funding for health care through duplicate private health insurance
4) Allow mixed practice in order to increase the supply of medical specialists
5) Fund hospitals based on services rendered
6) Make the publication of hospital performance indicators mandatory

Contrary to certain beliefs, these reforms have in no way constituted a threat to the goals of universality and accessibility to care. On the other hand, they have provided substantial benefits to patients, especially in terms of improving wait times and service quality.

INTRODUCTION

It is no secret that Quebec’s public health care system is becoming increasingly costly for taxpayers. Since the early 1980s, health care spending has outpaced the growth of the economy. Taking inflation into account, public health care spending per capita in the province of Quebec has risen by more than 90% in 30 years, to reach nearly $4,000 in 2013.[1] A recent study estimates that if its current rate of growth continues, it could actually take up almost 70% of the government’s budgetary spending by the year 2030.[2]

Of course, not all sources of increased spending are problematic. New medical technologies, among other things, even if they are sometimes quite expensive, can provide valuable services,[3] and even reduce other costs. They can, for instance, replace surgical procedures or reduce the number of hospital visits, thereby leading to a decrease in total health care spending.

In an efficient industry, greater expenses are not necessarily cause for concern, especially if the quality of goods and services received is better. Moreover, there is nothing unusual about a population demanding more of a certain kind of service as its income grows. Rising standards of living are in fact one of the factors responsible for the growth of health care spending in recent decades.[4]

However, when increased expenses do not lead to better services, there is every reason to be concerned. In this regard, the results of Quebec’s public health care system are far from satisfactory, despite the growing volume of resources devoted to the system over the years. The population is not getting its money’s worth compared to the vast majority of OECD countries,[5] and the situation is not improving.

Long waiting lists now seem to be a structural characteristic of the system. The median wait time between visiting a general practitioner and getting treatment by a specialist has more than doubled in the past twenty years, from 7.3 weeks in 1993 to 17.8 weeks in 2013.[6] According to studies conducted by the Commonwealth Fund, Quebec has been dead last for several years in international rankings of a dozen developed countries in terms of wait times in the emergency room and to see a doctor (see Figures 1 to 3 on iedm.org).[7]

Rarely a week goes by without some media outlet in Quebec taking stock of patients facing problems accessing primary care. According to a large study recently made public, nearly one Quebecer in five (and one in three among the poorest segment) reports having unmet needs when it comes to health care, primarily due to long wait times or the impossibility of seeing a doctor when needed (see Figure 4 on iedm.org).[8] Despite increased amounts of money injected into the health care system in the past 25 years, it is undeniable that the problem of overcrowded emergency rooms remains as serious as ever.[9] In 2013, the average wait on a stretcher in emergency rooms stood at 17.6 hours, which is nearly two hours longer than a decade ago.[10]

These access problems are aggravated by the inability of a substantial segment of the population to find a family doctor. In 2012, nearly 25% of the Quebec population still had no regular doctor.[11] As a result, many patients are forced to show up at an emergency room for health problems that could have been treated more effectively and less expensively in a doctor’s office.[12]

All of these delays in the health care system are not only distressing for patients on a basic human level, but also very expensive from an economic standpoint. According to a report from the Fraser Institute, the 214,144 Quebec patients waiting for medical treatment in the public system in 2012 suffered combined losses of salaries amounting to some $200 million.[13]

Given that traditional attempts to solve the problem of wait times have been unsuccessful, a majority of Quebecers wants government to explore private sector options. According to a poll released in January 2013, two out of three Quebecers (66%) said they agreed that “[patients] should be given the right to buy private health care within Canada if they do not receive timely access to services in the public system,” even if this might make access to care more unequal.[14]

An earlier poll commissioned by the MEI and conducted by Léger Marketing in September 2006 showed that a similar proportion of Quebecers (60%) would be in favour of the government allowing quicker access to health care for those willing to pay for it in the private sector, while maintaining the current free and universal health care system.[15] These polls suggest that there is a demand for health care financed and provided privately rather than exclusively by the public sector (as is currently the case for that basket of treatments considered to be medically required).

No excuse not to reform

Contrary to popular belief, it is not federal legislation but rather provincial laws that regulate almost all of the public health care system in Canada.[16] The Canada Health Act establishes the conditions that the provinces and territories must respect in order to receive the full amount of the federal government’s financial contribution. These conditions are not binding. A provincial law that violates the Canada Health Act is therefore not invalid or illegal. The sanction is purely political and its repercussions are financial, not legal.

A provincial government thus has no excuse for keeping itself from reforming the health care system by incorporating market solutions, modelled after successful measures carried out in the vast majority of OECD countries. It can already, without any major changes to the legal rules that maintain the government’s monopoly, integrate notions like flexibility and competition into the public system. It can also expand its recourse to the private sector for the provision of care, insofar as it continues to finance in full all insured treatments and that this larger place granted to the private sector does not infringe upon the condition that the system be publically administered, as spelled out in the Canada Health Act.

It is the admixture of public and private financing that poses a problem. It would therefore be impossible to allow a patient to pay to obtain faster service provided by the public sector, or inversely to partially finance with public funds treatment provided in a parallel private system, without contravening the Canada Health Act. The Quebec government could, however, stop insuring certain services, or repeal certain articles of the Health Insurance Act and the Hospital Insurance Act in such a way as to allow the development of a private sector alongside the public sector in the province, where patients would be free to pay for all medically required services either directly or with private insurance.

Six reform ideas

In this publication, the MEI is proposing six concrete ideas for reforming Quebec’s health care system. These reform proposals, which are all interrelated, would likely lead to substantial improvements both to the quality of care provided to patients and to their access to that care.

1) Promote freedom of choice for patients and competition between care providers
2) Promote the emergence of a true private hospital market
3) Increase funding for health care through duplicate private health insurance
4) Allow mixed practice in order to increase the supply of medical specialists
5) Fund hospitals based on services rendered
6) Make the publication of hospital performance indicators mandatory

These reform proposals are based on an exhaustive review of the literature: Over 250 books, studies and reports on health care policy were consulted and analyzed in depth in the context of this research project. The present Paper is also inspired by the work carried out by different MEI researchers in recent years.[17]

Since many countries have faced health care challenges similar to those now faced by Quebec—and others continue to face them—a thorough examination of the main reforms undertaken in several of these countries was carried out. There are some especially important lessons to be drawn from the experiences of Germany, England, Denmark, France and Italy, all countries whose health care systems are based on the principle of universal care.

Several observations arise from this broad analysis. First, the existence of a mixed public-private health care system is the norm in almost all OECD countries. It is apparent that countries that allow a lot of room for the for-profit private sector in the provision of care and that promote competition between the various care providers generally achieve better results than either Quebec or the rest of Canada in terms of accessibility and service quality.

Next, Canada is an exception in the indus­trialized world in limiting the role of private health insurance to the coverage of only those services that are not insured by the public system. And yet, many foreign experiments demonstrate that the instrument of duplicate private health insurance can help increase health care funding and relieve the pressure on the public system.

Finally, despite the fear of a certain portion of the population that greater reliance on the private sector will lead to a “two-tier” system, these international examples show that notions of freedom of choice, competition and profit are not incompatible with health care that is accessible to all.

Read the Research Paper on iedm.org

Notes

[1]. Canadian Institute for Health Information, National Health Expenditure Trends, 1975 to 2013, p. 163. The data have been adjusted to account for inflation using the Consumer Price Index (CPI) for Quebec compiled by Statistics Canada, CANSIM Table No. 326-0020. In 1980, public health care spending in real terms was $1,992.47 (in 2012 dollars).
[2]. Nicolas-James Clavet, Jean-Yves Duclos, Bernard Fortin, Steeve Marchand and Pierre-Carl Michaud, Les dépenses de santé du gouvernement du Québec 2013-2030 : projections et déterminants, Research Report No. 2013s-45, Centre interuniversitaire de recherche en analyse des organisations (CIRANO), December 2013, p. 11.
[3]. See David M. Cutler, “The Lifetime Costs and Benefits of Medical Technology,” Journal of Health Economics, Vol. 26, No. 6, 2007, pp. 1081-1100; William J. Baumol, The cost disease: why computers get cheaper and health care doesn’t, Yale University Press, 2012, pp. 87-93.
[4]. Robert E. Hall and Charles I. Jones, “The Value of Life and the Rise of Health Spending,” Quarterly Journal of Economics, Vol. 122, No. 1, 2007, pp. 39-72.
[5]. Brett J. Skinner and Mark Rovere, Value for Money from Health Insurance Systems in Canada and the OECD, Fraser Institute, October 2010; Jack Kitts et al., Better health, better care, better value for all: Refocusing health care reform in Canada, Health Council of Canada, September 2013.
[6]. Bacchus Barua and Nadeem Esmail, Waiting Your Turn: Wait Times for Health Care in Canada, 2013 Report, Studies in Health Policy, Fraser Institute, October 2013, p. 37.
[7]. Jean-Frédéric Lévesque and Mike Benigeri, L’expérience des soins des personnes représentant les plus grands besoins, le Québec comparé, Résultats de l’enquête internationale sur les politiques de santé du Commonwealth Fund de 2011, Le Commissaire à la santé et au bien-être, Government of Quebec, 2012; Mike Benigeri and Olivier Sossa, Perceptions et expériences de soins de la population: le Québec comparé, Résultats de l’enquête internationale sur les politiques de santé du Commonwealth Fund de 2013, Le Commissaire à la santé et au bien-être, Government of Quebec, January 2014.
[8]. Jean-Frédéric Lévesque et al., “Emerging organisational models of primary healthcare and unmet needs for care: insights from a population-based survey in Quebec province,” BMC Family Practice, Vol. 13, No. 66, 2012.
[9]. The problem of overcrowded emergency rooms is not a new one: It was already being observed in the 1980s. See Martha Gagnon, “Les omnipraticiens lancent un nouvel appel pour décongestionner les urgences,” La Presse, December 7, 1988, p. A3.
[10]. Daphné Cameron, “Palmarès des urgences : toujours plus d’attente,” La Presse, May 8, 2013; Pascale Breton, “Urgences : ‘c’est clair que ça se détériore’,” La Presse, February 7, 2007.
[11]. Statistics Canada, Table No. 105-0501, Health indicator profile, annual estimates, by age group and sex, Canada, provinces, territories, health regions (2012 boundaries) and peer groups. As part of another study, the Institut de la statistique du Québec estimates that 13% of Quebecers are unable to find a family doctor despite their efforts to do so and that another 8% of the population does not feel the need to have one. Institut de la statistique du Québec, Enquête québécoise sur l’expérience des soins 2010-2011. Le médecin de famille et l’endroit habituel des soins : regard sur l’expérience vécue par les Québécois, Vol. 2, March 2013, p. 35.
[12]. François-Pierre Gladu, “La pénurie réelle ou ressentie de médecins de famille au Québec : peut-on y remédier?” Le Médecin de famille canadien, Vol. 53, 2007, pp. 1871-1873.
[13]. Nadeem Esmail, “The private cost of public queues for medically necessary care,” Fraser Alert, July 2013.
[14]. Environics Institute, “What Canadians think about their health care system,” January 2013.
[15]. Montreal Economic Institute, “The Opinion of Canadians on Access to Health Care,” Results of a poll conducted by Léger Marketing, September 2006.
[16]. On this topic, see the MEI’s Economic Note entitled “Health Care Reforms: Just How Far Can We Go?” April 2003; Gerard W. Boychuk, “The Regulation of Private Health Funding and Insurance in Alberta Under the Canada Health Act: A Comparative Cross-Provincial Perspective,” The School of Policy Studies, SPS Research Papers, Vol. 1, No. 1, University of Calgary, December 2008.
[17]. Numerous researchers have contributed to this work over the years, including Germain Belzile, Marcel Boyer, Julie Frappier, Norma Kozhaya, Mathieu Laberge, Valentin Petkantchin and Frederik Roeder.


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