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Présentation devant la Commission Romanow sur l’avenir des soins de santé au Canada

Présentation de M. Michel Kelly-Gagnon, directeur exécutif de l’Institut économique de Montréal, devant la Commission Romanow

Merci d’avoir accepté de nous entendre, nous en sommes très honorés car nous sommes conscients qu’un grand nombre de groupes ont demandé à être entendus.

Je suis directeur exécutif de l’Institut économique de Montréal. L’Institut économique de Montréal est un «think tank» privé et indépendant qui se veut le pendant québécois francophone du C.D. Howe Institute, ou autre organisme semblable.

Nous avons débuté nos opérations le 1er juin 1999, et opérons actuellement sur la base d’un budget annuel d’environ 500 000 $.

Pour ceux qui souhaitent en savoir davantage sur l’Institut économique de Montréal, je vous réfère au dépliant bilingue de couleur bleu qui vous a probablement été distribué.

Avant de présenter le docteur Coffey et de lui céder la parole, je voudrais partager avec vous deux observations, toute simples, mais à mon avis quand même cruciales.

Tout d’abord, pour avoir un débat rationnel et constructif à propos de la réforme du système de santé Canadien, il faut savoir distinguer deux choses, soit d’une part:

  • un monopole étatique sur l’assurance et la production des soins de santé;
  • et, d’autre part, le principe de l’universalité des soins de santé. Il faut noter que j’utilise ici ce terme non pas dans un sens technique ou juridique, mais simplement pour exprimer l’idée selon laquelle tous les Canadiens, nonobstant leur niveau de revenus, doivent avoir accès à un panier raisonnable de soins et de services de santé de qualité, et ce à l’intérieur d’un délai raisonnable.
  • Je prend le temps de formuler cette remarque car j’observe que certains groupes et même certains politiciens, entretiennent la confusion entre ces deux choses bien distinctes.

    Il existe peut-être des mérites à l’un et à l’autre mais, encore une fois, c’est à mon avis une grave erreur que de les confondre. On nuit ainsi sérieusement à la rationalité du débat.

    D’ailleurs, l’expérience de la très grandes majorité des pays de l’OCDE nous démontre qu’il s’agit bel et bien de deux choses distinctes.

    De plus, il est faux de prétendre qu’une plus grande présence du secteur privé mènerait nécessairement à une américanisation de notre système de santé. Encore une fois, l’expérience concrètes des pays membres de l’OCDE situés en Europe et en Scandinavie appuie cette prétention.

    Sans plus tarder, il m’est agréable de vous présenter le docteur Edwin Coffey.

    M. Coffey est chercheur associé à l’Institut économique de Montréal, professeur adjoint retraité de la Faculté de médecine de l’Université McGill, et aussi coauteur d’une de nos publications intitulée Universel Private Choice: Medicare Plus, publication dont s’inspire notre présentation d’aujourd’hui.

    * * *

    Présentation de J. Edwin Coffey MD FRCSC FACOG, devant la Commission Romanow

    General Comments

    I would also like to thank the Commissioner and his staff for this opportunity to present our proposals for reshaping and enhancing the future of health care in Canada.

    You have received a copy of our presentation today and a copy of the Research Study that I co-authored with Dr Jacques Chaoulli. The second edition of this study was published September 2001 by the Montreal Economic Institute under the title of

    Universal Private Choice: Medicare Plus. A concept of health care with quality, access and choice for all Canadians

    .(2) French and English versions are available on the Institute’s Web site. The concrete proposals that I will outline are largely drawn from this research study.

    Before presenting our proposals for the future, I would like to briefly draw your attention to the past, to the 1964 report of the Royal Commission on Health Services by your predecessor, Commissioner Justice Emmett Hall.(3)

    In that historic report Commissioner Hall expressed some basic concepts and advice to Canadians. Together, with their elected representatives in Ottawa and the provinces, they were about to undertake a process of shaping and modelling the provincially administered prototypes of our current publicly funded health insurance programs, commonly known as medicare.

    I would like to mention a few of Justice Hall’s words of advice. Given the political and special interest group tensions that were developing across the country at that time, his words were both cautionary and courageous. Here are some examples:

  • He emphasized tolerance, diversity and innovation in shaping the health system;
  • He strongly supported individual freedom and personal responsibility in health matters, all of which he envisioned as part of the parallel and private voluntary sector that would enhance, rather than threaten, the overall objective of achieving the highest possible health standards for all of our people;
  • He urged Canadians and their governments not to become involved in a battle of semantics;
  • He declared his opposition to state medicine in which all the providers of health services are under the control of the state;
  • He advised that hospitals should enjoy freedom from political control or domination and that administration at the local level should be encouraged;
  • He insisted that the universal programs be based upon freedom of choice on the part of the citizens and on services provided by free and self-governing professions;
  • He interpreted the patient’s freedom broadly, to include a right to seek services from physicians practising independently from the public program and the right to purchase additional insurance coverage as he or she may see fit, from commercial and other carriers;
  • He acknowledged the need for participation and co-operation of the health professions, governments, and all kinds of institutions – private, voluntary, professional and public. By inference, this would include all the health system components not under the ownership or compulsory administration or control of governments, such as the private medical, hospital, and health insurance sectors;
  • He stated that the provincial programs should not be required to conform to any rigid pattern;
  • He did not envision a centralized monolithic bureaucratic health system organization.
  • There are differing opinions as to how successfully the federal and provincial policy advisors and legislators reflected Justice Hall’s advice, in shaping the prototypes of our publicly funded health insurance programs in the provinces and territories.

    My personal opinion has been shaped by four decades of frontline experience before and after the commencement of medicare, in both general practice and specialized medicine, in both rural and city environments, and in academic and leadership roles in university hospital centres and in provincial, national, and international medical organizations.

    During that time I have witnessed a medical and hospital system that was slowly deteriorating under the exclusive central planning and control of governments, to the detriment of patients.

    I have witnessed large numbers of dedicated physicians, nurses and other health care providers become increasingly demoralised by their inability, within an impoverished and dysfunctional health system, to provide the quality of health services for which they were trained and to provide timely access and choices that patients expect.(7, 8)

    I have been disillusioned by the compulsory and exclusive dependence of virtually all the medical and hospital system on government funded and government run health insurance monopolies, and by the failure of this approach to adequately sustain the system.

    I have seen patients, hospitals, and physicians further encumbered and endangered, by the prohibition or discouragement of parallel private medical and hospital services and insurance, through provincial and federal legislation, like no other health system in the western world.

    Although my conclusions are disappointing, they are not without hope and optimism. The favourable change in public opinion over the last four years, towards a greater role for the private sector in health care and insurance as long as the public system is not jeopardised, is encouraging.

    It should stimulate federal and provincial governments to remove the prohibitory and discouraging provisions in health legislation that affect the private sector. This would bring Canada’s health legislation back in line with the better performing OECD countries.

    Justice Hall’s liberal and tolerant vision of a patient centred and freedom dominated health care and health insurance environment has not yet been realized.

    He had anticipated a dynamic and innovative mix of public, private and voluntary health care and health insurance services where the publicly funded sector would, by circumstance, be the main player, but he did not recommend that provincial and territorial governments should have health insurance and health care monopolies.

    Nor did he suggest that the federal government should discourage provinces from permitting patients, physicians and hospitals to voluntarily contract for private medical or hospital services.

    Nor did he recommend the banning of private health insurance or private contracting of medical services in hospitals, nor the revoking of a physician’s attending staff appointment to hospitals should a physician choose not to participate in the provincial health insurance monopoly.

    Contrary to the explicit warnings of Justice Hall:

    – to avoid health programs of the extreme left or right,
    – to avoid state medicine and nationalization of health services,
    – and to safeguard the freedom of choice of citizens and professionals in health, elements so vital in a free society,

    well-meaning but poorly advised federal and provincial politicians introduced these serious impediments through federal and provincial health legislation or regulation.

    In doing so, they acted out of line with the health systems of all other OECD countries.

    This has been very detrimental to the overall performance of Canada’s health system, which is now ranked 30th in the world by the World Health Organization, and which is why we are all in this room today.(9)

    Mr Commissioner, you now have an opportunity to revisit, reflect, and make recommendations concerning these unfortunate legislative, structural, and financial flaws that prevent all sectors of the health care field – public, private and mixed – from achieving the high standards of quality, access, choice and performance that Justice Hall intended, that your Commission wants, and that the majority of Canadians expect.

    Your optimistic approach, as described in the Montreal Gazette(4) – « keep medicare, the system needs to be remodelled, not demolished »- fits very well with the remodelling proposals in Universal Private Choice: Medicare Plus, that do just that. Here they are in brief outline:

    Concrete proposals in UNIVERSAL PRIVATE CHOICE: MEDICARE PLUS: A Proposal for Reforming Canada’s Health Care System, by J Edwin Coffey MD, FRCSC, FACOG and Jacques Chaoulli MD, MA Ed – Montreal Economic Institute

    1. The publicly funded provincial health insurance plans commonly called medicare, should be retained as basic core insurance plans, available to all residents, and all eligible taxpayers should be required to financially support them.

    2. The health care system should be upgraded and it’s relevant legislation amended to meet European and OECD standards that permit parallel public and private health care and health insurance services to exist side by side. This will require a revision of federal and provincial health legislation to remove the prohibitions of private medical and hospital insurance and privately funded medical services in hospitals.

    3. Provisions of the Canada Health Act calling for access to services on uniform terms and conditions should be amended to read reasonable and timely access

    4. The health care system should allow for pluralism, free choice and innovation in the financing, insuring and delivery of health services, with increasing reliance on the natural incentives to improve when competition is permitted.

    5. Individuals should be allowed to opt out of medicare benefits covering certain categories of services such as office or clinic visits, hospital services, diagnostic and laboratory services, drugs, etc and receive a per capita cost-equivalent tax credit or voucher for that category.

    6. Opt-out tax credits and vouchers could only be used for purchasing an alternative form of private insurance or a health plan covering that category of service.

    7. Individuals without income could still make private choices with public funds. Government insurance vouchers would always pay for a core private insurance or health service plan, thus the concept of universal private choice means what it says – available to everyone.

    8. Medical Savings Plans (MSP) or Accounts (MSA), patterned after the Registered Retirement Savings Plans (RRSP), should be permitted as an alternative financing method. They would be voluntarily set up in conjunction with a compulsory high-deductible, low premium catastrophic health insurance plan that covers all expenses after a certain threshold is reached each year. Contributions to the plans or accounts would be tax deductible, and money withdrawn for medical expenses would be tax-free.

    9. Voluntary Health Purchasing Agencies could be set up by a minimum of 10,000 consumers, privately owned by their members and organized to assist and fully inform them regarding health insurance matters, and to use their financial clout to negotiate group purchases of health insurance and health plans for the members.

    10. Medicare patients who endure an unreasonable delay for diagnostic services or treatment should be issued a voucher to pay for these services elsewhere, at the expense of the offending hospital or regional board.

    11. Hospitals should become more independent and competitive in attracting patients. With greater financial and vocational independence of hospitals, and growing numbers of financially empowered health consumers who are cost conscious and fully informed on hospital matters of quality, access, available technology and professional reputation, patients should be seen as a benefit rather than a burden on the hospital’s budget.

    * * *

    Summary of UNIVERSAL PRIVATE CHOICE: MEDICARE PLUS, A Proposal for Reforming Canada’s Health Care System, By J Edwin Coffey MD, FRCSC, FACOG and Jacques Chaoulli MD, MA Ed

    1. It retains publicly funded medicare as a universal health insurance option for basic core services.

    2. It is based on the assumption that patients, physicians, hospitals, and insurers in Canada will be freed from prohibitive health legislation that severely limits consumer choice and access to private alternative health insurance and private medical services in hospitals.

    3. It frees up the innovative and competitive capacities of all, in the service of health care consumers.

    4. It eliminates the government monopoly in financing, planning and co-ordination of most health care services and takes advantage of market competition and individual planning.

    5. It provides for wider choice, opting out, tax credits, vouchers, and medical savings plans or accounts, and puts purchasing power in the hands of all consumers of health services, rich and poor alike, while encouraging personal responsibility and participation in the market for health services.

    6. It allows for mutual Health Purchasing Agencies to fully inform patients about their best health insurance options and negotiates with clout on their behalf.

    7. It gives hospitals greater financial and vocational independence from governments, and greater motivation to compete for and serve the growing numbers of financially empowered patients, who will become a bonus rather than a burden for hospital budgets.

    8. It allows for a voluntary shift from the predominance of government, in health system financing, planning and control, towards a pluralistic approach of financing, planning and providing services, mainly controlled by well informed individuals and families, as patients and consumers.

    Stockholm experiment with public funding, private provision and competition(5)

    I would like to bring to your attention a remarkable experiment in health system financing and delivery that has been evolving in Stockholm during the past 10 years. Johan Hjertqvist from Sweden first described it to us two years ago. He is an advisor to the Greater Stockholm Council on the health system and participated with us during the first presentation of our Universal Private Choice study, at an international conference in Montreal on the future of health care, sponsored by the Montreal Economic Institute.

    In the early nineties, Sweden was under pressure by the European Union to reduce its very high level of taxation that was used to support its generous but expensive welfare state programs. To function in a lower tax environment, Stockholm turned to the private sector with 3 goals in mind:

    Remove the public monopoly on the delivery of health care services.
    Control the spiraling costs of public sector services by introducing market forces and competition.
    Set new performance benchmarks such as shorter waiting lists, etc., for Swedish hospitals to emulate.

    In every category the experiment has shown success.(6)

    Previously unionized nurses have formed small companies that compete with each other for contracts with hospitals, nursing homes and other institutions. Their morale has climbed, their salaries have increased as employers reward initiative and responsibility and they are freed from union seniority restrictions and inflexibility. The healthcare providers are freed to experiment with more efficient practices. The nurses and physicians unions are now key supporters of this new competitive adventure.

    The County Council that controlled the area’s medical and hospital care system, elected to reduce taxes by trying a different approach in the ownership and control of hospitals and other health care institutions, hoping to reduce the health care costs. They introduced Diagnostic Related Group payments to hospitals for patient expenses, in an effort to reduce hospital costs.

    In 1998 the Council began the privatization of all primary care.

    In 1999 the Council sold one of their acute general hospitals, St Gorans, to a private company and encouraged the staff, hospital workers, professionals, food workers, lab and diagnostic services, etc to forms small companies and tender in a competitive market for the same hospital work.

    Some interesting things have happened as a result of competition for contracts of service in this internal market arrangement. Many of the hospital costs have been reduced. The costs of consultation in the outpatient clinics are now lower in the private sector than in the public sector.

    For example in ophthalmology the public cost was 28% higher than the private; in ear, nose, throat, it was 17% higher and in general surgery, internal medicine and dermatology it was 13% higher. Private nursing home costs have decreased by 30%.

    In St Gorans Hospital, lab and x-ray services have fallen by 50% and overall hospital costs are down by 30%.

    Their productivity has been increased in spite of these cost reductions, with many more patients being treated.

    Waiting times for diagnosis and treatment has been dramatically reduced. Waiting time for hip replacement is now
    10 weeks compared to more than a year in the average public hospital.

    The average wait for heart surgery is 2 weeks compared with 15 to 25 weeks in Sweden’s average public hospital.

    Plans are afoot for the Council to sell all 7 remaining hospitals in Stockholm to the private sector.

    While opponents of the privatization reforms had predicted that the private sector, by seeking to make a profit for shareholders, would drive costs up and efficiency standards down, the opposite has in fact been true.

    Values of Canadians With Respect to Shaping the Health Care system

    Values are attributes of individuals. When we talk of the collective values or societal values we are usually referring to an aggregate of the values of all the individuals. A community, a society or collective does not think, breathe nor make value decisions as such. That is why we use polls and surveys of individuals to get an overall view of the group surveyed.

    The constitutional values expressed in Canada’s Charter of Rights and Freedom are perhaps the most fundamental values that we hold with regards to the health system. Life, liberty and security are high on the value list. A free and democratic society, the ideal of the Rule of Law and equality under the law are other important values that help to protect our personal freedom in health matters.

    Freedom of choice is one of the highest personal values for patients, especially in such matters as the method of health care financing and insurance, and choice of physician and hospital. Of importance to a physician is the freedom to practice in a location of his or her choice and to choose the type of practice and method of remuneration. For the patient it is important to have freedom of information regarding his or her health and some choices in management of treatment.

    The Canada Health Act

    As for the Canada Health Act and its criteria for transferring funds to provincial health plans, it should be reviewed and thoroughly revised to better reflect the current public attitude and values concerning individual freedom and personal responsibility.

    The criteria of public administration for the provincial plans should be removed and that decision left to the provinces.

    The words « uniform terms and conditions » as used in the Universality and Accessibility sections to describe levels of health services, should be changed to « reasonable terms and conditions. »

    If the Canada Health Act is retained, its financial clout should be used to motivate the provinces to revise their health legislation and restore a full measure of personal freedom in the financing, insuring and delivery of health care and health insurance matters. This would allow for the necessary experimentation and field testing of proposals for mixed and parallel systems of health care financing, insuring and delivery while retaining medicare, as we have presented today.

    Closing remarks

    We have presented a very brief outline of our concepts and proposals for remodelling and enhancing the future health care system for Canadians. The impressive Stockholm experience in moving from a government controlled health service delivery monopoly to a competitive market driven system should give reassurance to your Commission that a parallel private health care and health insurance system for Canada would not harm the objectives of medicare but would more likely improve them. Only a rigorous field trial of the Universal Private Choice: Medicare Plus proposals would confirm or deny this claim.

    Thank you for receiving our oral and written presentations.


    1. Options for Reform through Public-Private Partnerships, Bob Taylor and Simon Blair, Viewpoint, www.worldbank.org/html/fpd/notes/.
    2. J Edwin Coffey, Jacques Chaoulli, Universal Private Choice: Medicare Plus, A concept of health care with quality, access and choice for all Canadians, Montreal Economic Institute, Montreal, September 2001.
    3. Royal Commission on Health Services 1964, Vol. 1 and 2, Queen’s Printer, Ottawa, Ont.
    4. The Gazette, page A13, February 7, 2002, Montreal.
    5. A View From Sweden, Johan Hjertqvist, Heritage Lectures No. 711, July 9, 2001, The Heritage Foundation, Washington, www.heritage.org/library/lecture/hl711.html.
    6. A Wess Mitchell, Sweden Edges Toward Free-Market Medicine, Brief Analysis No. 369, National Center for Policy Analysis, Dallas, August 31, 2001, www.ncpa.org.
    7. « Waiting can be pain, » Editorial, The Gazette, Montreal, September 8, 2001.
    8. M Vallis, M Kennedy, Doctors despondent over quality of care, 67% perceive decline, National Post and Ottawa Citizen, Toronto, October 12, 2000.

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