Hanne Gidora on the Canadian Health Care System

First of all there are two meanings of “Medicare”. I understand here it means health insurance for people over 65 and some other high risk groups, based on the Medicare and Medicaid bill of 1965 and the Social Security Amendments of 1972, and I understand there are going to be some amendments, and I’ve read a little bit about that.

But for me as a Canadian, Medicare is our universal health insurance plan that’s supposed to cover everybody from sea to sea to sea, and that’s what I want to talk about first, and about the ways it’s getting attacked these days. And perhaps in the following discussion we can talk about your system here.

For the first half of the last century there was no universal health insurance in Canada. Serious illness often meant bankruptcy or death because families couldn’t afford to pay for the care. In the last year of WWII, Saskatchewan elected a social democratic government, the CCF (Co-operative Commonwealth Federation) (which joined with big labour unions in 1961 to become the NDP – New Democratic Party). In 1947 premier Tommy Douglas introduced universal hospital insurance in Saskatchewan. This plan was funded from taxes, cost about $5.00 per person per year and finally enabled people in Saskatchewan to go to hospital for serious illness without losing the farm.

It took ten years, but eventually the Federal government introduced the Hospital Insurance and Social Service Act in 1957, which had Ottawa agree to finance 50% of the cost of provincial hospital care. Health care in Canada is under provincial jurisdiction, but overseen by the federal government. In order to receive those funds, provinces had to agree to pay the other half. So that took care of people who had to be hospitalized.

But of course as we know health care is much more than just hospitals. In 1962, Saskatchewan premiered another plan, an insurance plan to cover all medical care outside of hospitals. You know, often there is this image of the kindly old country doctor, providing health care 24/7, in all kinds of difficult conditions, and often just paid with a dozen eggs or a slab of bacon. You’d think those doctors would be happy with a plan that made sure they finally got a guaranteed income for the care they deliver, but no, the Saskatchewan doctors went on strike against the insurance scheme, for three weeks! Now I’m sure that kindly old country doctor really did exist, and likely still does in many places, but the majority of the medical establishment certainly felt threatened by Medicare, as it became known, and while there are many doctors in the forefront of the struggles to save our health care system, there are also plenty who want to have their cake and eat it too, and we’ll talk about that in a little while.

So in 1968 the federal government passed the Medical Care Act that expanded the Saskatchewan plan to the whole country, and by 1972 all provinces and territories were covered by universal health insurance.

It’s important to remember the circumstances that led to this development. Bourgeois historians like to tell us that universal health insurance came about because of the genius, the charisma, the passion of Tommy Douglas. Of course it helps to have a government that commits itself to such social achievements. But we can’t forget the impact of the great labour struggles of the twenties and thirties, organizing the unemployed in the relief camps; the On-to-Ottawa trek; and the upheavals and struggles that took place when the soldiers returned from WWII. Universal health care as part of social service legislation was one of the demands in those fights. And of course to get these schemes to spread beyond Saskatchewan took a great deal of grass roots organizing, of door knocking, lobbying and mobilizing of supporters.

In 1979 Justice Emmet Hall of the Supreme Court of Canada undertook a study of health care and he warned against the dangers of a two tiered system, because, as I said, right from the beginning there were forces that were trying to undermine universal health care. In response to his report, the federal government passed the Canada Health Act in 1984, and that is the law of the land we still live under today.

The Canada Health Act enshrines five principles:

1. public administration: administration of the plan must be carried out by a public authority on a non-profit basis.
2. comprehensiveness: all medically necessary services provided by hospitals and doctors must be insured
3. universality: all insured persons in the province or territory must be entitled to coverage on uniform terms and conditions
4. portability: coverage is maintained on moving or traveling within Canada and traveling outside of Canada
5. accessibility: there must be reasonable access by insured persons to medically necessary services, unimpeded by financial or other barriers

The Act also bans extra billing and user charges for insured services and provides for dollar-for-dollar penalties to the provinces. I am sure you can see some big loopholes in this Act that are being used by certain provinces and other forces to undermine universal public health care.

One of these forces is comprised of the pharmaceutical companies. They are making very healthy profits on our health care, as we all know; in fact they are consistently the most profitable companies on the planet, far ahead of the next most profitable sector, the banks. In 1993 the federal government under Chretien passed the Drug Patent Act which gives brand name drugs 20 years of protection against generic “knock-offs”. Drugs are covered under Medicare if you’re in hospital, and let me tell you, I work in a hospital and the sky’s the limit on drugs. Provinces also have plans that provide for coverage for drugs; in BC for example seniors don’t pay for drugs, or didn’t use to until our current government came around. So drug costs are a big chunk of our Medicare dollars, and they have risen from $4 billion in 1985 to over $16 billion today. So when they close beds and close hospitals and lay off nurses and other staff I can feel comforted by the thought that at least the shareholders of the drug companies are well taken care off, unlike my patients.

Regarding the fines provided for in the Canada Health Act, the first major one was imposed in 1995 against Alberta, for allowing extra billing at eye care and some other facilities. That’s actually an interesting story: Dr. Howard Gimbel, an ophthalmologist, opened the first private eye-surgery site in Calgary in 1984. He is a well-renowned eye specialist who pioneered some high-tech procedures and his services were and are in great demand. By 1994, Alberta Health was paying a total of $9 million to Dr. Gimbel’s clinics. The surgeons billed Alberta Health about $550 per cataract surgery. Dr. Gimbel also charged patients a “facility fee” of up to $1,200, which they paid out of their own pocket, to cover “overhead” expenses that are normally funded by the province in public hospitals.

The Klein government was so supportive of Dr. Gimbel’s enterprise that they not only paid the fine of $3.6 million, but later they began to cover the facility fees as well. Remember, all this money comes out of general revenue. As a result, many doctors feared the money would be sucked out of the public system, but others began to establish or upgrade their own private clinics. In 2000 Premier Klein introduces legislation to allow for private overnight stay hospitals; up until then the criteria for private facilities had been that they provide day surgery only.

We often hear from people that there’s nothing wrong with private clinics, they shorten waiting lists and if people have the money to spend they should be allowed to do so. Well, there are a few problems with this. For one thing, it seems quite reprehensible to Canadians that people should get health care based on their ability to pay rather than on their need for care. But it has also been proven again and again that those claims are untrue. One of the big problems of course is the shortage of health care professionals, doctors, nurses, and allied health. Private clinics would simply lure staff away from the public system and create even more chaos than there is already.

Again in Alberta, a study done in 1999 by the Consumers’ Association of Canada (Alberta Branch) found that waiting list and costs for cataract surgery were highest in regions dominated by private clinics. In Calgary, which had the most eye surgeons in the province, 100% of cataract surgery was done in private clinics. Waiting lists averaged 16-24 weeks and the most common extra charge to patients was $400 per eye for upgraded lenses. In Edmonton there were fewer eye surgeons, but 80% of cataract surgery was done in public hospitals. Waiting lists averaged 5-7 weeks and the average charge for an upgraded lens was $250 per eye. In Lethbridge 100% of cataract surgery was done in public hospitals. Waiting lists were 4-7 weeks, and the upgraded lens was covered by the regional health authority which was able to purchase them for well under $100 a piece.

There are many other studies that highlight other concerns with private clinics, but this one went directly to the core of the right wing propaganda. In spite of the evidence private clinics are sprouting up it seems everywhere.

In 2002 former premier of Saskatchewan Roy Romanow presented the findings of the Royal Commission on healthcare. He came out strongly in favour of a public system, not a private or two-tiered one, and he wanted it expanded to cover home care, dental care, pharmaceuticals, and long term care, so he is recommending universal insurance on the same basis as Medicare for those areas. He also strongly stated that federal funding needs to be increased. Remember originally there was a fifty/fifty split between the federal government and the provinces? Well, starting in the early to mid-nineties, under the auspices of then finance minister and now prime-minister-in-waiting Paul Martin, federal transfer payments to the provinces were cut to the point that it’s now more like 80/20, or even 90/10. Of course that really undermines the Canada Health Act, because it gives the federal government very little clout in enforcing the act. Romanow wants that funding restored and tied to accountability by the provinces how that money is spent.

Some interesting comments from a speech he was making: Many people think Canada’s health care system is a publicly funded monolith. In reality there are three segments: one that is totally publicly funded and makes up a little more than 40%; one of mixed public/private funding, for example drugs, home care, long term care for about 25%; and finally the third level which is almost entirely paid by private funds such as dental care, vision care, psychologists, physiotherapists, chiropractors, naturopaths etc. This level makes up about 30%.

When we are looking at cost increases, the first level that is entirely publicly funded is at the same per-capita spending as it was in 1981. Drug costs on the other hand have risen considerably as I mentioned earlier. So much for the myth that private health care would save money. He also addresses the administrative costs, which are two thirds less on a per capita basis in Canada than in the US. Romanow emphasizes that there is only one tax payer who has to cover these costs in the end, and a well run public system is a lot cheaper than a private or public/private mix system. Why? We as communists know that the purpose of business is to create profits, and these profits represent money taken out of the public system and siphoned into the pockets of shareholders.

Let’s look at some of those private business schemes, I hasten to add, that these schemes have powerful supporters within both provincial and the federal governments.

User Fees: they have been tried in different places in different ways over the years. Saskatchewan tried those fairly early on, 1968-1971, and found that they did not control costs, but led to an overall 18% drop in health care access by the poor and elderly, who are probably the people with the greatest need for health care. High income groups increased their use of services. In BC, under the Socreds, we had user fees for the emergency room. They were not onerous for most people, $10-15 if I remember correctly, but if you are on a tight budget they would have been a deterrent. I sometimes work in emergency and there are a lot of frustrated nurses who think those fees should come back, because we do have a lot of people who shouldn’t come to the emergency room, but the problem is the lack of care in the community, not the lack of user fees.

Some of those “frequent flyers” are elderly who don’t have enough home support, people with mental illness who can’t be managed by the stretched-to-the-max community mental health offices, chronically ill people who live at risk and the slightest stressor sends them back to hospital, people with minor injuries because there is no other after-hours care, and I can tell you an example of that: my partner George recently broke his finger. This was a Saturday evening; he had just come back from Edmonton and it had happened just before he had to catch his flight. Now we do have walk-in clinics, because there are more and more people who don’t have a family GP, and those clinics are open later, but on a Saturday evening we went to three different ones in our community and they were all closed. It had to be looked after so he had no choice but to go to the emergency room. Luckily it wasn’t busy so his wait was only about three hours, but people can sit there for eight hours or more, which doesn’t make for too many sweet tempers.

Medical Savings Accounts: this idea has been pushed by corporate think-tanks like the Fraser Institute for years. Consumers would get a set amount of money to buy health services. This particular scheme has led for example in Singapore to rampant duplication of expensive high tech equipment, and huge fees for doctors, as hospitals are trying to attract patients and poach the best specialists. For a public system this is obviously not a good plan.

De-listing: Most provincial governments have already cut the number of insured services to the bone, which means users have to pay more and more from their own pockets. Example: when I broke my wrist two years ago I had to get physiotherapy. At that time the MSP would pay part of my treatment, up to twelve visits a year. Now this service has been de-listed, and George has to pay more than twice as much for his physiotherapy for his finger than I had to pay. But physiotherapy is not a “frill”; we’ll see many more people with permanent disabilities which in the long run will cost the system more, because they may be less productive, they may develop complications such as arthritis or other joint injuries, and let’s remember there is only one tax payer.


Private clinics: we’ve already talked about them

Private doctors/public doctors: they go hand in hand with private clinics. Many of those doctors, specialists, work in both systems. But since they can make a lot more money in the private system, remember the “facility fees”, they tend to concentrate on their private practice and work less and less in the public system, which leads to longer waiting lists in the public system, not shorter ones like the corporate ideologues are trying to tell us. Let’s also remember that doctors’ education is heavily subsidized by the public; even though medical school is very expensive it’s still a lot less than it would be for them to pay the entire cost.

Public-Private partnerships: this is a scheme especially beloved by our provincial government. I’ve got an example of a P3 in Maple Ridge, where I happen to work although I don’t live there. Apparently the municipality decided in 1995 to revitalize its downtown core. It entered into a partnership for a project that was estimated to cost around $23 million and involved construction of a leisure centre, youth centre, arts centre, library, office tower, hotel and parking garage. The developer would hold the land on a fifty-year lease from the district. The district would lease the completed facilities from the developer. The district would contribute $4 million in cash up front. An amended agreement in June 2000 raised that contribution to $7 million. The developer would become the owner of the land where the office tower, hotel and parking garage were to be built.

The land alone is probably worth the money the developer put up, around $17 million. In addition, the district pays a yearly lease, plus:

*“additional rent” – the tenant’s share of operating expenses, taxes, utility costs and the cost of all additional services including an administrative fee of 15%
*the cost of any change orders
*at the end of five years, the balloon rent amount – the present value of the lease payments for years 6 to 25
*any profit the landlord would have earned for years 6 to 25
*any prepayment fee for mortgages

All in all, annual costs are $2.5 million on a project of $24 million, where the district put up $7 million up front. By the end of 2007 the district will have paid a grand total of $53.6 million. This does not even include the financing fees beyond the five-year lease term.

Health Care premiums: Only in Alberta and BC. The BC government has just recently increased those “premiums” by 100%. They are not really premiums since everybody has to pay, and they are not based on risk or on income, so amount to a disproportionate tax on those with lower incomes. If you’re really dirt poor you don’t have to pay, but for many families this is a great hardship.

All these ideas are being put forward to “save” our health care system, but as the Romanow report points out, it’s not the public sector that’s driving up costs. At the same time we keep hearing the message from the corporate media mouth pieces that access is so much better in the US and we should have a US type system. Well, here are some figures to compare our systems: http://www.canadians.org/display_document.htm?COC_token=COC_token&id=185&isdoc=1&catid=92


Just the Facts - Health Care information you need to know

Dollar for dollar, patient for patient, Canada's public health care system stands head and shoulders above the private, for-profit system followed in the United States.

Despite what they may say - we are in danger of Americanizing our health care system.
How do the two systems compare?

Canada (first rows)
United States (second rows)

Total health care spending $3,298 per person
Spends equivalent of over $7,000 per person

Public spending on health as percentage of Canada's total public expenditure - 15.3%
Public spending on health as percentage of U.S. total public expenditure - 18.5%

Private expenditure - 28%
Private expenditure - 56%

Spending decreased as a percentage of GDP - from a high of 10.2% in the early 1990's to 9.2% in 2000.
Spending continues to increase as a percentage of GDP - 14% in 2000, estimated to rise to 16% in the next few years.

All citizens covered
1 in 7 citizens not covered (45 million people) and even more underinsured

Life expectancy - #2 in the world
Life expectancy - #25 in the world

World Health Organization (WHO) Report 2000 - Overall attainment ranking #7
World Health Organization (WHO) Report 2000 - Overall attainment ranking #15

Health professionals decide who receives care based on medical need
Insurance companies and ability to pay decide access and treatment

Infant Mortality Rate 5.6/1,000
Infant Mortality Rate 7.8/1,000- 40% higher than in Canada

Of course those schemes and ideas don’t arise in a vacuum. We know that they come out of the context of the capitalist system. Governments aren’t class neutral; they promote the interests of a specific class, in our part of the world that’s usually the capitalist class. And capitalists, both Canadian and others, eye our public health care system in the same way my cats eye the fish tank. They want to get their hands on this huge market, this large “unopened oyster” as it has been called. And our governments have been complicit in entering into trade deals that are in danger of seriously undermining and destroying our public health care.

There is TRIPS, for example, the WTO agreement on intellectual property (Trade-Related Aspects of Intellectual Property Rights), which calls for a minimum of 20 years of monopoly patent protection for brand-name pharmaceuticals. I’ve already mentioned what this is doing to drug pricing in Canada, but just think for a moment what this is doing to poor countries in Africa that have a huge HIV/AIDS crisis on their hands and the retro drugs cost $10-15,000 per person, per years. Our government is supporting a TRIPS plus agreement at the FTAA negotiations, which would extend the patents to 25 years.

Another WTO agreement is GATS, the General Agreement on Trade in Services. It already covers health insurance, and Canadian negotiators were the ones to put it on the table. If Canada expands its public health insurance system to cover new areas, such as mentioned in the Romanow Report, or if there is privatization and de-listing in some provinces and not in others, Canada could face a GATS complaint from the US or European governments claiming that their private investors are being denied “market access”.

Then there is NAFTA, Chapter 11 which protects corporate “investment” and prevents the government from stopping corporations from entering our country. It also allows corporations to sue governments if the corporation thinks its investment is being “expropriated” in any way or treated differently than domestic companies. Right now the only thing that stops an all-out takeover is that our health care is not being privately delivered. If a US or European investor gains a foothold in the Canadian health system, through privatization or de-listing of services, Chapter 11 will make it more difficult and costly to reverse this commercialization. And of course, thanks to the BC government, French Sodexho, UK Compass and US Aramark are now delivering support services in our public hospitals, and direct resident care services in private or non-profit nursing homes.

At the same time, Canada’s trade strategy involves selling of health care expertise to countries around the world, and we can’t enter their markets without opening our own. So in time-honoured tradition this government ran its election campaign on protecting Medicare but in reality it’s up for grabs to the highest bidder.

The situation in BC is a little different. Our government isn’t even looking for the highest bidder, they are holding a yard sale of our public assets, including health care. When they came to power in 2001 their first action was to give a $1.5 billion tax cut to their wealthy and corporate friends. Technically, everybody got a tax cut, but for low and middle income earners that cut was minuscule and has long since been eaten up by all the new user fees, such as the doubling of MSP premiums and de-listing of services.

The next thing they did was gross interference in the collective bargaining that was taking place at that time in the public sector. They imposed contracts on nurses, allied health, transit workers and teachers. A few months later they re-opened these contracts and ripped huge chunks out of them, an act that has been referred to a legal vandalism, but it wasn’t just a bunch of right wingers being nasty, it opened the door wide to privatization.

Bill 29, also known as “Bull 29”, took away union and basic human rights from a large segment of health care workers. Doctors, pharmacists, nurses and some selected professions were somewhat exempt from the attack, if they were working in acute care. Continuing care, emergency rooms, support services and many allied health professions such as physio, x-ray, labs are wide open to the privatization juggernaut.

We keep hearing that there is no money, not very surprising after they just reduced their income by $1.5 billion annually, so health care and other public spending has been frozen to the extent that it doesn’t even cover the wage increases that were included in the contracts imposed by this same government. Another significant expense is the 100% increase in MSP premiums, since in most public sector collective agreements this cost is borne by the employer. Most of us also have private health insurance through our employer, which is now paying for the de-listed services that used to be covered by MSP.

The result? Health regions are embracing the privatization scheme as the panacea for all their woes. We have already lost our security guards and just recently our housekeepers. The new people brought in by private companies are poorly trained, get paid peanuts and I doubt very much that they will be willing to risk their and their families health if we get another SARS or similar outbreak, for the pittance they get paid, and no benefits. Furthermore the government has just passed another bill, Bill 94, to ensure that these workers don’t have any successorship or other union rights. Even if they are unionized, the contractor can simply create a sub-contractor company and the workers are back to square one. This is union busting at its worst, totally unheard of in BC and Canada.

Ok, you may say it’s not nice for the workers, but doesn’t it help the patients? Not really, we’ve had hospitals closed, emergency rooms closed, palliative care units closed, beds closed, nurses and other health care workers fired. One of the worst betrayals of election promises is what’s happening to seniors. There has long been a problem with a lack of long term care beds for frail seniors. This leads to people filling up acute care beds at a cost of $1,800 plus a day simply because there is nowhere for them to go. This is one of the main reasons for waiting lists, by the way, because surgery is not like a McDonalds drive-thru, there is some recovery time involved and in many cases that means a hospital bed at least for a few nights.

The Liberals (as they call themselves; I call them recycled Socreds) promised to open 5,000 new long term care beds. In a total turnaround soon after the election, they are now closing long term care facilities and replacing them with “Assisted Living”. Assisted living is provided by private contractors, the levels of care are much lower than in our current facilities, and residents have to pay much more out of their own pockets. It’s no solution for frail seniors with complex medical needs.

So with the backlog in long term care, we get a backlog in acute care and total congestion in emergency rooms. For quite a few years, emergency rooms have established “overflow” areas, basically holding areas for admitted patients who don’t have a bed on the ward. When I was working there last week we had ten admitted patients. Our emergency room has seven bays, plus 2 trauma beds and a minor treatment area with 5 beds. So without the overflow area it would be very hard to take care of any incoming emergencies.

The Royal Columbian Hospital in New Westminster, a tertiary care centre, has recently closed their emergency overflow. So the other day they had 23 admitted patients in the emergency room, and 11 ambulances lined up outside the door, with paramedics standing around and waiting for their patients to get triaged and then for the nurses to find a spot to put them. This is just one example of right wing health care policies.

What are we doing about it? There is good news and bad news. The good news, in many communities people are coming together like never before to take action against these politics. They have managed to save hospitals and programs in some areas and in the recent municipal elections have been able to elect some progressive city councillors. People are becoming more politicized and less apathetic in those coalitions.

On the downside, the labour movement has been playing a very limited role, although listening to our labour leaders you wouldn’t think so. The reason for that is the rampant right wing opportunism; a large segment especially of private sector unions whose leadership is either putting all its energy into re-electing an NDP government or, worse, think that right wing politics are beneficial for their members, such as allowing more logging and mining in parks. For us as communists this is a time where we can really get our message out and grow, but the lack of labour unity is a serious concern, and has to be a priority focus in our work.