The universal health care industry in Canada, pressured by federal and provincial government funding cuts and accreditation requirements, has been undergoing a process of evaluation and change to decrease costs, improve quality, and provide more services in an accountable manner (Chan, DeGroote, & Ho, 1997; Murphy, Grimes, & Snasdell-Taylor, 1998; Naylor, 1999). Canadian hospitals affected by these pressures are developing new institutional structures, management models, and organizational cultures in an effort to continue to provide universal, accessible, comprehensive, and portable care that is delivered through public administration (Armstrong, Armstrong, & Fegan, 1998).
To sustain universal health care, a number of health care providers have embraced the concept of managed care. Managed care "refers to a number of organizational structures, various financial arrangements and regulatory devices" that limit "unnecessary health service utilization by altering treatment process in various ways: through budget restrictions and utilization controls, through financial incentives for provider to limit services, through case management review of treatment plans against pre-established criteria and through the use of primary care physicians as gatekeepers for access to care" (Berkman, 1996, p. 542).
In Canada hospitals receive transfer grants from the provincial government to deliver selected services determined by government commissions on restructuring health care. The attempt to rationalize services across the province drives the decisions about who gets what, creating a competitive environment among hospitals. The hospitals then have to deliver services within their designated frameworks. Hospital capital costs and infrastructures are included in the transfer grants. However, the funds are insufficient to maintain the programs at the caliber physicians and consumers demand; thus hospitals are encouraged to raise funds to balance their budgets. Although all Canadians have health care insurance coverage, health care resources and access to services vary among provinces.
Professional services are funded in various ways. Physicians negotiate their fee-for-service rates with the government through their professional provincial medical association, and service fees for procedures are fixed. Some hospital physicians are salaried, whereas others have mixed salary and fee-for-service arrangements with hospitals. Some physicians "extra-bill" patients, but provincial governments are expected to discourage this practice. The federal government reduces transfer grants to the provinces by the amount physicians are estimated to extra-bill their patients. Other health care professionals are salaried and paid by programs that receive budgets with benchmarks from their particular hospital. Given that rationalization of health care has determined which hospitals host which programs, hospitals compete with each other to prove that they are fiscally responsible and should continue to be funded. Efficiency frequently supersedes quality indicators.
Although the initiatives for change in Canada and the United States are products of each country's political and cultural times (Dziegielewski, 1998), the strategies to provide cost-efficient, effective, and accountable health care initiatives in Canada are similar to those undertaken by U.S. market-driven private-industry management models (Edwards, Cooke, &Reid, 1996; Gilbert & Gilbert, 1989). U.S. hospitals may be motivated to reassess their delivery of health care by the profit factor; nonetheless, the trend in both countries has been to move from functional organizations to process-oriented systems (Young, 1997).
In functional organizations operating through hierarchical bureaucratic structures, interests of the patient are at times secondary to those of the organization. As a result, the medical model of client care often was provided in an inefficient, inequitable, and unaccountable manner that is believed to have led to the high cost of health care in both countries. …