Magazine article Risk Management

Understanding Canadian Health Care

Magazine article Risk Management

Understanding Canadian Health Care

Article excerpt

THE UNITED STATES has long received a wide variety of Canadian exports from timber to Molson's Beer. However, one potential export from up north which has yet to arrive in this country has sparked a major controversy within the American political, medical and risk management communities: the Canadian health care system.

Among the system's supporters and critics, there seems to be varying degrees of misconception on just how the system works. Some view it as a federal monopoly bordering on socialism while others see it as the only means of assuring total and all-encompassing coverage for every person. These views have one thing in common-both have nothing to do with the Canadian health care system.

Rather than rehash long-running debates on the pros and cons of the system, what follows is an unbiased overview of Canadian health care and the way it functions. Much of this information comes from two recent reports from separate investigations by the United States General Accounting Office, and the Economic and Social Research Institute of Washington, D.C.

Fully implemented in 1971, Canada's health care system is a publicly financed single payer system that provides coverage to all 26.5 million Canadians, regardless of income level or state of health. It is not solely a federally administered system; only 40 percent of funding comes from Ottawa, with the nation's ten provinces and two territories financing their respective shares through income, sales and payroll taxes. The system is flexible enough to allow the provinces and territories to add services, benefits and insurance regulations not present in the national system.

It is a universal system, but it does not cover all medical services. The basics, such as physician services, hospital care, X-rays and laboratory tests make up the heart of the coverage, although certain segments of the population receive additional benefits, such as coverage for prescription drugs for the elderly.

Health insurance in Canada is not tied to employment, although many employers offer supplemental private health insurance to cover what is not available in the national system, such as dental care, and semiprivate hospital rooms. The law prohibits private health insurance from duplicating the coverage offered in the national or provincial plans. More than 70 percent of Canadians purchase supplemental private insurance.

The Canadian medical care industry is primarily a private-sector operation. Ninety percent of the hospitals are private, non-profit corporations, and 95 percent of Canadian doctors are self-employed. There are more physicians per person in Canada than in the United States, with the ratio of generalists and specialists kept about equal in Canada. This ratio is maintained through residency training quotas; in the United States, no such quotas exist and only about one-third of all physicians are generalists.

Patients are free to select their physician. Fees are set in negotiations between provincial health ministries and medical associations. Patients do not pay for covered services because the physicians send their bills to the government to be fully reimbursed; there are no co-payments or deductibles in this system. The average Canadian physician enjoys a net income of $82,740 (American currency, 1987 statistic); his American counterpart earns $132,300. Professional expenses for self-employed Canadian physicians are $46,000, compared to $123,700 for the same sector in the United States. …

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