Good afternoon to all of you.
Thanks for the invitation to talk to the committee about the Canada Health Act generally, and the Canada Health Act annual report for 2014-15, which was tabled in Parliament just about a month ago, on February 25.
To start, I want put the Canada Health Act in context. I'll start by making a few comments about the role of the federal government in Canada's health care system.
As you likely all know, as a partner with many other players, most notably the provinces and territories, the federal government has a number of functions: we protect Canadians from environmental risks associated with unsafe food, health, or consumer products; we approve drugs for sale in the Canadian marketplace and monitor their safety; we respond to infectious disease outbreaks and various health emergencies; we support the delivery of health care to first nations and the Inuit, federal inmates, members of the Canadian Forces, and veterans; we promote and fund innovation and research in health care; and we inform Canadians about various health risks and beneficial practices that will help them make healthy choices.
With respect to health care specifically, while responsibility for the delivery of health care services rests primarily with provinces and territories, historically and currently, the federal government has exercised its spending power to support provinces and territories in the discharge of their responsibilities, and in so doing, to set the underlying principles and values for health care systems across the country.
As you know, the main vehicle through which the federal government transfers funds to provinces and territories is the Canada health transfer. By way of reference, in 2015-16, the current fiscal year, the federal government provided about $34 billion via the CHT, which represents a little over 23% of the total spending by provinces and territories. This transfer of funds to provinces and territories under the CHT is not automatic. In fact, in order to receive its full allocation, each province or territory must ensure that its publicly funded health insurance plan meets the requirements of the Canada Health Act.
The conditions and criteria of the act are, in effect, the national principles that guide the Canadian health care system: universality, comprehensiveness, accessibility of care, portability, and public administration. These principles indicate who shall be covered, for what, in general terms, and where within Canada and beyond our borders, as well as the basic character of provincial health insurance systems—that is, that those shall be publicly administered and operate on a non-profit basis.
Very importantly, the act also has provisions that discourage direct charges to patients for publicly insured health care services. These charges, defined variously as extra billing or user charges, are articulated in the act. These provisions are a critical element, giving meaning to the accessibility principle.
As the only federal legislation pertaining directly to the delivery of health care services, the Canada Health Act is a good example of the federal government using its spending power to set national standards and promote the primary objective of Canadian health care policy, which, as stated in section 3 of the act, is “to protect, promote and restore the physical and mental well-being of residents of Canada and to facilitate reasonable access to health services without financial or other barriers”.
The CHA is an excellent example of how governments have worked together over time to solve complex social policy challenges. In the annual report, there is a description of the relevant history in some detail. I just want to touch here on a couple of key milestones.
Canada's commitment to a largely publicly funded health care system began in 1947 as an ambitious and visionary experiment in public hospital insurance in Saskatchewan. Ultimately, to support replication of the Saskatchewan arrangements, the federal government passed the Hospital Insurance and Diagnostic Services Act in 1957, which committed the federal government to share the cost of these services with provinces. By 1961, all other provinces and territories had adopted similar models.
A few years later, the same pattern was repeated when Saskatchewan expanded its public health insurance regime into coverage for physician services. The Parliament of Canada passed the Medical Care Act in 1966, and again, other provinces and territories followed suit by 1972. By that time, both hospital and physician services were available to Canadians through a universal, pooled risk health insurance scheme.
Although Saskatchewan's Tommy Douglas saw publicly insured hospital and physician services as simply the initial stages of a medicare system that would eventually include other elements of care such as dental or access to drugs, the focus of Canadian medicare has remained focused on hospital and physician services.
Moving ahead a little bit in historical terms, by 1979, it was apparent that the objective of federal support for physician and hospital services for Canadians was being undermined by additional charges levied directly on patients.
In response to this growing threat to universal access to care, in 1979, at the request of the federal government, Justice Emmett Hall undertook a review of the state of heath care services in Canada. His report affirmed that health care services in Canada ranked among the best in the world, but he warned that extra billing by doctors and user charges levied by hospitals were creating a two-tier system that threatened universal accessibility of care.
Justice Hall's report and the national debate it generated led to the enactment of the Canada Health Act in 1984. The act retained the basic principles contained in those two earlier pieces of legislation and reaffirmed the country's commitment to a universal health insurance program by adding specific prohibitions on extra billing and user charges. In effect then, the goal of the Canada Health Act is to ensure that medically necessary physician and hospital services, as well as certain surgical dental services are available to Canadians on uniform terms and conditions, and without financial or other barriers.
The federal government encourages provinces and territories to experiment and design health care systems that meet their own particular circumstances, so long as the principles of the CHA are respected.
Since the act was passed, adherence by provinces and territories to its principles has meant that the provincial and territorial health insurance systems are much more alike than they are different. The machinery of the administration of the act also contributes to the consistency of a nationally publicly funded health care system. For example, Health Canada chairs a federal-provincial-territorial committee on reciprocal billing, which helps resolve issues Canadians may face when moving to other provinces or when travelling.
Health Canada also hears from Canadians through correspondence and telephone calls. In some cases, departmental officials are able to assist Canadians as they navigate the health care system and we may even intervene on their behalf.
For example, and this is a recurring situation, Canadians who move from one area of the country to another do not always understand that they are required to register with their new province's health insurance scheme. This only comes to their attention when they try to secure care using an expired or out-of-province card from their old province of residence. Working with both implicated provinces, we have on many occasions been able to assist Canadians in maintaining their coverage.
Of course, when Canadians reach out to us to comment on the delivery of specific services, we refer them to provincial and territorial ministries who have jurisdiction in this area.
I want to stress on the issue of compliance by provinces and territories that the health insurance plans of the provinces and territories generally respect the criteria and conditions of the Canada Health Act. In fact, the legislation in most provinces, governing their health insurance schemes, often goes well beyond the requirements of the Canada Health Act both in terms of the range of services covered and mechanisms to ensure compliance with the values and principles of universally accessible health care.
Many jurisdictions, as you likely know, cover to a certain degree vision care, pharmaceuticals used outside of hospitals, ambulance services, and so on. When provinces and territories provide care outside the scope of the act, they are not bound by the requirements of the act. They are free to arrange those services on their own terms and conditions, and according to their own priorities. This allows jurisdictions to target specific populations such as children, the elderly, or specific regions, and to require some sharing in costs by patients.
We recognize that while the CHA may establish important principles, provinces and territories are responsible for administering their multi-faceted systems that are usually governed by considerably more complex legislation detailing every aspect of how their health insurance scheme is administered, and how their health care system is organized, financed, and governed.
While the core principles of the Canada Health Act have enduring value, as health care evolves, the legislation has been subject to periodic clarification and interpretation to ensure its application to new circumstances.
Administration of the act, by way of example, has been informed by three very important key interpretation letters over the past 30 years.
In 1985, Minister Jake Epp's letter elaborated in great detail on the provisions of what was then still new legislation.
A decade later, in 1995, Minister Diane Marleau communicated the federal policy on private clinics, which expanded the definition of hospital to include facilities where patients, at that time, had to pay facility fees to receive services covered under medicare. Her letter was intended to put an end to those kinds of patient charges.
Finally, in 2002, Minister Anne McLellan wrote to the provinces and territories to outline a Canada Health Act dispute avoidance and resolution process. The objective of this initiative was to encourage ongoing communication, in the interest of avoiding disputes in the first place. In the event that such a dispute did occur and was not resolvable through our normal informal processes, a formal process to deal with these disputes was set out.
When instances of possible non-compliance with the Canada Health Act arise, our approach to the administration of the act emphasizes transparency, consultation, and dialogue with provincial and territorial health ministries. We rely on the goodwill of provinces and territories as we work through issues of concern, because under the act we do not have any direct investigative powers.
The application of financial penalties, through deductions under the Canada health transfer, is considered only as a last resort when all other options to resolve an issue collaboratively have been exhausted. These penalties are documented in the annual report, which you may have seen.
As you may have seen in the annual report that was tabled in February, from the time of the passage of the Canada Health Act until March 2015, over $10 million has been deducted from provincial or territorial transfer payments as a consequence of extra billing and user charges. That may seem like a small amount. I'll just note that the $10 million does not include close to $245 million that was deducted from 1984 to 1987 and subsequently refunded to the provinces and territories when they agreed to eliminate extra billing and user charges. That refund mechanism, which is no longer in effect, was intended at the time to act as an incentive for provinces and territories to come into compliance with the act. That's why the provision was time limited.
I want to be clear that our goal in administering the Canada Health Act is not simply to levy penalties. In fact, it's not really to levy penalties at all, but rather, to achieve compliance and therefore ensure access to insured services for Canadians, without barriers associated with ability or willingness to pay.
Let me quickly make a couple of comments about the annual report.
Tabling the report is a legislative requirement. It must be tabled in the first 15 sitting days of each calendar year. Although it is tabled in the federal Parliament, the content of it reflects the collaborative effort of provincial, territorial, and federal governments to inform Canadians about their publicly funded health insurance plans.
The federal section of the 2014-15 version of the report describes the Canada Health Act, our approach to administering it, and compliance issues that were on the table during the 2014-15 reporting period. As you may have seen, the bulk of the report is actually taken up by overviews of provincial and territorial health insurance plans. This information is provided to us at our request by provinces and territories. This data shows how each of those plans meets the conditions and criteria of the act, along with relevant statistics on publicly insured hospital, physician, and surgical-dental services in each jurisdiction.
However, it's important to note at the same time that while the report contains a lot of information about medically necessary physician and hospital services, which are subject to the criteria and conditions of the act, the report's scope does not extend to reporting on the status of the Canadian health care system as a whole. It is simply a report on the extent to which provincial and territorial health insurance plans comply with the conditions and the criteria of the act.
As I come close to the end of my remarks here, let me comment briefly on compliance issues. In terms of specific issues noted in this year's report, you will see a commentary on a deduction to British Columbia's CHT payment in the amount of a little over $241,000. This deduction was taken in respect of extra billing and user charges at private surgical clinics in B.C.
The report also notes a number of other recent and long-standing compliance issues. These issues vary from following up on stakeholder allegations of extra billing, to insisting that patients cannot be billed directly when they elect, for example, to have robotic-assisted surgery. Over the last year, we've approached provinces where hospitals were charging patients directly for preferred hospital accommodation when ward space was not available. We've also raised concerns in some parts of the country about membership fees at primary care clinics which, in our judgment, had the potential to pose a barrier to access to insured services.
I'm happy to say that our compliance work is generally conducted as a two-way street. From time to time provinces come forward and ask for advanced assessments of initiatives they are considering, to ensure that those conform to the requirements of the act, or at least they know in advance what might ensue if there's an issue or a proposal that might fall outside the act.
In the year in question we provided two such assessments. One concerned a proposal by a charitable foundation to pay for a nurse practitioner clinic dedicated to the clients of a community resource centre. The province was concerned that providing preferred access to clients would pose accessibility concerns under the act, but we advised the questioner that since the services were not provided by physicians nor in a hospital there were no concerns under the act.
The second assessment concerned a proposal by a group of ophthalmologists who wanted to charge patients for tests when they were performed in a physician's office instead of in a hospital. In that case there was a concern about the Canada Health Act, since the tests form part of a physician service, and no direct fees may be charged for such services when they are insured by a provincial or territorial health insurance plan. That proposal was abandoned.
Lastly, before turning to questions I'd like to touch on a recurring criticism that we certainly hear, and that is, that the Canada Health Act is an outdated piece of legislation that impedes innovation and modernization of health care systems. Not surprisingly, we have another view.
We'd like to remind members of the committee that the act allows provinces and territories the flexibility to experiment with various governance, organizational, delivery, and financing arrangements, provided those experiments meet the Canada Health Act test of no direct patient charges for insured services.
For example, many provinces are experimenting with family health teams, where physicians and other health care professionals work together to manage various aspects of patient care.
Other provinces have made care for those suffering from chronic conditions in remote areas less burdensome through tele-monitoring of patients' conditions.
Since no direct charges are made to patients in either of these cases there is no concern under these alternative delivery models. We think they are examples of the way in which the act is sufficiently flexible to accommodate delivery models that, frankly, were not envisaged in 1984 when the act was passed.
Let's just make this our concluding comment in these initial remarks. Our general view is that we think the values that underpin the act—those of equality, fairness, and solidarity—are just as relevant today as they were in 1984, and they will remain relevant as we continue to improve our health care system to meet the evolving needs of Canadians.
Mr. Chairman, I'll stop there, and both Gigi Mandy and I will be happy to take the members' questions.