April 2009




Universal healthcare: the Canadian experience

by Michelle Dalton EyeWorld Contributing Editor


This whole utopia of universal healthcare is crumbling in the face of increasing costs – Ike Ahmed, M.D.


As part of an ongoing series, EyeWorld analyzes the Canadian healthcare system

Canadian healthcare provided by uncontested provincial jurisdiction was enacted into law in 1867. It wasn’t until 1972, however, that all 10 provinces adopted some variant of socialized healthcare. All 10 provincial healthcare plans vary, with Saskatchewan leaning more socialist and Alberta’s the least, said Steve A. Arshinoff, M.D., clinical instructor of ophthalmology, University of Toronto, Toronto.

Further complicating matters, Canada’s three territories come directly under federal jurisdiction and have their own healthcare plans, and the indigenous Canadians also fall under federal jurisdiction with another healthcare mix as well. Universal healthcare in Canada means “that any investigation, service, and in some cases, medication required for normal health, are provided to the patient free of charge,” said David R. Edmison, M.D., Ottawa.

The Canadian Health Act “regulates the exclusion of the provision of private healthcare except for services not listed in the provincial plans,” Dr. Edmison said. “Charging a patient for a listed procedure such as cataract surgery could land a physician in jail even if the patient is willing to have their problem addressed sooner.”

Dr. Arshinoff said his province initially (Ontario) offered doctors the option of billing the patients directly and having the government reimburse the patient, or billing the government directly for services rendered. All physicians had to choose one or the other system, he said. In the late 1980s, the Ontario government sought more budgetary control and began to set firm healthcare budgets, Dr. Arshinoff said. Predictions abounded that by the mid-21st century, healthcare costs would consume every penny of the country’s gross domestic product. Medical fees were to be negotiated with the government once yearly, physician incomes were capped in an effort to reduce the number of services rendered to patients, and waiting lists to see physicians became the norm, Dr. Arshinoff said. Further, the government placed restrictions on physicians’ access to hospitals, which in turn became somewhat reluctant to hire new staff.

“Available healthcare dollars have not met the demand of more services and more expensive investigations, hospital budgets have shrunk, and operating room times were decreased,” Dr. Edmison said. “The reality is the public system can no longer meet the increasing demands [of the population].”

Simply stated, “this whole utopia of universal healthcare is crumbling in the face of increasing costs,” said Iqbal (Ike) K. Ahmed, M.D., assistant professor, University of Toronto, and clinical assistant professor, University of Utah, Salt Lake City. Anything deemed “medically necessary” cannot be billed to the patient and the government pays, Dr. Ahmed said. What is deemed medically necessary, though, varies among provinces, who noted some provinces mandate non-foldable intraocular lenses (IOLs) as standard of care, while others allow foldable IOLs.

“Even if you want to prescribe a certain drug, if it’s not provided by the province, the patient has to pay for it,” Dr. Ahmed said. The way the system is set “is not necessarily a bad thing, because you’re still ensuring everyone gets basic care,” he said. Further complicating the system, however, is a government-imposed restriction on the number of medical school applicants accepted, again in an effort to reduce costs. “Manpower studies showed there were too few physicians given the aging population who need more healthcare,” Dr. Edmison said. “Only in the past five years has the government finally acknowledged the physician manpower crisis and increased enrollment.”

Work environments

Most physicians work in a hospital setting, where they are reimbursed a set fee for procedures, Dr. Ahmed explained. “The hospital has a yearly budget, and the less they spend the more balanced their finances at the end of the year,” he said. “So there’s been a general lack of increase in the volumes of surgeries done, and no incentive to do more.”

Dr. Edmison added that, “Unfortunately, hospitals are given a global budget and, therefore, there is a built-in disincentive to treat patients as each patient consumes part of a fixed number of available dollars.” He also said that on-staff physicians are paid the same amounts, regardless of experience. “There’s no recognition of excellence in the field,” he said. “Plus we are continually faced with the fiscal constraints. This leads to a lack of morale throughout the whole system and all healthcare workers have lost a lot of enthusiasm for their work. This is compounded by the lack of gratitude patients have in a publicly funded system. There is a prevailing sense of entitlement on the part of the patients in the public system.”

For physicians interested in ambulatory surgical centers (ASC), Dr. Ahmed said if the procedures done in the ASC are deemed medically necessary, physicians will not be reimbursed for the procedure and cannot charge the patient directly.

In 2004, the federal government threw $5.5 billion at the provinces with the understanding they would improve patient access to care. The government chose five areas it deemed to have unacceptably long wait times; cataract surgery was among them. (The others are cancer, cardiac care, diagnostic imaging, and joint replacement.)

Lorne Bellan, M.D., professor and head, Department of Ophthalmology, Misericordia Health Centre, Winnipeg, Manitoba, and president, Canadian Ophthalmological Society, is chairman of the Wait Time Alliance, a group of physicians across five specialties the federal government deemed to have unacceptable wait times for physician visits and treatment. The group’s Web site, www.waittimealliance.ca, issues report cards on improvements in all specialties by province, with ophthalmology improving from a C or D to a B since the group’s inception.

Historically, he said, eastern provinces (Nova Scotia, Newfoundland, Prince Edward Island, New Brunswick) “didn’t have much of a problem with waiting lists, and the province of Saskatchewan had the longest waits in the country, with 30% of its residents waiting more than a year for an ophthalmologist appointment.” To address the public outcry for more timely access to healthcare, British Columbia, Alberta, and Quebec provinces have “turned a ‘blind eye’ to the establishment of private healthcare, and so far, have decided not to prosecute physicians who provide healthcare for ‘listed’ procedures in spite of threats from the federal government to stop transfer payments,” Dr. Edmison said.

In Manitoba, the province has created a physicians’ assistant program that started in September 2008, Dr. Bellan said. “These people will take less time to train, they’ll be less expensive to pay, and if they can do some of the simpler things, it will free up the physician’s time to focus on more difficult procedures,” he said.

“Because advocates of public healthcare are not as vocal as they and their families are impacted by the long wait times, private healthcare is spreading across Canada and is helping to take the pressure off the system,” Dr. Edmison said. In Quebec, a recent court case helped change the way healthcare is provided, Dr. Bellan said. In the case, the patient sued the province over how long he had to wait for orthopedic surgery, and the courts agreed. “The Chaoulli case was precedent-setting,” he said. “As a result, Quebec issues guarantees for certain things—namely, orthopedics and cataract. There’s a legal guarantee now that if you can’t get a case with a surgeon within six months, the government will pay to have you go elsewhere.”

“Policies to shorten select wait-time problems were initiated by the federal liberal government, and the new conservative government has gone further and challenged each province to meet certain guidelines,” Dr. Bellan said.

Hospital access

When a retiring physician sells the practice, the new owner is not guaranteed access to the hospital. Hospital administrators, giving the hospital more control of the type and scope of practice the new owner would have, would sometimes appoint someone other than the new owner to receive operating room privileges, Dr. Arshinoff said.

“There are not a lot of medical school slots open,” Dr. Ahmed said. “And then once you’ve graduated, the hardest thing to do is to get hospital privileges.” Anecdotally, he told EyeWorld that it is not unusual to wait one to two years before securing operating room privileges in some cities. “You can’t just hire a surgeon,” Dr. Arshinoff explained. “The hospital has to put a plan together to determine the funding needed for the hire, and then has to ask the province for the monies. Some-times even if it’s an approved hire, there’s no space to bring the surgeon on board.” He said he knows of one hospital that has been without a retinal program for 20 years because it could not secure funding. “In reality, there has always been a two-tier system,” Dr. Edmison said. Patients with the financial ability will often travel to the U.S. for more timely access to healthcare. Although private healthcare is not allowed in Canada, the British Columbia, Alberta, and Quebec provinces have opted not to prosecute physicians who provide private healthcare for listed procedures, Dr. Edmison said. Canadian ophthalmologists “can make a good living, despite the constraints on them,” Dr. Arshinoff said, but noted that while Canada “occasionally [gets] some things that remain unapproved for awhile in the U.S.,” the average Canadian hospital is about five years behind on technological innovations.


The Canadian government does not consider refractive surgery medically necessary, and therefore allows surgeons complete freedom, with the patient footing the whole cost.

“Refractive errors are not considered a medical problem that can’t be fixed without surgery,” Dr. Edmison explained. “You can see fine with glasses, the rationale goes. Unfortunately, that also holds true for residual refractive errors after cataract surgery.”

In cataract surgery, however, the hospital provides a basic lens “and physicians can charge the patient extra to get a more sophisticated lens,” Dr. Edmison said.

The Ontario government “set up big cataract centers, the idea being this is fairly rote surgery, and they could monitor it easier,” Dr. Arshinoff said. There are now three operating centers, performing around 6,000 to 7,000 cataract surgeries a year, or about half the province’s cataract surgeries, he said.

“But no one does anything different or innovative,” he said. “These surgeons will do ‘okay’ surgery, but we’re falling behind in adapting innovative techniques as the centers force ‘standardized procedures’ to save money.”

The advance of refractive cataract surgery has also led to an increase in the number of private clinics in Ontario, he said. The provincial hospitals embrace the idea of premium IOLs because they are no longer responsible for the cost of the IOL the patient receives.

“Surgeons need to be extremely cautious,” he said. “If you’re found to be performing government-covered cataract surgery privately but calling it something else, there are serious ramifications.”

In at least one province, the government contracts out standard cataract surgery to private clinics to reduce the waiting times, Dr. Edmison said.

“In Ontario, there are a number of centers where the patient is being charged extra for eliminating astigmatism,” he added. “There are a number of ways to add to government fees, but it’s all done somewhat under the radar.”

Cost containment also came in the form of income caps until a few years ago, he said. “Once you billed $475,000 in any given year, the government would prorate the next $50,000 by 50%, and beyond that, they’d only reimburse 25% of the fee,” Dr. Edmison explained. The cap ended four years ago because waiting lines were too long, he said.

“A busy cataract surgeon in Canada could earn $600,000 to $700,000 a year, but we’re taxed at 46.1%,” he said, adding that retinal surgeons could easily bill $1 million a year, working five days a week. “Many ophthalmologists supplement government income with private fees from a refractive practice,” he said.

Still, there are advantages to the Canadian system, the physicians said.

“As a physician, it’s much nicer to practice here than in the U.S.,” Dr. Bellan said, speaking of a friend in Houston who needs a staff of four just for billing. “My billing staff consists of me. I spend about 15 minutes on the computer punching in the billing codes for what I’ve done, click a button, and two weeks later click another button to see what’s been reimbursed.” Dr. Ahmed agreed, saying he has “about 98% recovery of billings without any extensive paperwork.” And overhead is low as well, about 30 to 40% of costs. “There are some misconceptions in the U.S. about the Canadian system,” Dr. Ahmed said. “We have a lot more liberty than the U.S. does in terms of control—how we want to run our practice, how we want to treat our patients. We get some technologies earlier, some medications earlier as well. Physicians here do very well.”

Editor’s note: Drs. Arshinoff, Edmison, Ahmed, and Bellan have no financial interests related to their comments. Dr. Bellan is chairman of the Wait Time Alliance.

Contact information

Ahmed: 416-625-3937, ike.ahmed@utoronto.ca
Arshinoff: 416-745-7007, ifix2is@sympatico.ca
Bellan: 204-788-8563, lbellan@cc.umanitoba.ca
Edmison: 613-724-3937, edmison@focuseye.com

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