Health Care In Canada: Incrementalism Under Fiscal Duress

PROLOGUE: Canada's health insurance system, the nation's most popular publicly financed service, has for years demonstrated a capacity to deliver universal, high-quality medical care for considerably less per patient than is the case in the United States. But now new strains are testing Canada's commitment to maintaining its treasured system. Over the 1990s, as Canada sought to eliminate its soaring budget deficit, the federal government reduced its financial commitment to the provincially administered health insurance plans. The plans, in turn, sharply squeezed their spending on hospitals, sorely testing physicians' and nurses' tolerance for major change. In sharp contrast with the United States, which has increasingly relied on market-driven methods to achieve the modest reductions in hospital capacity that had been recorded, Canada used a combination of fiscal and regulatory initiatives to radically restructure its hospital sector. In this paper David Naylor, a physician-scientist who also is well regarded as a student of the system, discusses the evolution of the provincial health plans. Naylor is a professor in the Department of Medicine at the University of Toronto and also a senior scientist of the Medical Research Council of Canada. Naylor was founding chief executive officer of the Institute for Clinical Evaluative Sciences and is a scholar of international repute. After earning his medical degree from the University of Toronto, Naylor was awarded a doctorate from Oxford University, where he studied as a Rhodes Scholar. ABSTRACT: Driven by fiscal pressures in the 1990s, Canada's provincial Medicare systems cut inpatient care, expanded community services, and consolidated hospitals under regional authorities in nine of ten provinces. Public confidence has been badly shaken by the transition. No province has successfully integrated services across the continuum of care. Home care and prescription drug coverage vary from province to province. Efforts to reform physician payment have stalled, and capacity to measure and manage the quality of care is generally underdeveloped. Thus, for the next few years, policymakers must stabilize the acute care sector, while cautiously pursuing an agenda of piece-meal reforms.