OTTAWA, June 19, 2012 – Canada's provinces could experiment with better ways to finance and deliver universal health care if the federal government removed shackles in the Canada Health Act (CHA) that create a barrier to such reform, two authors argue in a paper released today.

In a Macdonald-Laurier Institute paper entitled, First, Do No Harm: How the Canada Health Act Obstructs Reform and Innovation, authors Jason Clemens and Nadeem Esmail say serious reform can be achieved while retaining the core principles of universality and portability now found in the Act.

The way the CHA is currently written is incompatible with a number of policy options that could help achieve affordable, high-quality care based on proven success in other industrialized countries with universal health care: "In order for Canada to proceed with serious positive health care reform, the CHA must be revised."

The paper compares Canada's system to other developed nations that provide universal health care, and found a number of important differences. These include:

- All other universal health care countries allow private parallel health care, where patients can choose to purchase health care services outside of the public system;

- The large majority of those same universal health care countries allow privately owned and operated surgical facilities and hospitals delivering universally accessible care;

- Patients in the majority of universal health care countries are required to share in the cost of health care consumed; and

- In some of these countries, independent and private insurers operate the universal insurance scheme, in some cases in competition with one another. In some of these countries, individuals are able to tailor their universally accessible insurance plan to their own unique preferences.

While the CHA is theoretically compatible with a wide range of health care policies, it has a troubling lack of clarity that stifles provincial policy reform. Further, the authors argue that the federal government has been selective and arbitrary in its enforcement of the rules, creating additional uncertainty for provinces interested in pursuing health care reform.

Clemens and Esmail point to the successful overhaul of Canada's welfare system in 1995, and suggest a similar approach could work well for health care reform. The 1995 federal budget replaced the existing cost-sharing transfer to the provinces for social programs with a block grant while simultaneously freeing the provinces to experiment in the design and delivery of social services.

The authors propose a series of changes to the CHA that would bring Canada's system more in step with other universal health care countries around the world while retaining the principles of universality and portability to which Canadians are so attached.

Among the proposed changes:

- Remove the ban on extra billing and user charges, while ensuring low-income households will either receive financial assistance or are exempted from policies that introduce direct charges for use of the health care system;

- Clarify that provinces, not the federal government, are ultimately responsible to their citizens for health care delivery;

- Provide the provinces greater freedom to experiment with how provincial health insurance plans are operated and regulated, including for-profit and competitive models; and

- Affirm the principle of universality, but remove the reference to "uniform terms and conditions" to allow provinces to engage in more experimentation.

Clemens and Esmail argue that these reforms will not only create the environment for improved universal health care, but also protect the core principles of Medicare.

Jason Clemens is the Director of Research and Managing Editor of the Macdonald-Laurier Institute in Ottawa. Nadeem Esmail is an independent health care economist.

For more information or to arrange interviews, please contact Tripti Saha at or call (613) 482-8327, ext. 105.

The Macdonald-Laurier Institute is the only non-partisan, independent national public policy think tank in Ottawa focusing on the full range of issues that fall under the jurisdiction of the federal government.

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