Essential functions of Canada's public health care system, decentralization, and tools for quality assurance: consistency through change in the Canadian health system


Ed Aiston,1 Kate Dickson,1 and Nick Previsich1



"Canadians care deeply about their health and the health system. As a nation we want to continue to live healthy and productive lives. We now know that increasing our understanding of how such factors as income, education, housing, and support from family and friends influence our health will allow us to make further gains in improving health and reducing inequities."

¾Michael Decter, Chair of the Canadian Institute for Health Information 3 February 2000.



The high standard of living and health care enjoyed in Canada can be attributed to the strong partnerships that have evolved between the federal government and the provincial and territorial governments since the 1950s and 1960s, when the current health care system was being established. The Government of Canada's role in health care involves passing legislation and setting and administering national principles, standards, and regulations. The Government also helps finance provincial and territorial health care services through fiscal transfers. Using such policy instruments as direct spending, taxation measures, regulation, and information services, the Government of Canada has actively supported the provinces in developing health status objectives, producing comparative health status reports, conducting research on medical practice organizations, performing economic analyses of medical intervention alternatives, and assessing new technologies. Additional federal health responsibilities include developing strategies for health promotion and illness prevention and education and providing accurate and timely health information upon which Canadians can base their individual choices and decisions.

The direct management of health services is the responsibility of each province or territory. Through their respective health ministries, the provinces and territories plan, finance, and evaluate the provision of hospital care, physician and allied health care services, and some elements of prescription care and public health. The provinces and territories also supervise the specific responsibilities that are delegated to other, nongovernmental agencies. Provincial health ministries fund public hospitals, negotiate salaries of allied health professionals, and negotiate fees for physician services with provincial physician associations. In all cases, a schedule of benefits for physician services under the Health Insurance Act is published and available to the public.

National Forum on Health

In 1994 the Government of Canada launched the National Forum on Health with a mandate to "involve and inform Canadians and to advise the federal government on innovative ways to improve our health system and the health of Canada's people." Published in 1997, a resulting five-volume report entitled Canada Health Action: Building on the Legacy found that the Canadian health care system was fundamentally sound and recommended that its core characteristics remain unchanged. Sustaining Canada's health system will require a balance of actions on nonmedical determinants and of actions by the health system itself. On economic grounds, the Forum concluded that the single-payer model of public health insurance is the best approach to controlling overall spending on health. This Medicare system ensures that Canadians receive medical attention when they need it and avoids the duplication and inefficiency of a system with hundreds of private plans.

The Forum endorsed the concept of continuous quality improvement, defined as "a strategic, integrated management system for achieving customer satisfaction." The Forum supported quality assurance in health care, described as "the measurable and sustained achievement of preferred outcomes through appropriate collaboration and based on need." The Forum recognized there were unexplained variations across the country in rates of surgical procedures, number of hospital days being used by those who did not require acute care, and levels of inappropriate use of drugs. The Forum recommended that: 1) resources be used more efficiently within the system (as opposed to being increased), 2) collaboration be strengthened among organizations, providers, and consumers, 3) existing services be realigned, and 4) decision-making be evidence based. The Forum also recommended that steps be taken to bring home care and medically necessary drugs (referred to as Pharmacare) under the umbrella of the publicly funded health care system. In other words, out-of-hospital services should be made an integrated part of publicly funded health services and should reflect an approach to "funding the care, rather than the provider or site," by being based on need instead of supply.

The Forum also recommended that primary care services be carefully restructured. It did not put forward any particular model, but suggested that any reform of primary care include: 1) a realignment of funding to the patients, not services and 2) a remuneration method not based on volume of services provided by physicians but that promotes a continuum of preventive and treatment services and the use of multidisciplinary teams.

The Forum concluded that concerted actions based on informed decisions were needed to make the health care system more efficient, effective, and reflective of contemporary practice in health care delivery. A key objective should therefore be to rapidly develop an evidence-based health system, in which decisions are made by health care providers, administrators, policymakers, patients, and the public on the basis of appropriate, balanced, high-quality evidence. Federal leadership in developing a nationwide population health information system was considered essential. Such a system would bring together a standardized set of longitudinal data on health status, health determinants, and health system performance, and would ensure patient privacy and confidentiality.

Current directions for health in Canada ¾ decentralization for improved population health

In its 1997 budget the Government of Canada acted on a number of the National Forum recommendations. A Health Transition Fund of Can$ 150 million over three years was established to allocate funds to the provinces for pilot projects leading to better approaches to health care delivery, including home care, coverage for medically necessary drugs purchased outside the hospital, and primary care reform. An additional Can$ 50 million over a three-year period was put in place to launch a Canada Health Information System. Also being implemented are several programs to improve the health and well-being of children. An Aboriginal Health Institute has been established, and in November 1999 legislation was introduced to create the Canadian Institute(s) of Health Research. That Institute would organize, coordinate, and fund health research at the federal level and further evidence-based decision-making for quality assurance and efficiency in the use of resources.

Since 1991 most of the provincial governments have undertaken structural reforms involving the transfer of authority for both the health of populations and the provision of health services from the province to the subordinate regional or district level. In some cases these regional health authorities have also become responsible for the social programs. All the provinces have expressed a commitment to shifting the emphasis of their health systems away from institutionally based delivery models to community-based models that place increased emphasis on health promotion, disease prevention, a client focus, and strategic quality planning. Institutional restructuring has involved the consolidation of certain specialty services at designated hospitals, the closure of some hospitals, and the redesignation of some hospitals as community health centers. In addition, almost every province is moving toward improved service integration for the full continuum of care. Methodologies in the provinces have included integrating programs at the provincial level (Prince Edward Island and Newfoundland); using regional health authorities as the integrating body (Saskatchewan); targeting services to a specific population segment (senior citizens in Alberta; youth in Manitoba); integrating services for a particular disease category (cancer care in Ontario); and community-level initiatives (cities of Toronto and East York). All the provinces have also taken steps to develop "wellness" strategies, have begun to place more emphasis on developing primary care models and networks, and have increased funding for home care. Better information systems and closer linkages with teaching and research are also being developed as part of a new public sector results orientation that seeks to enhance integrity, transparency, and effective performance.

Information about how determinants, risk factors, and interventions relate to health outcomes is essential to protecting the health of Canadians. One response has been the Health Services Utilization and Research Commission (HSURC) in Saskatchewan. It is an arm's-length, government-funded agency that assesses the province's health system and makes recommendations for evidence-based change. HSURC is also the provincial health research granting agency. Other responses have included the Canadian Coordinating Office for Health Technology Assessment and the British Columbia Office of Health Technology Assessment. They were both established to influence decision-making on the appropriate use of health technology, by collecting, analyzing, creating, and disseminating information on the effectiveness, cost, and health impact of technology. The technologies of concern include all procedures, devices, equipment, and drugs used to maintain, restore, and promote health care.

The formation of the regional health authorities in the provinces has in turn required the development of new and flexible funding arrangements that allow the health services to fit the devolution to the regions of responsibility for hospital services, long-term care, and diagnostic and community services. Funding is allocated on the basis of the districts' population and health care needs, and it is adjusted according to the age and gender of the population served and the patterns of health service delivery. For institutional acute care services, the basic need indicators used are the standardized mortality rate, low birthweight rates, and a fertility factor. Institutional supportive care services recognize districts with higher proportions of elderly living with family or nonrelatives as having more need for services, and home-based services take into account districts with more elderly living alone or with family members. There is, however, widespread concern about the potential cost of insured home care and pharmaceutical programs, and opinions also diverge on home care and Pharmacare. In response to the need to measure the impact of these changes across the country, new accountability mechanisms are emerging. The provinces of Alberta, British Columbia, New Brunswick, Newfoundland, Nova Scotia, and Saskatchewan have all published formal accountability framework documents incorporating macrolevel public accountability, the opportunity for public interaction and influence, and health system performance reporting.

The search for quality assurance has led many of the provinces in Canada to develop their own health needs assessments as a basis for policy development and program implementation. These comprehensive assessments involve systematically collecting and analyzing information about underlying causes of health, illnesses, and injuries, including income, social status, education, employment opportunities, and the availability of preventive and primary care health services. The assessments encompass a geographical area or a particular group of people. The information is usually shared with planners, staff, other partners, and community members in order to develop policies and programs to improve and maintain health.

To strengthen policy development and program planning in Canada, national consensus indicators have been developed, as have specific provincial indicators in Newfoundland, Nova Scotia, Prince Edward Island, and Saskatchewan. These indicators include ones for the social and economic environment, the physical environment, health care, lifestyles and coping skills, human biology, child development, health status, and health system performance.

In the province of Prince Edward Island, "decision support tools" have been developed to improve understanding among health care providers and regional authorities of the conceptual framework of cross-sectoral reallocation (CSRA). CSRA refers to shifts in resources from one sector to another to improve the health of entire populations or target groups. Some examples are shifts from institutional health care services to community-based health care programs, or from health care services to such social services as income or employment supports. These tools create a favorable climate for CSRA, reduce conflict, assist in decision-making, and maintain support from health care providers, the media, and the public at large.

Current challenges for health in Canada

Canada's health care system is recognized as one of the best in the world, with its principles of universality, comprehensiveness, reasonable access, portability, and public administration. The system, however, does face challenges. A leading issue in the health sector reform process has been sustaining solidarity on the use of public taxes to fund health care in exchange for maintaining a readily accessible, high-quality system.

Canada has one of the highest levels of self-rated health among citizens of developed countries, with 63% of adult Canadians saying their health is excellent or very good, and only 9% rating their health as fair or poor. Despite that fact, there is growing public concern that a decade of funding and staff cutbacks has eroded the health care system. This has led to a number of initiatives designed to maintain quality and determine effectiveness.

Through its 1999 budget, the Government of Canada allocated federal transfers of Can$ 11.5 billion over five years for the provinces and territories to address their health care priorities. According to projections of the Canadian Institute for Health Information (CIHI), spending on Canada's health care system was expected to rise by 5% in 1998 and a further 5.1% in 1999. Hospital care remains the leading category of health expenditures, although its share of the total has steadily declined since the mid-1970s. Sales of prescription and nonprescription drugs are replacing spending on physician services as the second largest category. These rising costs are attributed to the growth of high-cost technologies, combined with a rapidly aging, more informed, and assertive population that is placing increased demands on the health care system.

There is also concern about the availability of trained nurses and physicians and the sustainability of the system. The reduction in medical school size in the early 1990s has meant that young physicians are not there to replace those who wish to retire. Despite this concern, Canada's physician supply grew 1.7% in 1997-1998, largely due to increases in the number of specialists and the number of physicians returning from abroad to work in Canada.

Continuing reforms of the health care and health financing system are essential, including with primary health care and home care. Also needed are refined community health models involving partnerships among doctors, nurse practitioners, nurses, and other health care providers, so as to make the most efficient use of resources. A HSURC report on Saskatchewan released in September 1999 looked at hospital use patterns and found that funding cuts did not adversely affect rural residents' health status or their access to health services. In February 2000 Canada's Health Minister and the chair of the Canadian Institute for Health Information announced the appointment of a governing council of the Canadian Population Health Initiative. The council will promote state-of-the-art analysis of research findings and make the resulting information accessible in innovative ways. The Western Canada Waitlist Project, to be released in the summer of 2000, will help Canadians better understand and manage waiting lists for health care services. These efforts and others will assist Canadians in making decisions that will improve their health and that of their families and communities.



1 Health Canada, International Affairs Directorate, Ottawa, Ontario, Canada. Send correspondence to: Nick Previsich, International Directorate, Health Canada, e-mail:

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