Quick Facts:

• Population (2009): 33,487,208
• GDP per capita (2008): $39,300
• Life Expectancy (years): M 79 , F 83
• Physicians per 10,000 people (2000-2009): 19
• Government health expenditures as percent of total government expenditures (2007): 18.1%
• Universal coverage through private providers: “Medicare” covers hospital, physician, and diagnostic services
• 65% of Canadians have additional coverage from private plans, most through employers
• Children, elderly, and poor health care covered through public programs
• Waiting times for specialty care has been cited as a systemic problem, due to lack of staff and equipment.
• Financed primarily by a combination of federal and territorial income taxes, plus some out-of-pocket spending from patients

Sources: CIA World Fact Book  and WHO World Health Statistics 2010; more statistics can be found at http://www.globalhealthfacts.org

Background Brief

Canada has a publicly funded and administered health care system that provides universal coverage to all residents primarily through private providers. The federal government sets national standards for health care, provides financial support for provincial and territorial programs and directly provides services to certain populations including the military, veterans, people living on reserves and inmates in federal penitentiaries. The ten provincial and three territorial governments administer and also finance health care services. Their health insurance plans are required to meet the five principles set in the Canada Health Act of 1970, including that plans must be: available to all eligible Canadian residents, comprehensive in coverage, accessible, portable among provinces, and publicly administered.

Access
Under the Canadian health care system, known as “Medicare,” universal coverage is provided for all legal residents. This insurance covers medically necessary hospital, physician, and diagnostic services, making them free at the point of use. Most dental care, vision care, medical equipment, and prescription drugs are not covered under Medicare. Designed to prevent the development of a two-tiered system, provincial laws prohibit or curtail the private sector from providing core services covered under the public health system. In 2005, the Supreme Court overturned this prohibition in Quebec.

Many Canadians (65%) obtain additional coverage from private health insurance plans, mostly through their employers, to supplement the care not covered or only partially covered by Medicare. For children, the elderly, and social assistance recipients, many of these services are provided for through other public programs.

Although access to a wide variety of heath services is available under Medicare, waiting times for specialty care has been cited as a systemic problem, particularly due to lack of availability to medical technology and the medical professional shortage. A 2005 study found that 57% of Canadians with health problems reported having to wait more than four weeks to meet with a specialist. [1] In recent years, public concerns over waiting times and access problems have spurred government committees to investigate strategies to address these problems and prompted the investment of $4.5 billion over six years by the federal government, that began in 2004-2005.

Financing
Canada’s Medicare system is financed primarily through a combination of federal and provincial and territorial taxes. The federal government transfers funds to the provinces, which are generated by federal income taxes. The federal funds accounts for approximately a third of health care spending. [2] The federal government can impose financial penalties on provinces if the principles in the Canada Health Act are not followed, but enforcement is restricted to these penalties and political persuasion. The provincial and territorial governments administer the plans and also negotiate salaries of health professionals that work for the system and setting fees for physician services. As a result, insurance plans differ slightly between provinces.

Seventy percent of financing for health care in Canada comes from public sources. [3] The remaining funding is divided between out-of-pocket spending (15%), private health insurance payments (12%), and social insurance funds for worker compensation and research (3%). [4] In Canada, health expenditures accounted for 10.1% of GDP and costs $3,900 per capita in 2007, between that of the U.S. and the U.K. [5] Spending on hospitals and physicians (43% in 2005) made up the largest portion of the total expenditures. [6]

Funding for the Canadian health care system has been a source of concern. Over the course of the past several decades, the federal share of payments to provinces has declined over the years. Both federal and provincial governments have faced financial deficits and have sought to reduce spending on health care services. This funding shortfall has caused shortages of medical workforce and growing waiting lists for patients due to limiting the enrollment of medical students, restricting purchase of medical technology and closing or the merger of many hospitals. [7]

Service Delivery
Primary health care is predominantly provided by general practitioners and family physicians, who are privately employed and typically work in small-group practices. They are paid on a fee-for-service basis and turn in health care claims directly to the provincial or territorial insurance plan to receive payment. Fee schedules are negotiated between the provinces and physician groups. Most hospitals are operated by community boards of trustees, voluntary organizations, or municipalities as nonprofit institutions. Hospitals are relatively autonomous in their daily actions, with control over resources and spending, but must comply with annual global operating budgets set by the provincial or territorial governments.

Primary health care serves two main purposes: (1) to directly provide services such as prevention, treatment of common diseases and injuries, and emergency care; (2) to coordinate patients’ health care and provide referrals to specialists. Canadians can choose their own physicians and although a referral is not required to see a specialist, there are incentives to discourage self-referral.

Resources

Armstrong, P., H. Armstrong, C. Fegan. (1998). A Perfect System? Universal Healthcare: What the United States Can Learn from the Canadian Experience. The New York Press: New York.
This chapter examines some of the successes and challenges of the universal health care system in Canada—expenditures, access, choice of providers, drug costs, fee-for-service payments, and privatization are discussed.

Canadian Institute for Health Information. (2005). Exploring the 70/30 Split: How Canada’s Health Care System is Financed.
This report gives a brief explanation of the Medicare system and a thorough account of how the system is financed.

Canadian Institute of Health Spending Databases, (2009).
The Canadian Institute of Health provides a large range of statistics regarding health care in Canada including data tables on health expenditures and leading health indicators.

Deber, R.B. (January 2003). Health Care Reform: Lessons from Canada. American Journal of Public Health, 93.1:20-24.
This article discusses Canada’s health care system and current issues in financing and delivering health care.

Eisen, B. and A. Bjornberg. (December 2009). Canada Health Consumer Index. Frontier Centre for Public Policy.
This index ranks the Canadian health system's performance by province with regards to patients' rights, waiting times, outcomes, and range of services.

Health Canada. Canada’s Health Care System. 2005.
This government publication provides an explanation of Canada’s universal health care system including information on delivery, expenditure, and the role of the government.

Hutchison, B., J. Abelson, and J. Lavis. Primary Care in Canada: So Much Innovation, So Little Change. Health Affairs, 20.3:116-131.
This article looks at Canada’s basic structure of primary care organization, funding and delivery and explores the prospects for future change.

Iglehart, J. K. (June 2000). Revisiting the Canadian Health Care System. New England Journal of Medicine, 342.26:2007-2012.
This article explains some of the challenges encountered by the Canadian health care system since the 1950s.

Detsky, A.S. and C.D. Naylor. (August 2003). Canada’s Health Care System— Reform Delayed. New England Journal of Medicine, 349.8:804-810.
In this article, the author provides a sequel to Iglehart’s report, focusing on what has happened in the three years afterwards, the “New Deal” between the federal and provincial administrations, and the prospects of the Medicare system.

Lewis, S., C. Donaldson, C. Mitton, and C. Gillian. (October 2001). The Future of Health Care in Canada. British Medical Journal, 323.7318: 926-929.
This article describes the historical and political context of the Canadian health care system, explains challenges since its inception, and suggests paths for the future.

Liao, J. and K. Choi. (November 2009). Cost Expansion versu Cost Control--Lessons from the Canadian System. The New England Journal of Meidicine. 361.
This paper uses Canada as an example of how health coverage can be expanded while maintaining cost control.

Menon, D. (May/June 2001). Pharmaceutical Cost Control in Canada: Does it Work? Health Affairs, 20.3:92-103.
This paper analyzes the reasons behind increases in pharmaceutical costs and potential solutions to limit the growth.

O'Hagan, J. et al. (2009). Self-Reported Medical Errors in Seven Countries: Implications for Canada. Health Care Quarterly, 12:55-61.
This study compares the rate of self-reported medical errors in seven countries with those for Canada. It uses data from the Commonwealth Fund's 2007 International Health Policy Survey to draw its conclusions.

Starfield, B. (May 2010). Reinventing Primary Care: Lessons from Canada for the United States. Health Affairs, 29.5:1030-1036.
This article details how the Canadian Health System has improved since the passage of the Canadian Health Act in 1970 and whether, or not, such improvements are possible in the United States.

Steinbrook, R. (April 2006). Private Health Care in Canada. New England Journal of Medicine, 354.16:1661-4.
This perspective piece examines the private health care sector of Canada’s health care system.

Woolhandler, S., T. Campbell and D.U. Himmelstein. (August 2003). Costs of Health Care Administration in the United States and Canada. New England Journal of Medicine, 349.8: 768-75.
This article looks at the health administrative costs of insurers, employers’ health benefit programs, hospitals, practitioners’ offices and nursing homes in the U.S. and Canada.

World Health Organization. 2005. Health Systems in Transition: Canada. European Observatory on Health Systems and Policies.
This paper provides an in-depth account of the structure, financing and service delivery of the Canadian health care system.