Medicare: Quirky past, uncertain future

By André Picard

To understand Canada’s medicare system, and the challenges it faces today, it is useful to know a bit about its origins. Three major players shaped its history — the Church, the military and the country’s political structure.

Canada’s first hospital, Hôtel-Dieu de Québec, was founded in 1639 by Augustine friars. For the next 300 years, religious institutions, and Catholic nuns in particular, dominated the delivery of care. Just as importantly, the strong religious presence created the cultural belief that health care should be free, one of the underpinnings of medicare.

The military — and the two World Wars — were another crucial influence. During the First World War, the federal government made military service mandatory for young men, provoking the Conscription Crisis.

The political crisis ended when the Liberals rallied to support the Conservatives’ conscription law, with one key condition — that veterans, their widows and children be offered free medical care. This was the first state-funded health insurance program — what we call medicare today.

When the Second World War began, Canada had a problem: 56% of volunteers were deemed unfit for service after a medical exam. This triggered much soul-searching about the role of government in health promotion and health-care delivery.

Prime Minister William Lyon Mackenzie King started talking about a national health insurance program during the war, saying it was the least the government could do to thank Canadians for their sacrifices in those years.

Familiar debate

Meanwhile, there was a lot of action in the provinces. In Saskatchewan, Premier Tommy Douglas created the first public hospital insurance plan in 1946. In neighbouring Alberta, Premier Ernest Manning took a different tack, offering to subsidize private insurance for the poor, the blind and single mothers.

The debate about the best approach — universal, socialized medicine versus subsidized private insurance — continues to this day.

As the provinces implemented programs, they also began to clamour for federal money — another long-standing tradition in this country. In 1956, the government of Louis St-Laurent offered to pay 50% of all hospital costs and diagnostic services, on the condition that access to care be universal and that user fees be outlawed. That law was adopted on March 1, 1957, which is essentially the birthdate of medicare as we know it today.

In 1960, Saskatchewan decided to expand its public hospital insurance plan to include doctors, triggering the infamous doctors’ strike of 1962 and leading to the defeat of Tommy Douglas. Ironically, his successor went ahead with the program because it was so popular with the public.

Important gaps in coverage

Meanwhile, Ottawa appointed Justice Emmett Hall to determine whether Canada was ready for national health insurance. At the time, 10.7 million Canadians had health insurance (private or public), but 7.5 million did not.

The Hall Commission called for a sweeping expansion of public health insurance, but Ottawa extended its 50-50 cost-sharing only to physician services, leaving drug coverage, homecare and long-term care for a later time — which never really came.

What did happen is that the federal government gradually reneged on its pledge to fund 50% of hospital and physician services. Today, federal health transfers account for less than 20% of public health spending.

Knowing this history is important because it helps us understand many of medicare’s struggles today.

The structure for delivering and funding health care in Canada was fashioned in the 1950s, and it has changed very little since. But the world, from medicine to demographics, has changed a lot.

In 1957, Canada was a young country — average age 27; life expectancy 67 — and the health system delivered little other than acute care. Today, the average age in this country is 47 and life expectancy is 82. The vast majority of care is chronic care.

We don’t follow our own advice

For decades, governments have bickered over funding instead of using their energies to reform and modernize the medicare system.  

For example, we have never implemented the sensible recommendations of the 1964 Hall Commission or the 1974 Lalonde Report. The latter, which focused on the social determinants of health, was one of the first policy papers to stress that health depends more on factors like income, education and housing than on medical care.

Other countries have taken our ideas, expanded on them and implemented them. Virtually all European countries have extended coverage beyond hospitals and physicians to prescription drugs, homecare, long-term care, dental care and so on.

They have also, especially in the Nordic countries, embraced the Lalonde Report. As a result, they have health care that is more extensive, fairer and cheaper than Canada. We have the least universal of all the universal health care systems in the world.

Finally, countries such as those in Europe have not become paralyzed by the so-called public-private debate. In Canada, we often speak proudly of our public system and how we don’t have private health care. The irony is that 30% of our health spending is private — the highest rate of any Western country apart from the United States.

We know the solutions

The puzzling thing is, despite all these challenges and failures, we deliver good health care in Canada. But we do it despite the system, not because of it.

Our fundamental problem is not how much money we spend on health care, but how we spend it. We have a bifurcated system, in which 100% of hospital and physician care is covered by public insurance, while other areas are covered unevenly (45% of prescription drugs and 4% of dental care, for example).

We still haven’t figured out the role of private insurance and private delivery of care within our public system — an issue debated since World War I. All our problems are administrative and engineering issues. They are about structure and co-ordination and proper allocation of resources.

As someone who has been writing about health care in Canada for three decades, my greatest frustration is that we know the solutions, but we are laggards at implementation.

We have known the solutions for more than 50 years: We need to expand what medicare covers, and clarify what it does and does not cover, focusing on paying for what works and on giving the public choice. To use the common analogy of the medicare “basket of services,” we need to make the basket wider, but less deep.

At the same time, the emphasis has to shift away from merely providing sickness care to addressing the causes of poor health, like lack of income and education. 

In short, we have to cast off our 1950s model of health care delivery and funding, which seems frozen in time, and drag medicare, kicking and screaming, into the 21st century.

André Picard adapted this article from his talk at uOttawa during Alumni Week 2016. Picard has received much acclaim for his writing, including the Michener Award for Meritorious Public Service Journalism and the Centennial Prize of the Pan American Health Organization, awarded to the top health reporter in the Americas. He is also an eight-time finalist for the National Newspaper Awards, Canada's equivalent of the Pulitzer Prize. He elaborates on the ideas in this article in his most recent book, The Path to Health Care Reform, available for free online.

Main photo:
In a doctor’s office circa 1950. Photo: Alexandra Studio/Toronto City Archives/flickr