By Dave Connor
How Free Health Care Works
To answer the first question, we must see it through the lens of a nation that views universal access to health care as a cultural institution, widely considered a right. It supports a philosophy that the measure of a society is in how it treats its most vulnerable members. Universal health care is possibly the core value that most binds and defines Canadians and is, in a sense, infrastructure, in that it has social and economic value that eclipses its cost.
In Canada, health care is not a profit center and is not run as a business, because it isn’t one. Health care is a provincial responsibility and is funded by a taxation system that is pervasive and aggressive. Canadians pay comparatively high income taxes to both provincial and federal governments. Less-affluent provinces receive transfer payments from the federal government to support shortfalls in provincial responsibilities. In Ontario, cigarettes are the equivalent of $8.20 a pack, a gallon of gas is $3.56, and a bottle of Canadian whiskey is $32.40. The revenues generated by these products help fund the health care system. Tax revenues for both levels of government are so lucrative; the sale of liquor is controlled through a retail system owned by the province.
The bulk of tax revenue comes directly from personal income tax. The taxable income levels for Canadians are high by comparison, in that mortgage interest is not tax-deductible. Every mortgage dollar is an after-tax dollar. This allows a significantly larger tax pool for governments to draw on. A paid first-class firefighter with a gross salary of $78,000 (comparable to police officers and high school teachers) will pay close to $20,000 in personal income tax, more than $8,000 of which goes to the province. Hidden in the $8,000 provincial tax is a health care premium of about $1,000.
In 2009, the provincial government has a budget of $93 billion; $46 billion of it (roughly half) goes to the Ministry of Health, the department responsible for “free” health care. This serves a population of 13 million.
Doctors, rather than HMOs, are the gatekeepers of the system. A test cannot be denied if a physician has ordered it; so must a hospital admit a patient.
One of the ways the province controls costs is by limiting the amount physicians can invoice the Ministry of Health for services. For general practitioners, fees are capped at approximately $400,000 per year. As a result, some family doctors will not take new patients, as they will not be paid for their work.
The system as designed does not cover medications unless a patient is in the hospital. After age 65, extended health benefits will apply including coverage for most medications. Coverage does not extend to long-term nursing home care. If an individual has pension benefits or savings/personal holdings, he will be expected to pay for long-term care for as long as the money lasts. No one is left without shelter or care, but those with the resources to cover their costs must do so.
Don’t People Die Waiting for Treatment?
The second question has grown out of anxiety created by those wishing to maintain the status quo. It is argued that the good doctors would leave if their income were affected. It is argued that people will die in hospital hallways, waiting for underfunded services provided by poorly paid practitioners. What is interesting is that these same arguments were made in 1959, when the Premier of Saskatchewan introduced the health care system that evolved into the Canadian model. His party went on to become the New Democratic Party. He became the grandfather of Kiefer Sutherland and was voted in a CBC national poll as the greatest Canadian ever. His name was Tommy Douglas.
The Canadian model offers significant differences from HMO-based programs. Coverage is not tied to employment, and patients are free to choose their physicians. It is very costly, but is accepted in all layers of society as the single most important service a government can provide. The tax structure causes Canadians to have a slightly lower standard of living than their American cousins, but one where impossibly difficult financial health care decisions are not made in a hospital waiting room. The system allows for a patient to have the same cancer twice or a sick child to have full coverage, without the asset evaporation of life savings or the family home. The system is expensive, and there can be wait times, but no firefighter has been denied surgery after a line-of-duty injury or has had to fight for treatment for a workplace cancer.
Dave Connor is a 28-year veteran and district chief with Mississauga Fire and Emergency Services, which serves a diverse community of 750,000 in Southern Ontario, Canada.