Canada

Access to care, access to justice: the legal debate over private health insurance in Canada

Keywords: Waiting lists, Health and safety, Insurance

The recent Supreme Court decision in Chaoulli has raised the prospect in Quebec of a greater role for private insurance in the healthcare system. A majority of the court ruled that Quebec’s prohibition on private health insurance for services only available in the public system was a violation of Quebec’s Charter on Rights and Freedoms, given that long waiting times in the public system cause both psychological and physical harm to patients. The court found that many Quebeckers would not suffer as a result of waiting lists if the ban on private health insurance was lifted. The court did not, however,reach a definitive conclusion on whether similar provisions in other provinces were also constitutional, with a three-three split on this issue. This means there is great uncertainty as to the legality of provisions in other provinces that seek to suppress the flourishing of a private sector, and more court cases can be expected. The Quebec government has asked for a 12-month stay in striking down the law relating to private health insurance, which the court has granted.

Four criticisms of the decision:

• 1.

  Parliamentary sovereignty vs judicial activism (in this case the court stepped too far into the policy arena). Some commentators, however, believe the court did not go far enough and should have endorsed a right to publicly (not privately) funded healthcare where long waiting times jeopardize an individual’s health and security of the person.

• 2.

  Failure to understand the dynamics between public and private insurance across a range of countries, and in particular a failure to distinguish social insurance (and group-based insurance) systems from systems where private insurance enables people to jump queues and waiting lists.

• 3.

  Failure to consider the distributional consequences of allowing private insurance and the inequities that arise where access is rationed on the basis of ability to pay.

• 4.

  Failure to consider other fixes (many provinces have introduced management systems that improve waiting times without forcing patients into a private system).

Four “take-home” messages for policy makers:

• 1.

  Policy makers should be prepared for litigation challenging restrictions on the private sector in every province. Careful consideration of the laws prohibiting the flourishing of the private sector is required to ensure they will withstand a constitutional challenge.

• 2.

  The best defence, and the best solution, is to fix the waiting list problem and provide people with certainty in waiting for treatment. Provinces should also provide a fair process by which citizens can appeal the length of time they have to wait for treatment, and they should consider implementing a patient bill or rights and/or waiting time guarantees.

• 3.

  The medical profession needs to be more aware of the increased potential for conflicts of interest when operating in a two-tier system.

• 4.

  Policy makers have jeopardised Medicare by neglecting the waiting time issue; although extremely problematic Chaoulli has focused political attention on waiting lists.

The conference Access to care, access to justice: the legal debate over private health care in Canada, partly sponsored by the Canadian Health Services Research Foundation, took place on 16 September, 2005 at the Metro Toronto Convention Centre. It was organized by Colleen M. Flood, Kent Roach, and Lorne Sossin of the University of Toronto’s faculty of law. A book based on the papers presented at the conference was released on 5 October, 2005. Materials relating to the Chaoulli case (including translations of the judgments at trial and appeal) and information on obtaining the book are available online at: www.law.utoronto.ca/healthlaw/

Many at the conference were critical of the Chaoulli decision. However, some were supportive; Stanley Hartt claimed that, in light of the public healthcare system’s state of disarray, Chaoulli was a long time coming and happened for good reasons. If the state wants to maintain a monopoly on healthcare, he argued, it should make sure that care is available within a medically reasonable time. Others retorted that, after Chaoulli, it may be politically more expedient for provinces to allow a two-tier system rather than to do the hard – yet necessary – work of overhauling Medicare.

Former Quebec health minister Claude Forget argued in support of the Chaoulli decision, saying it acknowledged the centrality of the individual within the healthcare system. It may also force the system away from the “command and control” management style of public administration, which tends, in Mr Forget’s view, to stifle incentives, competition, and efficiency. Chaoulli thus creates an opportunity to resolve the inevitable clash between comprehensiveness and the growing constraints on the availability of public resources by paving the way for a division of responsibilities between the public and private sectors.

In contrast, the Honourable Roy Romanow suggested that the court improperly moved from determining constitutional law to policy-making, and he cautioned against those who would exploit the decision to push their own agenda of markets over justice. Moreover, in his view, the court simply got the evidence wrong on the effects of private insurance: single-payer systems actually save resources and the so-called “third way” does not work, notably because it inevitably will cause a drift of resources to the private sector. He acknowledged that Chaoulli sounded a clarion call for reform, but emphasized that Medicare was a public good and Canadians have no appetite for a private system.

Misreading the evidence

A number of commentators criticized the court’s analysis of the evidence on the dynamics of public and private health insurance. The court failed to understand the dynamics between public and private insurance across a range of countries, and in particular it failed to distinguish social insurance (and group-based insurance) systems from those where private insurance enables people to jump queues and waiting lists. They also failed to consider the distributional consequences of allowing private insurance and the inequities that arise where access is rationed on the basis of ability to pay.

Colleen Flood, a University of Toronto law professor and Canada research chair in health law and policy, questioned the court’s conclusion that the public system would not be harmed by the advent of a private tier and discussed how the transfer of skilled medical professionals from the public to the private sector must affect the ability of the public system to deal with those who are left to be treated within it. She cautioned that, in the absence of an injection of a significant level of human capacity into the public system, waiting lists in that system will likely grow as a result of the advent of a private tier.

Professor Flood also argued that the court’s interpretation of the evidence on foreign systems was incorrect. First, she noted the argument that the public system’s “monopoly” was the source of waiting lists was misleading, since other “non-monopoly” countries also have waiting list problems. She also noted that countries with greater degrees of private financing have other access problems – for example high co-payments or, in the case of the US, a substantial proportion of the population without any insurance at all.

The evolving situation of healthcare in both the Netherlands and Germany was addressed by André den Exter, from the Rabdoud University Nijmegen, and Stephan Greß, from the University of Duisburg-Essen. They clearly illustrated the court’s misconceptions about how private insurance operates in European countries and especially noted that private insurance in Europe does not usually perform a duplicate function, enabling those who hold it to jump queues. Indeed in the Netherlands, the fee paid by private insurers and social insurers to physicians is the same, thus eliminating any incentive for physicians to preferentially treat those who are private payers. Both warned that the apparent quick fix of privatization should be viewed with scepticism.

Terry Sullivan, president of Cancer Care Ontario, discussed the successful management of waiting times for cancer in Ontario and suggested that the Supreme Court’s decision to see private insurance as the solution to inappropriate waiting times glossed over many other more promising approaches.

Consequences

A number of commentators discussed what the consequences would be of allowing a two-tier healthcare system.

Open markets

Ms. Tracey Epps, from the faculty of law at the University of Toronto, and Professor Andre den Exter, of Rabdoud University Nijmegen, warned that international trade agreements could render the reversal of privatization difficult. The presence of a market for private insurance would mean that access should be granted to American and Mexican insurance companies who, according to the rules of NAFTA, could claim large sums in compensation if their investments were subsequently re-nationalised or “expropriated.”

Increased potential for conflicts of interest

Trudo Lemmens, from the University of Toronto’s faculty of law, pointed out that the emergence of private insurance increased the risk of conflicts of interests for physicians. To what extent would a doctor’s medical decisions be influenced by the financial imperative to perform as many private consultations as possible?

Who would hold private insurance?

Professor Andrew Petter warned that access to private health insurance is likely to be a privilege enjoyed only by the more affluent. Professor Flood provided evidence from a range of jurisdictions that those with private insurance are more likely to be the well-off. Professor Petter noted that where public and private systems competed for the same healthcare professionals, those with private insurance would have an interest in the most-qualified being diverted to the private system, thereby diminishing the quality of the public system (and thus the care available to those without the resources to purchase private insurance). The more prudent strategy for governments seeking to reduce waiting times is not to expand private medical services for the few, but to improve public medical services for all. Taking this a step further, Professor Lorne Sossin of the faculty of law at the University of Toronto argued that the court should have endorsed a positive right to publicly (as opposed to privately) financed healthcare.

What to do now?

Tackle waiting times

After Chaoulli there is the prospect that similar challenges will be launched in other provinces to attack various pieces of legislation that prohibit the flourishing of a private sector. Participants at the conference were in agreement that the best approach – both legally and politically – it to tackle the issue of waiting lists and provide people with certainty in waiting times.

A fair process for decision review, with robust appeal mechanisms, is needed

Policy makers should be prepared for litigation challenging restrictions on the private sector in every province. Careful consideration of the laws prohibiting the flourishing of the private sector is required to ensure they will withstand a constitutional challenge. To stave off constitutional challenges and to improve Canadians’ faith in Medicare, Caroline Pitfield and Professor Flood argued that provinces should also provide a fair process by which citizens can appeal the length of time they have to wait for treatment and consideration. Any such appeal mechanism must be able to address issues with respect to the quality and the timeliness of access to healthcare services, as well as physical and psychological harm. Both they and Stanley Hartt argued that consideration should be given to implementing waiting time guarantees.

No more procrastination

The overriding sentiment of the day was that policy makers have jeopardised Medicare through neglect of the waiting time issue. Although extremely problematic, Chaoulli has focused political attention on waiting lists. Decision makers need to seize the moment to implement reform – to centralize the management of waiting lists and take it out of the hands of individual physicians – and work to restore Canadians’ faith that when the need the system it will be there for them by implementing mechanisms and safeguards to prevent unnecessary suffering while on waiting lists.

For more information: www.chsrf.ca/