The Political and Economic Sustainability of Health Care in Canada: Private-Sector Involvement in the Federal Provincial Health Care System

by Howard A. Palley, Marie-Pascale Pomey, and Owen B. Adams


Globally, the mix of private and public sector involvement in health care delivery is a focus of political and public policy concern. This study uses a comparative multi-dimensional methodology which also is a theory with respect to the dimensions of public policy-making to examine the nature of expansion of commercial activities within provincial health care systems. In so doing, it presents case analyses of Ontario, Quebec and Alberta. Such factors as the provincial political culture and history related to the delivery of health care services are examined.

The dynamic process between federal and provincial officials operating within the context of the Canada Health Act and Canadian fiscal federalism is also discussed. The authors also discuss economic and political sustainability concerns as they relate to increased commercial activities in the health care systems of the provinces. In addition, the ideology of political leadership and their disposition to act (or refrain from acting) is focused on. These are some of the factors that help shape the different ways in which various provinces have dealt with the phenomenon of commercial activities in provincial health care systems. Finally, the study raises the concern that, in order to see that the public need for access to health care services and to quality of care are met in this environment, there is a need for a regulatory process that will provide for public accountability.

Canada has a complex health delivery system which is a conglomeration of 13 public plans––10 provincial and three territorial as well as a number of federally administered plans serving special populations such as Aboriginals and Veterans––all providing full coverage for most hospital and physician services as well as partial coverage for many services that vary among plans.

The importance of this study is that it examines how the public/private sector relationship in health care delivery––particularly that of the for-profit sector––has developed both historically and in recent years, in three subnational provincial jurisdictions within a federal system. The case study provinces are Ontario, Quebec, and Alberta. The study examines both similarities and differences in this development. These provinces are highly distinct in their political culture and political history affecting health care delivery. Ontario and Quebec are Canada’s most populous provinces and Alberta is an increasingly populous prairie state. Alberta is unique in its long-time governance of the Progressive Conservative party and its predecessor the Social Credit Party. Ontario has had a more variable political history with periods of Progressive Conservative, New Democratic Party and Liberal leadership and in recent years Quebec governance has shifted between the Parti Québecois and the Liberal Party. In this study, one dimension that the authors examine are political dispositions to act regarding public/private initiatives in health care delivery and how this affects health care delivery in these provinces.

Provincial medical and hospital plans are constrained by the Canada Health Act of 1984. For necessary medical and hospital services, the provinces and territories must adhere to the five principles of the Act in order to receive federal funding. However for other extended health care and health care-related services, there are federal contributions that are not constrained by these principles––although subject to reporting obligations. Another factor providing some flexibility in provincial Medicare plans is that necessary hospital and medical services are not enumerated in the Canada Health Act. This has allowed some “delisting” of services which is discussed in the case studies.

In the provincial case studies, the authors examine how the federal/provincial dynamic in the delivery of health care services has worked out in the three provinces, with respect to similarities and differences regarding the involvement of the for-profit sector both within and outside the respective Medicare systems. They also examine how the fiscal setting has affected both political and economic sustainability pressures with respect to inclusion of private commercial initiatives in these three provincial settings. The authors note that these initiatives occur both within and external to Canadian provincial Medicare systems and that there is a need to see that such initiatives are held to public accountability to meet equity and access goals.

The study utilizes government documents, press reports and personal interviews to draw a picture of health delivery developments within the Canadian federal context. This study adds to the comparative health policy literature by applying a comparative approach to subnational provincial cases. It is also noteworthy to note that globally, many nations’ health insurance plans incorporate a mixed public and private health delivery system, albeit that the mixes of for-profit and not-for-profit organizations will vary with respect to the ideological, political, cultural and historical characteristics of various nations.

This is an important book for collections in Canadian studies, political science, and public health.

Watch the author interview with Professor Palley!


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