Guest posting by Carol Kushner
Not all of us have grasped that the provision of private services does not necessarily pave the way to a two-tier system. That is because not all of us understand that there are two separate issues: the financing of health care and the delivery of health care.
The following observations may throw light on the issue.
Re financing health care: public health insurance provides 100% coverage for doctor and hospital services as long as they are defined as “insured services” by the provincial health insurance scheme. Public health insurance is funded out of taxes and in some provinces, like Ontario and British Columbia, special health premiums must be paid to the government too.
The delivery of health care is a different matter. Physician fees are publicly covered and physicians billing OHIP are forbidden by law from extra-billing. Physicians who wish to are permitted to work entirely outside the system, and bill their patients for the total cost of care with no reimbursement from the province, but very few do so, apart from some plastic surgeons.
Healthcare delivery is private. Canada has very few publicly owned hospitals, the vast majority being private, non-profit corporations. There are a few for-profit private hospitals that were grandfathered when public health insurance was fully implemented in 1971 – the most notable example is the Shouldice Hospital, which specializes in hernia repairs and is now up for sale.
The issue of for-profit clinics, diagnostic centres, rehabilitation centres for physiotherapy, and surgical centres is relatively new. Many surgical centres are non-profit corporations (Kensington Centre, for example, which does cataract surgery). But some are definitely for-profit and frequently bend the rules by offering various devices (such as intraocular lenses) at exorbitant prices, permitted to do so legally when the device in question is not covered by the public system.
Physicians’ offices are also private businesses – only the payment is public for doctor services. The operation of medical practice is private. In the era when most doctors were solo practitioners, the profit equaled the doctor’s revenue minus expenses. Increasingly, physicians have been encouraged to work in groups with other doctors and other health professionals. Some group practices are very large. Then there are the large, for-profit MRI and CT scanning clinics. These too are in a grey zone, some provinces have cracked down on them; others have let them do as they wish.
The issue of two-tier is complex. The fundamental idea is that patients in Canada should have access to necessary medical and hospital care on the basis of need, not ability to pay. User fees charged by hospitals and extra-billing charged by physicians have been outlawed in order to protect that principle. It is very clear that some patients simply cannot afford to pay, and that some would forgo essential care because of fees charged. When a service is available only for that segment of the population willing and able to pay for it – we are describing a two-tier system.
We do not have such a system in Canada for hospital and physician services.
Eric Koch’s new book, The Golden Years: Five Stories, was launched on Saturday, March 16. The book is available from the 
Carol, thank you for removing much misunderstanding of a complex system.
That’s very kind of you to say, Michael.
I second MG’s thanks, to Eric and Carol.
Is there a quick way to describe Mr. Obama’s system in these terms, for comparison?
Thank you Tim – as for Mr. Obama’s scheme — he has mandated insurance for all — but relies mainly on the private insurance system. It is a very costly solution. Unfortunately there is no quick way to describe his health reforms — the US system is very complex, and dominated by very powerful interests.
This is an eminently lucid overview. However, what about optical, dental, and especially pharmaceutical care? Deinstitutionalization and advances in chemical therapies are leading to an increasing proportion of the total cost of medical care being incurred outside the traditional hospital/doctor system. These costs are not covered by governments (except for subsidizing prescriptions for seniors like me, I’m relieved to say).
You are perfectly correct — our system in Canada offers a patchwork of public and private coverage for the items you mentioned and they are “out from under the Medicare umbrella in terms of any guarantees of being charged out-of-pocket. Proposals for pharmacare and home care to create a more sensible system have met with fierce resistance from our political masters – although Tommy Douglas certainly envisioned their being added to the public scheme eventually. Public coverage for dental care was also proposed by Douglas, but dentists were strongly opposed to the idea.
Many thanks, Carol.