The ‘Alberta Paradox’: The Regulation of Private Health Insurance in Comparative Cross-Provincial Perspective Gerard W. Boychuk Department of Political.

The ‘Alberta Paradox’: The Regulation of Private Health Insurance in Comparative Cross-Provincial Perspective Gerard W. Boychuk Department of Political Science University of Waterloo Presented to the Institute for Advanced Policy Research, University of Calgary September 19 th, 2006

The Paradox... “Alberta is the testing ground of health care commercialization – and nose-thumbing at the Canada Health Act – and its role as a national “Trojan Horse” in pushing privatization has yielded impressive results elsewhere in the country...” CUPE Innovation Exposed, Oct.2004 “Alberta is the testing ground of health care commercialization – and nose-thumbing at the Canada Health Act – and its role as a national “Trojan Horse” in pushing privatization has yielded impressive results elsewhere in the country...” CUPE Innovation Exposed, Oct.2004 "Alberta, of all the provinces in Canada, is the most hostile towards private clinics. We couldn't function in Alberta." Dr. Brian Day President Elect – CMA Founder, Cambie Surgical Services Edmonton Journal, 18 Sept.2005 "Alberta, of all the provinces in Canada, is the most hostile towards private clinics. We couldn't function in Alberta." Dr. Brian Day President Elect – CMA Founder, Cambie Surgical Services Edmonton Journal, 18 Sept.2005

The Paradox... political leadership in Alberta firmly committed to increasing private funding in health services political leadership in Alberta firmly committed to increasing private funding in health services Alberta regulation of private funding/financing options is relatively stringent Alberta regulation of private funding/financing options is relatively stringent – more stringent that in several other Canadian provinces – more stringent than required by CHA Why? Why?

The Answer... relatively sophisticated political calculation based on a number of factors... relatively sophisticated political calculation based on a number of factors... – electoral benefits are unclear public opinion in Alberta no more (and likely less) supportive than public opinion in other provinces public opinion in Alberta no more (and likely less) supportive than public opinion in other provinces – Alberta government has contributed to an emphasis federal- provincial aspects of reform has undermined construction of a public consensus around reforms has undermined construction of a public consensus around reforms – health care funding not as pressing a political problem as often made out strong fiscal capacity make acceptance of the status quo a more politically palatable option strong fiscal capacity make acceptance of the status quo a more politically palatable option – Alberta government views health care reform as key ideological battleground reticent to experiment if success is not guaranteed reticent to experiment if success is not guaranteed

Stringency of Regulation (Private Provision/Funding/Insurance) in Alberta -- vis-a-vis Canada Health Act (CHA) CHA CHA – universal availability of public health insurance (on uniform terms and conditions) for all medically necessary hospital and physician services without financial barriers to access without financial barriers to access –extra-billing on insured services –user/facility fees on insured services (defined – Marleau, 1995) – non-requirements no legal probitions on private provision of services no legal probitions on private provision of services no legal prohibitions on private insurance no legal prohibitions on private insurance no reference to the status of physicians – only the status (insured vs. non-insured) services no reference to the status of physicians – only the status (insured vs. non-insured) services

Stringency of Regulation (Private Provision/Funding/Insurance) in Alberta -- vis-a-vis Canada Health Act (CHA) limits on private income by opted-in physicians limits on private income by opted-in physicians prohibits opted-in physicians from billing individual patients at rates above those payable by the public insurance program prohibits opted-in physicians from billing individual patients at rates above those payable by the public insurance program limits on public income by non-participating physicians limits on public income by non-participating physicians expressly prohibits reimbursement of residents who have paid fees for services provided by a non-participating physician expressly prohibits reimbursement of residents who have paid fees for services provided by a non-participating physician prohibitions on the private provision of services prohibitions on the private provision of services –prohibits private facilities providing emergency care requiring medically- supervised stays of more than twelve hours –prohibits physicians from performing ‘major’ surgical services except in a public hospital CHA only requires that facility fees be covered by public plan if physician fee is covered by public plan CHA only requires that facility fees be covered by public plan if physician fee is covered by public plan bans third party insurance for services that are otherwise publicly-funded bans third party insurance for services that are otherwise publicly-funded

Alberta in Cross-Provincial Comparative Perspective

POTENTIAL FOR PRIVATE FUNDING OF MEDICAL SERVICES – OPTED OUT PHYSICIANS NoneHigh Prohibit Opting-Out Limits on Fees Public Coverage Denied + Ban on Private Insurance Public Coverage Denied or Ban on Private Insurance No Restrictions OntarioOntario ManitobaManitoba Nova ScotiaNova Scotia BCBC AlbertaAlberta QuebecQuebec NewfoundlandNewfoundland *Public coverage denied. **Ban on Private Insurance

POTENTIAL FOR PRIVATE FUNDING OF MEDICAL SERVICES – OPTED-IN PHYSICIANS NoneHigh Prohibit Direct Patient Billing Ban Extra- Billing Ban on Private Insurance Public Coverage Denied No Restrictions (except no direct billing of public plan) SaskatchewanSaskatchewan ManitobaManitoba OntarioOntario QuebecQuebec Nova ScotiaNova Scotia NewfoundlandNewfoundland Allowed by CHA ?Allowed by CHA ?

Alberta in Cross-Provincial Comparative Perspective maximum allowance for private funding (using currently existing provincial practices) maximum allowance for private funding (using currently existing provincial practices) – non-participating phyisicians billing rates unrestricted billing rates unrestricted patient reimbursed (up to public rate schedule) patient reimbursed (up to public rate schedule) private insurance coverage private insurance coverage – participating physicians direct patient billing at unrestricted rates direct patient billing at unrestricted rates private insurance coverage private insurance coverage no patient reimbursement no patient reimbursement

Alberta in Comparative Perspective the Australian model (e.g. Emery) the Australian model (e.g. Emery) – public subsidization of private insurance premiums waive public premiums for individuals who purchase private insurance waive public premiums for individuals who purchase private insurance – coverage of physicians fee (non-participating, participating?) outside of the plan (up to fixed %) – facility fees in public facilities (up to fixed %) for ‘private’ patients allowable for services provided to private patients allowable for services provided to private patients –non-participating physicians issue is granting hospital privileges to non-participating physiciansissue is granting hospital privileges to non-participating physicians –participating physicians if physician fee is not publicly reimbursed (e.g. New Brunswick)if physician fee is not publicly reimbursed (e.g. New Brunswick) if patient is publicly reimubursed for physician fee??if patient is publicly reimubursed for physician fee??

Alberta in Cross-Provincial Comparative Perspective maximum allowance for private funding (using currently existing provincial practices) maximum allowance for private funding (using currently existing provincial practices) – non-participating phyisicians billing rates unrestricted billing rates unrestricted patient reimbursed (up to public rate schedule) patient reimbursed (up to public rate schedule) private insurance coverage private insurance coverage – participating physicians direct patient billing at unrestricted rates direct patient billing at unrestricted rates private insurance coverage private insurance coverage no patient reimbursement no patient reimbursement

Alberta in Cross-Provincial Comparative Perspective maximum allowance for private funding (using currently existing provincial practices) maximum allowance for private funding (using currently existing provincial practices) – non-participating phyisicians billing rates unrestricted billing rates unrestricted patient reimbursed (up to public rate schedule) patient reimbursed (up to public rate schedule) private insurance coverage private insurance coverage – participating physicians direct patient billing at unrestricted rates direct patient billing at unrestricted rates private insurance coverage private insurance coverage patient reimbursed (up to public rate schedule) patient reimbursed (up to public rate schedule)

Alberta’s Proposed Reforms Mazankowski Report Mazankowski Report

Alberta in Cross-Provincial Comparative Perspective MAIN POINT... MAIN POINT... – there is a lot of room under the CHA to expand the potential for private funding and private insurance of health services

Alberta Public Opinion in Cross- Provincial Perspective Alberta public opinion not more favourable to private funding/private insurance than other provinces (and probably less so) Alberta public opinion not more favourable to private funding/private insurance than other provinces (and probably less so) Compas, Pollara, Ipsos-Reid, Environics Compas, Pollara, Ipsos-Reid, Environics

Alberta Public Opinion in Cross- Provincial Perspective

Pollara, Health Care in Canada Survey, 2005.

Ipsos-Reid, CFNU, January 2006.

Ipsos-Reid, CMA, June 2006.

Alberta Public Opinion in Cross- Provincial Perspective Alberta public opinion not more favourable to private funding/private insurance than other provinces (and probably less so) – WHY? Alberta public opinion not more favourable to private funding/private insurance than other provinces (and probably less so) – WHY? public perceptions of the quality of public health services public perceptions of the quality of public health services levels of spending on public health services levels of spending on public health services government’s strategic approach to reform government’s strategic approach to reform

Ipsos-Reid, Health Care System Report Card, August 2005.

Source: Canada Institutes for Health Information, Statistics Canada

The Alberta Govt’s Strategic Approach to Reform “It is my preference that provincial/territorial Ministers themselves be given an opportunity to interpret and apply the criteria of the Canada Health Act to their respective health care insurance plans.” Minister Jake Epp National Health and Welfare Canada 1985 “It is my preference that provincial/territorial Ministers themselves be given an opportunity to interpret and apply the criteria of the Canada Health Act to their respective health care insurance plans.” Minister Jake Epp National Health and Welfare Canada 1985 “There’s nothing that says you have to stay in the Canada Health Act.” Premier Ralph Klein June 2004 “There’s nothing that says you have to stay in the Canada Health Act.” Premier Ralph Klein June 2004 “It may violate the Canada Health Act.” Premier Ralph Klein March 2006 (on Alberta health reform proposals) “It may violate the Canada Health Act.” Premier Ralph Klein March 2006 (on Alberta health reform proposals)

The Alberta Govt’s Strategic Approach to Reform “The minister [Alberta Health Minister Iris Evans] said a Supreme Court of Canada ruling last spring opened the door to broadening the use of private insurance for primary health-care treatments...” Calgary Herald, 14 Sept. 2005 “The minister [Alberta Health Minister Iris Evans] said a Supreme Court of Canada ruling last spring opened the door to broadening the use of private insurance for primary health-care treatments...” Calgary Herald, 14 Sept. 2005 “It's impossible to know whether Evans is leading the charge for a private, parallel health-care system, finally free of the constraints of the Canada Health Act, or for more modest reforms. […] Are we talking about a major realignment of services -- as if the Canada Health Act didn't exist -- where only public service is limited to expensive hospital treatment? Or some tinkering?” Sheila Pratt Edmonton Journal, 25 Sept. 2005 “It's impossible to know whether Evans is leading the charge for a private, parallel health-care system, finally free of the constraints of the Canada Health Act, or for more modest reforms. […] Are we talking about a major realignment of services -- as if the Canada Health Act didn't exist -- where only public service is limited to expensive hospital treatment? Or some tinkering?” Sheila Pratt Edmonton Journal, 25 Sept. 2005

The Paradox...

The Alberta Govt’s Strategic Approach to Reform WHY?? WHY?? recast provincial health reform as an issue relating to federal intrusion into a field of provincial jurisdiction recast provincial health reform as an issue relating to federal intrusion into a field of provincial jurisdiction rallying the base rallying the base –not an appropriate strategy for a broader electoral appeal blame avoidance for failing to undertake health care reforms which are not broadly politically popular blame avoidance for failing to undertake health care reforms which are not broadly politically popular

Alberta Health Expenditures “crowding out” argument “crowding out” argument – “Spending on health is crowing out other important areas like eduction, infrastructure, social services or security. If health spending trends don’t change, by 2008 we could be spending half of the province’s program budget on health. We do not believe that is acceptable.” Mazankowsi Report, 2001: 4

Alberta Health Expenditures “crowding out” argument “crowding out” argument – questionable logic – undue focus on health care expenditures (vs. tax relief, debt reduction) – empirical evidence??

Column BNo LagColumn B LaggedHealth Lagged General Category Specific Expenditure/Revenue Category Annual % Increas e Rate of Change (Annual Increase ) Annual % Increase Rate of Change (Annual Increase) Annual % Increase Rate of Change (Annual Increase) Other Expenditure Lag 1 yr. Lag 2 yr. Lag 1 yr. Lag 2 yr. Lag 1 yr. Lag 2 yr. Lag 1 yr. Lag 2 yr. Total Education0.14 (0.02) 0.22 (0.05) 0.09 (0.01) 0.16 (0.03) -0.03 (-0.00) 0.14 (0.02) -0.23 (-0.05) -0.32 (-0.10) -0.16 (-0.03) -0.27 (-0.07) Elementary/Secondary Education -0.13 (-0.02) 0.15 (0.02) -0.12 (-0.01) 0.13 (0.02) -0.10 (-0.01) 0.17 (0.03) -0.43 (-0.19) -0.33 (0.11) -0.24 (-0.06) -0.14 (-0.02) PSE0.48 (0.23) 0.24 (0.06) 0.32 (0.10) 0.11 (0.01) 0.01 (0.00) 0.05 (0.00) 0.26 (0.07) -0.14 (-0.02) 0.03 (0.00) -0.34 (-0.11) Deficit Reduction0.33 (0.11) 0.49 (0.24) -0.13 (-0.02) -0.54 (-0.29) -0.10 (-0.01) -0.46 (-0.21) 0.13 (0.02) -0.66 (-0.43) 0.43 (0.19) -0.78 (-0.62) ()=R 2 Correlation Between Health Expenditures and Other Expenditure, Alberta, 1990-2005

Column BNo LagColumn B LaggedHealth Lagged General Category Specific Expenditure/Revenue Category Annual % Increas e Rate of Change (Annual Increase ) Annual % Increase Rate of Change (Annual Increase) Annual % Increase Rate of Change (Annual Increase) Lag 1 yr. Lag 2 yr. Lag 1 yr. Lag 2 yr. Lag 1 yr. Lag 2 yr. Lag 1 yr. Lag 2 yr. RevenueOwn Source Revenue0.20 (0.04) 0.21 (0.04) -0.09 (-0.01) -0.09 (-0.01) -0.18 (-0.03) -0.21 (-0.04) 0.09 (0.01) -0.11 (-0.01) 0.13 (0.02) -0.08 (-0.01) Investment Income0.38 (0.15) 0.36 (0.13) 0.00 (0.00) -0.05 (-0.00) -0.24 (-0.06) -0.19 (-0.04) 0.20 (0.04) -0.10 (-0.01) 0.19 (0.03) -0.17 (-0.03) Income Tax-0.13 (-0.02) 0.04 (0.00) -0.21 (-0.04) -0.49 (-0.24) 0.31 (0.09) -0.09 (-0.01) -0.34 (-0.12) 0.25 (0.06) -0.20 (-0.04) 0.24 (0.06) Personal Income Tax-0.23 (-0.04) -0.25 (-0.06) -0.23 (-0.05) -0.16 (-0.02) -0.01 (-0.00) 0.39 (0.16) 0.07 (0.01) 0.45 (0.20) 0.07 (0.00) 0.40 (0.16) Corporate Income Tax0.07 (0.01) 0.24 (0.06) 0.06 (0.00) -0.28 (-0.08) 0.39 (0.15) -0.45 (-0.20) -0.46 (-0.21) -0.21 (-0.04) -0.27 (-0.07) -0.18 (0.03) ()=R 2 Correlation Between Health Expenditures and Revenues, Alberta, 1990-2005

Alberta Health Expenditures MAIN POINTS... MAIN POINTS... – “crowding out” alternative interpretation – growth in provincial fiscal capacity has been shared between tax relief, debt reduction, and health care alternative interpretation – growth in provincial fiscal capacity has been shared between tax relief, debt reduction, and health care – “crowding out” hypothesis must have some empirical content – strong economic growth makes health funding status quo more politically palatable it is politically easier to divided a growing pie than a shrinking one it is politically easier to divided a growing pie than a shrinking one

The Answer... relatively sophisticated political calculation based on a number of factors... relatively sophisticated political calculation based on a number of factors... – electoral benefits are unclear public opinion in Alberta no more (and likely less) supportive than public opinion in other provinces public opinion in Alberta no more (and likely less) supportive than public opinion in other provinces – Alberta government has contributed to an emphasis federal- provincial aspects of reform has undermined construction of a public consensus around reforms has undermined construction of a public consensus around reforms – health care funding not as pressing a political problem as often made out strong fiscal capacity make acceptance of the status quo a more politically palatable option strong fiscal capacity make acceptance of the status quo a more politically palatable option – Alberta government views health care reform as key ideological battleground reticent to experiment if success is not guaranteed reticent to experiment if success is not guaranteed

The Alberta Gov’ts Strategic Approach to Reform “There’s nothing that says you have to stay in the Canada Health Act.” Premier Ralph Klein June 2004 “There’s nothing that says you have to stay in the Canada Health Act.” Premier Ralph Klein June 2004 “It may violate the Canada Health Act.” Premier Ralph Klein March 2006 (on Alberta health reform proposals) “It may violate the Canada Health Act.” Premier Ralph Klein March 2006 (on Alberta health reform proposals) “The minister [Alberta Health Minister Iris Evans] said a Supreme Court of Canada ruling last spring opened the door to broadening the use of private insurance for primary health-care treatments...” Calgary Herald, 14 Sept. 2005 “The minister [Alberta Health Minister Iris Evans] said a Supreme Court of Canada ruling last spring opened the door to broadening the use of private insurance for primary health-care treatments...” Calgary Herald, 14 Sept. 2005 “It's impossible to know whether Evans is leading the charge for a private, parallel health-care system, finally free of the constraints of the Canada Health Act, or for more modest reforms. […] Are we talking about a major realignment of services -- as if the Canada Health Act didn't exist -- where only public service is limited to expensive hospital treatment? Or some tinkering?” Sheila Pratt Edmonton Journal, 25 Sept. 2005 “It's impossible to know whether Evans is leading the charge for a private, parallel health-care system, finally free of the constraints of the Canada Health Act, or for more modest reforms. […] Are we talking about a major realignment of services -- as if the Canada Health Act didn't exist -- where only public service is limited to expensive hospital treatment? Or some tinkering?” Sheila Pratt Edmonton Journal, 25 Sept. 2005 “It is my preference that provincial/territorial Ministers themselves be given an opportunity to interpret and apply the criteria of the Canada Health Act to their respective health care insurance plans.” Jake Epp Minister of National Health and Welfare Canada 1985 “It is my preference that provincial/territorial Ministers themselves be given an opportunity to interpret and apply the criteria of the Canada Health Act to their respective health care insurance plans.” Jake Epp Minister of National Health and Welfare Canada 1985

The ‘Alberta Paradox’: The Regulation of Private Health Insurance in Comparative Cross-Provincial Perspective Gerard W. Boychuk Department of Political.

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The ‘Alberta Paradox’: The Regulation of Private Health Insurance in Comparative Cross-Provincial Perspective Gerard W. Boychuk Department of Political.

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Presentation on theme: "The ‘Alberta Paradox’: The Regulation of Private Health Insurance in Comparative Cross-Provincial Perspective Gerard W. Boychuk Department of Political."— Presentation transcript:

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