Health Care - Canadian Policy

To achieve social growth, economic empowerment, and sustainability government legislative units should conduct thorough analyses of various policies that influence a country's inhabitants. The changing micro and macroeconomic, social, and technological environment necessitates the formulation of new government policies and the modification of current ones to meet the demands posed by new developments.

In their pursuit of power and legacy, political regimes always attempt to develop landmark policies through legislation aimed at improving citizens' lives and gaining broad public support for re-election to political positions. The sovereign power of every country is vested in the supremacy of the people which is normally exercised through voting and referendums. It is at the people’s disposal to assess and determine favorable policies that address the real problems faced by a country. The key areas in policy making always revolves around the public health, international relations, security, employment and cost of living.

The health  re policies in a countryare quite detrimental towards the overall progress of the given nation. Citizens of a country are only able to embark in nation building when they are healthy. Provision of affordable healthcare is the aim of policy makers in the healthcare service industry and the relevant government agencies. In Canada, health care has been a contentious issue and despite the various legislative attempts to streamline the sector, policies in the industry still depict faults. The provisions as enshrined in the Canada Health Act, 1984 establishes the public funding of the Canadian health care system. The Canadians are able to access health care conveniently financed indirectly through taxes. The publicly funded health care in Canada also commonly referred to as Medicare comprises a set of socially defined health insurance plans that cover Canadians. However, while the Canadian health care system is being funded publicly, the health services in Canada are provided largely by the private healthcare organizations. The provision of healthcare services by private enterprises poses great economic implications due to the high costs relative to the public facilities. The provision of publicly funded services by private firms translates to high costs affecting the government and the taxpayers. This paper will propose policy amendment on the Canada Health Act to improve the quality and limit the provision of publicly funded healthcare services by private enterprises (Sutherland, et al., 2017).

Rationale and Supporting Evidence

According to the Canadian Medical association, a figure estimated to be 75 percent of the health care services funded publicly in Canada are delivered in privately owned facilities. The shortcomings in some services including private rooms in hospitals, dental and vision care, rehabilitation services and home care have allowed the private sector in Canada to thrive in health care provision. Two thirds (75 percent) of the Canadian population hold a supplementary private insurance. The premiums which are publicly funded are paid to private health insurance providers through contracts with employee unions and employers. The health insurance companies are profit seeking entities thus implying that the rate of insurance premiums is higher as compared to government owned insurance firms. As per the data in 2016, Public and private health care expenditures in Canada account for 8 and 10.9 percent of the Canadian gross domestic product (GDP) respectively. The 70.7 percent of the expenditure on healthcare is from public resources majorly taxes. The Canadian Health Transfer is utilized by the Canadian federal government in disbursing the healthcare funds on a per capita basis. The spending as depicted in the data below indicates a rising spending in health by the Canadian government and its citizens. The fact that the 75% of the total expenditure goes to private healthcare facilities and insurance companies has a apparent implications on the economic well-being of the Canadians, management of government recurrent expenditure and the quality of healthcare services (Blomqvist, et al., 2017).

Canadian per capita Health expenditure

Source: (Statista, 2017)

Canadian Total Health Expenditures

Source: (Barua, et al., 2017)

Canadian Provincial Health Spending as percentage of GDP

Source: (Barua, et al., 2017)

Projected Canadian provincial health spending in relation to GDP

Source: (Barua, et al., 2017)

2016 Canadian Health Spending

Source: (The Commonwealth Fund, 2016)

The rationale behind the limitation of the offering of publicly funded healthcare services by private enterprises is aimed at reducing the costs and asserting more regulations to enhance healthcare in Canada.

Normative Analysis

The need to control the proportion of the publicly funded Canadian healthcare services delivered by the private entities is paramount in managing the expenditure incurred in healthcare by the various funders. For-profit healthcare facilities and insurance companies are bound to make exorbitant pricing on the services they offer to the Canadian citizens to increase their profit margins. Unlike in the case of the government facilities, the prices are quite minimal in that the government seeks no profits and the costs of services are meant to break even with the prices charged. In 2005, a petition was presented in the Canadian Supreme Court challenging the curtailing and prohibition of private healthcare in some provinces in Canada. In the case of Chaoulli vs. Quebec, the justices who heard the case quashed the prohibition of Quebec province that prevented the offering of medical services by private health insurance companies. The argument of the court was based on the fact that the public health service providers were not efficient in service delivery and that, 'access to a waiting list is not access to health care.' Huge amounts of the government and private funds are being spent on expensive private healthcare insurance companies and hospitals. However, the need for a policy curbing the extent of publicly funded services offered by private firms ought to be precedent by the improvement of quality of services in public facilities (The Commonwealth Fund, 2016).

Positive Analysis

While previous attempts to prohibit the provision of publicly funded healthcare services by private entities were disputed and disbanded, the need to impose limitations while providing a viable alternative is bound to be sustainable. There is growing awareness by the users of healthcare facilities in the need to develop an affordable healthcare system. The increasing per capita expenditure in the healthcare which is majorly offered by the private sector calls for the need of government intervention to ensure that affordable and competitive healthcare services are available. From the statistics, 75% proportion of the healthcare services delivered in private healthcare facilities and covered by private health insurance firms. This portrays the government’s laxity in employing measures to regulate the health sector which is a crucial tenet of the Canadian society. A policy to regulate the operations of private firms in the health industry coupled by the improvement of the state of services in the public facilities will lower the cost of health services while enhancing service delivery.

Economic analysis

By limiting the publicly funded healthcare services offered by the private firms, the development of the public facilities will be enhanced. The economic implication of empowering the public facilities is that there will be increased competition in the Canadian healthcare industry leading to increase in the quality of healthcare services while the prices of the same services will come down. The law of supply and demand will come into play. Also, the enhancing of services in the public health facilities will translate into more people seeking health services from public hospitals. The private firms will be forced to reduce their prices, enhance innovation and quality of services to attract customers. Also, the diversion of funds paid to private firms for the provision of healthcare services to public health facilities which are cheaper will save the taxpayers’ money. The savings from using public health facilities can be used in building more facilities, purchasing new healthcare technology and investing in research and development to improve healthcare service delivery (The Commonwealth Fund, 2017).

Impact on Business in Canada

The introduction of a new policy limiting the proportion of publicly funded healthcare services delivered in private healthcare facilities will reduce the revenues in the private healthcare organizations. The government will also receive less tax from the private healthcare sector. On the other hand, the Canadian citizens will have more disposable income to invest in small businesses, government securities and foreign direct investment. The purchasing power of the Canadians will be enhanced by the increase in disposable income resulting from cheap healthcare services offered by the public facilities and the reduction of prices by private firms due to competition in the healthcare industry. The business in the consumer goods industry will increase.

Conclusion and Recommendation

The government ought to protect the interests of its citizens by ensuring that proper legislative policies are adopted. While the passing of laws are subject to scrutiny by other arms of the government including the judiciary, laws and policies ought to emanate from a rational basis and seek to address real problems faced by the citizens of the given country. The healthcare sector is a sensitive field that requires close government supervision and control to ensure that the citizens have access to affordable and quality healthcare services. The approach towards the formation of healthcare policies ought to employ a holistic rationale that factors in the economic, social and political implications. The implementation of the policy to curb the proportion of publicly funded healthcare services offered by private enterprises will receive resistance from the owners of private healthcare organizations. The Canadian government will have to put in place the requisite infrastructure in the public facilities to ensure the alternative quality services are available. The Canadian government is recommended to first embark on reforms in the public healthcare to ensure that service delivery is of the required standards. Also, the Canadian government ought to establish a body to oversee the quality of services in the public healthcare facilities. Finally, the implementation of the policy should be rolled out in phases to avoid backlash and extensive disruptions from a sudden and unplanned change from both the citizens and the healthcare systems.


Barua Bacchus, Milagros palacioy, & Joel emes. (2017). Sustainability of Health Spending in Canada 2017. Canada, Vancouver; British Colombia. Fraser Institute. 2017

Blomqvist, A., Busby, C., & C.D. Howe Institute,. (2017). The paradox of productivity, technology, and innovation in Canadian healthcare. Toronto, Ontario: C.D. Howe Institute. 2017

Statista. (2017). Total health expenditure per capita in Canada from 1975 to 2017. Retrieved on December 6, 2017.

Sutherland, J. M., Hellsten, E., & Canadian Electronic Library (Firm). (2017). Integrated Funding: Connecting the Silos for the Healthcare We Need. Toronto, On, CA: C.D. Howe Institute. 2017

The Commonwealth Fund. (2016). 2015 International Profiles of healthcare Systems. United States. Common Wealth Fund Pub. 2016.

The Commonwealth Fund. (2017). Health Care in Canada: The Canadian Health Care System. Retrieved on December 6, 2017.

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