ANALYSIS: The Growing ‘Loopholes’ Allowing Private Health Care in Canada’s Staunchly Universal System

A paramedic wheels a gurney out from the emergency department at Mount Sinai Hospital in Toronto, Jan. 13, 2021. (The Canadian Press/Cole Burston)

Canada’s restrictions on private health care are labyrinthine and include many loopholes. And as medical practice evolves, the lag time for laws to catch up means more private health care is permitted in Canada than many may realize.

For example, nurse practitioners have been permitted to provide more services than ever before due to a health worker shortage, and they aren’t subject to the private care regulations written only for doctors.

With longer wait times and other problems in the public system, many Canadians are making use of the loopholes that allow them to use private clinics.

“We’re at the point where a two-tier health system easily and clearly exists,” Katherine Fierlbeck, a health policy expert at Dalhousie University, told The Epoch Times.

One of the biggest loopholes allowing that two-tier system to take hold is the fact that any patient can receive practically unlimited private care by going to another province.

Restrictions on private practice generally apply to services covered by provincial health insurance. Because out-of-province patients are not eligible for that insurance, they are allowed to get those services privately.

“I can operate privately on out-of-province patients,“ B.C. physician Dr. Brian Day told The Epoch Times via email. ”Recently, I treated five Alberta patients who travelled here from Alberta to escape long wait lists. On the same day, a colleague in Alberta treated six B.C. patients travelling the opposite way.”

Other carve-outs exist in the Canada Health Act for federal employees, prisoners, military personnel, people receiving workers’ compensation, and some others. They all have greater access to private care than the average Canadian.

Meanwhile, as patients wait months or even years for medical procedures, some provinces are trying to increasingly tap into private clinics. Federal Health Minister Mark Holland has insisted that health care must stay publicly funded.

What the Canada Health Act Says About Private Care

The Canada Health Act (CHA), which sets the foundation for the provincial rules around private care, doesn’t clearly prohibit much, Ms. Fierlbeck said.

She pointed out the confusing language in a key provision of the CHA, which states that “a province must insure all insured health services.”

“What does it mean to ‘insure all insured health services’?” she said. “It’s very important to note that it doesn’t say that GPs [general practitioners] cannot provide this procedure or that procedure privately, right?”

It’s up to the provinces what services are insured. “The Canada Health Act doesn’t explicitly say anything except that insured services must be insured,” she said.

Some of the key services being handled by the private sector right now include diagnostic scans, routine surgeries, virtual care, and a variety of services usually provided by family doctors. The extent to which these are covered by provincial plans varies across Canada.

Ottawa has tried in recent years to explicitly forbid private diagnostic scans. It withheld health transfers totalling $79 million in March from provinces that allowed private clinics to charge extra fees—the vast majority relating to diagnostic scans. It withheld roughly the same amount last year.

“To date there has been no indication that these fines have led provinces to take action on diagnostic facilities in their provinces,” Ms. Fierlbeck wrote in a C.D. Howe Institute commentary published in January.

She told The Epoch Times that “there’s a lot of scurrying happening behind the scenes” on the issue. She noted that two federal health ministers have said they would publish an interpretation letter making it clear that the Canada Health Act provisions apply to medically necessary diagnostic services. “Years later, it’s still not here,” she said.

“The legal basis for this interpretation is pretty iffy,” she said.

Virtual care boomed during the pandemic, and it’s now covered by some provinces, but not all. And where it is covered, sometimes each patient is only allowed limited care under provincial insurance.

Maple is a big provider of virtual care in Canada. It has agreements with some provinces to bill the provincial insurance for appointments, but it also offers options for patients to access care quickly for a fee.

Its website advertises the “member experience” at $79.99 per month, allowing unlimited 24/7 virtual care, home delivery for prescriptions, online sick notes, and specialist appointments within a week.

Some services have long been uninsured by the public system, such as ambulances, physiotherapy, and optometry. Whether or not the service is insured often hinges on whether a province considers it “medically necessary.”

It’s not only the type of medical service that determines whether it can be offered privately. It also depends on the doctor who performs the service and on the patient—such as whether the patient belongs to one of the exempted groups, including federal employees.

Depends on the Doctor, the Patient

Health Canada distinguishes between “participating,” “non-participating,” and “opted-out” physicians, each category of which comes with its own rules. These terms describe the extent to which a doctor participates in the public health system.

Non-participating doctors aren’t subject to the Canada Health Act provisions, because the services they provide are not considered “insured services,” Ms. Fierlbeck said.

This may mean that they provide physiotherapy, cosmetic procedures, and other services not covered by the province. But they may also provide diagnostic scans and elective surgeries that are at the heart of Canada’s current private-public health-care debate, Dr. Day said.

He highlighted a Library of Parliament report from 2005 that says fully private clinics that take no public money can provide a wide range of services; MRI diagnosis and hip and knee surgery are mentioned specifically. Such clinics are allowed to operate in a province without Ottawa holding back health transfer money from that province as a result, the report said.

Opted-out doctors charge patients directly but follow the provincial fee schedule and give patients a receipt so they can be reimbursed by the province.

These classifications are muddled, however. Ms. Fierlbeck has found provinces using various terms, including “withdrawn” or “not enrolled,” and the provincial classifications don’t always match the federal definitions.

“This definitional confusion is one reason why compliance with the CHA is so difficult to determine,” she said.

Penalties for noncompliance vary. Sometimes a doctor may be disciplined by his or her professional college, Ms. Fierlbeck said. In Ontario, individual patients and doctors can be fined $10,000 for violating the Commitment to the Future of Medicare Act. A corporation can be fined $25,000.

Regarding whether a patient is eligible for private care, the crux of the matter is the extent to which a person is considered provincially “insured,” Ms. Fierlbeck said.

The CHA states that according to the “universality” principle of the act, provinces must entitle 100 percent “of the insured persons of the province to the insured health services” in a uniform manner. It doesn’t say 100 percent of the “persons,” only the “insured persons.” But not everyone is strictly insured under the provincial regime.

Federal employees get “extras” beyond their provincial coverage, Ms. Fierlbeck said. So do indigenous people who are formal members of a band.

When asked what the rationale is behind exempting groups like prisoners and people receiving workers’ compensation, Dr. Day—who has led an unsuccessful Supreme Court challenge to private health restrictions—replied, “There is none.”

The Epoch Times asked Health Canada the same question, and spokesperson Anne Génier, said the exempted groups are not considered “insured persons” provincially because the federal government provides “equivalent coverage to these groups through separate federal programs.”

“As the individuals listed are covered under other programs, they are exempt from provincial and territorial public health care insurance coverage and thus the requirements of the Canada Health Act. These exemptions predate the adoption of the Canada Health Act and are not intended to constitute differences in access to publicly insured health care,” she said.

Dr. Day said, however, that it does result in different access to private care. He has, himself, treated federal employees such as judges. He bills them directly and they are reimbursed by the federal government.

Profitability

Whether or not private care is allowed isn’t the only factor in determining whether it is available in Canada. Profitability is another consideration: Is there a business case for it?

Ms. Fierlbeck said demand is growing due to long wait times in the public system, and the business case is likely getting stronger. Provincial “disincentives” sometimes make it unprofitable even when private care is technically allowed she said, giving the example of Quebec.

Quebec famously allows private health insurance to cover some publicly insured services, including hip, knee, and cataract surgery. In 2005, the Supreme Court ruled that it was a violation of the province’s charter (not Canada’s charter) rights to not allow private insurance for such services, as the public system had failed to provide them in a timely way.

But after that ruling, Ms. Fierlbeck said, the province pumped more money into those surgeries, pushing out the private market.

Demand for medical services is growing, she said. In addition to longer wait times, there are also more treatments and medications available—medical advances that may be beneficial, but also labour-intensive—and Canada’s population is aging, which weighs on the health-care system.

In 2023, private-sector health expenditure Canada-wide was just shy of $100 billion. That’s about 30 percent of total health expenditures, according to the Canadian Institute for Health Information (CIHI). This includes all out-of-pocket payments for health-care goods and services, private health insurance claims, private spending on health-related construction, and more, CIHI spokesperson Meagan Foreman told The Epoch Times via email.

Although the private sector has been around all along, the Canadian Medical Association recently said that “it’s time to talk” more about it. It started holding focused dialogues across the country about the balance of public and private care.

“Millions of Canadians aren’t getting the health care they need, when they need it. Some provinces are filling gaps in the health system by expanding private delivery of care, while others are pulling back,” the CMA said. “Understanding what this all means is critical.”