The Crisis in Health Care
A Brief by the Medical Reform Group of Ontario
Mr. Justice Emmett Hall
Health Services Review '79
April 1, 1980.
TABLE OF CONTENTS
PART I; SOME OF THE REASONS FOR THE FAILURE OF "REA-SONABLE
ACCESS" TO AND "UNIVERSAL COVERAGE" FOR HEALTH CARE
A. Income and Social Class
B. The Premium System of Payment
D. Cutbacks in Health Care Services
PART II; SOME SOLUTIONS TO THE CRISIS IN HEALTH CARE SERVICES
A. Alternatives to the Premium System of Payment
B. Methods to Alleviate Physician Discontent
C. Means of Insuring Physician Participa-tion in Government Health
D. Alternatives to Fee-for-Service as a Method of Physician Payment
PART III: BEYOND THE ECONOMIC ISSUES
Health- What Are Its Boundaries?
APPENDICES: Appendix A Statement of Principles of the Medical Reform
Group of Ontario
Appendix B Opting Out of OHIP, a resolution passed by the MRG
Appendix C Funding of Health Care, a resolution passed by the MRG
The Medical Reform Group of Ontario is a newly-established organization
of almost two hundred Canadian physicians and medical students;
two-thirds of our members are from Ontario. We formed in the midst
of mounting public concern about the future of health care in Canada,
uniting around three principles:
1. Health care is a right that must be guaranteed without financial
or other deterrents.
2. As physicians, we must turn our attention to the causes of ill
health in social, occupational, and environ-mental conditions, and
work to change these.
3. The health care system must be changed to provide a more significant
role for other health care workers, and for the public.
As physicians and medical students we are vitally concerned with
what we see as the crisis threatening the health care of the people
of Ontario and of Canada as a whole. The Charter of Health for Canadians
proposed by the Royal Commission on Health Services in 1964 states:
"...the achievement of the highest possible health standards
for all our people must become a primary objective of national policy...
This objective can best be achieved through a comprehensive, universal
Health Services Program for the Canadian people... to attain the
highest possible levels of physical and mental well-being."
We believe that the goals of the Charter of Health for Canadians
have not been met.
In this brief, we examine some of the reasons for the failure in
Ontario to achieve the principles of "reasonable access"
to and "universal coverage" for health care. Specifically,
we look at the following areas which affect the use of health care
(a) income and social class
(b) the premium system of payment
(d) cutbacks in health care services.
We then consider possible solutions to the problems of health care
delivery in Ontario:
(a) alternatives to the premium system of payment
(b) methods to alleviate physician discontent
(c) means of ensuring physician participation in government health
(d) alternatives to fee-for-service as a method of payment to physicians.
We conclude with an exploration of other factors which affect the
health status of Canadians, but which lie beyond the economics and
organization of medical care delivery.
PART I: SOME OF THE REASONS FOR THE FAILURE OF "REASONABLE
ACCESS" TO AND "UNIVERSAL COVERAGE" FOR HEALTH CARE
A. Income and Social Class
Hospital and medical insurance programs were introduced in an attempt
to correct inequalities in the access to medical care by eliminating
direct costs to patients. However, their introduction did nothing
to alter the way in which health care is delivered, nor to change
the power structure within the health care system.
Indirect evidence indicates that health insurance has not eliminated
differences in the health status of differing income groups. For
example, a Toronto survey compared public health indices- death
rate, tuberculosis rate, infant death rate, and still-birth rate-
for two public health districts in Toronto, one in a middle and
upper class district and the other in a working class and welfare
area. Prior to the introduction of health insurance, all four indices
were higher in the working class and welfare area. For the first
seven years after the start of the provincial medical scheme (QMSIP),
the decline in three of the four indices was greater in the middle
and upper class area.
If medicare did not equalize the health status of differing income
groups, did it result in equal access to health care facilities?
Three studies1,2,3 examined this question using data collected before
and after the introduction of Medicare and another looked at the
distribution of health care after Medicare.4 Although
the findings are not uniform, they generally show that Medicare
did not result in equal use of health facilities. When doctor-initiated
services, such as referrals to specialists, were examined, the
increase in use was greater among the highest income earners than
among the lowest.3,4 These studies reach the same conclusion: given
the same needs, people with differing incomes do not receive equal
amounts of care -- high income earners receive more care than do
low income earners.
Ease of access to doctors' offices influences who goes to see doctors.
People in low income areas rate proximity as a very important factor
in choosing a doctor.5 If they have to travel a long distance and
spend money for public transit and babysitters, they are just as
likely to use their time and money on problems they may perceive
as more pressing.6 And in 1968, of 769 paedia-tricians in Canada,
only twelve percent were located in lower income areas.7
Even if there were equal access, there still would not be equal
care. Most doctors either have middle class origins, or have acquired
middle class values during their training. It has been shown that
physicians report less interest, more frustration, and less satisfaction
dealing with lower class patients.8 For the same problem, doctors
will spend up to fifty percent more time with patients from the
highest social class than with those from the lowest.9 The amount
of information that a doctor gives out seems to be influenced by
his or her perception of the patient's economic status.10 As noted
above, the wealthy receive a larger proportion of doctor-initiated
services than do the poor. Although specialists' services may not
result in better care, referrals are made on the assumption they
will. Similarly, at a time when it was believed that extra time
in hospital was beneficial, wealthy women were kept in hospital
longer after giving birth than were poorer women.11
These class differences create tension between middle class doctors
and their working class patients. A study of senior citizens covered
by Medicare in an eastern U.S. city, found a strong negative correlation
between economic status and discontent with medical services in
the clinic these people were attending.12
Another study done in a downtown Toronto public housing community
found that 47 percent of the population felt that they understood
their own health better than most doctors.13
Income and social class restrict equality of access to health care.
Medicare itself has not corrected the inequities of health care
delivery to different social classes; the premium system, opting-out,
and cutbacks exaggerate these problems.
B. The Premium System of Payment
Three provinces, including Ontario, still collect premiums for
health insurance. The rate in Ontario of twenty dollars per month
for a single person and forty dollars per month for two or more
in a family , is the highest in Canada, more than twice that of
any other province. The other provinces finance health services
from general revenues; some provinces add on regular user charges,
at least for certain services.
It is often argued that some people are wholly or partially exempt
from paying premiums. For example, in Ontario, those over the age
of 65 and families with taxable incomes of less that $3500 pay no
premiums. Single people are exempt if their taxable income is below
$3000. Families with taxable incomes between $3500 and $50 and singles
with incomes between $3000 and $4000 pay only half of their premiums.
There are two flaws with such premium assistance plans.
First, a family on partial premium assistance will be paying between
4.8 and 6.9 percent of its taxable income on health insurance, and
a family with a taxable income of $5000 will pay 9.6 percent. Meanwhile,
a 'typical' urban family with an income of $18000 will pay only
3.3 percent of its taxable income for health insurance. The premium
system of payment is clearly a regressive form of taxation.
Secondly, the premium assistance program does not work. The Ontario
Select Committee on Health Care Financing and Costs (1978) found
that only about one-third of those eligible for full premium assistance
(162,000 of 487,000), and almost none of those eligible for partial
assistance (fewer than 1000 of 160,000) were receiving it.
Yet another obstacle to complete coverage for low-income families
is that the OHIP administration demands a full three months' payment
at one time. These payments must be made two to three months before
the insured period. Many individuals and families on low incomes
find it difficult to budget for the $60 or $120 every three months,
and instead spend their money on more immediate needs such as food
The Medical Reform Group is concerned about the substantial numbers
of Ontario residents without OHIP coverage. Data from nine community
health centres in Ottawa and Toronto indicate that in October 1979,
of 44,000 regular patients who had originally presented with an
OHIP number, approximately 6,000 were uninsured. These centres are
in areas with large numbers of the so-called 'working poor': people
who earn too much to be eligible for premium assistance and yet
who do not have a job-benefit package which includes payment of
health insurance premiums.
The percentage of people from lower income groups without OHIP
coverage is undoubtedly higher than that from higher income groups.
Unfortunately, the Ministry of Health in Ontario does not publish
data on the breakdown of insurance coverage by income group. Our
experience strongly suggests that the coverage is less than 95 percent
among significant groups of the population, and thus a far cry from
Nearly twenty percent of Ontario's physicians, and up to seventy-five
percent of those in certain specialties, have opted out of OHIP
and charge patients directly.15 It is important, there-fore, to
review the effects of 'user charges' as revealed in other Canadian
settings and as accepted by various official inquiries in to such
Decreased Services to the Poor. Studies of the Saskatchewan
attempt to collect 'deterrent' or user fees for health services
from 1968 to 1971 and the 1977 OHIP experience of patients in opted-in
and opted-out practices, reached similar conclusions:
"While the source of information regarding how Ontario residents
used medical services in 1977 differs from the methods used in other
studies, the general conclusions about the impact of user charges
remain the same... the volume of services provided decreased and
the groups who were the most affected were the poor, in this instance
public assistance beneficiaries and the elderly."17
Inflationary Effect on Health Care Costs. The above studies
also challenge the claim that user charges result in cost reduc-tions
to the health care system. The 1977 Ontario figures, for example,
showed that "in addition to whatever additional charges may
have been involved for the patients of opted-out physicians, these
doctors provided on average more expensive services to their patients."18
This finding reflects in part the 'physician feedback effect' which
occurs when physicians try to maintain their incomes in the face
of lower volume (as some patients are deterred by user fees); doctors
generate demand by doing more 'optional' services or even over-servicing.
To quote the Saskatchewan conclusions, "the evidence of a greater
volume of complete examinations provided during the co-payment period
suggests that physicians may have engaged in some substitution of
higher-priced for lower-priced services."19
Such physician behaviour reflects the potential in the present
system of physician remuneration for 'physician abuse', leading
to cost inflation. In fact, most authorities in this field find
little evidence of the 'patient abuse' so often cited by medical
associa-tions as a major cause of unnecessary costs for unnecessary
services. Wolfson, in his review of the 1974-1975 OHIP records,
states that "to the extent that abuse does exist in the system,
these results indicate that it is more likely to originate with
the physician through over-servicing than with patients through
In addition, as Barer, Evans, and Stoddart,21 point out, extra-billing
and add-on fees unilaterally and arbitrarily determined by physicians
can only inflate total health care costs to society because government-physician
negotiation of total costs for physician services is by-passed,
and doctors alone are in control.
Unequal Geographic Distribution of Increased Health Care Costs.
Present rates of opting-out for some specialties vary from 0 to
100 percent within particular counties and regions of Ontario, resulting
in geographic differences in health care costs. Recent Ministry
of Health figures22, for example, showed that the following have
opted out: all urologists in Peel, Halton, and Wellington counties
and in the city of Peterborough, all obstetrician-gynecologists
in Nipissing, and all anaesthetists in Middlesex county. In other
areas, the remaining handful of opted-in specialists have long waiting
times for office appointments. Perhaps more seriously, some rural
areas now have no opted-in general practitioners. Thus patients
in certain regions of Ontario must pay from their own pockets for
services which CHIP pays for entirely in others.
Development of a Second Rate Health Care System for the Poor.
The opting-out phenomenon in Ontario has already fostered a two-tiered
system of health care via the reappearance of the 'private' and
'public' patient streams in many hospitals. Many university specialists
are taking advantage of their long-standing privilege of being opted-out
in their offices and opted-in in the teaching hospital outpatient
clinics. In response to physician pressure, even specialists in
non-teaching hospitals were recently given this privilege in a little-publicized
ruling by the Ontario Ministry of Health. This phenomenon represents
a move towards the return of that objectionable twin system of care
which was wide-spread before Medicare: high continuity personalized
care by the consultant in his private office versus low continuity
'public clinic' care in teaching hospitals by the house staff on
duty, with or without the consultant's direct supervision. In areas
where all the specialists are opted-out, the extra-billing for private
office care forces some patients to attend the public clinics whether
they wish to be educational cases or not. Of course, there must
be 'teaching cases' in any health care system, but these should
be determined on the basis of the nature of the case and informed
patient consent, not by patient income.
Our view of the effects of opting-out in Ontario concurs with that
of the Select Committee of the OntarioLegislative Assembly in its
October 1978 Report on Health Care Financing and Costs:
"In summary, having weighed all the evidence presented to
it very carefully (94 witnesses and 189 written Briefs -ed.), the
Committee concludes that user charges for medical care are inappropriate
at this time."23
In fact, the Medical Reform Group of Ontario would go further and
say that the present opting-out situation is completely unacceptable.
It is clearly contrary to the spirit of the Hall Commission Report
of 1964 and the Medical Care Act passed in 1966, which guaranteed
reasonable and fair access to care to residents of all provinces
with public health insurance.24
D. Cutbacks in Health Care Services
The large number of cutbacks in health care services represents
a fourth major obstacle to "reasonable access" to and
"universal coverage" for health care in Ontario. While
the inflation rate runs at 9.8 percent and is likely to increase
further, the Ontario budget allowed only a 4.18 percent increase
for health spending last year.
Although there have been many adverse effects of cutbacks, hospitals
have taken much of the burden; constituting two-thirds of insured
health costs, they are an obvious target. Extensive closures of
active treatment beds have taken place across the province, based
on the Government's revised bed/population ratios of 3.5/1000 in
the south and 4.0/1000 in the north. Evidence relating these figures
to community needs is meagre. The full effect of bed closures is
difficult to quantify as the deficits these closures cause are largely
qualitative. The evidence is anecdotal but nonetheless compelling.
As physicians, we have time and again been faced with the frustration
of being unable to admit sick patients to hospital because there
are no beds available. Long waiting lists have led not only to great
inconveniences, but also to overtly dangerous situations. Overcrowding
is but one manifestation of the effects of cutbacks. Patients are
routinely placed in wards ill-equipped to handle their problems
because of the shortage of beds in the appropriate wards, and the
number of 'corridor admissions' has risen markedly. Other detrimental
practices related to cutbacks include the rerouting of ambulances
to more distant hospitals, and a move to discharge patients prematurely.
Chronic care patients are also not receiving the care they require.
Many people who should be in a nursing home wait six months to a
year for that service, and in the meantime cause a great strain
to their families; their presence at home may mean that a wage-earner
must give up a job in order to provide care. Other chronic care
patients occupy active treatment beds inappropriately and at great
cost to the taxpayer.
Staff reductions at hospitals have been another serious problem.
Over the past three years, many jobs have been cut and the loss
of more is expected. Cutbacks have thus meant not only deteriorating
patient care, but also rising unemployment, restric-tions on wages,
and demoralization of health care personnel.
These cutbacks in health care are not in the best interests of
the people of Ontario. The percentage of the provincial budget allocated
to health care continues to decline. The situation had become sufficiently
serious by early 1979 that the Federal Minister of Health expressed
concern that the increases of health care funding provided by federal
block grants were not being fully transferred into health care by
The Medical Reform Group of Ontario has taken the position that
health care spending be increased to at least keep pace with inflation;
that until alternative facilities exist, bed cuts be stopped and
wards reopened to alleviate waiting lists for care; and that the
large numbers of layoffs of hospital workers be reversed. The extent
to which the principles of "reasonable access" to "universal
coverage" for health care for Ontario residents is being threatened
by these cutbacks must not be minimized.
PART II: SOME SOLUTIONS TO THE CRISIS IN HEALTH CARE SERVICES
A. Alternatives to the Premium System of Payment
Canadian provinces have differing methods of financing health care
insurance programs. Ontario funds its plan through a combination
of premiums (the highest in Canada), general revenues, and per diem
charges for some services (such as extendicare and chronic care).
As discussed earlier, many people, particularly the 'working poor',
are finding it difficult to provide themselves and their families
with health insurance coverage because of its high cost in this
province. Many of those who are eligible for premium assistance
are not receiving it because of poor advertising of the plan. Some
never make the initial application for OHIP coverage.
Some of the inequities of the present Ontario system could be easily
remedied. The premium assistance program must be more widely advertised,
or tied to the Income Tax Act. The three month advance payment could
be eliminated. And the threshold for the premium assistance plan
must be raised to reflect family finances in the 1980's. However
the premium system goes against the spirit of universal accessibility
embodied in the original Medical Care Act and Diagnostic Services
A better method of financing the health insurance program might
be to increase corporate and personal income tax levels in Ontario,
with a system of tax credits for those least able to afford the
increase. This scheme would ensure universal coverage with no need
to advertise specific programs, eliminate the need for a separate
bureaucracy for the collection of premiums, and most importantly,
guarantee a progressive system of financing health care. It is worth
noting, incidentally, that the percentage of tax income from the
corporate sector has dropped dramatically: in 1962 it contributed
62 percent, in 1979, only 29 percent.
At present, one-third of health care funding in Ontario is derived
from premiums. Nonetheless, this system is regressive in our analysis
and our experience. It has led to a failure of the principle of
"universal coverage". The Medical Reform Group believes
that OHIP premiums must be abolished, and that funding for health
care must come from progressive forms of taxation.
B. Methods to Alleviate Physician Discontent
The discontent with the OHIP system registered by many Ontario
physicians stems from both economic and philosophical considerations.
However, equally important as a cause of constant and loud complaint
are a variety of OHIP practices and policies which appear, to some,
designed to harass the physician. Many of these policies, furthermore,
are detrimental to the practice of good medicine.
The Medical Reform Group advocates that OHIP support and experiment
with other methods of paying physicians. While fee-for-service remains
the major mode of payment in Ontario, however, we urge that improvements
be made in the manner of its adminis-tration.
Paperwork: Each OHIP billing card must be completed by hand,
with multiple details for each patient visit. Claims are processed
slowly and cards are regularly rejected and returned to the physician
if there are any errors or omissions, however minor. The long processing
time on claims should be reduced: at present, it may take months
to correct records or resolve disputes. The paperwork load could
be further reduced if a plastic card were issued to all OHIP subscribers
to be used on forms. Finally, doctors should be paid a paper-processing
fee, similar to that now paid to labs.
Patient and Practice Profiles: Physicians can improve their
methods of practice, undertake patient and practice research, and
compare their practices with those of their colleagues using practice
profiles. In Ontario, practice profiles are available only for a
fee, and then only several months after the period to be studied
has ended. A free profile service would aid in research and in modifying
practice patterns to meet the needs of specific practices and patient
Preventive Medicine: Although both physicians and governments
pay lip-service to preventive medicine, fee schedules do not reflect
this 'concern'. The physician is penalized for spending more than
minimal amounts of time per patient. Preventive medicine involves
counseling, teaching, and answering questions, and cannot be practiced
without taking time. Under existing OHIP fee schedules, a physician
must bill for psychotherapy or counseling (with a 'false' diagnosis)
in order to be remunerated for spending time on these services.
Broad categories under "Preventive Counseling" should
be introduced, including areas known to produce stress and illness:
poor diet, work-related stress, occupational hazards, child-rearing,
family problems, immunization for travel, family planning, infertility,
pregnancy and birth, etc.
Extended Care: Patients requiring chronic care, home care,
nursing home care, or public health assessment may generate hours
of unpaid time as the physician contacts agencies, social workers,
and families in order to secure services. More money and effort
should be expended on providing a variety of well co-ordinated levels
of care for the patient in the community and in non-acute beds,
in order to relieve pressure on doctors' time and to reduce the
numbers of inappropriate placements.
Although many of these considerations may appear minor, their collective
effect is not. The provincial government has not been responsive
to practical administrative details that would avoid physician irritation
and improve patient care. The adminis-tration of the system has
been a significant factor in the increase in the numbers of physicians
opting out and moving to sunnier climes.
C. Means of Ensuring Physician Participation in Government Health
The Medical Reform Group of Ontario has resolved that the practice
of opting-out be ended. In this section we examine the pros and
cons of several methods of achieving this objective.
Option A: Raise the OHIP Benefits (Fees) to Physicians:
If the main reason for doctors' opting out were financial, raising
OHIP benefits would theoretically convince doctors to re-enter OHIP
and stop extra-billing. But doctors also opt out for philosophical
reasons. Wolfson in 1975 found that a major difference between opted-in
and opted-out physicians was that the latter were likely to be "more
individualistic and conservative in their attitudes toward the role
of government in health services."25 Many recent statements
by the Ontario Medical Association confirm that an important objective
of opting-out is to re-establish the consumer-provider relationship
that once characterized patient-physician interactions. A central
component of this traditional relationship is the direct monetary
transaction between patient and doctor, without government intervention.
Physicians who advocate opting-out are in fact asking for provider
control over the total price of physician services. Some seem to
believe that they are simple entrepreneurs, offering services in
a free market, much like the corner shoe repair man.
The vehement philosophical objections to OHIP voiced by some of
our opted-out colleagues indicate that raising OHIP benefits alone
wouldn't convince all physicians to opt back in.
Option B: Limiting the Use of Publicly Funded Hospitals to Doctors
Who Are Opted-in: While the Medical Reform Group of Ontario
believes that doctors should not be able to make uncontrolled private
profits through their use of publicly-funded facilities in hospitals,
limiting the use of such hospitals to opted-in physicians would
be an indirect and awkward method of bringing doctors back into
OHIP. First, it would apply pressure primarily on physicians who
use hospitals extensively. A large number of urban general practitioners
and some specialists make little use of hospitals, and the bulk
of health care services are delivered outside of hospitals. Secondly,
limiting hospital use could well lead to pressure for the construction
of private hospitals along the lines of the American model. Finally,
there is a practical problem in enforcing such an arrangement: group
practices could leave only one physician opted-in to do hospital
admissions for the entire group by referral; the group could share
total incomes, thus circumventing the measure entirely.
Option C: The Quebec Option: The system currently employed
in Quebec limits Medicare benefits to those who receive their care
from opted-in doctors. Therefore, patients who see opted-out doctors
are entirely responsible for the costs of any services rendered.
Under this system, a physician must be either 'all in' or 'all out'
of the plan.
This kind of legislation, while attractive as a direct attack on
the problem, would almost certainly provoke a major confrontation
with a small minority of physicians. Some of these doctors might
be tempted to try practicing 'entirely out' of the OHIP system,
at least as an initial strategic manoeuvre, in response to the legislation.
Others would threaten to leave the country. In geographic areas
where most or all of the available physicians in a given specialty
might take either of these actions, serious hardship could result
for all but the most wealthy patients.
Option D: Legislating All Doctors Into OHIP: This option
would differ from the Quebec option in that 'entirely opted-out'
physicians would not be allowed to practice at all. A physician
could not bill a patient directly. Such legislation is most unlikely
in Canada, given the fact that since the advent of Medicare, physicians
have been free to practice entirely outside public health insurance
plans. There may be no need for such restrictive legis-lation: after
the introduction of the present system in Quebec, only a few physicians
in the province chose to opt out completely.
No one of the above methods appears entirely satisfactory, and
some combination of methods may be the best solution. For example,
a politically feasible and reasonably acceptable solution might
be a combination of legislation modeled on that currently used in
Quebec, combined with substantial fee increases to doctors
to 'sweeten the pot', as was done in many provinces when medical
insurance was introduced in the late 1960's.
This discussion has focussed on an acute problem of the present
system of physician payment. The Medical Reform Group believes that
it is also necessary for governments to more actively examine and
implement alternative methods of physician remuneration, Only in
this way can we eventually achieve a health care system which provides
quality care for all in a setting which is satisfying for both doctors
D. Alternatives to Fee-for-Service as a Method of Physician Payment
Fee-for-service has been the major method of remunerating physicians'
clinical services in Canada, while other systems of payment have
been largely ignored. Yet the literature regarding the experiences
of other countries with different payment systems does not validate
the high esteem accorded to fee-for-service.27,28
The major alternatives to the fee-for-service method of payment
are salary and captivation. In most countries some combi-nation
of all three methods is used.
A salaried physician receives an annual wage and is expected to
provide medical services during a specified period of time. Salary
is a common method of payment throughout the world and is used in
Canada to pay certain public health physicians, radiologists, anaesthetists,
and pathologists. A salary system is easy to administer and paperwork
is minimized. The patient is not deterred by financial barriers,
and both physician income and the health budget expenditures for
physician services are predictable.
Capitation systems are less common in other countries, but generally
have worked well. Under these systems, the physician receives a
single payment for each person on his or her roster. This payment
covers services for an extended period of time. The physician provides
all necessary care that he or she is qualified to provide for that
person, and any additional services are referred. Capitation has
been most frequently used to pay general practitioners, although
in some countries it is also used to pay specialists. Like a salary
system, capitation provides a predictable income for the physician,
alleviating the worries of generating an adequate income. Capitation
is somewhat less easy to administer than salary, but less burdensome
than fee-for-service. Capitation, moreover, encourages continuity
of care. Since it is to the physician's advantage to maintain a
healthy population, preventive medicine is encouraged.
Under fee-for-service, a physician is paid for each medical procedure
or visit. Many physicians have traditionally favoured this system
because it allows the greatest measure of control over the amount
of income that can be generated. A physician can increase his or
her income in one of two ways under this system: by increasing the
number of services provided or by increasing the fee charged for
each service. With the advent of public health insurance, the option
of increasing the fee per service was limited, leaving physicians
who wanted to substantially increase their incomes with the alternatives
of opting-out or increasing the number of services provided. Either
of these options creates problems for the patient.
Fee-for-service is a difficult system to administer and the total
expenditures for physicians' services are less predictable; planning
is more difficult. Preventive medicine is not encouraged: a healthy
population generates fewer patient visits, and the physician's income
is therefore decreased. Fee-for-service encourages unnecessary rechecks
and office visits for problems that could readily be managed over
the telephone. Besides adding an extra cost to the health care budget,
an extra cost to society is incurred through the loss of patients'
Opponents of salary and capitation argue that without the financial
incentive provided by fee-for-service, physicians would be encouraged
to underservice and to minimize their work load. There has never
been convincing evidence to substantiate this idea; the available
evidence in fact seems to refute it.31,32
No system of payment is ideal and any system is open to abuse.
Nonetheless, the predominance of fee-for-service as a method of
paying Canadian physicians can no longer be construed as in the
best interests of patients and physicians. There are, at present,
few opportunities to practice under an alternate payment system
in this country, and none of these are adequately publicized, promoted,
or funded. The Medical Reform Group of Ontario believes that combinations
of the above three systems should be actively encouraged: many physicians
would welcome the opportunity to practice under a salary or a capitation
system. We urge the creation of such opportunities.
PART III: BEYOND THE ECONOMIC ISSUES
We have concentrated thus far on what we see as the imme-diate
problems facing health care delivery in Ontario. But the roots of
these problems lie deeper, in many widely-spread areas. We are convinced
that the solutions to many of the problems that we are currently
facing lie outside the realm of the delivery of medical care.
Education of the Public: Health and medical knowledge is
too important to be left in the hands of the few who are fortunate
enough to become physicians or other health care workers. Basic
health and medicine should be a central part of public school education.
The need for medical intervention in minor ailments could be obviated,
and informed participation in ongoing medical treatment would be
possible. Furthermore, a critical knowledge of the complex of factors
which shape health, and of the economic, scientific, and philosophical
forces that shape the treatment of disease, would have profound
effects on health policy priorities in the future.
Education of Physicians: Medical education does not reflect
the needs of the practitioner as much as it does the interests of
academics and researchers. Common diseases- the daily run of colds,
flu-, sprains, and bruises- receive little consideration in medical
training, and the role of psychosocial factors in the causation
of disease is virtually ignored. The cornerstones of preventive
medicine- occupational and environmental health, nutrition, the
role of social class or geography- rarely receive more than passing
mention in medical school curricula.
Nor do doctors receive the education required to critically evaluate
the barrage of new information they will face once they leave medical
school. It is a disturbing truism that a physician's prescribing
habits come to reflect more and more the claims of pharmaceutical
company detail men, and less a critical scientific evaluation of
the available methods of therapy. Mechanisms should be developed
to ensure the continuing education of practicing physicians, with
emphasis not only on the awareness of new advances in medical technology,
but also on the critical appraisal of these advances.
Intimately linked with the content of medical training is the selection
of trainees: admission policies must be modified so that medical
school classes more accurately reflect the cultural, racial, class,
and sex composition of society. Even the mechanisms for the selection
of medical students should be reassessed.
The Role of Other Health Workers: More use must be made
of the experience, skills, and commitment of other health workers.
There is a need for innovative methods designed to break down the
rigid hierarchy of authority that characterizes working relationships
within the health care system, and to promote the ideal of a team
approach to patient care. The specialized skill and perceptions
of all health care personnel, from physiotherapists to orderlies
to nursing staff, should be more completely integrated into day-to-day
patient care. Many of the tasks now performed by physicians could
be at least equally well done by paramedical personnel.
Control of Health Care Institutions and Health Policy: The
administration and policies of health care institutions must better
reflect the wishes of those they serve and those they employ. Hospital
boards or district health councils, for example, too often represent
a sinecure for the privileged; they rarely reflect the composition
of the community. Democracy and accountability must be introduced
into the health care delivery system.
There is a need as well for mechanisms to be developed so that
issues of health policy- research priorities or the planning of
services, for example- could be opened to public input and scrutiny.
Funding of Preventive Programs: At present in Ontario, only
3.1 percent of the health budget is earmarked for "community
health", and even much of this small sum does not go to preventive
programs. In the face of mounting expenditures on technology-intensive,
treatment-oriented facilities, there is a need for increased spending
on preventive programs which might reduce the need for medical intervention.
For example, widespread antenatal programs aimed at high-risk mothers
could prevent some of the complications that neonatal intensive
care units are designed to treat. More money must be channeled into
programs to prevent ill health; all too often, sophisticated medical
technology can do little to correct the consequences of problems
which are readily amenable to preventive measures.
Health - What Are Its Boundaries?
Health care policy inevitably touches on areas as diverse as labour
relations, foreign affairs, and natural resources. Just as silicosis
is a problem of the foundry more than it is a disease of the lung,
or diphtheria a disease of poverty as much as it is a bacterial
infection, health care policy is often more a matter of social criticism
than of clinical medicine.
The final quarter of the twentieth century is witnessing a profound
transformation in our consciousness of the dimensions of health
and disease. We are learning, for example, that 80 to 90 percent
of cancer is environmentally-induced, and that perhaps a third of
all cancer can be linked to substances in the workplace. We are
learning that infant mortality is less a matter of bad genes than
it is a problem of poverty, malnutrition, and inadequate antenatal
care. At the other end of the scale, we are faced with the problems
of providing the aged with humane care during life, and death with
dignity. On all fronts we are being challenged to shift our focus
beyond the individual and his or her problems, to the complex of
factors that gives rise to these; health care is becoming less and
less the private concern of the individual, and more the public
concern of the whole society.
It is beyond the scope of this brief to explore in depth the policy
implications of these issues. We believe, however, that in the coming
decade, new mechanisms must be developed to respond to the many
challenges facing health care.
As a young and rapidly-growing organization of physicians and medical
students, the Medical Reform Group of Ontario wishes to add its
voice to those of the many Canadians who believe that the ideal
of publicly-funded, high-quality, accessible medical care for all
must be preserved, and that as a society, we must seek new ways
to make our health care system more responsive to the needs of all
1. P.E.Enterline, et al. The Distribution of Medical Services Before
and After "Free" Medical Care - The Quebec Experience,
New England Journal of Medicine, 289: 1174, 1973.
2. R.F.Badgley et al. The Impact of Medicare in Wheatville, Saskatchewan,
1960-1965, Canadian Journal of Public Health, 58: 101, 1967.
3. R.G.Beck. Economic Class and Access to Physician Services Under
Medical Care Insurance, International Journal of Health Services,
3: 341, 1973.
4. P. Manga. The Income Distribution Effect of Medical Insurance
in Ontario, Ontario Economic Council, Toronto (1978).
5. A.P.J.Finnegan and E.J.Monkman. Attitudes to Health Care: Student
Research in a Downtown Core, Canadian Family Physician, 18: 94,
6. J.P.Acton. Non-Monetary Factors in the Demand for Medical Services:
Some Empirical Evidence, Journal of Political Economy, 83: 595,
7. A.Crichton. The Community Health Centre in Canada, Vol.Ill -Community
Health Centres: Health Organizations of the Future, Information
Canada, Ottawa (1973), pp.6-12.
8. L.Dungal. Physicians' Responses to Patients: A Study of Factors
Involved in the Office Interview, Journal of Family Practice, 6:
9. D.J.G.Bain. The Relationship Between Time and Clinical Management
in Family Practice, Journal of Family Practice, 8: 551, 1979.
10. F.Davies. Passage Through Crisis, Bobbs-Merrill, Indianapolis
11. Toronto Daily Star, January 22, 1972, p.13.
12. M.D.Hyman. Some Links Between Economic Status and Untreated
Illness, Social Science and Medicine, 4: 387, 1970.
13. P.Finnegan et al. The Alexandra Park Health Study, Toronto (1971).
14. Ontario Ministry of Health List of Opted-In and Opted-Out Physicians.
Released December 19, 1979.
15. E.G.Beck and J.M.Horne as cited in R.F.Badgley and R.D.Smith,
User Charges for Health Services, Ontario Council of Health, Toronto
17. R.F.Badgley and R.D.Smith, op. cit., p.194.
18. Ibid., p.183.
19. Ibid., p.135.
20. A.D.Wolfson. Patient Utilization Study, University of Toronto,
Toronto (1978), mimeo, 37 pages.
21. M.L.Barer, R.G.Evans and G.L.Stoddart. Controlling Health Care
Costs by Direct Charges to Patients - Snare or Delusion, Ontario
Economic Council, Toronto (1979), pp.84-86.
22. Ontario Ministry of Health, op. cit.
23. Ontario Report of the Select Committee on Health Care Financing
and Costs, Legislative Assembly, Toronto (1978).
24. Canada. Medical Care Act, R.S.C. 1970, Chapter M-8. 25. Ontario
Medical Review, 45: 355 and 46: 20.
26. A.D.Wolfson, C.J.Tuohy and C.P.Shah. What Do Doctors Do? A Study
of Fee-For-Service Practice in Ontario, University of Toronto, Toronto
27. W.A.Glaser. Paying the Doctor: Systems of Remuneration and Their
Effects, Johns Hopkins Press, Baltimore (1970).
28. J.LeDou and J.Likens. Medicine and Money, Ballinger Publishers,
29. J.E.F.Hastings, F.D.Mott, D.Hewitt et al. An Interim Report
on the Sault Ste. Marie Study: A Comparison of Personal Health Services
Utilization: A Joint Canada-World Health Organization Project, Canadian
Journal of Public Health, 61: 289-296, 1970.
30. E.Vayda. A Comparison of Surgical Rates in Canada and in England
and Wales, New England Journal of Medicine, 289: 1224-1229, 1973.
31. E.Vayda. Pre-Paid Group Practice in the United States, Canadian
Family Physician, October, 1973.
32. W.A.Glaser, op.cit.
APPENDIX A: STATEMENT OF PRINCIPLES OF THE MEDICAL REFORM GROUP
As physicians and medical students, we view with concern the lack
of a forum to address the vital social issues facing health care
in Canada today. While science tells us that the roots of the common
causes of illness in Canada lie in correctable social, economic,
occupational, and environmental conditions, as a profes-sion we
have focussed on diagnosis and cure, ignoring the contri-bution
we can make to the prevention of disease. While political economy
tells us that there is a growing need to democratize the health
care system, as a profession we cling to an archaic hierar-chy whose
roots lie in the nineteenth century. While conscience tells us that
health care is the right of all Canadians, the medical profession
has increasingly involved itself in an attack on free universal
accessibility to care.
We recognize that our concerns extend beyond the immediate issues,
and that in seeking change, we must examine the intellec-tual, social,
political, and economic underpinnings of the prevai-ling philosophy
of medicine, particularly those which transform health care into
a saleable commodity.
We have, therefore, joined together to publicly express our concerns.
The Medical Reform Group of' Ontario is a democratic, non-sectarian
organization of progressive physicians and medical students dedicated
to the following principles:
1. Health care is a right.
The universal access of every person to high quality, appropriate
health care must be guaranteed. The health care system must be administered
in a manner which precludes any monetary or other deterrent to equal
2. Health is political and social in nature.
Health care workers, including physicians, should seek out and recognize
the social, economic, occupational, and environmental causes of
disease, and be directly involved in their eradication.
3. The institutions of the health system must be changed.
The health care system should be structured in a manner in which
the equally valuable contribution of all health care workers is
recognized. Both the public and health care workers should have
a direct say in resource allocation and in determining the setting
in which health care is provided.
The Medical Reform Group is committed to allying itself with the
struggles of other health care workers on an independent fraternal
The Medical Reform Group is not affiliated with any political party;
our common base is our commitment to the above principles.
APPENDIX B OPTING OUT OF OHIP
Resolution adopted by the Medical Reform Group of Ontario October
WHEREAS the Ontario Medical Association has actively encouraged
opting out of OHIP by all physicians in the province, and the use
of a fee schedule substantially higher than OHIP benefits,
WHEREAS, although the O.M.A. position is that opting out will result
in better quality of patient care, the underlying reasons for the
O.M.A. stand on opting out are as follows:
1) to increase physician income, by forcing patients to pay fee
increases in excess of those established by government,
and/or 2) to increase physicians' financial and political control
over the health care system by allowing them, through professional
associations, to unilaterally determine fees,
WHEREAS opting out results in:
1) decreased access to care for lower income patients, who are the
only ones significantly deterred by "deterrent fees",
2) a substantial unnecessary increase in total health care costs
over time due to unopposed physician control over fees,
3) a geographically unfair distribution of increased health care
costs to the consumer, since different communities experience different
increases in fees according to local rates of opting out,
4) an accentuation of the traditional disparity between the health
care received by the poor and that received by the wealthy, through
encouragement of the two-tiered "public" and "private"
and thus 5) the destruction of the basic principles of Medicare.
THEREFORE, the Medical Reform Group
1) opposes opting out or extra billing by physicians; for the reasons
given above, it is not an acceptable solution to doctors' dissatisfaction
with the present OHIP system,
2. calls for immediate action by the provincial government to develop
alternative systems of payment for physicians' services which will
a) end the practice of opting out
b) deal with physicians' and patients' dissatisfactions with the
present OHIP system,
c) safeguard the right of Ontario citizens to quality health care
with equal access for all,
3) calls for a public list of opted in and opted out physicians
as an interim measure to aid health care consumers and to make the
present situation a matter of public knowledge.
APPENDIX C FUNDING OF HEALTH CARE
Resolution adopted by the Medical Reform Group of Ontario October
WHEREAS the percentage of the Ontario budget spent on health care
continues to decrease,
WHEREAS many existing community projects are being cut, or forced
WHEREAS there have been massive hospital bed closures which have
not been compensated for by opening more appropriate facilities,
and massive layoffs of hospital staff that have adversely affected
the quality of care,
WHEREAS OHIP premiums constitute a form of regressive taxation,
with lower income citizens paying a higher proportion of their incomes
BE IT RESOLVED THAT
1) The health care cutbacks be reversed.
2) The health care budget be increased yearly to at least keep pace
3) More money be allocated to the important areas of preventive
medicine and community-based services, and this money not come from
cutting other essential services such as education and social services.
4) Until alternate facilities exist, hospital bed cuts be stopped
and wards re-opened to shorten waiting lists for care.
5) The important role of all health workers be recognized and cutbacks
in staffing be reversed.
6) OHIP premiums be abolished and funding for health care come from
progressive forms of taxation.
BE IT RESOLVED THAT the MRG pass the above resolution as statements
of principle, and to serve a guidelines for future work in these
Subject Headings: Abortion
Rights – Community
Health – Community
Health Centres – Drug
Substitution – Epidemiology
Medicine – Health
Administration – Health
Care Budgets – Health
Care Cost Containment – Health
Care Costs – Health
Care Delivery – Health
Care Finance & Fund-Raising – Health
Care in Canada – Health
Care in Ontario – Health
Care in the U.K. – Health
Care in the U.S. – Health
Care Myths – Health
Care Reform – Health
Care Resources – Health
Care Services – Health
Care Workers – Health
Clinics – Health
Determinants – Health
Economics – Health
Expenditures – Health
Issues – Health
Policy – Health
Service Organizations – Health/Social
Justice Issues – Health
Statistics – Health/Strategic
Planning – History
Medicine – Medical
Associations – Medical
Costs/Foreign – Medical
Education – Medical
Ethics – Medical
Human Resources – Medical
Personnel – Medical
Research Funding – Medicare
Use – Medication
Use/Seniors – NAFTA/Health
Health & Safety – Patients'
Rights – Pharmaceuticals
Compensation – Physician
Human Resources – Pro-Choice
Issues – Public
Health – Publications/Health
Policy – Women's
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