The organizational structure of the Canadian health care system is largely a function of the
constitutional division of power between orders of government that were established at the time of
the creation of the country in 1867. Reflecting the priorities of the time, the provinces were given
most of the responsibility for social services, including health care, but had limited taxation
powers, at least by today's standards. The federal government, however, received extensive
taxation powers which it translated into spending power in the post Second World War period.
Through cost-sharing and later block funding financial transfer arrangements, the federal
government has been able to establish a national legislative framework for the health system. This
framework is embodied in the Canada Health Act which establishes the principles upon which the
health system must be based in order for provincial governments to receive full federal transfers.
These principles are:
· universality requires that the plan must entitle 100% of the insured population to insured
services on uniform terms and conditions;
· comprehensiveness requires that all insured health services provided by hospitals and medical
practitioners be covered by the plan;
·
accessibility means that health services must be provided without barriers, including
additional charges to insured patients for insured services;
· portability ensures health coverage for insured persons when they move within Canada or
when they travel within Canada or abroad;
· public administration requires that the plan must be administered and operated on a nonprofit
basis by an accountable public authority appointed or designated by the provincial
government.
This framework has ensured a national health system which, while composed of ten provincial
and two territorial health insurance programmes, exhibits the same fundamental characteristics
across the country and yet also reflects provincial priorities. No two provincial programmes are
exactly alike in terms of organizational structure, planning, regulation, management, financing or
supplementary health service coverage. The following description of the Canadian health care
system focuses on the common elements of the 12 systems. Reference is also made to some
provincial differences in order to illustrate the subtle variations across the country.
6 Health care systems in transition – Canada
Organizational structure of the health care system
A defining characteristic of most health care in Canada is that it is publicly financed, but
privately delivered. In accordance with the "contract model" of health systems, there is a
separation between the payer or purchaser, and the provider. In Canada, governments act as the
payer, and for insured hospital and medical services they are the single payer.
While health care is not the sole responsibility of any order of government in Canada, the
provinces play the major role, as constitutionally determined. They are the key payer in the health
system. Others involved in the health care system, though not necessarily as payers, include the
federal government, municipalities or local government, the private sector, as well as other
partners.
The provincial role
The hands-on management of health services is fundamentally the responsibility of each
individual province or territory. Through their respective central health ministries or departments
of health, they plan, finance, and evaluate the provision of hospital care, physician and allied
health care services, some aspects of prescription care and public health. They also supervise
those specific responsibilities delegated to other nongovernmental agencies.
Provincial health ministries fund public hospitals, negotiate salaries of allied health professionals,
and negotiate fees for physician services with provincial physician associations.
In most provinces the administration and payment for insured services is managed by a provincial
health insurance plan accountable to the provincial government. These plans are taxation-based,
nonprofit and for insured services single-payer. They operate either from within the Ministry of
Health or through a separate agency closely linked to the ministry. These plans administer
payment to service providers on behalf of eligible provincial residents. The operation of these
plans must respect the principles of the Canada Health Act in order for the province to qualify for
full federal transfers.
With health care functions either located in, or overseen by, the Ministry of Health, the Minister
of Health is politically accountable for the operation of the health care system. The Minister of
Finance, or Treasurer, is responsible for setting the overall health budget of the government,
within which the Minister of Health must operate the system.
Most provinces provide some coverage for non-insured services for social assistance recipients.
Health related benefits for social assistance recipients typically include prescription medicines,
dental care and vision care. These programmes are usually operated from within ministries of
social services.
Each province has an arms-length Worker’s Compensation Board (WCB) which cares for
workers who have been injured on the job. Financed entirely by employers, the WCBs provide
workers with financial and health care assistance in the event of short- and long-term workrelated injuries or diseases, in return for relinquishing the right to sue for workplace negligence.
Subprovincial governments and bodies are also involved in health care to a degree. Many
municipalities make contributions to the capital costs of health care services in their areas and
often are responsible for public health programmes such as well-baby clinics and public health
education.
This overall structure has remained quite stable over the past two decades but is now undergoing
substantial change. Almost all provinces have incorporated or are experimenting with some
Organizational structure and management 7
degree of decentralization and regionalization in their health care systems. This is discussed in
more detail below.
The federal role
The federal government's role in health care involves the setting and administering of national
principles or standards for the health care system (i.e., Canada Health Act), assisting in the
financing of provincial health care services through financial transfers, and fulfilling functions for
which it is constitutionally responsible. One of these functions is direct health service delivery to
specific groups including veterans, native Canadians living on reserves, military personnel,
inmates of federal penitentiaries and the Royal Canadian Mounted Police. The delivery and
financing of health services for these groups are the responsibility of the federal government.
Other functions include health protection, disease prevention, and health promotion.
The federal government’s role in Canadian health care is undertaken primarily under the auspices
of the Department of Health, also known as Health Canada. This department is charged with the
mission of helping the people of Canada to maintain and improve their health. Since the early
1970s, Health Canada and its predecessor, Health and Welfare Canada, has undertaken a broad
leadership role to support this mandate. This has included: fostering essential national
relationships by establishing active health system partnerships with the provinces and territories;
supporting initiatives to redress health inequalities, improve knowledge management and research
dissemination; and creating innovative and effective health programmes to advance the health of
Canadians. The department also monitors the food supply, pharmaceuticals, health products, and
the environment, investigates disease outbreaks, and protects Canadians from hazardous
consumer products or materials in the workplace. The department is also responsible for the
delivery of health services, including non-insured or supplementary health services to Canada’s
native population.
The federal Minister of Health is politically responsible for the operation of the national health
insurance system, or Medicare, through the administration of the Canada Health Act. The
Minister of Finance is responsible for financial transfers to the provinces which assist in the
financing of insured health services.
Other federal departments are involved in health care through providing/funding health services
for the specific groups for which the federal government is responsible. They include the
Departments of Indian and Northern Affairs, National Defence, Correctional Services, and
Veterans Affairs.
