The second largest country in the world as measured by area, Canada is a high-income country with an advanced industrial economy. Since 2006, Canada’s economic performance has been relatively solid despite the recession that began in 2008. Although revenue growth has remained robust, the federal government as well as a number of provincial governments have also reduced tax rates in recent years. At the same time, health care costs continue to grow at rates that exceed economic and government revenue growth, raising concerns about the fiscal sustainability of health expenditure financed through the public sector.

Canada is a constitutional monarchy...

The second largest country in the world as measured by area, Canada is a high-income country with an advanced industrial economy. Since 2006, Canada’s economic performance has been relatively solid despite the recession that began in 2008. Although revenue growth has remained robust, the federal government as well as a number of provincial governments have also reduced tax rates in recent years. At the same time, health care costs continue to rise at rates that exceed economic and government revenue growth, raising continuing concerns about the fiscal sustainability of health expenditures, financing through the public sector.

In terms of the...

Canada has a predominantly publicly financed health system with approximately 70% of health expenditures financed through the general tax revenues of the F/P/T governments. At the same time, the governance, organization and delivery of health services is highly decentralized for at least three reasons: (1) provincial (and territorial) responsibility for the funding and delivery of most health care services; (2) the status of physicians as independent contractors; and (3) the existence of multiple organizations, from RHAs to privately governed hospitals that operate at arm’s length from provincial governments (Axelsson, Marchildon & Repullo-Labrador, 2007).

The Canadian provinces and territories are responsible...

The public sector in Canada is responsible for almost 70% of total health expenditures (THE). After a period of spending restraint in the early to mid-1990s, government expenditures have grown rapidly, at a rate of growth only exceeded by private health expenditure. Since health expenditures have grown more rapidly than either the growth in the economy or public revenues, this growth has triggered concerns about the fiscal sustainability of public health care. Contrary to popular perception, demographic ageing has not, at least yet, been a major driver of health system costs in Canada. Over the last two decades, prescription drugs...

The non-financial inputs into the Canadian health system include buildings, equipment, information technology and the health workforce. The ability of any health system to provide timely access to quality health services depends not only on the sufficiency of physical and human resources but also on finding the appropriate balance among them (Romanow, 2002). Both the sufficiency and the balance of resources need to be adjusted continually by F/P/T governments in response to the constantly evolving technology, health care practices and health needs of Canadians.

From the mid-1970s until 2000, capital investment in hospitals declined. Small hospitals were closed in many...

Although it is difficult to generalize given the decentralized nature of health services administration and delivery in Canada, the typical patient pathway starts with a visit to a family physician, who then determines the course of basic treatment, if any. Family physicians act as gatekeepers: they decide whether their patients should obtain diagnostic tests, prescription drug therapies or be referred to medical specialists. However, provincial ministries of health have renewed efforts to reform primary care in the last decade. Many of these reform efforts focus on moving from the traditional physician-only practice to interprofessional primary care teams that provide a...

Since 2005, when the first edition of this study was published (Marchildon, 2005), there have been no major pan-Canadian health reform initiatives. However, individual provincial and territorial ministries of health have concentrated on two categories of reform, one involving the reorganization or fine tuning of their regional health systems, and the second linked to improving the quality and timeliness of – and patient experience with – primary, acute and chronic care.

The main purpose of regionalization was to gain the benefits of vertical integration by managing facilities and providers across a broad continuum of health services, in particular to improve the coordination...

In assessing performance, the Canadian health system has been effective in financially protecting Canadians against high-cost hospital and physician services. At the same time, the narrow scope of universal services covered under medicare has produced important gaps in coverage. With regard to prescription drugs and dental care, for example, depending on employment and province or territory of residence, these gaps are filled by PHI and, at least for drug therapies, by provincial plans that target seniors and the very poor. Where public coverage of drugs and dental care does not fill in the cracks left by private coverage, equitable access...

In Canada, public and private coverage for health services is highly segmented by health sector. Universal, first-dollar coverage is restricted to medically necessary hospital and physician services. Other health goods and services, including prescription drugs, rehabilitative care and long-term care, are subject to targeted coverage or subsidies that cover some of the gaps left by PHI and OOP payments, but where private funds are the major source of financing, such as dental care, there are high levels of inequity in utilization and health outcomes.

Setting and achieving pan-Canadian standards and objectives in a highly decentralized federation requires considerable intergovernmental and...