Canada's High Court Ends Ban On Private Health Insurance

The Canadian Supreme Court last month struck down a prohibition in Quebec province on private health insurance, citing the existence of lengthy waiting lists for services under the country's publicly funded nationalized health service.

In the case Chaoulli v. Quebec, Canadian citizen George Zeliotis and physician Jacques Chaoulli, M.D., charged that the prohibition on private insurance deprives citizens of access to care because necessary services are not provided in a timely manner under the country's overburdened public system.

Zeliotis had experienced a number of health problems, including the need for orthopedic surgery, for which he was placed on a waiting list. Chaoulli is a physician who tried unsuccessfully to obtain a license to operate an independent private hospital.

“The evidence shows that in the case of certain surgical procedures, the delays that are the necessary result of waiting lists increase the patient's risk of mortality or the risk that his or her injuries will become irreparable,” the court said. “The evidence also shows that many patients on nonurgent waiting lists are in pain and cannot fully enjoy any real quality of life. The right to life and to personal inviolability is therefore affected by the waiting times.

“The evidence also demonstrates that the prohibition against private health insurance and its consequence of denying people vital health care result in physical and psychological suffering that meets a threshold test of seriousness,” the justices stated.

The ruling appears to be a blow to Canada's nationalized health service and was received in some quarters of the United States as a vindication of arguments against a “single payer” solution for health system reform.

“The Canadian ruling ought to be an eye opener for the U.S., where `single-payer,' government-run health care is still a holy grail on the political left...,” the Wall Street Journal wrote in an editorial following the decision. “The larger lesson here is that health care isn't immune from the laws of economics. Politicians can't wave a wand and provide equal coverage for all merely by declaring medical care to be a `right,' in the word that is currently popular on the American left....”

“There are only two ways to allocate any good or service: through prices, as is done in a market economy, or lines dictated by government, as in Canada's system,” the editorial stated. “The socialist claim is that a single-payer system is more equal than one based on prices, but last week's court decision reveals that as an illusion.”

In fact, judges in the case focused their decision on the claim that waiting lists imposed suffering and distress—not on the viability of the national health service or its goals.

“As we enter the 21st century, health care is a constant concern,” wrote Justice J. Deschamps. “The public health care system, once a source of national pride, has become the subject of frequent and sometimes bitter criticism. This appeal does not question the appropriateness of the state making health care available to all Quebeckers. On the contrary, all the parties stated that they support this kind of role for the government. Only the state can make available to all Quebeckers the social safety net consisting of universal and accessible health care.

“The demand for health care is constantly increasing, and one of the tools used by governments to control this increase has been the management of waiting lists,” he continued. “The choice of waiting lists as a management tool falls within the authority of the state and not of the courts. The appellants do not claim to have a solution that will eliminate waiting lists.”

But there is little doubt the ruling will have a profound effect on the country's nationalized service.

Ray Freebury, M.D., an APA Assembly representative from the Ontario District Branch, said many Canadians see the decision as opening the window for the development of a private insurance market that could co-exist with the public program, helping to ameliorate the problem of waiting lists. But he expressed some reservations about that prospect, saying evidence from Great Britain—where a private insurance industry has grown up alongside the National Health Service—suggests that private insurance tends over time to degrade the public system.

But Freebury also said the costs of the public program to the government and tax-payers are growing insupportable, in part because of the expansion of medical technology and capacity and the aging of the population. “The cost of the public universal system is so burdensome to government that eventually [it] will withdraw [its] range of services or allow a partial, private system,” he told Psychiatric News.

He added that he believes the universal, public system is still regarded with pride by most Canadians. “In general I think the public recognizes that there are unavoidable issues, and people still think very highly of the system that we have,” he said.

Joseph Berger, M.D., a past president of the Ontario District Branch and a representative to the APA Assembly, said he “very much” welcomed the Supreme Court's decision and the introduction of private insurance.“ Any country that has tried to rely solely on a government-controlled monopoly has been highly unsuccessful,” he told Psychiatric News. “Without competition, standards just deteriorate.”

He believes a private insurance market can co-exist with the public, universal program and will make it stronger. “The only effect should be a positive one,” he said. “There is no consideration among the people I speak with about doing away with the public system or with universal access.”

Pierre Paul Yale, M.D., vice president of the Quebec Association of Psychiatrists, a branch of the Canadian Psychiatric Association, echoed some of Freebury's comments and said he welcomes the court's decision and the introduction of private insurance. “In the long run there will be a problem with funding the government system—that program will not hold out another 10 or 15 years unless we have lower-cost treatments and procedures.

“Right now we are trying to offer five-star quality medicine, and the medications are more and more expensive,” he said. “So we have to put a limit somewhere.”

Yale, who reported that the average wait for an MRI is six to eight weeks at least, said he believes the public system could exist side by side with a private insurance market.

He added that in his city of St. Jeansur-Richelieu, in Quebec, the shortage of psychiatrists is so severe that the waiting time to see one has been as long as four years. That is down to eight months now, he said, and in September a new service would begin in which psychiatrists will provide consultation to family physicians who provide mental health care in the primary care setting. The psychiatrist will provide a consultation within two weeks of the patient entering care and then follow up with the family physician regarding treatment recommendations, Yale said.

Physicians for a National Health Program (PNHP), an organization of American physicians advocating for national health insurance, said the Canadian court's decision could backfire on Canadians.

“Long queues... result from inadequate capacity of the health care delivery system, not from the method of paying for care,” the PNHP said in a statement. “It defies logic to suggest that private insurance will correct the capacity deficiencies that result in queues. When a public health care delivery system has deficient capacity, the role of private insurance, as defined by this decision, is to authorize a larger payment for the services than the public insurance provides. This merely jumps those with private coverage to the front of the queue....”

The PNHP statement is posted at<www.pnhp.org/news/2005/june/pnhp_statement_on_th.php>. The court's decision is posted at<www.lexum.umontreal.ca/csc-scc/en/rec/html/2005scc035.wpd.html>.▪