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Fraser Institute

Virtual care will break the Canada Health Act—and that’s a good thing

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5 minute read

From the Fraser Institute

By Bacchus Barua

The leadership of the Canadian Medical Association (CMA) is facing sharp criticism for its recent proposal to effectively ban private payment for virtual care. In a clear example of putting politics before patients, this would only erect additional barriers for those seeking care.

Moreover, it’s a desperate bid to cling to an outdated—and failed—model of health care while underestimating modern-day innovations.

Virtual care—online video doctor consultations—is a private-sector innovation. In response to our government system’s inability to provide timely care, private companies such as Maple have been offering these services to Canadians for almost a decade. In fact, the public system only pushed meaningfully into the virtual space during COVID when it established partnerships with these private companies alongside setting up new fee codes for virtual consultations.

In return for improving access to physician consultations for thousands of Canadians, these virtual care companies have been rewarded with increased government scrutiny and red tape. The weapon of choice? The Canada Health Act (CHA).

Specifically, sections 18 to 21 of the CHA prohibit user fees and extra billing for “medically necessary” services. Further, the insurance plan of a province must be publicly administered and provide “reasonable access” to 100 per cent of insured services. Provinces found in violation are punished by the federal government, which withholds a portion (or all) of federal health-care transfer payments.

Until recently, there had been no obvious conflict between the CHA and privately paid-for virtual care—primarily because the provinces are free to determine what’s medically necessary. Until recently, many provinces did not even have billing codes for virtual care. As virtual services are increasingly provided by the public sector, however, the ability to innovatively provide care for paying patients (either out-of-pocket or through private insurance) becomes restricted further.

Within this context, the CMA recently recommended formally including virtual care services within the public system, alongside measures to ensure “equitable access.” At the same time, it reiterated its recommendation that private insurance to access medically necessary services covered by the CHA be prohibited.

See where this is going?

The kicker is an additional recommendation banning dual practice (i.e. physicians working in both the public and private sector) except under certain conditions. This means doctors in the public system who could otherwise allocate their spare hours to private appointments online would now have to choose to operate exclusively in either the public or private system.

The combined effect of these policies would ensure that innovative private options for virtual care—whether paid for out-of-pocket or though private insurance—will either be overtaken by bureaucracies or disappear entirely.

But what the CMA report fails to recognize is that virtual care has expanded access to services the government fails to provide—there’s little reason to suspect a government takeover of the virtual-care sector will make things better for patients. And even if governments could somehow prevent Canadian doctors and companies providing these services privately, virtual care is not beholden to Canada’s physical borders. Patients with a little bit of technical knowhow will simply bypass the Canadian system entirely by having virtual consultations with doctors abroad. If Canadians can figure out how to access their favourite show in another country, you can be sure they’ll find a way to get a consultation with a doctor in Mumbai instead of Montreal.

Instead of forcing physicians and patients to operate within the crumbling confines of government-run health care, the CMA’s leadership should be grateful for the pressure valve that the private sector has produced. We should celebrate the private innovators who have provided Canadians better access to health care, not finding ways to shut them down in favour of more government control.

Fraser Institute

Here’s your annual bill for public health care

Published on

From the Fraser Institute

By Bacchus Barua

Notably, the amount paid by the average family has increased by 239.7 per cent since 1997 (the first year of available data).

According to a recent survey by Statistics Canada, almost half of Canadians said that rising prices are affecting their ability to meet day-to-day expenses. At the same time, Canadians are increasingly aware of their significant tax burden, with 74 per cent feeling the average family is overtaxed. This is not surprising given the average Canadian family spends more on taxes than food, clothing and shelter combined.

However, one contributor to this growing tax burden remains hidden—the price we pay public health care. You read that right. Public health care is not free—but it’s very difficult to figure out exactly how much we pay for it on an individual or family basis.

This is primarily because our public health-care system is funded through general government revenues. In other words, there’s no dedicated tax that fully funds the system. Our income taxes, sales taxes, business taxes and other taxes get poured into a fiscal vat, from which governments take a generous portion for health care.

While it’s easy enough to gauge total health-care spending by governments ($225.1 billion) or how much was spent per Canadian ($5,614), it remains nearly impossible for Canadian families of different sizes and incomes to calculate how much they contribute towards that vast amount.

But a recent study helps us get a general idea. According to the study, an average family of four (two parents and two children) with an average income of $176,266 will pay an estimated $17,713 (in taxes) for public health care this year. Single Canadians, with an average income of $55,925, will pay $5,629. Of course, these amounts vary by income with the poorest 10 per cent of income earners paying $639 while the top 10 per cent pay $47,071.

Notably, the amount paid by the average family has increased by 239.7 per cent since 1997 (the first year of available data). This increase is 3.1 times greater than the rate of inflation, 2.2 times greater than food cost increases, and 1.6 times greater than housing costs increases. And crucially, the cost of public health care for the average family has increased 1.7 times faster than their average incomes grew during the same period.

These figures are not only important for families who are interested in how their tax dollars are spent, they are one very important side of the equation when trying to understand whether we receive good value for our health-care dollars. Moreover, as politicians continue to promise ever increasing health-care spending to fix our crumbling system, it’s crucial for Canadians to understand exactly how that spending impacts their wallets.

One thing is clear. With nearly an $18,000 price tag for the average family of four, Canada’s public health-care system is anything but free.

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Economy

Energy transition will be much longer and more arduous than they’re telling you

Published on

From the Fraser Institute

By Jock Finlayson

While many Canadian politicians and activists continue to trumpet the “energy transition” and conjure visions of a low-carbon future that supposedly lurks just around the corner, along comes Natural Resources Canada with its latest Energy Fact Book. A careful review of the publication pours cold water on any notion of a rapid shift to a fundamentally different energy system, one that features a much smaller role for the fossil fuels that now supply the vast majority of the energy used by Canadians.

The book contains a wealth of information on Canada’s large and notably diverse energy sector, covering production, consumption trends, investment, and the environmental impact of energy production and use.  Separately, Natural Resources Canada also publishes “energy profiles” for the individual provinces and territories that provide further insight into energy production and consumption patterns across the country.

Starting with energy production (and considering all sources of energy, including uranium), crude oil accounts for about 45 per cent of Canadian energy output, measured in petajoules. Natural gas and natural gas liquids comprise another 32 per cent, with uranium chipping in 11 per cent of primary energy production. Smaller shares come from coal (5 per cent), hydroelectricity (5 per cent) and “other” renewables (3 per cent).

The statistics on energy output confirm that fossil fuels dominate the mix of energy sources produced in Canada. There’s little reason to believe this will change in a significant way in the near term.

Turning to energy consumption, a review of the most recent information leads to a broadly similar conclusion.

Based on Statistics Canada’s latest data, industry, collectively, is responsible for about 35 per cent of final end-use energy demand; this category includes manufacturing, natural resource extraction and processing, and construction. Transportation is the second-largest consumer of energy (29 per cent of final demand), followed by the residential (16 per cent) and commercial sectors (14 per cent).

What about the various sources of energy Canadians depend on for their comfort and well-being and to enable industrial and other business activity? Refined petroleum products rank first, providing about two-fifths of all energy consumed. Natural gas is second (35-36 per cent). Electricity comprises just 16-17 per cent of the energy used in Canada. Overall, fossil fuels still meet more than three quarters of Canadians’ requirements for primary energy.

Some may be surprised that electricity constitutes less than one-fifth of the energy used in Canada. A principal strategy of governments aspiring to slash greenhouse gas emissions is to redirect energy demand to electricity and away from oil, natural gas and other carbon-based energy sources. That makes sense, particularly since Canada’s existing electricity grid is about 80 per cent carbon-free. But a “big switch” to electricity won’t be easy. Consider that, over the first two decades of the millennium, Canadian natural gas consumption jumped by 34 per cent while electricity demand rose by 12 per cent. This underscores the resiliency of household and business demand for reliable affordable energy—of which natural gas is the best example.

Raising electricity’s share of total energy consumption will necessitate an enormous expansion across all segments of the Canadian electricity sector, encompassing not only the development of far more generation capacity but also the construction of additional transmission networks to deliver electric energy to end-users. Industry experts talk of boosting the amount of electricity produced in Canada by up to three times within two decades—a herculean task, assuming it’s even possible.

And, in line with the “net zero” goals espoused by many governments, virtually all of new electricity presumably must come from carbon-free sources (e.g., hydropower, other renewables, biomass, nuclear). There’s also the challenge of replacing the remaining carbon-based electricity still produced in Canada with carbon-free alternatives, as mandated by the Clean Electricity Regulations (CER) recently adopted by the Trudeau government.

Suffice to say the transition away from fossil fuels as the predominant source of energy consumed in Canada will be a lengthy and arduous journey and is sure to encounter more and bigger obstacles than most of Canada’s political class understands or cares to acknowledge.

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