The Challenge of Defining Medicare Coverage in Canada

25 Pages Posted: 18 Oct 2013 Last revised: 30 Oct 2013

See all articles by J. C. Herbert Emery

J. C. Herbert Emery

University of Calgary - Department of Economics

Ronald D. Kneebone

University of Calgary - The School of Public Policy; University of Calgary - Department of Economics

Date Written: October 16, 2013

Abstract

There is a widespread impression among Canadians that their health-care system is universal, comprehensive and equitable. Given this impression, Canadians may be surprised to discover that, for instance, while annual physicals and receiving advice on dealing with cold symptoms are covered by the public plan, the costs of rehabilitation from a brain injury or stroke are not fully covered. While universal, the public plan is not comprehensive nor, arguably, is it equitable.

The Canada Health Act (CHA) uses the term "medically necessary" to define medical procedures and treatments to be paid for by the publicly-funded medicare system. In Canada’s health-care system, the term has come to refer almost exclusively to those services provided by a physician, or provided within a hospital setting, by a physician or other staff. Services that a reasonable person might consider "necessary," but are provided outside those settings, are typically not covered.

In many ways the federally-legislated Canada Health Act has been culturally enshrined as a consecrated icon of national identity. But the legislation fails to clearly identify the line between necessary and unnecessary medical services. This has put provincial governments — who are responsible for medical-funding decisions — in the difficult position of having to make this decision, and they have resorted to drawing that line in sometimes surprising places. The line drawn between "necessary" and "unnecessary" medical treatments has been determined by the financial self-interest of medical stakeholders, by hospitals rationing global budgets, and by financially-constrained provincial governments. The result is a relatively narrow definition of medical necessity that undermines the equality goals the CHA is often claimed to uphold.

Health care is arguably the most important public-expenditure program in Canada. It is important for Canadians to understand clearly what services and levels of care this program provides so that they can prepare for, and possibly insure against, outcomes that are not covered. We do not argue it is easy to make this demarcation between what is and what is not covered by medicare. We do argue, however, that it is necessary to establish this line and to draw attention to its position.

Keywords: Medicare, Canadian medicare, Canadian health-care system, health-care, Canada Health Act, medically necessary

JEL Classification: I1, I10, I11, I18

Suggested Citation

Emery, J. C. Herbert and Kneebone, Ron, The Challenge of Defining Medicare Coverage in Canada (October 16, 2013). SPP Research Paper No. 6-32, Available at SSRN: https://ssrn.com/abstract=2341234 or http://dx.doi.org/10.2139/ssrn.2341234

J. C. Herbert Emery (Contact Author)

University of Calgary - Department of Economics ( email )

2500 University Drive, NW
Calgary, Alberta T2N 1N4
Canada
403 2205489 (Phone)
403 2825262 (Fax)

HOME PAGE: http://econ.ucalgary.ca/emery.htm

Ron Kneebone

University of Calgary - The School of Public Policy

Calgary, Alberta
Canada

University of Calgary - Department of Economics ( email )

2500 University Drive, NW
Calgary, Alberta T2N 1N4
Canada

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