Canadian Health Policy Institute (CHPI): Governments Could Save $5 Billion Annually by Allowing Modest User Charges for Physician Services in Canada
TORONTO, ON–(Marketwired – September 20, 2016) – A new study suggests that the Canada Health Act (1984) is a barrier to the fiscal sustainability of Canada’s public healthcare system. The Act prohibits supplementary funding mechanisms like user charges and extra-billing. The study estimates that Provincial governments could be saving $5 billion annually on publicly funded health spending by allowing modest user charges for physician services in Canada.
Using data from the Canadian Institute for Health Information on utilization and payments for fee-based physician services, the study estimated the potential for user charges, co-pays and extra billing to offset government health expenditures in Canada. It was published at Canadian Health Policy, the online journal of Canadian Health Policy Institute (CHPI).
The analysis showed that if, in the fiscal year 2004-2005 the provinces had pegged all future increases in physician fee-for-service payments to changes in the Consumer Price Index and allowed extra billings to cover fee inflation, by 2014-2015 governments could be saving up to $4 billion per year versus actual costs. Based on the most current utilization, a user fee of $20 per service could have offset up to $5.3 billion in government health spending in 2014-15, and a 25% co-payment per service could have offset $4.1 billion.
According to the author Dr. Brett J Skinner, “The estimates are projections of the maximum potential for savings. Some patients are high-frequency or high-intensity users of medical care. Governments would need to put limits on the direct costs that any individual patient (or family, household) could be exposed to when designing user charges, including for example capping total out-of-pocket costs on an annual basis or as a percentage of income. Such policies would reduce the magnitude of the potential savings.”
Nevertheless, he believes the study shows that, “modest user charges for public medical services are a fiscally attractive, socially manageable and economically feasible supplementary funding mechanism for Canada’s healthcare system.”
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The article, Governments could potentially save $5 billion annually by allowing user charges for physician services in Canada, is available online at: www.canadianhealthpolicy.com
Canadian Health Policy Institute (CHPI) is an independent think-tank dedicated to providing information and ideas for a better health system.