Canada - World Health Organization Regional Office for Europe

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Health systems in transition Canada
on a graduated basis, where a provincial plan impeded reasonable access by
permitting extra billing or user fees, and this proposal was incorporated into
the Canada Health Act in 1984.
In 1995, the federal government replaced EPF with the Canada Health and
Social Transfer (CHST). The new transfer folded in yet another transfer fund
(for social assistance) with health and higher education but the cash portion of
the transfer was reduced and the provision for automatic annual increases was
eliminated. These actions triggered considerable intergovernmental acrimony
as well as concerns about the impact of the changes on the national dimensions
of the health system (Romanow, 2002). In response to these and other concerns,
the federal government replaced this omnibus CHST with the Canada Health
Transfer in 2004 and reintroduced the feature of the annual increase – now
set at 6% per annum for 10 years. Estimated at C$27 billion in the fiscal year
2011–2012, the Canada Health Transfer amounts to slightly more than 20% of
estimated provincial spending on health in 2011 (CIHI, 2011e).
3.3.4 Purchaser–provider relations and payments to providers
In addition to administering, funding and coordinating services provided by
other organizations, most RHAs also deliver health services directly. This mix
of hierarchical integration and contractual coordination means that RHAs act
as both purchasers and providers, although the emphasis is more on integration
than competitive contracting (as it is in the United Kingdom). The one major
exception to this particular RHA model is Ontario where the fourteen RHAs,
known as LHINs, do not directly provide any services. Although it might be
argued that that the organizational design of regionalization in Canada creates a
purchaser–provider split, there is little evidence that it was formally structured
in a way to promote an internal market similar to the National Health Service
reforms in the United Kingdom.
Most hospitals are funded through global budgets, either directly (by
ministries of health), or indirectly through budget allocations to RHAs. In
recent years, some jurisdictions in Canada have begun to experiment with
alternative forms of funding mechanisms for hospital care. These include
activity-based funding, with British Columbia being the first province to adopt
an activity-based funding approach for hospitals on a large scale (Sutherland
et al., 2011). To date, there has not been a comprehensive evaluation comparing
these hospital-funding mechanisms (Sutherland, 2011a).