4b Financing Issues in Canadian Health Care

Question 1

What is the current trend of health-to-GDP ratio (viewed in the context of the last 40 years)?

Answer 1

Current trend of a declining health-to-GDP ratio (appears similar to that experienced in the mid-1990s)
- has fallen gradually in the past few years following the recession in 2009

Question 2

How is health care paid for? (who pays what? Federal/provincial)

Answer 2

Federal pays approx. 35% and Provincial pays for 65%

Question 3

What is a direct economic footprint?

Answer 3

As a major employer, the health care sector directly employs about 1.4 million Canadians - which represents about 9% of the total jobs in Canada.

Question 4

What is an indirect economic footprint?

Answer 4

Many Canadian jobs are indirectly supported by the health care sector through its supply chain.

Question 5

What kind of jobs are supported economically indirectly by the health care system?

Answer 5

The purchase of medical supplies, office equipment, and hundreds of other inputs from virtually every industry in Canada.

Question 6

What is “fee-for-service”?

Answer 6

Payment method in which doctors and other health care providers receive a fee for each service such as an office visit, test, procedure, or other health care service.

Question 7

What are capitation payments?

Answer 7

Under the capitation method, the provider receives a fixed monthly payment for person enrolled in a health plan.

Question 8

What are “per-diem payments”?

Answer 8

Payments based on the number of days a service is provided. This payment is usually not adjusted to allow for differences in patient characteristics.

Question 9

What is “global budget”?

Answer 9

Payment of a particular sum to cover the operating costs of services provided by the hospital in a given period of time.

Question 10

What are “categorical grants”?

Answer 10

National government determines the purposes, or categories, for which the money should be used. Categorical grants may be spent only for narrowly defined purposes and recipients often must match a portion of the federal funds.

Question 11

What are “block grants”?

Answer 11

A large sum of money granted by the national governments to a regional government with only general provisions as to the way it is to be spent. This can be contrasted with a categorical grant which has more strict and specific provisions on the way it is to be spent.

Question 12

What is a “budget”?

Answer 12

Plan for spending to accomplish specified objectives.

Question 13

What is a “deficit”?

Answer 13

Shortfall in one fiscal period.

Question 14

What is “debt”?

Answer 14

Accumulation of deficits.

Question 15

What is “operating budget”?

Answer 15

Annual estimates of the total value of resources required for the performance of the operation including reimbursable work or services for others. If also includes estimates of workload in terms of total work units identified by cost accounts.

Question 16

What is “capital budget”?

Answer 16

Financial plan to finance long-term outlays, such as for fixed assets like facilities and equipment.

Question 17

What is equalization?

Answer 17

Federal transfer program that allows all provinces, regardless of their ability to raise revenue, to provide roughly comparable levels of services at roughly comparable levels of taxation. Eligibility to receive equalization funding is determined by a formula measuring each province’s revenue-raising capacity against a five-province standard.

Question 18

Which provinces currently receive equalization?

Answer 18

PEI, Nova Scotia, New Brunswick, Ontario, Manitoba, Quebec

Question 19

What is a tax transfer?

Answer 19

A federal tax transfer involves the federal governments ceding some of its “tax room” to provincial governments. Specifically, a tax transfer occurs when the federal government reduces its tax rates to allow provinces to raise their tax rates by an equivalent amount. With a tax transfer, the changes in federal and provincial tax rates offset one another and there is no net financial impact on the taxpayer.

Question 20

How much is CHT expected to continue to grow until 2016-2017?

Answer 20

6%

Question 21

How much is CHT funding supposed to increase by year after 2017/2018?

Answer 21

3%

Question 22

What is the Organization for Economic Co-operation and Development (OECD)?

Answer 22

International economic organization of 34 countries founded in 1961 to stimulate economic progress and world trade.

Question 23

What does the Organization for Economic Co-operation and Development (OECD) do?

Answer 23

It is a forum of countries committed to democracy and the market economy, providing a platform to compare policy experiences, seek answers to common problems, identify good practices, and co-ordinate domestic and international policies of its members.

Question 24

Which country has the highest spending per person on health care?

Answer 24

The United States

Question 25

What are the key issues at the public:private interface?

Answer 25

Safety valve to provide recourse against excessive wait times.
Defining the basket of publicly-insured services.
Increasing capacity/throughput through public:private partnerships (P3s)
Improving performance measurement and quality assurance in both public and private delivery.
Ensuring a regulatory framework that strikes the right balance between professional autonomy and social responsibility.