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Inefficiency in private insurance points to the need for an expanded system of coverage, say doctors

March 27, 2014

TORONTO – A new study in the Canadian Medical Association Journal (CMAJ) exposes the inefficiency of private health insurance in Canada, pointing to a need to reconsider how these services are paid for, according to a group of physicians.

Many health care services, such as drugs, dental and physiotherapy, are not covered under Medicare, leaving Canadians to purchase private insurance, pay out-of-pocket or go without. According to the new study, Canadians are getting less and less care for their money. Whereas in 1991, Canadians received 92 cents in benefits for every dollar spent on premiums, they received only 74 cents for every dollar in 2011.

“The analysis exposes the ineffective nature of the current private insurance model. Insurance company profits continue to rise while patients get less,” said Dr. Monika Dutt, Chair of Canadian Doctors for Medicare. “We just aren’t getting our money’s worth, especially now. The Canada Health Act was set up at a time when infectious diseases requiring hospital and physician care were most important. But today our major challenge is chronic disease, and we can no longer leave medications and other crucial services to an inefficient private insurance industry.”

The study comes at a time of heightened health care insecurity in Canada, with for-profit companies such as BC’s Cambie Surgical Centre pushing for a system that permits payment for medically necessary services traditionally covered by Medicare. The Cambie Surgical Centre goes to BC’s provincial court this September to argue its constitutional right to charge for such services. If they succeed, it will open the door for a US-style, two-tier health care system that offers premium service to those with the ability to pay.  

“The trial in BC places added emphasis on private insurance inefficiency,” said Dr. Dutt. “If the legal challenge overturns the prohibition on charging for services now covered by Medicare, we are likely to see a wave of for-profit insurance giants swoop in to sell a fundamentally flawed product. Based on these outcomes, we need to shrink private insurance for health care in Canada, not facilitate its expansion.”

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For more information:
Chad Andrews, Canadian Doctors for Medicare
T: 416-351-3300
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