The latest legal challenge to Canada's healthcare system

A primer on the legal dispute between Dr. Brian Day and British Columbia – and how it may affect Canada's healthcare system

By Karen S. Palmer, M.P.H., M.S., June, 18, 2015

In British Columbia, as in the rest of Canada, the health care system, “Medicare,” provides public funding for all medically necessary hospital and physician services.

The Canada Health Act (federal legislation enacted in 1984) strongly discourages private payment, such as extra billing and user charges, for hospital and physician services covered under Medicare. If provinces (except Quebec) allow private payment for such services, the federal government is mandated to withhold an equivalent amount from federal cash transfers. With rare exceptions, this financial penalty for failing to comply with the legislation has been effective in restricting extra billing and other user fees.

The CHA is silent on care delivery, taking no position on whether health care should be delivered in private, not-for-profit or private, for-profit facilities.

When are doctors legally permitted to charge patients?

Under BC legislation, physicians enrolled in (and thus being paid by) the BC Medical Services Plan (MSP) must work entirely within the publicly-funded system when providing medically necessary care, whether that care is provided in hospitals or privately-owned facilities. As long as physicians are enrolled in MSP, they are prohibited from charging BC residents any fee for, or in relation to, the delivery of medically necessary hospital and physician services.

Physicians are, however, permitted to completely un-enroll from MSP. Non-enrolled physicians in BC may charge patients whatever amounts they want for providing medically necessary services, so long as those services are not provided in a “hospital” or a “community care facility” (as defined by the Hospital Act).

Patients are permitted to pay a non-enrolled physician out-of-pocket, but not with private “duplicative” insurance (such insurance — covering the same patients and services as the public insurance — does not currently exist in BC). Very few BC physicians are non-enrolled in MSP.

What’s the court case about?

Dr. Brian Day, the President and CEO of two private for-profit investor-owned facilities (Cambie Surgery Centre and their partner, Specialist Referral Clinic, neither of which is designated as a “hospital”) is challenging the prohibition on private billing by enrolled physicians.

Dr. Day alleges that the limits on charging patients privately, enshrined in the Canada Health Act (CHA, and its equivalent provincial legislation in BC), infringe patients’ rights to life, liberty and security of the person under Section 7 of the Canadian Charter of Rights and Freedoms.

The essence of Dr. Day’s claim is that, because the publicly-funded system compels some patients to wait for the delivery of some medically necessary services (in particular, elective surgery), patients should have the right to obtain such services more quickly by paying privately, either out-of-pocket or through private insurance.

Dr. Day supports a system of “dual practice” in which physicians can be paid from both public and private purses, including through private health insurance covering medically necessary hospital and physician care.

Beyond this, Dr. Day also argues that even physicians still enrolled in MSP should be allowed to “extra bill” patients — through out-of-pocket payment and private insurance — who do not wish to wait their turn for publicly-funded care. His rationale is that since BC physicians not enrolled in MSP are already permitted to collect out-of-pocket payments for care delivered outside of hospitals or community care facilities, then private duplicative insurance should also be for sale to BC patients who do not wish to wait for publicly-funded care, even when they are treated by physicians still enrolled in MSP.

Why is the province of BC opposing Day’s position?

The Attorney General (AG) of BC will argue against these changes to Medicare, based on evidence affirming that allowing a parallel private payment system, and physician dual practice, in an otherwise publicly-funded health care system, negatively affects these systems.

The AG will argue that there is no causal connection between BC’s limits on private payment and the alleged deprivation of life, liberty or security of the person.

Instead of care being delivered on the basis of need, as is the case now, overturning the limitations on private payment would result in care being provided first to those who can afford to pay. This means that if the law impeding extra-billing is over-turned, then all physicians would be able to charge patients whatever fees they wished, on top of what physicians are already paid by the government.

The AG will argue that care should be delivered on the basis of need, not ability to pay. If the same physicians are delivering both publicly-funded and privately-funded care, evidence from other countries shows that patients who can afford to pay out-of-pocket or through private insurance are likely to get care faster, regardless of their need. When physicians preferentially treat private pay patients, the probable result of a parallel public-private pay system is increased wait times for those unable to pay.

The AG will also bring evidence to show that allowing a multi-payer health care system will lure physicians from the public-pay sector to the private-pay sector, potentially reducing the availability, quality and timeliness of care in the publicly-funded system.  It will also argue that a multi-payer health care system that includes private health insurance will drive up costs, forcing public funders to pay higher prices to “compete” with private insurers.

The trial is expected to commence in the British Columbia Supreme Court in November 2015.

For more information, see also: 

Backgrounder: Court challenges to one-tier medicare:

Four things you should know about the pending Charter challenge against medicare

Backgrounder: Surgical wait times for publicly funded health services in Canada

Commentary: BC doctors’ election represents crossroads for the future of medicine in Canada

This article was prepared for by Karen Palmer, M.P.H., M.S., adjunct professor in the Faculty of Health Sciences at Simon Fraser University, where she taught comparative health care policy until 2013. She is currently an independent health policy analyst and health services researcher.