How Alberta’s Private-Public Surgery Model May Work Without Violating Federal Funding Rules

Alberta Premier Danielle Smith in a file photo. The Canadian Press/Jason Fransson

Alberta’s move to allow a parallel private surgery system alongside the public health system has raised concerns among opposition and advocacy groups, who say it violates federal health-funding rules.

Premier Danielle Smith announced the proposal on Nov. 19, saying that letting surgeons perform privately funded surgeries during their off-hours will shorten public wait times without added costs to taxpayers. The opposition NDP and a number of advocacy groups say the plan violates the Canada Health Act (CHA) and is a major step toward privatization.

While the CHA, which dictates the terms under which provinces can get federal funds for health care, does have broad restrictions, health-care policy scholar Nadeem Esmail says Smith’s proposed model can comply with federal law as long as it ensures that privately funded services remain fully private without any public money involved.

“This policy does appear to fit the rules, that is, the privately funded services will be fully private, and there will be no sharing of costs with the public scheme,” Esmail, director of health policy at the Fraser Institute, told The Epoch Times.

He added that the model’s compliance with the Act will be subject to Ottawa’s interpretation of the criteria outlined in it.

One key point is that the CHA’s criteria apply to procedures deemed medically necessary. Smith has said the new model would limit private surgeries to elective procedures. But this could be a grey area. In 2023, Alberta had more than $13 million withheld from its federal health transfer after Ottawa said the province breached the act by permitting private payment for diagnostic services such as MRIs and CT scans in situations considered medically required. Alberta disputed Ottawa’s conclusion.

Ottawa says it is currently engaging with Alberta to better understand the proposed changes.

“Our new government will always protect the Canada Health Act and Canada’s universal health care system,” Guillaume Bertrand, a spokesperson for federal Health Minister Marjorie Michel, said in a statement to The Epoch Times.

“We have a collaborative approach with all provinces and territories to ensure all Canadians continue to have equitable access to medically necessary care based on their medical needs, not their ability to pay.”

Canada Health Act Criteria

Esmail says one criterion the federal government may argue the Alberta model challenges is accessibility, under Section 12 of the CHA.

The accessibility criterion requires government-funded health systems to provide services “on uniform terms and conditions” without barriers such as user charges that impede “reasonable access” to services.

Esmail says it’s important for the new model to clearly distinguish between public and private services to exclude the latter from being considered a part of the universal scheme.

“The key will be that there’s no cost-sharing between the universal scheme and privately funded services. Those services have to be entirely outside of the universal scheme,” he said.

“The tweak that the province is proposing is that physicians don’t have to fully opt out of the public scheme to deliver those fully, privately funded services.”

Under the current provincial rules set out in the Alberta Health Care Insurance Act, physicians participating in the public system cannot bill patients for publicly insured services. Only those who opt out of the public system are allowed to charge patients directly.

Another criterion Alberta’s proposed model would likely be measured against is universality, which requires provinces to ensure all insured residents are covered under the public plan.

Colin Craig, president of think tank SecondStreet.org, says the proposed model would still comply with that criterion, as “there will still be a public health care system available for everyone to use.”

“If you allow some people to pay for treatment, then they will no longer require the government system to help them, so the government system can focus more on helping people who don’t have the money,” he told The Epoch Times.

Contravening the Federal Act

Esmail says that since the Canada Health Act is a funding transfer act, the only impact on Alberta if its proposed dual system breaches it would be the loss of federal health transfers, which make up roughly 20 to 25 percent of the province’s total health budget.

He says losing federal funds could affect the province, but notes that higher spending has not translated into faster access or shorter wait times. A Fraser Institute study published on Oct. 21 found that despite relatively high health-care spending, Canada has far fewer medical resources and longer wait times than other countries with universal health systems.

Esmail says that while he believes the proposed model complies with the CHA, Ottawa could determine otherwise, heightening the risk of losing federal funding. Still, he says, the proposed model could represent a step toward improving health-care access.

“It’s very clear we are not getting value for our money now,” he said. “This proposed change is part of the solution.”

Criticism

The Alberta NDP, meanwhile, says the changes will violate the CHA, lead to a two-tier system, and mark a major step toward health-care privatization.

“Why is the minister planning to charge Albertans to see a doctor, violating the Canada Health Act and the principles of public health care?” Sharif Haji, NDP MLA and shadow minister of primary and preventative health services, said in the Alberta legislature on Nov. 18.

The Canadian Doctors for Medicare, a group that advocates for Canada’s publicly funded health system, said the dual‑practice model could affect access to public care by encouraging some physicians to spend more time in the private system, where they can earn higher fees.

“This will quickly create a two-tiered system that expedites care for those who pay privately, while increasing wait times for people who can’t afford to pay,” said Thara Kumar, former board director of the organization and an emergency physician in Alberta, in a Nov. 19 press release.

The Canadian Medical Association, which is also against the plan, said the changes mean that many will pay “twice for health care, once through taxes and a second time with their credit card.”

Smith said the initiative, called the “dual practice surgery model,” will include measures to protect the public system, such as setting a quota of publicly funded procedures surgeons must complete to qualify for private work, limiting private surgeries to evenings or weekends, and keeping some specialties only in the public system.

The premier says the new model would help reduce wait-lists by letting patients who can pay for surgery get it done during off-hours, taking them out of the public queue without adding costs for taxpayers.

“One challenge we face is that surgeons are not doing all the surgeries they could because the public health system can’t afford the operating room time, so patients wait too long, and some frustrated surgeons leave Canada,” Smith said on Nov. 19.