I OVERVIEW

Canada is a federated country comprising 10 provinces and three territories,2 populated by over 36 million people.3 Under a ‘separation of powers’ concept, Canada’s Constitution allocates responsibility for various matters between the federal government of Canada on the one hand, and the provincial governments on the other. Thus, while the government of Canada is responsible for the delivery of healthcare to a subset of Canada’s population,4 generally, the regulation and funding of healthcare is within the provincial jurisdiction.

Regulating the delivery of healthcare is a significant function of our provincial governments. This fact is not surprising, given that the delivery of healthcare is, year-in and year-out, among the issues of greatest import to Canada’s populace, and given that it is the subject of 35–45 per cent of almost all the provincial governments’ budgets. Provincial legislatures pass laws relating to, among others: healthcare delivery; health protection and promotion; the governance and operation of facilities in which healthcare is delivered; the delivery of mental healthcare, cancer care and home care; the regulation of healthcare professionals; healthcare privacy, procurement, accountability and transparency; and the means by which physicians may be compensated for the provision of their services.

II THE HEALTHCARE ECONOMY

i General

The Canada Health Act is likely the most recognised statue in Canada. Certainly, it is the single most important statute in defining how healthcare is delivered in Canada – even though, as said above, under the Canadian Constitution, the federal government has no jurisdiction to regulate healthcare. How then did it acquire this influence? Through its purse. The Canada Health Act is a funding statute. In it, the government sets out a number of conditions. If in a year the healthcare system of a province meets the conditions, the province will be entitled to its full share of the Canada Health Transfer for that year. Aggregating billions of dollars,5 no province can afford not to be in compliance.

ii The role of health insurance

To meet the conditions of the Canada Health Act, each province must have a health insurance plan in effect that, among other things, is:

  • a publicly administered;
  • b comprehensive;
  • c universal;
  • d portable; and
  • e accessible.

To be accessible, provincial health insurance plans must prohibit extra billing and user charges for medically necessary healthcare services. In practice, the prohibition on extra billing means that physicians and dentists are unable to charge any amounts in addition to those they are being paid by the provincial healthcare insurance system.

While a detailed description of each of these criteria is outside the bounds of this chapter, the result is that each province has its own government-operated health insurance plan that pays for insured health services, meaning medically necessary healthcare services rendered to insured persons. While the provincial plans vary in a number of ways and provide some limited exceptions, for the most part, Canadians receive all medically necessary healthcare through their provincial health insurance system. Physicians, hospitals and other healthcare providers are prohibited by provincial law from charging Canadians for medically necessary healthcare. Canada is one of only two countries in the world that makes the purchase of supplemental or private healthcare for medically necessary healthcare services illegal.

We note that the term ‘medically necessary’ is not necessarily used in provincial health insurance statutes. The term has come to mean any healthcare service a province has agreed to fund in the fee schedule to its health insurance plan statute. Similarly, although for ease we refer in this chapter to ‘Canadians’ as those who are entitled to the benefits contemplated by the Canada Health Act and the provincial health insurance statutes, technically those entitled to such benefits are ‘insured persons’. An insured person is an ‘eligible resident’ of a province (generally, someone who lives in a province for a specified amount of time per year, whether or not the person is a Canadian citizen, and including landed immigrants).6

iii Funding and payment for specific services

Provincial health insurance statues prohibit private insurance companies from selling insurance for medically necessary healthcare services delivered to Canadians (since these services are paid for by each province’s health insurance plan). Nonetheless, a limited private insurance market exists, including for:

  • a dental services (since only dental services delivered in hospital, and dental services provided to certain age groups and those living below specified income levels are covered by the provincial health insurance plans);
  • b prescription drugs (since, with limited exceptions including in the case of drugs prescribed to seniors and those living below specified income levels, only drugs administered in hospital are covered by the provincial health insurance plans);
  • c out-of-country insurance (since the provincial insurance plans will only cover healthcare delivered outside of Canada in limited circumstances and in limited amounts); and
  • d non-medically necessary services (e.g., most physiotherapy, chiropractic services and home care).

III PRIMARY / FAMILY MEDICINE, HOSPITALS AND SOCIAL CARE

The desired entry point for healthcare in Canada is the general practitioner or family physician. While historically, many family physicians practised medicine independently, the low ratio of family physicians to Canada’s population and the desire of a better work–life balance among physicians has led to a different organisational structure. Over the past decade or more, family physicians have increasingly come to organise themselves in groups where they practise not just with other physicians, but in many cases also with other allied healthcare providers, such as social workers, nutritionists and nurse practitioners.7 In some jurisdictions, patients are expected to ‘roster’ with such a team, and have all of their primary healthcare needs met there.

Nearly all other practising physicians in Canada are specialists (e.g., surgeons, oncologists, obstetricians, anaesthetists). Access to patient-facing specialists is generally obtained via referral from a family physician.

It is expected that most patients will have their primary healthcare needs met through their family physician in the family physician’s office. However, since not all patients have family physicians, and because family physicians are not always accessible in a timely manner (e.g., after hours), a large number of Canadians continue to have their primary healthcare needs met through hospital emergency departments or after-hours clinics. Both modes are considered inefficient and expensive. A growing number of hospital-sponsored urgent care centres are emerging to meet patient demands stemming from, among other things, the inaccessibility of their family physicians.

Healthcare is delivered in a number of settings:

  • a private clinics: including the offices of physicians and other specialists;
  • b surgical centres, or in Ontario, independent health facilities: generally for specialty day surgeries or diagnostic procedures;
  • c community health centres: clinics for marginalised or other specific populations;
  • d community centres: clinics for specialised procedures provided by allied health professionals, such as infusion clinics or for speech pathology, physiotherapy, etc.;
  • e hospices: for palliative or end-of-life care;
  • f private homes or seniors homes: where patients receive ‘home care’, including clinical (e.g., wound care and physiotherapy) and non-clinical (e.g., light housekeeping) care, and respite care for family caregivers;
  • g hospitals: of which there are many types – acute, chronic, tertiary, community, etc.; and
  • h long-term care (nursing) homes.

It should be noted that since not all healthcare services are medically necessary (and as such, are not insured services under provincial health insurance plans), services in a number of the settings referred to above may be paid for privately (i.e., outside of the provincial health insurance system), including by Canadians and their private insurers.

For a number of years, Canada has been developing a national electronic health record (EHR) system, through a collaboration of the government of Canada, a federal agency (Canada Health Infoway), provincial governments and other health sector organisations. EHRs are intended to ensure that legible and available patient records are readily available whenever they are needed by healthcare providers. This national initiative is also intended to ensure compatibility across different provincial or regional systems, so that a patient can receive healthcare anywhere in Canada, and have his or her EHR accessible to healthcare providers.

The national EHR initiative is supplemented by other provincial electronic health record initiatives. For example, provinces have supported the conversion of paper-based systems to electronic systems at family physicians’ offices and hospital systems, and have developed systems that focus on particular aspects of the health sector, such as chronic disease management.

While the EHR system is developing at local, micro-levels (in a specific hospital; with a pharmacist; with a family physician), secure connectivity between sites and large-scale adoption is still on the horizon.

IV THE LICENSING OF HEALTHCARE PROVIDERS AND PROFESSIONALS

i Regulators

Healthcare professions are governed by legislation that sets out, among other things, the scope of the practise of the profession, qualifications for entry into the profession, governance structure and requirements, and other restrictions on the practise of the profession. The primary purpose of such legislation is public protection.

Most healthcare professions are regulated by their own professional ‘college’, which is a corporation. In Ontario, for example, there are currently 26 of these colleges, which regulate various healthcare professions, including medicine, nursing and dentistry. Each college has a council that manages and administers the college’s affairs and functions as the college’s board of directors. Generally, colleges are funded by the healthcare professionals that comprise their membership, but some receive operating funding from the government.

Colleges are required by legislation to ensure that the public has access to qualified, skilled and competent healthcare professionals. Among other things, colleges are tasked with developing, establishing and maintaining the following: standards of qualification, standards of practice, quality assurance programmes and standards of professional ethics. The colleges also investigate complaints regarding their members’ conduct and may impose disciplinary measures on those healthcare professionals within their jurisdiction.

With respect to healthcare professionals, many provinces in Canada have moved away from a licensing model to a registration model with a focus on harm prevention.

ii Institutional healthcare providers
Professionals within institutional healthcare providers

Employers in Canada have vicarious liability for the acts of their employees. Thus, hospitals, long-term care homes, private clinics and other healthcare providers are diligent in ensuring that healthcare providers they employ are qualified to practise. Where healthcare providers provide healthcare services in a hospital, long-term care home or other healthcare institution on a non-employed basis, the institution applies the same rigour but to a higher scale, knowing that in most cases it is these non-employed professionals who will be overseeing and directing the care provided by other professionals. Physicians constitute by far the largest number of professionals providing healthcare services in such institutions on a non-employed basis. Others may include dentists, midwives and nurses of the extended class (nurse practitioners).

Institutional healthcare providers themselves

With a limited number of exceptions, hospitals in Canada are charitable organisations that are not privately owned. They are not licensed per se, but are classified by the government as to type (e.g., acute; chronic, tertiary, community) and receive funding from their provincial government (or a government intermediary). The funding is based on a number of criteria, including population base, patient composition and fixed-service fees. In some provinces, hospitals are overseen by volunteer boards; in other provinces, they are overseen by a regional authority. Hospitals are not legally limited in the services that they offer, but given that nearly all of their operating revenue comes from the provincial government (or a government intermediary), generally they cannot expand into new service offerings without government support.

Long-term care homes and independent health facilities (which provide insured services) are operated under licence. A large percentage of the long-term care homes and independent health facilities are privately owned, and a market exists for the purchase and sale of such licences. It is noted, however, that long-term care home licences and independent health facility licences cannot be transferred without the consents required by the applicable statute.

Subject to the comments above regarding independent health facilities, generally, licences are not required to operate private clinics that are not engaged in surgical procedures. However, in some provinces, such as British Columbia, Alberta, Ontario and Quebec, private clinics providing surgical procedures outside of hospitals are subject to accreditation or licensure by the College of Physicians and Surgeons of that province. For instance, in Ontario, a physician is not permitted to commence using a private clinic premises for the purposes of performing procedures that are performed under general or local anaesthesia, or parenteral sedation (as well as many types of procedures that are performed under local anaesthetic), until those premises have passed an inspection conducted by an inspector from the College of Physicians and Surgeons of Ontario.

iii Healthcare professionals

The requirements for registration as a member of a healthcare profession are set out in the various healthcare profession statutes in each province, which were described in Section IV.i above.

Healthcare professionals are required to have professional liability insurance. In certain cases, it is a requirement of registration with a college that the applicant demonstrates that he or she will have such insurance as of the anticipated date for the issuance of his or her certificate of registration.

The healthcare profession statutes also often provide a means by which certified healthcare professionals in other provinces can have their extra-provincial credentials recognised without having to go through the entire registration process anew.

Some healthcare professions have different classes of certification, each of which may have its own registration requirements. Moreover, different classes of certification may have different terms, conditions and limitations imposed on the certificate of registration, which limit the healthcare professionals’ scope of practice. For example, there may be limitations imposed on the member’s ability to provide care to patients, perform controlled acts and supervise the practice of the profession by another person. Where the registrar of the college has doubts as to whether the applicant fulfils the registration requirements, or is of the opinion that terms, conditions or limitations should be imposed on a certificate of registration, notice is normally provided to the applicant, and the applicant is often given an opportunity to make submissions.

It is an act of professional misconduct to contravene a term, condition or limitation imposed on a member’s certificate of registration. If a member commits an act of professional misconduct, the member may be subject to sanctions, including the following:

  • a the member’s certificate of registration may be revoked or suspended;
  • b terms, conditions or limitations may be imposed on the member’s certificate of registration;
  • c the member may be reprimanded; and
  • d the member may have to pay a fine.

There are procedural fairness requirements set out in the legislation that give the member an opportunity to be heard and challenge disciplinary decisions.

Where a healthcare professional is found by the court to have contravened a healthcare profession statute, he or she may be subject to fines or imprisonment. For example, aside from certain limited exceptions, it is an offence for a person to perform a controlled act (meaning an act that poses a potential risk of harm to the public if performed by an unqualified person)8 unless the person is a member authorised by a healthcare profession statute to perform the act, or the performance of the act has been delegated by a person so authorised to another person. On conviction for the offence, a person may be liable to a fine or imprisonment.

V NEGLIGENCE LIABILITY

Negligence claims are pursued through actions in court. To be successful in a claim for negligence, a plaintiff must establish that the defendant owed him or her a duty of care, the defendant breached that duty by falling below the standard of practice that is applicable in the circumstances, the plaintiff suffered harm and there is a causal connection between the harm and the negligence.

Healthcare providers owe a duty of care to their patients, the scope of which has broadened to include the duty to obtain informed consent, to warn patients of inherent dangers in products, and not to abandon patients. Healthcare professionals are not held to a standard of perfection, but, rather, are held to a standard of a prudent and diligent professional in similar circumstances. Damages may include out-of-pocket expenses incurred as a result of the negligence, as well as general damages for pain and suffering, loss of past and future income, and the cost of future care. Causation is proved by demonstrating that the injury would not have occurred ‘but for’ the defendant’s negligence on the balance of probabilities.

Healthcare facilities, such as hospitals, can be held directly liable for negligent management or administration of the facility where the negligence causes or contributes to the harm of the plaintiff. For example, a healthcare facility may be found liable for failing to properly train or supervise employees, protect patient confidentiality or hire competent staff. Healthcare facilities may also be held vicariously liable for the negligence of their employees (which would not normally include doctors, as doctors are typically not employees of the facility).9

i Notable cases
R v. John Doe, 2016 FCA 191

Privacy class actions involving healthcare providers is an emerging area in Canada. A class action was recently certified on behalf of participants in the Marijuana Medical Access Program (MMAP) after letters were sent to the participants with the programme’s name on it (thereby revealing the participants’ association with MMAP). The class action followed a finding by the Office of the Privacy Commissioner that Health Canada violated federal privacy laws. The plaintiffs alleged many causes of action. The Federal Court of Appeal confirmed the order for certification, but only with respect to the causes of action of negligence and breach of confidence.

More generally the issue of privacy surrounding personal health information has recently garnered significant attention on account of numerous high-profile cases involving unauthorised collection, use or disclosure of personal health information by healthcare professionals and institutions (each of which have obligations under privacy laws to protect personal health information in their custody or control). For example, in 2016, two individuals became the first health professionals to be convicted of an offence under Ontario’s health privacy legislation for unauthorised ‘snooping’ into the electronic health records of a high-profile patient of the hospital where they were employed. In addition to being terminated from their employment, both individuals were also fined under the province’s health privacy legislation.

On one hand, the expanding use of technology within healthcare institutions brings with it new challenges in ensuring that personal health information is not collected, used or disclosed in unauthorised manner; on the other hand, such technology makes it easier for such unauthorised collection, use or disclosure to be detected.

Benhaim v. St-Germain, 2016 SCC 48

In another recent case from Quebec, the Supreme Court of Canada considered whether, in a medical malpractice case where the defendant’s negligence has undermined the plaintiff’s ability to prove causation, an adverse inference of causation must be drawn against the defendant. The action was brought by the spouse and child of a patient who died of cancer. The defendant physicians failed to investigate a chest x-ray that the plaintiffs alleged would have allowed earlier detection of the cancer. The trial judge found that while the physicians were negligent in their diagnosis, it was not established on a balance of probabilities that their negligence was the cause of the patient’s death because evidence showed the cancer was likely already incurable. However, it was not possible to confirm the exact stage because of the defendant physicians’ fault.

The majority of the Supreme Court held that there is no legal requirement for a trier of fact to draw an adverse inference of causation where the defendant’s negligence has undermined the plaintiff’s ability to prove causation. An adverse inference of causation is not triggered as a matter of law, but rather, is within the discretion of the trial judge. The Supreme Court observed that ordinary rules of causation operate in medical liability cases. In such cases, the defendant is often in a better position to determine causation. The plaintiff is not required to prove causation with medical certainty, but, the Supreme Court held, requiring a trial judge to draw a presumption where the plaintiff has adduced little affirmative evidence is too low of a threshold. The trier of fact may draw an inference of causation, but the nature of the principle is permissive.

Paur (Committee of) v. Providence Healthcare, 2017 BCCA 161

The British Columbia Court of Appeal recently upheld a finding that the defendant hospital was liable under the Occupiers Liability Act (OLA) for a patient’s injuries after the patient, who was being held under the Mental Health Act, attempted to commit suicide in a hospital bathroom. Two nurses were also found liable for negligence for delay in attending to the patient. The admitting physician was not held liable, as the Court of Appeal accepted the finding of the trial judge that physicians are not required to take into account the design of hospital bathrooms.

The Court of Appeal discussed the standard of care applicable to hospitals in the design of their premises and observed that the standard of care under the OLA is the same as the common law negligence standard, and that the hospital had a duty to take reasonable steps to keep patients safe while being held in the hospital. The trial and appeal courts consulted Ministry of Health standards for hospitals. The standard is of reasonable rather than complete safety, and there is no single standard among hospitals with respect to admission and design. The Court observed that hospitals must balance complete safety and complete freedom and privacy, but noted that where there is a risk of loss of life the balance must weigh in favour of safety. The decision underscores the need for hospitals to ensure that their facilities and staffing protocols reasonably protect patient safety and limit the risk of suicide.

VI OWNERSHIP OF HEALTHCARE BUSINESSES

While healthcare in Canada is generally paid for publicly (with taxpayers’ dollars), it is provided in large part by those in private business; including physicians and private clinic operators, long-term care home operators and, in Ontario, independent health facility operators.

Though some physicians are hospital employees (e.g., radiologists, those working in labs and research areas and a limited number of hospitalists), most physicians are self-employed or working in partnership with other physicians. Physicians may incorporate medical professional corporations to enter into leases and other non-clinical agreements and their spouses or family members may own a non-controlling percentage of such businesses (provided that the physicians themselves remain liable for the professional services they provide). The same is true for certain other healthcare providers, such as dentists and optometrists. A market exists for the purchase and sale of all such businesses, but control of these professional corporations is limited to other healthcare professionals of the same designation.

Non-professionals may provide services to professional corporations and so may indirectly participate in the business arrangements of such professionals. Private corporations that provide space and other administrative services to healthcare professionals are common. Opportunities exist for purchase and investment in these service corporations. Notwithstanding their private nature, these corporations and the professionals practising within them are required to comply with the provincial laws prohibiting private payment for professional services. Private payment for professional services is at the middle of a high-profile case that originated in British Columbia, Cambie Surgeries Corp v. British Columbia (Medical Services Commission), 2013 BCSC 2066.

Like other provinces, British Columbia prohibits the use of private insurance for insured services and does not allow services provided in a private surgical clinics to be billed outside of the public insurance plan. The constitutionality of these restrictions is being challenged at this time by Cambie Surgeries Corp, an owner and operator of two private healthcare facilities in British Columbia. Cambie alleges that prohibitions on extra billing and private insurance violate Canada’s Charter of Rights and Freedoms by limiting timely access to medical services for residents. While British Columbia’s public insurance legislation does not preclude private clinics or private billing, it prohibits a public/private model like Cambie’s, in which a private clinic engages in extra billing in addition to receiving funding for insured services. While the trial is adjourned until September 2017, it is anticipated that the decision of the court will be appealed to the Supreme Court of Canada, since it could have a significant impact on how healthcare services are delivered and funded in Canada.

VII COMMISSIONING AND PROCUREMENT

Some Canadian healthcare providers (e.g., hospitals and health authorities) are subject to public procurement rules. These rules arise out of national and regional domestic trade agreements; provincial statutes and procurement directives; and the specific policies of each public sector purchaser. Procurement rules are intended to ensure fairness, transparency and accountability in decisions about the use of public funds. They apply to contracts for the purchase of goods or services that meet or exceed certain value thresholds. Generally, these rules require those contracts to be awarded through an open competitive process – that is, a process that is open to any person to submit a bid. They also require public sector purchasers to share material information with prospective bidders at the outset; evaluate bids consistently and only against stated criteria; and publish information about successful bids. Also, new public procurement requirements require provincial governments to designate an impartial administrative or judicial authority to review challenges from bidders or prospective bidders (either in the first instance, or as an appeal body).

VIII MARKETING AND PROMOTION OF SERVICES

Communication with the public about healthcare services is regulated to ensure accuracy and maintain professionalism. Healthcare professionals may advertise for the purpose of providing information relevant to informed decision making. Only individuals admitted to a college can use professional designations such as ‘doctor’, ‘dentist’ or ‘physiotherapist’. Provincial legislation and colleges’ policies prescribe how professionals can market their services and describe their qualifications and education. For example, legislation and college policies prohibit advertising that is false, misleading or unprofessional, endorsements or testimonials and claims of superiority, comparisons or guarantees. Non-compliance may be considered professional misconduct.

Though it is generally acceptable to advertise fees for services that are not publicly funded, some colleges have policies that place restrictions on fee advertisements for professional services; for example, restrictions on the use of promotional deals in advertisements. Interestingly, however, there are no corresponding restrictions on the ability of institutional healthcare providers to advertise their services.

IX FUTURE OUTLOOK AND NEW OPPORTUNITIES

Given Canada’s ageing population, the high percentage of our GDP expended on healthcare, the comparatively poor health outcomes achieved,10 and the challenges created by the single payer healthcare system, it is likely that there will be both micro and macro changes to the healthcare landscape in the years to come. For example, the use of e-health and telemedicine represent a micro change that may create new opportunities. However, currently, legal and structural barriers to e-health and telemedicine exist; for example, no national framework for telemedicine exists.

1 Lynne Golding, David Rosenbaum and Daniel Fabiano are partners, and Laurie Turner, Rosario Cartagena and Kimberly Potter are associates, at Fasken Martineau DuMoulin LLP. The authors would like to thank Kathryn Beck (associate), Alanna Tevel (associate) and Sophie MacRae (articling student) for their assistance with the writing of this chapter.

2 As the distinction between a province and a territory is not important for the purposes of this paper, all will be referred to herein as ‘provinces’.

3 Statistic provided by Statistics Canada.

4 The government of Canada provides direct healthcare services to First Nations people living on reserves, Inuit populations, serving members of the Canadian Forces, eligible veterans, inmates in federal penitentiaries and some refugee claimant groups.

5 In 2017–2018, the aggregate Canada Health Transfer was approximately C$37 billion dollars.

6 For example, in order to be an eligible resident in Ontario (i.e., receive health insurance coverage in Ontario), an individual must, among other things, be present in Ontario for 153 days in any 12-month period.

7 In big cities, these physicians and other allied healthcare providers are sometimes organised into community health centres. These centres are similar in many respects to other physician organisations but they are operated by a charitable corporation with a view to treating particularly impoverished or other marginalised groups in society.

8 As determined by the legislature.

9 Further details on physicians status within institutions is included above in Section IV under the heading, ‘Professionals within Institutional Healthcare Providers’.

10 OECD Health Statistics 2017, released June 30, 2017; Mirror, Mirror 2017: International Comparison Reflects Flaws and Opportunities for Better U.S. Health Care, The Commonwealth Fund, released 14 July 2017.