The Canadian experience.

People in the United States have generally ignored Canada's long experience with extensive public financing and management of its health system. This is unfortunate because the two countries are similar in so many ways that Canada's experience is very pertinent to the continuing debate in the United States over increasing government involvement in health care. Two lessons emerge from Canada's experience. First, while many in the United States are dubious about more government involvement in health care, Canada's overall experience has been favorable. Second, Canada's experience suggests some specific forms that such public involvement should take to improve the performance of the health system. One important reason for Canada's favorable experience has been the decentralization of government decision-making. Constitutionally, the ten provinces have jurisdiction over most health services, so they are key decision-makers. The federal government, however, has had an important role in the shaping of Canada's health system, most importantly by offering subsidies to provinces willing to establish certain health programs that meet its standards. Canada's extensive public financing of health services is the most striking difference between its health system and that of the United States. In each province all medically necessary physician services and most inpatient and outpatient hospital services are publicly financed for all residents. Hospital services have been publicly financed for more than twenty years and physician services for more than ten years. Provincial agencies administer the programs, reimbursing physicians predominantly on a fee-for-service basis. Hospitals typically receive biweekly payments based on their provincially approved budgets. The provincial plans are financed jointly by the federal and provincial governments, largely from their general revenues. Few now bother to collect premiums or special health taxes, and minimal use is made of deterrent charges. The provinces vary considerably in the extent to which other personal health services are publicly financed. For example, some finance dental services for children; some, prescription drugs for people aged sixty-five years and over.