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ANALYSIS:

1. Would the scheme contemplated by bill 11 violate any of the program criteria established in the Canada Health Act?


In this section of our opinion, we will first examine the substantive requirements of the Canada Health Act. With that foundation, we will evaluate whether the following elements of Bill 11 violate the substantive requirements of the Canada Health Act:
  • the authorization of privately-owned “surgical facilities”
  • the creation of a category of uninsured “enhanced medical goods and services”

We will then consider whether the Minister’s role under sections 8 and 15 of the Bill ensures compliance with the Canada Health Act. Finally, we will summarize our conclusions in relation to this issue.

A. The Canada Health Act


Purpose of the Canada Health Act



In accordance with the contextual approach mandated by Rizzo Shoes, supra, each section and term of the Canada Health Act is to be read in its entire context, including the context of other sections of the Act and the Act as a whole.
The Preamble includes the following:

Whereas the Parliament of Canada recognizes … that continued access to quality health care without financial or other barriers will be critical to maintaining and improving the health and well-being of Canadians …


Section 3 and 4 state as follows:

  1. It is hereby declared that the primary objective of Canadian health care policy is to protect, promote and restore the physical and mental well-being of residents of Canada and to facilitate reasonable access to health services without financial or other barriers.

  2. The purpose of this Act is to establish criteria and conditions in respect of insured health services and extended health services provided under provincial law that must be met before a full cash contribution may be made. [emphasis added]

Funding Criteria under the Canada Health Act



Sections 5 and 7 of the Canada Health Act state as follows:


5. Subject to this Act, as part of the Canada Health and Social Transfer, a full cash contribution is payable by Canada to each province for each fiscal year.
7. In order that a province may qualify for a full cash contribution referred to in section 5 for a fiscal year, the health care insurance plan of the province must, through the fiscal year, satisfy the criteria described in sections 8 to 12 respecting the following matters:


  1. public administration;
  2. comprehensiveness;
  3. universality;
  4. portability; and
  5. accessibility. [emphasis added]


These criteria are expanded upon in ss. 8 to 12 of the Canada Health Act. Each relevant requirement will be considered in greater detail below.

Public Administration

Section 8 of the Canada Health Act states in relevant part as follows:


8. (1) In order to satisfy the criterion respecting public administration,


(a) the health care insurance plan of a province must be administered and operated on a non-profit basis by a public authority appointed or designated by the government of the province;
(b) the public authority must be responsible to the provincial government for that administration and operation; and
(c) the public authority must be subject to audit of its accounts and financial transactions by such authority as is charged by law with the audit of the accounts of the province. [emphasis added]



Comprehensiveness

Section 9 of the Canada Health Act states as follows:


9. In order to satisfy the criterion respecting comprehensiveness, the health care insurance plan of a province must insure all insured health services provided by hospitals, medical practitioners or dentists, and where the law of the province so permits, similar or additional services rendered by other health care practitioners.[emphasis added]

“Insured health services” is defined under s. 2 of the Canada Health Act as follows:


“Insured health services” means hospital services, physician services and surgical dental services provided to insured persons, but does not include any health services that a person is entitled to an eligible for under any other Act of Parliament or under any Act of the legislature of a province that relates to workers or workmens’ compensation. [emphasis added]

“Hospital services” is defined in s. 2 of the Canada Health Act as follows:


“hospital services” means any of the following services provided to in-patients or out-patients at a hospital, if the services are medically necessary for the purpose of maintaining health, preventing disease or diagnosing or treating an injury, illness or disability, namely,

  1. accommodation and meals at the standard or public ward level and preferred accommodation if medically required,
  2. nursing service,
  3. laboratory, radiological and other diagnostic procedures, together with the necessary interpretations,
  4. drugs, biologicals and related preparations when administered in the hospital,
  5. use of operating room, case room and anaesthetic facilities, including necessary equipment and supplies,
  6. medical and surgical equipment and supplies,
  7. use of radiotherapy facilities,
  8. use of physiotherapy facilities, and
  9. services provided by persons who receive remuneration therefor from the hospital,
but does not include services that are excluded by the regulations.
[emphasis added]

“Physician services” is defined as follows in s. 2 of the Canada Health Act:


“Physician services” means any medically required services rendered by medical practitioners.


Thus, under the Canada Health Act the term “insured health services” is defined such that it describes a uniform package of health services that must be comprehensively covered by a provincial insurance plan if the plan is to qualify for federal funding. In other words, the use of the word “insured” in the term “insured health services” does not mean that the package of “insured health services” will vary with the particular insurance plan of each province. The “insured health services” package is, in effect, the “national standard” of medicare.

As will be seen below, because of the criteria of comprehensiveness, universality, and accessibility set out under the Canada Health Act, in order to qualify for full cash contribution from the federal government, a provincial health care insurance plan must cover all “medically necessary” hospital services, and all “medically required” physician services.

Note that the definition of “hospital services” under the Canada Health Act refers to

… medically necessary for the purpose of maintaining health, preventing disease, or diagnosing or treating an injury, illness or disability …


This indicates that “medical necessity” is about the purpose for which a service is provided, as opposed to the quality of service that is provided. The focus is on the health of the insured person, and thus “necessary” refers to the presence or absence of disease, injury, illness or disability. In other words, in order to be “medically necessary”, a treatment must simply be provided for the purpose of addressing a harmful medical condition, as opposed to being provided, for example, for the purpose of enhancing a person’s physical appearance.

It has been noted that the French version of the Canada Health Act uses the term “md0069calement nc0065ssaires” in translation of both “medically necessary” and “medically required.” Under the Official Languages Act, therefore, both versions are equally authoritative, so it is likely that there is no legal distinction to be drawn between the two different phrases in the English version of the Canada Health Act. Further, this conclusion has been stated to apply generally to the phrases “medically necessary” and “medically required” in Canadian health care law in any event: Cameron v. Nova Scotia Attorney General (1999), 177 D.L.R. 4th 611 (NSCA) at paras. 74 to 75.
Universality and Accessibility.
Section 10 of the Canada Health Act states as follows:

10. In order to satisfy the criterion respecting universality, the health care insurance plan of a province must entitle one hundred per cent of the insured persons of the province to the insured health services provided for by the plan on uniform terms and conditions.
[emphasis added]

Section 12 of the Canada Health Act states as follows:

12. (1) In order to satisfy the criterion respecting accessibility, the health care insurance plan of a province

  1. must provide for insured health services on uniform terms and conditions and on a basis that does not impede or preclude, either directly or indirectly whether by charges made to insured persons or otherwise, reasonable access to those services by insured persons;
  2. must provide for payment for insured health services in accordance with a tariff or system of payment authorized by the law of the province;
  3. must provide for reasonable compensation for all insured health services rendered by medical practitioners or dentists; and
  4. must provide for the payment of amounts to hospitals, including hospitals owned or operated by Canada, in respect of the cost of insured health services. [emphasis added]



When one considers the specific definitions of comprehensiveness, universality and accessibility in the Canada Health Act, it becomes clear that the phrase “medically necessary” is intended to mean that patients with identical harmful medical conditions are entitled to receive equal quality of care regardless of ability to pay.

This is specifically illustrated by s. 12(1)(a) of the Canada Health Act, but in general it is also clear that to the extent that quality of care varies with an individual’s ability to pay, the “insured health services” within the meaning of the Canada Health Act will not be provided for on uniform terms and conditions and will clearly be offered on a basis that does “impede or preclude”, either “directly or indirectly”, reasonable access to the services by all of the “insured persons.”

We are supported in this conclusion by Sujit Choudhry, “The Enforcement of the Canada Health Act” 1996, 41 McGill L.J. 461 at 468-9:


The Canada Health Act requires provincial plans to cover 100% of provincial residents on uniform terms and conditions. Presumably, this excludes plans that categorize residents according to medically irrelevant criteria, such as income level.

The author continues at p.491 as follows:


The message from Finlay (no.3), however, is that there must be some minimum content to provincial plans for federal schemes to be effective; refusing to address the question of medical necessity would effectively read comprehensiveness out of the Canada Health Act. Furthermore, since the Canada Health Act does not expressly delegate to provincial governments the task of defining medical necessity, its meaning remains a matter of statutory interpretation. Finally, failing to give meaning to the requirement of comprehensiveness would defeat the whole point of Medicare, which is to guarantee fair equality of opportunity.

Similarly, at page 492 the author states as follows:


Health care needs are a matter of social justice, because they limit the range of individuals’ opportunities to pursue their conceptions of the good life. The idea is that but for one’s disease or disability, one would be able to enjoy a wider range of opportunities. Framing the impact of ill health in this way makes the relevant comparison between a diseased or disabled state of health and a normal state of health, which persons are entitled to enjoy, as a matter of justice. The object of Medicare is to ensure that individuals are returned to that normal state.


We note also that Timothy A. Caulfield in “Wishful Thinking defining ’medically necessary’ in Canada” 1996, 4 Health Law Journal 63 to 85, states as follows at paragraph 4:

In Canada, the public funding of health care resources has always been limited by medical necessity, as both the federal and provincial health legislation state that reimbursement will only be provided for necessary services. However, because there is no operational definition of this term, it has historically amounted to any service which physicians believe should be provided.


And at paragraph 14:

In sum, no operational definition of medically necessary, or similar terms, exists in the federal legislation. However, it is submitted that the Act does set the stage for a broad definition of medically necessary, since the mental, social, environmental and preventive aspects of health care are referred to throughout. [Referring to the Preamble to the Canada Health Act and sections 2 and 3]

Summary



In our opinion, the legal criteria under the Canada Health Act impose the following conditions on federal funding:
  • Comprehensiveness requires that any medical treatment for a harmful medical condition must be insured under the provincial plan.
  • Universality and accessibility require that every medical treatment for a harmful medical condition must be provided on uniform terms and conditions to every qualified resident of the province.
  • In relation to any medical treatment for a harmful medical condition, universality and accessibility require that inability to pay must not prevent a person from receiving an equal quality of care and an equal speed of care to that received by another person with the same medical condition but who has a greater ability to pay.

A purposive interpretation of the Canada Health Act, in our opinion, indicates that the overarching legislative intention is equality of opportunity: any two individuals in a province, with a similar harmful medical condition, should be entitled to treatment of equal quality at an equal speed, regardless of differences in their individual ability to pay.

B. The definition of “Private Hospital”



The Prohibition against “Private Hospitals”

Section 1 of the Alberta Health Care Protection Act, Bill 11, states as follows:



1. No person shall operate a private hospital in Alberta.




The Canadian Oxford Dictionary defines “hospital” in part as follows:



hospital 1. a. An institution providing medical and surgical treatment and nursing care for ill or injured people.



Thus, on a cursory analysis of the “plain meaning” of s. 1, one would ordinarily expect s. 1 to target a very broad and general prohibition against privately-owned, for-profit “institutions providing medical and surgical treatment and nursing care for ill or injured people.”



However, as will be shown below, this “prohibition on private hospitals” is, in our opinion, very misleading unless one gives a close reading to the “definitions” section. We note that, curiously, in Bill 11 the “definitions” section is located at the back of the Bill.2


Definition of “Private Hospital” in Bill 11


The phrase “private hospital” is defined in s. 29 of the Alberta Act as follows:




29(m) “private hospital” means an acute care facility that

(i) provides emergency diagnostic, surgical and medical services and

(ii) admits patients for medically supervised stays exceeding 12 hours,

but does not include a public hospital.




Sections 2 and 4 of the Bill 11 permit the provision of insured surgical services and uninsured surgical services at “designated surgical facilities” or “approved surgical facilities”. As will be explained below, although these “surgical facilities” do not fall within the definition of “private hospital” set out above, they would be considered “hospitals” in other contexts, including under the Canada Health Act and under Alberta’s own Hospitals Act.



The phrase “surgical facility” is also defined under s. 29 of the Act as follows:




29(q) “Surgical facility” means a facility whose primary function is to provide a limited range of surgical services”.




“Surgical service” is also defined under s. 29 of the Bill, as follows:




29(r) “Surgical service” means the alteration of the human anatomy manually or through the use of an instrument or the introduction of any instrument into the human body, where such a procedure

(i) is carried out with the concurrent use of

(A) a drug to induce sedation, or

(B) local regional or general anesthesia

to a degree that requires the monitoring of vital signs, or






(ii) is normally associated with the kind or degree of risk that is prescribed by the council of the College for the purposes of this clause and bylaws under the Medical Profession Act,


but does not include a minor surgical procedure that is exempted in the regulations under s. 25(1)(a).



Comparison to Definition under Canada Health Act


Under the Canada Health Act, the term “hospital” is defined as follows in s. 2




“hospital” includes any facility or portion thereof that provides hospital care, including acute, rehabilitative or chronic care, but does not include

(a) a hospital institution primarily for the mentally disordered, or

(b) a facility or portion thereof that provides nursing home intermediate care service or adult residential care service, or comparable services for children.



[emphasis added]


It is clear, therefore, that the definition of “private hospital” in Bill 11 is considerably narrower than the definition of “hospital” under the Canada Health Act.



First of all, the Canada Health Act definition of “hospital” includes facilities that provide rehabilitative or chronic care, whereas the definition of “private hospital” under Bill 11 refers only to acute care. The Alberta definition of “private hospital” is further restricted to facilities that provide all of “emergency diagnostic, surgical and medical services” while no such limitation is found in the Canada Health Act definition.



Finally, the Alberta definition of “private hospital” does not appear to include any facility that admits patients for medically supervised stays of less than 12 hours. No such restriction is found on the definition of “hospital” under the Canada Health Act.



This analysis, together with ss. 2, 4, and 29 of Bill 11 which allow and describe the operation of “surgical facilities”, leads to the conclusion that “surgical facilities” under Bill 11 will in fact be “hospitals” within the meaning of the Canada Health Act. This, in turn, leads to the conclusion that a privately owned “surgical facility” in Alberta is in fact a privately owned “hospital” as that term is defined in the Canada Health Act.



Therefore, when s. 1 of the Bill says that “no person shall operate a private hospital in Alberta”, it is in fact employing a very different and considerably narrower definition of “hospital” than the definition used under the Canada Health Act.



This conclusion is further reinforced by Bill 11’s use of the phrase “facility services”. Section 4 of the Bill reads:




4. Where a person receives an insured surgical service at a designated surgical facility,

(a) the operator of the surgical facility shall provide facility services to the person, and

(b) no person shall charge or collect any amount in respect of the provision of facility services that is in addition the amount that is payable for the facility services by the health authority under an agreement referred to in section 8.




“Facility services” are also defined by s. 29 of Bill 11, as follows:



29(g) “facility services” means any of the following services that are medically necessary and are directly related to the provision of a surgical service at an approved surgical facility:



  1. standard ward accommodation, or a semi-private or private room where the patient’s condition requires it;

  2. meals;

  3. necessary nursing services, including private nursing care where ordered by the attending physician or dentist;

  4. laboratory, radiological and other diagnostic procedures, together with the necessary interpretations;

  5. use of operating room, case room and anaesthetic facilities, including necessary equipment and supplies;

  6. use of physical therapy services;

  7. use of surgical equipment and supplies;

  8. medical goods and services consistent with generally accepted medical practice for the surgical services being provided in the surgical facility;

  9. transportation by ambulance or commercial vehicle of a patient from the surgical facility to an approved hospital under the Hospitals Act, a nursing home, a mental health facility or another surgical facility;

  10. any other service that is prescribed in the regulations.




This definition of “facility services” in the Alberta Bill is almost identical to the definition of “hospital services” under the Canada Health Act, set out above. As private surgical facilities authorized under Division 1 of Bill 11 to provide “insured surgical services” are required by s. 4 to provide “facility services”, the striking similarity between “facility services” and “hospital services” further reinforces the conclusion that a privately owned “surgical facility” under Bill is in fact a privately owned “hospital” within the meaning of the Canada Health Act.



The Bill 11 definition of “private hospital” sets out conditions, all of which it appears must be satisfied in order to be a “private hospital”:




(m) “private hospital” means an acute care facility that



(i) provides emergency, diagnostic, surgical and medical services, and

(ii) admits patients for medically supervised stays exceeding 12 hours,

but does not include a public hospital; [emphasis added]






The implication is that an acute facility that admits patients for medically supervised stays for more than 12 hours but provides only one of the four types of services set out in s. 29(m)(i) is not considered a “private hospital.” Thus a facility in which surgery is performed but no emergency diagnostic or medical services are otherwise provided and that admits patients for medically supervised stays exceeding 12 hours would not, under the Bill 11, be considered a “private hospital.”



This is further confirmed by Division 2 of the Bill which contemplates the operation of “surgical facilities at which uninsured in-patient surgical services are provided”, so long as such facilities are accredited by the College of Physicians and Surgeons pursuant to the Bill.



“Uninsured in-patient surgical service” is defined under s. 29(t) of the Act as follows




“uninsured in-patient surgical service” means a surgical service that



(i) is provided by a physician, and

(ii) requires a medically supervised post-operative period of care exceeding 12 hours;



and is provided in circumstances under which no benefit is payable under the Alberta Health Care Insurance Act.




As will be explained below, under the provisions of Bill 11, where a patient chooses to “enhance” an otherwise insured surgical service, no benefit may be payable under the Alberta Health Care Insurance Act. In other words, a private for-profit facility could conduct surgery on a patient requiring medical treatment, who would otherwise be able to receive that treatment at a public facility but at a lower quality and subject to a longer wait list, could keep the patient in the facility for a number of days afterward, and yet still would not be a “private hospital” under Bill 11.



Thus, the fact that such “uninsured in-patient surgical services” could be provided in privately owned surgical facilities, and that the Bill may convert “insured surgical services” into “uninsured surgical services” where the patient and doctor agree to “enhance” the service, further indicates that such privately-owned surgical facilities would not be considered “private hospitals” under Bill 11, notwithstanding that they would clearly qualify as privately-owned “hospitals” under the Canada Health Act.


Comparison to Definition under Alberta Hospitals Act


We note also that the unique definition of “private hospital” under Bill 11 is considerably narrower than the definition of “hospital” under the Alberta Hospitals Act, R.S.A. 1980, c. H-11. Section 1(1) of that Act includes the following definition:



(j) “hospital” means an institution operated for the care of diseased, injured, sick or mentally disordered people.




Clearly, a privately-owned surgical facility would be a “hospital” under the Alberta Hospitals Act, but would not be a “private hospital” under Bill 11.


Section 62(a) of the Hospitals Act presently provides as follows:



62 The Lieutenant Governor in Council may make regulations



(a) prescribing the basis on which the Minister may make contracts with nursing homes, private hospitals, or other institutions, facilities or persons, other than approved hospitals, for the provision of standard ward hospitalization or other services to be furnished to patients as insured services under this Part; [emphasis added]






Section 1(b) states as follows:



“approved hospital” means a hospital designated by the Minister as an approved hospital pursuant to Part 2.




Section 32(1) of Bill 11 repeals s. 62(a) of the Hospitals Act, and replaces it with the following:

62. The Lieutenant Governor in Council may make regulations

(


a) prescribing the basis on which the Minister may make contracts with hospitals, other than approved hospitals, for the provision of standard ward hospitalization or other services to be furnished to patients as insured services under this Part. [emphasis added]




Therefore, privately-owned “hospitals” under the Hospitals Act are no longer to be called “private hospitals” under the Hospitals Act, but are now to be known as “hospitals, other than approved hospitals.” In our view, this amendment was likely seen as necessary precisely because private “surgical facilities” will still be “hospitals” under the Hospitals Act, and thus would have been “private hospitals” under the existing Hospitals Act. This would have led to a confusion between the prohibition of “private hospitals” under Bill 11 and the permission for “private hospitals” implicit in the Hospitals Act. The consequential amendment in essence avoids the literal conflict between the two Acts, but does not change the fact that privately-owned “surgical facilities” are in fact private “hospitals” within the meaning of the Hospitals Act.

Consistency with the Canada Health Act


As explained above, the Alberta definition of “private hospital” is much narrower than all of the following:




  • the definition of “hospital” under the Canada Health Act;

  • the definition of “hospital” under the Alberta Hospitals Act; and

  • the normal dictionary meaning of “hospital”.


Consequently, in our view, s. 1 of Bill 11 is misleading to the extent that it purports to prohibit “private hospitals” but, in truth, prohibits only a mere subset of what in any other context would be properly understood to be privately-owned hospitals. In fact, the types of privately-owned “surgical facilities” expressly authorized under Bill 11 will in fact be privately-owned “hospitals” in the ordinary sense of the word, under the Canada Health Act, and under Alberta’s own Hospitals Act.



However, in our view, the fact that Bill 11 in effect authorizes privately-owned “hospitals” as that term is defined under the Canada Health Act does not in and of itself violate the “public administration” requirement of the Canada Health Act, because the “public administration” requirement applies only to the “health care insurance plan” of a province, and particular facilities are not part of the “administration” or “operation” of the “health care insurance plan” itself. Section 2 of the Canada Health Act defines “health care insurance plan” as follows:




“health care insurance plan” means, in relation to a province, a plan or plans established by the law of the province to provide for insured services.




While the fact that the Bill authorizes private “hospitals” within the meaning of the Canada Health Act does not in and of itself violate the Canada Health Act, in actual operation, private for-profit hospitals may indirectly “impede or preclude” reasonable access to the national standard of services, and thus violate the accessibility requirement.3 In our opinion, the federal Health Minister, if he or she is of the opinion that this operational outcome is an inevitable consequence, may well be able to trigger the review process without waiting to see if the likely outcome in fact occurs.

C. “Enhanced Medical Goods and Services” and “Insured Services”




Bill 11 creates a number of new categories of medical services, and a number of new categories of medical facilities (as was seen in the previous section).

“Enhanced Medical Goods or Services” and “Medically Required”


“Enhanced medical goods or services” is defined under s. 29 of Bill 11 as follows:



“enhanced medical goods or services” means medical goods or services that exceed what would normally be used in a particular case in accordance with generally accepted medical practice.




“Insured surgical service” is defined in Bill 11 follows:



“insured surgical service” means a surgical service that is provided by a physician, or by a dentist in the field of oral surgery, in circumstances under which a benefit is payable under the Alberta Health Care Insurance Act.




The definition of “surgical servi