Medicare at 30

SPECIAL REPORT * DOCUMENT

Medicare turns 30

Malcolm Taylor, PhD

July 1992 marks the 30th anniversary of Saskatchewan's introduction of the first universal, tax-supported program of medical care insurance in North America. It is hard to believe that an entire generation has grown up under its protective umbrella and, given current nationwide popular support for medicare, it is equally difficult to recall its horrendous birth pangs.

But, despite the heavy costs for the participants and for much of the public, Saskatchewan had pioneered again. Eleven years after the province introduced hospital insurance in 1947, a national program was initiated; it would take only half as long for national medicare to arrive once Saskatchewan first offered it in 1962.

The Cooperative Commonwealth Federation (CCF) formed its first government in Saskatchewan in 1944 and retained a majority in three successive elections.

Among its many commitments, a

comprehensive range of health services had the highest priority.

This was made clear by the fact that the premier, Tommy Douglas, also held the health portfolio for the first 6 years.

Great strides were made by the CCF. Although the medical profession had been apprehensive about what a CCF government would do, the relationship started smoothly enough. On Aug. 23, 1944, the council of the College of Physicians and Surgeons of Saskatchewan invited Douglas to

meet with its members, and in that one evening they worked out the main details of the first social assistance health services program in Canada. All recipients of oldage pensions and mothers' allowance, as well as wards of the province, were entitled to medical, hospital, dental and drug benefits beginning Jan. 1, 1945 6 months after the election.

Health regions were organized and public health services were vastly improved, as were mental health services. Of course,

Malcolm Taylor is emeritus professor of public policy at York University, Downsview, Ont. He is author of Health Insurance and Canadian Public Policy: The Seven Decisions that Created the Canadian Health Insurance System and Their Outcomes (Montreal, McGill-

Queen's University Press, 2nd Ed., 1988).

From 1953 to 1955 he was adviser to the CMA's Committee on Economics.

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Saskatchewan Premier Tommy Douglas had given health care top priority CAN MED ASSOC J 1992; 147 (2)

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the triumphal accomplishment was the success of the Hospital Services Plan (HSP), launched in 1947.

Although most doctors benefitted directly from the HSP, of equal interest was an experiment in public medical care. Swift Current Region Number 1 had introduced a medical care program covering its 50 000 residents on July 1, 1946. By 1950 the number of physicians practising in the region had increased from 19 to 35.

A physician in the region,' the chairman of the college's health insurance committee2 and Dr. Arthur Kelly3, the CMA general secretary, spoke out in support of the program, but attempts by two other regions to introduce similar programs in 1955 were defeated in plebiscites, mainly because of opposition by the college.

The amicable relationship between the medical profession and Saskatchewan government was turned around by the CMA's decision to withdraw the ringing endorsement of the proposed government program of health insurance that it had provided during hearings of the House of Commons Committee on Social Security in 1943.4 Those proposals had been drafted by an interdepartmental committee that was greatly assisted by the CMA, which was able to ensure that almost all of the association's 1934 "Principles" were incorporated in the draft legislation that accompanied the proposals.

However, when the 1945 Dominion-Provincial Conference on Post-War Reconstruction, with its federal offer to subsidize provincially administered health services programs, collapsed in May 1946, the CMA saw an opportunity to occupy the vacuum of unfulfilled public expectations through the rapid development and expansion of profession-sponsored prepayment plans. In 1947 it began negotiations to establish TransCanada Medical Plans, and in 234

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1949 it officially abandoned its 1943 policy. It now wanted to limit government involvement to paying the full premiums to the prepayment plans on behalf of those receiving social assistance, and subsidizing those with low incomes.

In 1950 the Saskatchewan college, which had been calling for "state-aided health insurance" since 1933, adopted the new CMA policy and accelerated efforts to expand its sponsored plans, Medical Services Inc. (Saskatoon) and Group Medical Services in Regina. Efforts to amalgamate the two plans were unsuccessful.

Some readers may be surprised that the college acted in the political role that is usually filled by a provincial medical association. However, in the midst of the Depression, with membership in the Saskatchewan Medical Association declining, the profession had persuaded the Liberal government that it could no longer afford to finance the two bodies; in 1937 the government agreed to their amalgamation, and the college council added the association's responsibilities to its own.

The college became the Saskatchewan division of the CMA and was the only body in Canada serving the dual - and occasionally conflicting - functions of regulating the medical profession in the public interest, and speaking as the voice of organized medicine in promoting the profession's interests.

However, by the mid-'50s it appears that it was not only the combining of these two roles that accounted for the college's extraordinary political power and influence. What had emerged was, in essence, a unique "private" government. Its legal base rested on the Medical Profession Act. Its economic base lay in the profession's control of the prepayment plans - it determined the policies respecting enrolment, benefits, method of payment and, to a large

extent, the amount of payment.

It was unique in that, unlike other private governments, membership was not voluntary. With its compulsory membership, the "association" was assured of adequate revenues from the annual licence fee. No physician could "opt out" by simply not paying his association dues; as a Montreal Star editorial observed (July 5, 1962), the college resembled a "state within a state." One could say that Saskatchewan had two governments in the field of health - a private and a public one, each with its own legislature, cabinet, bureaucracy, revenue system, territorial domain and political ideology. Any action by one to encroach on the territory of the other would invite certain conflict.

By now it was 1959, and the CCF faced an election in 1960. It had to refurbish its image as a party of progress, and the main issue was clearly medicare. Despite its 15-year commitment, the party had recognized that the economic foundations for an undertaking of such magnitude had simply not been in place. In 1958, however, the "windfall" federal contributions of the national hospital insurance program had provided new funds that clearly belonged to the health care sector.

Now was the time for the CCF to recapture the positive thrust of the mid-'40s and to achieve its long-standing objective.

The premier made the announcement in a radio broadcast on Apr. 29, 1959. He said the government would appoint an advisory committee representing doctors, the public and the government "in order that we may have the benefit of their advice before any policy decisions are made." The government wanted a report no later than Dec. 31, 1960. The college, fearful that it would be outvoted on a committee whose recommendations it would undoubtedly oppose, saw LE 15 JUILLET 1992

delay as its most potent strategy.

On Jan. 18, 1960, the college president, Dr. Harold Dalgleish, indicated that representatives would be appointed if the committee was enlarged and its terms of reference vastly expanded.

Negotiations continued and it was not until Apr. 25 that the membership of the committee, chaired by Dr. Walter Thompson, a former president of the University of Saskatchewan, was announced. Three of the 12 members represented the college.

But even as the college acquiesced in the appointments, it was preparing for what it considered to be the political battle of its life - the June 1960 election. The college assessed its members $100 to wage its publicity campaign, and about two-thirds of the province's 900 doctors paid the fee; later, the CMA contributed $35 000. The college's position was supported by the Liberal, Conservative and Social Credit parties, as well as by pharmacists, dentists and the Chamber of Commerce.

But despite the expensive campaign, the CCF increased its membership in the legislature and captured 40% of the vote in what had been virtually a referendum on medicare. On June 9, Kelly, the CMA's general secretary, stated: "This is a democracy . . . our efforts will now be bent on avoiding the defects we see in government plans elsewhere."

But the college did not interpret the election in this light and continued its earlier strategy of delay. As the committee's deliberations dragged on into the 14th month, 6 months behind schedule, the government decided it could brook no further delay. On June 21, 1961, the premier asked Thompson for an interim report so that the government could introduce "enabling legislation couched in general terms, to be prepared and introduced in the legislature at the fall session."

JULY 15, 1992

Dr. Gordon Fahrni Archives. CMA

This is a democracy.

Our efforts will now be bent on avoiding the defects we see in government plans elsewhere." the late Dr. Arthur Kelly, then CMA general secretary, after 1960 Saskatchewan election

The Thompson committee responded with an interim report on Sept. 25. It included recommendations of the majority for a program providing universal coverage and a comprehensive range of medical service benefits, financed by subsidized premiums and administered by a public commission. Dissenting minority reports were filed by the representatives of the college and the Chamber of Commerce and by the Federation of Labour member.

The medical care insurance legislation was introduced at the fall session in early November and on Nov. 7, 1961, Tommy Douglas crossed off the last item on his agenda for Saskatchewan and resigned to assume his responsibilities as national leader of the recently formed New Democratic Party (NDP). Woodrow Lloyd, the provincial treasurer, became premier.

Preparations for introduction of the program on Jan. 1, 1962, had been under way for several months, but it was now clear that this target date was unrealistic and the "appointed day" was set for Apr. 1. By now it was time to appoint the commission that would oversee the program, but the college refused to nominate

candidates. Accordingly, when the commission was announced on Jan. 5, the chairman, Donald Tansley, was a senior finance official and the two physician members, Dr. Sam Wolfe and Dr. Orville Hjertaas, were not endorsed by the college.

Delays continued. First, mainly because of difficulties in bringing new computer facilities on line, the launch date had to be postponed to July 1. This delay was nearly fatal because it gave opponents, including the mushrooming Keep Our Doctors committees, 3 more months in which to mobilize. Second, on Mar. 2, 1962, the minister wrote to Dalgleish informing him that the government was prepared to make changes in the legislation to meet doctors' objections, but not to repeal it. The invitation was finally accepted and meetings were held Mar. 28, Apr. 4 and, briefly, on Apr. 11.

The government offered numerous concessions, the most important being that physicians need not accept payment by the commission - patients could pay the physician and be reimbursed by the commission. This was an enormous concession. Contrast the difference in the administraCAN MED ASSOC J 1992; 147 (2)

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tive burden and costs, and the hassles for patients, between an indemnity contract administered by insurance companies and the service contract pioneered by Blue Cross and the profession-sponsored plans. And, of course, it opened up the entire issue of extra-billing.

The college then presented its alternatives. Insurance would be available through existing or new prepayment plans; the government would pay the premiums on behalf of indigents; all other insured persons would be subsidized by the government; each prepayment plan would charge the premiums it needed; patients would pay the doctor and receive a refund of a major (unstated) portion of the expense incurred; and no additional charges would be made to indigents. While the government's proposals incorporated even more completely the CMA principles, the college's proposals were more unattractive than anything previously proposed; in fact, they marked a highly retrograde step from the prepayment plans

currently operating.

When the council returned on Apr. 11, it was evident that the government had made up its mind that further negotiations would be fruitless. The premier read a prepared statement giving seven reasons for rejection of the college's proposals, press releases were distributed, and the meeting ended.

Never had doctors' distrust of the government been greater.

The college responded by calling a meeting of all Saskatchewan doctors in Regina on May 3 and 4, and about two-thirds of them attended. The premier's speech was a low-key review of events to that date, an elaboration of the program, a firm declaration to administer the program so as not to interfere with physicians' professional freedom, and an appeal to the doctors "to join in a bold attempt to consolidate past gains and to move to new horizons 236

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in the field of medical care."

But rational goals, courageously expressed, could neither legitimize the government's actions in the doctors' minds, nor abate in any way their rising confidence that in solidarity they would triumph. A near unanimous standing vote was the response to the president's question as to who would oppose the medicare plan and refuse to work under it. Those few who did not stand were later ostracized. On the second day the meeting passed resolutions instructing the council to make plans for emergency services in designated hospitals on July 1, when all doctors' offices would be closed. The two parties were now on a collision course.

There was one more attempt to reconcile the impasse. At the CMA's annual convention in Winnipeg, the president, Dr. Gerald Halpenny, stressed the association's support and demanded that the government meet with the college. A meeting with the cabinet was arranged for June 22, and the college council repeated its demand for the multicarrier plan proposed on Apr. 4. The premier countered with his earlier offer that all doctors could practise outside the act. At one point Dalgleish said that he could take this proposal to his Health Services Committee but another doctor interjected that the entire proposal was unacceptable. The meeting ended, and both parties withdrew to write their press releases. On July 1, the withdrawal of all but emergency services in

designated hospitals began.

No provincial government had ever faced such an overwhelming confrontation. Faced with an alarming exodus of doctors

-

there were "For Sale"

signs on doctors' houses and on the Medical Arts Building in Saskatoon - Dr. Sam Wolfe flew to England to recruit both permanent and temporary replacements.

The premier flew to Toronto and

Montreal to meet with NDP leaders and constitutional experts. He also invited Dr. Stephen Taylor (Lord Taylor of Harlow), a London physician who had been one of the architects of Britain's National Health Service, to come to Regina.

But the most fortuitous (and fortunate) event was that the CCF annual convention, at which all cabinet members would be present, was to be held in Saskatoon in the third week of July; the college's council had been in almost constant daily session in the Medical Arts Building there.

The convention also offered an opportunity for reciprocal hospitality: at the request of the college Dalgleish was invited to address the meeting. His proposals were similar to those that the college had presented to the government on May 4, with a special plea that the act be suspended.

In the audience was Lord Taylor, who had spent the previous day meeting with the cabinet and with doctors on emergency service in Regina, and he and Dalgleish now joined the council in the Medical Arts building. "Although the guest could not be classified as a mediator, he immediately began to act as one," Kelly5 reported. "He said that he favoured retaining the prepayment plans . . . and would try to persuade the Cabinet of their merits. After two hours of discussion he left to do just that. The next day he reported back that [the plans] could continue to function under the Act." Gradually, Taylor began to be trusted by most of the council members. To expedite negotiations, he decided that the two parties must be kept apart. Therefore, he assumed the role of intermediary, striding back and forth along the three short blocks between the two hostile forces, one bivouacked in the Bessborough Hotel, the other encamped in the Medical Arts Building. For 5 days LE 15 JUILLET 1992

he laboured indefatigably, reporting, interpreting, persuading, cajoling, threatening to leave, and weaving through all of it with large measures of wit, humour and histrionics. With the assistance of government officials he prepared a draft agreement that was approved by cabinet and then negotiated with the council. On Monday, July 23, the Saskatoon Agreement was signed. Doctors began returning to their offices and closed hospitals reopened.

There was one major concession by each party. The council accepted the government's position that the medicare plan must be universal and that the government would be the sole collector of revenues and the disburser of payments. The government accepted the college's position that the prepayment plans be retained as billing and payment conduits for those doctors who did not want to deal with the Medical Care Insurance Commission (MCIC). Four modes of payment were authorized: * Doctors could choose direct payment from the commission as payment in full. * Doctors could practise partly or entirely in association with one or more of the voluntary agencies. Patients enrolled with these agencies would be billed at the agreed rate. The agency would transmit the account to the MCIC, which would pay the agency which, in turn, would pay the doctor. * Doctors could practise partly, largely, or entirely outside any voluntary agency and not be enrolled for direct payment by the commission. They would bill patients entirely at their own discretion and submit an itemized bill.

Patients would be reimbursed the standard fee and be responsible for any "extra-billing." * Doctors could practise entirely for private fees, provided the patient agrees to seek no reimbursement.

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There were many other points, but one of the most important was the addition of three more doctors to the MCIC. But the peaceful convalescence that Lord Taylor had prescribed was too much to expect, for the trauma had been too serious, the emotional wounds too deep, the dislocations too severe, the compromises too galling and the loss of trust too great for any speedy reconciliation and recovery to occur. Continuing suspicion clouded every action or statement by either party.

sion had been appointed by Prime Minister John Diefenbaker at the request of the CMA, and chaired

by Mr. Justice Emmett Hall. The report rejected the subsidy strategy urged by the CMA and the insurance industry and unanimously endorsed a plan fundamentally the same as the original Saskatchewan proposals. It was small comfort to the defeated CCF-NDP leaders.

But Saskatchewan had pioneered again, and within a few years all Canadians would enjoy the results. The list of medical

Saskatchewan had pioneered again, and within a few years all Canadians would enjoy the results.

Numerous major events followed. One was defeat of Saskatchewan's CCF government in 1964, even though it obtained the same percent of the votes it had received in 1960. Ross Thatcher formed a new Liberal government that, to the dismay of the college, did not restore the prepayment plans to their earlier independent role. There was some consolation in that Saskatchewan doctors' incomes rose to the highest level in Canada, $3400 above the Canadian average. Even more important, while 68 doctors had left the province in 1962 and another 200 had left subsequently, by June 1964 the physician-population ratio was higher than ever before.

But perhaps most significant was the June 1964 release of the Report of the Royal Commission on Health Services. The commis-

leaders who pioneered the prepayment plans and political party leaders who made it all possible is legion. For many of them the personal costs were high, but the values for which they fought were idealistic, humane and compassionate, reducing risk and fear and expanding confidence, hope and freedom.

References 1. Howden CPG: The Swift Current Pro-

gram. Sask Med Qtly 1949; 13: 4-6 2. Brown JL: Swift Current Health Insurance. Ibid: 251-258 3. Kelly AD: The Swift Current Experiment. Can Med Assoc J 1948; 58: 506511 4. Taylor MG: Thirty years on . . . a nostalgic look at Canadian medicine's 'finest hour.' Can Med Assoc J 1973; 108: 86-92 5. Kelly AD: Saskatchewan Solomon. Can Med Assoc J 1962; 87: 416-417 CAN MED ASSOCJ 1992; 147(2)

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