Ten years after the 2015 Canada Health Transfer reform: A persistent equity concern of insufficient risk-equalization

Abstract

Two guiding principles related to equity in healthcare, both in Canada and internationally, are that healthcare should be financed according to the ability-to-pay and utilized based on need. The Canada Health Act (CHA, 1984) aims to remove financial barriers and provide equitable access to healthcare in Canada. Contingent on meeting the conditions set out in the CHA, each province receives federal funding through the Canada Health Transfer (CHT). In 2014–2015, the CHT underwent a major change in that all provinces are now receiving funds on a per capita basis. We highlight equity concerns regarding the CHT allocations by reviewing the three main provincial level healthcare need indicators of its population: aging populations, the prevalence of chronic conditions, and population density. Results show that there are significant variations in all the three indicators among Canadian provinces. Specifically, Atlantic provinces have high values for all indicators, thus making per capita healthcare costs larger in these provinces. In contrast, larger provinces, particularly Alberta, are low in all indicators compared to the rest of Canada. Having a per capita CHT allocation means that provinces with a high range of healthcare need indicator values are in a more difficult situation to deliver sufficient healthcare to its population. A need-based allocation system can better meet the important policy objective of equity in healthcare for Canada.