Validation of the Rationale of Medicare

Updated: May 28

Because Google Adsense deemed this website to have too little content for ads, I'll be posting my top 25 undergraduate papers. This the crescendo paper from Canadian political thought. A very deep political dive on the origins of Canada's health care system.


Dalhousie University

POLI 3405

November 7th, 2019



Tommy Douglas is one of the most respected figures in Canadian politics. Generally, people are aware that they have him to thank for Canada’s system of universal and single-payer healthcare. The former premier of Saskatchewan had his healthcare plan implemented by his successor in 1962. In 1984, the Canada Health Act solidified its framework on a federal level. It was a tremendous accomplishment, given the level of opposition. From political opposition to doctor opposition to media opposition, Tommy Douglas weathered the storm, held his ground and was victorious. Why was Tommy Douglas so committed to this bit of legislation? In other words, what rationale was fuelling his ideological need for the law and is the rationale still valid today?

To understand the rationale behind the healthcare plan of Tommy Douglas, one must look to his long and spirited speech to the Saskatchewan legislature in 1961. As premier, he was responding to the backlash against his Medicare plan from the leader of the opposition (the Liberal Party), and a significant backlash from media and a medical establishment. In terms of his rationale for his plan, there wasn’t much in terms of sheer philosophy. A few quotes such as Douglas saying Medicare care is “something to which people are entitled by virtue of belonging to a civilized community”(1) are present.

He believed that a society with an abundance of money and resources, a society that spends large amounts on tobacco, alcohol and horse racing, ought to guarantee everyone is medically taken care of. However, the substance which fueled this belief was mostly data. Most of his speech he spent citing figures. For example, he cited the 1951 Canada Sickness Report and pointed out that more impoverished people have much worse health outcomes than higher-income groups. Douglas then claims that people with low incomes won’t seek medical attention if they will have trouble affording it. He goes on to later claim his plan would cost less money than the private plans that existed at the time. And the final bit of numbers cited that invoke a philosophical belief was the fact that private plans invoke a flat premium and don’t take into account income. That structure of paying for medical care is antithetical to the social democratic ideals that Douglas would have espoused. Tommy Douglas and the entire Co-operative Commonwealth Federation believed that those who make much larger incomes ought to contribute more to the healthcare system than those earning much lower incomes. That is commonly known as “progressive taxation.”

Douglas finished off his speech with the quote, “I am convinced that inside two or three years both the doctors who provide the services and the people who receive the service will be so completely satisfied with it that no government will dare take it away.” So essentially, his rationale was that our society ought to have Medicare for ethical reasons. However, the empirical rationale was that it was going to cost less, everyone was going to be more satisfied than they would be with private plans, and it would decrease the chance of a rise of communism.

Before any of those claims can be validated, it would be worthwhile to note what Canada’s current healthcare system covers and if it differentiates from the original vision of Tommy Douglas. Canadians today do not have dental coverage. Other forms of health care that aren’t covered under the Canadian system are eye care, psychological services and prescription drugs. For these services, the funds are paid by insurance plans provided by your employer. What happens if you’re among the 15 percent of working Canadians who are self-employed?(2) Tough luck, you’ll be paying all of the expenses for those non-covered health services out of pocket or purchasing a private form of insurance in which those services are covered. That is why it is relevant to the question of whether the rationale of Douglas stands today to ask whether our system covers what Tommy Douglas envisioned, let alone what his original Medicare law covered in his home province of Saskatchewan.

As it turns out, not much has changed in terms of Medicare in Canada. The plan that Tommy Douglas spearheaded in Saskatchewan is effectively the same as Canada’s current form of Medicare. In fact, in Douglas’ speech to the legislature, he hoped that his Medicare plan would “become the nucleus around which Canada will ultimately build a comprehensive health insurance program which will cover all health services—not just hospital and medical care—but eventually dental care, optometric care, drugs and all other health services which people require.” Douglas definitely would have seen it as unfortunate that so little has changed in our system. Especially considering research done by a handful of scholars for the Canadian Medical Association Journal shows a universal public drug program could save Canadians 7.3 billion dollars.(3)

There are a variety of ways to empirically evaluate whether the rationale of Douglas still holds today. The first and perhaps most vital metric to consider when comparing private health insurance to health care that is paid for by the government is the metric of cost. Initially, it seems as if it’s a matter of common sense that healthcare which is paid for by the government would be cheaper as there will be no profits to be made by insurance companies. However, that is not the only potential difference. Premier Douglas provided figures of health care spending in his speech to parliament.

Given that the main question is that of the validity of the rationale at the time and whether it still stands today, one of the only practical ways of answering the question is comparing healthcare costs of the various systems today. The United-States is about as close as it gets for comparing a Canadian healthcare system before the universal adoption of Medicare (via the Canada Health Act of 19844) to after its adoption. That is because the United-States, as of 2019, has a solely private health insurance system with the exception of people over 65 (who have Medicare), people too poor to afford insurance (who have Medicaid) and veterans (who have the Department of Veterans Affairs).(5) In a 2018 study by Jennifer Abbasi, detailed comparisons between health care systems of developed countries are made. As it turns out, the United-States spends more than twice on health care per capita than does Canada.(6) Laurence Seidman argues in his 2015 article “The Affordable Care Act versus Medicare for All” that the primary explanation for the discrepancy in the percentage of GDP expenditure on health care comparing the United-States to other countries is the U.S. governments inability to negotiate drug prices.(7) It is an indisputable point, given the numbers. However, that isn’t the entire story. As James Kahn points out in “The Case for Medicare for All,” a system where everyone is enrolled in Medicare is far more efficient administratively.(8) And as mentioned before, there are no funds allocated to the profits of insurance companies. So, as it turns out, Tommy Douglas was correct in his assessment of single-payer healthcare being cheaper than privatized health insurance. Although, of course, a cheaper healthcare system doesn’t mean much if its quality is not as good.

One of the most explicit and upfront metrics of measuring health care systems by the quality of healthcare is satisfaction. Finding measurements of health care satisfaction before and after the Medicare law of 1962 is quite tricky. Thinking back to the Douglas’ quote on how “…no one dare take it away,” in a sense, this has already been validated. None of the federal Canadian political parties are proposing to revert to a privatized health insurance system. However, to be objective, one must look to numbers. A Health Affairs article from 1995 detailed an opinion survey about health care satisfaction for Americans, Canadians and West Germans. It found the Canadians to be the most satisfied with their healthcare and the Americans to be the least satisfied.(9) That had matched the result of their previous opinion survey four years prior.(10) So it appears Canadians are quite comfortable with having publicly financed healthcare over privatized health insurance. Then again, Tommy Douglas also mentioned that physicians would be satisfied with Medicare.

To assess the physician satisfaction of Medicare, the perfect starting point is that of The Saskatchewan doctors strike following the passing of Douglas’ Medicare. Over 90 percent of physicians in the province partook in a short strike because they were convinced they would be required to withstand a pay cut and because they feared it would eliminate choice among patients.(11) These concerns are quite suspect for a variety of reasons. Knowing what we know today, the immediate cause for suspicion is that of the illusion of losing choice. In a single-tiered private market insurance only system, you are only permitted to see the doctors for which you can afford. In a two-tiered system with a public option but also alternative private plans, you may only see the doctors who chose to see public option patients if you are on the public option. However, in a system with universality where everyone is on the same plan (such as in Canada), theoretically, your choice of doctor is the largest because there is one single pool of physicians, instead of having them divided. Perhaps there was an inference that physicians will be paid less under a universal system, so there will be fewer physicians. However, this claim is also logically suspect. How many people are willing to withstand years of medical school, which is academically excruciating, solely because they wish to make lots of money and not because they want to be a physician? If making money was their priority, would they not go into fields of investment?

One of the most surprising elements of the doctor strike in Saskatchewan was just how quickly the physicians changed their opinion. That is not merely based on the metric that the strike ended less than a month after it started. But also, the fact that by 1965, most doctors in Saskatchewan favoured Medicare.(12) It sounds as though a radical transformation took place; however, the strike was effectively ended by the “Saskatoon Agreement.” As a result of the agreement, certain amendments were added to the law. The amendments allowed doctors to opt-out Medicare, raised payments to doctors under Medicare, and there was an increase in the number of physicians sitting on the Medical Care Insurance Commission.(13) It is worthwhile to note that Lord Taylor, a British physician who helped implement the United-Kingdoms National Health Service, was brought in as a mediator to help reach the Saskatoon Agreement.(14) Although those amendments to the law would have silenced some concerns of the physicians who were aggravated enough to strike, it remains quite shocking that 90 percent of physicians partook in the strike, only to have a majority of them support the law just a few years afterwards. Perhaps the fear and hysteria were driven out of a desire for personal profits to remain rather than objective analysis. The motivations for which are easily explainable.

The explanation for such a dramatic turnaround among doctors in the province of Saskatchewan could be viewed as a case study in media manipulation. It is curious that when doing research on the strike, one does not find any evidence of a coalition of economists warning of the impending doom that Medicare will bring. Instead, there are stories of racist imagery claiming foreign doctors will be taking the jobs of those in Saskatchewan.(15) Illogical claims of a removal of choice. Along with expected charges of socialism and communism. This is behaviour that should be expected whenever a particular party is going to be taking a loss financially. The party in this case would be firms that provided private health insurance. Tommy Douglas sought to dispel worries of socialism and communism in particular.

The final and perhaps most politically interesting claim of Douglas that he used as an argument for the adoption of his Medicare proposal is that of a decreasing chance of communism. The idea being that if everyone had at least access to public healthcare, there would be less pain and suffering and thus less chance of a radical political uprising. Douglas had to have been aware he was arguing for a form of healthcare, which is paid by public funds at a time where such ideas were probably at their most controversial. In 1961, the Cold War was in full effect, so naturally, ideas of public ownership or funding of anything that had been controlled by the market could have been presented as socialism intruding. Dishonest actors could also portray it as communism intruding because generally, these terms can be conflated among those who have never studied political thought. This final claim of Douglas requires the least amount of research to validate. There have not been any seats of power gained by any communist party since this healthcare debate.(16) In fact, in the 2019 Canadian federal election, Canadas Communist party received 0.02% of the popular vote.(17) Hence why we can confirm Douglas was correct in predicting that a publicly funded universal healthcare system had diminished any odds of any potential communist revolt.

While it is unfortunate that Tommy Douglas’ vision of Canada having a healthcare system that covers all health needs has not come any closer to fruition since his death, his legacy lives on. Canadians certainly are grateful for the change he brought. He had a rationale that a publicly financed healthcare system was not only a moral obligation but also made empirical sense. He claimed it would cost less money than the private counterpart. The data shows that to be true. He claims that patients and physicians would be happier with a publicly funded system. The data also appears to confirm that. He claimed they would be so satisfied that no elected official would dare take it away. That certainly has held true. And lastly, he claimed that a public healthcare system would make communist revolts less likely. That was an intelligent argument to make considering charges of “socialist” and “communist” were most likely levelled at him at the time. And he appears to have been correct about that prediction as well. Canada’s Communist party has no federal power whatsoever. For these reasons, it is unequivocal that his rationale still stands today.




Bibliography


Douglas, Tommy. Medicare: Time to Take a Stand. 1961. Reprinted from Tommy Douglas Speaks: Till Power is Brought to Pooling, ed. L.D. Lovick, Lantzville: Oolichan Books.


Statistics Canada. 2018. Labor Force Survey. Statistics Canada. Ottawa.


Morgan, Steven G et al. “Estimated cost of universal public coverage of prescription drugs in Canada.” CMAJ : Canadian Medical Association journal = journal de l'Association medicale canadienne vol. 187,7 (2015): 491-497. doi:10.1503/cmaj.141564\


Canada, Health. “Government of Canada.” Canada.ca. Government of Canada, August 22, 2016. https://www.canada.ca/en/health-canada/services/canada-health-care-system.html


“Medicare, Medicaid, & VA Military Benefits Differences.” Medicare & Medicare Advantage Info, Help and Enrollment. Accessed November 7, 2019. https://www.medicare.org/articles/medicare-medicaid-va-military-benefits-differences/.


Papanicolas I, Woskie LR, Jha AK. Health Care Spending in the United States and Other High-Income Countries. Figure 1. JAMA. 2018;319(10):1024–1039. doi:10.1001/jama.2018.1150


Laurence Seidman; The Affordable Care Act versus Medicare for All. J Health Polit Policy Law 1 August 2015; 40 (4): 911–921. doi: https://doi-org.ezproxy.library.dal.ca/10.1215/03616878-3150160\


Kahn, James G. “The Case for Medicare for All.” New Labor Forum 28, no. 2 (May 2019): 52–56. doi:10.1177/1095796019837941.


Blendon, Robert J., John Benson, Karen Donelan, Robert Leitman, and et al. "Who has the Best Health Care System? A Second Look." Health Affairs 14, no. 4 (Winter, 1995): 220-30. doi:http://dx.doi.org.ezproxy.library.dal.ca/10.1377/hlthaff.14.4.220. http://ezproxy.library.dal.ca/login?url=https://search-proquest-com.ezproxy.library.dal.ca/docview/204615670?accountid=10406.


Brown, Lorne. “The Birth of Medicare.” Canadian Dimension, July 3, 2012. https://canadiandimension.com/articles/view/the-birth-of-medicare.


Larmour, Jean. “Saskatchewan Doctors' Strike.” Saskatchewan Doctors' Strike. The Canadian Encyclopedia, February 7, 2006. https://thecanadianencyclopedia.ca/en/article/saskatchewan-doctors-strike.


Marchildon, Gregory P., PhD. "Legacy of the Doctors' Strike and the Saskatoon Agreement: CMAJ CMAJ." Canadian Medical Association.Journal 188, no. 9 (Jun 14, 2016): 676-677. http://ezproxy.library.dal.ca/login?url=https://search-proquest-com.ezproxy.library.dal.ca/docview/1797693318?accountid=10406.


Simpson, Jeffrey. "Saskatchewan and the Difficult Birth of Medicare." Queen's Quarterly, Summer, 2012, 270-283, http://ezproxy.library.dal.ca/login?url=https://search-proquest-com.ezproxy.library.dal.ca/docview/1039307648?accountid=10406.


Foot, Richard. “Communist Party of Canada.” Communist Party of Canada. The Canadian Encyclopedia, February 6, 2006. https://www.thecanadianencyclopedia.ca/en/article/communist-party-of-canada.


Elections Canada. 2019 Federal Election results. October 21st, 2019.




1 - Douglas, Tommy. Medicare: Time to Take a Stand. 1961. Reprinted from Tommy Douglas Speaks: Till Power is Brought to Pooling, ed. L.D. Lovick, Lantzville: Oolichan Books.

2 - Statistics Canada. 2018. Labor Force Survey. Statistics Canada. Ottawa.

3 - Morgan, Steven G et al. “Estimated cost of universal public coverage of prescription drugs in Canada.” CMAJ : Canadian Medical Association journal = journal de l'Association medicale canadienne vol. 187,7 (2015): 491-497.

4 - Canada, Health. “Government of Canada.” Canada.ca. Government of Canada, August 22, 2016.

5 - “Medicare, Medicaid, & VA Military Benefits Differences.” Medicare & Medicare Advantage Info, Help and Enrollment.

6 - Papanicolas I, Woskie LR, Jha AK. Health Care Spending in the United States and Other High-Income Countries. Figure 1. JAMA. 2018;319(10):1024–1039.

7 - Laurence Seidman; The Affordable Care Act versus Medicare for All. J Health Polit Policy Law 1 August 2015; 40 (4): 911–921.

8 - Kahn, James G. “The Case for Medicare for All.” New Labor Forum 28, no. 2 (May 2019): 52–56.

9 - Blendon, Robert J., John Benson, Karen Donelan, Robert Leitman, and et al. "Who has the Best Health Care System? A Second Look." Health Affairs 14, no. 4 (Winter, 1995): 220-30.

10 - Blendon J. Robert., Leitman, Robert., Morrison, Isan., Donelan, Karen. Satisfaction With Health Systems In Ten Nations. Data Watch. Health Affairs. 1990. Bethesda, Maryland.

11 - Brown, Lorne. “The Birth of Medicare.” Canadian Dimension, July 3, 2012.

12 - Larmour, Jean. “Saskatchewan Doctors' Strike.” Saskatchewan Doctors' Strike. The Canadian Encyclopedia, February 7, 2006.

13 - Marchildon, Gregory P., PhD. "Legacy of the Doctors' Strike and the Saskatoon Agreement: CMAJ CMAJ." Canadian Medical Association.Journal 188, no. 9 (Jun 14, 2016): 676-677.

14 - Simpson, Jeffrey. "Saskatchewan and the Difficult Birth of Medicare." Queen's Quarterly, Summer, 2012, 270-283,

15 - Brown, Lorne. “The Birth of Medicare.” Canadian Dimension, July 3, 2012.

16 - Foot, Richard. “Communist Party of Canada.” Communist Party of Canada. The Canadian Encyclopedia, February 6, 2006.

17 - Elections Canada. 2019 Federal Election results. October 21st, 2019.