International Travel Insurance Journal www.itij.co.uk Spring 2002

Health insurance - don't leave home without it

The only time Canadians are allowed to purchase medical and standard ward hospital insurance is when they leave Canada. According to Tim Lynch provincial governments are transferring their responsibility for health coverage abroad to travel insurers.

Canadians regard their access to health services as being a right of privilege of being Canadian. This places Canadian travel health insurers in the unenviable position of meeting expectations in service delivery that the publicly funded Canadian health system is not always able to accommodate.

The provision of health services in Canada is the constitutional responsibility of the provincial level of government. The federal government's Canada Health Act (CHA) governs the Canadian health system nationally. Under CHA provincial health insurance plans cover all "medically necessary" inpatient hospital and medical services. These programs are managed in accordance with the CHA criteria of health programs being: publicly administered, comprehensive, universal, portable, and accessible – which generally means "free" at time of need. The Canadian government ensures these national criteria are adhered to through its fund transfer arrangements that supplement provincial health ministry budgets. Under these conditions, there are no markets for medical and standard ward hospital insurance coverage for Canadians in Canada.

Canadian travel health insurance premiums cover the cost of providing a local health services in the country being visited that stabilize patients and repatriation of the patient back to Canada as efficiently as possible. Standard case management criteria require travel insurers to have a hospital bed available in Canada before starting to transfer the patient home. Under Canada’s highly controlled supply management health system, Canadians living in Canada often have difficulty gaining access to hospital beds. Canadians in need of a hospital bed when outside the country have to be accommodated within these limitations.

"There is no legal obligation for insurance companies to actively engage in trying to persuade hospitals to take patients," says Dr Robert MacMillan, President, SelectCare Risk Management Corp. Toronto. Dr MacMillan, who is also President of the Travel Health Insurance Association of Canada, (THIA) goes on to say, "Insurance companies are within their rights to just drop patients off at hospital emergency departments; then The Canada Health Act kicks in, and the hospital has to deal with the patient." Such practice, he recognises, would be counter to any professional standard of case management and would overload the system inappropriately.

From talking with several Canadian travel health insurers in the researching this article it is evident that the industry prides itself in delivering a personal service at a time of need to patients in their trust. The challenge is balancing these standard customer obligations in a domestic publicly funded hospital system that often fails to serve Canadians in Canada.

Having practised medicine for several years in Ontario and having served as President of the Ontario Medical Association as well as Assistant Deputy Minister for the Ontario Health Insurance Plan (OHIP) prior to assuming a career in the travel health insurance business, Dr MacMillan acknowledges that if he has trouble finding a hospital bed for his patients, the industry in general has a problem.

When he is unable to locate a hospital bed, Dr MacMillan’s strategy is to recommends that the patient’s relatives complain to their local hospital administrator. If that doesn't work he advises that they complain to the office of the Minister of Health and if that doesn't work he says there is always the media. In Canada's publicly funded health system embarrassing their provincial minister of health in public is often the last resort for patient care advocates.

The Association of Canadian Academic Health Care Organizations (ACAOH), which represents the interest of tertiary care teaching hospitals across Canada, was approached about the possibility of establishing some arrangements among its members for repatriation of injured or sick Canadians stranded abroad. With its close to forty member facilities strategically located across Canada, theoretically this entity could facilitate repatriation admissions of Canadians into their provincial health systems. In the context of Canadian hospitals offering such a specially designed service to care for the needs of sick Canadians abroad, Jeff Lozon, ACAHO President, stated, "Hospitals do not have the staff to cover current beds and they cannot have the beds to reserve right of admission for Canadians abroad.’ He stressed that ‘such arrangements would look like a special set of Canadians were getting special access to hospitals."

Routinely in Canada when the supply of hospital beds fails to meet prevailing demand, patients are triaged for admission to available beds. Remembering that hospitals in Canada are dependent on funding from their provincial governments, any attempt at short-circuiting this triage system could have political implications for hospitals authorities. Under the Canada Health Act the admission to a hospital of a Canadian patient from abroad has to be treated the same as a local community admission. In some designated trauma centres there may be instances where patients in transit are under some care by the receiving centre. Generally, the only time a Canadian hospital is obliged to be involved in caring for a patient is when the patient is inside the hospital’s emergency department.

This situation has to be recognised by assistance companies responsible for transferring patients to Canada. Murray Martin, President and CEO, Hamilton Health Sciences Corporation, reported that as CEO of the Vancouver General Hospital he witnessed an American Medi Vac air transport ambulance company delivering a patient to the ER department and try to depart without proper transfer of responsibility. The Medi Vac crew did not realize that such admission are triaged along with all other ambulance deliveries. This lack of understanding about how the Canadian health system operated resulted in the air ambulance having to remain on the ground at Vancouver airport for several hours.

Faced with periodic tidal waves of demand in his ER he only has one ER) one hospital administrator argued that the hospital needs of Canadians outside of Canada are the problem of travel insurers. However, he acknowledged that sick patients, have to be admitted, somehow, when they arrive at the ER, regardless of where they come from. The possibility of repatriating a patient who becomes a chronic case, which is a drain on a hospital’s resources, as well as the possibility of infectious disease being introduced to hospitals from abroad, may also discourages Canadian hospitals from serving such admissions. Furthermore, some hospital medical staff personnel are not too interested in receiving patients who have been ‘worked on’ by doctors in other countries.

Discussing the challenges travel insurers have in trying to find a hospital for Canadians injured abroad, Dr Ron Mayer, VP & Chief Medical Officer, World Travel Protection, Toronto says, ‘It is easier to get a foreign patient into a Canadian hospital than it is to get a Canadian patient admitted from a foreign country.’ This is because Canadian hospitals and admitting physicians see a foreign admission as a source of revenue that supplements their provincial health ministry allocation. Most Canadian hospitals have little experience in the pricing of such admissions. Some tend to price their services by comparison with similar admissions in US hospitals.

Describing the compassion that resides in the system, Dr Mayer said, ‘When a Canadian is sick in the US. with no insurance there is a definite effort on the part of local hospital admission physicians to get the patient back to Canada to avoid US. hospital costs. Such efforts are usually initiated under the guidance of the patient’s relatives, the family physicians and possibly a travel insurance company. Similarly when a Canadian is in a less than adequate hospital in some part of the world, a hospital admissions physician may try extra hard to find a place in their hospital.’

Dr Mayer cautions that this compassion in serving a sick Canadian in a foreign land is reduced when the patient has travel insurance and is in a US hospital. "Often the admitting physician in Canada advises that the patient stays where he or she will receive better care than if they were in any Canadian hospital." Under these circumstances, the travel health insurance company has to pay for the costs of providing hospital care in the US, which is somewhat of a dilemma for the travel insurance industry.

Providing portability of health services is one of the guiding criteria of the Canada Health Act. With respect to Canadians being in need of hospital services while outside of Canada, the Act specifies that "the provinces should provide payment on the basis of the amount that would have been paid by the provinces for similar services rendered in the province, with due regard, in the case of hospital services, to the size of the hospital, standards of service and other relevant factors."

The reality is that each province pays a different amount and nowhere near the cost of a stay in a US. hospital. Ontario pays a per diem rate of $400.00 British Columbia pays $75.00.

The dilemma facing the Canadian travel insurance industry is that this failure of provincial health insurance plans to meet their obligations in covering hospital care abroad, and the decision of the federal government to ignore such infractions, has been the basis upon which the travel health insurance industry in Canada has grown. To advocate that the provincial governments live up to their obligations with respect to covering the cost of Canadians in foreign hospitals may reduce the need for private travel health insurance. Without informing the electorate Canadian governments have transferred the cost foreign hospital care to the private insurance companies. In the meantime, the travelling Canadian consumer gets stuck with higher premiums as well as higher taxes.

Tim Lynch, Consultant: Health Services Reimbursement

Info-Lynk Consulting Services Inc