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The Public Finance of Medical and Dental Care in Newfoundland — Some Historical and Economic Considerations*

Published online by Cambridge University Press:  20 January 2009

Malcolm C. Brown
Malcolm C. Brown
Affiliation:
Associate Professor of Economics, Department of Economics, The University of Calgary, Canada.
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Abstract

The article discusses the evolution of Newfoundland's health care system from the turn of the century to the present. During this time there were considerable changes in social conditions, political arrangements and the availability of public monies, all of which influenced the structure of the health care sector. In general terms, Newfoundland's health care system shifted from one involving low expenditures and many British type institutions to one involving high expenditures and American type institutions. The evidence suggests that the changes have been particularly beneficial for Newfoundland's merchant class, including the doctors and dentists, although some benefits have also accrued to patients and fishermen.

Type
Article
Information
Journal of Social Policy , Volume 10 , Issue 2 , April 1981 , pp. 209 - 227
Copyright
Copyright © Cambridge University Press 1981

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References

1 See Noel, S. J. R., Politics in Newfoundknd, University of Toronto Press, Toronto, 1971, pp. 296–313Google Scholar, for a statement of the agreement on the terms of the union between Newfoundland and Canada.

2 See Brown, Malcolm C., ‘Comparative Aspects of the New Zealand and Canadian Health Systems’, Economic Record, 53 (06/09 1977), 182–97CrossRefGoogle Scholar, for a detailed discussion of these Acts.

3 Noel, op. cit. pp. 8–9.

4 Miller, L., ‘The Newfoundland Department of Health’, The Federal and Provincial Health Services in Canada, Canadian Public Health Association, 1962, p. 2.Google Scholar

5 Some customary charges in 1951 were $20 for a delivery, and $25 for an appendectomy or any other major operation, plus $5 per day. See Agnew, H., Craig, A., Taylor, M. and Curren, F., Hospital Facilities in Newfoundland, A Study Conducted for the Honourable J. R. Chalker, Newfoundland Minister of Health, 1952, p. 114.Google Scholar

6 In 1951, the annual capitation payments were $6 to $8 per family. Alternatively, patients could pay at the rate of $1 per visit to the out-patient department (ibid.).

7 Some half charges in 1950 were $3.00 for an x-ray, $0.50 per day for a ward bed, $3.00 per day for a private room and $0.50 for an out-patient visit. Concerning out-patient visits, however, the charge was $1.50 on Sundays and holidays.

8 Right Honourable Brain, Lord, Royal Commission on Health, Government of Newfoundland and Labrador, St John's, 1966, p. 6.Google Scholar

9 Miller, op. cit. p. 3.

10 The merchant class had never shown much penchant for behaving charitably towards the fishermen. In addition to this consideration, the communities without medical care were mostly Irish and Catholic, while the merchants were English and Protestant.

11 Noel, op. cit. pp. 210–14.

12 Miller, L., ‘The Cottage Hospital Plan in Newfoundland’, Newsletter (Special Issue, Part 2 of the Newfoundland Medical Association Journal), 16 (09 1964), 25.Google Scholar

13 While all the MOs were eventually to become salaried doctors, it is somewhat of a simplification to say that they were salaried in the early days. Initially, they received basic stipends, which increased from $1,200 in the late 1930s to $2,500 in the early 1950s. In addition, by the 1950s they were paid about two-thirds of the subscription payments collected, and could charge limited fees under the Workman's Compensation Act, the War Veteran's Act, and other Acts involving public funds.

14 Parsons, W. D., ‘The Newfoundland Medical Association, 1924–1964’, Newsletter (Special Issue, Part 1 of the Newfoundland Medical Association Journal) 16 (09 1964), 25.Google Scholar

15 Roberts, H. D., ‘Recollections of a Secretary-Treasurer of the N.M.A. Prior to Confederation’, Newsletter (Special Issue, Part 2 of the Newfoundland Medical Association Journal), 16 (09 1964), 11.Google Scholar It might be noted that when the NMA was set up in 1924 it specified four principal aims – (1) to advance medical science, (2) to prevent disease, (3) to maintain a high scientific and social status of members, and (4) to protect the public against those unqualified to treat the sick or injured. Aims (3) and (4) seem to have been invoked in the NMA's objection to cottage hospitals. See Perlin, A. B., ‘Medicine in Newfoundland – The Pre-Confederation Era’, Newsletter (Special Issue, Part 1 of the Newfoundland Medical Association Journal), 16 (09 1964), 24.Google Scholar

16 Government of Newfoundland and Labrador, Department of Health Annual Report, 1951, St John's, pp. 2–3.Google Scholar

17 As of 1952 there were 29,000 paid-up subscribers in the Cottage Plan, involving coverage for 107,000 individuals.

18 The Cottage Plan did have some customary fees, however. In 1952, some examples were $10 for maternity cases, $0.50 for dental extractions and S2.50 per day for private rooms.

19 Government of Newfoundland and Labrador, Public Accounts, 1940–1941, St John's, pp. 41, 127.Google Scholar

20 Government of Newfoundland and Labrador, Public Accounts, 1947–1948, pp. 39, 127Google Scholar; and Public Accounts, 1948–1949, pp. 39, 121.Google Scholar

21 Government of Newfoundland and Labrador, Public Accounts, 1934–1935, pp. 31, 36Google Scholar; Public Accounts, 1940–1941, pp. 41, 127Google Scholar; and Public Accounts, 1947–1948, pp. 39, 127.Google Scholar

22 Agnew et. al., op. cit. p. 10.

23 Government of Newfoundland and Labrador, Eleventh Census of Newfoundland and Labrador, 1945, Volume 1, St John's, 1947, p. 17.Google Scholar

24 Paddon, W. A., ‘Medicine in Northern Labrador – the First Years’, Newsletter (Special Issue, Part 1 of the Newfoundland Medical Association Journal), 16 (09 1964), 29.Google Scholar

25 Noel, op. cit. p. 265.

26 Agnew, op. cit. Appendix, p. 1. Agnew also noted that there were only three other large general hospitals operated by provincial governments – the Victoria General (Halifax), the University Hospital (Saskatoon), and the University Hospital (Edmonton).

27 Ibid. pp. 10–12. Of the 1,521 general beds in the province, 334 were in St John's General Hospital, 480 were in the cottage hospitals, 164 were in the IGA hospitals, 114 were at the Twillingate hospital and 396 were in either church or company hospitals.

28 Brain, op. cit. Vol. 2, p. 6.

29 Brown, Malcolm C., The Financing of Personal Health Services in New Zealand, Canada and Australia, Research Monograph No. 20, Centre for Research on Federal Financial Relations, The Australian National University Press, Canberra, 1977, pp. 61–4.Google Scholar

30 Health and Welfare Canada, Expenditures on Personal Health Care in Canada, 1953–1961, Health Care Series No. 16, Ottawa, 1963, p. 20Google Scholar; and National Health Expenditures in Canada, 1960–1973, 1975, p. 29.Google Scholar

31 Health and Welfare Canada, ‘Figures Released Provisionally, Pending Preparation of Published Report in Both Official Languages’, Ottawa, 1978, Table 15.Google Scholar

32 Brown, The Financing of Personal Health Services in New Zealand, Canada and Australia, op. cit. p. 69.

33 The relation between hospital size and economic efficiency in the Newfoundland context is discussed in Brown, Malcolm C., ‘Production and Cost Relations of Newfoundland's Cottage Hospitals’, Inquiry, 17 (Fall 1980), 268–77.Google ScholarPubMed

34 While fee-for-service practitioners charge for travel time it is not enough to compensate for what they could make in their offices.

35 Government of Newfoundland and Labrador, Department of Health Annual Report, 1952, St John's, p. 88.Google Scholar

36 Government of Newfoundland and Labrador, Department of Health Annual Report, 1971, St John's, p. 91.Google Scholar As a matter of interest it might be noted that the cottage nursing stations had all been phased out by the early 1970s. Nursing stations remained, however, in the IGA system.

37 The usual capitation payment for individuals after 1952 was $7.50. In Botwood and Channel the family rate was $24, while the individual rate was $12. In Old Perlican and in areas outside the cottage districts the rates were $9 and $4.50 respectively.

38 Government of Newfoundland and Labrador, Department of Health Annual Report, 1958, p. 75.Google Scholar

39 Miller, L., ‘Public Medical Care Programs in Newfoundland’, Canadian Journal of Public Health, 56 (02 1965), 69–70.Google ScholarPubMed

40 Brain, op. cit. Vol. 1, p. 8.

41 Health and Welfare Canada, ‘Figures Released Provisionally, Pending Preparation of Published Report in Both Official Languages’, 1978, Table 15.Google Scholar

42 In interpreting these figures, the reader should keep in mind that they refer to all hospitals, and not just those listed under the Hospital Act.

43 Health and Welfare Canada, ‘Figures Released Provisionally, Pending Preparation of Published Report in Both Official Languages’, 1978, Table 15.Google Scholar

44 Royal Commission on Health Services (Hall Report), Volume 1, Queen's Printer, Ottawa, 1964, p. 39Google Scholar; Health and Welfare Canada, Canada Health Manpower Inventory, 1972, p. 64Google Scholar; and Canada Health Manpower Inventory, 1977, p. 170.Google Scholar

45 If data for later years are any guide, about half the DMOs in 1955 worked part-time, allocating the rest of their time to private practice.

46 Salaried practice is defined to exclude radiologists, pathologists, medical administrators and medical faculty.

47 Government of Newfoundland and Labrador, Newfoundland Medical Care Commission Annual Report, 1971–1972, St John's, pp. 15–16.Google Scholar

48 Data from which the 60 per cent estimate is derived are the following. The average DMO salary was $14,375 in 1967, $20,000 in 1968, $30,000 in 1974, $32,000 in 1976, $35,500 in 1977 and $36,900 in 1978 (Government of Newfoundland and Labrador, Remuneration of Cottage Hospital Physicians, A study done by Kates, Peat, Marwick and Co., Montreal, 1968, pp. 1–6Google Scholar; and Government of Newfoundland and Labrador, Department of Health Salary Details, 1976–1977, St John's, p. 70).Google Scholar The average net income of fee-for-service practitioners was $25,578 in 1967, $30,488 in 1968, $38,846 in 1971 and $38,282 in 1972 (Health and Welfare Canada, Earnings of Physicians in Canada, 1962–1972, Ottawa, pp. 18–20Google Scholar). Finally, medicare payments per full-time fee-for-service practitioners were $50,771 in 1971–72, $52,210 in 1972–73, $66,452 in 1974–75 and $75,660 in 1976–77 Government of Newfoundland and Labrador, Newfoundland Medical Care Commission Annual Report, St John's – 1972–1973 Report, p. 18, 1974–1975Google ScholarReport, p. 16 and 1976–1977Google ScholarReport, p. 16.Google Scholar From these data, the DMO salary as a proportion of average net income of fee-for-service practitioners was estimated to be 56.2 per cent in 1967, 65.6 per cent in 1968, 60.3 per cent in 1974 and 56.5 per cent in 1976.

49 Comparison of doctor workloads in the Newfoundland case would be difficult not only because of a lack of data, but also because salaried doctors are more common in areas where home visits have been necessary and fee-for-service has been relatively unprofitable.

50 Brown, The Financing of Personal Health Services in New Zealand, Canada and Australia, op. cit. p. 41.

51 Government of Newfoundland and Labrador, Remuneration of Cottage Hospital Physicians, op. cit. p. v–3.

52 Government of Newfoundland and Labrador, Public Accounts, St John's, 1960–1961, p. 120Google Scholar and 1969–70, p. 111.

53 Government of Newfoundland and Labrador, Department of Health Annual Report, 1969–1970, p. 128.Google Scholar

54 As of 1969, there were 45 doctors practising in Newfoundland who had gone through the bursary program. There were 72 trained, but 27 had eventually set up practice elsewhere (ibid.).

55 Brain, op. cit. Vol. 3, pp. 7–19.

56 This statement of policy was made to me by several senior civil servants at the Newfoundland Department of Health during discussions with them.

57 The Children's Health Plan came into play only in areas outside cottage districts, since the Cottage Plan already provided the benefits in question.

58 Government of Newfoundland and Labrador, Department of Health Annual Report, 1965–1966, St John's, p. 176.Google Scholar

59 Ibid. 1968–69, pp. 177–8.

60 Health and Welfare Canada, ‘Figures Released Provisionally, Pending Preparation of Published Report in Both Official Languages’, op. cit. Table 15.

61 Government of Newfoundland and Labrador, Department of Health Annual Report, 1961–1962, p. 228.Google Scholar

62 Ibid. 1971–72, p. 20.

63 Ibid. 1965–66, p. 125.

64 Government of Newfoundland and Labrador, Department of Health Salary Details, 1976–1977, op. cit. p. 70.

65 Health and Welfare Canada, ‘Figures Released Provisionally, Pending Preparation of Published Report in Both Official Languages’, op. cit.

66 Brown, ‘Comparative Aspects of the New Zealand and Canadian Health Systems’, op. cit. 189–91.