Medical practice may be on the verge of great changes in Canada, and in particular in Quebec. For a long time, physicians could not incorporate their medical practices because of rules meant to preserve their professional autonomy and protect patients (who are always vulnerable when faced with sickness). All Canadian provinces gradually opened the door to incorporation for physicians, most often with strict rules about physicians’ shares ownership and seats on the board of the corporations. Quebec was the last province to allow incorporation in 2007, following years of pressure from physicians’ associations, mainly for tax reasons.

June, 15 2009   |   Margaret McGregor, Marie-Claude Prémont & Jean Turgeon


The Canadian health sector of medical and hospital practice has been shielded from private investment since the implementation of public medicare, about forty years ago. Things may now be changing, step-by-step, to open up private investment opportunities. In Quebec, Bill 33 (Québec, 2006), enacted following the 2005 Chaoulli conservative-minded decision of the Supreme Court of Canada, allowed private surgical facilities to be owned by non-physician private-investors to a maximum of 50% minus one share. Will the rule succeed in maintaing physicians’ professional autonomy when the history of corporate ownership tells us that corporate control does not necessarily require majority ownership? Ownership rules may also be relaxed in due course. Only time will tell us, but the conjunction of other meaningful structural changes in public healthcare suggest the need for vigilance.    

In Quebec, like in the rest of Canada, public administration, including the healthcare sector, is slowly being submitted to competition rules in different settings. Three major sets of regulations are opening the core of public medicare to trade and commercial forces. The first deals with procurement and public tendering rules for public markets, including the health sector. Those rules have been gaining ground for years but standardisation of tendering rules throughout Quebec’s public administration is likely to occur by the end of 2008.    

The second set of rules, brought in after the Liberals led by Jean Charest took power in 2003, is pushing public-private partnerships (P3s) across health institutions and services  Quebec is now investing billions of dollars in two mega-university hospitals in Montreal where the P3 model was imposed by the highest level of public administration. Through aggressive and focused public policy, the P3 model is reproducing itself across the spectrum from construction to renovation and from hospital management to long-term care.    

The third, and more recent set of rules, deals directly with contracting out of even more complex markets, namely public health services delivery where private-investor surgical facilities, laboratories and clinics may gradually supplant publicly-paid privately-delivered health services.    

In British Colombia, since April 2003, five out of six health regions signed 65 contracts with 22 private medical and surgical facilities for short term clinical services (B.C., 2007). The same year, Vancouver Coastal Health, the biggest health region, contracted out 740 day surgeries. Last year, the same regional Authority granted 1.2 million dollars to a private facility to perform day surgeries (VCH, 2008). In Ontario, the majority of long-term residential care is already contracted out to the investor-owned private sector.   

International experience tells us that public tendering is ill adapted to such complex contracts. Therefore, different rules are necessary, that rely mainly on hierarchical checks and balances and require constant alertness from public administrators charged with safeguarding the public interest when negotiating individual clauses in contracts.    

Before and after signing such complex contracts, public administrators from all provincial health systems will have to ensure a rigorous follow-up in order to fulfill their accountability and transparency duties. We know, for example, that the US federal government had no option but to develop a very complex health industry regulation and oversight system for long-term residential care where over 70% of care is delivered by the private, for-profit sector. For example, a website (http://medicare...) regularly posts staffing levels, inspection reports, bedsore levels and other health quality indicators for all nursing homes financed by Medicare throughout the country. The Ontario government created a similar website for its long-term residential care sector, where complaints and details regarding inspection reports are posted.    

We have yet to see the full development and impact of the integration of competition rules within the Canadian health care system. We can also expect private funding, still severely restricted by the prohibition of double dipping for physicians and restrictions on private duplicative insurance, to grow in the near future.    

There is no doubt that the governance of provincial health systems will be radically transformed by the introduction of competition rules across the system and the prospect of growth in private funding when private-investor delivery facilities are ready to capture the right markets across the healthcare system. Let us hope that this path will be trod warily and that full disclosure and debate will occur on the Canadian political scene.  


Margaret McGregor is
Clinical Associate Professor at the Department of Family Practice, University of British Columbia, Canada. Marie-Claude Prémont and Jean Turgeon are both Professors at the École nationale d’administration publique (ENAP), Quebec, Canada



Prémont, M.-C. ”Clearing the Path for Private Health Markets in Post-Chaoulli Quebec“, Health Law Journal, 2008 [in Press]  

Québec National Assembly, An Act to amend the Act respecting health services and social services and other legislative provisions, S.Q. 2006, c. 43 [Bill 33]  

An Act respecting contracting by public bodies, R.S.Q., c. C-65.1

Regulation respecting the practice of the medical profession within a partnership or a company, R.R.Q., c. M-0, r. 8.1.01.    

British Colombia Ministry of Health, Letter from the BC Ministry of Health requesting information about non-hospital medical surgical facilities' capacity and quality control, 2007.    

Vancouver Coastal Health, Vancouver Coastal Health - Schedule of Payments to Suppliers of Goods and Services, Fiscal Y ear, 2008.    

Medicare: Page consulted September,7, 2008



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