Prepaid group practice under universal health insurance in Canada

This paper describes the experience of the two prepaid group practice plans in Ontario before and after universal health insurance. Both plans were capitalized, before national health insurance, by member contributions and both have had persistent problems with enrollment constraints and professional opposition. The Sault Ste. Marie Plan began in 1963, six years before Canadian medicare. The plan was paid a capitation fee for medical services but did not share in savings from its reduced hospital use. After universal insurance sharing in decreased hospital use was offset by regulations which allowed plan members to use non-plan physicians at Plan expense. Payments to non-plan physicians now take up 20 per cent of Plan income. Active enrollment of members has been replaced by a Ministry of Health registration system which is based on overall utilization. The St. Catharine's Plan began at the same time as universal insurance in 1969. Its out-of-plan use averaged about 40 per cent of total income. Most recently this program has shifted from capitation to cost-reimbursement payment. In Canada present trends include cost containment, financing by general tax revenues rather than premiums and increased categorical benefits. Under Canadian universal health insurance prepaid group practice has an uncertain future.