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PROVINCE OF BRITISH COLUMBIA REPORT of the Hospital Insurance Inquiry Board 1951-52 British Columbia. Legislative Assembly 1952

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 PROVINCE OF BRITISH COLUMBIA
REPORT
of the
Hospital Insurance Inquiry
Board
1951-52
VICTORIA, B.C.
Printed by Don McDiarmid, Printer to the Queen's Most Excellent Majesty
1952  TABLE OF CONTENTS
Letter of Transmittal of Report	
Act Setting Up the Hospital Insurance Inquiry Board-
Order in Council Naming Members of the Board	
Order in Council Fixing Allowances to Board Members	
Order in Council Designating Minister to Whom Reports Shall Be Made..
Page
5
7
9
10
11
Report
Section 1.—Foreword     13
Section 2.—Matters of Policy Directly Affecting the Financing of the Service—
Items 1 to 19, Inclusive, in Accordance with Detailed Index at Front of Section..    17
Section 3.—Matters of Policy—General—
Items 20 to 29, Inclusive, in Accordance with Detailed Index at Front of Section    35
Section 4.—B.C.H.I.S. Administration—
Items 30 to 37, Inclusive, in Accordance with Detailed Index at Front of Section    45
Section 5.—Hospital Operation and Management and Hospital Construction and
Extension—
Items 38 to 51, Inclusive, in Accordance with Detailed Index at Front of Section    57
Tribute to Work of Secretary and Staff.  80
Letter of Transmittal—Signatures  81
Section 6.—Appendices—
Item I.—Summary of Recommendations  82
Item 2.—Interim Recommendations Made by the Board-
Nos. 1 and 2, Dated August 11th, 1951	
No. 3a, Dated October 17th, 1951	
No. 4a, Dated October 17th, 1951	
No. 5, Dated September 25th, 195L.._.
  89
  89
  90
  92
No. 6, Dated September 25th, 1951...          93
No. 7, Dated October 17th, 1951  94
Order in Council Having Reference to Interim Recommendations Nos.
1, 2, and 7 •-  95
Item 3.—Other Documents Referred to in Report—
(a) Estimated Financial Effect of the Recommendations of the Board   i 96
(b) Excerpt from Report of Mr. Samuel Eckler, F.S.A  97
(c) Summary of Comparative Hospital Costs  102
(d) Summary of Comparative Hospital Staffs  103
Item 4.—Indices of—
(a) Public Hearings Held by the Board  104
(b) Hearings Held by the Board Not Advertised as Public  104
(c) Hospitals Visited by the Board, etc  104
(d) Written Submissions to the Board  105  REPORT
To the Honourable the Minister of Health and Welfare,
Province of British Columbia.
The Hospital Insurance Inquiry Board, appointed in accordance with the provisions
of chapter 36, Statutes of British Columbia, 1951, to inquire into, investigate, survey,
and to furnish advice with regard to the Hospital Insurance Service and all matters
pertaining to hospital operation in the Province, and to make reports and recommendations thereon, begs to submit the following Report.  1951
Hospital Insurance Inquiry.
Chap. 36
CHAPTER 36.
An Act authorizing an Inquiry into the " Hospital Insurance
Act " and its Administration.
[Assented to 18th April, 1951.]
Short title.
Board constituted.
Chairman of Board.
Remuneration of
Board members.
Powers and duties
of Board.
WHEREAS it is in the public interest that an inquiry should be
made into the provisions of the " Hospital Insurance Act" and
the administration thereof:
Therefore, His Majesty, by and with the advice and consent of the
Legislative Assembly of the Province of British Columbia, enacts as
follows:—
1. This Act may be cited as the "Hospital Insurance Act Inquiry
Act."
2. For the purposes of this Act, there shall be constituted a Board
of not more than twelve persons to be called the " Hospital Insurance
Inquiry Board," the members of which shall be appointed by the
Lieutenant-Governor in Council.
3. One of the members shall be appointed to be Chairman of the
Board.
4. (1) The remuneration of the members of the Board shall be
determined by the Lieutenant-Governor in Council.
(2) If any person appointed a member of the Board is also a member
of the Legislative Assembly, he shall not receive any remuneration, but it
shall be lawful notwithstanding the provisions of the " Constitution Act "
for such member to accept payment out of the public funds of such sum
for travelling and living expenses as may be fixed by the Lieutenant-
Governor in Council, and the acceptance of such sum shall not make
such person ineligible as a member of the Legislative Assembly, and
shall not disqualify him to sit and vote in the Legislative Assembly.
5. The powers, duties, and functions of the Board shall be as
follows:—
(a) Generally to inquire into and investigate the system of hospital
insurance established by the said Act, and to make a study in
7 Chap. 36
Hospital Insurance Inquiry.
15 Geo. 6
collaboration with such persons as it may see fit as to what
amendments may be necessary to the said Act:
(b) To make a survey of the Hospital Insurance Service, and to
furnish advice with regard to such Hospital Insurance Service:
(c) To investigate the hospital-construction programme, the relations between the Hospital Insurance Service and the hospitals
of the Province, the relations between the various professions
and groups connected with the operation of hospitals in the
Province, and all matters pertaining to hospital operation in
the Province.
other investigations. q xhe Board shall make such other investigations and conduct such
other inquiries for the purposes of this Act in such manner as the
Lieutenant-Governor in Council may require and direct.
Reports and
recommendations.
7. The reports and recommendations of the Board shall be made to
such Minister as may be designated by the Lieutenant-Governor in
Council before the first meeting of the Legislative Assembly held in the
year 1952.
Powers on
investigation.
8. For the purpose of any inquiry held pursuant to the provisions of
this Act, the Board shall in respect of the investigation have the like
powers as are given to Commissioners appointed under the " Public
Inquiries Act."
Regulations.
9. For the purpose of carrying into effect the provisions of this Act
according to their true intent, and to supply any deficiency therein, the
Lieutenant-Governor in Council may make such regulations not inconsistent with the spirit of this Act as may be deemed necessary, advisable,
or convenient. All regulations shall be published in the Gazette and
shall have the same force and effect as if incorporated herein.
Appointments. XO. Such officers, clerks, and employees as are required for the
purposes of this Act may be appointed by the Board.
costs and expenses. xx. The costs and expenses incurred in the administration of this Act
shall, in the absence of any special appropriation of the Legislature
available for that purpose, be paid out of the Consolidated Revenue
Fund. COPY OF MINUTE APPROVED APRIL 24th,  1951
To His Honour the Lieutenant-Governor in Council:
The undersigned has the honour to recommend that, pursuant to section 2 of the
" Hospital Insurance Act Inquiry Act," chapter 36 of the Statutes of British Columbia,
1951, the following persons be appointed to constitute the " Hospital Insurance Inquiry
Board":—
Donald Cameron Brown, M.L.A., Vancouver.
Walter Hendricks, M.L.A., Nelson.
Arvid Waldemar Lundell, M.L.A., Revelstoke.
Daniel John Proudfoot, M.L.A., Victoria.
Sydney John Smith, M.L.A., Kamloops.
Robert Cecil Steele, M.L.A., Vanderhoof.
Herbert John Welch, M.L.A., Qualicum Beach.
Harold Edward Winch, M.L.A., Vancouver.
And that Sydney John Smith be appointed Chairman of the said Board.
Dated this 24th day of April, a.d. 1951.
A. D. TURNBULL,
Minister of Health and Welfare.
Approved this 25th day of April, a.d. 1951.
BYRON I. JOHNSON,
Presiding Member of the Executive Council. COPY OF MINUTE APPROVED JUNE 1st, 1951
To His Honour the Lieutenant-Governor in Council:
The undersigned has the honour to recommend that-, under authority of section 4
(2) of the " Hospital Insurance Act Inquiry Act," chapter 36 of the Statutes of British
Columbia, 1951, the scale of allowance for travelling and living expenses incurred by
members of the Hospital Inquiry Board in the discharge of their duties be fixed as
follows: A living allowance at the rate of twenty dollars ($20) per diem for each day
necessarily engaged on the work of the Board, or while travelling on behalf of the
Board, plus actual travelling expenses.
And that such expenses be paid upon production of vouchers duly certified by the
Chairman of the said Board and for which purpose an advance may be made to the
Chairman.
Dated this 1st day of June, a.d. 1951.
A. D. TURNBULL,
Minister of Health and Welfare.
Approved this 1st day of June, a.d. 1951.
BYRON I. JOHNSON,
Presiding Member of the Executive Council.
10 COPY OF MINUTE APPROVED SEPTEMBER 28th,  1951
To His Honour the Lieutenant-Governor in Council:
The undersigned has the honour to report that the Hospital Insurance Inquiry
Board appointed pursuant to the " Hospital Insurance Act Inquiry Act" is required by
the said Act to make its reports and recommendations to such Minister as may be designated by the Lieutenant-Governor in Council before the first meeting of the Legislative
Assembly held in the year 1952:
And to recommend that, pursuant to section 7 of the " Hospital Insurance Act
Inquiry Act," being chapter 36 of the Statutes of 1951, the Minister of Health and Welfare is hereby designated as the Minister to whom the reports and recommendations of
the Hospital Insurance Inquiry Board shall be made.
Dated this 28th day of September, a.d. 1951.
A. D. TURNBULL,
Minister of Health and Welfare.
Approved this 28th day of September, a.d. 1951.
H. ANSCOMB,
Presiding Member of the Executive Council.
11  Report of the Hospital Insurance Inquiry Board
SECTION 1.—FOREWORD
British Columbia Hospital Insurance Service had been in operation for less than
two and one-half years when the Hospital Insurance Inquiry Board was set up. During
those first few months of its existence B.C.H.I.S. had grown into a $22,000,000 a year
project. It was big business from the start, and it was a new business, too. In only
one other place in the world had the hospital insurance problem been approached on a
broad scale, such as was attempted in British Columbia on January 1st, 1949. Two
years before that date there was no similar scheme in existence anywhere. So there was
no established precedent or pattern to follow.
During 1949 and 1950 B.C.H.I.S. experienced many of the difficulties that were to
be expected in a new undertaking of this nature. As a result, during the regular session
of the Legislature in 1951 the Hospital Insurance Inquiry Board was appointed, and its
terms of reference gave it broad powers to investigate, between sessions, every phase of
the hospital insurance problem and bring in a report before the opening of the first
regular session of the Legislature of 1952.
Soon after organization of the Board, Mr. Maurice Hesford, F.C.A., who had had
a wide experience in hospital accounting and auditing, was appointed Secretary of the
Board. Offices were opened in Vancouver. Information bearing on the subject of our
inquiry was sought from the Federal Department of Health and Welfare at Ottawa and
many other sources throughout Canada and the United States. These included the
Canadian headquarters of " Blue Cross," commercial insurance companies, some Provincial Departments of Health and Welfare, Medical Associations in Canada and the
United States, including the Mayo Clinic at Rochester, Minn.
The Board commenced its work within the Province by going to Victoria, where it
spent a week at headquarters of B.C.H.I.S. in conference with the Administration and
getting acquainted with the head-office routine.
Information gathered from many sources brought the Board to the conclusion that
the task involved a tremendous lot of detail that would require a very long time to complete if every phase of the hospital insurance problem was to be fully explored.
It was, therefore, decided to seek the services of specialists in the fields of actuarial
practice and business administration. After exhaustive inquiry and on the highest
recommendations, we appointed Mr. Samuel Eckler, F.S.A., of the nationally known
firm of Pipe & Eckler, of Toronto, to be our Actuarial Consultant. This was followed
by the appointment of Messrs. Stevenson and Kellogg Limited as Management Engineer
Consultants. This firm occupies a high place in that particular field in Canada and
came to us very highly recommended by important business firms who had and are still
employing them.
Mr. Eckler immediately commenced a comprehensive study of B.C. Hospital Insurance problems from the standpoint of an insurance actuary and Messrs. Stevenson and
Kellogg Limited started a complete survey at B.C.H.I.S. headquarters in Victoria.
When the actuarial study and administration survey got under way, the Board held
hearings throughout the whole Province, in order to get " on the ground " information
on the experience of citizens, hospital boards, and other organizations with B.C.H.I.S.,
and also to hear suggestions from such persons and organizations.
13 FF 14 BRITISH COLUMBIA
The itinerary commenced with a complete coverage of the Interior of the Province,
which took the Board up the Coast through Prince Rupert and Prince George to the
Peace River District and on to the Southern Okanagan and Kootenay areas. This trip
took three weeks to complete. It was followed by a week devoted to hearings at points
on Vancouver Island, and the Board then concluded its public hearings in the City of
Vancouver, where it sat for eight days.
Of the seventy-six British Columbia hospitals within the B.C.H.I.S., the Board or
a section of the Board actually visited thirty-nine hospitals. In addition to these visits,
the Board met with the Boards of fourteen other hospitals. We held public hearings at
twenty-one points in the Province. A complete tabulation of all hearings will be found
in an appendix to this Report. The public hearings were all adequately advertised, and
the interest of citizens was reflected in attendance. It is impossible to estimate with
accuracy how many people were represented by spokesmen, but it is safe to say that we
heard representatives of a majority of the entire population of the Province. A list of
the organizations submitting briefs and representations forms another appendix to this
Report.
Immediately following public hearings in British Columbia, the Board went to
Regina in order to gather first-hand information on the Saskatchewan Hospital Services
Plan, which had started exactly two years before the commencement of B.C.H.I.S. The
officials of the S.H.S.P. were extremely courteous and helpful. Saskatchewan, like British Columbia, has followed the process of trial and error, and during the five years of
their operations many changes have been made, based on experience. The basic difference in the organization of the two plans is found in the methods used for registration
and collection of premiums. The Province of Saskatchewan is blanketed by an almost
100-per-cent organization of municipalities or local improvement districts, and registration and collection is handled almost entirely through the municipal organizations and
a commission is paid to them. In British Columbia this plan could not be followed
because of the fact that we have large areas of unorganized territory. Utilizing the
municipalities for registrations and collections enables the Plan in Saskatchewan to be
handled with a staff much smaller than has been necessary in B.C.H.I.S. To deal with
a total registration of about 310,000 in Saskatchewan, of which 280,000 or 90 per cent
pay in one annual payment, the staff numbers about 155 persons, but the total amount
of commissions paid would equal the salaries of an additional seventy-five employees.
In British Columbia there are over 445,000 registrations and the staff numbers in excess
of 640. This phase of administration has been given special attention by our Business
Management Consultants, and we are advised by them that implementation of our
recommendations in this respect would result in a reduction of B.C.H.I.S. staff from
over 600 to 223.
The principal difference in the financing of the two plans is that the direct payment
by registrants in Saskatchewan is by way of a " tax," which is less than the " premium "
as paid directly by the people of British Columbia. It naturally follows that a greater
portion of the cost of the hospital plan in Saskatchewan is met by indirect taxation,
partially covered by one-third of a 3-per-cent sales tax.
A survey of the benefits under the two plans shows that there are certain differences. For instance, Saskatchewan covers care of chronic patients, whereas the benefits to chronic patients in British Columbia are restricted. While new-comers to the
Province of Saskatchewan wait six months to be eligible for benefits, there is a two
months' waiting period for a new resident in British Columbia. Both plans pay the
hospital bills of their citizens confined to hospitals outside their home Province for a
like period of thirty days; the Saskatchewan plan paying for such a patient at the rate
of $5 per day, whereas the B.C. rate is $6.50 per day. An investigation of hospital
costs shows a major difference, largely reflected in total wages paid due to the fact that
the general wage scale is higher in British Columbia than in Saskatchewan. REPORT OF THE HOSPITAL INSURANCE INQUIRY BOARD FF 15
By this time the Board had amassed a great deal of material which was set aside
for study and consideration after the conclusion of public hearings. About the middle
of October we proceeded to analyse and correlate subject-matter of the briefs and
minutes of our hearings. It had become quite apparent that there were what might be
described as acute ailments in B.C.H.I.S. We gave first consideration to those items
that appeared to be the more urgent, and as we laboured on them and approached the
dead-line date for completing our report, it became ever more apparent that the time
available was not sufficient to carry out an over-all survey in the intensive manner it
deserved. We received the report of Mr. Eckler in December, and early in January we
were advised by Messrs. Stevenson and Kellogg Limited that their work on the administration survey at B.C.H.I.S. headquarters could not possibly be completed and available in time for us to use in a final report before the opening of the Legislature on
February 19th.
As a consequence, we have completed an interim report, containing the recommendations that we consider most essential to correct many flaws in the present service
and make B.C.H.I.S. more satisfactory to every one concerned. Many of our recommendations may reflect criticism. If so, it interprets public opinion as we have found it.
Our approach has, from the beginning, been based on the undisputed fact that there was
a great deal of dissatisfaction with B.C.H.I.S. and that a year ago there were two
alternatives before the Legislature: first, to abandon the scheme entirely and, second,
to try to correct the faults so that the B.C.H.I.S. could render the great humanitarian
service that it was intended to do. A great majority of our citizens have expressed the
wish that the Hospital Service be made to work satisfactorily, and we believe if our
recommendations are implemented, the results will go a long way toward reaching that
objective.
Many of our recommendations will save costs and increase income. Others will
increase costs and decrease income. We have prepared a tabulation, which is included
as an appendix to this Report, which shows as nearly as can be estimated the net effect
of our recommendations on the finances of B.C.H.I.S. Many of the items contained in
the tabulation can be positively confirmed, while in the case of other items it was quite
impossible to arrive at exact figures but, in all such cases, we have made estimates based
on thorough study of the facts related to the particular item, and we have aimed at a
minimum estimate rather than an exaggerated one.
The financial effect of the Board's recommendations if adopted is threefold: on
(1) the citizens, (2) B.C.H.I.S., (3) the Government.
The citizens of British Columbia will save about $2,000,000 per annum for
co-insurance charges. Those in lower-income brackets will be relieved of the payment
of premiums.
B.C.H.I.S. will lose the co-insurance income and will bear the considerable cost of
extended benefit periods for chronic cases. The Service, however, will save on the very
substantial reduction in the cost of administration and will also be relieved of the loss
on the cost of hospitalization of Social Welfare cases and Treaty Indians. The Service
is now burdened with these costs which rightly belong to other departments of Government, and our recommendations would transfer these items from B.C.H.I.S. to the
proper Government agency. In the case of Treaty Indians, nearly half a million dollars
in hospitalization costs now borne by B.C.H.I.S. would be paid by the Federal Government. The B.C.H.I.S. will further gain $1,000,000 from increased per diem grants and
an estimated $875,000 from increased premium collections, and they will lose $300,000
due to increased coverage of chronic cases. Other smaller items are clearly shown in
the tabulations referred to and the total net gain to B.C.H.I.S. is $2,100,000.
The effect on other departments of the Government or on the Consolidated Revenue
Fund would be the cost of the following items:— FF 16 BRITISH COLUMBIA
(1) Increased cost to cover full hospitalization costs of
Social Welfare cases  '.  $1,000,000
(2) Increased per diem grants from 70 cents to $ 1        650,000
(3) Grants-in-aid to nursing-schools        130,000
(4) Premiums for low-income group  70,000
Making a total of   $1,850,000
Giving due consideration to all these facts, we are satisfied, therefore, that the net
result of the implementation of all our recommendations contained herein will be a net
saving.
We wish here to emphasize strongly that higher costs reflected in hospital budgets
mean higher costs to B.C.H.I.S. which will have to be met, but this will occur because
of the operation of ordinary economic and other conditions prevailing. There is, however, nothing included in the specific recommendations of this Board which will cause,
of themselves alone, an increase in hospital costs unless it is shown in the tabulations
referred to above.
Many of the recommendations made by us will necessitate amendments in Acts or
regulations, and we wish to point out that we have neither attempted ourselves nor have
we sought technical advice on the details that would be involved in such amendments.
Above all other things that the Board learned during its deliberations is that the
people of British Columbia are intensely interested in the matter of hospital insurance.
This interest is equalled by just as keen interest beyond the boundaries of the Province.
One of the most interesting discoveries we made was that governments all over this
continent—Provincial, State, and Federal—are presently engaged in trying to solve the
problem created by the inability of the great masses to provide individually for the
steadily increasing cost of hospital service. Millions of dollars have been spent and
countless volumes of reports have been compiled on studies and surveys aimed at meeting this new and great social problem. The attention of the North American Continent
is directed to the experiment that is going on in our Province under B.C.H.I.S., and
British Columbia has the opportunity of giving a lead in the matter of hospital insurance. If we make reasonable progress in this new field of social service, we will give
that lead and create for our Province an enviable record which will be a source of great
pride to our people.
In conclusion, the Board extends to all those individual citizens and organizations
who assisted us in our task our grateful thanks. We were greatly inspired in our work
by the fine spirit of co-operation displayed by those people referred to in the register of
contributors accompanying this Report as an appendix. There are other persons—official and otherwise—who also gave us most valuable assistance but did not appear
formally before us. In justice to all the people referred to in this connection, we refrain
from singling out any for special mention. We are sure that all those who assisted us
will share in the satisfaction which comes from a sincere effort to place the British
Columbia Hospital Insurance Service on a more acceptable basis. REPORT OF THE HOSPITAL INSURANCE INQUIRY BOARD FF 17
SECTION 2.—MATTERS OF POLICY DIRECTLY AFFECTING
THE FINANCING OF THE PLAN
1. Completion of Unfinished Survey and Study.
2. Continuation of Hospital Insurance Service (Basic Plan).
3. Premium Rates.
4. Co-insurance Charges.
5. Financing the Over-all Deficits of the Plan.
6. Municipal and Provincial per Diem Grants.
7. Future Increases of Premium Rates or Curtailment of Benefits.
8. Exemption of Groups on Religious Grounds.
9. Exemption of Groups: Canadian Pacific Medical Association of
British Columbia and Telephone Employees' Medical Services
Association of British Columbia.
10. Exemption from Premium Liability:  Low-income Groups.
11. Exemption from Premium Liability:  Student Nurses under 21.
12. Benefits:  Out-of-Province Hospitalization.
13. Benefits: Out-patient Services.
14. Charges for Non-elective Use of Private and Semi-private Wards.
15. Premium Payable by Wives of Certain Veterans.
16. Hospitalization of Treaty Indians—Federal Government Responsibility.
17. Payment for Hospitalization of " Social Aid " Cases.
18. Educational Grants-in-Aid to Cost of Operation of Training-
schools for Nurses.
19. Chronic Cases: Limit of B.C.H.I.S. Liability.
No. 1.—COMPLETION OF UNFINISHED SURVEY AND STUDY
According to the terms of reference covering the duties of the Hospital Insurance
Inquiry Board, the Board is asked to file its report before the opening of the regular
session of the Legislature in 1952.
The Board has been advised by the Management Engineer Consultants, Messrs.
Stevenson and Kellogg Limited, who were engaged by the Board to make a complete
survey of the administration procedures at the headquarters of the Service, that the said
survey (which has been proceeding for a considerable time) will not be completed in time
for this Report. We have so far received from Messrs. Stevenson and Kellogg Limited
only interim (or partial) reports. They estimate it will take some months yet to finish
their work.
The actuarial report of Mr. Samuel Eckler, of Toronto, who was appointed as
Actuarial Consultant to the Board, was received in December, and should be considered
in conjunction with the final report of Messrs. Stevenson and Kellogg Limited. It is,
therefore, impossible for this Board to meet the requirements in its Commission, with
respect to submitting a complete and final report. We have accordingly restricted our
positive recommendations in this interim report to those matters coming within our study
to date, in respect to which we feel immediate changes should and can be made for the
betterment of B.C.H.I.S. and the satisfaction of the citizens of the Province.
The Board therefore recommends that the time for submitting its final report be
extended so that Messrs: Stevenson and Kellogg Limited may be enabled to complete
their survey, after which the Board may proceed with a combined study of the two reports
referred to, before filing the final report of this Hospital Insurance Inquiry Board with
the Minister of Health and Welfare. FF  18 BRITISH COLUMBIA
No. 2.—CONTINUATION OF HOSPITAL INSURANCE SERVICE
(BASIC PLAN)
The first basic question to command the attention of the Board was whether or not
British Columbia Hospital Insurance Service should be continued. Much information
was submitted by individuals and representatives of various organizations bearing on this
basic question. The information secured from submissions, together with further facts
gathered from a survey of the Hospital Insurance problem in other parts of Canada and
the United States, all pointed to the necessity for some plan that will remove the responsibility for hospital costs from the individual budget to an organized insurance plan.
As evidence that this necessity is agreed upon by all sections of the public, we would
quote from the opening paragraph of the brief of the British Columbia Hospitals' Association, as follows:—
The B.C. Hospitals' Association is now, and always has been, in favour of a compulsory
province-wide Hospital Insurance Plan.
And from the written submission of the College of Physicians and Surgeons of British
Columbia:—
There is agreement among doctors that insurance of all citizens against the possibility of a
large hospital bill is in the best interests of the community. Since the inauguration of Hospital
Insurance in British Columbia, we have witnessed numerous instances of the gratitude of patients
who have received expensive hospital care. The bills for this hospital care would formerly have
threatened their economic security.
And further, from the brief of Mr. G. H. Jackson, secretary-treasurer of the Canadian
Pacific Employees' Medical Association of British Columbia:—
There would seem to be no doubt that hospital insurance must continue. It would be contrary to the wishes of the vast majority of the electorate and disastrous to the hospitals if it was
abandoned.
During recent years there have been sensational advances in all branches of medicine, surgery, drugs, hospital services, and every other phase of health correction and
care. A member of the delegation which appeared before the Board, representing the
British Columbia Hospitals' Association, made the statement that " The practice of
medicine is fifty years behind the science of medicine "—a situation which is being rapidly
changed. Not so long ago, many people considered a hospital was a cross between a
boarding-house and a pest-house, and avoided entering a hospital because it was considered the place to take a patient only when hope was abandoned. At that time, people
of means who could afford to have nursing service made available in their homes did so
in preference to entering hospitals. A little later on (as a matter of fact, up to five or ten
years ago) hospital service was deemed to consist of bed and board, with some nursing
service, and many hospital insurance programmes were financed on a premium of about
$1 per month per family. That margin of fifty years which had existed between the
practice and science of medicine has been materially reduced during the last five to ten
years. New techniques in the science of medicine, and particularly new developments in
drugs, are responsible for a substantial increase in costs.
Higher prices of drugs and medical services, combined with the general trend to
higher levels in wages, salaries, and supplies of all kinds that contribute to hospital
service, have brought us to the point where it is almost impossible for the average head
of a family to budget for hospital costs from their own personal income. We learn on
the authority of Herbert E. Klarman, Assistant Director of the Hospital Council of New
York, writing in the Harvard Business Review for September, 1951, that the average
cost per patient-day in general hospitals throughout the United States was, at that time,
$15.65. This is a nation-wide average figure. Some localities run very much higher.
A hospital authority on the Mayo staff at Rochester, Minn., recently stated that the per REPORT OF THE HOSPITAL INSURANCE INQUIRY BOARD FF 19
patient-day cost, based on public-ward services, ran as high as $31 in some sections of
the United States.
Based on the foregoing facts, the general consensus of opinion, as expressed to the
Board on behalf of the public of British Columbia, was almost unanimously in support of
the continuance of a hospital insurance service. Spokesmen for many other bodies who
play a part in hospital service, such as the College of Physicians and Surgeons, the British
Columbia Registered Nurses' Association, and labour organizations, all stated very definitely that the organizations they represented had benefited from the inauguration of the
Hospital Insurance Service and were hopeful that it could be put on a successful operating
basis.
The conclusions of our actuary, Mr. Samuel Eckler, were set out in Chapter VIII
(entitled "Problems and Recommendations") of his report, a copy of which chapter is
to be found as an appendix to this Report.
In his submission, Mr. Eckler puts forward three possible approaches to the basic
problem of the continuance of a compulsory hospital insurance plan, as he sees the matter.
It will be noted that Approach No. 1 deals with the continuation of the present plan
of a complete service benefit, with almost the entire population of the Province being
covered.
Approach No. 2 contemplates that the present plan shall be fundamentally altered
by providing a cash per diem benefit rather than the over-all cost benefit now given.
Approach No. 3 contemplates that the compulsory hospital insurance service should
be terminated at some future date.
We wish to note first that, in view of the almost 100-per-cent support and approval
of compulsory hospital insurance which was placed before this Board, we are entirely
unable to conclude that Approach No. 3 would be acceptable to the citizens of the
Province or to the Legislature.
In connection with Approaches Nos. 1 and 2, Mr. Eckler has endeavoured in his
report, as quoted, to set out the advantages and disadvantages of each approach.
It will be conceded that such a report is deserving of the fullest and most serious
study, but this it cannot receive until the report of Messrs. Stevenson and Kellogg Limited
has also been received.
The Board therefore recommends that the B.C.H.I.S. shall continue to follow the
present plan as referred to in Approach No. 1 of the Eckler Report, subject only to the
recommendations contained in this Report of the Board, until the Board is in a position
to file its final report.
No. 3.—PREMIUM RATES
In considering the matter of premium rates, the Board was faced with requests from
many quarters for a reduction in the rates at present effective, whereas the facts obtained
regarding hospital costs and also comparative premium rates in existence throughout
Canada and the United States indicated that it would be inadvisable to recommend any
premium reduction at this time. However, as other recommendations of the Board will
reveal, it has reason to believe, even while giving due consideration to rising costs, that
there is a distinct possibility of a fuller realization of the premium income due to the
Service and a very substantial reduction in the administration costs of the Service.
In anticipation that the recommendations of the Board concerning a new system of
registration and premium payments will be accepted and implemented, the Board is of
the opinion that a further period of time should elapse during which the results of the
changed system are experienced and on record, every effort being made during that period
to effect the expected savings and realize the highest aggregate income.
The Board therefore recommends that at present there shall be no increase in the
premium rates. FF 20 BRITISH COLUMBIA
No. 4.—CO-INSURANCE CHARGES
When the Board commenced its duties at the end of May, 1951, the matter of the
co-insurance charge which had been introduced, effective April 1st, 1951, by Regulations
Nos. 14-1 to 14-6, inclusive, had become the cause of the liveliest controversy and
criticism. This criticism arose not only from the premium-paying public, but also from
many of the hospital boards and administrators throughout the Province.
In order to accurately determine the view-point of the hospitals in connection with
the matter, and the results accruing to hospitals up to that time, the Board caused a
questionnaire to be sent out to each hospital in the Province. The great majority of these
were returned, and in most cases adequate information and opinions were given. It may
be safely said that the majority of the hospitals were not in favour of co-insurance in the
form and manner in which it had been introduced. Some of them said that increased
premiums would have been preferable; some of them objected to the application of the
charge to the first ten days' stay in hospital; some believed that the imposition of such a
charge should be permissibly varied to meet the needs of any particular community or
hospital; and various other suggestions for alternative plans were put forward.
However, the larger number of hospitals, of those expressing an opinion, were in
favour of the abandonment of the co-insurance imposition.
As examples of the opinions expressed in written submissions received from hospitals, we quote as follows:—
Cumberland General Hospital.—While co-insurance may have succeeded to some extent in
reducing hospital demands, it is doubtful whether it actually represents a source of appreciable
revenue, after allowing for increased paper work, cost of collection and bad debts. Further, the
good-will of the premium-paying public towards the scheme is lessened by the fact that coinsurance charges occur at a time when they require services for which they have already paid by
way of premiums.
Grand Forks Community Hospital.—In theory co-insurance might have something to justify
it, but in practice it is a monstrosity. It presupposes that doctors are so unprincipled that they
will fill the hospitals with patients that do not require acute care. We have not found it so.
Further co-insurance has greatly increased outstanding accounts receivable, and it has multiplied
the work of the collector. It has meant more bookkeeping, more collecting, more outstanding
accounts, more office staff, and more operating expenses in many ways. In actual practice, coinsurance appears to be a failure, and there is certainly every proof that it antagonizes our
citizens.
Providence Hospital, Fort St. John.—It would appear that a more acceptable method of
having the patient share the costs of hospitalization would be to charge for at least some of the
extras, and it is our opinion that such charges would cause less controversy. Most patients
appear to regard co-insurance charges as a violation of their contract with the Hospital Insurance
Service.
The British Columbia Hospitals' Association, in effect, recommended the abandonment of the present system of co-insurance charges, by suggesting that " The Government
permit the hospitals to decide what co-insurance, if any, is necessary to make up any
deficiency in order to meet the cost of service in each hospital."
Other organizations making written submissions to the Board are quoted as
follows:—
United Steel Workers of America, Trail.—We wish to go on record as being resolutely
opposed to the co-insurance per diem payments feature of the Act. This feature is, in our
opinion, wrong in principle. The yearly premiums are paid to ensure against hospital bills, but
now when faced with the additional cost that is always involved by hospital treatment, additional
levies are made by co-insurance. ...'■'!
Vancouver, New Westminster and District Trades and Labour Council.—We submit that the
present premium rate is far too high, and with the addition of co-insurance, the basically sound
idea of hospital insurance becomes a nullity. In other words, the benefits of the scheme have
become unattractive due to the price that must be paid for the benefits received. We submit that
co-insurance be absolutely abolished. REPORT OF THE HOSPITAL INSURANCE INQUIRY BOARD FF 21
North Sidney Property Owners' Association.—We consider the government's plan for coinsurance a very objectionable feature as it places an unbearable burden on persons in the low-
income brackets, and will prevent many of them from receiving necessary hospital care. The fear
of being hospitalized and having to meet the co-insurance charges, in addition to the premiums,
may prevent some of these people from even calling in a doctor till their case has developed to
the stage where such action is unavoidable, and the result may well be the loss of one of the most
important benefits expected from the Hospital Insurance Service—namely, the diagnoses of
diseases in their early stages, when they may be successfully treated.
Farmers' Institute, District "J," Peace River Block.—We are opposed to any policy of coinsurance.
C.C.F., Peace River Executive.—Co-insurance added to the burden of those who have faithfully paid the premiums; and those persons in the low-income group, who have had to probably
sacrifice in order to pay the premium now find themselves in the position of having to pay still
more co-insurance, in the event of sickness.   Co-insurance should be abolished.
And from individuals the following are samples of written submissions received:—
Mr. G. H. Jackson, Secretary, Canadian Pacific Employees' Medical Association of British
Columbia.—Co-insurance was put into effect for the avowed intention of relieving the pressure
on hospital bed-space, particularly for minor conditions and elective surgery. It is doubtful if it
has achieved that object. What it has done is relieve the B.C.H.I.S. of a large portion of the cost
of the initial ten days' treatment, arouse the public to a spirit of indignation, and place on the
shoulders of hospital authorities the responsibility of collecting the charge. If we are to have
hospital insurance, the rates should be raised to a point where co-insurance is not necessary.
It must be realized that when co-insurance has been paid by an individual, or for a family group,
in any one year, the incentive to keep out of hospital is removed.   It can only be effective once.
Mr. R. Lingford, Salmon Arm, B.C.—As for this co-insurance, it is a tragic error, in my
humble opinion. It brings up again the phantoms of worry and fear to countless people who are
already having a hard struggle, even when in good health, to make ends meet. It may even
endanger the lives of some, who would prefer to stay away from hospital rather than be forced
into more debt, even though hospitalization is essential for them. Co-insurance kills the whole
principle of insurance. It is not insurance at all, but an unfortunate idea of extracting money
from the sick for the benefit of the hospitals. The few sick have more burden placed upon them
to pay for the many, instead of the many paying for the few.
Mr. A. H. Povah, Hospital Accounts Collector, Kelowna, B.C.—Co-insurance is the greatest
factor. It hits a man when is down and least able to take it—when his earning power is cut off
and his expenses are mounting. It hits the young mother going to hospital for her child—
attacks on young growing families. It has been stated the reason for co-insurance is that patients
over-stay at the hospital. This is not so. The patient is helpless. He has no say whatever in the
matter; the doctor orders him in, and orders him out. These patients should not be assessed an
extra $2.50 per day at a time when they are least able to pay it.
These written submissions were repeated verbally throughout the length and breadth
of the Province by individuals speaking for themselves and also acting as representatives
of other organizations of repute.
The Board, when visiting Saskatchewan to study the Saskatchewan Hospital Services
Plan, had the privilege of meeting with the executive officers of the Saskatchewan Hospitals' Association. The Board learned that no co-insurance is charged in Saskatchewan;
and, in discussing the subject with the Board, Mr. Bassett, president of the association
and administrator of the Prince Albert City Hospital, stated that they like the present
system of the S.H.S.P. whereby the hospitals are paid a definite sum twice monthly by
the Plan; and he believed that this assurance of a certain monthly income acts in some
measure as a deterrent to the overcrowding of hospitals and the temptation to secure as
large an occupancy as is possible. He further stated that the association would not
recommend a co-insurance charge and would not O.K. it unless the Government showed
a definite inability to meet hospitalization costs. Mr. Bassett continued that hospitals
would be very unpopular with the public if they took any other stand; and, furthermore,
the hospitals did not desire to go back to the position of being collection agencies.
The Board has come to the conclusion that the weight of evidence is against the
continuance of the co-insurance charge.   It is doubtful if it has accomplished its primary
■■■■     :-     	 FF 22 BRITISH COLUMBIA
objective of curtailing the abuse of hospitalization. Neither has it been demonstrated
that the additional net revenue resulting therefrom has been sufficient to outweigh the ill
will created by the charge—and the Board is of the opinion that if it is considered definitely necessary to obtain that additional revenue, it may be well and advisably sought
from other sources.
The Board therefore recommends that co-insurance charges against patients in
hospitals be completely abandoned.
No. 5.—FINANCING OVER-ALL DEFICITS OF THE PLAN
The matter of whether or not the Government should subsidize the Hospital Insurance Fund substantially or should expect it to be self-supporting is a subject of basic
policy. Many submissions made to the Board were to the effect that hospital costs have
reached the point where the individual is no longer able to meet hospital bills in full. By
the same standards, it can be assumed that no group of individuals can meet hospital
costs for that group without a subsidy.
Information gathered from many sources has convinced the Board that the premium
income collectable by B.C.H.I.S. can be substantially increased and that administration
costs can be substantially reduced. It is impossible at this time to estimate to what
extent the net premium income will go toward meeting future over-all hospital costs, and
until changes as recommended by this Board relating to registration and premium collections are actually established, it is not possible to arrive at a reliable estimate of the
amount likely to be required from consolidated revenue and the definite formula for
Government support of the Service from that source.
The Board therefore recommends that a long-range programme of financing the
Service be developed, with a definite policy and formula of Government financial support,
and that there be established a policy that should a deficit develop in the hospital insurance financial year for reasons over which the hospitals and B.C.H.I.S. had no control or
which could not reasonably be foreseen by B.C.H.I.S. or the Government, then the said
deficits shall be paid from consolidated revenue.
No. 6.—MUNICIPAL AND PROVINCIAL PER DIEM GRANTS
A great deal of evidence was gathered, and many opinions and suggestions were
submitted to the Board regarding the entire subject of municipal contributions toward
hospital finances, not only in connection with the capital cost of construction and equipment, but also with regard to the operating costs. In view of the situations existing in
some localities, the main interest tended to centre on the matter of the municipal liability
for, or contributions to, capital outlay. This particular aspect will be dealt with elsewhere. We are here concerned with the matter of municipal contributions to hospital
operating costs.
While this subject was not referred to in many written briefs placed before the
Board, it was very generally discussed between the Board and those appearing before it.
As an example, however, of opinions verbally repeated quite frequently, we quote the
following from the written submission of the Hospital Employees' Federal Union, of
Vancouver, dated August 13 th, 1951:—
There has been no increase in the contribution of 70 cents per day toward the upkeep of
hospitals which the municipalities have been paying for the past ten years. A contribution of
70 cents per day to-day is equivalent to only 35 cents as compared with ten years ago. In terms
of purchasing power, hospitals are receiving only 50 per cent of the value of the contribution at
the time the figure of 70 cents was agreed upon.
Of all municipal services, hospitals alone have not received an increased share from local
taxes. Roads, sewers, schools, fire and police protection, and the whole range of essential municipal services are now being financed and maintained at much higher costs.   Hospitals are no less REPORT OF THE HOSPITAL INSURANCE INQUIRY BOARD FF 23
important to citizens than any of these other services. The local community has a responsibility
towards its hospitals. It is scarcely logical that such an important service should be discriminated
against in this way. Hospitals should share in the increased taxes which are being levied and
collected by local authorities.
It is undeniable that the municipal contribution of 70 cents per patient-day toward
hospital expense is a figure that has remained unchanged over a considerable number of
years, when every comparative figure was rapidly increasing. There is perhaps not much
need to develop an argument to demonstrate the fact, or the opinion, that in the light of
present-day prices and values this 70-cent contribution is no longer fair or adequate.
Proceeding to another phase of the same subject, many suggestions were made to
the Board as to the desirability of changing the basis of contribution—substituting for
the present per patient-day basis a per capita basis, enabling much simpler calculation
and doing away with a very considerable amount of record-keeping, accounting, and
checking. On this particular phase of the subject, The Corporation of the City of Penticton had the following to say, in a written brief presented to the Board on August 8th,
1951:—
Firstly, the present method of invoicing municipalities for the per diem charges on a patient-
day basis is in our opinion a costly undertaking, costly not only for the Insurance Service in
invoicing municipalities on the basis of actual occupancy of a hospital bed, but also costly to the
municipality being invoiced in that each item on the invoice must be checked to insure that the
municipality is not being invoiced for a patient not the responsibility of the municipality concerned. It has been our experience that much correspondence is necessary in order to establish
responsibility in some cases and the facts when obtained are so meagre that the municipality
originally billed is eventually stuck with the costs.
It is, of course, appreciated that recourse may be had to a board of arbitration to establish
responsibility but the machinery is too ponderous and the delay is too great for a municipality to
make much use of this procedure, especially where comparatively small amounts are concerned.
It is further noted that there is great delay in the invoicing on a per diem basis. In some cases
the invoice is not received for many months after the patient has been discharged from the hospital and it will, of course, be appreciated that until the account is received by the municipality
the Hospital Insurance Service cannot collect the per diem charges.
It is suggested that the per diem charges be made on the basis of population such as this
municipality enjoyed during 1950. A per capita basis of per diem charges would enable the
council to budget for the full amount which would be required to be paid during the year and
the Hospital Insurance Service would also have an indication of what revenue might be expected
from this source.
The same view-point has been verbally put forward by several hospital administrators and municipal officials directly concerned with the receipt or payment of these
contributions. The Board was further informed by the Minister of Health and Welfare
that for a time the Department gave to the municipalities the option of contributing on
the per capita basis, but that due to a partial acceptance only of the option it was afterwards discontinued and the patient-day basis reverted to entirely.
The Board has become convinced that, from any point of view, what might be lost
to the Hospital Service by placing this contribution on a per capita basis will be saved in
costs attachable to its operation.
We now proceed to a further phase of this particular problem—a phase concerning
which very strong opinions were expressed to the Board from time to time. This concerns
the entire subject of the contributions made, or not made, by a municipality or by an
unorganized territory toward the cost of hospitalization (of residents of such municipality
or unorganized territory) in hospitals in other municipalities, more particularly where
there is no hospital in the municipality or unorganized territory from which the patient
comes.
As in the case of the first phase of this entire problem, the interest and discussion
tended to centre around the contribution to capital expenditure, but nevertheless there
exists a firmly based opinion in the organized municipalities, and on the part of the
hospital boards there, that the per patient-day contribution toward hospital costs from FF 24 BRITISH COLUMBIA
outside municipalities or unorganized territories is not adequate or equitable, and that
the said outside municipalities or unorganized territories should be required to make a
larger contribution to the cost of hospital care of its residents than the contribution made
by a municipality having a hospital within its own limits. The entire subject is a very
involved and contentious one, and it is not possible to set out here all the considerations
or arguments that are advanced from different view-points, but the Board has come to
certain conclusions on all these matters, and—
The Board therefore recommends:—
(1) That the per diem contribution paid by municipalities, or by the Government in the case of unorganized territories, shall be increased from the
present basis of 70 cents per patient-day to the sum of $1 per patient-day:
(2) That consideration be given to basing the contribution mentioned above
on a per capita basis rather than the present per patient-day basis, with
the per capita rate thereof being set to produce an approximately equal
amount of revenue to the Service:
(3) That where a resident of a municipality or of an unorganized territory is
hospitalized in a hospital outside the confines of his own municipality
or territory, the said municipality, or the Government on behalf of the
unorganized territory, shall pay an additional 25 cents per patient-day in
connection with such patients. This additional payment shall be made
direct to the hospital in question, to be treated as non-operating revenue
of the receiving hospital, and the hospital concerned shall be required to
bill the proper authority for this additional 25 cents per patient-day charge.
No. 7.—FUTURE INCREASES OF PREMIUM RATES OR CURTAILMENT
OF BENEFITS
When giving consideration to the desirability or otherwise of a change in the
premium rates now in effect, and on which point the recommendation of the Board is
recorded in Recommendation No. 3, the Board also took under advisement the changes
which had been made in premium rates since the initial date of the operation of the
Service—namely, January 1st, 1949.
There was an increase in the original premium rates, which increase was made
effective during the first year of operation of B.C.H.I.S.—namely, 1949. There was then
a further increase in the premium rates, effective for the year 1951. This was authorized
by the Legislature of 1951, and its actual operation was effective from July 1st. However, the premium which was altered was the annual premium for the calendar year. The
Board has elsewhere made clear that it is in agreement with the principle and policy of an
annual premium, although this may be paid or payable in two instalments. They have
given careful thought and consideration to the procedure which has been followed up to
date in putting increases of premium rates into effect, and they are of the opinion that it
is unfair and not in accordance with sound business practice to institute an increase in a
premium under a Compulsory Insurance Act with the said increase having a retroactive
effect. It is not necessary to advance all the considerations which caused the Board to
come to this definite opinion. It should be sufficient to point out that such a retroactive
step causes a very considerable resentment in the minds of the premium-payers of the
Province, who generally believe that they are entitled to full and adequate advance notice
of any such changes as may be contemplated and finally approved by legislative action.
The Board therefore recommends that there shall be no further or future increase in
the premiums required to be paid annually, and no reduction of benefits conferred by the
Act, within any premium year, and that any such changes as may be, from time to time,
authorized by Act of the Legislature, affecting the annual premium payments, or the REPORT OF THE HOSPITAL INSURANCE INQUIRY BOARD FF 25
benefits conferred by the " Hospital Insurance Act," shall have effect only at the commencement of the next premium year.
No. 8.—EXEMPTION OF GROUPS ON RELIGIOUS GROUNDS
In view of the fact that application was received from another religious body for the
same exemption for their members as is now enjoyed by members of the Christian Science
Church, the Board gave the matter careful consideration. It seems obvious that if the
door to exemption on religious grounds was widened by the admission of further bodies,
the requests for this treatment would increase and the difficulty of deciding as to the
merits of the application of one denomination as against that of others would be a most
serious problem. Further, the Board takes the position that Hospital Insurance Service
in its present form is a public service of the Province that may be compared with education, other forms of social assistance, and even the provision of highways, toward which,
as in the case of all such public services, every citizen must contribute his fair share for
the general good, even if the benefits arising from such public services are not equally
distributed amongst individuals.
It should be noted that the Board has ascertained that in the Province of Saskatchewan members of the Christian Science Church are not exempted from the provisions
of the Saskatchewan Hospital Services Plan and that no application for exemption by
that group has been made.
The Board therefore recommends that in future no group of citizens of the Province
be exempted from the provisions of the " Hospital Insurance Act" on religious grounds
and that the present exemption extended to members of the Christian Science Church
shall be discontinued.
No. 9.—EXEMPTION OF GROUPS: CANADIAN PACIFIC EMPLOYEES' MEDICAL ASSOCIATION OF BRITISH COLUMBIA AND TELEPHONE EMPLOYEES' MEDICAL SERVICES ASSOCIATION OF BRITISH COLUMBIA.
Apart from the group of persons which has been up to date exempted on religious
grounds—namely, the Christian Scientists—the only other groups exempted from the
provisions of the Act are the members of the Canadian Pacific Employees' Medical
Association of British Columbia and of the Telephone Employees' Medical Services
Association of British Columbia.
The Board wishes to go on record as believing that it is desirable to look forward
to the time when there shall be no group of citizens of the Province subject to special
exemption from the provisions of the Act, and—
The Board therefore recommends that the position of the present exempted groups
referred to above shall be reviewed by competent authority as soon as possible, with
a view to bringing the members of such groups directly within the operations of the
B.C.H.I.S. at such a time as it may be found feasible and advisable to so do.
No. 10.—EXEMPTION FROM PREMIUM LIABILITY:
LOW-INCOME GROUPS
As was to be expected, many representations were made to the Board on behalf
of those people in receipt of very low incomes who are nevertheless expected to pay
B.C.H.I.S. premiums because they are not in any class to which exemption has so far
been granted. These not only included relatives and dependents of protected veterans,
etc., but the many private people without any particular classification or standing who
exist on a limited retirement or investment income, or on limited earnings. Dealing particularly with the first class, that of the dependents or relatives of veterans, we quote from
a brief of the British Columbia Command of The Canadian Legion, as follows:— FF 26 BRITISH COLUMBIA
Low Income Groups (Exemptions)
For three years in succession we have presented requests to the B.C. Government for exemption from payment of premiums by: —
(1) Wives of recipients of War Veterans Allowance.
(2) Widows—recipients of an allowance under the regulations of the War Veterans
Allowance Act.
(3) Recipients of Dependent Parents Pensions paid under the regulations of the Canadian Pension Act.
(4) Dependents of members of the Canadian Armed Forces (on overseas service).
(5) Other low income groups not included in the groups named in this brief.
It should be noted that as a result of Department of Veterans' Affairs regulations, the Federal Government has relieved Provincial Governments of large expenditures of money through
Social Welfare sources, by paying War Veterans Allowances to veterans, and to their widows, and
also by granting complete hospital and medical services to war veterans, in receipt of War
Veterans Allowance, irrespective of the cause of disability requiring treatment.
In addition, grant of pensions to dependent parents of deceased veterans by the Federal
Government has assisted in relieving Provincial Governments from extra expenditures on Social
Welfare.
The maximum allowance paid under War Veterans Allowance Act regulations is: Married
veteran, $70.83;  single veteran, $40.41;  widow, $40.41.
Dependent parents pensions usually run around $40.00 monthly.
Present Exemptions
The Provincial Government has already recognized that low income groups should not be
called upon to pay hospital insurance premiums, but such exemptions have only covered those
people in receipt of Old Age Pensions and the Blind who receive a pension. Persons in receipt
of Social Assistance are also exempted from payment of premiums.
We submit that recipients of War Veterans Allowances, their widows, and those in receipt
of Dependent Parents Pensions from Federal sources are in a less favourable financial position in
British Columbia than people receiving Old Age Pensions, including the Blind.
We feel that action to exempt the groups that we have named in this brief is long overdue.
Other Low Income Groups
We realize that other groups in receipt of low incomes, as well as those in whom The
Canadian Legion is primarily interested, have a similar claim to exemption from payment of
hospital premiums, and it will be noted that they are also included in this brief.
Cost of living is not going down, and we feel that steps should be taken at the earliest possible date to exempt low income groups from payment of hospital premiums and that they be
provided with a hospital card.
As regards the over-all body of people in the low-income groups, we quote from the
brief of the Vancouver, New Westminster and District Trades and Labour Council:—
There is a large group of persons who cannot be classed as average wage earners—namely,
the people in the low income group—and we suggest that the purpose of the legislation under
section 7 was to alleviate the hardship of assessing pensioners and other persons for the Hospital
Insurance premium who are not in a position to pay yet are deserving of the benefits under the
Act.
This committee feels that there are many persons equally deserving of the benefits and are
now being assessed who are in no better position to pay the premium than the pensioner. Persons
earning $100 per month or less are faced with a continual struggle to meet the high cost of living
without the added burden of having to pay hospital premiums. As would be the case with pensioners, assessing people in this income group is in effect depriving them of the basic necessities
of life and is not consistent with the whole tenor and purpose of the legislation which is to benefit
all persons even those who cannot possibly meet the premium payments.
We submit that section 7 of the Act be amended to include all persons in receipt of income
of $100 per month or less.
From the brief of the British Columbia Retired Civil Servants' Association:—
At the general meeting of our Association today I was directed to call your attention to
many of our members who receive less than the old age pension rate which entitles recipients to
free medical aid and hospitalization. Last year, in addressing our body, the Hon. A. D. Turnbull
stated that those who could not pay for the hospital service would not be compelled to do so with
no fixed limit as to income.   At the same time these of our members feel that they are actually REPORT OF THE HOSPITAL INSURANCE INQUIRY BOARD FF 27
under legal compulsion to pay the premiums and are under the threat of prosecution if they fail
to do so. What they may be given as a favor they would rather receive as a right. We would
ask therefore that your Commission take this matter into consideration, and, if possible, recommend some legislation that would relieve those in these low income brackets of their present
anxiety.
And from the brief of the B.C. Federation of Labour:—
We ask this Committee to give serious consideration to the following proposals:—
(2) That Clause 7 (exemption from premiums) be extended to include all those whose
total income is derived from compensation pensions, war pensions and pensions
from other Governmental sources, or whose income is less than $100 per month.
Also from the North Sidney Property Owners' Association:—
We feel, very strongly, that something further should be done to provide relief from hospitalization costs to persons in the lower income brackets.
In addition, we quote from letters received from individuals, which contain samples
of many representations that were placed verbally before the Board by people all over
the Province in similar categories, who felt themselves to be in distressing positions:—
From Mrs. K. H. Ramage, Sidney.—It is quite impossible for us to continue paying the
hospital insurance. We are living on a fixed income of under $70.00 a month and we are not
old enough to claim the old age pension.
We own our own house and by the time we have paid taxes, insurance, water, light and fuel
there is little enough left for food, let alone anything else.
Up to now we have paid the premiums out of our capital, which of course reduced our
income and cannot go on.
In any case people in our circumstances cannot afford to call in a doctor and pay the
enormous fees they are asking now.
From Mr. Albert Flavell, White Rock.—I wish to make the following submissions to your
Board:
That the recent increase in B.C.H.I.S. fees is a direct tax on the low income and low wage
group for the benefit of high income groups.
The writer is in the very low income group and owing to the high B.C.H.I. fees is unable
to see a doctor on necessary occasions and thus is unable to get hospitalization.
Persons of my age—62—and income, therefore, are condemned by B.C.H.I. to the use of
hospitals only for the purpose of getting a passport to the cemetery.
Except for food the $30.00 B.C.H.I. levy is my largest yearly expense, and is 20% of my
expected yearly cash income.
The Blue Cross protection @ $12.00 per year from 1943 to 1948 was enjoyed by me and
was quite satisfactory.
We wish to make it clear that many of these submissions were made to the Board
prior to the introduction of the Federal old-age pension for people of 70 years and over,
and the implementing legislation passed by the special session of the British Columbia
Legislature. Prior to this special session, the Minister of Health and Welfare appeared
before the Board and discussed what general policy might be adopted concerning hospital
insurance premiums, etc., for the entire class of people in low-income brackets. The
Board had not at that date had sufficient time to give careful consideration to the subject
but, as a result of its further deliberations, has arrived at a decision which it thinks may
fairly deal with the whole problem, and—
The Board now recommends that in the case of persons not otherwise exempted
from the personal payment of premiums and who can establish that their income is not
more than $720 for the year in the case of a single person or $1,200 for the year in the
case of a married person, the said persons shall be exempted from personal payment of
the premium but that the proper premiums for them shall be paid to B.C.H.I.S. by the
proper Government department. FF 28 BRITISH COLUMBIA
No.  11.—EXEMPTION FROM PREMIUM LIABILITY:      >
STUDENT NURSES UNDER 21
The position of student nurses with regard to payment of B.C.H.I.S. premiums
was placed before the Board in writing by one or two organizations. The Kamloops-
Tranquille Chapter of the Registered Nurses of British Columbia has the following
to say:—
We understand that University students are exempt from this ruling, in which case do you
not think that student nurses should come under the same category?
Speaking for several individuals, Mr. H. H. Piper, of Kamloops, wrote as follows:—
I certainly think the Hospital Insurance Service must be pretty hard up, on the other hand,
they should not be after collecting $15.00 from every student nurse in training in B.C. hospitals,
when they have to collect from student nurses when they have already paid through the parents.
The Royal Columbian Hospital of New Westminster made the following suggestion:—
Nurses in training be recognized by the Hospital Insurance Service as students until they
reach 21 years and consequently remaining as dependents under coverage of parents or guardians.
The matter, which is an important one to those concerned, was followed up verbally
in the discussions before the Board by such organizations as the Registered Nurses'
Association of British Columbia and others, and it was agreed that the educational
standing of student nurses in this regard should be recognized.
The Board therefore recommends that student nurses, not over the age of 21 years,
be recognized as dependents in the same manner as those persons presently covered by
subsection (d) of section 1 of Regulation 1, under which dependents are defined.
No.  12.—BENEFITS:   OUT-OF-PROVINCE HOSPITALIZATION
The limited benefits allowed a beneficiary under the Act for hospitalization outside
the Province of British Columbia were the subject of a considerable number of representations made to the Board. These had to do not only with the particular situation
which exists in certain border areas such as the Peace River Block, but also with the
entire matter of non-elective hospitalization outside the Province.
The following are quotations from some of the written briefs submitted to the Board,
having to do with the difficulties caused by geographical location:—
Dawson Creek Chamber of Commerce.—Where a registrant leaves the province, the
B.C.H.I.S. will only pay $6.50 a day for a period not exceeding thirty days. Situated as we are
in a town adjacent to the border, this works a hardship on border residents. It is very often
necessary to send a patient to the City of Edmonton (which is the closest large medical centre)
for further treatment and it is our opinion that the benefits paid by the B.C.H.I.S. should be
extended to persons who are attending hospitals outside the Province on the advice of their
physicians. They are entitled to unlimited coverage within the Province, and should not be
prejudiced due to geographical location. This matter has been taken up with the B.C.H.I.S. by
the Dawson Creek Chamber of Commerce before but nothing in a remedial way has been done.
Farmers' Union of Alberta, B.C. Section.—If section 28 of the Act cannot be brought into
effect so as to allow patients full benefits under the Act when forced to seek specialists' advice at
Edmonton, and to be hospitalized there, then some special arrangements should be made where
beds can be secured at Vancouver whenever necessary and not just in case of life or death, and
that some allowance should be made the patient for the additional travelling costs. Our doctors
here are all familiar with Edmonton doctors and hospitals, and this is not the case when it comes
to Vancouver.
C.C.F., Peace River Block, Dawson Creek.—The geographical location of the Peace River
Block has not only retarded development in this section of British Columbia, but has created
problems here such as probably will not be found in other areas of British Columbia.
As rural hospitals are not as well equipped as their urban counterparts, many persons who
require specialist treatment must travel to Edmonton which is the nearest city to secure this
service, and because this city is outside the province, persons unfortunately needing treatment are
penalized by going to Edmonton as the B.C.H.I.S. only pays $6.50 per day for thirty days, REPORT OF THE HOSPITAL INSURANCE INQUIRY BOARD FF 29
whereas if they could afford to go to Vancouver then the B.C.H.I.S. would pay the rates allowed
to the hospitals in the latter City.
Mr. W. G. Cowan, Postmaster, Field, B.C.—Due to our location in the province, which is
only about 12 miles from the Alberta border line, we are compelled for reasons of economy in
transportation and at the same time to secure the services of competent doctors, to go to Banff,
Alberta, when hospitalization is necessary, but because of this we are penalized by the B.C.H.
Commission. We pay the same premiums as other residents of the Province but only receive
about half the benefits. The Commission pay $6.50 per day for hospital accommodation; all
other extras such as medicines, X-rays, dressings, etc., has to be paid by the patient. This, you
will agree, is poor coverage compared to other residents. Such a set-up is causing much concern
and bitterness against B.C. Hospital Insurance, especially to the working class in the lower income
groups.
It should, however, be clearly understood that these are not the only places which
by reason of their geographical location find it almost essential to send residents out of
the Province for their hospitalization. Where this action is non-elective and not of their
own choosing, it would certainly appear at first consideration that, having paid the same
premiums as all other registrants, the people referred to are entitled to the same measure
of protection against hospitalization costs, wherever that hospitalization needs to occur.
There is, in addition to the exigencies imposed by boundary or geographical locations,
the matter of persons fully covered by the payment of premiums who are absent from
the Province and because of circumstances over which they have no control are forced
to use the services of hospitals elsewhere and may consequently incur bills of much
greater proportions than if they were hospitalized in the Province of British Columbia.
The allowed benefits, being limited as to both rate and time, seem to the Board to
be somewhat less than fair. However, the Board realizes that there must be some limitation placed on these benefits in order to prevent abuse from one source or another, and
in an attempt to reach a more reasonable and equitable solution of the problem—
The Board now recommends that when a registrant under B.C.H.I.S., or his dependents, in good standing is compelled by circumstances beyond his control, or on the
definite advice of his physician in British Columbia, to take hospital treatment outside
the confines of the Province (more particularly when the home of the patient is so
geographically located as to make the out-of-Province hospitalization necessary or
desirable), B.C.H.I.S. shall pay for the said hospitalization a rate of $6.50 for each
patient-day up to a limit of thirty days, plus a maximum of 50 per cent of the cost of all
extras which would be covered completely by B.C.H.I.S. if the treatment was in a
hospital in the Province.
No.  13.—BENEFITS:   OUT-PATIENT SERVICES
Many suggestions were made to the Board with regard to out-patient services,
especially those in connection with diagnostic procedures. After exhaustive consideration of these several suggestions, the Board was obliged to recognize the fact that revisions
are desirable in the services already included or to be included in the Hospital Service
plan, but did not consider this was a proper time for a recommendation for the extension
of services or changes in the regulations relating to out-patient treatment.
The Board, however, feels that study and due consideration should be given as
soon as possible to this phase of hospitalization and, because of the possibility that some
extension of out-patient benefits may be a desirable deterrent to bed occupancy and
effect a possible net saving in total hospital costs,—
The Board therefore recommends that careful study be given as soon as possible
to the question of benefits having to do with out-patient services of hospitals, with a view
to setting up the most desirable scheme from the view-point of service and the insured
public, and that changes as decided upon be put into effect in the Province. FF 30 BRITISH COLUMBIA
No. 14.—CHARGES FOR NON-ELECTIVE USE OF PRIVATE
AND SEMI-PRIVATE WARDS
There have been many requests for elimination of the extra charge over and above
the public-ward rate for private and semi-private wards when occupied by patients who
do not elect to occupy private or semi-private wards but are placed therein because of a
lack of public-ward accommodation—such patients having paid their premiums.
A general opinion expressed before the Board in this matter is reflected in the
recommendation of the British Columbia Federation of Labour, quoted as follows:—
We ask this committee to give serious consideration to the following proposals:—
(3)  That whenever a patient requires hospital care and beds are available, irrespective
of the ward, that those patients be admitted without any extra cost to the patients.
The Board therefore recommends that in the case of non-elective use of private-
or semi-private-ward accommodation in hospitals within the Province there be no extra
charge to B.C.H.I.S. registrants for the said accommodation.
No. 15.—PREMIUMS PAYABLE BY WIVES OF CERTAIN VETERANS
On a point related to the treatment of pensioned veterans and other persons of low
income, representations were made to the Board concerning the premium payable by the
wife of a veteran who is himself completely covered for hospitalization by the Department
of Veterans' Affairs, and for whom, therefore, no B.C.H.I.S. premium is payable. It had
apparently become the custom, because of the changing regulations applicable to D.V.A.
pensioners, for the administration of B.C.H.I.S. to take the stand that although such
veteran might be completely covered for D.V.A. treatment for pensionable disability, he
must, nevertheless, pay a premium to protect himself from charges which might be made
by a general hospital in the event of his requiring hospitalization for some other ailment
which, in many cases, might be the result of an accident. Having taken this stand, the
B.C.H.I.S. also decided that in any case the wife, not being a single person, must be
covered by payment of the full premium imposed on the head of a family.
The entire matter is a very involved and complicated one, and it would seem impossible to lay down rules that would cover every contingency that arises in connection with
such a person. The Board realizes the difficulty of stating a permanent policy in this
regard. However, in an attempt to cover the comparatively few cases where hardship
would otherwise be inflicted—
The Board now recommends that in the case of married war veterans who are
themselves completely covered for hospitalization by the provisions or regulations of the
Department of Veterans' Affairs at the time being in force, the premium required to be
paid by, or for, his wife (in case the family income is over $1,200 per annum) shall be
the premium of a single person.
No. 16.—HOSPITALIZATION OF TREATY INDIANS—FEDERAL
GOVERNMENT RESPONSIBILITY
The Department of Indian Affairs of the Dominion Government pays to B.C.H.I.S.
premiums as called for by the " Hospital Insurance Act" for Indians living on reservations in the Province. It has been brought to the attention of the Board that in 1950
the hospitalization cost of Treaty Indians exceeded the premiums received for the entire
group of Treaty Indians by over $353,000, and it is estimated that the excess cost of the
hospitalization of Treaty Indians in 1951, above the amount of premiums received for
the entire group, will amount to over $435,000. REPORT OF THE HOSPITAL INSURANCE INQUIRY BOARD FF 31
According to information placed before the Board, it is an undoubted fact that
Treaty Indians, as a group, show a very high incidence of illness, resulting in a longer
length of stay in hospital than that of the average patient.
At the time the members of the Board visited Regina to study the Saskatchewan
Hospital Services Plan, they were informed that the Saskatchewan Plan did not accept
the responsibility for hospitalization of Treaty Indians within the Province on a premium
basis, but that the complete cost of such hospitalization remained the responsibility of
the Dominion Government. The Board is of the opinion that the Province of British
Columbia is certainly not being fairly treated in this connection, nor should it continue
to bear the very heavy burden imposed upon it by a particular group, which, prior to the
enactment of the "Hospital Insurance Act," was the complete responsibility of the
Federal authorities, and—
The Board therefore recommends that arrangements be made with the proper
department of the Government of Canada for payment by it of the total cost of hospitalization of Treaty Indians of British Columbia.
No.  17.—PAYMENT FOR HOSPITALIZATION OF "SOCIAL AID" CASES
It has been drawn to the attention of the Board, by the Commissioner of B.C.H.I.S.,
that the cost of hospitalization for those patients generally known as Social Welfare cases,
and including specifically (1) Social Assistance and Japanese, (2) Old-age pensioners
and blind pensioners, (3) Mothers' Allowance cases, and (4) Child Welfare cases, was
very considerably in excess of the premiums paid to B.C.H.I.S. on behalf of the total
number embraced within these groups. Messrs. Stevenson and Kellogg Limited have
supplied the Board with the actual figures for the year 1950. The cost of hospitalization
of persons coming within these groups during that year was $1,960,559, and the total
premiums paid to B.C.H.I.S. to cover the complete membership of these groups was
$1,010,857, indicating that the hospitalization of this number cost $950,000 in excess of
the total premiums for the entire group.
The Board was also given the 1951 figures on an estimated basis. At the time these
estimated figures were compiled, the exact figures to August 31st were available. The
estimated figures for the entire year are: Hospital costs, $2,552,860, and premium
receipts, $1,284,623, or an excess cost of $1,268,237. Against this, however, must be
set the co-insurance charges, which will be, or have been, paid by or on behalf of those
persons hospitalized, which is estimated to amount to $253,000, so that it may be said
that the 1951 excess of cost over revenue, as affecting this class of persons, is approximately $1,000,000.
The British Columbia Hospitals' Association took a keen interest in this phase of
the operations of B.C.H.I.S., and we quote from their brief, as follows:—
Social Welfare
A study of the incidence of illness and the average length of hospitalization will disclose
that the cost of hospital service to persons in receipt of social assistance is considerably in excess
of the premiums paid by the Government on their behalf. We feel that this burden should not
be passed on to the insurance premium paid by the public. We feel that an appropriate amount
should be paid into the Fund through Provincial Welfare budgets to cover this.
Despite ail efforts to restrict stay in hospital to persons really in need of hospital care, and
for no longer a period than is necessary, many cases of over-stay do occur. The causes almost
invariably come under the heading of welfare. The cost of this should not be debited against the
hospitals. Nine times out of ten cases of this kind are the direct result of lack of suitable provision elsewhere. Thus a problem which does not properly belong to the hospitals is thrust upon
them. We feel that suitable Provincial-Municipal grants should be paid into the Fund to take
care of this.
It may, of course, be claimed that the fact that there is an excess of cost over
premium income in connection with these cases does not make any difference in the long FF 32 BRITISH COLUMBIA
run because the Government of the Province is meeting the deficits of the B.C.H.I.S.,
and, therefore, if it pays specifically out of welfare funds or consolidated revenue for this
hospitalization, it would have to meet a lesser deficit of B.C.H.I.S. The Board feels,
however, that it must not lose sight of the fact that it is dealing with an insurance service,
and that these particular cases constitute what would be called in commercial insurance
circles a " hazardous risk," which risk would be either refused by the insurance brokers
or subjected to a special excess premium. Nor does the Board consider it is fair that
B.C.H.I.S. (which in a measure is a separate subdivision of the Department of Health
and Welfare and which is asked to submit its own accounts covering all operations under
the Act) should be compelled to include therein a particular class of operations which it
knows is being conducted at a loss of $1,000,000 per annum.
It must be realized that if there were no Government Hospital Insurance Service,
Health and Welfare or some other agency would be responsible for the actual hospital
bills of these people.
The Board therefore recommends that those persons comprising the groups of
Health and Welfare cases referred to above be no longer accepted by the Service on an
ordinary premium basis, but that the responsible Government department—namely, the
Department of Health and Welfare—pay the full cost of hospitalization of all such
persons coming within these groups, such payments to be made to the B.C.H.I.S.
No. 18.—EDUCATIONAL GRANTS-IN-AID TO COST OF OPERATION
OF TRAINING-SCHOOLS FOR NURSES
The Board heard a considerable number of representations having to do with the
implications arising from the fact that the cost of training student nurses (in places where
the hospital actually has a training-school) is included as part of the total hospital-
operations cost and is, therefore, reflected in the estimated, and finally accepted, budgets
and the per diem rates. It must be remembered that the number of hospitals actually
operating training-schools for nurses is a small minority of the total number of hospitals
in the Province.
Amongst the written submissions placed before the Board, the British Columbia
Hospitals' Association had this to say on the subject now dealt with:—
Education
Part of the work of certain hospitals is purely educational. We feel that the cost of this
should not be a charge against insurance premiums, neither should it be permitted to place an
unfair burden on the student. Education in hospitals is by no means limited to student nurses.
It includes internes, and different classes of technicians. We feel that the cost of education
should be assessed separately from the cost of service to patients, and that the rate paid to hospitals with approved educational programs should take the educational program into consideration. We feel that the cost of education in hospitals should be calculated and an equivalent
amount paid into the Insurance Fund from Provincial Education budgets to cover that cost.
The Registered Nurses' Association of British Columbia dealt with the matter as
follows:—
At the present time the cost of operating schools of nursing tends to be confused with the
cost of operating hospitals. Schools of nursing should operate under independent budgets which
set forth clearly all sources of income and all estimated expenditures.
Government has accepted responsibility for education for the professions with the exception
of nursing. We believe that the Government has a responsibility for nursing education as well
and we urge that where it can be shown by recognized methods of cost analysis that a school of
nursing is costing the hospital more than the value of services given by the students of that school
this difference be met by Government grant-in-aid to the school.
And the Royal Columbian Hospital, at New Westminster (which was not at that time a
member of the British Columbia Hospitals' Association), expressed a similar view-point
in a suggestion worded as follows:— REPORT OF THE HOSPITAL INSURANCE INQUIRY BOARD FF 33
Education grants (should) be provided training hospitals to subsidize student premiums,
instructors' salaries, cost of uniforms, food, laundry, linen, etc., rather than have these expenses
included in the operating costs of such hospitals.
It was further pointed out to the Board that the few training-schools in existence in
the hospitals in British Columbia were regularly training a larger number of student
. nurses than sufficed to supply their own year-to-year need of trained nursing personnel,
and that they were, therefore, undertaking this educational training partly for the benefit
of all hospitals of the Province.
The Board endeavoured to ascertain, with a degree of certainty, the margin of net
cost to a hospital which operates a training-school for nurses, arising out of the difference
between salary, room, board, or other costs or allowances paid to student nurses and
instructors (plus the cost of building upkeep and maintenance) and the value of the
services rendered in the hospital by the student nurses. It would appear that no positive
figures are available, but in the Province of Saskatchewan the Board was informed that
a study of training-school costs made in the general hospitals at Regina and Saskatoon
showed the services given by student nurses to have a value much less than the cost of
training, the differential varying from $60 to $140 per trainee per annum. These facts
being taken into consideration, there would appear to be ample justification for support
of the suggestions and submissions made to the Board, as already outlined.
In addition to this, it must not be forgotten that there is a very widespread impression prevalent throughout the Province that the premium-payer in certain sections of
the Province, adjacent to what may be called only " moderate " hospitalization facilities,
is unfairly called upon by being compelled to pay exactly the same premium as the
residents of an area adjacent to a hospital with far more adequate and costly facilities.
While the problem of a possible classification of hospitalization facilities has not
been dealt with exhaustively in this Report, the general subject may be referred to in
other parts hereof. Confining the matter to the particular subject of the cost of training-
schools, however, the Board feels that a case has definitely been made out, and—
The Board therefore recommends that training-schools for nurses, in conjunction
with hospitals within the Province, be considered as educational institutions in so far
as it is necessary to enable them to come within the provisions for grants-in-aid from
the Department of Education, to the end that the net cost of operating such training-
schools shall in no way be a part of, or taken into account as, an operating cost to be
covered by B.C.H.I.S.
No. 19.—CHRONIC CASES:   LIMIT OF B.C.H.I.S. LIABILITY
While another recommendation of the Board has dealt with the matter of procedure
necessary in order to handle properly the very important subject of diagnosis of chronic
cases, the Board nevertheless feels that there are very weighty considerations which justify
further action to alleviate the burden that may be placed upon certain sufferers who enter
an acute or general hospital and are later found to be in the " chronic " classification.
It has been pointed out that there are many such patients (not being the responsibility of the Social Welfare Department) whom it is found impossible to move from the
said acute or general hospital at the time it is decided that the patient is a chronic case.
This situation arises from various causes, which will be easily understandable, the chief
amongst them being the lack of available beds in institutions for the treatment of chroni©
ailments and the inadvisability of returning the said patients to their homes.
It cannot be denied that the particular cases to which we have referred are still, to
some degree, a responsibility of the Province as a whole, and if the Province does not
recognize this responsibility in some degree, directly, such cases will definitely either
become a charge on the Social Welfare Department or be left to suffer the very grievous
consequences of being faced with crippling financial liability at a time when they are FF 34 BRITISH COLUMBIA
positively and completely unable to help themselves. Much has been said to the Board
on the tragic effects caused by financial worry pressing upon any sick person, and this
particular kind of case is one in which these effects are most clearly evident.
For these reasons, therefore, the Board has given this matter very considerable and
earnest thought, and—
The Board now recommends that the liability of B.C.H.I.S. for an account in a
general hospital incurred by a patient who is a registrant, or dependent of a registrant, in
good standing under the Act, who has been declared to be a chronic case, shall continue
until they have been otherwise placed, but in no case shall it continue more than sixty
days beyond the effective date at which the case has been ruled otherwise to be a chronic
case. The ruling referred to is the decision of the Medical Board of Review, if the
diagnosis has been referred to them; and this recommendation is intended to apply to
cases remaining in hospital which do not become the responsibility of the Social Welfare
Department. REPORT OF THE HOSPITAL INSURANCE INQUIRY BOARD FF 35
SECTION 3.—MATTERS OF POLICY—GENERAL
20. B.C.H.I.S. Management Board and Select Standing Committee.
21. Hospital Advisory Council.
22. Public Relations of the Service.
23. Field Representatives of B.C.H.I.S.
24. Exempted Areas.
25. Annual Accounts of B.C.H.I.S.
26. Premium-year.
27. "Chronic" Diagnosis: Provisions for Review.
28. Provision for Permissive Use of Special Drugs.
29. Premium-payment Enforcement:   Prosecutions and Garnishee
Proceedings.
No. 20.—B.C.H.I.S. MANAGEMENT BOARD AND SELECT
STANDING COMMITTEE
The Board received many recommendations in connection with the administration
of B.C.H.I.S.   A few representative suggestions are quoted herewith:—
From the North Sidney Property Owners' Association.—A permanent Extra-Governmental
Board should be created to administer the B.C.H.I. Act on a basis similar to the Board administering the Workmen's Compensation Act.
From the Halls' Prairie Farmers' Institute.—We are strongly in favour of the provincial
Hospital Commission to take entire charge of the carrying out of the Hospital Act free of all or
any political control; this Commission to consist of five persons, as follows:
One appointed by the Government;
One appointed by the Medical Profession;
One appointed by Agriculture;
One appointed by Labour; and
One appointed by Industry.
This Commission will be entirely responsible for the carrying out of the Act, to suggest
changes in the Act, and in every way endeavour to see that a compulsory hospital system for the
Province is made to be fair, just, and equal to all the people.
We consider that hospitalization for the people is altogether too important, from the public
standpoint, to be made a political football.
From the Standard Railway Labour Joint Legislative Committee for British Columbia.—
This Joint Committee has always opposed the principle of one-man commissions. We believe it
borders too close to a dictatorial system for our Canadian mode of life. Therefore, however
conscientiously the appointee may conduct his duties, he can never hope to obtain the confidence
of a majority of the people he is sworn to serve. This being so, the purpose of his office is
frustrated from the beginning.
We sincerely believe that much of the spontaneous and contentious opposition to the present
Act and interpretations of its administrator would have been avoided by a commission of at
least three members. These, we suggest, should represent a fair blend of constituents, and
include one holding the full confidence of labour. This commission should, we think, apply a
more mature, comprehensive understanding of the problems of the people who have been obliged
by law to provide the premiums for this insurance service.. It should also, by prompt hearing and
dealing sympathetically with complaints, relieve much of the deplorable doubt and distrust that
has unfortunately invaded this very important public service.
From Mr. G. H. Jackson, Secretary-Treasurer of the Canadian Pacific Railway Employees'
Medical Association of British Columbia.—The present Hospital Insurance Inquiry Board form
a Standing Committee of the Legislature with supervision over the operations of hospital insurance in all its phases. That it meet at intervals of not more than three months throughout each
year, at least until operations are proceeding on a smooth and sound basis. With the experience
gained in the course of their enquiry the members of the board would be admirably suited to
compose this Standing Committee representing, as they do, both the Government and His
Majesty's Loyal Opposition.
Mr. Jackson, who appeared before the Board on more than one occasion, has
verbally stated that he is decidedly in favour of a board of management to consist of FF 36 BRITISH COLUMBIA
three laymen, who should hire the necessary experts; but there should be no attempt to
make the commission consist of one hospital administrator, one doctor, and one businessman. He definitely thought the board of three would be very desirable because, however
good the individual might be, the public has no confidence in the rule of one man.
The Board therefore recommends that B.C.H.I.S. be administered by a board of
three members, without legislative or judicial powers, and also that Standing Orders of
the Legislature be amended to provide for the appointment of a Select Standing Committee on Hospital Insurance, which shall meet at each regular session of the Legislature
and shall review the report of the B.C.H.I.S., meet with the board of management, and
report to the Legislature.
No. 21.—HOSPITAL ADVISORY COUNCIL
A Hospital Advisory Council was appointed when B.C.H.I.S. was first organized.
It was reconstituted in March, 1950, and its first meeting was held in September of that
year. We have been advised by the Commissioner that since 1950 regular meetings of
the Hospital Advisory Council have been held at least every three months. The Commissioner conveyed to the Board that he was well satisfied with the services rendered by
the Hospital Advisory Council. On the other hand, several organizations which are
actually represented on the Hospital Advisory Council believed that their representatives
could have been of greater service if the fullest advantage had been taken of their desires
in this regard, and other organizations which did not have representation on the Hospital
Advisory Council believed that they could also have rendered valuable assistance. The
opinions of these organizations are set out as follows:—
From the Vancouver Board of Trade.—It was inevitable that under its present set-up
B.C.H.I.S. would disturb the former relationship of doctor, hospital, patient and community.
A satisfactory and equitable realignment of the spheres of operation and responsibility, where
inter-dependence is as apparent, demands mutual consultation and co-operation. More effective
utilization of the Provincial Hospital Advisory Council on policies and issues could have aided the
Government in its decisions. The Provincial Hospital Advisory Council should become a more
effective agent, and it should meet frequently and have opportunity to determine and indicate
policy rather than be called together to concur in fait accompli and to approve departmental
decisions.   The Hospital Insurance Act should be amended accordingly.
From Royal Jubilee Hospital.—Section 23 of the Hospital Insurance Act requires that there
be an Advisory Council to advise the Minister in regard to hospital insurance matters. This
Council has seldom been used in an advisory capacity and does not contain a hospital administrator so that it rather serves as a sounding board than an advisory council.
From the Late Dr. T. W. Sutherland, Parksville.—When your commission was in Nanaimo,
you told me of your informal meeting with the executive of the B.C. Medical Association.
In the event that an Advisory Council to the B.C.H.I.S. be set up, the medical representative
should not be a political appointee but rather one who had the confidence and support of the
Medical Association. To that end, I would suggest that the Medical Association be asked to
nominate three men and that the Government appoint one of these three. The same would
apply to the B.C. Hospitals' Association, labor organizations, etc.
The Board therefore now recommends:—
(a) That the broad intention behind the setting-up of the Hospital Advisory
Council be fully realized, and that if full advantage is not now being taken
of the services of the Council, steps be taken to realize the maximum
benefit therefrom; and that, further, all proposed important changes in
policy or regulations be discussed with the said Advisory Council before
the proposed changes are put into effect:
(b) That the Hospital Advisory Council shall in future include in its membership two private members of the Provincial Legislature, to be
appointed or named before each regular session of the Legislature is
prorogued, and that the said private members shall be selected from the
membership of the Select Standing Committee which has been in existence REPORT OF THE HOSPITAL INSURANCE INQUIRY BOARD FF 37
during the said regular session, one to represent the Government and one
to represent the Official Opposition.
No. 22.—PUBLIC RELATIONS OF THE SERVICE
In view of the prominence with which the matter of the public relations of B.C.H.I.S.
was brought before this Board, the Board has attempted to consider each and all of the
activities of the Service that would be properly classified under this heading, and which
in any way influence public opinion of the Service. These activities include many
features, ranging from newspaper releases and advertisements down to the style of letters
that go to the general public in the ordinary way from the offices of the Administration.
The evidence was that the large spaces used in newspaper advertisements, and frequently
the type of matter contained therein, gave to the general public impressions of waste and
extravagance, and attempts to force the insurance scheme on the public without at the
same time seeking to improve the Service.
Similarly, representations were made to the Board in all parts of the Province as to
the tactless and dictatorial tone of letters received from Victoria. Not only were the
letters referred to considered to be offensive, but there was constant complaint of the
delay in receiving replies of any nature from Victoria—and statements that in many cases
letters sent there had been completely ignored. There was, in addition to the above, a
great deal of complaint made to the Board with respect to the general make-up of, and
the wording used on, premium notices. Many of these notices sent out in the past were,
in the opinion of the Board, very difficult for a large percentage of the people concerned
to understand, and it is certainly very annoying to the average person to have to seek out
someone of superior intelligence in order to obtain an expert interpretation of something
that should have been plain and straightforward in the first place. This matter, alone,
has not made for good public relations with the ordinary registrant and premium-payer.
B.C.H.I.S. is " big business" and, when functioning properly, will be dealing with
nearly every citizen of the Province. Its success depends on public acceptance, not on
the ability of the Government or the Administration to make people like it. Therefore,
the Board wishes to point out that supervision of public relations is a highly specialized
occupation. Volumes have been written on the subject, and intensive training courses
have been developed to fit people to engage in the important role of public-relations
officers. The proper preparation and presentation of matter to be included in press
statements, public addresses, advertisements, or even in the make-up of letters dealing
with commonplace matters is something that makes the most vital difference to any
organization in its relations with its customers or the general public.
We feel that B.C.H.I.S. needs public-relations guidance, which would help sell
hospital insurance service to the public—and this is not to be confused with the mere
handing-out of publicity.
We feel that B.C.H.I.S. needs a public-relations officer, responsible directly to the
Minister, if the present administration system is to be followed—or responsible directly
to a board, if the B.C.H.I.S. is to be administered by a board. His duties would be
many: they would include visiting every hospital in the Province regularly, contacts with
the public generally, attendance at public meetings, and every activity which would
acquaint him with the opinions of the population of the Province as to the workings of
B.C.H.I.S. We are sure that when visiting hospitals such an officer would learn of many
situations where a simple decision to be made in Victoria could wipe out much resentment, providing the said decisions were made promptly. It would therefore be the duty
of the public-relations officer to find the things which are the subject of public concern and
then urge the Administration to attempt quickly to correct the source of dissatisfaction.
We are not suggesting that the public-relations officer is merely an official to receive FF 38 BRITISH COLUMBIA
complaints and pass them on. We do think, however, that he would hear complaints at
times, and he could get the difficulties smoothed over before the complainants were so
concerned as to take their cases to the public press. Furthermore, a public-relations
officer should be fully acquainted with the decisions of the Administration, and he should
know of these decisions well in advance of the time they will be announced to the general
public. He can then prepare the way for the announcement, by setting out what particular difficulties have faced the Administration in certain respects, and seek to guide
public opinion toward the favourable acceptance of the decisions to be announced. The
public-relations officer also should be the contact with the press, and should have
authority from the Administration to get and to hand out, where he believes it to be good
business to do so, details which the newspapers want—and he should have authority to
go directly to the sub-department to get his information.
Another field of public relations to which we might allude is the work of the field
representatives of B.C.H.I.S. throughout the Province, but we have dealt with this particular matter in another recommendation.
The Board therefore recommends that, as it is their opinion that the scope of the
public relations of the B.C.H.I.S. justifies the retention of a Director of Public Relations of
outstanding ability, steps be taken to secure the services of such a person, and that responsibility for the public relations of the Service be placed in his hands as soon as possible.
No. 23.—FIELD REPRESENTATIVES OF B.C.H.I.S.
During the first year that B.C.H.I.S. functioned, a chain of offices was opened up
throughout the Province. At one time these offices totalled sixty-two. Suitable persons
were in charge of these offices, to look after collections and serve as sources of information in connection with the Service generally. For various reasons, which the Board is
not in a position to question at this time, this system of district offices was changed, with
the result that the staff was substantially reduced and the majority of the offices were
closed. There is no question but that a valuable service was rendered by this system of
district offices, but it is questionable whether they justified their cost. However, their
discontinuance was sorely felt by citizens in localities where they were closed, and there
has been a very strong appeal made by such districts for the reopening of district offices.
The ultimate solution to this problem depends upon whether or not the recommendation of this Board, numbered 30, is adopted and put into effect. Under subsection
(iii) of section (c) of the plan contemplated by this recommendation—" Provisions for
Payment of Premiums "—it is suggested that premium and arrears payments are to be
accepted through various collection agents. Adoption of this portion of the Board's
recommendation would permit payments of premiums and issuance of interim receipts
at many places, such as branches of chartered banks, express money-order offices, Government Agents, and any and all other places that would make it easy and convenient
for persons to pay premiums. This would result in a broader service than has ever been
available with respect to payment of premiums, so that the need for district offices
would be somewhat relieved.
We do, however, feel that there is a need for a field force of what might be called
" trouble-shooters." This field force should be composed of carefully selected personnel, properly trained to adjust problems of various kinds. These fieldmen would not
necessarily have to work out of local offices, provided there was some place, such as a
Government Agent's office, to use as headquarters. The Board learned that much dissatisfaction existed throughout the Province with respect to matters that are presently
handled by correspondence from Victoria, and it believes that many problems at present
dealt with by correspondence could be referred to the fieldmen for personal contact and
adjustment. REPORT OF THE HOSPITAL INSURANCE INQUIRY BOARD FF 39
Particular stress has been laid in another section of these recommendations on the
matter of public relations. This field force could be made a most important factor in
the field of public relations by handling problems of premium-payers with dispatch and
better understanding. The number of persons to be employed in this particular work is
a matter for very careful study, and it is suggested that the force should be adequate but
not excessive.
The Board therefore recommends that the present force of district representatives
be enlarged to an extent necessary for them to take care of problems as outlined herein
without undue delay; and, further, that the personnel of this field force be given proper
training to fit them to act as " top-notch " public-relations officers.
No. 24.—EXEMPTED AREAS
Subsection 1 of section 11 of " Hospital Insurance Act" Regulations (revised to
April 10th, 1951) reads as follows:—
The following persons shall be entitled to claim exemption pursuant to clause (/) of subsection (1) of section 8 of the Act:—
(a) Residents of the Atlin Electoral District:
(b) Persons residing north of the 55th parallel in the Omineca Electoral District,
with the exception of Manson Creek:
(c) Persons residing north of the 55th parallel in the Fort George Electoral District:
(d) Persons residing north of the 58th parallel in the Peace River Electoral District.
The areas set out in the above subsection are sparsely populated, and administration would be very difficult, and the likelihood of the people benefiting is not great.
However, in accordance with the above regulations, unless they claim exemption they
are offenders under the B.C.H.I. Act and Regulations.
We feel that residents of these remote northern areas should be extended the privilege of becoming registered under B.C.H.I.S. voluntarily instead of being subject to the
regulations by which they must apply for exemption.
The Board therefore recommends that the necessary amendments be enacted to
exempt all persons in the areas referred to, but that the privilege of voluntary registration and participation under the " Hospital Insurance Act" be extended to them.
No. 25.—ANNUAL ACCOUNTS OF B.C.H.I.S.
We now refer to the matter of annual accounts of B.C.H.I.S. It has so far been
found necessary for the Service to keep two sets of accounts—one for the calendar year
because of the fact that the operations of the Service commenced on January 1st, 1949,
and the added fact that the hospitals of the Province operate on a calendar-year basis,
and another set for the fiscal year ended March 31st, in order to coincide with the
accounting system of the Provincial Government.
It is obvious that, as a result of these two necessities, the accounts of the Service
published so far cannot be said to be truly and properly prepared on a revenue basis for
either period. Reference to the First Annual Report of the Service for the year 1949
shows that the accounts for that particular year were (subject to certain estimated
figures) prepared on a correct revenue basis, but when we turn to the Second Annual
Report of the Service, January 1st to December 31st, 1950, we find that the procedure
adopted for the calendar year 1949 has been abandoned, and the published financial
statement is simply a statement of cash receipts and disbursements of the fiscal year
ended March 31st, 1950. The Board has not yet obtained any published statement for
any further period, and it may be presumed that the next statement to appear will be
similar to the Second Annual Report and will carry only the receipts and payments to
March 31st, 1951.
In the opinion of the Board, this form of statement gives entirely insufficient information to the Legislature or to the people of the Province.    Furthermore, when the FF 40 BRITISH COLUMBIA
statement is placed before the Legislature, the information which is contained therein is
already a year old, although the results of the operations of the Service for the year
which is ended at a much later date are already on record at the headquarters of B.C.H.I.S.
When visiting Regina to review the Saskatchewan Hospital Services Plan, the Board
learned that the complete accounts of the Plan for the previous calendar year were placed
before the Legislature before the end of the following February and were printed and in
circulation prior to May 31st following.
Another point having a bearing on this matter was the complaint of several hospitals
that they were unable to obtain, until it was too late to be of any use, information concerning the operations of comparable hospitals which they felt might enable them to
correct their own shortcomings and thereby benefit the Service in general.
In view of the impossibility of divorcing the operations of the Service from the
operations of the hospitals of the Province, it would seem desirable that the Service should
continue with the practice adopted in the first year of its operations, preparing accounts
on a proper revenue and expenditure basis for the calendar year, thus enabling the closest
check of the accounts of the hospitals of the Province and also enabling a publication of
the detailed income and cost figures of the Service within a reasonable lapse of time after
the close of the period to which they refer.
The Board therefore recommends that it seems highly desirable to have the annual
accounts of B.C.H.I.S. prepared on a revenue and expenditure basis for each full year of
its operation, rather than on a cash receipts and payments basis running to March 31st
only, and that publication thereof should be made as early as possible in a manner clearly
understandable to the general public.
No. 26.—PREMIUM-YEAR
A suggestion worthy of consideration regarding the commencement date of the
premium-year was made to the Board. The matter of changing the fiscal year to coincide
with the calendar year and thus place the accounts of the Service on a more desirable
basis has already been dealt with in another recommendation.
After careful consideration, the Board decided that the premium-year does not
necessarily have to be the same as the fiscal year of the Service, and it was pointed out to
the Board that many premium-payers would find it easier to meet their obligations at
some other times than the year-end and the month of June. The arguments advanced in
support of this point of view include the suggestion that the month prior to January 1st
is a spending season, when the resources of the average person are thereby seriously
depleted; that this period is also a period of seasonable unemployment; and, further, that
as a general rule tax payments become due in the months of May and June, and that they,
also, cause a considerable strain on the financial resources of the average person.
It was also pointed out that if the premium-year started on April 1st and ended
March 31st, the extra work involved in the receipt of premiums in great numbers at one
time would not impose as great a problem on B.C.H.I.S. as if this work was imposed on
the Service at the end of the calendar year, along with all the other extra work related to
the year-end activities.
The Board therefore recommends that, as soon as can effectively be done, the
premium-year be from April 1st to March 31st.
No. 27.—"CHRONIC" DIAGNOSIS:   PROVISIONS FOR REVIEW
A very important matter, which has caused a tremendous amount of distress and
dispute to an increasing degree during the last eighteen months, is the system in force
(and the manner in which rulings are made by the B.C.H.I.S. Administration) regarding
illnesses classed as " chronic," which has the effect of curtailing the liability of the --./.::-:■     ,: %
REPORT OF THE HOSPITAL INSURANCE INQUIRY BOARD FF 41
Service for the hospital account. The viewpoint of many hospitals on this matter was
forcibly expressed, and the Board also obtained the opinions of various other organizations of repute. In addition, the Board was faced with much evidence of cases of
distressing hardship from the individual point of view. It may safely be said that no
other phase of the Board inquiry has produced, to such an extent, evidence of existing
circumstances meriting the most careful and considerate attention of all interested
authorities from a humanitarian point of view.
We first quote the opinion of the spokesman for the medical profession—the
College of Physicians and Surgeons:—
It is recognized by the doctors that B.C.H.I.S. was not set up to provide chronic hospital care
and that controls in this respect are a " necessary evil." We object strongly, on behalf of our
patients, to the method for control that has been set up in Victoria to handle this problem.
Certain categories of patients, in particular, may be placed in distressing circumstances when
present methods are followed. These categories include patients with advanced cancer, patients
with severe acute forms of non-pulmonary tuberculosis, mental patients above the age of seventy,
and patients with certain conditions of long duration that may require very special hospital care,
notably poliomyelitis and paraplegia. // rs intolerable to us that an arbitrary ruling can be made
by a single medical civil servant in Victoria indicating that certain individuals in any of the
above-mentoned groups, whom he has not seen and whose doctors assert are still requiring acute
medical and hospital care, are now eligible for two more weeks or four more weeks or no more
care at all under B.C.H.I.S. It has been apparent to us that the doctor on the staff of B.C.H.I.S.
in Victoria is in no position to determine the eligibility of individual patients for insurance
coverage in these difficult and controversial problem cases.
Decision in these matters should be made at a local level by a competent medical man or
committee of medical men and should be based on the findings in each case. It will be impossible
to find doctors to act in these capacities until more adequate services are made available for the
care of convalescent and chronic disease outside of the acute general hospital. No doctor in
practice will condone or be party to the discharge of a patient from an acute general hospital
if that discharge means gross deterioration of the standard of medical care. That, in fact, is what
we are being asked to do now by B.C.H.I.S. on not infrequent occasions.
Apart from consideration of patients who are sidetracked away from acute hospital, we feel
that the number of patients whose coverage is terminated before their doctor considers that they
are fit for discharge, though it is a small number, is significant. It is just these cases of catastrophic hospital expense that led the majority of citizens to accept hospital insurance as a good
measure. We have been told, in respect to these cases, that the Hospital Insurance Service does
not state that a patient should be turned out of hospital. That is true, but when a citizen of limited
means is told that if he or his dependent remains in hospital he must pay eight or ten or thirteen
dollars a day, the practical result is the same. Furthermore, there will be immediate and very
strong pressure from the hospital to move that patient out because the hospital does not want
to be stuck with the bill if that citizen defaults.
The point of view of many hospitals is reflected in the quotations given below
from their respective written submissions to the Board:—
Powell River General Hospital.—The Board of Management are not in agreement with the
present method of a staff in Victoria determining the need for hospitalization. This method
incurs an unnecessary amount of paper work and nuisance to a co-operative medical staff. The
Board of Management wishes to recommend that the decision as to whether or not a patient is
in need of acute care in a general hospital be left to the discretion of the local hospital authority.
Penticton Hospital.—We feel that the determination of chronic from acute cases can be made
only at the attendant medical level. A committee of doctors from the medical staff in all hospitals should be appointed and authorized to rule on all cases in hospital over fourteen days. At
that time, the patient can be advised of his limited stay in hospital under hospital insurance, and
the many just criticisms of diagnostic practice by remote control eliminated. We are well pleased
with the general principles of the plan, but feel that some remedy must be found in order that
the humanitarian basis on which it was founded is not lost in the monetary approach.
And from other organizations we select the following written submissions on this point:—
Vancouver Board of Trade.—Efforts now being made by B.C.H.I.S. to expedite classification
of chronic and acute illnesses should be pursued in order to eliminate the delays which have been
annoying, costly, and onerous to patients and hospitals alike. In large urban centres, such as
Vancouver, the appointment of a small panel of doctors or an Admission and Discharge Officer
by the respective hospitals to rule on such cases after interview of patient, doctor, and hospital FF 42 BRITISH COLUMBIA
officials would, it is believed, serve a necessary and useful function. The decisions and recommendations of Admittance and Discharge Officers would, in turn, be reviewed by a department
official. Rulings of a single official at Victoria, based on incomplete information, would thus be
avoided. Some hospitals have set up voluntary panels which are proving effective in the expeditious handling of admittances and discharges.
The Vancouver Board of Trade therefore recommends that it be made obligatory on each
hospital to appoint an Admission and Discharge panel or officer to deal with classification of
chronic and acute illnesses.
Imperial Veterans' Action Committee in Canada.—We understand that as at present the
B.C.H.I.S. reserve to themselves the right to decide when a case is chronic and when not chronic.
Furthermore, we understand that the Service may decide that a case is chronic after a person is
out of hospital, or after even receiving treatment on several different occasions, and then decide
to bill the patient. We object to to laymen deciding when a case is chronic, which we contend
should be a matter purely for a doctor to decide. We also feel that a clear definition should be
given as to the stage at which a case is declared chronic.
Mr. G. H. Jackson, Secretary-Treasurer, Canadian Pacific Railway Employees' Medical
Association of British Columbia.—Next comes the question of what might be termed " long-stay
cases." Under the Regulations of B.C.H.I.S., patients are entitled to in-patient hospital care for
" acute " conditions only and coverage is terminated when active hospital treatment is no longer
necessary. This sounds perfect in theory; but in its application it is quite a different matter.
There is only one person competent to decide when a patient's condition is or ceases to be acute
and that is the attending doctor. It is absurd to assume that a medical referee sitting in an office
in Victoria can decide when an acute condition does not exist. The practice is unethical and is
unfair to the patient, the hospitals and the medical profession. To promise " unlimited " coverage
and then cut it off arbitrarily, or as has been done in some cases, say that coverage will not be
continued beyond a pre-determined date, set by the medical referee, who has not seen the patient,
is frankly dishonest.
With regard to a particular class of patient, the following from a brief of the
British Columbia Polio Fund is very noteworthy:—
Today, polio treatment is a concern in at least 45 communities throughout the province and
the recent action of the B.C. Hospital Insurance Scheme has given grave concern to all these
people. In a recent ruling of the authorities of the B.C. Hospital Insurance, polio patients have
been placed on a two-weeks basis for their hospitalization. For those who know the facts, this is
a shocking situation and one that shows that those who made such a decision have a complete
lack of knowledge of the medical facts concerning polio and, in addition, no conception of the
economic implications of such a decision as it affects everyone concerned, except the immediate
saving of money for the insurance scheme. It shows no regard whatever for the long-range
thinking that is necessary when one is dealing with a disease such as polio and seems to demonstrate that these people (B.C. Hospital Insurance) are taking any means whatever (as in this
case the placing of these victims in a position to possibly face a life of invalidism) to cover up
the more serious and basic errors of judgment and planning.
In appealing for these victims now, we feel that we may be speaking for other diseases later
because, if no change is made, other diseases that require any length of hospitalization whatever
will no doubt be treated in like manner. Polio is a disease that strikes suddenly and, in many
cases, with dramatic consequences and frequently tragic results for the victim. To put it very
bluntly, without the long, painful, tiresome rehabilitation process now available, a good many
victims of polio would have been better off to die at the very outset of the disease. It is quite
true that the infectious stage of the disease is quite short, usually about two weeks, and if that
is what is considered the end of hospitalization by the authorities of the B.C.H.I.S., then they are
labouring under very grave and serious misconceptions. By definition, and this is a definition set
out by the B.C. Hospital Insurance Scheme in recent newspaper advertising, a disease is said to
have reached the chronic stage when the patient has reached the position where they can be
adequately cared for in some other place than the hospital, thus ending the need for hospital care
automatically, according to the B.C.H.I.S.'s way of thinking.
The victims of polio have at the end of two weeks just passed the infectious period and to
apply the definition of the B.C. Hospital Insurance at this stage of treatment is, to say the least,
almost ridiculous. Polio patients with any residual paralysis whatever can and do receive benefits
from hospitalization for as long as two years and the help they receive can be given at no other
place or in no other way than in the hospital. To be specific, for example, Miss Violet Tennant
has been in the Vancouver General Hospital from January 1947 to the present time. She shows
continuous improvement but could not possibly be cared for outside the hospital. Under present
hospital insurance rulings, if this should happen to you, it would cost you approximately $22,400.
It should be pointed out that at least 90% of the citizens in B.C. could be considered indigenous REPORT OF THE HOSPITAL INSURANCE INQUIRY BOARD FF 43
as regards polio. The bare necessities of hospital treatment amount to $405.00 per month. If
these people cannot be protected under B.C.H.I.S., then there is no insurance. So to say that
a polio case has reached pernicity at the end of two weeks is not supported by any facts whatever.
In view of the foregoing facts, we ask this commission to intervene on behalf of the polio
victims of this province. We are asking that the recent arbitrary ruling of two weeks' hospitalization be changed to a no limit period subject only to recommendations as to time limit of the
hospitalization period by a proper and competent medical authority.
We wish to emphasize the fact that the above represent only a portion of the written
submissions made by organizations in connection with this subject, and that these and
the other written submissions to the Board were reiterated and confirmed in a most
forcible manner from many sources by verbal testimony given to the Board.
The Board has reason to believe that there has been recently a gradual development
of a procedure by which there is more co-operation between local medical authorities
and the B.C.H.I.S. Administration—and that there is a definite trend to improvement of
the situation that had arisen.
However, the Board does not think that all causes for dissatisfaction have been
removed, and believes that a carefully studied and definite plan must be laid down for
early adoption to govern future action and procedure.
The Board therefore recommends that:—
(1) Where it is decided that a patient in an acute or general hospital is ruled
to be, or to have become, a chronic case, and not the responsibility of
B.C.H.I.S., advance notice of the discontinuance of benefits shall be
giyen in every case; and the effect of such ruling shall in no case be
retroactive:
(2) Before such ruling is made, any and all cases should be referred, wherever
possible, to the medical staff of the hospital, whose opinion shall be
fully considered by the medical consultant or administration of B.C.H.I.S.:
(3) In all cases of difference or dispute arising at any point as to the correctness of the diagnostic decision, the final decision should be left to a
Medical Review Board, consisting of two representatives of B.C.H.I.S.
and three doctors appointed by the College of Physicians and Surgeons:
(4) Provision be made for the appointment of the said Medical Review
Board as soon as possible.
No. 28.—PROVISION FOR PERMISSIVE USE OF SPECIAL DRUGS
During the course of its inquiries, the Board heard of many cases of severe and
even tragic hardship arising out of the regulations by which the use of certain costly
drugs is not included as a benefit under B.C.H.I.S.
The Vancouver General Hospital has this to say in their written submission to
the Board in general connection with this subject:—
Another problem involves an apparent lack of co-ordination between the B.C. Hospital
Insurance Service and competent medical authorities. Rulings, regarding which drugs and
pharmaceuticals may be included as operating expenses, sometimes appear to be based on a
dollar value rather than on medical necessity. Rulings, as to which type of case is not covered
by the B.C. Hospital Insurance Service, do not always appear to have sound medical reasons as
their basis.
One example is the present ruling on the use of ACTH and Cortisone. When these drugs
first appeared on the market, it was reasonable to assume that definite restrictions regarding their
use were required. However, there has now been sufficient research and experience connected
with these drugs to permit their use under certain definite conditions, but there is no prescribed
method in which application for use of these drugs may be made.
To establish arbitrary rules that certain treatments or conditions will be excluded is not
always reasonable or fair to the patient. Decisions should be made locally by competent medical
men, based on the findings of individual cases. In many hospitals there are competent medical
boards which would certainly be qualified to advise on these matters and supervise the limited use
of certain specific drugs and treatments. FF 44 BRITISH COLUMBIA
Recommendation: That an active means of co-operation between the B.C. Hospital Insurance
Service and competent medical authorities be instituted for the purpose of deciding which drugs
and treatments may be included in the hospitals' operations.
More than one case has been drawn to the attention of the Board where a patient
has been in distressing need of the said drugs, even to the point where the only chance
of saving the patient's life is afforded by the use of the drugs. In addition to this
comes evidence that the patient and his responsible relatives have exhausted their entire
means in honest and praiseworthy efforts to ensure the utmost in medical treatment,
sometimes over prolonged periods—and they now have absolutely no material resources
or credit left by which they can, themselves, secure the vitally needed treatment or drugs.
The Board feels it futile to try to set down in writing the many humanitarian factors
that enter into the consideration of cases of this nature.
The Board has, however, elsewhere suggested the setting-up of a Medical Board of
Review to work with, or for, the B.C.H.I.S., and in the hope and expectation that this
recommendation will be duly implemented—
The Board therefore recommends that the Medical Board of Review, if established,
shall have the authority to allow the use of special drugs for hospital patients, when
vitally necessary, on the recommendation of the local medical authority.
No. 29.—PREMIUM-PAYMENT ENFORCEMENT:   PROSECUTIONS
AND GARNISHEE PROCEEDINGS
The Board notes that sub-section (2) of section 11 of the " Hospital Insurance Act "
provides that any person who, on summary conviction, is found to be guilty of an offence
against the Act by reason of non-payment of premiums, in addition to being fined " shall
be ordered by the Magistrate or Justice to pay the amount of the premium that is owing,
including any arrears, etc., etc."
It has been drawn to the attention of the Board that, in a substantial number of
prosecutions initiated by B.C.H.I.S. against non-premium-payers, the judgment of the
Court has imposed a fine plus Court costs but has not included an order for payment of
arrears in accordance with the section of the Act quoted above.
There is also another matter having to do with the enforcement of payment of
premiums. Section 11b of the Act provides that the Commissioner, or any person
authorized by him, may require the employer to pay the premium owing by the
employee—and pay the same to the Commissioner on account of the premium owing by
the employee. It would appear that this procedure of simple garnishee has not been used
to the fullest extent, and it would also seem that the procedure of automatic garnishee
might be extended to be effective against any sums owing to a delinquent person, whether
by an employer or any other person.
The Board therefore recommends:—
(a) That the competent authority shall call to the attention of the Magistrates
and Justices of the Province the provisions of subsection (2) of section
11 of the Act as referred to above, and shall require their future compliance therewith:
(b) That the Administration of B.C.H.I.S. shall take full advantage of the
provisions of section 11b of the Act when such action is justified by
circumstances:
(c) That the application of section 11b shall be widened so as to permit the
procedure of automatic garnishee by the Administration of B.C.H.I.S of
any sums owing to a delinquent registrant (or person required to be a
registrant under the " Hospital Insurance Act "), provided that such extension is ruled by competent authority to be possible. REPORT OF THE HOSPITAL INSURANCE INQUIRY BOARD FF 45
SECTION 4.—B.C.H.I.S. ADMINISTRATION
30. Plan of Registration and Premium Collection.
31. Proof of Standing under the Act.    (To be required from applicants for any Provincial (annual) licence.)
32. Limit of Liability for Premium Arrears.
33. Collection of Arrears of Premiums.
34. Exemption Cards:   Issue to Certain Persons and Charge Therefor.
35. Changes of Status.
36. Elimination of Certain " Group " Records.
37. Pamphlet Covering Plan and Benefits.
No. 30.—PLAN OF REGISTRATION AND PREMIUM COLLECTION
One of the major matters commanding the attention of the Board has been the overall method of collecting premiums and issuing proper identification certificates. Our
Business Management Consultants, Messrs. Stevenson and Kellogg Limited, have devoted
a great deal of attention to this particular phase of the operation of B.C.H.I.S. The Board
gave due consideration to the relationship between suggested methods and the personnel
and general expense required to operate on the basis of the various suggestions.
We think it would be useful at this point to interject the remarks made in the
written submission of Mr. G. H. Jackson, secretary-treasurer of the Canadian Pacific
Employees' Medical Association of British Columbia, as follows:—
It would seem to be evident that the present arrangement of a combination of payroll
deductions and direct payment cyclic billing is not the solution. Insofar as the Hospitals are
concerned it is far from satisfactory. Hospitals should be assured that everyone who is registered
with B.C.H.I.S. has coverage. All contributors should be eligible for benefits as soon as they
have registered. From an employer's standpoint payroll deductions are not entirely satisfactory,
particularly where transients are involved. If some improved system of collection could be put
into effect on January 1st, 1952, it would be the best indication that the Government intends to
place B.C.H.I.S. on a business-like basis.
After many discussions with Messrs. Stevenson and Kellogg Limited, they submitted
to the Board the following plan as being their suggestion for obtaining the maximum
efficiency at the minimum cost:—
(Note.—The plan immediately following is referred to in the recommendation at
the end of this section as " Plan No. 1.")
(a) That an annual premium is to apply for each calendar year, with the
provision that half-yearly partial payments may be accepted.
(b) Individuals will be responsible for payment of their premiums before the
premium due date. No bills are to be sent by B.C.H.I.S. but a Notice
of Premium Due will be sent to all registrants at their last-known address.
(c) Provisions for payment of premiums will include:—
(i) Allowance for payment of at least one-half the total annual
premium semi-annually prior to January 1st and/or July 1st.
(ii) Premium-year (calendar year January 1st to December 31st)
is to be distinguished from benefit period, which will be: First half,
January 1st to June 30th; second half, July 1st to December 31st.
(iii) Both premium and arrear payments are to be accepted through
authorized collection agents.
(iv) Premium payments for less than the full amount of the annual
premium must be made before January 1st or July 1st and must be for a
full six months' period. No partial payments are to be permitted except
as in subsection (/). FF 46 BRITISH COLUMBIA
(d) Individuals will be eligible for hospitalization benefits if payment for the
current half-yearly benefit period has been made. Seven days' grace will
be allowed to late premium-payers, providing they were in benefit during
the previous benefit period. A fourteen-day waiting period is to apply to
new registrants, those who were not in benefit during the previous benefit
period, or those previously in benefit who have not paid the premium for
the current benefit period before the expiry of the period of seven days
of grace allowed after the date of premium payment.
(e) Arrears will apply as follows:—
(i) If premium has been paid for the first half-year's benefit period
(January 1st to June 30th), arrears, if any, will be for the immediately
preceding calendar year (January 1st to December 31st), unless the
registrant is actually liable for less than that amount according to the Act
and basic records.
(ii) If premium has been paid for the second half-year's benefit
period (July 1st to December 31st), arrears, if any, will be the total of
the premium payable for the eighteen months immediately preceding July
1st (January 1st of the preceding year to June 30th of the current year),
unless the registrant is actually liable for less than that amount according
to the Act and basic records.
(iii) If a person has paid premiums for the current benefit period,
he will be eligible after the fourteen days' waiting period for hospitalization benefits despite owing arrears. The collection of arrears will be the
responsibility of a separate section of B.C.H.I.S., whose responsibility
will be to collect and arrange for the collection of arrears, using the various
devices and powers allowed by law.
(/) Premium payments may be made direct to B.C.H.I.S. offices in Victoria
or to any authorized collection agent.
(g) Certified interim receipts will be issued by all authorized collection agents
for all premium payments made to them..
Official eligibility certificates will be issued by B.C.H.I.S. for all
payments made direct to their offices and against all certified interim
receipts received from the authorized collection agents.
(h) The employers will be responsible for seeing that all new employees are
in benefit. If the new employee is not in benefit the employer will arrange
to have him placed in benefit at the time of employment. The employer
will also be responsible for checking all his employees at stated intervals
to ensure that they are all in benefit. Arrangements must be made to
immediately place in benefit any employees who may be found to be out
of benefit.
(0 Identity cards will be issued to all dependents upon request only. However, the B.C.H.I.S. may arrange for authorized agents or secretaries of
any exempted groups to issue identity cards to all exempted persons in
their groups, sending duplicates to B.C.H.I.S. for their records.
(/') There shall be no interference, implied or actual, with the right of
employers and employees to jointly arrange for monthly or other periodical deduction by the employer of such sums as will amount in due
course to the total premium payable by the employee at the commencement of every six months' period. The employer shall under these circumstances either:—
(i) Remit the total amount of the periodical deductions to B.C.H.I.S.
in trust for the employee; or REPORT OF THE HOSPITAL INSURANCE INQUIRY BOARD FF 47
(ii) Deposit the sums in a special account in trust for the employees
and cause the total thereof to be transmitted to B.C.H.I.S. prior to the
commencement of the next six months' premium period.
Irrespective of the manner in which the employer chooses to handle
the deductions in agreement with his employees, it shall not be necessary
for him to report to B.C.H.I.S. in detail the separate amounts deducted
from each employee until the due date of the next six months' premium
period.
Continuance of the practice already in force between any employer
and his employee on a purely voluntary basis is encouraged in every way.
(k) In the case of persons entering the Province for temporary employment
only and without intending to take up residence therein within the meaning of the " Hospital Insurance Act," it shall be permissible for an
employer to engage such person or persons and the requirements as to
deduction of an amount to cover the current hospital insurance premium
shall be waived in the first instance—but nevertheless no such person
shall continue to be employed for a longer period than two complete
months without becoming thereafter immediately liable to the premium
payment or deduction by the employer—and no employer shall waive
such requirements in the first instance if he has knowledge that the said
person has previously been employed in British Columbia (within the
current six months) for a period of two months or longer.   And, further,
the employee shall sign a declaration that he has not previously been
employed in the Province for an aggregate of two months within the
current benefit period and setting out the periods of employment since
he entered the Province.
It will be seen that the consequence of the adoption of this plan would be that
employers of labour within the Province could not give employment to any person not
properly registered and in good standing under the " Hospital Insurance Act," and that
this consequence would need to be enforced by the necessary enactments to make it legal
and therefore effective.   It may, however, be thought that such action is of too dictatorial
a nature and not likely to be well received by the majority of the employed or the
employers of the Province.
Recognizing that the success of any law is dependent upon the measure of public
acceptance of its requirements, the Board believes that the desired results might be
attained by a somewhat different approach, though it is possible that this second approach
would not be so fully effective and would also to some extent reduce the saving of cost to
B.C.H.I.S. that is anticipated by this Plan No. I. The Board, therefore, sets out an
alternative plan, as follows:—
(Note.—The plan immediately following is referred to in the recommendation at
the end of this section as "Plan No. 2.")
(a) That an annual premium is to apply for each calendar year, with the
provision that half-yearly partial payments may be accepted.
(b) Individuls will be responsible for payment of their premiums before the
premium due date. No bills are to be sent by B.C.H.I.S. but a Notice of
Premium Due will be sent to all registrants at their last-known address.
(c) Provisions for payment of premiums will include:—
(i) Allowance for payment of at least one-half the total annual
premium semi-annually prior to January 1st and/or July 1st.
(ii) Premium-year (calendar year January 1st to December 31st) is
to be distinguished from benefit periods, which will be: First half, January
1st to June 30th; second half, July 1st to December 31st. FF 48 BRITISH COLUMBIA
(iii) Both premium and arrear payments are to be accepted through
authorized collection agents.
(iv) Premium payments for less than the full amount of the annual
premium must be made before January 1st or July 1st and must be for a
full six months' period. No partial payments are to be permitted except
as in subsection (/').
(d) Individuals will be eligible for hospitalization benefits if payment for the
current half-yearly benefit period has been made. Seven days' grace will
be allowed to late premium-payers, providing they were in benefit during
the previous benefit period. A fourteen-day waiting period is to apply to
new registrants, those who were not in benefit during the previous benefit
period, or those previously in benefit who have not paid the premium for
the current benefit period before the expiry of the period of seven days of
grace allowed after the due date of premium payment.
(e) Arrears will apply as follows:—
(i) If premium has been paid for the first half-year's benefit period
(January 1st to June 30th), arrears, if any, will be for the immediately
preceding calendar year (January 1st to December 31st), unless the registrant is actually liable for less than that amount according to the Act and
basic records.
(ii) If premium has been paid for the second half-year's benefit
period (July 1st to December 31st), arrears, if any, will be the total of the
premium payable for the eighteen months immediately preceding July 1st
(January 1st of the preceding year to June 30th of the current year),
unless the registrant is actually liable for less than that amount according
to the Act and basic records.
(iii) If a person has paid premiums for the current benefit period, he
will be eligible after the fourteen days' waiting period for hospitalization
benefits despite owing arrears. The collection of arrears will be the responsibility of a separate section of B.C.H.I.S., whose responsibility will
be to collect and arrange for the collection of arrears, using the various
devices and powers allowed by law.
(/) Premium payments may be made direct to B.C.H.I.S. offices in Victoria
or to any authorized collection agent.
(g)  Certified interim receipts will be issued by all authorized collection agents
for all premium payments made to them.
Official eligibility certificates will be issued by B.C.H.I.S. for all
payments made direct to their offices and against all certified interim
receipts received from the authorized collection agents.
(h) Employers shall be required to ascertain that all new employees are duly
registered and in benefit by requiring the production by them of their
eligibility certificate before the first pay-day after the commencement of
employment, and further required to check all employees at half-yearly
intervals to ensure that they are all in benefit.
In the event of failure on the part of a new or old employee to produce the necessary evidence of good standing to the employer, it shall be
the duty of the said employer to forthwith report to B.C.H.I.S. in Victoria
the names and last-known addresses of all such employees, together with
their registration numbers, if any.
The employer shall also be required to keep a proper record of all
his employees, with their B.C.H.I.S. registration numbers, which records
shall be open to examination by properly authorized officials at all times. REPORT OF THE HOSPITAL INSURANCE INQUIRY BOARD FF 49
(i) Identity cards will be issued to all dependents upon request only. However, the B.C.H.I.S. may arrange for authorized agents or secretaries of
any exempted groups to issue identity cards to all exempted persons in
their groups, sending duplicates to B.C.H.I.S. for their records.
(/) There shall be no interference, implied or actual, with the right of employers and employees to jointly arrange for monthly or other periodical
deduction by the employer of such sums as will amount in due course to
the total premium payable by the employee at the commencement of
every six months' period. The employer shall under these circumstances
either:—
(i) Remit the total amount of the periodical deductions to B.C.H.I.S.
in trust for the employees; or
(ii) Deposit the same in a special account in trust for the employees
and cause the total thereof to be transmitted to B.C.H.I.S. prior to the
commencement of the next six months' premium period.
Irrespective of the manner in which the employer chooses to handle
the deductions in agreement with his employees, it shall not be necessary
for him to report to B.C.H.I.S. in detail the separate amounts deducted
from each employee until the due date of the next six months' premium
period.
Continuance of the practice already in force as between any employer
and his employee on a purely voluntary basis is encouraged in every way.
(k) In the case of persons entering the Province for temporary employment
only and without intending to take up residence in the Province within
the meaning of the "Hospital Insurance Act," the employer will be
required to ascertain the length of the said person's stay in the Province
up to the time of commencement of (new) employment; but the employer
will not be required to report the name and address of such employee to
B.C.H.I.S. until he has knowledge that such employee has resided or been
employed in the Province for a period of two complete months or over, in
which case due notification shall be given by the employer to B.C.H.I.S.
as required in section (h).
(I)  On receipt by B.C.H.I.S. of any and all such advices of non-registration
or lapse of good standing the Administration shall forthwith take all
necessary steps to secure the proper registration and payment of premiums
by the non-registrants or delinquents.
The Board therefore recommends that Plan No. 2 of registration of beneficiaries and
premium collection as outlined above be adopted in its entirety at the earliest possible
date, and that the necessary enactments be made to define the duties of the persons therein
referred to and the proper penalties for failure to comply with the provisions thereof, and
that the said plan be given a fair trial over a predetermined period, at the end of which
period the position shall be reviewed, and if the response of the persons required by the
Act to become registered and to pay premiums is not such as to have achieved the desired
and intended results, then consideration shall be given to the necessity of introducing a
plan such as the other plan referred to in this section.
No. 31.—PROOF OF STANDING UNDER THE ACT
(To be required from applicants for any Provincial (annual) licence.)
Reverting to the basic matters of policy considered by the Board in the early stages
of its investigation, it should be pointed out that having decided that B.C.H.I.S. must be
continued in some form, it naturally follows that in order to be successful the plan FF 50 BRITISH COLUMBIA
should register as nearly as possible 100 per cent of those who should pay premiums
within the meaning of the Act. Past experience of the Hospital Service indicates that
the methods used to register those who should be in the plan have failed to be 100 per
cent effective and, at the same time, the same methods have proven very costly in that
a large staff was required to operate the plan followed.
The following observations are quoted from the brief of the Vancouver Board of
Trade:—
To ensure the successful operation of B.C.H.I.S. it is necessary that as many eligible residents
of the Province as possible are registered under the scheme. To date reports indicate that in spite
of legislation requiring compulsory registration there are an unduly large number of people who
have not complied with the law. Not only lack of enforcement of the Act has contributed to the
financial problems of B.C.H.I.S., but hospitalization of delinquents who have not paid their own
hospital bills have jeopardized the financial standing of a number of hospitals.
The Vancouver Board of Trade, therefore, declares that since it has been deemed necessary
and desirable to have a government sponsored universal hospital insurance plan, it, therefore,
follows there should be compulsory registration of all eligible B.C. residents and recommends
that the government enforce the law requiring compulsory registration.
And from the brief of the Vancouver General Hospital:—
There are two main factors causing the increase in amount to be collected, one is co-insurance, and the other non-insured patients. While some of the non-insured patients are transients
who cannot be expected to have insurance coverage, a good portion of the increase is due to
residents whose insurance is not in good standing at the time of their admission to hospital. If the
compulsory features of the Hospital Insurance Act, regarding registration and payment of
premiums, were enforced, there is no doubt there would be a reduction in the amount we are
required to collect from patients.
Recommendation: That the compulsory factors of the Hospital Insurance Act, regarding
registration and payment of premiums, be enforced in order to reduce the amount hospitals are
required to collect from patients.
Having in mind that full registration is essential and that the scheme is compulsory,
it is pointed out that evaders are law-breakers. Furthermore, when a substantial percentage of those who should pay premiums are evading their responsibility, they throw
an extra load on the law-abiding citizens who are registered and paying premiums.
By the terms of the recommendation immediately preceding this one and entitled
" Plan of Registration and Premium Collection," the Board believes that it has set forth
procedures that may adequately cover the case of employed persons and render evasion
of the plan for such persons virtually impossible. It would be unfair to this very large
percentage of the population who are on the payrolls of the Province to take no steps to
properly ensure the participation of self-employed or other people who are necessarily
not covered by any payroll plan. There have, in the past, been evaders of the scheme
in both classes. Having now dealt with the employed people, the Board considers that
it must seek to ensure the same measure of co-operation and participation by the other
section of the public.   Such a step is only fair to the larger body of the population.
Many suggestions have been advanced to the Board in this regard, but most of
these have been found to be impractical and unworkable. Two alternative schemes
have, however, been considered by the Board. The matter of public acceptance must
be taken into account, as in the immediately preceding recommendation of the Board.
We therefore present two alternative recommendations, believing that if the suggestion
made in the first alternative is considered to be inadequate or is first tried without satisfactory results, the second alternative must eventually be resorted to.
The Board therefore recommends:—
(a) That the necessary legislation be enacted to require that any issuer of an
annual licence on behalf of the Province of British Columbia shall, at the
time of issuance thereof, ascertain the registration number or exemption
certificate number of the licensee in all cases where such licensee is
required to be covered by the " Hospital Insurance Act," and that if the
said licence-issuer is unable to obtain the necessary evidence of standing REPORT OF THE HOSPITAL INSURANCE INQUIRY BOARD FF 51
under the said Act, he shall thereupon forthwith report the name and
address of the licensee concerned to the B.C.H.I.S., whose duty it shall
be to ascertain that all such licensees are properly registered under the
Act.
It is also recommended that the Administration of B.C.H.I.S. shall
seek the co-operation of issuers of municipal licences within the Province, with a view to having the same procedure followed by such officers.
Or, alternatively—
(b) That any person who is subject to registration under the " Hospital
Insurance Act," when applying for the issuance of any annual Provincial
licence within the Province of British Columbia, shall produce his official
eligibility certificate, certified interim receipt (current period), or exemption certificate proving his good standing under the " Hospital Insurance
Act" and regulations, and in default of the production of such evidence
of good standing shall not be entitled to the issue to him of any such
licence.
No. 32.—LIMIT OF LIABILITY FOR PREMIUM ARREARS
On the first day on which the Board commenced their investigations and studies,
they were confronted with the problem of endeavouring to ascertain what percentage of
the population of the Province required by law to be registered and covered by the
" Hospital Insurance Act" was so registered and covered. Estimates of the said percentage were placed before the Board in every public and private hearing held. In
addition, similar estimates appeared regularly in the public press, as news reports and
editorial comments, and in the form of " Letters to the Editor." The minutes of the
proceedings of the Board reveal opinions that the percentage of the population not
covered under the Act ranges from 20 to 40 per cent; and it was not unusual in certain
areas to have a figure of 50 per cent or even 60 per cent mentioned. These estimates,
of course, conflicted with the figures put forward by the B.C.H.I.S. Administration,
which purported to show that over 90 per cent of the population was properly covered.
It will be obvious that the Board was in no position to arrive at an exact figure, or even
to give definite support to any particular estimated figure. It may, however, be said
that the Board became convinced, and remains convinced, that at least 20 per cent of
the population referred to is either non-registered under the " Hospital Insurance Act"
or has become and remains delinquent in the payment of the premiums called for by
the Act and regulations.
It need hardly be pointed out that this moderate calculation of the percentage of
the population non-registered or delinquent reflects a very heavy loss of revenue to which
the Service is entitled by law. In addition to this, there is undoubtedly a very serious
demoralizing effect upon the registered and paying public, arising from their knowledge
(or supposed knowledge) of the delinquency of a great number of their fellow-citizens.
The opinion that persons complying with the law were " suckers " was very commonly
held, often expressed to the Board, and appeared to be growing day by day. It was
not unusual to have citizens report that they were positively aware that many of their
neighbours had never registered under the " Hospital Insurance Act." Very reliable
evidence was given that in numerous cases men who applied for, or were offered,
employment by firms which had adopted the payroll-deduction system of B.C.H.I.S.
either declined the employment offered or left the said employment as soon as they
discovered that this would lead to their registration for the purposes of hospital insurance,
and such persons frankly stated that they could go elsewhere without the slightest
difficulty and obtain satisfactory employment which would leave them still unfettered
and free as far as hospital insurance requirements were concerned. FF 52 BRITISH COLUMBIA
In connection with both non-registrants and delinquents, it later became evident
that the proportion of accounts incurred by these persons, or their dependents, in the
hospitals of the Province was increasing, and that the refusal of the B.C.H.I.S. to accept
liability for the said accounts was placing an undue burden upon the hospitals, about
which they were most seriously concerned. There was the added factor that the
exact standing of many of these people was not readily ascertainable, and in some cases
the patient had left the hospital days or weeks before the hospital administration had
ascertained their current standing—and the hospital administration was therefore
deprived of the proper opportunity to collect (or endeavour to collect) the hospital
account from the individual.
Furthermore, apart from the unknown quantity of persons who had never been
registered under the Act and still could not be identified, was the problem of the
amounts owing individually and in the aggregate, by those persons who had been registered at late dates, whose exact previous liability was not easily ascertainable. Any
attempt, therefore, to take into the accounts of the Service figures supposedly covering
the revenue due to them from such persons was futile.
In an endeavour to approach the problem from possibly the most practical and
sensible point of view, this Board considered that their first duty was to attempt to
make recommendations which would have the effect of securing the registration of as
many unregistered persons as possible, and bring into the funds of the Service as much
as was possible of the revenue to which they were definitely entitled from the non-
registrants and delinquents mentioned.
The Board considered this matter very seriously over a period of weeks, after
becoming acquainted with its great importance; and as a result of their deliberations,
they submitted to the Minister of Health and Welfare, on September 25th, 1951, their
Interim Recommendation No. 4. The Minister discussed this interim recommendation
very fully with the Board at certain of its sessions, and, as a result, the Board's recommendation was amended, becoming Interim Recommendation No. 4a, which will be
found in the appendix to this Report (and dated October 17th, 1951).
This recommendation was duly implemented, and publicity was given to the
compromise of arrears scheme embraced therein. This scheme, however, was necessarily limited as to time, the final date of acceptance being set at November 30th, 1951.
The result of the compromise scheme offered will be considered as satisfactory or
unsatisfactory, depending upon the point of view.
The Board was informed that, up to the expiry date, 862 persons had taken advantage of the compromise scheme. It can be easily calculated that this meant an immediate
addition to the revenue of the Service of approximately $35,000, and while these figures in
themselves must be looked upon as disappointingly low, it should not be overlooked that
the 862 new registrants committed themselves to pay, in instalments, arrears which
would probably amount to a further $65,000—and, more important, they would remain
properly registered and (it is to be hoped) satisfied persons under the provisions of
the Act. The Board feels that had it been possible to deal with this particular problem
at an earlier date, and grant a more extended period of time for acceptance of the
compromise scheme, prior to the incidence of a new year, the results would have been
much more satisfactory in every way.
This matter has been dealt with at considerable length because of the great interest
of the public generally, and because the Board believes that the experiment was well
worth while and justified, in spite of certain adverse criticism from people who did not
take the stand that " half a loaf is better than no bread."
The above is preliminary to a recommendation which the Board has decided upon
concerning arrears still existing, or to come into existence in the future. It will be found
that the Board elsewhere has made certain very definite recommendations, designed to REPORT OF THE HOSPITAL INSURANCE INQUIRY BOARD FF 53
bring under the operation of the Act a maximum proportion of the public legally called
upon to register, and the question as to a basic decision regarding the arrears of late
registrants and delinquent persons still remains. We do not believe there is any necessity
to repeat in any way the arguments set forth above having a bearing on this entire
question.
It would, however, appear to this Board that for the reasons above stated (and
other reasons), there must be a limit placed upon the period, or amount, of arrears
which any non-registrant or delinquent is called upon to pay. Apart, however, from
the position of the individual, it is the definite opinion of the Board that there is a
marginal value only to arrears going beyond a certain point in time or amount; and
that beyond that marginal value the cost of collection, not only in terms of dollars and
cents, but also in terms of goodwill, becomes definitely prohibitive.
There is the further point that the Administration is faced with an impossible task
in trying to estimate the true value of such delayed arrears, and the keeping of accounts
of such a nature in itself entails the engagement of staff in clerical and accounting work
far beyond the realizable sums.
The Board therefore recommends that, effective not later than July 1st, 1952,
a person becoming registered under the Act, or having been registered, seeking to place
himself in good standing, shall be required to pay a sum equal to the premium for the
current year as regularly provided, and the arrears for the previous premium-year if he
is liable for the same. The provisions of this recommendation are intended in no way to
interfere with the powers of the Minister or the Commissioner to reduce the amount of,
or to suspend indefinitely payment of, arrears owing by any person.
No. 33.—COLLECTION OF ARREARS OF PREMIUMS
In connection with the collection of arrears owing by any registrant under B.C.H.I.S.,
the Board points out that it has made recommendations to fix the standing of any
person as regards liability for arrears and participation in the benefits offered by the
Act. These recommendations, therefore, will have the effect of clarifying absolutely the
position of any such person entering a hospital as a patient, and will mean the hospital
administration is in no way concerned with arrears of premiums owing by any patient
registered under B.C.H.I.S.
The position of the registrant in connection with the benefits of the Act will,
providing the other recommendations of this Board are implemented, cease to be affected
by the arrears which the registrant owes.
The Board therefore recommends that the collection, or realization, of the amounts
which will from this time be recognized as arrears, and kept on the books and in the
accounts of the Service, be a matter for handling by a special collection department of
the B.C.H.I.S. Administration, to be segregated completely from the records of current
premium payments and the receipt and collection thereof. The term " arrears," as
used in this recommendation, would not be intended to mean the late payment of the
premium for the current benefit period, but those arrears defined in Recommendation
No. 32.
No. 34.—EXEMPTION CARDS:   ISSUE TO CERTAIN PERSONS
AND CHARGE THEREFOR
If the recommendations of this Board respecting enforcement of registration under
the " Hospital Insurance Act" are adopted, it will be necessary for all persons who
come within the provisions of the Act to have an eligibility card to prove registration,
which card is usually issued to them on payment of the required premium. Therefore,
a special provision will need to be made for those groups who are exempt from the
provisions of the Act or from the payment of premiums as individuals, such as members FF 54 BRITISH COLUMBIA
of the Canadian Pacific Employees' Medical Association of British Columbia and the
Telephone Employees' Medical Services' Association of British Columbia, as well as
pensioners and others in low-income groups whose hospital bills or premiums are paid
by the Government and, in addition, another group consisting of adult dependents of
registrants.
The Board therefore recommends that all adult residents of the Province coming
within the provisions of the " Hospital Insurance Act" who are, by reason of special
exemption or otherwise, not required to personally pay a premium in accordance with
the regulations shall nevertheless be required to obtain from B.C.H.I.S. an official
exemption card or certificate covering each premium-year or benefit period, as the
case may be, and to pay a charge for the said card or certificate amounting to $2
per annum.
This requirement shall not apply to the following persons mentioned in section 8
of the "Hospital Insurance Act":—
(1) Those persons mentioned in section 8, subsection 1 (a), to whom the
Government of Canada provides hospital benefits:
(2) Those persons mentioned in section 8, subsection 1 (c), who are covered
by the " Canada Shipping Act, 1934 ":
(3) Those persons mentioned in section 8, subsection 1 (d), who are
employed by the Government of Canada or the Government of any
other country:
(4) Those persons mentioned in section 8, subsection 1 (/), who are residing
in exempted areas:
(5) Those persons mentioned in section 8, subsection 1 (g), who are covered
by the " Saskatchewan Hospitalization Act, 1948 ":
(6) Those persons mentioned in section 8, subsection (3), who are inmates
of Provincial institutions, gaols, or penitentiaries.
No. 35.—CHANGES OF STATUS
The Board learned, from information supplied by the Administration and by
Messrs. Stevenson and Kellogg Limited, that there were no positive regulations in force
by which the constant and always-recurring changes in status of persons coming within
the requirements of the Act may be reasonably put ihto effect and subjected to reasonable control. It would appear, for example, that a person employed up to any date and
not being, up to that time, a member of the two exempted groups—namely, the B.C.
Telephone Company and the Canadian Pacific Railway Company—has been entitled to
demand, consequent upon a change in his employment which places him in one of these
two groups, a refund of the exact amount " prepaid " under the regulations which had
affected him up to that time.
Similarly, changes in status from single to married, or from married to single, lapse
of dependency owing to age, or to change of age, and many other changes have been
recognized as operating to change immediately the status of the person concerned under
the " Hospital Insurance Act" and regulations; and such practice has, according to the
information obtained by the Board, led to innumerable refunds, the net amount of
which can hardly be ascertained. However, the said net amount of refunds is a minor
matter compared with the effect of the very considerable correspondence, record-
changing, and other clerical work which must accrue to the Administration under the
present system. Tabulation of duties of staff employed in the Payroll Deduction Section
shows that in 1951 eleven male and fourteen female adjustment clerks were engaged in
dealing with such changes of status, and that five male and twenty-one female adjustment clerks were engaged in the Direct Payment Division of the Administration with
similar duties. REPORT OF THE HOSPITAL INSURANCE INQUIRY BOARD FF 55
The Board has elsewhere recognized the fact that the Act calls for the payment of
an annual premium, and has also recommended that this premium may be payable in
two instalments, each covering a half-year term. The Board has also elsewhere recommended that there shall be no increase in premiums or reduction in benefits within any
premium-year. In line, therefore, with what the Board considers to be the fairness of
the two recommendations last referred to, it seems not unfair to provide that there shall
be no change in the status of any beneficiary which would affect his standing under the
Act during any current half-year period. This would eliminate the major portion of the
refunds now applied for and made, with the consequent tremendous volume of work in
the offices of the Administration, which has been referred to above.
The Board therefore recommends that the Act or regulations shall be amended to
provide that there shall be no change in the status of any beneficiary of B.C.H.I.S.
which would affect his standing under the Act in any way whatsoever during any current half-year period for which the necessary premium has been paid; but any and all
such changes shall have effect only at the beginning of the next half-year period after
the date at which a change of status did, in fact, take place.
No. 36.—ELIMINATION OF CERTAIN GROUP RECORDS
Representations of Messrs. Stevenson and Kellogg Limited to this Board have
pointed out that up-to-date group records have been kept by B.C.H.I.S. covering the
following groups:—
(1) C.P.R.   Employees'   Medical   Association,   comprising   approximately
14,000 people.
(2) B.C. Telephone Employees' Medical Association, comprising approximately 3,000 people.
(These two groups are exempt from the provisions of the " Hospital
Insurance Act.")
(3) Certain war veterans exempt from the provisions of the " Hospital Insurance Act."
(4) Armed forces personnel.
(5) T.B. patients in institutions.
(6) Persons in mental institutions.
(7) Inmates of infirmaries and homes for the aged.
(8) Inmates of Provincial prisons, penitentiaries, and industrial schools.
(9) Residents of exempted areas.
(10) Members of the Saskatchewan Hospital Plan.
(11) Members of the Royal Canadian Mounted Police.
The Board has been advised by the Management Engineers that the total number
of individuals for whom these group records are kept is nearly 50,000, and that, if these
group records were eliminated, an annual saving of approximately $15,000 per annum
in salaries alone would result.
The Board believes that virtually no useful purpose is now served by the keeping
of these group records, and that under the system covering registration and exemption
of individuals recommended by this Board, the need for these records would be even
less necessary.
The Board therefore recommends that all individuals exempted from the requirements of the " Hospital Insurance Act," whether comprising the membership of the two
groups specifically exempted by the Act or being in another category, shall receive an
exemption card for every benefit period or a permanent exemption card, wherever possible, and that the separate group records now being kept by B.C.H.I.S. shall be
eliminated. FF 56 BRITISH COLUMBIA
No. 37.—PAMPHLET COVERING PLAN AND BENEFITS
There has been a demand from some quarters for issue of a " policy " which would
set out the benefits covered by B.C.H.I.S. to the premium-payer. The Board is fully
conscious of the need for some specific outline of benefits, but under a Province-wide
insurance service it is questionable whether an insurance policy, according to the
accepted definition, is necessary to fulfil this need.
The alternative suggested by some is a pamphlet or booklet that would outline not
only the benefits extended, but also other facts of interest to all registrants. In 1949
B.C.H.I.S. issued a 16-page booklet giving such information. The same need is taken
care of in connection with the Saskatchewan Hospital Services Plan by a folder which
can be enclosed in envelopes with notices of payments due, etc. A draft of a similar
folder made applicable to the B.C. plan is shown as an appendix to this Report. It is
felt, under the circumstances, that a revision of the 1949 booklet, patterned after the
Saskatchewan folder, would serve the purpose requested by those who ask for " policies " and, in general, it would be a splendid piece of literature for general distribution.
The Board was advised that the Saskatchewan folder cost $3,065 for 500,000, or three-
fifths of a cent each.
The Board therefore recommends that a pamphlet with details of the plan and
benefits, and similar in form to the Saskatchewan Hospital Services Plan pamphlet,
entitled " What's Your Question? " should be sent out with all notices of premiums due,
and that it be obtained in sufficiently large quantities as will reduce the cost to a minimum and permit it to be used for general distribution. REPORT OF THE HOSPITAL INSURANCE INQUIRY BOARD FF 57
SECTION 5.—HOSPITAL OPERATION AND MANAGEMENT
AND HOSPITAL CONSTRUCTION AND EXTENSION
38. Budgets and the "Fixed Budget" System.
39. " Fixed Charges " in Hospital Budgets.
40. System of Payments by B.C.H.I.S. to Hospitals.
41. Comparative Costs of Hospitalization.
42. Employees' Wage Agreements.
43. Student Nurses:  Hours of Work.
44. Responsibility for Hospital Accounts of Evaders.-
45. Elimination of Social Security and Municipal Aid Tax on Hospital Supplies.
46. Purchase of New Equipment:  Consent of B.C.H.I.S.
47. Central Purchasing Agencies.
48. Dispensing of Drugs.
49. Chronic Cases (Social Welfare) Remaining in Hospital.
50. General Relations with B.C.H.I.S.
51. Hospital Construction and Extension, etc.:  Study of Needs and
Provision for Hospital Improvement Districts.
No. 38.—BUDGETS AND THE "FIXED BUDGET" SYSTEM
Prior to the commencement of any public hearings, the Board held informal meetings with the representatives of certain institutions, including the boards of the Vancouver General Hospital, St. Paul's Hospital (Vancouver), and the Royal Columbian
Hospital (New Westminster). On July 26th the Board commenced a tour of the Interior of the Province which lasted until the middle of August, during which time they
visited thirty hospitals and heard thirty-seven submissions made by the boards of management of hospitals. During the month of September the Board continued its itinerary
of public hearings, journeying to North Vancouver, the Fraser Valley, and Vancouver
Island, during that time visiting five hospitals and hearing fifteen submissions of the
boards of management of hospitals.
At each and every one of these sittings and hearings, the Board endeavoured to
develop fully a frank discussion of all problems having to do with hospital operation and
management as related to B.C.H.I.S., and it may safely be said that this purpose was
fully accomplished.
It was evident from the outset, up to and including the last hearing of the Board,
that the greatest cause of concern to the hospital boards of the Province was the matter
of hospital budgets and, more particularly, the effect of the " fixed budget" system
introduced by B.C.H.I.S. With one or two exceptions, the story placed before the
Board was the same on all occasions, being to the general effect that the hospitals of
the Province could not operate under the present " fixed budget" system; that they
could not avoid substantial deficits for the year 1951; that certain items of expenditure
were improperly disallowed in the said budgets; that due provision was not made or
allowed for increasing costs of which there could be no accurate estimate or foreknowledge; and, further, that advice of cuts in the budgets submitted to B.C.H.I.S. had not
been received by the hospital boards until the end of April or later in 1951, and during
the first four or five months of the year the operations of the hospitals had been carried
on in anticipation of a reasonable acceptance of their budgets as submitted, and they
were thereafter advised of the fact that they were expected to reduce their expenditures
for the entire year to provide for the very substantial cuts made in their previously
anticipated income.
Another very important aspect of this matter was the fact that even though the
per diem rate finally set for 1951 was a higher rate than had been in effect for 1950, FF 58 BRITISH COLUMBIA
the hospitals had billed the " other agencies " (such as the Workmen's Compensation
Board, the Canadian Pacific Employees' Medical Association of British Columbia, and
the Telephone Employees' Medical Services Association of British Columbia) at the old
rate until the new budget rates were finally set in April or May, and the hospitals were
unable to collect from these agencies retroactively at the increased per diem rate which
was made applicable to the entire year as far as B.C.H.I.S. was concerned.
The Board afterwards ascertained that the hospital budgets which were originally
submitted were finally reduced by B.C.H.I.S. by a gross amount of $991,850, but that
the portion of the aggregate budgets chargeable to B.C.H.I.S. was reduced by $819,268.
It is impossible to set down here the entire volume of written evidence which was
submitted to the Board to show the views and alleged position of the hospitals consequent upon the decisions made by the Legislature and the B.C.H.I.S. Administration,
and it is pointed out that these written submissions were supplemented by an even
greater weight of evidence and opinions verbally submitted to the Board. The Board,
however, feels that to deal with this matter adequately in this Report it must here record
the written opinions of certain hospital boards, which are a reflection of all the submissions made.   We therefore quote as follows:—
From the brief of the Vancouver General Hospital:—
One of the major problems faced by all hospitals is the manner in which the budgets are
reviewed and approved by the B.C. Hospital Insurance Service.
The 1951 budget of the Vancouver General Hospital was submitted to the B.C. Hospital
Insurance Service on December 8th, 1950, but it was not until April 30th, 1951, that we were
advised by the B.C. Hospital Insurance Service that our rate for 1951 had been revised to $13.60.
The covering letter specifying the new rate implied that a reduction had been made in our budget,
but neither the amount nor the items to be reduced were specified. We requested advice of the
amount of the reduction verbally from members of the Service (including a trip to Victoria for
this purpose) but could obtain no answer. On May 31st, 1951, we were informed verbally that
the Vancouver General Hospital budget had been cut by $195,000 and, after further requests, we
were eventually notified in writing on July 16th, 1951, that our budget had been cut by $194,357.
It is unreasonable to expect a hospital to operate on its submitted budget for several months
with no official notice of change and then be forced to cut back during the balance of the year
a sufficient amount to effect a retroactive reduction in the budget.
We feel that some method should be devised so that the hospitals are notified prior to the
commencement of the fiscal year as to the final disposition of their budget. One alternative
method for this latter suggestion would be that consideration be given to changing either the
fiscal year for the hospitals or for the Hospital Insurance Service.
Recommendation: That budgets be approved prior to the commencement of the hospital
fiscal year.
If a hospital exercising careful controls over its budget is told to make an arbitrary reduction
in that budget, service must suffer. This tren,d would develop into a most serious situation.
Medicine is dynamic and progressive and there will be an inevitable and necessary increase in the
cost of hospital care. To set up arbitrary controls that are going to decide what increase in
service, if any, may be permitted is unwise. Each hospital should be required to exercise most
rigid economies but, that having been done, the B.C. Hospital Insurance Service should carefully
consider covering the full amount of the budget, and should discuss the situation with representatives of the respective hospitals before making any reductions. Unless this is done the standard
of hospital care in the Province of British Columbia will slowly but surely deteriorate.
We had carefully prepared and submitted a budget for 1951, showing a total expense of five
and three-quarter million dollars. Before submitting the budget, the original requests from our
department heads had been reduced by $174,000 and in addition another $144,000 had been
deducted from salaries to allow for possible vacancies (based on previous experience and current
conditions) due to lack of available employees and turnover. While the budget estimates for
1951 were being prepared, the Commissioner and the Assistant Commissioner visited the hospital
and discussed with the Director and the Controller the probable costs for the coming year. At
that stage, the final budget had not been completed. At no time after the Vancouver General
Hospital budget for 1951 was submitted to the B.C. Hospital Insurance Service did anyone communicate with us to discuss any phase of our estimates.
Recommendation: That the budgets be reviewed by the B.C. Hospital Insurance Service with
the representatives of the respective hospitals before final approval. REPORT OF THE HOSPITAL INSURANCE INQUIRY BOARD FF 59
From the brief of the Royal Jubilee Hospital, Victoria:—
Hospital service in this Province would have deteriorated to a dangerous level if the Government had not assisted hospitals on planned basis through the establishment of hospital insurance
and yet the hospitals are still faced with financial problems because labour costs and the cost of
supplies have accelerated in line with the increased costs of other industries.
Until the adoption of the " fixed budget " principle it was incumbent on each hospital to keep
a full house in order to create additional income. It is as ridiculous to price hospital care at
a per diem rate as it would be to pay fire departments on the basis of the number of alarms or to
pay school boards in direct relation to the number of children. A hospital budget fluctuates very
little in relation to the occupancy and the payment of a fixed budget is a principle used for many
years in hospitals. If hospitals knew with certainty at the first of the year the amount they were
to receive from the B.C.H.I.S., there would be a greater effort to manage within the limits allowed
and there would be no encouragement to keep a high occupancy in order to develop revenue.
This suggestion is made on the basis that sufficient funds would be provided to ensure a satisfactory service.
Hospital finances have been much complicated by the admission of non-insured persons who
have not the ability to pay their hospital charges. The amount of " free work " varies in the
different parts of the Province but it is unthinkable that a hospital would refuse admission or
necessary available service to a sick or injured person because of indigent circumstances. By
using a truly " fixed budget" basis the hospitals would be able to absorb the free work.
Hospitals have found it difficult to proceed with capital expenditures because the net result
of operations cannot be accurately measured until the end of the year and then the funds on hand
may not be sufficient to permit capital expenditures until the accounts are finally settled by the
B.C.H.I.S. many months later.
With an assured basic income which would allow for a basic minimum of service the
hospitals could operate with confidence and gradually improve their services by planning new
services with the B.C.H.I.S.
Our ratio of expense in the various main divisions of hospital costs are found to be within
the ratios prescribed for standard hospital costs and the budget is within .3 per cent of the
estimate prepared by the board of directors. However, it should be noted that the budget
figures given here for the six months period do not reflect the deduction of $58,000.00 made
arbitrarily by the B.C.H.I.S. Costs for the year 1950 amounted to $11.95 per diem and we have
been awarded $11.95 for 1951 and do not see how we can keep within this figure for 1951 in
view of labour negotiations and other increases in costs without reducing service. Although our
costs for 1951 are 10 per cent greater than for 1950, it would appear from available figures that
the B.C.H.I.S. intends to pay us less than last year. We contend that this is unrealistic, especially
in view of the increased number of patient days.
From the brief of the Royal Columbian Hospital, New Westminster:—
The Minister of Health and Welfare has stated in the Provincial House that during 1951
hospitals would be asked to operate on a fixed budget. After this budget has been approved by
the B.C.H.I.S. the hospital would be expected to live within it. By definition, a budget is a plan
to establish and organize a programme of operating performance. As directed, the hospital
prepared its budget for 1951 which was submitted to B.C.H.I.S., but no approval of this or an
amended budget has been received. How then can a budget plan be implemented and adhered
to without some indication of the nature of hospital services and facilities to be provided. The
only notification received from B.C.H.I.S. was that the per diem rate for 1951 had been established and that the Royal Columbian Hospital would be required to reduce the over-all estimated
expenditures by $146,000.00. No indication was given as to how the per diem rate was arrived
at, nor where it was expected that the saving required could be made. It would seem that if the
Hospital Insurance Service is to be placed in the position of determining the amount of money
any hospital may spend on its operations, then B.C.H.I.S. should also determine the standards of
hospital care which they expect the participants in the hospital insurance scheme to receive.
Admittedly, such standards would be very difficult to establish, due to the fact that the medical
staff of any hospital is primarily concerned with the needs of the patients and they would take
little or no cognizance of any predetermined standard, if they felt that such standards were not
in the best interests of the patient. This factor alone would tend to defeat the practicability of
fixed budgeting. Again, the standard of hospital care will vary from hospital to hospital (some,
as our own, providing such services as radiology, pathology, cardiology, etc.), depending on the
character of the community it serves, and the types of sicknesses and injuries for which care is
required. The Royal Columbian Hospital, situated at the confluence of three major highways,
has a prevalence of automobile accidents, which in all probability would not be experienced to
to the same degree by any other hospital in British Columbia. FF 60 BRITISH COLUMBIA
B.C.H.I.S. has stated on several occasions that it does not wish to disturb the autonomy of
the Hospital Board of Management, despite the fact that by virtue of the controls which it
exercises over the hospital's finances, such autonomy can not possibly exist. The hospital's
revenue is indirectly controlled by the B.C.H.I.S., and consequently this factor predetermines the
amount of money which can be expended on the operation of the hospital. The B.C.H.I.S. in its
circular dealing with the hospital budgets has left to the Hospital Board of Management the
problem of determining where economies are to be made in order to operate within the per diem
rate established. Whether or not the B.C.H.I.S. established standards for hospital care, it would
seem that the standard should be consistent among all British Columbia hospitals, but the variation in asked-for-expenditure cuts does not appear to permit such consistency. However, neither
the directives received from B.C.H.I.S. nor conversations with the officials elicited any information with respect to the standards of hospital care or services to be provided.
From the brief of the Vernon Jubilee Hospital, Vernon, B.C.:—
We do not object to the present policy of operating on a fixed budget, subject to adjustments
to meet unforeseen circumstances or conditions, but we do object to having our budget cut arbitrarily by the Commission. For 1951, our budget was cut by $9,300.00. It was suggested
by the Commission that we cut down our wage bill to meet the greater amount of this cut. As all
employees are covered by union contracts, wages could not be reduced even if the board should
wish to do so. The only alternative would be to reduce our staff. Our administrator states that
the staff cannot be cut and still give service. If the Commission provides our funds then we
recognize, even if we dislike to do so, that we must accept a certain measure of control over our
expenditures. But our objection is to remote control; if we are told to cut our staff, and we
do not think that any cuts can be made, then there should be a proper analysis of our operations
made on the ground by some one competent to do so. The Commission this year has fixed our
rate at a sum at which we claim to be unable to operate. Our rate should either be adjusted to
provide the required funds or the Commission should have an expert to tell us where we are going
wrong. The policy of having to operate on a certain fixed amount and not on what is actually
required to maintain service is wrong.
From the brief of the Powell River General Hospital, Powell River, B.C.:—
This hospital, in preparing its 1951 budget, did so with aview to the most economic operation, and followed the instructions of the Hospital Insurance Service not to take into account
increases in commodity prices or wage increases. The budget for this hospital amounted to
$268,685.00—and was cut by $18,000.00. There is no doubt in the minds of this board of
management that this cut was made necessary by the lack of funds, caused in some measure by
the inability of the Hospital Insurance Service to collect premiums and other Government departments not paying their full share in their incurred liabilities.
From the brief of the Penticton Hospital, Penticton, B.C.:—
Our bad debts this year will approximate $6,000.00 to $7,000.00 and will account for the
greatest per cent of our operating deficit. During the year 1950, proven bad debts were considered as an operational expense. With this in mind, when preparing our 1951 budget, we made
only a nominal allowance for those bad debts not acceptable to B.C.H.I.S. The term " fixed " as
applied to our budgets as of May 1 st this year was not anticipated. We are well pleased with the
general principles of the plan but feel that some remedy must be found in order that the humanitarian basis on which it was founded is not lost in the monetary approach.
From the brief of the Chilliwack General Hospital, Chilliwack, B.C.:—
The deficit with which we are at present faced and which, in spite of every effort to economize, we are unable to reduce and can see no hope of so doing, as long as we are forced to try
to operate on a fixed budget, is our chief concern; for we cannot imagine how this can be made
up out of hospital funds, of which we have none, or by the community. Revenue by way of
donations has ceased.
To the end of July we had exceeded our submitted budget by over $18,000.00. This estimate
was submitted in November, 1950, and based on our experience to September, 1950. What was
thought at that time to be a fair increase to cover rising costs was added. We were advised that
$7,500.00 had to be cut from the budget as submitted with the suggestion that it could be cut
from salaries and wages, repairs and linen.
From the brief of the Creston Valley Hospital, Creston, B.C.:—
Under the fixed budget arrangement made by B.C.H.I.S. our estimates for 1951 were slashed
by the amount of $7,000 or 11.2 per cent of our total estimated expenditures, which action we
vigorously protested to BCH. Since that time we have repeatedly pointed out that we have
attempted but are unable to reduce expenditures to in any way approach this required reduction. REPORT OF THE HOSPITAL INSURANCE INQUIRY BOARD FF 61
However, whether we are financially able to absorb this reduction or not, we have been forced to
do so by monthly reduction of advance expenditure payments by BCH, which places us in the
position today of being forced to ask our creditors to carry as unpaid purchase bills our accounts
for the month of June—$1,900.00, July—$2,000.00, and a bank overdraft of $1,100.00. You
gentlemen are business men, and if you were asked to operate your private concerns as BCH
forces hospitals to operate, you would undoubtedly consider closing your doors to further business, as we must at this time seriously consider doing. We members of the (hospital) board are
forced in day to day contact to face hospital creditors, and we are sure that if our own businesses
were in the same financial position as the hospital is at present, our only recourse would be to
turn the key in the front door. BCH has repeatedly insisted that the day to day operation of the
hospital is the concern solely of the board, but when our day rate is set for us at a definite figure
and our allowed expenditures are cut to meet the revenue supplied by that rate, we fail to see
how in any measure we may be held responsible for any deficit that might occur.
From the brief of the Rest Haven Hospital, Sidney, B.C.:—
The British Columbia Hospital Insurance Service was introduced to help hospitals financially, with definite and repeated promises that the hospital autonomy would not be affected.
The opposite has developed.
Under the present plan, our entire current working capital has been liquidated, including
non-operating funds, due to the factors which follow:
1. Daily rates set by British Columbia Hospital Insurance Service below cost for three consecutive years.
(a) Our average gross operating income per adult, child, and newborn patient day
during 1948 was approximately $10.75.
(b) In spite of inflation and with increased expense during 1949, our gross operating
adult and child patient day was reduced to about $9.25, by the Insurance Service.
(Public ward rate—$6.70 per day.)
(c) In 1950, with the continued inflation spiral, our average gross operating income
for adult and child patient day was only $10.15—still below 1948. (Public ward
rate—$9.00.)
(d) In 1951, our present average is still below the 1948 patient day average income.
We are asked to do the impossible—reduce our budget by $10,800.00. (Public
ward rate—$9.67.)
The inflation spiral is beyond our control, yet the Insurance Service has continually established a rate below our very conservative estimate, and rejected legitimate operating expenses
which have been in effect for years.
From the brief of St. Joseph's General Hospital, Dawson Creek, B.C.:—
We strongly suggest that the fixed budget recently suggested be discontinued and the hospitals be allowed to budget for the ensuing year on a basis of actual previous cost and expected
increase, or otherwise.
Referring to the fixed budget, we are convinced that this is definitely the wrong approach to
the problem, as a fixed budget is an impossibility in hospital work due to the unpredictable circumstances which might arise. Application to the Hospital Management is made for a true
statement of expected expenditures and in the case of this Hospital a true statement is given; the
consequence is that if this budget is not approved, reduction in the services of the hospital must
necessarily ensue. These services have always been at a high standard, economically supplied,
and we feel that no cut should be made in the budget as submitted.
And finally from the brief of the British Columbia Hospitals' Association:—
We would draw attention to the fact that the existing plan commenced with the intention of
reimbursing all hospitals at cost for services rendered (section 13, Hospital Insurance Act). It
was not long before this ambition was modified by restrictions in services; by refusing to pay
interest on borrowed capital; then by disallowing depreciation and, more recently, by arbitrarily
cutting down hospital budgets to protect the Hospital Insurance Fund from further deficits.
Today the hospitals are trying to carry on their work dressed in strait-jackets. The original
intention of the Act was to provide money to meet the needs of hospital patients. This has now
changed to cutting down services to patients to meet the needs of the Hospital Insurance Fund.
The end product, particularly from the point of view of the individual patient, is an
intangible. It is not only intangible, but it is a constantly fluctuating thing. Medical and
surgical science is constantly changing. Advances in science are increasing the chance of
survival; increasing the chance of complete restoration to health; and reducing the length of
time it is necessary for a patient to remain in hospital. Hospitals cannot be efficient and, at the
same time, postpone important improvements in treatment until the end of the current fiscal year.
There is another facet of hospital work that makes its objectives even more intangible.   While FF 62 BRITISH COLUMBIA
advances in science and professional and technical skill are important, tender and sympathetic
care of the individual is still a vital factor in restoration to health. Psycho-somatic illnesses are
numerous. The attitude of the patient towards his illness is a major factor in recovery. It is
in this field that our small hospitals have an opportunity to perform a great service, and they do.
Who shall assess the exact value of this in terms of dollars and cents?
Having thus exhibited the view-point of the hospitals of the Province, the Board
now wishes to quote from the submissions made to it in writing on behalf of the College
of Physicians and Surgeons and the Hospital Employees' Federal Union:—
The College of Physicians and Surgeons of British Columbia.—The financing of hospital
care is not our business. We wish to point out, however, that in any hospital a rigid budget,
pre-fixed at an arbitrary level by an agency outside that hospital may have a deleterious effect on
the standard of medical care. A hospital is a community service institution and cannot be
regarded as a boarding-house for the sick. If a hospital exercising careful controls over its
budget is told to make an arbitrary reduction in that budget, service must suffer. There is, and
will continue to be, an inevitable and necessary increase in the cost of medical care because the
economics that result from more efficient means of treatment do not affect the increased costs
of more complex methods. The setting up of arbitrary controls at Victoria to decide what
increase in service, if any, may be permitted, will have an ill-effect, in time, on the standards
of hospital care in British Columbia.
The Hospital Employees' Federal Union, Local 180.—While a fixed budget policy may be
sound and workable, in a normal period of stable prices, and enable the Government to achieve
its apparent aim of stabilization of hospital costs, in our view it is neither desirable nor workable
in the present inflationary period. And surely no one will deny that we are in a definite inflationary period. The cost-of-living index recorded for the month of January, 1951, was 172.5;
the index as released by the Dominion Bureau for the month of July was 187.6, an increase of
8.8 per cent. Assuming that a reasonable budget for the operation of a hospital in January was
$200.00 per month, obviously that same figure would be out of line for the month of July.
Simple mathematics would reveal that the budget should now be $217.60 per month. If we can
judge from the trend during the first seven months of this current year, a budget established on
the basis of January 1st to December 31st, rigid and unyielding, would be still further out of line
by the end of the year.
It should here be said that the complaint was made in many instances to the Board
that whereas the position of hospitals existing (or thought to exist) as at June 30th or
July 31st, 1951, had been called to the attention of the Commissioner of B.C.H.I.S., no
satisfactory answers had been received by the hospital boards concerned.
It was further pointed out that under the regulations in effect concerning the exact
operation of the " fixed budget" system, it was not possible for any hospital board or
administrator to gauge with any certainty the exact amount of income to be received for
the calendar year from B.C.H.I.S. until after the closing of the hospital's books and
accounts at the end of the said year.
In view of the apparent seriousness of the position of the hospitals of the Province,
as presented to this Board, the Board felt it incumbent to give earnest consideration at
once to the representations made to them, and to take some action. Consequently, the
Board, on September 25th, 1951, caused to be transmitted to the Minister of Health and
Welfare its Interim Recommendation No. 5, which will be found in the appendix to this
Report.
At the conclusion of all its hearings the Board again gave this entire matter of
hospital budgets the fullest possible measure of study and consideration. By the time
this Report is presented to the Legislature, the true results of hospital operation for the
year 1951 may be known, and will reveal the justification, or otherwise, of the importance
attached to the matter by the Board and the submissions made to the Board during the
summer months.
The Board, however, feels that it must endeavour to make a contribution toward the
fixing of a reasonable, satisfactory, and acceptable long-range solution of the problems
with which the hospitals are confronted in this regard.
The Board learned, when investigating the Saskatchewan Hospital Services Plan,
that 60 per cent of the finally accepted hospital budgets in the Province are set after REPORT OF THE HOSPITAL INSURANCE INQUIRY BOARD FF 63
discussion by a delegation of the hospital board with the administrators of the Plan, the
said delegation visiting Regina for that purpose. The Board was told that no flat cuts
took place in any hospital budget without discussion as between the Plan and the hospital
concerned. They were further told that the administrators of the Plan are willing to
negotiate at any time of the year to make retroactive adjustments if necessary.
The Board therefore makes the following recommendations:—
(a) That the budgets of the hospitals of the Province, when submitted to
B.C.H.I.S., must include therein all the anticipated costs of efficient
operation, and if the B.C.H.I.S. Administration, upon examination of any
budgets so submitted, disagrees with the figures submitted, they shall make
prompt arrangements for consultation with the hospital board concerned
so that adjustments may be studied and considered; and only after such
consultation shall the figures then agreed upon become a " fixed " budget.
(b) Such " fixed " budget, nevertheless, still remains subject to agreed changes
arising as the effect of circumstances over which the hospital board has
no control.
(c) There shall be no reduction of a per diem rate set by B.C.H.I.S. and
existing in any hospital, made effective until the time when the new budget
of the said hospital is fully agreed upon for the year in accordance with
clause (a) hereof.
(d) That at the commencement of each year the " other agencies " shall be
notified by B.C.H.I.S. that accounts rendered to them for hospitalization
for which they are liable are on an interim basis until the hospital budgets
and rates are fixed for the year by B.C.H.I.S., and that such accounts are
thereafter subject to increase or decrease in accordance with the new
rates set.
No. 39.—"FIXED CHARGES" IN HOSPITAL BUDGETS
The general matter of the " fixed budget" system for hospitals and the manner of
payments applicable thereto has already been dealt with by the Board in this Report. It
was felt unwise to complicate the Board's previous treatment of this subject by injecting
arguments or detail having to do only with parts of hospital expenditure.
For this reason, therefore, we deal now with the matter of what are generally called
fixed charges, usually of an annual nature, to be found in the accounts of all hospitals, as
they are found in the accounts of practically any business or institution. The charges we
have reference to include allowances or reserves for depreciation on buildings, furnishings, and equipment, allowances or reserves for bad and doubtful debts, provision for
interest or carrying charges on capital debts which are the responsibility of the hospital,
and any other legitimate reserves or allowances of a like nature.
As concerning the submissions made to the Board, in general it may be said that the
allegation is that under the "fixed budget" system now in force proper treatment is
not accorded to those items by B.C.H.I.S. Throughout the length and breadth of the
Province, the Board did not find any hospitals willing to admit that the present rate of
allowance for depreciation was in any degree reasonable or sensible.
Regarding the allowances for bad and doubtful debts, it would appear that the
principal objection arises from the fact that there is no assurance of any certain method of
treatment to cover these debts, which may have been incurred from a variety of different
causes, such as delayed advice of non-acceptance of a patient's account by B.C.H.I.S.,
opposition to co-insurance charges, as well as ordinary hazards pertaining to the collection of any business account.
Another factor inherent in the whole subject may be mentioned: Due to the rising
price level more and more of a hospital's working capital is being tied up in inventories. FF 64 BRITISH COLUMBIA
Furthermore, the amount tied up in accounts receivable has been increasing to considerable proportions. As time goes on, therefore, the working capital of hospitals is becoming
more and more depleted. The question may well be asked whether the hospitals are
expected to find replacement of or additional working capital themselves, or will it be
supplied through the Insurance Service?
With regard to the matter of interest or carrying charges on capital debts which are
the responsibility of the hospital; this, of course, does not affect certain hospitals, particularly municipal hospitals throughout the Province. However, we wish to let the
attitude of the hospitals, expressed in many written briefs, speak for itself on all these
points by quoting from the submissions made to the Board, as follows:—
Nanaimo Hospital, Nanaimo, B.C.—Furthemore, no allowance is admitted for depreciation
on the buildings or equipment other than an arbitrary 10 cents per bed-day on occupancy. In the
case of this hospital, this will amount to not more than $3,000.00 a year. The building and
equipment have recently been appraised at a valuation of close to half a million dollars, and the
depreciation, which would normally be taken on this investment by any commercial concern,
would be in the neighborhood of $25,000.00 a year. Similarly the Commission will not allow
interest on the bonded indebtedness as an expense in calculating the day date, although it is an
actual cash outgo, and must be made up from funds other than those received from the Commission. Fortunately, up to the present, our donations and bequests have been sufficient to meet this
expense. But it does not seem reasonable that the Commission should be arbitrarily allowed to
expropriate our services without including in the per diem rate items of expense such as depreciation and bond interest, which are indisputably a part of the expense of running the institution
just as much as are wages, materials and supplies.
St. Martin's Hospital, Oliver, B.C.—The building was designed by the government architect
and the government subsequently made a grant of fifty thousand dollars towards the cost of the
building which ultimately amounted to one hundred and thirty thousand dollars. The Sisters
of St. Ann, therefore^ had to raise by way of a loan from the Credit Foncier, some eighty thousand
dollars, which the hospital society reduced by some ten thousand dollars through public subscriptions. In the course of negotiations with the Sisters of St. Ann, the board of management was
constituted by the election of four members from the community, four nominated by the Sisters
of St. Ann (two of whom are local citizens) and one member nominated by the Lieutenant-
Governor in Council, completing a board of nine members.
The hospital society agreed that any money contributed by the Sisters of St. Ann towards
the cost of the building should be repaid out of the depreciation account, until this indebtedness
had been liquidated. It was further agreed that the hospital should be operated by the Sisters
of St. Ann without recourse to public support.
Prior to the advent of the B.C.H.I.S., depreciation at the rate of five per cent was set up
to amortize the debt and the balance remaining as at the 31st of December, 1949, was $40,100.00.
The B.C.H.I.S. makes no allowance for depreciation, the only means therefore of repaying the
debt is out of the Sisters' personal salaries. Some argument may be advanced to commend this
method of repayment, but the board of management feels that such an argument cannot be
justified, either legally or ethically.
Royal Inland Hospital, Kamloops, B.C.—Amounts allowed for depreciation of buildings and
equipment are not adequate and in view of the fact that working capital of the hospital has disappeared entirely, in meeting increased costs and annual deficits, a substantial change should be
made allowing sufficient funds to avoid accumulation of replacement, maintenance and renewal
expenditures for which no money is or will be available under the present method in use.
Vernon Jubilee Hospital, Vernon, B.C.—It is suggested that the present policy of the Commission with regard to depreciation allowance is not good business practice. Hospital boards are
not permitted to charge any depreciation as an operating cost, except an allowance of 10 cents
per patient day. This is far from adequate, and we cannot help feeling that the present policy is
dictated not by sound business principles but by motives of expediency.
Rest Haven Hospital, Sidney, B.C.—The following changes would materially strengthen the
plan and give hospitals a foundation on which to operate.
Make provision for proper depreciation expense based on regular established depreciation
schedules, at least for those hospitals where capital investments were financed by the hospital.
St. Joseph's General Hospital, Dawson Creek, B.C.—(1) We strongly suggest that the
depreciation allowance formerly in force in the Hospital Insurance rules, or some form thereof,
be restored immediately.
Referring to item number (1) above, we can only refer to the experience of the St. Joseph's
General Hospital and the difficulties that have been met since the Hospital Insurance Plan has ^■■ppp
REPORT OF THE HOSPITAL INSURANCE INQUIRY BOARD FF 65
been put into effect. At the inception of Hospital Insurance Service there was a deficit of
approximately $46,000.00 which had been incurred by the Hospital with a view at that time of
repaying to the loaning organization, with interest. Since the Hospital Insurance Service merely
reimburses at operating cost, there has been no possibility of any repayment of the loan. It is
felt therefore that in all fairness interest should be considered as an operating cost, and the only
feasible way would be to pay the loan out of a depreciation fund.
Finally, the British Columbia Hospitals' Association may be said to have summed
up the situation in the following introductory remarks to their brief presented to this
Board:—
We would draw attention to the fact that the existing Plan commenced with the intention
of reimbursing all hospitals at cost for services rendered (Section 13, Hospital Insurance Act).
It was not long before this ambition was modified by restrictions in services; by refusing to pay
interest on borrowed capital; then by disallowing depreciation and, more recently, by arbitrarily
cutting down hospital budgets to protect the Hospital Insurance Fund from further deficits.
Today the hospitals are trying to carry on their work dressed in strait-jackets. The original
intention of the Act was to provide money to meet the needs of hospital patients. This has now
changed to cutting down services to patients to meet the needs of the Hospital Insurance Fund.
The Board fully realizes that the matters referred to are most important, and have
a considerable bearing on the operations of hospitals and likewise on the operations of
B.C.H.I.S. The Board is not prepared to put forward any recommendation which makes
possible a complete solution of the whole problem. In view of other recommendations
made by the Board, it feels that the question of bad debts and allowances therefor will
assume a minimum importance in the near future, and with regard to the other two
divisions of this subject,—
The Board now makes the following recommendations:—
(a) That in the case of hospital equipment, full depreciation allowance (in
accordance with the classification thereof) shall be permitted as an annual
operating cost in hospital budgets, in order to cover equipment replacement; and
(b) That the entire question of allowances for depreciation on buildings, and
carrying charges on capital debts which are the responsibility of the
hospital board, shall be the subject of serious study by the Administration
of B.C.H.I.S. at the very earliest possible date, with a view to a more
satisfactory agreement being reached concerning these charges between
the hospital boards and the B.C.H.I.S.
No. 40.—SYSTEM OF PAYMENTS BY B.C.H.I.S. TO HOSPITALS
This is a matter which is, of course, definitely bound up with the general subject of
hospital budgets, and particularly with the present system of " fixed budgets," on which
subject other recommendations are elsewhere made by the Board.
This phase of the matter has been the subject of thorough discussion with the boards
and administrators of many hospitals. It is a somewhat involved matter, and a variety
of opinions has been expressed in connection therewith. The arguments advanced take
into account the effect of the depleted working capital of many hospitals, the fact that
advances made on earlier dates by B.C.H.I.S. to hospitals are in many cases deducted
from the current payments due to these hospitals, and a great many other factors.
It has been suggested that the system in force should be changed in various ways,
and the extreme position taken is, of course, that the hospitals should be paid by
B.C.H.I.S. on a month-by-month basis for all services rendered. The Board has looked
closely into the manner of payments now in force in conjunction with the " fixed budget"
system. Briefly, it may be stated that the total amount of the " fixed budget" of any
hospital having been arrived at, it is reduced to a per patient-day basis, and this is broken
down into two distinct parts—namely, the constant cost and the variable cost.   The said
3 FF 66 BRITISH COLUMBIA
constant cost is then supposedly paid to the hospital concerned in twenty-four semimonthly instalments, and the variable cost is paid to the hospital in monthly instalments,
in amounts depending on the accounts submitted for patients actually passing through
the hospital. We find, however, that the payment (of the constant instalment) is, each
month, based upon the occupancy for the previous month. This has led to dissatisfaction
on the part of the hospitals because of the complications which ensue. It should be clear
that a hospital may receive in July a " constant" instalment payment based on a very
low occupancy experienced in the month of June, whereas the July rate of occupancy may
have gone to a much higher level, and the consequent cost of the hospital operation for
the second month is in many respects increased, and to meet these increases promptly
the hospital does not have immediately available the adequate funds.
The Board fully realizes that this is not a simple matter to any but accountants, and
has no desire to set down here all the technicalities involved. It does, however, seem to
the Board that the approach made to a proper system of payments to hospitals is somewhat in the nature of a negative rather than a positive approach. Furthermore, the
Board must report that it has been impressed by the apparent superiority of the system
in force in the Province of Saskatchewan. Under this system the " fixed budget" of the
hospital, arrived at on an agreed-occupancy basis, is also broken down into the constant
and variable factors, but payment of the portion of the " fixed budget" which covers the
constant factors is made to the hospital in twenty-four equal and unvarying instalments
throughout the year. The "variable" cost is then paid to the hospitals as the actual
" occupancy " bills are rendered and passed. It should be mentioned that the Board was
told that the straight payment of the entire per diem rate had had a tendency to encourage
the overcrowding of hospitals, and that therefore the system of "hold-back" of the
" variable " cost was instituted.
It appears to the Board that this system has at least the merit of giving exact knowledge to the hospital of a minimum monthly cash income which it will receive from the
Service, thereby enabling the hospital administration, as far as possible, to fit their operations into this definite pattern; and it is possible that there is considerable inducement to
the hospitals to operate as closely as possible to this fixed sum, with the result that a
considerable measure of economy is effected.
For these reasons, the Board now recommends that the system of B.C.H.I.S. payments to hospitals be reviewed, with the object of arriving at a more satisfactory plan;
and the Board is of the opinion that the system in use in Saskatchewan should be followed,
unless specific and valid reasons exist in favour of some other system.
No. 41.—COMPARATIVE COSTS OF HOSPITALIZATION
In the course of its work the Board obtained from various sources outside the
Province information as to hospital costs, but probably of the greatest interest, and most
closely comparable to the British Columbia costs, were figures obtained from the
Province of Saskatchewan. The Director of the Saskatchewan Hospital Services Plan
supplied the Board with fully detailed figures of several hospitals in that Province, both
as regards actual costs for 1950 and approved budgets for 1951.
It is not possible to say that the operations of any hospital in Saskatchewan are
exactly comparable to the operations of any one hospital in British Columbia because
there will necessarily be some varying features. For instance, two hospitals with the
same rated bed capacity will not necessarily have the same percentage of occupancy or
total of patients' days. Then a hospital of a certain size in Saskatchewan might have
a training-school, whereas there might not be any training-school in conjunction with
a hospital of comparable size in British Columbia; or, again, a hospital of a certain
size in Saskatchewan might be in the " Catholic Conference " group, but the comparable
hospital in British Columbia might be under a different form of management. REPORT OF THE HOSPITAL INSURANCE INQUIRY BOARD FF 67
However, the Board caused certain comparisons to be made. In the appendix
to this Report there will be found a Summary of Comparative Figures for Hospital
Operation for 1950, in which are the figures of actual operation of a Saskatchewan-town
hospital with a rated capacity of sixty-one beds, and the actual figures of seven hospitals
in British Columbia of reasonably similar rated bed capacity. It will be noted that
the actual patients' days vary considerably in most of the comparative figures, and,
necessarily, the percentage of occupancy also varies.
Bearing these variations in mind, the study of comparative costs is nevertheless
most interesting and informative. It will be particularly noted that the cost to
B.C.H.I.S. of the hospital in British Columbia having the number of patients' days
most nearly equivalent to the figure for the Saskatchewan institution cost the B.C. Service
slightly over 60 per cent more than the Saskatchewan hospital cost the Saskatchewan
Hospital Services Plan, although the actual patients' days of the B.C. institution was
less than SVi per cent in excess of those of the Saskatchewan institution. The detailed
figures set out in this comparative summary are quite clear and need not be repeated
here.
It is, however, quite apparent that the very considerable excess of costs in British
Columbia over those in Saskatchewan arises chiefly from the difference in the amount of
net wages and salaries paid in the comparable institutions. In the case of the two
hospitals quoted, it will be noted that the total net wages paid in the B.C. hospital was
120 per cent higher than the total paid in the Saskatchewan institution. For this reason,
the Board also presents, as an appendix to this Report, a comparative statement of staff
employed for the year 1951 in a hospital in a B.C. city and in a city hospital in the
Province of Saskatchewan. It will be noted that the rated capacity of these two
hospitals is not exactly the same, but the figures covering the percentage of occupancy,
the total patients' days, and costs are plainly set out. It is felt that these comparisons
will be of very great interest to all concerned with the problem of hospital costs in the
Province of British Columbia. The Board, of course, knows that there are certain basic
circumstances existing which cause, and partly account for, the very great difference in
costs as between Saskatchewan and British Columbia.
One or two of these factors that might be mentioned are the over-all higher wage
rates in British Columbia and the high standard of hospital service in British Columbia.
The last-mentioned factor necessarily includes the use or allocation of a considerably
greater measure of nursing service per patient per day, with the resultant numerical
increase in nursing staff.
The Board, however, is not completely satisfied that the wide variance shown in
the total-cost figures of similar institutions can be entirely and completely justified
or approved. As already stated, the Board could put forward many factors and
arguments in support of the position of the B.C. institutions, but this does not mean
that the Board has had the opportunity of going thoroughly into all phases of the matter,
and the Board believes that such thorough investigation and study would be a most
desirable undertaking.
Apart from any other consideration, the evidence obtained and referred to here
certainly seems to support the views of the Board as expressed in another recommendation, concerning the development by B.C.H.I.S. of an organization of trained personnel
that may render maximum assistance to hospital boards and administrators in connection
with various phases of hospital operation and management.
It is, however, believed that the importance of the matters referred to above is
such as to call for positive consideration, and—
The Board therefore recommends that the Administration of B.C.H.I.S. shall
arrange, at as early a date as possible, for adequate and full conference with the executive
of the British Columbia Hospitals' Association and other interested parties, with a view FF 68 BRITISH COLUMBIA
to giving intensive study to the matters referred to above, and to arrive at conclusions as
to whether or not the comparative position of the hospitals of the Province is sufficiently
justified.
No. 42.—EMPLOYEES' WAGE AGREEMENTS
One of the most important matters considered by the Board was the entire subject
of wage rates negotiated by the duly authorized bargaining agents for hospital employees
with the various hospital boards, and the manner in which they are affected by the
" fixed budget" policy of B.C.H.I.S. Very strong representations were made in this
connection. Most of these submissions were made verbally to the Board by many
hospital boards and administrators, and by the representatives of the Hospital Employees'
Federal Union.
Dealing first with the view-point of the hospitals, we quote from four briefs which
were submitted in writing, and which, to some extent, may be said to set out the views
generally held by hospital boards throughout the Province.    It will be noted that, in
addition to the main subject of wage and salary rates, a great deal of attention has been
given to the question of employers' contributions to pension or superannuation funds:—
North Vancouver General Hospital.—Causes of additional cost are brought about by the
formation of unions which have attained very high percentage increases as compared with the
cost of living.    Our agreement with labour unions, according to the Act, should be carried out,
but the B.C.H.I.S. will not allow us to do this because they have materially cut our budget.
We feel that the only fair way for labour-union agreements is to work on the cost-of-living
basis, which we are endeavouring to do.
Royal Columbian Hospital, New Westminster, B.C.—Other problems requiring consideration
are:
(1) The need for regional union bargaining annually with each hospital in a given
area represented at negotiations.
(2) The establishment of one approved superannuation scheme.
Rest Haven Hospital, Sidney, B.C.—Assurance was given to all hospitals that the advent of
B.C.H.I.S. would not affect regular, established, legitimate operating expenses. After a period
of two years, B.C.H.I.S. rejected certain of our operating expenses without any reason. The main
item was an inexpensive but comprehensive pension plan which has been part of our regular
operating expenses since 1922. The Board feels this should be accepted as an operating expense
for the following reasons—the Hospital Insurance Service's original policy provided for the
acceptance of hospital operating expenses that were in effect before the advent of the Service.
Our employees' pension plan has been in effect in this hospital for the past thirty years.
The Honourable George S. Pearson promised that " Services existing in hospitals prior to
the advent of compulsory hospital insurance would not be curtailed or interfered with." The
Hospital share of our pension fund is only 3 per cent of our payroll, which is very much
lower than other hospitals with pension plans. Pension plans of other hospitals which were
in effect before 1949 are being allowed.
Another view-point is expressed by the Royal Jubilee Hospital, Victoria, as follows:—
During the past few years hospital employees have taken advantage of the I.C.A. Act to
secure adequate bargaining privileges with hospital management and the employees no longer
feel that they should make a contribution to the community because hospitals cannot afford
higher wages. There can be no doubt that hospital employees are entitled to a fair wage but the
hospital employees generally feel that they should retain all of the privileges which are traditional
to hospital employment because of the low wage structure, and also receive wages comparable
to modern industry.   Hospitals are giving more in perquisites than most types of occupation.
Hospital employment has become more popular since the inception of B.C.H.I.S. and it is
not difficult to recruit good personnel in most urban hospitals at the present time. To better
understand the labour problem and the mounting cost of hospital payrolls, it is suggested that
the Hospital Inquiry Board might meet with official committees from properly organized employee
groups.
Then, turning to the employees' point of view, the main submissions on their behalf
were made by the Hospital Employees' Federal Union, Local 180, which, we understand,
is the bargaining agent for the majority of hospitals organized under the " Industrial
Conciliation and Arbitration Act." REPORT OF THE HOSPITAL INSURANCE INQUIRY BOARD FF 69
The representatives of this body first appeared before the Board in Vancouver in
September, when they made urgent representations to the Board in support of a written
brief, from which we quote somewhat extensively as follows:—
We feel however that the burden of maintaining a service which is for the benefit of all
should be borne by all on a fair and equitable basis. No group of employees should be singled
out to make special sacrifices or to subsidize a service which all enjoy. In our opinion, hospital
employees are being singled out and penalized. Regulations have been issued by the Hospital
Insurance Service which seriously curtail the power of hospital employees to negotiate effectively
for wage increases which are necessary to offset the continued rapid rise in the cost of living.
In 1950 the government introduced its " fixed budget" policy to control the financial operations of hospitals in British Columbia. The introduction of this policy, coupled with an
amendment to the Hospital Act, passed at the last session of the Legislature, seriously weakens
the bargaining position of hospital workers. Under the amendment referred to above, hospital
workers are required to complete their negotiations by November 30th for all agreements for
the next calendar year. This means, for example, that all our negotiations with hospital boards
on wage contracts for the year 1952 must be completed on November 30th, 1951.
As a result of this regulation, also, the wage negotiations of hospital employees are now
governed by the provisions of two separate statutes—the Industrial Conciliation and Arbitration
Act and the Hospital Act. In order to meet the deadline of November 30th, set out in the
Hospital Act, and at the same time comply with all the steps required in the conciliation and
arbitration under the ICA Act, negotiations on wage agreements must commence not later than
September 1st, four months before the annual contracts being negotiated are to go into effect.
In normal times it would be difficult enough to begin negotiations at such an early date.
In the present uncertain inflationary period, it places us in an almost impossible position. We
are forced to " guess " what economic trends will be, and their possible effect on the cost of living,
four months before the wage agreement is to become operative, and sixteen months before it will
expire. Even a competent economist would hesitate to make such a prediction with any degree
of accuracy.   It is neither fair nor reasonable to expect hospital workers to do so.
We also find ourselves set apart from the rest of the organized labour movement, with
additional handicaps placed on our wage negotiations. We are now required to negotiate all our
wage contracts simultaneously during a concentrated three-month period of the year with
numerous local hospital boards located in many distant parts of this large province.
Furthermore, there is no guarantee that even if an agreement on wages is reached between
a local hospital board and its employees, the decision is final and binding. The budget is subject
to review, and possible revision or veto by the authorities in Victoria. This right to veto has
already been exercised by the Insurance Service when it disallowed a concession gained by the
employees of the Royal Columbian Hospital in New Westminster. But, ten miles away, the
employees of the Vancouver General Hospital are covered by this same condition of employment
and the cost recognized by the Hospital Insurance Service.
Thus the position is that a budget drawn up by a local hospital board, including estimates for
wage increases agreed upon after lengthy negotiations, may be curtailed. Such a reduction in the
budget may wipe out the estimates providing for a wage award. Under these circumstances, we
contend that the rights guaranteed to employees under the labour legislation of the province are
denied to hospital workers under the regulations of the Hospital Act, inasmuch as the authorities
in Victoria, through control of the budget, can over-rule the decisions of the local hospital boards,
the bodies with whom the negotiations must be carried on. Apparently for us free trade union
bargaining no longer exists.
Through their union, hospital workers seek first to establish reasonable wage scales, and
second, to maintain their real wages in a period of rising prices through the negotiations of wage
increases. Under existing conditions, we do not see how the fixed budget policy of the government can operate without interfering with the opportunities of workers to ensure and maintain
a reasonable standard of living. This is clearly illustrated in cases where local hospital boards
grant, as some have, a cost of living bonus which calls for adjustments to keep pace with the rise
in the cost of living. If the local hospital board is to live up to its agreement and grant the
increases provided for under the contract, the Hospital Insurance Service will have to deviate
from its " fixed budget " policy.
We believe that a continual attempt on the part of the government to adhere rigidly to a fixed
budget in the face of unpredictable price increases in all hospital costs, supplies, and equipment
as well as wages, will be an added threat to the wage levels and living standards of hospital
employees. Governments themselves find that they cannot function without supplementary
estimates. In our opinion, some method must be provided to ensure flexibility in hospital budgets
in order that the health service and wage standards will not suffer.
There has been no increase in the contributions of 70 cents per day toward the upkeep of
hospitals which the municipalities have been paying for the past ten years. A contribution of
4 FF 70 BRITISH COLUMBIA
70 cents today is equivalent to only 35 cents as compared with ten years ago. In terms of purchasing power, hospitals are receiving only 50 per cent of the value of the contribution at the time
the figure of 70 cents was agreed upon.
Of all municipal services, hospitals alone have not received an increased share from local
taxes. Roads, sewers, schools, fire and police protection, and the whole range of essential
municipal services are now being financed and maintained at much higher rates. Hospitals are
no less important to citizens than any of these other services. The local community has a
responsibility towards its hospitals. It is scarcely logical that such an important service should
be discriminated against in this way. Hospitals should share in the increased taxes which are
being levied and collected by local authorities.
We cannot allow this opportunity to pass without some reference to the charge which is
repeatedly being made that wage costs are the cause of the rise in hospital costs. It is true that
substantial improvements have been made in the wages and working conditions of hospital
employees. This was a necessary step. Hospital employees were a group of depressed workers
in a depressed industry. Their wage increases were long overdue. But higher wages do not
necessarily mean higher operating costs. On the contrary, higher wages promote greater efficiency and can contribute to lower costs of operation.
We come back to the vital matter of wage negotiations for hospital employees. The British
Columbia Hospital Insurance Service places the responsibility for wage negotiations in the hands
of local hospital boards. The former does not enter directly into these negotiations. If local
hospital boards have autonomy in regard to the wages of their employees, as contended by the
Hospital Insurance Service, then agreements arrived at between local hospital boards and their
employees in regard to wages should be accepted by the Hospital Insurance Service. If the
Hospital Insurance Service reserves the right to control the budget, as it does, and through this
control upset the basis on which wages are financed, then local hospital boards do not enjoy
autonomy in regard to wages, nor do hospital employees enjoy the rights of collective bargaining
to which they are entitled under the provision of the ICA Act. If the results of negotiations
carried out strictly in accordance with the Labor Act of the province can be arbitrarily wiped
out by a body to which we do not have access and which was not a party to the wage negotiations, a situation exists which is a serious threat to the bargaining rights and wage standards of
hospital employees.
In conclusion, our membership respectfully submits the following recommendation—that
local hospital boards should have autonomy in regard to wages and working conditions included
in wage agreements with their employees and the cost of wage awards shall be incorporated in
budgets of the hospitals concerned.
The Board at that time promised to give due study and consideration to the representations which had been made. However, during further deliberations of the Board in
Vancouver, toward the end of October, representatives of this organization asked to be
allowed to again appear before the Board, and this privilege was granted.
While the contentions of the hospital boards and the hospital employees' representatives are set forth at some length above, and possibly do not need to be enlarged
upon, it might be stated, to simplify the matter, that the chief causes of complaint are that
the hospital boards of the Province have been rendered virtually impotent to agree to
wage and salary increases, cost-of-living provisions, etc., duly negotiated with the bargaining agents of their employees in accordance with the laws of the Province, because of
the effect of the " fixed budget" policy of B.C.H.I.S., and the directives issued thereunder.
Attention was specifically drawn to the circular letter, dated July 13th, 1951, addressed
to hospitals by the Commissioner of B.C.H.I.S., which reads as follows:—
To all Approved Hospitals:
Some time ago, hospitals were notified that the government was adopting a policy of fixed
budgets with regard to the operation of hospitals in this province. This policy was deemed
necessary in order to make it possible to coordinate the financing of hospital operation through
the Insurance Service with the overall policy of government finances.
The Hospital Insurance Fund is supported by premium payments, municipal and provincial
per diem grants and additional assistance from the provincial government. The total amount of
money available to the Service through the fund is decided upon during the session of the legislature each year, and there are no additional monies available during the year for hospital operation. It is essential then that the expenditures from this fund to hospitals be kept within the
amount provided in the fund each year. To achieve this, the policy of firm budgets has been
adopted and it is desirable to call your attention at this time to the fact that the Hospital Insur- REPORT OF THE HOSPITAL INSURANCE INQUIRY BOARD FF 71
ance Service has been directed by the government to adhere to the decision to institute and carry
out this fixed budget policy. ,
Under these circumstances then, hospitals will readily realize that this policy is not compatible with any arrangements whereby expenses might vary in accordance with any proposal
which embodies an escalator clause necessitating increased expenditure during a year of operation.
If a hospital board enters into a wage agreement which contains a cost-of-living clause, or
extends the life of an existing agreement containing such a clause, and it becomes necessary
during 1951 and following years to make an upward salary adjustment as a result of the
cost-of-living bonus clause, it will be the responsibility of the hospital board to provide the
additional funds required to finance the salary adjustment or, alternatively, to reduce other
expenses by a like amount. The application of the fixed budget policy does not make available
funds for interim adjustments of this nature during a financial year, and it is therefore essential
that hospitals adhere to the budget which has been approved for the year's operations.
This directive, properly read, is, of course, quite clear; it says that by virtue of the
"fixed budget" policy adopted by the Government, responsibility for finding the funds to
cover any form of wage increases not included in the accepted budget must rest with the
hospital board concerned and cannot be accepted by the B.C.H.I.S.
At its last interview with the Board the Hospital Employees' Federal Union drew
the attention of the Board to the fact that they had negotiated wage agreements for 1952
with the Vernon and Kelowna Hospitals, and that a few days later they had received from
the Administrator of the Vernon Jubilee Hospital a letter, dated October 12th, 1951,
from which the following is quoted:-—
I have been instructed by Mr. K. W. Kinnard, Chairman of the Board of Directors of this
hospital, to advise you that the B.C. Hospital Insurance Service is not willing to accept the terms
of the agreement as tentatively agreed upon at the meeting held with you on October 2nd.
I am not in a position to give you any detail at this time as it is the intention of the President
to confer with representatives of the B.C.H.I.S., who will be in attendance at the B.C. Hospitals'
Association's convention which is to be held in Vancouver from October 16th to 19th.
The representatives of the Hospital Employees' Union interpreted the statement in
the two documents referred to as being a denial by the Commissioner of B.C.H.I.S. of the
rights of hospital boards and hospital employees to agree upon wage rates and conditions
in accordance with powers conferred by the laws of the Province. It must be admitted
that in view of the position in which the hospital boards are placed by the " fixed budget"
provisions of B.C.H.I.S., the factual result is as stated by the Hospital Employees' Union.
It should also be stated quite clearly, in all fairness, that the union representatives frankly
admitted that because of the nature of the duties of hospital employees, strike action on
their part was unthinkable.
In consultation with Dr. Baird, Administrator of the Regina General Hospital, the
Board learned that the Saskatchewan Hospital Services Plan does not tell the hospital
what it can and must do in connection with wage agreements, but rather insists on the
hospital board negotiating the best deal it can get.
The Board laboured long and arduously in an effort to find some satisfactory solution (or recommendation) concerning this very important subject. The Board has
elsewhere dealt with the matter of future hospital budgets and, in the hope that their
recommendations in connection therewith will be accepted and implemented, the Board
believes that this entire matter of wage rates, in all its detail, may thereafter be brought
to a completely satisfactory conclusion. The Board does not feel that it is now in a
position to pronounce final judgment upon the very important question with which it
has been grappling, and the best it can do is look forward to satisfactory action being
possible when its other recommendations for changes in the Service have been studied
and adopted, and to some extent put into effect.
The Board now therefore recommends that, because of the evidence of a great deal
of dissatisfaction on the part of the hospital boards of the Province and the employees
thereof, as represented by their bargaining agents, with the attitude and actions of
B.C.H.I.S. concerning wage agreements, and because the Board believes it is not the FF 72 BRITISH COLUMBIA
function of B.C.H.I.S. to interfere directly or indirectly in the matter of wage negotiations, an early conference of all interested parties be held—namely, the hospital boards
or Hospitals' Association, the hospital employees or their bargaining agents, and representatives of the Department of Labour—in which conference the Administration of
B.C.H.I.S. shall take no part:
And, further, that the Board point to the agreements which have been arrived at
and are now in force with policemen's and firemen's organizations in various parts of
the Province, as forming a possibly acceptable solution on which to base a permanent
policy as regards hospital employees and the terms of their employment. It is intended
that the aforementioned conference shall deal with all matters having to do with the
position of employees of hospitals, including the matter of pension and superannuation
funds and the allowable contributions thereto of hospital boards.
No. 43.—STUDENT NURSES:   HOURS OF WORK
The Registered Nurses' Association of British Columbia submitted a most constructive brief to the Board. Many of their suggestions are reflected in the Board's recommendations. Their submission contained a reference to hours of work of student nurses,
as follows:—
The Registered Nurses' Association has drafted recommendations concerning hours of duty
and health protection for student nurses. These with certain modifications have been approved
by the Association's Committee on Educational Policy (on which each school of nursing and
the British Columbia Hospitals' Association have representation) and by the Government Committee on Nursing Service. During the past five years the Association has periodically discussed
with the Honorable Minister of Health the great need for implementation of clause 29 of the
Registered Nurses' Act which reads:
" The Lieutenant-Governor in Council may make regulations governing the hours of duty
for student nurses in schools of nursing."
We believe that the cost of decreasing the students' hours of duty from 48 hours to 44 hours
per week (the major change proposed and one which would necessitate additional graduate staff)
has been the reason no action has been taken. We therefore strongly urge that monetary
consideration not be permitted to postpone implementation of this clause, in line with the
recommendations made by the Association.
In reviewing the subject of hours of work for student nurses, the Board learned
that at the Regina General Hospital, where there is a training-school for nurses with an
enrolment of 215 students, a forty-four-hour work-week is in force, with a three-week
vacation, plus statutory holidays.
The Board therefore recommends that the request of the Registered Nurses' Association of British Columbia with reference to hours of work of student nurses be given
favourable consideration.
No. 44.—RESPONSIBILITY FOR HOSPITAL ACCOUNTS
OF EVADERS
The Board has elsewhere recommended that, subject to certain conditions, a registrant under B.C.H.I.S. shall be entitled to the benefits thereof in any benefit period for
which he has paid the current premium; and, further, the Board has recommended that
the arrears of premiums for which any person is liable shall cover only a certain fixed
and definite period prior to his original registration. The Board has further recommended that the collection or realization of such arrears shall be the responsibility of
a special department of B.C.H.I.S. The Board has also suggested and recommended
certain improved methods and procedures by which it is hoped that a maximum percentage of the population of the Province will be registered and covered under the Act
and regulations.
It is nevertheless recognized that there will be some small percentage of evaders of
the scheme still in existence, and it is further recognized that from time to time some of
these evaders will enter the hospitals of the Province for acute or general treatment. REPORT OF THE HOSPITAL INSURANCE INQUIRY BOARD FF 73
The Board believes that, under a scheme made compulsory by Provincial legislation, such evaders are not the final responsibility of local hospital authorities in any way.
Many representations have been made to this effect by individual hospitals. These are
too numerous to be quoted here, but the whole sense of the matter may be considered
to be covered by the following remarks found in the brief of the British Columbia
Hospitals' Association:—
Failure to cover all persons liable to pay premiums has created one of the most expensive
and difficult problems now facing both B.C.H.I.S. and the hospitals, namely, identification of
persons entitled to hospitalization under the plan. If all liable persons were covered, it would
only be necessary for the hospital to prove residence and length of residence.
Being in agreement with the reasoning behind these representations—
The Board now recommends that, since the collection of premiums under the
" Hospital Insurance Act" is the function of the B.C.H.I.S., then the final responsibility
for the collection or coverage of any hospital accounts incurred by evaders of the provisions of the Act is for the Service to assume, and that such a policy should be
definitely adopted, but nevertheless the hospital board or administration concerned shall
initiate and exhaust all reasonable steps in their endeavours to collect the said accounts
from the patient or his responsible relatives in the first instance.
No. 45.—ELIMINATION OF SOCIAL SECURITY AND MUNICIPAL AID
TAX ON HOSPITAL SUPPLIES
It has been pointed out by many hospital boards that drug supplies and hospital
equipment generally are exempt from Federal sales tax of 10 per cent but the Provincial
social security and municipal aid tax applies to all such items going into a hospital,
except drugs that are specifically prescribed by a physician. In other words, hospital
equipment and supplies such as are exempted from the Federal sales tax are assessed
the Provincial tax, with this single exception.
As all hospitals are non-profit institutions and as Government subsidies are made
toward hospital deficits, it is suggested that exemption from the Provincial tax to the
same degree as is granted in the case of the Federal tax would eliminate a lot of clerical
and paper work and result in a net saving to the British Columbia Government.
The Board therefore recommends that the cost of purchases made by the hospitals
of the Province covering articles or supplies which are exempted from the Federal sales
tax be also exempt from the imposition of the social security and municipal aid tax.
No. 46.—PURCHASE OF NEW EQUIPMENT:   CONSENT
OF B.C.H.I.S.
A somewhat minor matter which appeared to be causing concern to some hospital
boards and administrators was the procedure outlined to be followed in order to secure
the necessary permission from B.C.H.I.S. for the purchase of new equipment toward
the cost of which a Government grant could be expected. It would appear that a capital
expenditure of practically any amount for equipment which has a certain life expectancy
must be first authorized by the Commissioner of B.C.H.I.S. if the hospital in question
expects to receive a Government grant covering a portion of the cost.
As can be understood, this procedure technically applies to items of comparatively
small cost, but nevertheless essential to the hospitals concerned. In many of these cases
the purchase of the required equipment is necessary on short notice, and the complaint
presented to the Board was that there is undue delay in obtaining the needed permission.
The hospital is required to submit a form of application showing the specifications of
the article in question, the life expectancy, and the tenders received to cover its cost.
In certain cases, even of expenditures of comparatively large amounts, it could (according to the hospital board or administrator) be demonstrated that the said cost would be FF 74 BRITISH COLUMBIA
fully recovered in savings effected by the use of the new article, in even one operating
year—and, in many cases, over a slightly longer period.
In view of rising prices, and the fact that it is not always possible to get a fixed and
definite tender which is not subject to upward revision, it appeared from testimony given
to the Board that annoying consequences had followed the delay in granting of permission by B.C.H.I.S.
As already stated, this would seem to be somewhat of a minor problem, and we
find that in the larger hospitals adjacent to the centre of B.C.H.I.S. Administration,
the problem has not caused any serious difficulties. Nevertheless, the Board considers
that the position of the smaller and more remote institutions is worthy of note, and for
this reason—
The Board now recommends:—
(a) That the mechanics or operation of the rules and regulations pertaining
to the granting of permission to purchase new hospital equipment shall
be examined with a view to eliminating the difficulties and delays so far
encountered, and thereby remove the cause for any complaint in the
future:
(b) That purchases by the hospitals of such new equipment not having a cost
value higher than $100 be made permissible without the prior consent of
the B.C.H.I.S. Administration having to be obtained.
No. 47.—CENTRAL PURCHASING AGENCIES
Practically all submissions made to the Board showed a keen general interest in
rapidly rising costs of operating hospitals, and there was a genuine desire expressed to
contribute suggestions that would help to counteract this tendency.
A suggestion that came from many quarters was that central purchasing on some
plan be resorted to by the hospitals of the Province.
A study of the matter revealed to the Board that such a policy was fraught with
some difficulty, but, nevertheless, it is believed that it holds great possibilities. Certain
items, no doubt, could be purchased collectively on behalf of all hospitals in the Province, whereas in some cases this would be impractical. In the latter case, pool-purchasing would only be possible by smaller groups of hospitals located in particular zones
throughout the Province.
The Board has ascertained that the system of pool-purchasing of supplies, etc., for
hospitals has been found to be successful in certain cities, with special reference to the
City of Cleveland, Ohio, and also that plans are being laid to inaugurate a system of
pool-purchasing on a regional basis for the hospitals in the Province of Saskatchewan.
Mr. Cox, Assistant Commissioner of B.C.H.I.S., in discussing this matter with the
Board, stated that he had continually urged hospitals to try some measure of pool-
purchasing, at least in different zones. He believed they could perform a good service.
He said individual hospital administrators in many cases did not know the mechanics of
good purchasing.
The Board therefore recommends that B.C.H.I.S. encourage hospitals to develop,
to the greatest extent possible, a system of bulk centralized purchasing of supplies.
No. 48.—DISPENSING OF DRUGS
The matter of dispensing of drugs in hospitals was reviewed in great detail by the
Pharmaceutical Association of the Province of British Columbia. The highlights of their
submission in this regard are as follows:—
The Pharmacy Act of the Province of British Columbia was passed on March 3, 1891.
It is obvious, even from the date of this earlier legislation, that the Act was intended for the
protection of the health of the public. It was designed to see that the persons who were
dispensing medicines for the public in drug-stores throughout the province should only be REPORT OF THE HOSPITAL INSURANCE INQUIRY BOARD FF 75
persons who had adequate training and technical and professional knowledge to enable them to
discharge these duties in a careful, efficient and capable manner.
Conditions have changed throughout the years and, even before the advent of the B.C.
Hospital Insurance Service, persons were entering hospitals for treatment for many diseases
which in former years were treated at home. At the same time, medical and pharmaceutical
research was proceeding apace and new therapeutic discoveries were made. Today, more than
ever before, the compounding and dispensing of prescriptions calls for a very high standard
of professional skill and knowledge which is reflected in the extension of pharmaceutical training
across Canada through practical experience under the College of Pharmacy to a five-year course.
As the Pharmacy Act exists and has been passed by the legislature of British Columbia,
and of all other provinces across Canada, for the protection of the public, it is but logical that
under a hospital insurance scheme, sponsored and directed by the Government, the same margin
of protection for the health of the public in regard to the dispensing of prescriptions by competent
and trained personnel must be afforded.
The Pharmaceutical Association of British Columbia embraces every pharmaceutical chemist
in the province of British Columbia and licences under the authority of the Pharmacy Act
all retail pharmacy and hospital dispensaries operating in British Columbia. The Association
is entrusted by the Government with the responsibility for maintaining the high standards of
service for such establishments as are established under the authority of the Pharmacy Act. The
Association is one of the most democratic in Canada in that all employers and employees have
an equal vote in the affairs and administration of the Association.
The principle that pharmacists should handle the dispensing of prescriptions has been
approved under the British scheme, by the Canadian Government, and by our own British Columbia Government.
The situation in British Columbia since the advent of hospital insurance has become steadily
worse from the standpoint of protecting the health of the public in regard to the dispensing of
drugs in hospitals. The reasons for this situation are undoubtedly economic. In the first place
it is now quite apparent that innumerable hospital boards, in determining their per-patient per-day
rate for submission to the Hospital Insurance Commission, did not include drugs in their estimated costs. To overcome this situation, many of these smaller hospitals, and some larger
hospitals of 100 beds or more, operating without a dispensary, have started the purchasing of
increasing quantities of drugs from manufacturers and wholesalers, and these drugs are being
dispensed for patients in the hospitals by nurses and other persons who are not qualified, either
by training or through legal standing, for the dispensing of such drugs. The development of this
practice is seriously endangering the lives of patients in hospitals. A number of minor accidents
have already occurred, and a serious accident may take place at any time.
It would appear that there has been a tendency on the part of the Hospital Insurance Commission to condone this situation in view of the alleged economy in operations. In actual practice it is extremely doubtful that any real economies are effected. The buying of pharmaceuticals
for a dispensary or hospital is a very complicated problem, requiring professional knowledge.
There are an enormous number of duplications and a matron, or nurse, or other unqualified
persons, doing the buying of pharmaceuticals and drugs for hospitals, may pile up a very considerable stock, which would not be necessary if some person with the proper skill and knowledge
was handling the actual buying. In addition, many pharmaceutical preparations go bad in
a short period of time, and knowledge of the proper storage and the length of time which
quantities of certain drugs can be stored is essential in order to maintain these drugs in their full
strength, and to be sure that when used in dispensing, they have their full therapeutic efficiency.
Numerous pharmacists have reported to this office that they have on occasions been called
in by the local hospitals to advise them regarding a large accumulation of drugs. In many cases
these pharmacists state they had found the drugs had been in stock so long they were useless and
they have consequently been destroyed by the matron on the advice of the pharmacist concerned.
It has been suggested that every hospital in British Columbia should have a pharmacist.
In actual practice this does not seem possible. However, it would seem essential that the B.C.
Hospital Insurance Commission should accept the responsibility for seeing that drugs are dispensed to patients in hospitals under legal conditions and in compliance with the regulations of
the province, and of Canada. The subject of hospital insurance is receiving increasing study from
pharmacists, and the College of Pharmacy of the University of British Columbia is now preparing
a post-graduate course, which will give particular instructions to those interested in the development of this field of pharmacy.
In the Province of Saskatchewan, a plan has been worked out whereby hospitals under 100
beds can make an arrangement with the local pharmacist, and he will purchase their stock of what
is described as ward stocks in the name of the hospital, thereby securing the benefit of exclusion
of the 10 per cent Sales Tax, granted on hospital purchases by the Federal Government, and at
the same time taking advantage of quantity prices and lower quotations, extended by manufac- FF 76 BRITISH COLUMBIA
turers to the hospitals. While thus buying, in the name of the hospital, drugs which are used in
larger quantities by the hospital, these pharmacists handle the actual preparation and control
of the stock of such drugs as are turned over to the wards of the hospital, and other prescriptions
which have to be individually compounded or dispensed on a scale or prescription basis in their
own drug-stores for the patients in such hospitals. This scheme has worked out satisfactorily
in Saskatchewan, and has permitted the compliance with the requirements of the Pharmacy Act
there; maintained a high standard of pharmaceutical service for the patients; and resulted in
definite economy in hospital operations.
In one of the largest hospitals in British Columbia it has been found that through the efficient
operating of a committee composed of representatives of every group of specialists in the professions, it has been more economical to eliminate duplications there and to permit free supply
of all drugs to patients in that hospital. In effect this arrangement has made it possible to avoid
carrying possibly a dozen or more competitive brands of pharmaceuticals, thereby reducing the
overhead of the hospital. It is also maintained that if it were necessary to keep separate records
and to bill hospital patients for some drugs, while supplying others free, it would greatly increase
the overhead of the dispensary, as it would involve charging for these drugs on a basis of retail
prices instead of the cost-plus-time basis which is in effect under the more embracive scheme.
While such an arrangement as this, we have been assured, can be worked out with the utmost
economy in a larger hospital, it would seem that the publication of an enlarged B.C. Formulary
would provide the solution in the smaller hospitals. It has been found under the Medical
Assistance Branch of the Department of Health and Welfare, that our present Formulary is
inadequate, and a large number of additional items have been included. In fact the scheme is
now so broad that almost anything within reason, which is ordered by a doctor and can be
justified by the medical director of the scheme, is approved. A joint committee of the B.C.
Medical Association and the B.C. Pharmaceutical Association has been at work for many months
on the preparation of a new edition of the B.C. Formulary, which should go a long way to solve
many of the problems involved in hospital dispensing at the present time.
In connection with the employment of pharmacists in hospitals, there is no doubt that even
smaller hospitals could, under many circumstances, employ a pharmacist profitably. The following are but a few suggestions which have been supplied by hospital pharmacists in this
connection:
1. Besides their duties of dispensing prescriptions and supplying and keeping records of
medicines used in different ways, a pharmacist in a smaller hospital can improve on
procedures and techniques used in laboratories, and arrangement and preparation of
stock preparations.
2. Advise the physician which type of medication will be most economical for treatment
to long-term patients (cancer patients, control of pain, etc.).
3. Assisting or taking care of purchases of supplies or equipment for the hospital.
4. Keep physicians, internes, and, to some degree, nurses posted on the latest information on new pharmaceuticals.
5. Use his knowledge along research lines and in many cases possibly develop new
methods and improved equipment which will result in economies.
6. In some cases, he could act as hospital accountant and also keep hospital records.
There are possibly many other points that will occur.    I think one of the most important is
the fact that by his knowledge a pharmacist in a hospital may be in a position to supply some
effective medication which will reduce the time of the stay of the patient in the hospital, thus
effecting economies in the per-patient cost and making a larger number of beds available more
quickly, and by eliminating the necessity for increasing the hospital overhead by the provision
of additional beds.
It is quite evident that the present situation in regard to the steady increase of indiscriminate
dispensing of drugs in hospitals cannot continue without serious consequences. Hospitals themselves cannot expect to collect on public liability insurance where dispensing, resulting in an
accident, is the consequence of a deliberate violation of the laws of the province. Hospitals at
the present time have no other revenue than from the government, and any extensive litigation
would be directly reflected in the expenses which the government would be called on to pay in
connection with hospital operations. At the same time the B.C. Pharmaceutical Association,
entrusted as it is with the responsibility for the health of the public, cannot sit by indefinitely and
see the practice of dispensing prescriptions by unauthorized persons continuing to increase in
hospitals throughout the province.
It is apparent to the Board that the recommendations of the Pharmaceutical Association of the Province of British Columbia are soundly based—
And the Board therefore recommends that all dispensing of drugs in hospitals, or
for hospital patients, should be done by registered pharmacists or qualified physicians. REPORT OF THE HOSPITAL INSURANCE INQUIRY BOARD FF 77
No. 49.—CHRONIC CASES (SOCIAL WELFARE)
REMAINING IN HOSPITAL
A great deal of attention was drawn by various organizations and individuals to
another phase of the general subject of hospitalization of chronic cases.
It is an admitted fact that where a case has been ruled chronic, a patient cannot, in
many instances, be quickly removed from the general hospital because of the fact that
no suitable place is available to which he might be transferred. The Board has dealt
with the extension of the liability of B.C.H.I.S. for cases which do not come as a responsibility of the Social Welfare Branch. There remains, therefore, a consideration of the
position of the general hospital in numerous cases, where such persons who are the
responsibility of the Social Welfare Branch are concerned. It has apparently not been
the custom of the Social Welfare Department to accept any liability for costs incurred
in the time elapsing before the chronic patient is removed from the general hospital.
In the meantime, B.C.H.I.S. has terminated its liability, with the result that the hospital
has been providing facilities and treatment in many cases, with no source from which
to collect the cost thereof.
Arising out of this situation, it was pointed out that in some hospitals in the Province
where the bed occupancy is not overtaxed, it is quite possible for the said hospitals to
retain these patients without adversely affecting the admittance of acute cases, and
thereby relieve the urgency of the demands on the Social Welfare Department to remove
the said patient.
While the Board does not consider it desirable to recommend any policy which
would encourage the utilization of hospital beds ordinarily intended for acute cases by
such chronic cases, they are nevertheless confronted with certain conditions existing at
the present time, and in view of these—
The Board therefore recommends that where B.C.H.I.S. acknowledges that there
is a surplus of beds in any general hospital, and the board of the hospital affected comes
to an amicable agreement with the Social Welfare Branch to accept chronic cases at
a certain rate differing from the fixed per diem rate approved by B.C.H.I.S., the consent
of B.C.H.I.S. be given. The policy enunciated by the foregoing is predicated on the
assumption that the beds so acknowledged to be surplus may be set apart for the use of
chronic or convalescent cases, and will remain in that classification until the entire bed
situation of the hospital concerned is reviewed by the hospital administration and
B.C.H.I.S.
No. 50.—GENERAL RELATIONS WITH B.C.H.I.S.
The success of our Hospital Insurance Service is dependent on the establishment
of good relations with those who play a part in rendering hospital service. There is no
class of people who are in a more important position in this respect than the hospital
boards and administrators. It is therefore essential that negotiations, correspondence,
and all relations between B.C.H.I.S. and the hospitals should be on a most harmonious
plane. We have learned that this fact is appreciated by the Commissioner, and some
headway has been made in establishing an over-all co-operative relationship with
hospitals.
However, shortages of personnel and other difficulties related to the embryo stage of
the whole service are responsible for a serious lack of accomplishment in this direction.
The average hospital needs counsel and advice on many matters, including administration, purchasing, dietary, and other phases of hospital operation. Improved conditions
in the operation of the hospital will result in economies which will reflect in the budget,
and we feel sure that a reasonable expenditure in this field of service to hospitals will be
amply repaid. To express the opinion of a representative hospital in regard to this
matter, we quote from a submission to the Board from the Vancouver General Hospital,
as follows:— FF 78 BRITISH COLUMBIA
It is our feeling that closer co-operation between the B.C. Hospital Insurance Service and
the Administration of the hospitals would assist in breaking up a great many of the problems
we have mentioned in our brief.
We know that the B.C. Hospital Insurance Service has the problems of the hospitals at
heart and, now that the first pressure of getting the plan under way is over, we believe the time
is opportune for representatives of the B.C. Hospital Insurance Service and the hospitals to sit
down and work out the remaining problems.
Recommendation: That a procedure be established whereby representation of the Boards
of the hospitals could confer with representatives of the B.C. Hospital Insurance Service to
discuss problems.
The Board therefore recommends that the B.C.H.I.S. round out, as soon as possible,
a complete organization of specialists in the various phases of hospital operation and
management, to the end that they may render maximum assistance to hospitals and
receive full co-operation in return.
No. 51.—HOSPITAL CONSTRUCTION AND EXTENSION, ETC.:   STUDY OF
NEEDS AND PROVISION FOR HOSPITAL IMPROVEMENT DISTRICTS
Under the terms of reference set out in the Act authorizing an inquiry into the
" Hospital Insurance Act" and its administration, clause (c) of section 5 specifically
gave the Board power to investigate the matter of hospital-construction.
The Board regrets that time has not permitted this particular phase of its commission
to be carried out in anything like a completed manner, and the subject must therefore
be dealt with in this Report in somewhat general terms. The conclusions arrived at by
the Board are set out as follows:—
(1) Due to the rapid growth of population and industry, the Province is in
urgent need of some new and additional construction of both acute or
general hospitals and chronic or convalescent institutions.
(2) In view of the urgent need, it is suggested by the Board that there should
be, at the earliest possible date, a very intensive study of the present needs,
the advantages to be derived from a zoning scheme to cover the hospital
facilities of the Province, and with particular reference to the debatable
question of centralization or decentralization; and that this study should
also definitely go into the nature of, and the best place in which the
provision of, additional accommodation for chronic and convalescent
cases may be provided; and, further, that the best advice should be
secured on the controversial subject of the percentage of private, semi-
private, and public wards in general- and acute-hospital construction.
The Board further suggests that the main stumbling-block to proceeding at a satisfactory pace to meet the demand existing for extended hospital facilities is the lack of
proper legislation which will outline the responsibilities of various departments of
Government. It would appear essential, for instance, to provide by law that all municipal
governments shall take their full share of responsibility in this connection. It would
further appear desirable to provide a legal plan by which action may be speedily, simply,
and efficiently taken in cases where more than one municipality or department of
government is concerned.
The Board is of the opinion that the amendments to the " Water Act," passed by
the 1951 Session of the Legislature, which were intended to help in this connection, have
proven by subsequent experience to be unsatisfactory and inadequate. The Board has
become acquainted with the " Union Hospitals Act" of Saskatchewan. The evidence
is that this Act, which was instituted in 1916 and is, therefore, not new legislation, has,
during the years since 1939 (and more particularly since 1945), worked in a very
satisfactory manner. The provisions are simple and straightforward, and the responsibilities of all concerned are clearly defined. It is suggested, therefore, by the Board that
a new Act be provided for the Province of British Columbia, to be known specifically REPORT OF THE HOSPITAL INSURANCE INQUIRY BOARD FF 79
as the " Hospital District Improvement Act," which will follow very much along the lines
of the " Union Hospitals Act" of Saskatchewan; and that upon its adoption the provisions
now in force, particularly those having to do with the " Water Act," shall be rescinded.
Before leaving this suggestion of increased or expanded hospital facilities, the Board
wishes to state that it has studied, with a very considerable degree of interest, plans for
the establishment of health units within the Province, under the control of the Department
of Health and Welfare, of which the first full unit is now operating in the Vernon area.
The information available in this connection leads the Board to believe that the intended
services in these health units will, no doubt, in time be of great benefit to the Province,
and that the results thereof will be sufficient to cause an appreciable lightening of the
burden placed upon hospitals by overoccupancy and undue length of stay.
The Board further would say that it has had called to its attention other developments of home-care treatment which have taken place, particularly in the United States.
It would appear that this development probably originated from plans similar to the
one now being tried in the health units of the Province. In this connection, attention
is particularly called to the home-care programme of the Montefiore Hospital of New
York City, which was commenced on January 1st, 1947, and which, before the end of
1949 (according to material studied by the Board), had definitely proved its worth and
effected savings in the net total of hospitalization costs.
Dealing with the allied phases of hospital construction and service, we would here
bring to notice a paragraph from the brief submitted to the Board by the Registered
Nurses' Association of British Columbia, which is concurred in by this Board:—
Standards under which hospital construction grants are made available to hospitals are
a responsibility of the Hospital Insurance Service and we assume that the Service will carry
similar responsibility in respect to grants-in-aid for schools of nursing. We urge that standards
in regard to facilities for instruction, residence and recreation be developed in collaboration
with representatives of the Registered Nurses' Association.
The Board now recommends that a more intensive study of the whole matter of
hospital construction than was possible in the limited time available to the Board be made;
and
It is further recommended that this study be proceeded with as soon as possible.
// is further recommended that new legislation be enacted, similar to the " Union
Hospitals Act" of the Province of Saskatchewan referred to in the preamble to this
recommendation, which will enable the setting-up of hospital improvement districts in
the Province of British Columbia. FF 80 BRITISH COLUMBIA
The Board wishes to record a high tribute to our
Secretary, Mr. Maurice Hesford, F.C.A. His devoted
interest, sincere loyalty and broad experience has been
of invaluable assistance to us in our task. We also wish
to express our sincere thanks to all other members of
our staff for their efficient service. REPORT OF THE HOSPITAL INSURANCE INQUIRY BOARD FF 81
All of which we respectfully submit.
S. J. SMITH, Chairman.
DON. C. BROWN.
WALTER HENDRICKS.
A. W. LUNDELL.
D. J. PROUDFOOT.
R. C. STEELE.
H. J. WELCH.
HAROLD E. WINCH.
Maurice Hesford, Secretary.      February, 1952. FF 82 BRITISH COLUMBIA
SECTION 6.—APPENDICES
SUMMARY OF RECOMMENDATIONS OF THE BOARD
1. Completion of Unfinished Survey and Study.—That the time for submitting its
final report be extended so that Messrs. Stevenson and Kellogg Limited may be enabled
to complete their survey, after which the Board may proceed with a combined study of
the two reports referred to before filing the final report of this Hospital Insurance
Inquiry Board with the Minister of Health and Welfare.
2. Continuation of Hospital Insurance Service (Basic Plan).—That the B.C.H.I.S.
shall continue to follow the present plan as referred to in Approach No. 1 of the Eckler
Report, subject only to the recommendations contained in this Report of the Board,
until this Board is in a position to file its final report.
3. Premium Rates.—That at present there shall be no increase in the premium
rates.
4. Co-insurance Charges.—That co-insurance charges against patients in hospitals
be completely abandoned.
5. Financing Over-all Deficits of Plan.—That a long-range programme of financing
the Service be developed, with a definite policy and formula of Government financial
support, and that there be established a policy that should a deficit develop in the
hospital insurance financial year for reasons over which the hospitals and B.C.H.I.S.
had no control or which could not reasonably be foreseen by B.C.H.I.S. or the Government, then the said deficits shall be paid from consolidated revenue.
6. Municipal and Provincial per Diem Grants.—(1) That the per diem contribution paid by municipalities or by the Government, in the case of unorganized territories,
shall be increased from the present basis of 70 cents per patient-day to the sum of $1
per patient-day.
(2) That consideration be given to basing the contribution mentioned above on
a per capita basis rather than the present per patient-day basis, with the per capita rate
thereof being set to produce an approximately equal amount of revenue to the Service.
(3) That where a resident of a municipality or of an unorganized territory is
hospitalized in a hospital outside the confines of his own municipality or territory, the
said municipality, or the Government on behalf of the unorganized territory, shall pay
an additional 25 cents per patient-day in connection with such patients. This additional
payment shall be made direct to the hospital in question, to be treated as non-operating
revenue of the receiving hospital, and the hospital concerned shall be required to bill the
proper authority for this additional 25 cents per patient-day charge.
7. Future Increase of Premium Rates or Curtailment of Benefits.—That there shall
be no further or future increase in the premiums required to be paid annually, and no
reduction of benefits conferred by the Act within any premium-year; and that any such
changes as may be, from time to time, authorized by Act of the Legislature, affecting
the annual premium payments or the benefits conferred by the " Hospital Insurance
Act," shall have effect only at the commencement of the next premium-year.
8. Exemption of Groups on Religious Grounds.—That in future no group of citizens
of the Province be exempted from the provisions of the " Hospital Insurance Act" on
religious grounds, and that the present exemption extended to members of the Christian
Science Church shall be discontinued.
9. Exemption of Groups: Canadian Pacific Medical Association of British Columbia
and Telephone Employees' Medical Services Association of British Columbia.—That the
position of the present exempted groups referred to above shall be reviewed by competent authority as soon as possible, with a view to bringing the members of such groups
directly within the operations of the B.C.H.I.S. at such a time as it may be found
feasible and advisable to so do. REPORT OF THE HOSPITAL INSURANCE INQUIRY BOARD FF 83
10. Exemption from Premium Liability: Low-income Groups.—That in the case
of persons not otherwise exempted from the personal payment of premiums and who
can establish that their income is not more than $720 for the year in the case of a single
person or $1,200 for the year in the case of a married person, the said persons shall
be exempted from personal payment of the premium, but that the proper premiums for
them shall be paid to B.C.H.I.S. by the proper Government department.
11. Exemption from Premium Liability: Student Nurses under 21.—That student
nurses, not over the age of 21 years, be recognized as dependents in the same manner
as those persons presently covered by subsection (d) of section 1 of Regulation 1, under
which dependents are defined.
12. Benefits: Out-of-Province Hospitalization. — That when a registrant under
B.C.H.I.S., or his dependent, in good standing, is compelled by circumstances beyond
his control, or on the definite advice of his physician in British Columbia, to take hospital treatment outside the confines of the Province (more particularly when the home of
the patient is so geographically located as to make the out-of-Province hospitalization
necessary or desirable), B.C.H.I.S. shall pay for the said hospitalization a rate of $6.50
for each patient-day up to a limit of thirty days, plus a maximum of 50 per cent of the
cost of all extras which would be covered completely by B.C.H.I.S. if the treatment was
in a hospital in the Province.
13. Benefits: Out-patient Services.—That careful study be given as soon as possible
to the question of benefits having to do with out-patient services of hospitals, with
a view to setting up the most desirable scheme from the view-point of service and the
insured public;  and that changes as decided upon be put into effect in the Province.
14. Charges for Non-elective Use of Private and Semi-private Wards.—That in the
case of non-elective use of private- or semi-private-ward accommodation in hospitals
within the Province, there be no extra charge to B.C.H.I.S. registrants for the said
accommodation.
15. Premiums Payable by Wives of Certain Veterans.—That in the case of married
war veterans who are themselves completely covered for hospitalization by the provisions
or regulations of the Department of Veterans' Affairs at the time being in force, the
premium required to be paid by, or for, his wife (in case the family income is over
$1,200 per annum) shall be the premium of a single person.
16. Hospitalization of Treaty Indians—Federal Government Responsibility.—That
arrangements be made with the proper department of the Government of Canada for
payment by it of the total cost of hospitalization of Treaty Indians of British Columbia.
17. Payment for Hospitalization of " Social Aid " Cases.—That these persons comprising the groups of Health and Welfare cases referred to above be no longer accepted
by the Service on an ordinary premium basis, but that the responsible Government
department—namely, the Department of Health and Welfare—pay the full cost of hospitalization of all such persons coming within these groups, such payments to be made
to the B.C.H.I.S.
18. Educational Grants-in-Aid to Cost of Operation of Training-schools for
Nurses.—That training-schools for nurses, in conjunction with hospitals within the
Province, be considered as educational institutions in so far as it is necessary to enable
them to come within the provisions for grants-in-aid from the Department of Education,
to the end that the net cost of operating such training-schools shall in no way be a part
of, or taken into account as, an operating cost to be covered by B.C.H.I.S.
19. Chronic Cases: Limit of B.C.H.I.S. Liability.—-That the liability of B.C.H.I.S.
for an account in a general hospital incurred by a patient who is a registrant, or dependent of a registrant, in good standing under the Act, who has been declared to be
a chronic case, shall continue until they have been otherwise placed, but in no case shall
it continue more than sixty days beyond the effective date at which the case has been
ruled otherwise to be a chronic case.    The ruling referred to is the decision of the FF 84 BRITISH COLUMBIA
Medical Board of Review, if the diagnosis has been referred to them; and this recommendation is intended to apply to cases remaining in hospital which do not become the
responsibility of the Social Welfare Department.
20. B.C.H.I.S. Management Board and Select Standing Committee.—That B.C.H.I.S.
be administered by a board of three members, without legislative or judicial powers, and
also that Standing Orders of the Legislature be amended to provide for the appointment
of a Select Standing Committee on Hospital Insurance, which shall meet at each regular
session of the Legislature and shall review the report of the B.C.H.I.S., meet with the
board of management, and report to the Legislature.
21. Hospital Advisory Council.—(1) That the broad intention behind the setting-up
of the Hospital Advisory Council be fully realized, and that if full advantage is not now
being taken of the services of the Council, steps be taken to realize the maximum
benefit therefrom; and that, further, all proposed important changes in policy or regulations be discussed with the said Advisory Council before the proposed changes are put
into effect.
(2) That the Hospital Advisory Council shall in future include in its membership
two private members of the Provincial Legislature, to be appointed or named before
each regular session of the Legislature is prorogued, and that the said private members
shall be selected from the membership of the Select Standing Committee which has been
in existence during the said regular session, one to represent the Government and one
to represent the Official Opposition.
22. Public Relations of the Service.—That, as it is their opinion that the scope of
the public relations of the B.C.H.I.S. justifies the retention of a Director of Public
Relations of outstanding ability, steps be taken to secure the services of such a person,
and that responsibility for the public relations of the Service be placed in his hands as
soon as possible.
23. Field Representatives of B.C.H.I.S.—That the present force of district representatives be enlarged to an extent necessary for them to take care of problems as outlined herein without undue delay; and, further, that the personnel of this field force be
given proper training to fit them to act as " top-notch " public-relations officers.
24. Exempted Areas.—That the necessary amendments be enacted to exempt all
persons in the areas referred to, but that the privilege of voluntary registration and
participation under the " Hospital Insurance Act " be extended to them.
25. Annual Accounts of B.C.H.I.S.—That it seems highly desirable to have the
annual accounts of B.C.H.I.S. prepared on a revenue and expenditure basis for each
full year of its operation, rather than on a cash receipts and payments basis running to
March 31st only, and that publication thereof should be made as early as possible in
a manner clearly understandable to the general public.
26. Premium-year.—That as soon as can effectively be done, the premium-year be
from April 1st to March 31st.
27. "Chronic" Diagnosis: Provisions for Review.—(1) That where it is decided
that a patient in an acute or general hospital is ruled to be, or to have become, a chronic
case, and not the responsibility of B.C.H.I.S., advance notice of the discontinuance of
benefits shall be given in every case; and the effect of such ruling shall in no case be
retroactive.
(2) Before such ruling is made, any and all cases should be referred, wherever
possible, to the medical staff of the hospital, whose opinion shall be fully considered by
the medical consultant or Administration of B.C.H.I.S.
(3) In all cases of difference or dispute arising at any point as to the correctness
of the diagnostic decision, the final decision should be left to a Medical Review Board,
consisting of two representatives of B.C.H.I.S. and three doctors appointed by the College
of Physicians and Surgeons.
(4) That provision be made for the appointment of the said Medical Review Board
as soon as possible. .: ™ ' , ? --.:—-< ™ ™
REPORT OF THE HOSPITAL INSURANCE INQUIRY BOARD FF 85
28. Provision for Permissive Use of Special Drugs.—That the Medical Board of
Review, if established, shall have the authority to allow the use of special drugs for
hospital patients, when vitally necessary, on the recommendation of the local medical
authority.
29. Premium-payment Enforcement: Prosecutions and Garnishee Proceedings.—
(1) That the competent authority shall call to the attention of the Magistrates and
Justices of the Province the provisions of subsection (2) of section 11 of the Act as
referred to above, and shall require their future compliance therewith.
(2) That the Administration of B.C.H.I.S. shall take full advantage of the provisions of section 11b of the Act when such action is justified by circumstances.
(3) That the application of section 11b shall be widened so as to permit the
procedure of automatic garnishee by the Administration of B.C.H.I.S. of any sums owing
by a delinquent registrant (or person required to be a registrant under the " Hospital
Insurance Act"), provided that such extension is ruled by competent authority to be
possible.
30. Plan of Registration and Premium Collection.—That Plan No. 2 of registration
of beneficiaries and premium collection as outlined above be adopted in its entirety at the
earliest possible date, and that the necessary enactments be made to define the duties of
the persons therein referred to and the proper penalties for failure to comply with the
provisions thereof; and that the said plan be given a fair trial over a predetermined
period, at the end of which period the position shall be reviewed, and if the response of
the persons required by the Act to become registered and to pay premiums is not such
as to have achieved the desired and intended results, then consideration shall be given
to the necessity of introducing a plan such as the other plan referred to in this section.
31. Proof of Standing Under the Act (to be required from applicants for any
Provincial (annual) licence).—(1) That the necessary legislation be enacted to require
that any issuer of an annual licence on behalf of the Province of British Columbia shall,
at the time of issuance thereof, ascertain the registration number or exemption certificate
number of the licensee in all cases where such licensee is required to be covered by the
" Hospital Insurance Act"; and that if the said licence-issuer is unable to obtain the
necessary evidence of standing under the said Act, he shall thereupon forthwith report
the name and address of the licensee concerned to the B.C.H.I.S., whose duty it shall be
to ascertain that all such licensees are properly registered under the Act.
It is also recommended that the Administration of B.C.H.I.S. shall seek the co-operation of issuers of municipal licences within the Province, with a view to having the same
procedure followed by such officers.
Or, alternatively—
(2) That any person who is subject to registration under the " Hospital Insurance
Act," when applying for the issuance of any annual Provincial licence within the Province
of British Columbia, shall produce his official eligibility certificate, certified interim
receipt (current period), or exemption certificate proving his good standing under the
" Hospital Insurance Act" and regulations, and in default of the production of such
evidence of good standing shall not be entitled to the issuance to him of any such licence.
32. Limit of Liability for Premium Arrears.—That, effective not later than July 1st,
1952, a person becoming registered under the Act, or having been registered, seeking to
place himself in good standing, shall be required to pay a sum equal to the premium for
the current year as regularly provided, and the arrears for the previous premium-year
if he is liable for the same. The provisions of this recommendation are intended in no
way to interfere with the powers of the Minister or the Commissioner to reduce the
amount of, or to suspend indefinitely payment of, arrears owing by any person.
33. Collection of Arrears of Premiums.—That the collection or realization of the
amounts which will from this time on be recognized as arrears, and kept on the books
and in the accounts of the Service, be a matter for handling by a special collection FF 86 BRITISH COLUMBIA
department of the B.C.H.I.S. Administration, to be segregated completely from the
records of current premium payments and the receipts and collection thereof. The term
" arrears," as used in this recommendation, would not be intended to mean the late
payment of the premium for the current benefit period, but those arrears defined in
Recommendation No. 32.
34. Exemption Cards: Issue to Certain Persons and Charge Therefor.—That all
adult residents of the Province coming within the provisions of the " Hospital Insurance
Act " who are, by reason of special exemption or otherwise, not required to personally
pay a premium in accordance with the regulations shall nevertheless be required to obtain
from B.C.H.I.S. an official exemption card or certificate covering each premium-year or
benefit period, as the case may be, and to pay a charge for the said card or certificate
amounting to $2 per annum.
This requirement shall not apply to the following persons mentioned in section 8
of the " Hospital Insurance Act ":—
(1) Those persons mentioned in section 8, subsection (1) (a), to whom the
Government of Canada provides hospital benefits:
(2) Those persons mentioned in section 8, subsection (1) (c), who are
covered by " Canada Shipping Act, 1934 ":
(3) Those persons mentioned in section 8, subsection (1) (d), who are
employees of the Government of Canada, or the government of any other
country:
(4) Those persons mentioned in section 8, subsection (1) (/), who are
residing in exempted areas:
(5) Those persons mentioned in section 8, subsection (1) (g), who are
covered by the " Saskatchewan Hospitalization Act, 1948 ":
(6) Those persons mentioned in section 8, subsection (3), who are inmates
of Provincial institutions, gaols, or penitentiaries.
35. Changes of Status.—That the Act or regulations shall be amended to provide
that there shall be no change in the status of any beneficiary of B.C.H.I.S. which would
affect his standing under the Act in any way whatsoever during any current half-year
period for which the necessary premium has been paid, but any and all such changes
shall have effect only at the beginning of the next half-year period after the date at which
a change of status did, in fact, take place.
36. Elimination of Certain Group Records.—That all individuals exempted from
the requirements of the " Hospital Insurance Act," whether comprising the membership
of the two groups specifically exempted by the Act or being in another category, shall
receive an exemption card for every benefit period, or a permanent exemption card,
wherever possible, and that the separate group records now being kept by B.C.H.I.S.
shall be eliminated.
37. Pamphlet Covering Plan and Benefits.—That a pamphlet with details of the
plan and benefits, and similar in form to the Saskatchewan Hospital Services Plan
pamphlet, entitled " What's Your Question? " should be sent out with all notices of
premiums due, and that it be obtained in sufficiently large quantities as will reduce the
cost to a minimum and permit it to be used for general distribution.
38. Budgets and the "Fixed" Budget System.—(1) That the budgets of the
hospitals of the Province, when submitted to B.C.H.I.S., must include therein all the
anticipated costs of efficient operation, and if the B.C.H.I.S. Administration, upon
examination of any budgets so submitted, disagrees with the figures submitted, they shall
make prompt arrangements for consultation with the hospital board concerned so that
adjustments may be studied and considered; and only after such consultation shall the
figures then agreed upon become a " fixed " budget.
(2) Such " fixed " budget, nevertheless, still remains subject to agreed changes
arising as the effect of circumstances over which the hospital board has no control. REPORT OF THE HOSPITAL INSURANCE INQUIRY BOARD FF 87
(3) There shall be no reduction of a per diem rate set by B.C.H.I.S. and existing
in any hospital, made effective until the time when the new budget of the said hospital
is fully agreed upon for the year in accordance with clause (1) hereof.
(4) That at the commencement of each year the " other agencies " shall be notified
by B.C.H.I.S. that accounts rendered to them for hospitalization for which they are liable
are on an interim basis until the hospital budgets and rates are fixed for the year by
B.C.H.I.S., and that such accounts are thereafter subject to increase or decrease in
accordance with the new rates set.
39. "Fixed Charges" in Hospital Budgets.—(1) That in the case of hospital
equipment, full depreciation allowance, in accordance with the classification thereof,
shall be permitted as an annual operating cost in hospital budgets, in order to cover
equipment replacement; and
(2) That the entire question of allowances for depreciation on buildings and carrying charges on capital debts, which are the responsibility of the hospital board, shall be
the subject of serious study by the Administration of B.C.H.I.S. at the very earliest
possible date, with a view to a more satisfactory agreement being reached concerning
these charges between the Hospital Boards and the B.C.H.I.S.
40. System of Payments by B.C.H.I.S. to Hospitals.—That the system of B.C.H.I.S.
payments to hospitals be reviewed, with the object of arriving at a more satisfactory
plan; and the Board is of the opinion that the system in use in Saskatchewan should be
followed, unless specific and valid reasons exist in favour of some other system.
41. Comparative Costs of Hospitalization.—That the Administration of B.C.H.I.S.
shall arrange, at as early a date as possible, for adequate and full conference with the
executive of the British Columbia Hospitals' Association and other interested parties,
with a view to giving intensive' study to the matters referred to above, and to arrive at
conclusions as to whether or not the comparative position of the hospitals of the Province
is sufficiently justified.
42. Employees' Wage Agreements.—That because of the evidence of a great deal
of dissatisfaction on the part of the hospital boards of the Province and the employees
thereof, as represented by their bargaining agents, with the attitude and actions of
B.C.H.I.S. concerning wage agreements, and because the Board believes it is not the
function of B.C.H.I.S. to interfere directly or indirectly in the matter of wage negotiations,
an early conference of all interested parties be held—namely, the hospital boards or
Hospitals' Association, the hospital employees or their bargaining agents, and representatives of the Department of Labour—in which conference the Administration of
B.C.H.I.S. shall take no part.
And, further, that the Board point to the agreements which have been arrived at
and are now in force with policemen's and firemen's organizations in various parts of the
Province, as forming a possibly acceptable solution on which to base a permanent policy
as regards hospital employees and the terms of their employment. It is intended that the
aforementioned conference shall deal with all matters having to do with the position of
employees of hospitals, including the matter of pension and superannuation funds and
the allowable contributions thereto of hospital boards.
43. Student Nurses: Hours of Work.—That the request of the Registered Nurses'
Association of British Columbia with reference to hours of work of student nurses be
given favourable consideration.
44. Responsibility for Hospital Accounts of Evaders.—That since the collection of
premiums under the " Hospital Insurance Act" is the function of the B.C.H.I.S., then
the final responsibility for the collection or coverage of any hospital accounts incurred
by evaders of the provisions of the Act is for the Service to assume; and that such a policy
should be definitely adopted; but nevertheless the hospital board or administration
concerned shall initiate and exhaust all reasonable steps in their endeavours to collect the
said accounts from the patient or his responsible relatives in the first instance. FF 88 BRITISH COLUMBIA
45. Elimination of Social Security and Municipal Aid Tax on Hospital Supplies.—
That the cost of purchases made by the hospitals of the Province covering articles or
supplies which are exempted from the Federal sales tax be also exempt from the
imposition of the social security and municipal aid tax.
46. Purchase of New Equipment: Consent of B.C.H.I.S.—(1) That the mechanics
or operation of the rules and regulations pertaining to the granting of permission to
purchase new hospital equipment shall be examined with a view to eliminating the
difficulties and delays so far encountered, and thereby remove the cause for any complaint
in the future.
(2) That purchases by the hospitals of such new equipment, not having a cost value
higher than $100, be made permissible without the prior consent of the B.C.H.I.S. Administration having to be obtained.
47. Central Purchasing Agencies.—That B.C.H.I.S. encourage hospitals to develop,
to the greatest extent possible, a system of bulk centralized purchasing of supplies.
48. Dispensing of Drugs.—That all dispensing of drugs in hospitals, or for hospital
patients, should be done by registered pharmacists or qualified physicians.
49. Chronic Cases (Social Welfare) Remaining in Hospital.—That where B.C.H.I.S.
acknowledge that there is a surplus of beds in any general hospital, and the board of the
hospital affected comes to an amicable agreement with the Social Welfare Branch to
accept chronic cases at a certain rate differing from the fixed per diem rate approved by
B.C.H.I.S., the consent of B.C.H.I.S. be given. The policy enunciated by the foregoing
is predicated on the assumption that the beds so acknowledged to be surplus may be
set apart for the use of chronic or convalescent cases, and will remain in that classification
until the entire bed situation of the hospital concerned is reviewed by the hospital administration and B.C.H.I.S.
50. General Relations with B.C.H.I.S.—That the B.C.H.I.S. round out, as soon as
possible, a complete organization of specialists in the various phases of hospital operation
and management, to the end that they may render maximum assistance to hospitals and
receive full co-operation in return.
51. Hospital Construction and Extension, etc.—That a more intensive study of the
whole matter of hospital-construction than was possible in the limited time available to
the Board be made; and that this study be proceeded with as soon as possible; and that
new legislation be enacted, similar to the " Union Hospitals Act" of the Province of
Saskatchewan referred to in the preamble to this recommendation, which will enable the
setting-up of hospital improvement districts in the Province of British Columbia. REPORT OF THE HOSPITAL INSURANCE INQUIRY BOARD FF 89
INTERIM RECOMMENDATIONS MADE BY THE BOARD
Interim Recommendations No. 1 and No. 2
This Board, in accordance with section 7 of the " Hospital Insurance Act Inquiry
Act," makes certain interim recommendations which it considers should be submitted
at this time, and which, if implemented, will remove what the Board considers to be
injustices and will also change phases of present policy which are necessarily resulting
in public antagonism to the British Columbia Hospital Insurance Service.
It has been drawn to the Board's attention repeatedly at hearings of the Board, and
conclusive evidence has been produced to amply demonstrate, that many persons have
been denied benefits when they honestly considered themselves to be fully paid on
premiums, or when their ineligibility was due to circumstances over which they themselves
had no control.
Therefore, in accordance with a motion properly moved, seconded, and unanimously
carried at a meeting of the Board held at Nelson, B.C., on Saturday, the 11th day of
August, 1951, it is now recommended to the Minister of Health and Welfare:—
If a premium payment, or a premium payment and arrears, is received by
the British Columbia Hospital Insurance Service within seven (7) days after
due date, that the insured person or persons be considered as having remained
in " good standing " for purposes of benefits under the British Columbia
" Hospital Insurance Act," and not subject to section 9-1 of the regulations
under the said Act; and it is also further recommended that the seven (7) days'
grace be further extended where necessary to meet circumstances when distance
and postal-delivery circumstances or services cause additional difficulties affecting the receipt of the said premium payments by the British Columbia Hospital
Insurance Service.
That in cases brought to the attention of the British Columbia Hospital
Insurance Service where hospitalization bills have not been accepted as a valid
responsibility of the Service, where it can be shown that premium payment after
due date was due to uncontrollable factors respecting receipt of premiums, that
the said accounts be accepted for payment by the British Columbia Hospital
Insurance Service [this policy to be publicized].
That publicity be given to a British Columbia Hospital Insurance policy
that anyone making payment of premium or premium and arrears to any
authorized Government official, such as a Government Agent, will be in " good
standing " from the date of the receipt given by the said official, subject to the
terms of the recommendation numbered one (1) above.
Submitted on behalf of the Board.
S. J. Smith,
Chairman.
Interim Recommendation No. 3a
(Amendment of Recommendation No. 3)
Whereas there are numerous cases of pensioners and other persons subject to a very
limited income, who are making every attempt to pay the necessary premium for the
current period, but who find it completely impossible for the time being to meet the
premiums which should have been paid for the years 1949 and 1950, and in which cases
it is within the power of the Commissioner to suspend indefinitely the payment of such
arrears: FF 90 BRITISH COLUMBIA
Therefore be it Resolved, That this Board recommends to the Minister that where
the Commissioner uses the authority conferred under Regulation 2-13, and applies a payment by any registrant to the premium due for the current six months' period, and there
is still a payment necessary to meet fully the said premium for the current period, upon
payment of same being made, the insured person or persons shall be considered to be
a beneficiary pursuant to the Act, and entitled to the benefits provided by the Act,
immediately after the lapse of fourteen (14) days from the date upon which the payment
of the said premium for the current period has been made or completed, notwithstanding
the fact that the registrant may still be in arrears of premiums for prior periods, which
arrears have been indefinitely suspended.
At a properly constituted meeting of the Hospital Insurance Inquiry Board held in
Vancouver on Wednesday, October 17th, 1951, the above recommendation was approved
and adopted.
On behalf of the Board.
S. J. Smith,
Chairman.
Interim Recommendation No. 4a
(Amendment of Recommendation No. 4)
During the hearings of the Hospital Insurance Inquiry Board throughout the Province
since the 27th day of July, considerable evidence has been presented to the Board indicating that a substantial percentage of persons who are required to be insured under the
Act are not so covered.
The Board is informed that the statistics of the British Columbia Hospital Insurance
Service show that, of the persons admitted to hospitals during the first half of 1951, the
percentage of persons referred to above is 7.03 per cent. Attempts by this Board to
ascertain the percentage of the total population in this category have resulted in estimates
being given to them which vary from district to district all the way from 10 to 40 per cent.
While this Board is not in a position to pass judgment as to the exact percentage, it is
nevertheless satisfied that this exact percentage is considerably higher than that estimated
by the British Columbia Hospital Insurance Service. It would therefore seem desirable
to establish some method or procedure by which a betterment of the existing situation
is made possible, both from the point of view of the British Columbia Hospital Insurance
Service and that of the general public. It has been represented to the Board that as far
as people in this category are concerned, many would like to register themselves, but
are deterred by the fact that payment (at the time of registration) of arrears of premiums
would be a financial impossibility, and the knowledge that until the said arrears of
premiums are paid they could not receive any of the benefits of the British Columbia
Hospital Insurance Service.
It seems evident to the Board that the premiums of this group of people, for the
current year alone, if secured by the British Columbia Hospital Insurance Service, would
provide an addition to the cash income of the British Columbia Hospital Insurance
Service amounting to a very considerable sum.
In addition, the gap in the difference between the total population and those
registered under the Service would be narrowed down, and this would result in a larger
revenue after the current year, at a reduced collection cost.
Many suggestions have been advanced to this Board as to methods of settling the
matter of arrears of these people, ranging from " wiping the slate clean, and starting REPORT OF THE HOSPITAL INSURANCE INQUIRY BOARD FF 91
afresh " to " prosecuting with the utmost rigour of the law." The Board is of the opinion
that some reasonable plan is possible, whereby the problem may be very largely resolved
with immediate benefit to the British Columbia Hospital Insurance Service, satisfaction
to most of the delinquents, and safe from any justified criticism of a severe nature by
those who have done their full duty under the " Hospital Insurance Act." It should be
borne in mind that some of the persons referred to in the first part hereof have not at any
time had the protection of the " Hospital Insurance Act," and that a number of them may
have incurred penalties through the loss of that protection, by reason of personal payment
of hospital bills, or by deferment of hospitalization which they might otherwise have
sought and obtained.
Therefore, we recommend to the Honourable Minister of Health and Welfare that
changes be made in the regulations referred to in section 35 of the " Hospital Insurance
Act," so that:—
(1) Upon payment in full of the necessary premiums for the last six months
of 1951, and the first six months of 1952, the persons referred to in the
preamble to this recommendation be placed in good standing at the
termination of a waiting period of fourteen (14) days, subject to the
following further conditions, namely:—
(2) That the said persons shall agree, in a form and manner to be set out by
the Commissioner of the British Columbia Hospital Insurance Service, to
pay to the British Columbia Hospital Insurance Service the amount of
their premiums, in accordance with the Act and regulations, for the years
1949, 1950, and the first six months of 1951, such payment to be made, as
far as possible, by regular periodical instalments, from time to time, as may
be arranged.
(3) Nothing in the above recommendations shall be construed as affecting
those cases in which the Commissioner has or otherwise would, because of
exceptional circumstances, grant indefinite suspension of the payment of
arrears.
(4) That the easement afforded by the changes in the regulations which are
recommended above shall be extended only up to and including the 30th
day of November, 1951, after which they shall cease to have force and
effect.
(5) That, as from the date last mentioned, it shall be the policy of the Commissioner of the British Columbia Hospital Insurance Service to secure
the compulsory registration of all persons liable to registration under the
Act who still remain unregistered, and to collect all arrears of premiums
from such persons, without remission, and to take any and all steps as will
result in complete registration of all persons coming under the Act, without
further delay, and at the earliest possible date.
(6) That suitable publicity be given at once, through the British Columbia
Hospital Insurance Service, to these recommendations, if approved by the
Minister, such publicity to first receive the approval of the Chairman of
this Board, acting on behalf of the Board.
At a properly constituted meeting of the Hospital Insurance Inquiry Board held in
Vancouver on Wednesday, October 17th, 1951, the above recommendation was approved
and adopted.
On behalf of the Board.
S. J. Smith,
Chairman.. FF 92 BRITISH COLUMBIA
Interim Recommendation No. 5
The Hospital Insurance Inquiry Board has met with fifty-six hospital boards. In
the majority of hospitals it is found that they have incurred deficits over a six- or seven-
month period in the 1951 year which .approximate, equal, or exceed the amount by
which their budget estimates were mandatorily cut by the British Columbia Hospital
Insurance Service, or are incurring deficits to an extent which, if continued for the
remaining period of the current year, will equal or exceed the amount by which their
budget estimates were cut.
In the opinion of the Hospital Insurance Inquiry Board the estimated budgets submitted to the British Columbia Hospital Insurance Service, except in a few cases, were
accurately and conservatively prepared. The Board has been unable to obtain any
explanation as to the factual, actuarial, or reasonable basis upon which the budget cuts
were made.
The Board, after a great deal of consideration, finds it impossible to understand
why the British Columbia Hospital Insurance Service made disproportionate cuts in
budgets of hospitals of similar bed capacity in almost identical districts or to find any
reasonable or factual explanation as to why a budget of $66,000 should be cut by $1.
The Board supports the principle of hospital budgeting and review by the British
Columbia Hospital Insurance Service, but is definitely of the opinion, based upon all
information before it, that there has been neither rhyme, reason, nor understanding
given to the budget cuts made by the British Columbia Hospital Insurance Service on
the hospital budgets for 1951. The Board believes that in the majority of cases budget
submissions of the hospital boards evidenced a greater real appreciation of facts and
evaluation of future costs than that of the Rate Board of the British Columbia Hospital
Insurance Service.
The Hospital Insurance Inquiry Board strongly feels that present hospital deficits
have, in the main, been incurred because of British Columbia Hospital Insurance Service
budget cuts and rising costs in both labour and materials beyond the control of the
hospital boards, and in the opinion of the Board the hospital boards have done everything possible to meet the British Columbia Hospital Insurance Service budget cuts.
The Board is further convinced that sufficient evidence has been introduced to conclusively demonstrate the hospital boards in their original budget submissions were close
in estimating increased costs.
A further factor to be borne in mind is that although, in general, hospital budgets
for 1951 were submitted to the British Columbia Hospital Insurance Service prior to the
end of November, 1950, earliest advices sent to the hospital boards regarding the Rate
Board cuts were dated approximately April 30th, 1951, and in numerous cases later
than that date, and that, therefore, the hospital boards, in ignorance of the subsequent
action, continued to operate for at least four months on the basis of their first budgets,
and that this factor in itself is a legitimate explanation of some portions of the deficits
reported up to the present time.
The Hospital Insurance Inquiry Board feels that note should be taken of the fact
that although the British Columbia Hospital Insurance Service increased hospital budget
estimates by $199,591, the Rate Board decreased estimates by $1,191,441, thereby
leaving a reduction from the actual budget submissions of $991,850.
The Hospital Insurance Inquiry Board is strongly of the opinion that the consequences of the deficits already incurred are serious and deplorable, and are resulting in
a pessimistic attitude on the part of the hospital boards and administrators, thereby
curtailing their ability to provide services of the quality and extent to which the public
is entitled. Furthermore, the Board feels that the situation is such as to create bad
public relations, as instanced by the fact that many hospitals have not paid their
accounts for two or three months and have thereby brought both the name of the hospitals and the British Columbia Hospital Insurance Service into ill repute. ——
REPORT OF THE HOSPITAL INSURANCE INQUIRY BOARD FF 93
It is therefore recommended by the Hospital Insurance Inquiry Board to the
Minister of Health and Welfare:—
(1) That immediate steps should be taken to establish a policy that will give
to all hospitals at present operating on a deficit, or that may have an
operating deficit at the end of the year, a grant or grants not to exceed
the difference between their original budget estimate for 1951 and the
budget decided by the British Columbia Hospital Insurance Service:
(2) That any hospital operating on a greater deficit than its budget cut by
the British Columbia Hospital Insurance Service shall have the opportunity to present its case for additional consideration through the Minister
of Health and Welfare to the Executive Cabinet:
(3) That should the funds of the British Columbia Hospital Insurance Service
not be sufficient to pay in accordance with the aforementioned recommendations, same should be paid from the consolidated revenue:
(4) That it should be made clear to all concerned that should the recommendations of the Hospital Insurance Inquiry Board on this matter be implemented, it be understood that they are only interim recommendations to,
in part at least, take care of the immediate hospital situation; and that
future financial arrangements between the hospitals and the British
Columbia Hospital Insurance Service or the Government will be as may
be recommended by the Hospital Insurance Inquiry Board as accepted
or amended by the Government or the British Columbia Legislature.
At a properly constituted meeting of the Hospital Insurance Inquiry Board held in
Vancouver on Tuesday, September 25th, 1951, it was moved and seconded that this
recommendation be approved and adopted.
Motion carried unanimously.
S. J. Smith,
Chairman.
Interim Recommendation No. 6
The Board has received numerous representations from hospital boards, doctors,
organizations, and individuals strongly protesting what was generally termed " remote
control diagnosis" relative to the classification of a sick person as " acute" or
" chronic."
The Board is not yet prepared to suggest a policy on this matter, but as an interim
recommendation is unanimous in resolving that all patients admitted to a hospital who
are in good standing as to premium payments and whose doctors declare them to be
" terminal cases " requiring acute hospital care be accepted as the responsibility of the
British Columbia Hospital Insurance Service for payment of hospitalization costs.
At a properly constituted meeting of the Hospital Insurance Inquiry Board held in
Vancouver on Tuesday, September 25th, 1951, it was moved and seconded that this
recommendation be approved and adopted.
Motion carried unanimously.
On behalf of the Board.
S. J. Smith,
Chairman. FF 94 BRITISH COLUMBIA
Interim Recommendation No. 7
Be it Resolved, That this Board recommends to the Minister:—-
(1) That Regulation No. 9-1 (Restriction of Benefits), of the regulations
under the "Hospital Insurance Act," be amended to read as follows:—
" Where the required premium payment is made by, or on behalf of,
a person on or after the first day of the hospital insurance period to
which it is applicable, such a person shall not be deemed to be a beneficiary pursuant to the Act until fourteen (14) days from the date on
which the payment was made.
" Where an overdue premium is paid within the last fourteen (14)
days of the hospital insurance period to which it is applicable, the fourteen-day term during which benefits are withheld, as provided herein,
shall extend into the subsequent hospital insurance period, regardless of
the fact that the premium applicable to the subsequent hospital insurance
period is paid on or before the due date thereof."
(2) That upon adoption of this recommendation by the Minister, suitable
publicity be given thereto at the earliest possible date:
(3) That publicity now be given to the recommendation of the Board, dated
the 12th day of August, 1951, which recommendation has already been
adopted, whereby a period of seven (7) days of grace is allowed after
the due date for the receipt of a premium payment.
At a properly constituted meeting of the Hospital Insurance Inquiry Board held in
Vancouver on Wednesday, October 17th, 1951, it was moved and seconded that this
recommendation be approved and adopted.
Motion carried unanimously.
On behalf of the Board.
S. J. Smith,
Chairman. REPORT OF THE HOSPITAL INSURANCE INQUIRY BOARD FF 95
COPY OF MINUTE APPROVED, OCTOBER 23rd, 1951
To His Honour the Lieutenant-Governor in Council:
The undersigned has the honour to recommend That, pursuant to section 35 of the
"Hospital Insurance Act," being chapter 151 of the "Revised Statutes of British
Columbia, 1948," the " Hospital Insurance Act " Regulations, made by Order in Council
No. 900, approved May 5th, 1950, as amended, be further amended by striking out
Regulation 9-1, and inserting the following as Regulations 9-1 and 9-2:—
"9-1. Where the required premium payment is made by, or on behalf of, a person
on or after the first day of the hospital insurance period to which it is applicable, such
a person shall not be deemed to be a beneficiary pursuant to the Act until fourteen days
from the day on which the payment was made. Where an overdue premium is paid
within the last fourteen days of the hospital insurance period to which it is applicable,
the fourteen-day term during which benefits are withheld, as provided herein, shall extend
into the subsequent hospital insurance period, regardless of the fact that the premium
applicable to the subsequent hospital insurance period is paid on or before the due date
thereof.
" 9-2. Notwithstanding any other provision of these regulations, the period of time
allowed for payment of a premium shall be extended until the seventh day of the hospital
insurance period to which the premium payment is applicable, and if payment of the said
premium is made on or before that day, the provisions of Regulation 9-1 shall not apply
to the person on whose behalf the premium payment is made. Where a premium is paid
after the commencement of the hospital insurance period to which it is applicable but
prior to the expiration of the seven-day period of grace provided herein, the person on
whose behalf the payment is made shall not be entitled to benefits pursuant to the Act
during those days in the said hospital insurance period prior to the day on which the said
payment was made."
Dated this 23rd day of October, a.d. 1951.
A. D. TURNBULL,
Minister of Health and Welfare.
Approved this 23rd day of October, a.d. 1951.
H. ANSCOMB,
Presiding Member of the Executive Council. FF 96
BRITISH COLUMBIA
TABULATION OF ESTIMATED INCREASES TO THE INCOME AND EXPENDITURES OF THE B.C.H.I.S. CONSEQUENT UPON THE ADOPTION OF THE
RECOMMENDATIONS OF THE HOSPITAL INSURANCE INQUIRY BOARD
AS CONTAINED IN ITS INTERIM REPORT, FEBRUARY, 1952.
No. and Subject of Recommendation
Increased
Income
Decreased
Income
Increased
Expense
Decreased
Expense
4. Elimination of co-insurance charges
(increase in hospital budgets)	
6. Municipal and Provincial per diem
$2,000,000.00
$1,000,000.00
50,000.00
8. Inclusion of Christian Scientists as
11. Exemption  of  student  nurses  as
$25,000.00
12. Out-of-Province   hospitalization —
87,000.00
16. Hospitalization of Treaty Indians:
Federal Government responsibility-
17. Hospitalization of Social Welfare
cases—payment in full	
$436,500.00
1,000,000.00
18. Grants-in-aid to schools of nursing
(reduction in hospital budgets)	
130,000.00
19. Chronic cases—increased limit of
B.C.H.I.S. liability	
300,000.00
25,000.00
20,000.00
50,000.00
20. Management board for B.C.H.I.S.
27. " Chronic case " diagnosis—Medical
Review Board  	
28. Special drugs—permissive use	
30. Plan of registration and premium
collection 	
875,000.00
50,000.00
1,065,000.00
34. Exemption cards—annual charge  .
$2,975,000.00
25,000.00
$25,000.00
$2,482,000.00
1,631,500.00
$1,631,500.00
Net increase  .
$2,950,000.00
$850,500.00
Net increase in B.C.H.I.S. income.
Net increase in B.C.H.I.S. expense
Net gain to B.C.H.I.S	
$2,950,000.00
850,500.00
$2,099,500.00
It is to be cleariy understood that the above calculations are set out to show only the effect of
the proposed changes on the B.C.H.I.S. itself. The following items, showing a saving to the Service,
would become a responsibility of other departments of the Provincial Government:—
Provincial Government per diem grants—increase      $650,000.00
Difference between premium payments and cost of full hospitalization of Social Welfare cases	
Grants-in-aid for schools of nursing .
Payment of premiums for low-income groups (Board's Recommendation No. 10)	
1,000,000.00
130,000.00
70,000.00
$1,850,000.00
In addition to these four items the Provincial Government (Department of Municipal Affairs)
will pay the cost of the extra 25 cents per patient-day grant referred to in the last paragraph of
Recommendation No. 6 (if implemented). The best estimate which the Board can make as to the
aggregate amount of this item to be paid by the Government is $150,000 per annum. Note, however,
that this item does not affect the finances of B.C.H.I.S. because the payment is intended to go direct
to the hospitals concerned and to become " non-operating " revenue to them.
It is also to be clearly understood that these calculations are based on the positive recommendations of the Board as found in its Report. They do not take into account any (other) increased costs
of hospital operation which come into effect by reason of ordinary economic factor's reflected in
hospital budgets for 1952 and future years. REPORT OF THE HOSPITAL INSURANCE INQUIRY BOARD FF 97
EXCERPT FROM THE ACTUARIAL REPORT OF MR. SAMUEL ECKLER,
F.S.A., OF TORONTO, ON THE BRITISH COLUMBIA HOSPITAL INSURANCE SERVICE, DATED DECEMBER 1st,  1951.
CHAPTER VIII. PROBLEMS AND RECOMMENDATIONS
A. Summary of Problems
At the meeting of the Inquiry Board that I attended on June 25th, 1951, I stated that part of
my job would be to clarify the basic problems of the Hospital Insurance Plan. At that time, and in
a letter to the Chairman of the Inquiry Board, I reviewed some of these problems. As a result of
my investigation of the plan and its operation, I have modified my original conception of the problems
and I regard the following as the important ones.
1. Should the universal compulsory hospital insurance plan be continued? If it should be
continued, should any modifications be made in it? If not, what other techniques would
solve the problem of health insecurity and hospital deficits?
If the plan is to be continued, there are the following additional problems:
2. Finances.
How should the moneys for financing the benefits under the plan be raised?
Is the present proposed plan of raising approximately two-thirds by premiums, 30 per
cent by provincial subsidy and 4 per cent by municipal grants satisfactory?
Is the premium structure reasonably equitable?
Should the provincial subsidy come from consolidated revenue or should it be an
earmarked tax?   Should a special tax be levied to cover the provincial subsidy?
What provision, if any, should be made for the payment of premiums by low income
and indigent groups?
3. Benefits.
Should a service or cash benefit be provided?
Are deterrents to hospital admission and prolonged stays desirable and, if so, how should
they be arranged?
Should hospital care be provided for chronic diseases?
Should a maximum limit be put on hospital stays?
4. Hospital relationships.
What method of payment should be used to reimburse the hospitals for benefits under
the plan?
What administrative relationships between the hospitals and the plan will produce the
best results?
5. Should the plan be administered by a semi-independent agency composed of more than
one person?
B. Recommendations
Many of the above problems have been discussed in previous chapters and some answers have
been given. At this stage, I should like to summarize many of the conclusions I have drawn and
give recommendations under three alternative courses of action.
The first two approaches assume that it is desirable to continue the state-operated compulsory
hospital insurance plan. The third approach involves the discontinuance of the hospital insurance
plan and the substitution therefor of other methods to meet the hospital insurance needs of the citizens.
If the compulsory hospital plan is continued under either one of the first two approaches, the
following conditions should be satisfied, that
(a) the rate of hospital utilization does not become excessive. Otherwise, the plan may be
uneconomic in relation to alternative expenditures of the same amount of money.
In order to accomplish this condition, deterrents to hospital utilization, both for admissions and long stays, are necessary. For example, I consider that the Saskatchewan
utilization rate is excessive and that clearly too much emphasis has been placed there
on hospital care as a method of improving the health of the people.
(b) a reasonable amount of hospital autonomy be preserved. Otherwise, the insurance plan
becomes a dispenser of hospital services as well as an insurance organization.
(c) hospital per diem costs remain reasonable. Otherwise, the over-all cost of the plan
would be too expensive.
Approach 1.
The present plan with minor modifications—that is, a service benefit plus almost universal coverage—should be continued. The chief advantage of this approach is that the beneficiary, except for
his co-insurance payments, will have all his hospital costs paid for.    The advent of co-insurance has FF 98 BRITISH COLUMBIA
reduced this advantage somewhat but it is still an advantage. The chief objections to the plan are
that it seriously reduces the autonomy of hospitals, the value of the service benefit varies from
community to community and the beneficiaries do not understand the exact money value of the
benefits they receive. If the Hospital Insurance Service promises a service benefit, then it must be
prepared to pay what the local hospital says that benefit costs or step in and rule what those costs
shall be. Basically, there is no other course. Nevertheless, this process can be effected on a reasonably equal partnership basis with the local hospitals participating in the affairs of the Insurance
Service. The Blue Cross Plans, which usually provide service benefits, are almost in all cases owned
and operated by the hospitals themselves. Undoubtedly, that is one of the reasons why the Plans are
working satisfactorily.
Practically, premiums cannot vary geographically and the defect of invariable premiums and
variable benefits from locality to locality cannot be overcome. However, the fact of a substantial
government subsidy and a different level of premiums might solve this problem to a large degree.
The provincial Blue Cross Plans have the same difficulty.
The fact that the beneficiaries do not know the money value of the service benefits they receive
can be readily overcome by proper public relations.
Under this approach, I suggest the following:
(1) I see no strong reason for making any important change in the present exemptions. Some
minor changes might be desirable. Administratively, it would undoubtedly be simpler to exempt no
persons from the payment of premiums. For example, the exemption of approved plans might be
withdrawn but I think there is some advantage from, a public relations point of view in offering the
option of joining another plan to any group that qualifies. The hospital insurance costs of the
employees of the British Columbia Telephone Company and the Canadian Pacific Railway are
probably less than those of the members of the general population because the employees are select
groups (any group of employees is, on the average, in. better health than the general population
because they are younger and because the group excludes invalid persons). If the premiums are
greater than the hospital insurance costs of those employees—and at the present level they may very
well be—the Hospital Insurance Service would benefit financially by withdrawing the exemption from
these two groups. However, if the premiums are reduced so that they are lower than the hospital
insurance costs of these groups, then the Insurance Service would gain by continuing the exemption.
The question of exempted persons should be constantly reviewed and individual equity arid the
mechanics of administration should be balanced against the rights of members of certain groups.
(2) The benefits provided beneficiaries suffering chronic diseases should be clarified. If any
chronic diseases are excluded, they should be clearly named and listed. A definite maximum limit
should be placed on the benefits for an insured chronic disease. Although I understand such a limit
is being used now, by administrative discretion, it would be preferable to specify this limit in published
regulations.
I hesitate to recommend a basic liberalization of the coverage for chronic diseases in view of the
age distribution of the British Columbia population and the high per diem cost. It is also important
from a cost point of view to keep the hospital utilization rate at a minimum. I consider it very
important to obtain the complete co-operation of the local hospitals and the medical profession in the
matter of chronic diseases and to make certain that the public thoroughly understand the reasons for
. limitations on chronic cases.
(3) Some plan of co-insurance is essential to keep the hospital utilization rate at a minimum.
The system of co-insurance should be designed to reduce admissions and long stays. In addition, it
should be easily understood and administered. For each admission, I suggest that the beneficiary
pay the hospital a fee of a specified amount—possibly the cost of one day's hospitalization for stays
of more than one day and something less for a one-day stay—and so much per day for each day of
hospital stay over a certain period. The amount of the admission fee, the number of days' stay
beyond which additional payments by the beneficiary are required, and the amount of the additional
payments can be determined by the condition that the total income to the hospitals from this source
should equal approximately the present estimated co-insurance income. Before a change of this sort
is effected, it should be discussed and approved by the hospitals involved.
(4) The definition of " dependents" should be changed to include only spouse, unmarried
dependent children under 19, unmarried dependent children between 18 and 21 going to school and
unmarried incapacitated children. This change should not be introduced until provision is made for
premium payment by indigents and low income groups.
(5) The pattern of financing the hospital plan should be revised so that single persons pay
a premium equal to about 50 per cent of the head of family rate (with dependents defined as in
previous paragraph) and the provincial and municipal governments pay the remainder. I estimate
that during 1950 the value of the hospital benefits paid to single persons was about $18. Whatever
the single person paid over this amount was really in the nature of a poll tax, the proceeds of which
were used to subsidize the hospital insurance costs of families.
At this stage, I am not prepared to say more than that no premium rate charged any group of
persons should be very much in excess of the value of benefits received by that group.   It is clear that REPORT OF THE HOSPITAL INSURANCE INQUIRY BOARD FF 99
the present premium rate structure does not meet this condition. The actual level of premiums
depends on the amount of the subsidy the government wishes to provide for the plan. As an
illustration, the single person premium might be $24 a year and the family premium $48. Under
such rates, the government subsidy, exclusive of the premiums paid on account of indigents and low
income groups, would probably be less than the 1951-1952 fiscal year estimate because of the
suggested limitation in the definition of dependents. On the other hand, if the premiums are set at
$21 for single persons and $42 for families, the government subsidy might be greater than estimated
in the 1951-1952 budget
(6) The Hospital Insurance Act should include a specific provision that employers be permitted
voluntarily to share in the premiums required from employees who are covered under the plan.
I understand that the British Columbia Electric and the Consolidated Mining & Smelting Companies
pay 50 per cent of the premiums of their employees. There are probably a few other employers
which pay part of their employees' premiums. The insurance plan should actively encourage this
process, possibly by employing representatives to visit various employers.
(7) The Act should be amended to provide that the hospital insurance premiums will be adiusted
regularly in relation to changes in hospital utilization and per diem hospital costs. I consider this
aspect important from a public relations point of view to make it clear that increases in hospital costs
and hospital utilization may result in greater premiums.
(8) Consideration might be given to special or earmarked taxes to finance the government subsidy to the plan. Such special taxes might be accompanied by a significant reduction in the proportion of the total hospital insurance costs raised by premiums, in which case the need for assistance in
the payment of premiums to low income and indigent persons would be reduced.
(9) Provision should be made for either municipal or provincial agencies to pay part or all of
the premiums of persons unable to pay premiums and who request assistance. These persons include,
among others, the needy aged, the needy unemployed and low income employees. A means test
related to income only might be applied; for example, the rule might be that the hospital insurance
premium should not exceed 2 to 3 per cent of the annual income of the person making application for
payment of part or all of this premium.
There are probably other methods of meeting this problem but I do not think that any of them
are administratively as direct and simple as the above suggestion. Another method might be to provide that the premiums at no time exceed a certain percentage of a person's income. And still another
solution might be to express the premiums as a percentage of income but never to exceed a certain
specified maximum. My objections to both these methods are that they require a knowledge of every
person's income and would also complicate collections.
(10) The method of payment to hospitals should be designed so as to discourage unnecessarily
long stays and encourage economy of hospital operation. The method adopted should also be
accepted and understood by the local hospitals.
(11) It is essential to set up a closer formal relationship between the local hospitals and the
insurance plan than exists at the present time. Although the Hospital Advisory Council, which represents the interested groups, has an important role to play in the successful administration of the plan,
I think some other liaison body should be established to effect harmonious relationships between the
hospitals and the plan. I consider this suggestion important for the successful and economic administration of a service type of hospital insurance benefit.
(12) The annual reports prepared by the Hospital Insurance Service should give a complete
picture of the year's operations of the plan and a description of items, administrative and otherwise,
of interest to the public. Among the operational items covered in the report should be included an
analysis of the insured persons by age, sex, single and head of family, a breakdown of the gap between
the total insured persons and the total estimated population by those exempted and those delinquent
in premium payments, calendar year financial statements, statistics of per diem hospital costs, hospital
utilization by age and sex, tabulation of admissions by length of stays, and admission rates.
Approach 2.
The present plan should be altered fundamentally by providing a cash per diem benefit to the
hospital.
The advantages of this plan are:
(1) It effects a closer control of costs. The cost of the insurance plan would depend entirely on
hospital utilization which can be kept reasonably level. An increase in hospital costs would mean
greater hospital payments by the beneficiaries to the hospitals. Undoubtedly, rising hospital costs
would bring about a demand for an increase in the per diem cash benefit but it would then be clearly
understood by the beneficiaries that the increase in premiums is due to a rise in hospital costs. The
payments for the services provided by the hospitals outside of room and board and general nursing
could be better controlled.
(2) The affairs of the local hospitals would not have to be as closely scrutinized under a cash
benefit plan as they have to be under a service benefit plan. Accordingly, the Boards of Management
of local hospitals would be able to exercise more independence in guiding the affairs of the hospitals FF 100 BRITISH COLUMBIA
than under a service benefit. In effect, they would establish the payments required by the insured
patients to the hospitals for the difference between the cash benefit allowed by the insurance plan and
the actual rates charged by the hospitals.
(3) Although the cash benefits allowed by the plan would probably have to vary from hospital
to hospital, there could be a closer relationship than under the service benefit plan between the
premium charged and the benefits allowed.
(4) Under a cash benefit plan, the insurance plan would operate strictly as an insurance service
and would not be directly concerned with hospital administration. Matters of improvement in hospital accounting and administration would then be looked after by a department of government
especially trained and equipped for this service.
The chief defects of the cash benefit plan are that:
(i)  many beneficiaries would probably still find it difficult to meet the deficiency payments
required;
(ii) unless the insurance plan interferes with the hospital's rights to establish rates charged
its patients, many insured persons might feel that the rates charged are excessive.
The recommendations under the first approach that would apply equally to the second are those
respecting exemptions, chronic diseases, definition of dependents, financial basis of premiums, voluntary employer contributions, special taxes for government subsidy, assistance for indigent and low
income groups, complete annual reports.   In addition to the applicable recommendations made under
the first approach, I suggest the following for this second one.
(1) The per diem cash benefit should be established at a level slightly under the standard ward
per diem rate. More than one per diem rate should be used with different rates for small, medium
size and large hospitals. The reimbursements for special services should be either a multiple of the
per diem cash benefit, for example 20 times, or a fiat amount such as $100 or $150. The per diem
cash benefit should be reduced after a specified period, for example 30 days, to bring it in line with
the lower hospital'costs for long stays and in order to discourage long stays.
(2) A liaison would still be necessary between the local hospitals and the Insurance Service but
it probably could be adequately arranged through an agency such as the Hospital Advisory Council.
(3) Hospital deficits would no longer be a concern of the Insurance Service. If the government
decides that some action has to be taken on this problem, it should be attacked by another agency of
the government.
(4) If this approach is followed, the change-over should be carefully prepared and understood
by all institutions and persons concerned.
Approach 3.
The compulsory Hospital Insurance Service should be terminated at some future date. The
advantages of this approach have already been examined in Chapter VII. They might be summarized
as follows. Part of the hospital insurance needs of many people can be met by voluntary insurance
agencies without involving the government in increasingly costly activity and without interfering with
the rights of individuals. In addition, the government subsidy under the present insurance plan would
probably produce a greater long range improvement in health if it were spent on preventive health
measures and medical research.
The objections to this approach are that voluntary insurance leaves large gaps in coverage and
that the compulsory hospital plan has still not been given a fair trial. Possibly, with proper safeguards
and more effective administrative procedures, some of the criticisms of the present plan might be
overcome.
If the plan is to be discontinued entirely, I suggest that an effort be made by the government to
encourage voluntary insurance to cover as many persons as possible. Possibly some techniques could
be devised to cover aged persons and persons in rural communities, which are the two large groups not
presently adequately covered by the voluntary hospital insurers in other provinces.
In place of compulsory hospital insurance, the feasibility of a state operated catastrophe medical
care insurance plan might be considered. This type of state health insurance is being actively promoted in the United States by many groups. Under such a plan of insurance, all medical care expenditures, including all hospital payments and fees to health personnel (doctors, physicians-surgeons,
nurses, etc.) in any one year in excess of a specified percentage of a person's income, would be paid
as a benefit. Most of these plans contemplate that something less than the total catastrophe expenditures would be paid to the insured in order to prevent abuse of the plan. The cost of such a plan
would depend chiefly on the percentage figure of income above which the insurance benefits are paid.
A very high percentage might not cost very much more than the present government subsidy to the
Hospital Insurance Plan. This plan might have popular appeal. In considering it, many aspects
would have to be investigated—a careful analysis of the relation of medical care expenditures to
family income, the distribution of family incomes and the method of financing and administration. REPORT OF THE HOSPITAL INSURANCE INQUIRY BOARD
FF 101
? WHAT SERVICES
ARE NOT INCLUDED
IN THE PLAN ?
? HOW DO I BECOME
Definite Outline of those
A BENEFICIARY ?
B.
C.
H.
I.
S.
Hospitalization Services
which the Plan does not
	
cover.
-   ?
? WHAT ARE THE
PREMIUM RATES ?
Outline of Premiums—
(a) Single Persons:
(b) Families:
With details of Dependent
Coverage included.
o
o
ft
Full Outline of Plan of Registration and Payment of
Premiums, including the
privilege of arranging Payroll Deductions between
Employer and Employee.
3
o
ft
YOU
WERE
ASKING
? WHAT HAS THE
INSURANCE SERVICE
DONE TO DATE ?
? WHAT ARE THE
BENEFITS INSIDE
B.C. ?
? WHAT ARE THE
BENEFITS OUTSIDE
B.C. ?
A.
Number of Claims Paid
to Date
Amount Involved
Number of Claims over
$2,000 etc. etc. etc.
a
o
Description of Benefits allowed to all Beneficiaries
hospitalized within the
Province.
a
ft
Outline of Benefits provided
for Registered Citizens of
B.C. who enter hospitals
outside the Province.
FROVu
UMiAtar, FF 102
BRITISH COLUMBIA
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u S3 > REPORT OF THE HOSPITAL INSURANCE INQUIRY BOARD FF 103
SUMMARY REGARDING COMPARATIVE HOSPITAL STAFFS
.    .      , ,          ...               .. Hospital in Hospital in
Actual hospital Capacity  British Columbia City Saskatchewan City
Beds and cribs  405 503
Bassinets      66 50
         471   553
Rated capacity (beds)                  405 466
Percentage of occupancy, 1950^                   86.73 98.9
Total patient-days           123,934 168,220
Gross operating expenses as per
fixed budget, 1951      $1,854,003.00 $1,518,916.00
Net cost to service (estimated)_'    $1,507,226.00 $1,368,673.00
Net wages and salaries (estimated)       $1,204,903.00 $85.8,000.00
Per diem rate set for 1951                 $11.95 $8.14
1951 Staff
Administration and switchboard    53 44
Social service       4 2
Medical records       8.7 2
  65.7        48
Graduate nurses  147.5 65
Student nurses  221 223
Practical nurses and nurses' aides 48 72
Orderlies   26 16
442.5        376
Laboratory—
Pathologist        1 1
Technician and others     22 17
Students _'  10
■         23   28
Physiotherapy   4                            4
Radiology—
Radiologists       3 2
Technicians and others     14.5 11
         17.5        13
Pharmacy        9.5 3
Interns       9.5 14
Nursing-school        9.0 	
         28   17
Dietary  47 61
Housekeeping, gardeners  100 50
Power plant, laundry  40 32
Total staff  767.7 629 FF 104
BRITISH COLUMBIA
PUBLIC HEARINGS HELD BY THE BOARD
July 28th, 1951-
July 28th, 1951-
July28th, 1951—
July 30th, 1951-
August 1st, 1951-
August4th, 1951
Ocean Falls.
Prince Rupert.
Williams Lake.
Dawson Creek.
—Prince George.
■Kamloops.
August 6th, 1951—Vernon.
August 7th, 1951—Kelowna.
August 8th, 1951—Penticton.
August 10th, 1951—Trail.
August 11th, 1951—Nelson.
August 13th, 1951—Cranbrook.
August 13th, 1951—Fernie.
August 15th, 1951—Nakusp.
September 5th, 1951—Abbotsford.
September 8th, 1951—Victoria.
September 10th, 1951—Nanaimo.
September 11th, 1951—Port Alberni.
September 11th, 1951—Courtenay.
September 12th, 1951—Powell River.
September 17th, 1951—Vancouver.
September 18th, 1951—Vancouver.
September 19th, 1951—Vancouver.
September 20th, 1951—Vancouver.
September 21st, 1951—Vancouver.
September 24th, 1951—Vancouver.
HEARINGS HELD BY THE BOARD NOT ADVERTISED AS PUBLIC
July 29th, 1951—Quesnel.
July 30th, 1951—Pouce Coupe.
July 31st, 1951—Fort St. John.
August 9th, 1951—Grand Forks.
August 14th, 1951—Golden.
HOSPITALS VISITED AND HOSPITAL BOARDS HEARD
Abbotsford	
Alert Bay - 	
Visited
    No
    No
__       . Yes
Heard
Yes
Yes
Armstrong
Yes
Ashcroft     -   -           —   	
  Yes
Yes
Burns Lake                     -
    _ Yes
Yes
Chemainus 	
Chilliwack 	
Comox
  Yes
    No
    .   No
Yes
Yes
Yes
Cranbrook          ..
    Yes
Yes
Creston	
Cumberland     	
Dawson Creek _ _     	
  Yes
    No
    . Yes
Yes
Yes
Yes
Duncan       - - -    ~
     __          Yes
Yes
Fernie      	
           No
Yes
Fort St. John	
  Yes
'        .__                    Yes
Yes
Golden            ..     .
Yes
Grand Forks • _    - _
      .             No
Yes
Hazelton -     	
                    Yes
Yes
Invermere       -
--   -                    Yes
Yes
Kamloops _   	
    -.                    No
Yes
Kaslo    - _„ 	
                      Yes
Yes
Kelowna      -.    -     . .
Yes
Yes
Kimberley	
Ladysmith  	
  Yes
           Yes
Yes
Yes
Langley -   	
     .._           No
Yes
Mission	
           No
Yes
Nakusp	
    No
Yes REPORT OF THE HOSPITAL INSURANCE INQUIRY BOARD
FF 105
HOSPITALS VISITED AND HOSPITAL BOARDS HEARD—Continued
Visited
Heard
Nanaimo      .
    No
Yes
Nelson          	
  Yes
Yes
New Denver - -  	
  Yes
Yes
North Vancouver             _
Yes
Yes
  Yes
Yes
Ocean Falls      . ,       	
Yes
Oliver —-      	
Yes
Penticton  	
  Yes
Yes
Port Alberni      _       _ 	
    No
Yes
Powell River     —          	
- Yes
  Yes
Yes
Prince George         —
Yes
Prince Rupert _—       	
  Yes
Yes
Princeton         _ ■      —_              -   -      .
   No
Yes
Quesnel                       ..       -      -    - 	
- Yes
Yes
Revelstoke	
  Yes
Yes
Rossland 	
  Yes
Yes
Salmon Arm            _ _
  Yes
Yes
Smithers     	
  Yes
Yes
Summerland    „-           ____   _ 	
-    - Yes
Yes
Terrace               '
Yes
Yes
Trail 	
  Yes
Yes
Vancouver—
Royal Columbian, New Westminster	
  Yes
Yes
Vancouver General	
  Yes
Yes
St. Paul's    	
_ Yes
Yes
Vanderhoof	
  Yes
Yes
Vernon	
  Yes
Yes
Victoria—
Royal Jubilee	
    No
Yes
St. Joseph's	
    No
Yes
Williams Lake	
  Yes
Yes
WRITTEN SUBMISSIONS TO THE BOARD
Hospitals
Abbotsford Hospital, Abbotsford, B.C.
Arrow Lakes Hospital, Nakusp, B.C.
Creston Valley Hospital, Creston, B.C.
General Hospital, Chilliwack, B.C.
General Hospital, Kelowna, B.C.
General Hospital, Ladysmith, B.C.
General Hospital, North Vancouver, B.C.
General Hospital, Princeton, B.C.
General Hospital, Powell River, B.C.
General Hospital, Salmon Arm, B.C.
General Hospital, Vancouver, B.C.
Grand Forks Community Hospital, Grand Forks, B.C.
Hawthorne Private Hospital, Vancouver, B.C.
Langley Memorial Hospital, Murrayville, B.C.
McDougall Memorial Hospital, Kimberley, B.C. FF 106 BRITISH COLUMBIA
Mission Memorial Hospital, Mission, B.C.
Nanaimo Hospital, Nanaimo, B.C.
Penticton Hospital, Penticton, B.C.
Rest Haven Hospital, Sidney, B.C.
Royal Columbian Hospital, New Westminster, B.C.
Royal Inland Hospital, Kamloops, B.C.
Royal Jubilee Hospital, Victoria, B.C.
Slocan Community Hospital, New Denver, B.C.
St. Joseph's Hospital, Victoria, B.C.
St. Joseph's General Hospital, Dawson Creek, B.C.
St. Martin's Hospital, Oliver, B.C.
Tofino Hospital, Tofino, B.C.
Vernon Jubilee Hospital, Vernon, B.C.
West Coast General Hospital, Port Alberni, B.C.
War Memorial Hospital, Williams Lake, B.C.
Labour Organizations
B.C. Federation of Labour, Vancouver, B.C.
Hospital Employees' Federal Union, Vancouver, B.C.
Local 7310, United Mine Workers' Association, Fernie, B.C.
Standard Railway Labour Joint Legislative Committee, Vancouver, B.C.
Vancouver and New Westminster Trades and Labour Council, Vancouver, B.C.
Victoria and District Trades and Labour Council, Victoria, B.C.
United Steelworkers of America, Trail, B.C.
Veterans' Organizations
Army and Navy and Air Force Veterans, Gambier Harbour, B.C.
Canadian Legion, B.C. Command, Vancouver, B.C.
Canadian Legion, Rivers Inlet, B.C.
Imperial Veterans' Action Committee in Canada, Vancouver, B.C.
Imperial Veterans' Corps of B.C., New Westminster, B.C.
Langley Legion No. 21, Langley, B.C.
Women's Organizations
British Columbia Women's Institutes (Bulkley-Tweedsmuir District), Decker Lake, B.C.
B.C. Women's Institutes, Cariboo District, Quesnel, B.C.
B.C. Women's Institutes, Peace River Block.
Congress of Canadian Women, Vancouver, B.C.
Miscellaneous
B.C. Hospitals' Association, Vancouver, B.C.
B.C. Hospitals' Association, Yale-Cariboo Zone.
B.C. Polio Fund, Vancouver, B.C.
B.C. Retired Civil Servants' Association, Victoria, B.C.
Capitol Hill Ratepayers' Association, Vancouver, B.C.
C.C.F. Peace River Executive, Dawson Creek, B.C.
College of Physicians and Surgeons, Vancouver, B.C.
Community Chest and Council of Greater Vancouver, Vancouver, B.C.
Canadian Temple of the More Abundant Life, Vancouver, B.C.
Comox South Liberal Association, Vancouver Island, B.C.
Dawson Creek Chamber of Commerce, Dawson Creek, B.C. REPORT OF THE HOSPITAL INSURANCE INQUIRY BOARD FF 107
Dominion Income Tax Staff Association, Vancouver, B.C.
Farmers' Institutes, District "J," Peace River Block.
Farmers' Institutes, District " B," Bulkley Valley, Skeena Valley, B.C.
Farmers' Union of Alberta (B.C. Section), Rolla, B.C.
Halls Prairie Farmers' Institute, Cloverdale, B.C.
Langley Ratepayers' Association, Fort Langley, B.C.
North Sidney Property Owners' Association, North Sidney, B.C.
Provincial Junior Chamber of Commerce.
Pacific Coast Pipe Co. Ltd., Vancouver, B.C.
Penticton City Council, Penticton, B.C.
Pharmaceutical Association of B.C., Vancouver, B.C.
Registered Nurses' Association of British Columbia, Vancouver, B.C.
Registered Nurses' Association of B.C. (Kamloops-Tranquille Chapter), Kamloops, B.C.
Surrey Property Owners' Association, Cloverdale, B.C.
South Cowichan Taxpayers' Association, Vancouver Island, B.C.
The Canadian Life Insurance Officers' Association, Toronto, Ont.
Union of B.C. Municipalities, Victoria, B.C.
Vancouver Board of Trade, Vancouver, B.C.
White Rock Ratepayers' Association, White Rock, B.C.
Yarrows Ltd., Victoria, B.C.
Individual
H. E. Andrew, City Clerk, Penticton, B.C.
C. P. Bagnall, Vernon, B.C.
H. A. Breen, Prince Rupert, B.C.
W. G. Cowan, Postmaster, Field, B.C.
Donald F. Gower, Dawson Creek, B.C.
G. H. Jackson, Secretary-Treasurer, Canadian Pacific Employees' Medical Association
of British Columbia, Vancouver, B.C.
H. R. Matthews, 12 Marine Avenue, Westview, B.C.
G. T. McKay, Supervisor, Settlement Service, Department of Citizenship and Immigration, Vancouver, B.C.
J. A. Ploos, Secretary-Manager, Fernie Memorial Hospital, Fernie, B.C.
A. H. Povah, Kelowna, B.C.
Dr. C. M. Robertson, Osoyoos, B.C.
A. E. P. Stubbs, Chemainus, B.C.
Dr. T. W. Sutherland, Parksville, B.C.
T. A. Titchmarch, Penticton, B.C.
And many others.
victoria, B.C.
Printed by Don McDiarmid, Printer to the Queen's Most Excellent Majesty
1952
1,500-252-3119 

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