Hospital Services Plan

One of the major recommendations of the Sigerist Commission in 1944 was that universal hospitalization be provided for Saskatchewan residents. As a preliminary step, Saskatchewan was the first province in Canada to provide funds for capital construction of Hospitals. Between March 16, 1945 and March 1, 1949, the Saskatchewan government provided $653,714 in outright construction grants and $173,500 in loans. The National Health Grants Programme in 1948 added substantial federal funds to support hospital construction. Unfortunately, Saskatchewan's position ahead of other provinces was a detriment to receiving matching federal funds for new construction, since many of its hospitals had already been built and hence did not qualify for federal reimbursement. The new CCF government's plan to introduce the first hospitalization insurance program in North America required a master administrator; Henry Sigerist suggested to Premier T.C. Douglas that Dr. Fred D. Mott might be that man. Mott was a graduate of McGill Medical School and a senior officer with the United States Public Health Service. He became chairman of the Saskatchewan Health Services Planning Commission on September 1, 1946. A man of integrity and action, Mott moved with remarkable speed and efficiency to bring provincewide universal hospitalization into effect on January 1, 1947.

The Saskatchewan Hospital Services Plan (SHSP) broke new ground. New administrative machinery had to be invented. A new uniform hospital accounting system was finalized. Tax collection procedures were agreed upon with the municipalities. Scores of clerical, secretarial, and tabulating personnel were appointed and trained. A massive publicity program was mounted to encourage early registration and tax payment. The only office space available was in an ancient, vacated store building. Clerks sat Elbow-to-elbow in front of long rows of plywood-on-trestles, processing the registration and tax collection payments. The annual hospital premium was $5 for each adult and child, with a maximum of $30 per family; each municipality received a 5% commission for collecting the premium. Premier Douglas favoured a premium for two reasons: the cash-strapped province needed the money, and he felt such a payment would be a psychological “buy-in” for members of the public, who would thereby feel greater responsibility for their plan. Patients no longer had to pay for in-patient hospital services. The doctors in Saskatchewan enthusiastically and almost unanimously supported the plan, because they could now admit patients to hospital whenever necessary, without concern for cost.

The hospitalization costs for the first year - $7,560,763, a per capita cost of roughly $7.56 - were almost exactly twice Sigerist's original forecast. The $5 per person hospital tax nevertheless covered 60% of the cost, leaving only 40% to be paid from general revenues. This efficiency was possible because municipalities collected the premiums, and administrative costs were only 5% of the total.

Per capita costs of hospitalization then rose rapidly in subsequent years, to $9.69 in 1947, $11.41 in 1948, and $13.59 in 1949. As Malcolm Taylor says, “The tax collection system was successful to a degree unexpected for a regressive ‘poll' tax.” In Saskatchewan, the annual premium was dispensed with for seniors on January 1, 1972, and for the entire population on January 1, 1974.

Other provinces were slower to jump on the hospitalization bandwagon. British Columbia's hospitalization plan, the second in Canada, followed in 1949 but, lacking Saskatchewan's organization, suffered horrendous problems. By 1961, all provinces were participating, but only after each had sent administrators to Regina to learn how to do it right. And cost-sharing by the federal government for 45% of the hospital plan, starting on July 1, 1958, now provided the Saskatchewan government with the funds it needed to undertake its long-sought goal of Medicare.

C. Stuart Houston

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Further Reading

Houston, C.S. 2002. “Province-wide Hospitalization.” Chapter 8 in Steps on the Road to Medicare. Montreal: McGill-Queen's University Press.