‘The greatest Machiavellian fraud’: Ontario’s bitter fight over what became OHIP

Posted on May 10, 2023 in Health History

Source: — Authors:

TVO.Org – Politics/History
May 9, 2023.   Written by Jamie Bradburn

In 1965, the federal Liberals proposed a national medicare program. Premier John Robarts wasn’t happy about it.

“Just think of the petty unimportant complaints that will jam our offices. It’s not a very happy prospect. Vigilance is a small price to pay for freedom.”— F.T. Porter, assistant secretary of the Ontario Medical Association, speaking at a forum on medicare at Kingston General Hospital in May 1966.

As the implementation date for the Ontario Medical Services Insurance Plan (OMSIP), the predecessor to OHIP, approached during the spring of 1966, there was plenty of fear and uncertainty. Ontarians were confused as to who would be automatically enrolled in the plan and who would have to sign up. The OMA urged doctors to place some of the administrative burden on patients to avoid becoming mindless civil servants. And, amid battles with Ottawa over participating in a federal medicare program, Premier John Robarts worried about the federal government interfering in a traditionally provincial jurisdiction and what a public plan would do to existing medical-insurance plans.

By the 1960s, most Ontarians had some form of medical insurance, whether as individuals or through a plan arranged by their employer. These plans were provided by commercial insurers or non-profit, doctor-sponsored providers such as Physician Services Inc. (which was partly controlled by the OMA) and Windsor Medical Services (which had covered people in the Windsor area since the late 1930s). Plans for government-operated plans had been discussed for years and led to the launch of a public hospital-insurance plan in the late 1950s.

Editorial cartoon from the April 28, 1966, Kingston Whig-Standard showing Premier John Robarts and Ontario minister of health Andrew Dymond; editorial cartoon from the May 19, 1966, edition of the Ottawa Citizen showing premier John Robarts and Ontario minister of health Andrew Dymond, with federal health minister Allan MacEachen in the background.

During the early years of Robarts’s premiership, a medical-insurance plan had been drafted but stalled while under special-committee review. The federal Liberal government of Lester Pearson proposed a national medicare program in 1965 that would see Ottawa cover some of the cost of provincial programs if they met certain conditions, including portability, universality, and non-profit administration. Robarts criticized the federal proposal as an example of Ottawa placing financial pressure on the provinces to create programs on its terms. He was concerned that existing commercial and non-profit insurers would be harmed or disappear entirely. “Robarts could not understand why it was thought inadequate to proceed with Ontario’s practical, far less grandiose and complicated method of having the state cover people who could not afford private insurance,” biographer A.K. McDougall notes.

On May 11, 1965, OMSIP was introduced to the legislature via Bill 136. Enrolment in the program would be voluntary, based on the notion that people don’t like to be compelled to do anything. Costs for low-income groups would be partly or fully covered by the province, ensuring that physician services would be available to all. Premiums would not exceed set maximums. If all went well, the plan would take effect in June 1966.

Debate lasted for several weeks. The opposition parties were concerned that a financial-means test might be required for participants. They argued that additional services like dental care and prescriptions should be covered. They observed that the bill lacked provisions to prevent doctors from extra-billing patients and that it catered too much to insurance companies. Despite efforts to delay the bill by six months, it passed third reading on June 21, 1965.

Part of a pamphlet explaining how to fill out an OMSIP application, ca. 1966- 1969. 

After negative public feedback, which included vigils at Queen’s Park by church ministers, the legislation was amended and brought back to the legislature in January 1966: standard contracts would be prepared by the province, public-assistance recipients would be automatically enrolled, and there would be a greater range of rates based on income. The opposition continued to attack the premise of voluntary, instead of compulsory, enrolment; Liberal leader Andrew Thompson’s attempts to incorporate mental-health care, phase in services like home nursing and subsidized drug costs, and get the government to conduct broader consultation beyond the OMA were unsuccessful. Robarts felt these amendments would “do nothing for the people of the province,” and the bill passed.

To sell the public on OMSIP, an advertising campaign launched two weeks before enrolment opened on March 1, 1966. Celebrities such as journalist Betty Kennedy and country entertainer Gordie Tapp appeared in commercials. Newspapers ran “Good News for Harry,” a comic-strip-style ad featuring Harry, a blue-collar guy who worried about medical-care costs. While Harry though OMSIP was an “odd name,” his buddy Ron believed it was “beautiful” because it represented an opportunity to pay the bills. Enrolment forms were available via mail and through bank branches. Anyone who didn’t enrolstill had the option of being fully covered by private insurers. The media and the opposition questioned the fact that promotional brochures were delivered to homes four days before the final bill passed

The OMA was critical of OMSIP. It felt the ads didn’t make clear that OMSIP covered only 90 per cent of doctors’ fees. While physicians could bill their services directly to OMSIP, the OMA recommended that they send the bill to their patients and let them handle the paperwork to submit claims. In Scarborough, 200 doctors returned unopened OMSIP payment forms. Members of the Kingston Academy of Medicine voted not to co-operate with the program. “Doctors do not want to become civil servants,” academy president D.J. Delahaye told the Kingston Whig-Standard. He believed his peers feared that medicare would create regulations that would lower care standards for doctors and patients and that, as medical costs rose, the government might not always meet its promise to pay 90 per cent of the OMA fee schedule. Gradually, this resistance faded, and, by early May, the government claimed that only 200 out of the province’s 8,500 doctors still required their patients to submit their claims to OMSIP.

With enrolment at just over half of the expected level, as well as confusion over which elderly Ontarians would be automatically added to OMSIP (only those receiving old-age assistance would be), the deadline to sign up was extended by two weeks, to May 15. Those who missed that date would have to wait a minimum of three months to receive benefits. The initial monthly costs were $5 for individuals, $10 for couples, and $12.50 for families.

The OMA continued to engage in fearmongering. In a pamphlet issued that summer, the association warned that, if OMSIP paid doctors instead of patients, “you might wake up some morning and find your doctor working for the government, not you.”

By the end of 1966, OMSIP was still experiencing growing pains. Its head office in Toronto received nearly five times more claims than it had expected; its computerized processing system was overwhelmed, and payments were delayed up to three months. OMSIP employees racked up overtime hours to process claims and complaints. They received over 1,000 calls a day — most of them, not happy ones.

Some of the hiccups OMSIP encountered:

To increase awareness of the plan, an OMSIP mobile-information centre began touring the province in November 1967. The van was staffed with two representatives who answered questions and promoted the plan’s benefits. “Decorated externally in blue and white with the OMSIP insignia on its roof as well as both sides and back, the mobile information centre has comfortable seating accommodation,” the Sault Star observed. “It is designed to create an informal atmosphere, in which persons seeking information can relax.”

Meanwhile, the provincial government kept sending signals that it wanted no part of the federal medicare plan scheduled to begin in mid-1968. In November 1967, provincial treasurer Charles MacNaughton mused about opting out and using federal medicare contributions to tackle issues the Robarts government felt were more pressing, such as education and housing. A combination of OMSIP and existing private plans, many believed, was good enough for Ontarians.

There were signs medical insurance in Ontario was preparing itself in case the province did join the federal plan. PSI announced it would drop its individual subscribers at the end of 1967 and focus on group plans, leaving around 250,000 subscribers free to explore their options. OMSIP entered group coverage around this time, providing coverage to groups considered too small for traditional plans.

Speaking to the Greater Niagara Chamber of Commerce in January 1968, Robarts announced that Ontario would not enter the federal medicare program for at least a year after it came into effect. “I reject the federal proposals as being excessively expensive, unfair to those provinces unable to participate, not consistent with our priorities, and tampering improperly with matters which are directly the responsibility of the province,” he declared. He did not want to be part of a scheme subsidized by tax revenues from provinces that couldn’t afford to participate. He refused to dismantle private plans in favour of expanded OMSIP to meet federal requirements. He also felt that, since health was a provincial jurisdiction, provinces should be given more consideration in running plans and that a federal plan should be phased in slowly so that it would have less of an impact on the economy and give provinces some wiggle room.

Making Medicare: The History of Health Care in Canada

A year later, critics accused Robarts of being a mouthpiece for private insurers, especially those based in his home city of London. His own statements were becoming more extreme: for example, he called the most recent set of federal medicare legislation “the greatest Machiavellian fraud ever perpetrated on the people of Canada.”

“What is wrong with insurance companies?” he exclaimed in an interview with journalist Peter C. Newman in March 1969. “Every single person in this country does business with Canadian insurance companies one way or another. And I don’t think you can sort of damn them out of hand and say that they have improper motives.” He boasted that no other province had so many private plans available to employers and employees and expressed his conviction that, overall, Ontarians were getting a much better deal than they would through the feds.

On June 17, 1969, Robarts announced that Ontario would join the federal plan as of October 1, becoming the seventh province to do so (only New Brunswick, Prince Edward Island, and Quebec continued to hold out). New legislation brought Ontario’s program, which was renamed the Ontario Health Services Insurance Plan (OHSIP), closer to federal guidelines. A Health Services Insurance Council was formed consisting of members of the public, OMA, and insurers. The province also set up a system of designated agents, primarily existing private insurers, to handle enrolment and collect premiums for basic government plans. These insurers were also allowed to sell supplemental packages to the public. Doctors would send their bills to these agents instead of directly to the government. The details weren’t fully fleshed out, but Robarts promised that the standard monthly premiums wouldn’t be any higher than OMSIP’s. The new plan would take effect on October 1. The legislation passed easily with Progressive Conservative and Liberal support.

Robarts indicated that both sides had produced a plan that, unlike previous proposals, took into account special conditions in Ontario. He had also become convinced that Ottawa would never let the province’s share of medicare money be used for other purposes. “You fight for what you want,” Robarts said, “but you realize the country has to go on, and you bend a little.”

Insurance carriers contemplated their future. Commercial insurers seemed enthusiastic and promised to set up a non-profit corporation to meet federal guidelines. The new rules appeared to be a giant win, as medical insurance had always been a loss leader and would now cost them less. As for the major non-profit doctor-sponsored plans, Windsor Medical Services wound down its operations, and its office and employees were transferred to the province, becoming OHSIP’s first regional office. PSI was not interested in being a “post office” for the plan and dissolved itself, leaving its customers to fend for themselves.

As issues surrounding enrolment, doctors’ fees, and plan integration were sorted out, the plan continued to be refined — and, in 1972, medical care and hospitalization plans were merged under the name OHIP.

In the end, Robarts still wasn’t satisfied with how medical insurance in Ontario had evolved. “It was hard for him to disguise the fact that his government had suffered a major, bitter setback after years of battling on the medicare issue, but it had not been a total defeat,” McDougall observes. “Premiums sensitive to income and a role for private carriers had been salvaged. They would remain a source of political controversy for many years.” When Robarts left office in 1971, he noted that his failure to stop the federal medicare plan was among his greatest disappointments.

Sources: John P. Robarts: His Life and Government by A.K. McDougall (Toronto: University of Toronto Press, 1986); The Story Behind the Ontario Health Insurance Plan and Its Impact on the Public Sector by Marvin L. Simner (dissertation, University of Western Ontario, 2020); the December 27, 1967, edition of the Brantford Expositor; the February 22, 1966, March 5, 1966, May 3, 1966, May 5, 1966, August 26, 1967, October 24, 1967, November 17, 1967, April 22, 1969, and June 18, 1969, editions of the Globe and Mail; the April 9, 1966, May 5, 1966, and January 25, 1968, editions of the Kingston Whig-Standard; the February 22, 1966, and April 5, 1966, editions of the North Bay Nugget; the November 10, 1966, edition of the Ottawa Citizen; the March 1, 1969, edition of the Ottawa Journal; the November 11, 1967, edition of the Sault Star; the February 25, 1966, and December 21, 1966, editions of the Toronto Star; and the August 2, 1966, July 18, 1969, and August 28, 1969, editions of the Windsor Star.

Jamie Bradburn is a Toronto-based writer/researcher specializing in historical and contemporary civic matters. 


Tags: , , , ,

This entry was posted on Wednesday, May 10th, 2023 at 12:25 pm and is filed under Health History. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.

Leave a Reply