The Canadian Medical Association (CMA) welcomes the opportunity to appear before the Sub-Committee on the Status of Persons with Disabilities to discuss issues related to the Disability Tax Credit (DTC). This tax measure, which is recognition by the federal government that persons with a severe disability may be affected by having reduced incomes, increased expenses or both, compared to those who are not disabled i, helps to account for the intangible costs associated with a severe and prolonged impairment. It also takes into account disability-related expenses that are not listed in the medical expense deduction or which are excluded by the 3% threshold in the Medical Expense Tax Credit.
Physicians are a key point of contact for applicants of the DTC and, given the way the program is structured, a vital participant in its administration. It is for these reasons that we come before you today to address specific concerns related to the program’s performance. In addition, we would like to discuss the broader issue of developing a coherent set of tax policies in support of health and social policy.
The Integration of Tax Policy with Health Policy and Social Policy
The federal government, through a variety of policy levers such as taxation, spending, regulation and information, has played a key role in the development of our health care and social systems. To date however, discussion about the federal role in these areas has centered largely on federal transfers to the provinces and territories and the Canada Health Act.
However, in looking at how to renew Canada’s health and social programs, we should not limit ourselves to these traditional instruments. Today we have a health system that is facing a number of pressures that will challenge its sustainability. These pressures range from an aging and more demanding population in terms of the specialty care services and technology they will seek; the cry for expanding the scope of medicare coverage to include homecare and pharmacare; and a shortage of health personnel. These are only some of the more immediate reasons alternative avenues of funding health care, and thus ensuring the health and well-being of our citizens, must be explored.
In our pre-budget consultation document to the Standing Committee on Finance ii, the CMA recommended that the federal government establish a blue ribbon National Task Force to study the development of innovative tax-based mechanisms to synchronize tax policy with health policy. Such a review has not been undertaken in over 25 years since the Royal Commission on Taxation in 1966 (Carter Commission).
The CMA is echoing its call for a National Task Force to develop new and innovative ways to synchronize tax policy with health policy and social policy. A study of this nature would look at all aspects of the taxation system, including the personal income tax system, in which the DTC is a component.
The remainder of our brief addresses issues specific to the DTC.
Physician Involvement in the DTC Program
The CMA has in the past provided input with respect to the DTC program. Our working relationship on the DTC program with the Canada Customs and Revenue Agency (CCRA) has been issue-specific, time-limited and constructive.
Our first substantive contact in regard to the DTC program was in 1993 when the CMA provided Revenue Canada with a brief review of the program and the T2201form. It is interesting to note what our observations were in 1993 with regard to this program because many of them still hold true today.
Here are just some of the issues raised by the CMA in 1993 during our initial review of the program:
* The tax credit program may not address the needs of the disabled, it is too hit and miss. The DTC program should be evaluated in a comprehensive way to measure its overall effectiveness in meeting the needs of persons with disabilities.
* The program should be called the “Severe Disability Tax Credit Program” – or something equivalent to indicate that not everyone with a disability is eligible.
* The program puts physicians in a potential conflict with patients—the responsibility of the physician to advocate for the patient vs. gate-keeper need for Revenue Canada. The physician role should be to attest to legitimate claims on the patients’ behalf.
* Revenue Canada should clarify the multiplicity of programs. There are numerous different federal programs and all appear to have varying processes and forms. These overlapping efforts are difficult for patients and professionals.
* A major education effort for potential claimants, tax advisers and physicians should be introduced.
* A suitable evaluation of claimant and medical components of the process should be undertaken.
The CMA does not have a standardized consultative relationship with the CCRA in regard to this program. An example of this spotty relationship is the recent letter sent by the CCRA Minister asking current DTC recipients to re-qualify for the credit. The CMA was not advised or consulted about this letter. If we had been advised we would have highlighted the financial and time implications of sending 75 to 100 thousand individuals to their family physician for re-certification. We also would have worked with the CCRA on alternative options for updating DTC records. Unfortunately, we cannot change what has happened, but we can learn from it. This clearly speaks to the need to establish open and ongoing dialogue between our two organizations.
Policy Measure: The CMA would like established a senior level advisory group to continually monitor and appraise the performance of the DTC program to ensure it is meeting its stated purpose and objectives. Representation on this advisory group would include, at a minimum, senior program officials preferably at the ADM level; those professional groups qualified to complete the T2201 Certificate; various disability organizations; and patients’ advocacy groups.
We would now like to draw the Sub-committee’s attention to three areas that, at present, negatively impact on the medical profession participation in the program, namely program integrity, program standardization (e.g., consistency in terminology and out-of-pocket costs faced by persons with disabilities) and tax advisor referrals to health care providers.
A primary concern and irritation for physicians working with this program is that it puts an undue strain on the patient-physician relationship. This strain may also have another possible side effect, a failure in the integrity of the DTC program process.
Under the current structure of the DTC program, physicians evaluate the patient, provide this evaluation back to the patient and then ask the patient for remuneration. This process is problematic for two reasons. First, since the patient will receive the form back immediately following the evaluation, physicians might receive the blame for denying their patient the tax credit—not the DTC program adjudicators. Second, physicians do not feel comfortable asking for payment when he or she knows the applicant will not qualify for the tax credit.
For the integrity of the DTC program, physicians need to be free to reach independent assessment of the patient’s condition. However, due to the pressure placed by this program on the patient-physician relationship, the physician’s moral and legal obligation to provide an objective assessment may conflict with the physician’s ethical duty to “Consider first the well-being of the patient.
There is a solution to this problem it’s a model already in use by government, the Canadian Pension Plan (CPP) Disability Program. Under the CPP Disability Program, the evaluation from the physician is not given to the patient but, it is sent to the government and the cost to have the eligibility form completed by a physician is subsumed under the program itself. Under this system, the integrity of patient-physician relationship is maintained and the integrity of the program is not compromised.
Policy Measure: The CMA recommends that the CCRA take the necessary steps to separate the evaluation process from the determination process. The CMA recommends the CPP Disability Program model to achieve this result.
Fairness and Equity
The federal government has several programs for people with disabilities. Some deal with income security (e.g., Canada Pension Plan Disability Benefits), some with employment issues (e.g., Employability Assistance for People with Disabilities), and some through tax measures (e.g., Disability Tax Credit). These government transfers and tax benefits help to provide the means for persons with disabilities to become active members in Canadian society.
However, these programs are not consistent in terms of their terminology, eligibility criteria, reimbursement protocols, benefits, etc. CMA recommends that standards of fairness and equity be applied across federal disability benefit programs, particularly in two areas: the definition of the concept of “disability”, and standards for remuneration to the physician. These are discussed in greater detail below.
1) Defining “disability”
One of the problems with assessing disability is that the concept itself is difficult to define. In most standard definitions the word “disability” is defined in very general and subjective terms. One widely used definition comes from the World Health Organization’s International Classification of Impairments, Disabilities and Handicaps (ICIDH) which defines disability as “any restriction or inability (resulting from an impairment) to perform an activity in the manner or within the range considered normal for a human being.”
The DTC and other disability program application forms do not use a standard definition of “disability”. In addition to the inconsistency in terminology, the criteria for qualification for these programs differ because they are targeted to meet the different needs of those persons with disabilities. To qualify for DTC, a disability must be “prolonged” (over a period of at least 12 months) and “severe” i.e. “markedly (restrict) any of the basic activities of daily living” which are defined. Though CPP criteria use the same words “severe” and “prolonged” they are defined differently (i.e., “severe” means “prevents applicant from working regularly at any job” and “prolonged” means “long term or may result in death”). Other programs, such as the Veterans Affairs Canada, have entirely different criteria.
This is confusing for physicians, patients and others (e.g., tax preparers/advisors) involved in the application process. This can lead to physicians spending more time than is necessary completing the form because of the need to verify terms. As a result if the terms, criteria and the information about the programs are not as clear as possible this could result in errors on the part of physicians when completing the forms. This could then inadvertently disadvantage those who, in fact, qualify for benefits.
Policy Measures: The CMA would like to see some consistency in definitions across the various government programs. This does not mean that eligibility criteria must become uniform.
In addition, the CMA would like to see the development of a comprehensive information package for health care providers that provides a description of each program, its eligibility criteria, the full range of benefits available, copies of sample forms, physical assessment and form completion payment information, etc.
The remuneration for assessment and form completion is another area where standardization among the various government programs would eliminate the difficulties that some individuals with disabilities currently face. For example, applicants who present the DTC Certificate Form T2201 to their physicians must bear any costs associated with its completion out of their own pockets. On the other hand, if an individual is applying to the CPP Disability Program, the cost to have the eligibility form completed by a physician is subsumed under the program itself.
Assessing a patient’s disabilities is a complex and time-consuming endeavour on the part of any health professional. Our members tell us that the DTC Certificate Form T2201 can take as much time and effort to complete as the information requested for CPP Disability Program forms depending, of course, on the patient and the nature of the disability. In spite of this fact, some programs acknowledge the time and expertise needed to conduct a proper assessment while other programs do not.
Although physicians have the option of approaching the applicant for remuneration for the completion of the DTC form, they are reluctant to do so because these individuals are usually of limited means and in very complex cases, the cost for a physician’s time for completing the DTC Form T2201 can reach as much as $150. In addition, physicians do not feel comfortable asking for payment when he/she knows the applicant will not qualify for the tax credit. Synchronizing funding between all programs would be of substantial benefit to all persons with disabilities, those professionals completing the forms and the programs’ administrators.
Policy Measure: We strongly urge the federal government to place disability tax credit programs on the same footing when it comes to reimbursement of the examining health care provider.
Tax Advisor Referrals
With the complexity of the income tax system today, many individuals seek out the assistance of professional tax advisors to ensure the forms are properly completed and they have received all the benefits they are entitled to. Tax advisors will very often refer individuals to health professionals so that they can be assessed for potential eligibility for the DTC. The intention of the tax advisors may be laudable, but often, inappropriate referrals are made to health professionals. This not only wastes the valuable time of health care professionals, already in short supply, but may create unrealistic expectations on the part of the patient seeking the tax credit.
The first principle of the CMA’s Code of Ethics is “consider first the well-being of the patient.” One of the key roles of the physician is to act as a patient’s advocate and support within the health care system. The DTC application form makes the physician a mediator between the patient and a third party with whom the patient is applying for financial support.
This “policing” role can place a strain on the physician-patient relationship – particularly if the patient is denied a disability tax credit as a result a third-party adjudicator’s interpretation of the physician’s recommendations contained within the medical report. Physicians and other health professionals are not only left with having to tell the patient that they are not eligible but in addition advising the patient that there may be a personal financial cost for the physician providing this assessment.
Policy Measure: Better preparation of tax advisors would be a benefit to both patients and their health care providers. The CMA would like CCRA to develop, in co-operation with the community of health care providers, a detailed guide for tax preparers and their clients outlining program eligibility criteria and preliminary steps towards undertaking a personal assessment of disability. This would provide some guidance as to whether it is worth the time, effort and expense to see a health professional for a professional assessment.
As raised in a previous meeting with CCRA, the CMA is once again making available a physician representative to accompany DTC representatives when they meet the various tax preparation agencies, prior to each tax season, to review the detailed guide on program eligibility criteria and initial assessment, and to highlight the implications of inappropriate referral.
The DTC is a deserving benefit to those Canadians living with a disability. However, there needs to be some standardization among the various programs to ensure that they are effective and meet their stated purpose. Namely, the CMA would like to make the following suggestions:
1. The CMA would like established a senior level advisory group to continually monitor and appraise the performance of the DTC program to ensure it is meeting its stated purpose and objectives. Representation on this advisory group would include, at a minimum, senior program officials preferably at the ADM level; those professional groups qualified to complete the T2201 Certificate; various disability organizations; and patient advocacy groups.
2. The CMA recommends that the CCRA take the necessary steps to separate the evaluation process from the determination process. The CMA recommends the CPP Disability Program model to achieve this result.
3. That there be some consistency in definitions across the various government programs. This does not circumvent differences in eligibility criteria.
4. That a comprehensive information package be developed, for health care providers, that provides a description of each program, its eligibility criteria, the full range of benefits available, copies of sample forms, physical assessment and form completion payment information, etc.
5. That the federal government applies these social programs on the same footing when it comes to their funding and administration.
6. That CCRA develop, in co-operation with the community of health care providers, a detailed guide for tax advisors and their clients outlining program eligibility criteria and preliminary steps towards undertaking a personal assessment of disability.
7. That CCRA employ health care providers to accompany CCRA representatives when they meet the various tax preparation agencies to review the detailed guide on program eligibility criteria and personal assessment of disability, and to highlight the implications of inappropriate referral.
These recommendations would certainly be helpful to all involved - the patient, health care providers and the programs’ administrators, in the short term. However what would be truly beneficial in the longer term would be an overall review of the taxation system from a health care perspective. This could provide tangible benefits not only for persons with disabilities but for all Canadians as well as demonstrating the federal government’s leadership towards ensuring the health and well being of our population.
i Health Canada, The Role for the Tax System in Advancing the Health Agenda, Applied Research and Analysis Directorate, Analysis and Connectivity Branch, September 21, 2001
ii Canadian Medical Association, Securing Our Future… Balancing Urgent Health Care Needs of Today With The Important Challenges of Tomorrow”, Presentation to the Standing Committee on Finance Pre-Budget Consultations, November 1, 2001.
Recommendation: That the federal government ensure provincial and territorial health care systems meet the care needs of their aging populations by means of a demographic top-up to the Canada Health Transfer.
The Canadian Medical Association unites physicians on national health and medical matters. Formed in Quebec City in 1867, the CMA’s rich history of advocacy led to some of Canada’s most important health policy changes. As we look to the future, the CMA will focus on advocating for a healthy population and a vibrant profession.
The Canadian Medical Association (CMA) is pleased to provide the House of Commons Standing Committee on Finance this pre-budget submission, focused on the major challenges confronting seniors care in Canada. As Canada’s demographic shift advances, the challenge of ensuring quality seniors care will only become more daunting unless governments make critical investments in our health care system today. This is a national issue that will affect all provinces and territories (PTs). However, not all PTs will bear the costs equally. The current federal health transfer system does not take demographics into account. The CMA proposes the federal government fund a share of the health care costs associated with our aging population by means of a new “demographic top-up” to the Canada Health Transfer (CHT).
Recommendation: That the federal government ensure provincial and territorial health care systems meet the care needs of their aging populations by means of a demographic top-up to the Canada Health Transfer.
Seniors Care: Challenges and Opportunities
Canada, like most OECD economies, is grappling with the realities of a rapidly aging population. The population of seniors over the age of 65 in Canada has increased by 20% since 2011 and it has been projected that the proportion of Canada’s total population over 65 will exceed one-third by 2056 with some provinces like Newfoundland and Labrador reaching that point as soon as the mid-2030s.1 Census figures also show that the fastest growing demographic in Canada between 2011 and 2016 was individuals over 90, growing four times the rate of the overall population during this period.2
These demographic changes have a number of major implications for the future of Canadian society. Chief among them is the new pressure they add to our health care system. As the population ages, it is expected that health care costs will grow at a significantly faster rate than in previous years. As demonstrated in Chart 1 below, population aging will be a top contributor to rising health care costs over the decade ahead. By 2026–27, these increases will amount to $19 billion in additional annual health care costs associated with population aging, as shown in Chart 2.
Many seniors experience varying degrees of frailty, which the Canadian Frailty Network (CFN) defines as “a state of increased vulnerability, with reduced physical reserve and loss of function across multiple body systems” that “reduces ability to cope with normal or minor stresses, which can cause rapid and dramatic changes in health.”3 About 75% to 80% of seniors report having one or more chronic conditions.4 It is primarily the care associated with management of these conditions as well as increased residential care needs that drive the higher costs associated with seniors care. The average annual per capita provincial/territorial health spending for individuals age 15 to 64 is $2,700 compared with $12,000 for seniors age 65 and over.5
Our medicare system, which was established over half a century ago, is not designed or resourced to deal with this new challenge. The median age of Canadians at the time of the Medical Care Act’s enactment in 1966 was 25.5 years. It is now 40.6 years and is expected to rise to 42.4 years in the next decade.5 While past governments have placed significant focus on hospital care (acute and sub-acute), transitional care, community supports such as home care and long-term care (LTC) have been largely underfunded. Demographic changes have already begun to place pressure on our health care system, and the situation will only become worse unless funding levels are dramatically raised.
Chart 1: Major contributors to rising health care costs (forecast average annual percentage increase, 2017–26)5
Chart 2: Provincial/terrioritial health care costs attributable to population aging ($ billions, all PTs relative to 2016–17 demographics)5
Individuals in Ontario wait a median of 150 days for placement in a LTC home.6 In many communities across the country acute shortages in residential care infrastructure mean that seniors can spend as long as three years on a wait list for LTC.7 Seniors from northern communities are often forced to accept placements hundreds of kilometres from their families.8 The human and social costs of this are self-evident but insufficient spending on LTC also has important consequences for the efficiency of the system as a whole.
When the health of seniors stabilizes after they are admitted to hospital for acute care, health care professionals are often confronted with the challenge of finding better living options for their patients. These patients are typically assigned Alternate Level of Care (ALC) beds as they wait in hospital for appropriate levels of home care or access to a residential care home/facility.
In April 2016, ALC patients occupied 14% of inpatient beds in Ontario while in New Brunswick, 33% of the beds surveyed in two hospitals were occupied by ALC patients.9 The average length of hospital stay of all ALC patients in Canada is an unacceptable 380 days. Not only does ALC care lead to generally worse health outcomes and patient satisfaction than both LTC and home care, but it is also significantly more expensive. The estimated daily cost of a hospital bed used by a patient is $842, compared with $126 for a LTC bed and $42 per day for care at
home.10 Moreover, high rates of ALC patients can contribute to hospital overcrowding, lengthy emergency wait times and cancelled elective surgeries.11 Committing more funding to LTC infrastructure would lead to system-wide improvements in wait times and quality of care by helping to alleviate the ALC problem.
A recent poll found that only 49% of Canadians are confident that the health care system will be able to meet senior care needs and that 88% of Canadians support new federal funding measures.12 Fortunately, there have been some signs at both the provincial and federal levels that seniors care has become an issue of increasing importance. New Brunswick recently introduced a caregiver’s benefit while the Ontario government has recently committed to building 15,000 LTC beds over the next decade. The federal government highlighted home care as a key investment area in the most recent Health Accord bilateral agreements and has made important changes to both the Canada Pension Plan (CPP) and Old Age Security (OAS) programs.
The Demographic Top-Up: Modernizing the CHT
Despite these recent and important initiatives by governments in Canada, additional policy and fiscal measures will be needed to address the challenges of an aging population. Many provincial governments have shown a clear commitment to the issue, but the reality is that their visions for better seniors care will not come to fruition unless they are backed up by appropriate investments. This will not be possible unless the federal government ensures transfers are able to keep up with the real cost of health care. Current funding levels clearly fail to do so. Projections in a recent report by the Conference Board of Canada, commissioned by the CMA, indicate that health transfers are expected to rise by 3.6% while health care costs are expected to rise by 5.1% annually over the next decade.3
Over the next decade, unless changes are made, provinces/territories will need to assume an increasingly larger share of health care costs. If federal health transfers do not account for population aging, the federal share of health care spending will fall below 20% by 2026.5 Aging will affect some provinces more than others, as demonstrated in Figure 1 below. The overall cost of population aging to all of the provinces and territories is projected to be $93 billion over the next decade.5 The absence of demographic considerations in transfer calculations therefore indirectly contributes to regional health inequality as provinces will not receive the support they need to ensure that seniors can count on quality care across Canada.
Figure 1: Increases in health care costs associated with population aging, 2017 to 2026 ($ billions)5
The CMA recommends that the federal government address the health costs of population aging by introducing a “demographic top-up” to the Canada Health Transfer. One model for this would require the federal government to cover a share of the costs projected to be added by population aging in each province/territory (see above) equal to the federal share of total health costs covered now (22%). The Conference Board of Canada estimates that the overall cost of such a change would be $21.1 billion over the next decade (see Table 1).
This funding would greatly enhance the ability of the provinces and territories to make much-needed investments in seniors care and the health care system as a whole. It could be used to support the provinces’ and territories’ efforts to address shortages in LTC, to expand palliative care and home care supports and to support further innovation in the realm of seniors care.
Table 1: Cost of demographic top-Up by province in $ millions5
The evidence that our health care systems are not prepared or adequately funded to ensure appropriate and timely access to seniors care, across the continuum of care, is overwhelming. Wait times for LTC and home care are unacceptably high and complaints about lack of availability in Northern and rural communities are becoming increasingly common. Health care providers in the LTC sector regularly raise concern about overstretched resources and a lack of integration with the rest of the health care system.
By introducing a new demographic top-up to the Canada Health Transfer, the federal government would demonstrate real leadership by ensuring that all provinces/territories are able to adapt to an aging population without eroding quality of care. Furthermore, improvements in how we care for our seniors will lead to improvements for patients and caregivers of all ages through greater system efficiencies (e.g., shorter wait times for emergency care and elective surgeries) and more coordinated care.
The CMA has been, and will continue to be, a tireless advocate for improving seniors care in Canada. The CMA would welcome opportunities to provide further information on the recommendation outlined in this brief.
1Statistics Canada. Age and sex, and type of dwelling data: key results from the 2016 Census. Ottawa: Statistics Canada; 2017. Available: https://www150.statcan.gc.ca/n1/daily-quotidien/170503/dq170503a-eng.htm
2Ministry of Finance Ontario. 2016 Census highlights, fact sheet 3. Toronto: Office of Economic Policy, Labour Economics Branch; 2017. Available: www.fin.gov.on.ca/en/economy/demographics/census/cenhi16-3.html.
3Canadian Frailty Network. What is frailty? Kingston: The Network; 2018. Available: www.cfn-nce.ca/frailty-in-canada/
4Canadian Institute for Health Information (CIHI). Health care in Canada, 2011: a focus on seniors and aging. Available: https://secure.cihi.ca/free_products/HCIC_2011_seniors_report_en.pdf
5The Conference Board of Canada. Meeting the care needs of Canada’s aging population. Ottawa: The Conference Board; 2018. Available: www.cma.ca/En/Lists/Medias/Conference%20Board%20of%20Canada%20-%20Meeting%20the%20Care%20Needs%20of%20Canada%27s%20Aging%20Population.PDF
6Health Quality Ontario. Wait times for long-term care homes. Available: www.hqontario.ca/System-Performance/Long-Term-Care-Home-Performance/Wait-Times
7Crawford B. Ontario’s long-term care problem: seniors staying at home longer isn’t a cure for waiting lists. Ottawa Citizen 2017 Dec 22. Available: https://ottawacitizen.com/news/local-news/ontarios-long-term-care-problem-seniors-staying-at-home-longer-isnt-a-cure-for-waiting-lists
8Sponagle J. Nunavut struggles to care for elders closer to home. CBC News 2017 Jun 5. Available: www.cbc.ca/news/canada/north/nunavut-seniors-plan-1.4145757
9McCloskey R, Jarrett P, Stewart C, et al. Alternate level of care patients in hospitals: What does dementia have to do with this? Can Geriatr J. 2014;17(3):88–94.
10Home Care Ontario. Facts and figures – publicly funded home care. Hamilton: Home Care Ontario; n.d. Available: www.homecareontario.ca/home-care-services/facts-figures/publiclyfundedhomecare
11Simpson C. Code gridlock: why Canada needs a national seniors strategy. Ottawa: Canadian Medical Association; 2014. Available: www.cma.ca/En/Lists/Medias/Code_Gridlock_final.pdf
12Ipsos Public Affairs. Just half of Canadians confident the healthcare system can meet the needs of seniors. Toronto: Ipsos; 2018. Available: www.ipsos.com/en-ca/news-polls/Canadian-Medical-Association-Seniors-July-17-2018