Unregulated Private Markets for Health Care in Canada? Rules of Professional Misconduct, Kickbacks to Physicians and Physician Self-Referral in Canada

“Unregulated private markets for health care in Canada? Rules of professional misconduct, kickbacks to physicians and physician self-referral in Canada” (2004) 170 Canadian Medical Association Journal 1115-18 (with N.K. Choudhry & A. Brown).

Full Version (PDF)
The regulation of private health care has become a central issue in Canadian health policy. There has been little discussion of the regulation of independent health facilities (IHFs).  IHFs are privately owned, for-profit entities that provide therapeutic and diagnostic services, such as physiotherapy and laboratory testing, and operate both within and outside the public system. There may be 1000 IHFs in Ontario alone. IHFs depend on physician referrals for patients. This raises 2 important issues. First, IHFs can compensate physicians for patient referrals (a kickback), a practice that can potentially distort clinical judgement. Second, physicians can make referrals to IHFs that they themselves own, raising similar concerns. Both problems have occurred in the United States and have prompted regulation. Kickbacks and self-referral have generated limited scholarly commentary in Canada. We review the rules governing financial relationships between physicians and IHFs as found in provincial codes of professional conduct for physicians. In some respects, these rules adequately protect patients; in others, they do not. We propose regulatory models to be implemented before the further proliferation of IHFs.