OTTAWA — The federal government should stop enforcing the rules that govern medicare for five years so that provinces can "experiment" with new ways to finance the system, such as direct patient payments and private insurance, a new report released Monday says.

The report by the Fraser Institute says Canada is experiencing a "medicare bubble" as its spending on health care becomes increasing costly and unaffordable.

The controversial report has been released as health care emerges as a major issue in the federal election. All of the parties are attempting to lay claim to the title of medicare's defender.

They have all promised to pump billions more dollars into the system, but none has presented a comprehensive plan to respond to the increasing concerns of experts, who say the system is heading toward financial unsustainability.

"The Canada Health Act forbids many of the successful policies that are commonly used in other developed countries that also have universal access health-care systems," Mark Rovere, co-author of the Fraser Institute report, said in a written statement.

"We've been tracking provincial health spending since 2004 and it's readily apparent that unless provincial governments gain the freedom to innovate and devise a better way to finance health care, Canadians will face higher taxes, expanded rationing of medical goods and services or extensive cutbacks in other government programs."

The report found that government health spending in the country's largest provinces — Ontario and Quebec — now consumes more than half of total provincial revenues. Moreover, it projects that Saskatchewan, Alberta, British Columbia and New Brunswick will face the same "funding crunch" by 2017, while Manitoba and Prince Edward Island are on track to spend half of all revenues on health care by 2028.

Despite the increasing burden of health-care spending on the governments, the report concludes there are still significant problems for patients who rely on medicare.

It says that Canadians waited an average of 18.2 weeks in 2010 between an appointment with a family doctor and receiving treatment from a specialist — up from 9.3 weeks in 1993.

"Governments are trying to control costs by rationing access to necessary medical care," says the report.

Additionally, it says patients are not getting access to the drugs they need because provincial drug plans increasingly refuse to pay for them — even though they have been approved by Health Canada as safe and effective.

In conclusion, the report says that medicare's government-funded structure "produces rates of growth in health spending that are not sustainable without at least a partial reliance on user-based, private financing."

The report says the federal government should "temporarily suspend" enforcement of the Canada Health Act for a five-year trial period "to allow the provinces to experiment with new ways of financing medical goods and services."

That federal statute explicitly prohibits medical user fees and extra billing by doctors, and is perceived to forbid private health insurance. As a result, most provinces have legislation which forbids private health insurance for medical services covered by medicare.

The Fraser Institute report also says the provinces should:

- Require patients to make "percentage-based" payments for all the publicly funded medical goods and services they use. This would be known as "co-insurance."

- Make it legal for patients to make private payments and buy private insurance for all types of medical goods and services, including treatment in hospitals and physicians' services. The report says this would "off-load" some of the costs borne by the taxpayer-funded public health system.

- Allow health providers to receive reimbursement for their services from "any insurer or payer," whether it's the government or an individual or their private insurance company.

- Allow health-care providers to charge patients fees in addition to the government-set health-insurance reimbursement level. That would essentially be a form of extra-billing, which was outlawed by the Canada Health Act nearly 30 years ago.

- Create "economic incentives" to improve the quality of health-care delivery and lower costs by permitting both for-profit and non-profit health providers to "compete" for the delivery of publicly insured health services within medicare. The report notes that similar types of policies are common across health systems in the Organization for Economic Co-operation and Development countries.

mkennedy@postmedia.com

Twitter.com/Mark_Kennedy_