CANADA STRUGGLING TO CONTROL HEALTH CARE COSTS Rising prices force government to rework universal access New York Times TORONTO- This winter, Fred Holmes took his two children, Monica, 15, and David, 13, both of whom had colds, to a medical laboratory to have their throats swabbed. A few weeks later, he received two bills, each for $19.80. Never before under Canada's 27-year-old universal health insurance system did Holmes have to reach into his own pockets to pay for such a common medical service. But bills like that are the wave of the future. Like the United States, Canada, with a radically different system in which the government uses tax money to pay most medical bills and regulates hospital budgets and doctors' fees, faces exploding medical costs. One response has been to get individuals and employers to pick up more of the tab- like laboratory fees for some common procedures. Pride In Universal Access Canadians are proud of a system that generally provides good medical care to all its citizens at a lower cost than in the United States- averaging $1,915 (in U.S. dollars) per person in 1991, the latest year for which figures are available, compared with $2,868 in the United States. But spending in recent years has grown nearly as fast as in the United States, and is outstripping the ability of the public sector to pay. Despite new efforts to control costs, from cutbacks in covered services to caps on doctors' fees and hospital budgets, "revenues in the public sector are not increasing fast enough," said Bill Tholl, director of health policy at the Canadian Medical Association. Aggravating the financial distress has been Canada's most painful recession since the Great Depression, which has compressed tax receipts and cut federal transfer payments to the 10 provinces and two territories that actually run the health system for 27 million Canadians. Less Federal Money The Canadian federal government used to pay half of the health system costs. Now it is down to 30 percent. As a result, the provinces have been forced into even larger deficits to finance health care, which consumes about a third of their total spending. These deficits mean more money owed to domestic and foreign lenders, who buy provincial bonds. As the Clinton administration prepares to overhaul the U.S. health care system to include 37 million Americans now uninsured and to stem rising costs, the Canadian system- which gives everyone, rich or poor, access to doctors and hospitals- is going through a major reassessment of its own. No one wants to dismantle the most popular Canadian social program. But there is talk of changing some of the ground rules. For example, fees have been widely discussed, even though they would contravene the Canada Health Act of 1984, which reaffirmed the fundamental principles of universal access to comprehensive care, unimpeded by financial barriers. One of the provincial premiers, Frank McKenna, a Liberal Party member from New Brunswick, has suggested that wealthier Canadians would be willing to pay fees to ensure that the poorest Canadians continue to get free health care. "I don't believe there's another nation in the world that has such an open-ended system of health care where they simply give the dollars out, no matter what amount, to health-care providers and recipients, without asking for some modest deductible in return for those who can afford to pay it," he said last year. Quebec Proposes User Fees Quebec's Ministry of Health has already proposed a user fee of $5 each time a patient uses an emergency room, but has not yet adopted it. Still, it does require a $2 service charge per prescription for those over 65 who normally get prescriptions free. A ceiling limits the fees to $100 a year. While opinion surveys show that more than half of Canadians would support patient fees as the best way to control health care costs, opponents have successfully resisted, arguing that the practice would polarize rich and poor and require cumbersome administrative machinery. Reducing covered services, another approach to shifting the burden to users, has made greater headway.