When Toronto resident Lydia Batelaan goes into labor next month, she probably won't call her obstetrician. That's not because she's into alternative birthing techniques. For her first baby, Batelaan wants access to everything, including pain relief, that obstetricians have to offer. But after more than six months of searching, she still hasn't found an obstetrician willing to take her as a patient.Batelaan is one of thousands of women who find themselves caught in the middle of a ferocious political battle between the Ontario government and the province's 22,000 doctors. The dispute started earlier this year when, in an attempt to control health care spending, the Progressive Conservative government led by Premier Mike Harris announced it was knocking 10 percent off doctors' fees and would no longer subsidize doctors' malpractice insurance, which costs up to $18,000 a year for high-risk fields like obstetrics, orthopedics and neurosurgery.In July, obstetricians began refusing new patients to protest the government cuts. On November 8, many more of Ontario's 20,000 doctors stopped taking new patients and closed their after-hours clinics, and surgeons began refusing to do elective surgery. On December 13, many doctors closed their offices for the day in protest. Last month, the government and the doctors' association reached a tentative deal, but the doctors haven't ratified it yet. If the dispute isn't resolved soon, women like Batelaan will have to go to the hospital emergency room and take whatever obstetrician is on call.Since its inception over 28 years ago, universal public health insurance has been Canada's most popular social program. Poll after poll has shown Canadians' high regard for a system that treats everyone equally, regardless of ability to pay. A 1993 Gallup Poll found that 96 percent of Canadians prefer their health care system to that of the United States. A recent poll by the government's Finance Department revealed that a majority of Canadians, including many who support spending cuts in other social programs, would rather see taxes go up than health care cut.Yet despite Canadians' attachment to Medicare (the name for Canada's health careprogram), the system is becoming a frequent target for a government bent on cost-cutting. In the past four years, many Canadians have seen a significant drop in quality of care, as hospitals have closed and health care workers have been laid off. Preying on fears that Canada's aging population will put more pressure on the health care system, critics now call for privatized medicine. They charge that universal health care is a "luxury" that Canadians can no longer afford. Public health insurance provides comprehensive benefits to Canadians. All "medically necessary treatment"--everything from visits to a family physician toneurosurgery--is paid for exclusively by the government. Canadian law forbids health care providers from charging extra fees to patients, and doctors bill thegovernment on a fee-for-service basis. Most Canadian doctors earn between $75,000 and $180,000 annually--between one-tenth and one-sixth of what American doctors make. Hospitals and other health care providers, like home-care servicesand community clinics, receive the bulk of their budgets from the government.Canadians have good reason to appreciate this system, generally recognized as one of the most equitable and cost-effective health care systems in the world. While the United States spends 14 percent of GDP on health care and still does not cover 35 million of its citizens, Canada spends less than 10 percent of its GDP on health care and covers all citizens. Until recently, Canadians were happywith the quality of care they received. The 1993 Gallup Poll found that 89 percent of Canadians ranked the quality of their health care as good or excellent.Unlike in the United States, cuts to health care budgets in Canada have been motivated less by spiraling costs than by the perceived need to cut the country's $422 billion deficit at any price. Canadian per-capita health care spending is only slightly higher than that of most other industrialized nations.The country's current health care woes were exacerbated in 1995 when the federalgovernment, determined to reduce the deficit, announced that it would knock $5 billion (or 38 percent) off the $13.5 billion it passes on to Canada's provincesto pay for health care. (While health standards are enforced by federal law, theactual day-to-day running of health services is administered by the provinces, using money the federal government transfers to them from national coffers.) Provinces were left struggling to make ends meet while trying to slash their owndeficits.In Canada's national newspaper, the Globe and Mail, Presbyterian minister Keith McKee described the effects of the cutbacks in Ontario, where the government announced it would cut hospital spending by 18 percent over the next three years. During visits to parishioners in Ontario hospitals, McKee said he discovered a urine bag overflowing because no one had time to empty it, rooms where the air conditioning was broken for weeks on end, and elderly patients left hungry in hospital beds because they were too weak or confused to remove the plastic lids from their lunch containers."Hospitals are scary places to venture into," wrote McKee. "If you are elderly, very sick or mentally ill and do not have a friend or family member looking out for your best interests while you are in hospital, you are in deep trouble."Although Ontario's health care cuts are the ones making national headlines, other provincial governments--led by parties across the political spectrum--haveplunged the knife far deeper into their health care budgets. The Quebec government recently chopped $140 million from its health care budget. The Manitoba government announced this summer that it was taking $29 million out of the health care system. Saskatchewan closed 52 rural hospitals and froze its health care budget. In Nova Scotia, hospital closings and job losses have accompanied an 8 percent reduction in health spending over the past three years.The number of hospital workers in Prince Edward Island has been reduced by 13 percent.By far the most radical health care spending cuts have been carried out in Alberta, Canada's hotbed of right-wing radicalism. The government, led by Premier Ralph Klein, cut Medicare spending by 12 percent over the past four years as part of a deficit-reduction plan. In the first year of cutbacks, 50 percent of Alberta's acute-care beds were closed. Over the past three years, heart surgery waiting lists have doubled and waiting times for joint replacementsurgery have tripled. In the provincial parliament, opposition members started to announce instances of hospital disasters, including the case of one two-week-old baby who died after waiting five hours to see a doctor.Across Canada, the cuts have prompted considerable public outcry, forcing several governments to flip-flop on the issue (see sidebar). But overall, healthcare budgets are still decreasing and Medicare advocates worry that Canadians eventually will become frustrated with government cuts and look to private health care for solutions. "They're depriving public health care so much that they'll say privatization is the only way we have to go," says Jane Cornelius, president of the Ontario Nurses Association. "We'll end up with a two-tiered health system with American-style privatization." In fact, 28 percent of Canadian medical care is already privately funded: Dentalwork, cosmetic surgery and optometry have never been covered by public health insurance. But Medicare advocates fear the introduction of privatized health care to medically necessary "core" services. If that happens, they say Canadianscan kiss an equitable, cost-effective system goodbye."Overall costs for health care will rise, not fall, as private insurance steps in to fill the void left by retreating government programs," says health policy analyst Dr. Michael Rachlis. "The wealthy and the healthy will do fine. Poor people--and especially those who are sick--will not." Once wealthy and powerful Canadians have a private system to fall back on, Medicare advocates argue, they'll abandon their support for the public system. Furthermore, if a private system coexists with a public system, the public system will inevitably be burdened with the high costs of difficult procedures. "It's called creaming and dumping," says Donna Wilson, a member of the Alberta-based organization Friends of Medicare. "The private businesses go afterthe cream--the easy and profitable procedures--thereby dumping the bigger, more expensive problems on the public system."A number of powerful interests--including doctors, drug companies, for-profit biotechnology firms and American insurance companies--already are making a push toward a two-tiered system. Not surprisingly, government caps on doctors' fees go over like a lead balloon with most physicians. In addition, many doctors havebecome frustrated with the damage that government cuts to nursing staff and hospitals have done to the quality of care they provide. As a result, many Canadian doctors are coming around to supporting the idea of private health care."The government is expecting more services to be provided than they're willing to pay for," says Dr. Michael Thoburn, executive director of professional services at the Ontario Medical Association. "Our position is that you either bring the bottom line up or the top line down, or you bring in alternative funding to fill in the gap."At its annual meetings in 1995 and 1996, the Canadian Medical Association (CMA),the doctors' professional body, narrowly defeated motions proposing a parallel private system and vowed to lead a national debate on two-tiered health care. Last March, the CMA held a closed-door health "summit" on the future of health care with three private, for-profit health care providers, including Liberty Health, owned by the Boston-based Liberty Mutual Group. Having saturated their own market, American insurance companies like Liberty Health see opportunities in the Canadian market. "When you have $76 billion (U.S. $55.5 billion) in health care expenditures in Canada," says Wilson of Friends of Medicare, "you get a few people who want a piece of that pie."In 1995, Liberty Health bought Ontario Blue Cross (one of Canada's largest providers of insurance for health care services, such as dentistry and drugs, not covered by Medicare) from its nonprofit owner, the Ontario Hospital Association. In 1994, Blue Cross President Dunbar Russel told the Globe and Mailthat the company predicts the market for private insurance will double in the next five years as the population ages and government bows out of health care inthe interests of cutting the deficit.Insurance companies maintain they are committed to universal health care in Canada, but critics say that their business interests are more in line with privately funded health care. "Liberty Health's market is selling insurance for what the government no longer covers," says Mike McBane, coordinator of the pro-Medicare lobby group Canadian Health Coalition. "They say they believe in core services but they believe that core should be shrunk. That would create a parallel health system."Although health care funded primarily by the private sector is still a somewhat distant threat (it would require a change in Canadian law), for-profit medical companies are expanding in Canada. The health summit report expressed support for universal health care, but included a resolution to increase private-sector funding, management and delivery. Current law prohibits anyone but the government from paying for Canadians' health care, but it says nothing about whoprovides it. While governments fund hospitals and other health care providers, most of these facilities are actually owned by private, nonprofit corporations.Recently, however, many provincial governments appear to favor turning to the for-profit sector for services traditionally performed by nonprofit corporationsor public facilities. Earlier this year, the Ontario government passed a law allowing it to contract out services to for-profit providers. It recently announced that it would let for-profit companies bid against nonprofit ones to provide home-care service.Nova Scotia and Prince Edward Island now have private companies running their billing systems, and New Brunswick is preparing to do the same. Lab services, which have traditionally been provided by public hospitals, are now being privatized around the country.Governments argue that for-profit providers are cheaper and more efficient, but supporters of the current system say costs will go up as for-profit companies move in, thereby putting even more pressure on public coffers. "The irony is, we're not going to save," says McBane of the Canadian Health Coalition. "That's demonstrated by the United States, which spends more money for less services than any other country."The for-profit sector has begun to chip away at the principle of equity upon which the Canadian health care system is based. The Alberta government recently extricated itself from a prolonged battle with the federal government over its connivance at the misconduct of eye surgeon Howard Gimble. At Gimble's clinics, patients were charged a $1,000 fee on top of the costs covered by Medicare for cataract surgery--a practice prohibited by Canadian law. Alberta refused to stopGimble from charging the extra fee, and the federal government responded by cutting its transfer payments to the province. The dispute was recently resolvedwhen the Alberta government agreed to foot the $1,000 per patient fee itself.Then there are the odd arrangements that have emerged from the proximity of Canada's socialized health care to America's private system. In Alberta, a private group of doctors, nurses and investors calling itself the "Hotel de Health" is lobbying to use provincial hospital beds left empty by the cutbacks to establish a private service offering medical care to wealthy Americans.In Toronto, the King's Health Center, a private clinic affiliated with the Mayo Clinic in the United States, is negotiating with U.S. insurance companies and HMOs to provide medical care to American patients at a fraction of U.S. costs. Canadians are prohibited from paying the seven-month-old clinic for medically necessary surgery, but King's says it has plans to refer paying Canadians tired of waiting lists to the Mayo Clinic."It's like a dog chasing its tail," says Cornelius of the Ontario Nurses Association. "There are many people in the U.S. who want the finer aspects of the Canadian system while some in Canada are chasing an American-style system."In many ways, the American health care system has always functioned as a second tier to the Canadian system, allowing wealthy Canadians to jump waiting lines and take advantage of American health services.As anxiety about the quality of Canadian care grows, American health care providers are making new inroads into the lucrative Canadian market. In Toronto,a former stock broker has a flourishing business selling American hospital procedures like heart and hip operations to affluent Canadian patients who are fed up with waiting lists. Last January, the University of Virginia Medical Center bought an ad in the Globe and Mail inviting the paper's well-heeled readers to travel south for hip and knee replacement.Supporters of Medicare argue that Canada's health care woes could be resolved bya well-organized and adequately funded reform of the existing system. Transferring money to prevention and community care would both reduce Canadians'need for costly hospital care and improve overall health."You can never build a big enough hospital at the bottom of the cliff," says health policy analyst Rachlis. "It's much more prudent to put a fence around thetop."Along with transferring funds to community-based care, Medicare supporters say that health care costs could be controlled by paying doctors a flat salary rather than fees for each service they perform. This would reduce the incentive to prescribe unnecessary treatments. Many advocates of public health care also favor giving a bigger role to other health care providers, such as nurses and midwives. Since they require less training than doctors, health care costs woulddecline.Meanwhile, in Toronto, the expectant Lydia Batelaan continues to wait for an obstetrician. Under the circumstances, she's remarkably unperturbed. That's because she's getting excellent prenatal care from a nurse and general practitioner team at her local community health clinic."I feel confident in their hands," says Batelaan. "They have time to spend with patients and you don't get that feeling of being rushed in and rushed out like you do in a lot of specialists' offices."Ironically, if Batelaan is a symbol for the trouble facing Canada's health care system, the form of community care that she has sought also represents the happyfuture that many wish for Medicare.