The Canadian System

As the congress returns from the August break and resumes the Healthcare debate, I thought it would be relavent to share thoughts on the various healthcare plans from many of the other nations.

One of the best, concise and probably least biased reports come from the CATO institute. The Grass Is Not Always Greener: A Look at National Health Care Systems Around the World Michael D. Tanner Cato Institute: Policy Analysis

I plan to share the text from the Policy analysis on each of the various countries over the next couple of weeks so that the pros and cons of each program can be thought about and possibly discussed.

We should be able to learn from all of them and hopefully not make similar mistakes. I think most people will see that the more successful programs have similarities: Patients have more direct financial involvement; there is more free market competition and less government bureaucracy.

A Few Thoughts on Canada

Canada is another country that did not make the top 20 health care systems in the WHO rankings (it finished 30th), and few serious advocates of universal health care look to it as a model. As Jonathan Cohn puts it, “Nobody in the United States seriously proposes recreating the British and Canadian system here—in part because; as critics charge . . . they really do have waiting lines.”(312) However, since the press still frequently cites it as an example, it is worth briefly examining.

Although Canada is frequently referred to as having a “national health system,” the system is actually decentralized with considerable responsibility devolved to Canada’s 10 provinces and 2 territories. It is financed jointly by the provinces and the federal government, similar to the U.S. Medicaid program. In order to qualify for federal funds, each provincial program must meet five criteria: 1) universality—available to all provincial residents on uniform terms and conditions; 2) comprehensiveness—covering all medically necessary hospital and physician services; 3) portability—allowing residents to remain covered when moving from province to province; 4) accessibility—having no financial barriers to access such as deductibles or copayments; and 5) public administration—administered by a nonprofit authority accountable to the provincial government.

Federal financing comes from general tax revenue. The federal government provides a block grant to each province which amounts to around 16 percent of health care spending. However, most funding comes from provincial taxes, primarily personal and corporate income taxes. Some provinces also use funds from other financial sources like sales taxes and lottery proceeds. And some (British Columbia, Alberta, and Ontario) charge premiums, although health services cannot be denied because of inability to pay. The healthcare system is an enormous part of the Canadian welfare state. On the provincial level, the health care system amounts to between one-third and one-half of all social welfare spending.(313)

Provinces must provide certain benefits, including primary care doctors, specialists, hospitals, and dental surgery. Other benefits, such as routine dental care, physiotherapy, and prescription drugs, are optional. Some provinces offer substantial coverage for these services, some cover them only partially, and some do not cover them at all. Except for emergencies, treatment by specialists or hospital admission requires a referral from a primary care physician.

Provider reimbursement is set by each province, and some provinces restrict overall physician income. In general, however, reimbursement is on a fee-for-service basis. Hospitals are paid a specific pre-set amount to cover all noncapital costs. Capital expenditures must be approved on a case-by-case basis.

An increasing number of Canadians also carry private insurance, most often provided through their employer. Originally this insurance was designed to cover those few services not covered by the national health care system. At one time, all provinces prohibited private insurance from covering any service or procedure provided under the government program. But in 2005, the Canadian Supreme Court struck down Quebec’s prohibition on private insurance contracting.(314) Litigation to permit private contracting is now pending in several other provinces.

In addition to the public hospitals covered by the government, many private clinics now operate, offering specialized services. Although private clinics are legally barred from providing services covered by the Canada Health Act, many do offer such services in a black market. The biggest advantage of private clinics is that they typically offer services with reduced wait times compared to the public health care system. Obtaining an MRI scan in a hospital could require a wait of months, whereas it could be obtained much faster in a private clinic.

Waiting lists are a major problem under the Canadian system. No accurate government data exists, but provincial reports do show at least moderate waiting lists. The best information may come from a survey of Canadian physicians by the Fraser Institute, which suggests that as many as 800,000 Canadians are waiting for treatment at any given time. According to this survey, treatment time from initial referral by a GP through consultation with a specialist, to final treatment, across all specialties and all procedures (emergency, nonurgent, and elective), averaged 17.7 weeks in 2005.(315) And that doesn’t include waiting to see the GP in the first place

Defenders of national health care have attempted to discount these waiting lists, suggesting that the waits are shorter than commonly portrayed or that most of those on the waiting list are seeking elective surgery. A look at specialties with especially long waits shows that the longest waits are for procedures such as hip or knee replacement and cataract surgery, which could arguably be considered elective. However, fields that could have significant impact on a patient’s health, such as neurosurgery, also have significant waiting times.(316) In such cases, the delays could be life threatening. A study in the Canadian Medical Association Journal found that at least 50 patients in Ontario alone have died while on the waiting list for cardiac catheterization.(317) Data from the Joint Canada–United States Survey of Health (a project of Statistics Canada and the National Center for Health Statistics) revealed that “thirty-three percent of Canadians who say they have an unmet medical need reported being in pain that limits their daily activities.”(318) In a 2005 decision striking down part of Quebec’s universal care law, Canadian Supreme Court Chief Justice Beverly McLachlin wrote that it was undisputed that many Canadians waiting for treatment suffer chronic pain and that “patients die while on the waiting list.”(319)

Clearly there is limited access to modern medical technology in Canada. The United States has five times as many MRI units per million people and three times as many CTscanners.(320) Indeed, there are more CT scanners in the city of Seattle than in the entire province of British Columbia.(321)

Physicians are also in short supply. Canada has roughly 2.1 practicing physicians per 1,000 people, far less than the OECD average. Worse, the number of physicians per 1,000 people has not grown at all since 1990. And while the number of nurses per 1,000 people remains near the OECD average, that number has been declining since 1990.(322)

In addition, although national health care systems are frequently touted as doing a better job of providing preventive care, U.S. patients are actually more likely than Canadians to receive preventive care for chronic or serious health conditions. In particular, Americans are more likely to get screened for common cancers, including cancers of the breast, cervix, prostate, and colon.(323)

Canada has been relatively effective at controlling spending. The country spends about 9 percent of GDP on health care, a percentage that has risen only slightly over the last decade. Relative to average OECD expenditures, Canadian health expenditures have declined by 4 percent since 1997.(324) That cost control, however, has clearly come at the expense of access to care.

Canadians’ dissatisfaction with the problems in their system has been growing for some time. One survey showed that some 59 percent of Canadians believe that their system requires “fundamental changes,” and another 18 percent believe the system needs to be scrapped and totally rebuilt.(325) Still, Canadians are reluctant to embrace market reforms that are associated with the U.S. health care system—a system that Canadians disdainfully reject. As one observer put it:

Anxiety about Americanization and the constantly reinforced strain of national pride in Canadian health care coexist[s] with considerable uneasiness about the actual state of that care. It is as if, when Canadians look south across the border they swell with pride, but when they look within they shrink back, seeing many problems and feeling uncertainty about the future.

Canadians may jealously guard their system and resist “Americanizing” it, but even advocates of universal health care are coming to recognize that it does not provide a valid model for U.S. health care reform.