Canada’s Medicare, Myths and Realities

Canada’s Medicare

Myths and Realities

A Contribution to the US Health Reform Debate

Prepared for the City Club of Portland, Oregon

Panel

1 October 2009

Douglas A Bigelow, PhD

Professor Emeritus

  1. I. US Myths Pertaining to Canada’s Medicare

1. The US has the best health insurance and health care in the world; anything else would diminish that excellence.

[Distinguish among inputs, service quality, outputs, outcomes, and impacts; report US-CAN-OECD findings in each area. US has larger inputs, especially in specialty diagnosis/treatment, and high tech hospitals. But US access, process quality, outputs, outcomes, and impacts are mixed, in some cases worse. Overall, US health insurance and health care are far below the best in the world.]

2. The US is different (“American Exceptionalism”), so nothing invented elsewhere would work here.

[All countries are different, just like the US; no entire systems have been/can be transferred; lessons can be learned and applied. e.g., Taiwan learned from US experts and adapted CAN Medicare with a major difference--premiums rather than general taxation. Further, the US already incorporates components of systems found elsewhere.]

3. Other countries’ health insurance and health care systems are “socialized” which is unacceptable in the US.

["Socialized" is a polemic baiting word, which makes a reasoned response unhelpful. But values are fundamental to every system. Government regulation is a business-like strategy for delivering on a social value: "no financial barrier to medically necessary health care" i.e., SECURITY. There is also a value on fairness and social solidarity. While every other OECD country has a predominantly private economy as well as a democratic government, US is "socialized" in many practical ways including military, Eisenhower's interstate highway system (adapted from Germany); VA medical (a la British NHS); Medicare (a la CAN Medicare, from which the name came); etc.]

4. Other countries’ health insurance and health care systems “ration” which is unacceptable in the US.

[All countries ration (health care and other resources) by mechanisms such as price; medical necessity; medical efficacy; risk-benefit ratio; relative value of alternatives. CAN uses “supply side” rationing. CAN provides immediate emergency surgery, elective is next in line, and cosmetic is provided in the private insurance/care sector and not in the public.]

5. Other countries’ health insurance and health care systems have “waiting lists” which are unacceptable in the US.

[Waiting lists for specialists and some elective surgery are longer in CAN than US. Everyone is entitled to be put on a waiting list regardless of ability to pay; waiting lists are used for bargaining and for political purposes, have been unaudited and highly inaccurate, beginning to be managed resulting in major improvements in accessibility and quality of care, e.g., joint replacement]

6. Other countries’ health insurance and health care systems diminish patient and provider “choice” (or “freedom”) which is unacceptable in the US.

[Patient and provider choice is greater in other countries than it is under private for-profit insurance. In CAN a provider can see any patient and a patient can see any physician, diagnostic/lab clinic, and be admitted to any hospital, which is not provided for by private for-profit insurers in US.]

7. in other countries’ health insurance and health care systems, ”government bureaucrats get between you and your doctor” which is unacceptable in the US.

[In CAN, government negotiates formularies with drug companies, fee schedules with Medical Associations, and annual budgets with hospitals. "Colleges of Physicians and Surgeons" establish practice guidelines for doctors who practice independently under College supervision. Government does not pre-approve services or otherwise get involved in the doctor-patient relationship, as do private for-profit insurers in US]

8. Free health care in other countries creates unlimited (“candy store”) utilization (moral hazard).

[More of most primary care and hospital services are delivered in CAN; however, government still works on getting people in need of medical attention to come in and use what is free. In health care, utilization is actually driven by supply. Government attempts to influence supply--boosting medically needed supply and discouraging/prohibiting medically unnecessary supply]

9. Free health care in other countries is running up uncontrollable national expenditures.

[Cost pressures are a major problem in every country; other countries have "bent the curve" and are spending 50% less. cost control is difficult but possible in other countries]

10. Health insurance and health care systems are run by large, complex, and expensive bureaucracies in other countries, which is unacceptable in the US.

[In CAN and other OECD countries, health insurance and health care is SECURE and SIMPLE, from the patients' and providers' point of view. Existing US insurance and care is extremely complex and beyond understanding of most participants. CAN costs of administering are less than 5% (like US Medicare) while private for-profit insurance overhead is about 20%. Costs to Providers for billing etc., are similar]

Nature of the Propaganda War

  1. Behind the scary headlines: What the public isn’t told

Borderline Medicine” filmed 20 Feb 1990 by PBS.

Cardiac patient, AM, filmed at VGH: cardiac catheterization indicates he needs surgery

Walter Cronkite: “5 months later, AM is still waiting for surgery, despite the fact that 25% of patients with left main coronary artery disease die within a year.”

Horrors!!!

Like other media horror stories I saw in Canada…

Walter Cronkite didn’t know…and the public didn’t know…

AM had been offered surgery and been urged to undergo surgery by his physician and by the hospital…repeatedly.

He refused (his angina pain medication was working nicely, thank you)

2 yrs later, his condition worsened and he accepted the surgery.

(source: Rachlis MM, Kushner C. 1994. 188-190.)

  1. Stretchers (Tom Sawyer)

George H Bush: “post operative mortality is 44% higher in Canada than in the US for high risk procedures.”

No: the study he cited actually found that Canada had better short- and long-term outcomes in 8 of 10 classes of surgery studied—Mr. Bush seized upon the 2 outliers.

(source: Roos LL. 1992 cited in Rachlis & Kushner, 1994, 203-204.)

  1. Orchestrated Outrage

Atypical, exaggerated or false claims of serious adverse consequences generated en mass in an effort to shape public opinion and force a government concession:

Struggle over share of resources is fought in public, on front pages, with theatrics, rhetorical threats, and horror stories.

(source: Evans, Lomas, et al, 1989; Rachlis, Kushner, 1994.)

Health Care Politics and Economics

Health care economics is a complex study

Policy objectives: timely access to quality, effective service (including fair and sufficient returns for providers to maintain a supply of personnel, services, goods, and equipment); …while restraining expenditure and taxes

Conflict of interests: unequal distribution of wealth; need to redistribute wealth to meet health goals (equal access)—charity is strained and some dissatisfaction and strife is inevitable

Epidemiological paradox: wealth is inversely related to health—exacerbates redistribution conflict

Market dynamics: supply drives demand and price (unlike non-health marketplaces); costs without benefits are common (me-too drugs; higher-than-needed training; inefficient and ineffective protocols)

Input-Outcome Disconnect

Research has demonstrated that larger inputs are sometimes absorbed by rising labor and material costs, while efficiency and quality sags and outcomes worsen. Restricted inputs sometimes restrain costs while driving up efficiency and quality with improved outcomes.

More (input) is not always better (results); sometimes less is better.

Polemics:

No population is ever entirely satisfied with its health care system; pain, disability, and premature death are never completely avoidable or curable.

Because of the “bell curve,” input-outcome disconnect, and “regional variations,” there are always examples of bad health care in countries with good health care overall; and always examples of good health care in countries with poor health care overall.

Because of “cognitive dissonance” the facts can always be distorted to fit strongly held beliefs.

Opponents of public health care include some who are ideologically committed; who have over-riding self-interests; who prefer competition over cooperation—which makes consensus building and rational decision-making difficult.

Major Need for Reforms

  • 45m without insurance (most lacking employer-based and unable to afford individual) (Schoen, Collins, Kris, 2008) (National Coalition on Health Care)
  • 700k bankruptcies (Himmelstein, Health Affairs, 2005/02/02. 5-62.)
  • 20k deaths due to lack of treatment for treatable conditions (Nolte, Health Affairs, 2008/Jan-Feb. 71)
  • Survival rate from major disease (Commonwealth Foundation. Multinational comparisons. 2006/11)
  • Healthy life expectancy at 60 (Schoen. US system performance)
  • Infant mortality (Schoen)
  • Prices (Anderson, 2003).
  • National health spending per-cap and per-GDP (Anderson, 2004, 2005)
  • Administrative overhead ($300b) (Woolhandler, 2003; Casalino, 2009; Sakowski, 2009)

Barriers to Health Reform in US

[note: similar to establishment of National Parks per Ken Burns]

100 years (T. Roosevelt; FD Roosevelt; H. Truman; D Eisenhower; R Nixon; W Clinton; B Obama)

Structure of Government: (Steinmo & Watts, 1995) favors private and local interests over public and national purpose

  • Committees with powerful committee chairs
  • Every member is an individual entrepreneur; every vote is up for grabs
  • Lobbying; campaign contributions
  • (Vs national parties with party platforms and discipline)

Values/cultural ethos:

  • Private autonomy vs “state has a duty to intervene” (Kunitz SJ, Pesis-Katz, 2005)
  • Competitive individualism vs “redistributive welfare”
  • Liberalism vs conservative collectivism (noblesse oblige)

Myths:

  • US has a private enterprise economy (ignoring public/government participation)
  • Government is less efficient and effective than private enterprise (ignoring business overhead costs and failures)
  • Private enterprise can perform in any arena (e.g., corrections; education; military)
  • Europe doesn’t work

Misinformation/propaganda: It is much easier to change the facts than your opinion.

  • GH Bush: Canadians can’t choose their own doctors.
  • Newt Gingrich: Illegal for Canadian seniors to get most operations.
  • Paul Tsongas: couldn’t have gotten his bone marrow transplant in Canada.

Myth: US is different and cannot employ ideas from elsewhere (American Exceptionalism)

Dissemination of best practices: “we’re different; it won’t work here”

All countries are different, just like the US!

No country’s health insurance/health care system is exactly like any other’s,

No country has copied another’s UHI without extensive modification and adaptation.

But every country also has learned lessons from the rest (Reid, 2009.)

  • Unified system—one system applies to all (OECD)
    • One set of forms, rules, prices—easy to administer
    • Effective negotiation of prices by single buyer
    • Standardized information
    • Precludes gaming the system
    • Incentive for prevention—own the patient for life
    • Government regulation is essential to access and affordability (Germany, Japan)
    • Public finance of basic services is essential to cost control (Canada, Taiwan, US CMA)
      • Non-profit financing—no perverse incentives
      • Universal coverage (OECD)
        • Moral imperative
        • Public willingness to accept cost control
        • Prevention, early diagnosis and treatment—avoid costs
        • Risks and benefits locked together
        • Public delivery improves quality and outcomes as well as costs (UK; US VA)

Lessons can be adapted and applied to health reform in US

Myth: US health systems (insurance/health care) is the best in the world—foreign ideas would diminish that excellence

“Best” is not a home team cheer, not a loyalty oath—use valid standards and measures

Some International (OECD/WHO) Standards and Indicators

Safety

  • Errors in delivery (deaths due to medical error)
  • Capacity to prevent and treat preventable and treatable conditions
  • Technical skills of workforce
  • Continuity of Care
  • Unwarranted variation in service
  • Appropriateness (right service at the right time)
  • Per capita
  • Per GDP
  • Prices per CPI Alignment of incentives with objectives
  • Meet expectations of patients
  • Cost-effective application of new technology
  • Unnecessary care
  • Value-for-money (cost-benefit)
  • Universal coverage of people and service
  • Barriers to access (lowered)
  • Timely access
  • Shortage/maldistribution of supply (lessened)
  • Attention to Vulnerable population
  • Waiting times (shortened)
    • Disability
    • Life expectancy (at birth; at age 65)
    • Infant mortality
    • Clinical outcomes

Technical quality of care

Affordability/Cost containment (level and growth in spending)/Viability

Efficiency (cost per output)

Effectiveness

Access

Health status

(To repeat:) Excellence can be found in different aspects of national systems:

  • Inputs (money spent; personnel expertise; facilities)
  • Quality of service (best practices, standards of care, care maps)
  • Outputs (persons treated; procedures performed)
  • Outcomes (recovery due to treatment; medical mishaps)
  • Impacts (infant mortality; maternal mortality; life expectancy; quality years of life; burden of illness)
  • Values (equal access/fairness, security)

Being a very large and rich nation, the US has the best inputs.

  • spends a lot more
  • has well-trained personnel (i.e., abundance of high end specialists; others have fewer but they do have them)
  • has an abundance of high tech hospitals (others have fewer but others do have them).

The US has pockets of excellent quality services,

  • e.g., the MAYO clinic, where best practices and continuous quality improvement are in play. (However, even those are out ranked by some elsewhere)

But

Infant mortality:

Other countries do better due to pre- and neo-natal care, rather than heroic rescue—prevention, primary care, early dx-tx have good outcomes

Healthy life expectancy at age 60:

Result of effective general treatment for treatable conditions

Survival from conditions amenable to health care interventions: (asthma; diabetes)

Survival after treatment (heart attack; kidney transplant; major surgery)

[US breast cancer surgery survival is better]

Overall, the US does NOT have the best health system in the world

Myth: “If you like your insurance, keep it”: US employer-based private for-profit insurance works to the satisfaction of US people

This myth is helpful in allaying people’s fears about change

But, it is a myth and it is rhetorical:

  • employer-based insurance is neither good insurance
  • nor are most people satisfied
  • nor can government subsidized employer-based private for-profit insurance be sustained

Trends in employer-based private for-profit insurance:

  • Rapidly rising premiums (greater than other costs, industry revenues, wages)
  • Progressive transfer of premium payment to employees
  • Imposition of co-pays and caps
  • Shrinking choices of plans
  • Dropping of retired employee benefits
  • Renegotiation of labor agreements
  • Termination of coverage altogether

Majority of US population favors publicly funded UHI, not private for-profit

Some large corporate employers urging termination of employer-based insurance (including by public UHI)

Some unions urging replacement of employer-based insurance by public UHI

Most small businesses unable to provide insurance

Days of fringe benefit, tax-subsidized, employer-based health insurance are ending.

Myth: Other countries’ health systems are socialized, which is unacceptable in the US

Charges of “socialism” has been a political baiting technique used by opponents of social security, Medicare, traffic control, and any government intervention which might adversely affect a special interest.

The charge of “socialism” is used instead of fairness, efficiency, effectiveness, or any practical considerations

While simple distrust of and distaste for government is an understandable sentiment, the inescapable realities of government—extent of actual government role, success and cost-benefit of government action/services, and practical requirements for government—leave the simple sentiments underlying charges of “socialism” fanciful if not fanatic

There is also a more aggressive and vicious sentiment underlying some of the charges of socialism—sentiments dramatically displayed in previous as well a current political talk. The idea of “possessive individualism” –the Ayan Rand school of irrational, unbridled selfishness and fantasies about the origins of success, prosperity and wealth—underlies some of the more belligerent charges of “socialism” (J Chait, 14 September 2009.)

Jonathan Chait

Senior Editor

view bio

But years of indoctrination stretching back to the labor conflicts of the early 20th century, reinforced by the specter totalitarian communism, have made the charge of “socialism” and effective polemic tool.

For special interests, the charge of “socialism” is simply an effective rhetorical tool with which to pursue their economic interests.

Facts are:

The US is “socialized”

  • Nearly 50% of US health care is funded by government (Medicare, Medicaid, etc).
  • The US delivers health care to its military veterans in a totally “socialized” fashion—the VA is government owned and operated.
  • US Government pays more per capita for health care than any other country’s government…more even that the total per capita health care costs of most UHI countries

Efficiencies of government UHI—and Inefficiencies of non-governmental solutions—are easily seen in administrative overheads:

20% for private for-profit insurance vs less than 5% for US government and foreign government insurers

Efficiencies of government UHI—and Inefficiencies of non-governmental solutions—are easily seen in Cost-efficiency of services:

UHI total health care costs < 50% of US per-cap and 2/3rds of US per-GDP

Prices achieved under UHI are much lower than those achieved by private for-profit insurers

…because government

  • sets uniform rules and
  • simple, efficient processes for the system and all its players.
  • negotiates a standard fee schedule or budget with providers.

Outcomes: Other country’s health insurance and/or health care systems do have more effective government involvement, even when the total payout is less and the proportionate pay-out is not much different.

  • Infant mortality
  • Maternal mortality
  • Avoidable death from treatable conditions
  • Life expectancy

What critics call “Socialism” –i.e., government involvement in health insurance and health care—is practical

…and Americans are a pragmatic, innovative people!

Myth: Other countries’ health systems ration health care, which is unacceptable in the US

All countries ration health care, including the US.

The US and third world countries ration by price—you can get it, if you can pay enough.

Other countries regulate supply. This means:

creating supply where there was otherwise insufficient supply—e.g., rural and remote services, subsidized physician training, public clinics.

restricting supply where there is excess over need—e.g., specialists.

regulating private providers.

establishing formularies and lists of covered services

Everyone wants accessible, quality, affordable medical care.

One of the perverse principles of health care is: More is not always better. Sometimes less is better.

All interventions have risks—e.g., cardiac surgery can actually be much riskier than being on a waiting list.

Nearly 100,000 deaths due to medical misadventures.

Regional mapping studies show—huge variation in utilization; often more utilization having poorer outcomes (risk controlled studies).

Another perverse principle of health care: Supply drives demand…and price.

Doctors with unfilled practices, specialists, and hospitals with empty beds don’t just sit around waiting for business, (whether sincere or merely self-serving) they recommend, refer, and even pressure patients into diagnostic testing and treatments, even when those involve significant risk.

Pharmaceutical suppliers aggressively push utilization of their products by DTC advertising, detailing, free samples, sponsoring, etc.

Other countries negotiate prices, use “medical technology assessment”, “evidence-based best practices,” and “relative value” considerations

Overall: US rationing doesn’t work as well as UHI rationing

Myth: Other countries’ health systems have waiting lists, which are unacceptable in the US

Waiting lists/waiting times are important: care delayed can be care denied.

All countries have problems with some excessive waiting…

not entirely due to insufficient medical budgets, MDs, hospital beds

20k people/year die from treatable conditions in the US…

…many couldn’t get on a waiting list

In countries with UHI, e.g., Canada…People with medically treatable conditions are entitled to be put on waiting list.

Waiting lists/times are as long or short as a democratically elected government, and electorate are willing to make them.

In UHI systems, where the government is the single payer, waiting times/lists are a negotiator’s blackjack …as are strikes

…claims about excessive waiting are in the headlines.

…hospitals, specialists, and unions have an interest in rallying public support and pressuring government to increase spending (“orchestrated outrage”)

It helps to understand the wait list/time news in context. That is one of the realities of single payer systems.

But wait lists/times are becoming the focus of innovation and quality improvement.

[Later. First: wait lists/times are not what they seem. ]

Wait lists have been unaudited and unmanaged in the past, with many of the persons on the wait list not actually waiting. Audits of waiting lists have found large percentages of people who:

  • have moved
  • have changed their minds
  • never knew they were on the waiting list
  • are on several waiting lists at the same time for the same procedure
  • have improved
  • have died

Waiting time and waiting lists are issues everywhere. There are serious negative consequences of waiting too long.

Setting the right level of resources is part of the challenge in managing waiting lists. However, increasing resources has been found to have no effect in some cases, and even to worsen medical outcomes

A much bigger task is process innovation whereby both efficiencies in processing patients and quality are improved.

Overall: UHI countries are getting on top of the “waiting” or “access” challenges; the US hasn’t started to face the hidden waiting list or very visible access problem yet.

Myth: Other countries’ health systems deprive people of choice, which is unacceptable in the US

Ironic!!!

US health insurance plans often restrict access to physicians and facilities to those under contract with the Plan.

US health insurance plans often restrict services which a physician or facility may provide, often on a case-by-case pre-approval basis (concurrent utilization review)

Other countries (e.g., Canada) allow free choice of physician and facility

Other countries (e.g., Canada) allow physicians complete freedom of practice—where, when, and how

Other countries (e.g., Canada) allow physicians alternative, mixed, and flexible reimbursement methods (fee-for-service; sessions; contracts; salaries)

Overall: it is the US which has deprived patients and providers of choice.

Myth: Other countries’ health systems are run by large, complex, expensive bureaucracies

Ironic!!!

Opponents of government regulated health insurance and health care portray them as large, complex and expensive government bureaucracies.

Charts were used in Congress during the 1996 (Bob Dole’s response to Clinton plan) and in recent health reform debates to convey an impression of extraordinary bureaucratic size, complexity and cost.

However, administration of private for-profit health insurance and health care is more complex:

Administrative costs of private for-profit insurance are 20% vs 5% for government-run insurance in the US and in other countries;

costs to the providers for billing, cash flow management, etc., are also higher under multiple private for-profit insurers

Administrative personnel in the private for-profit sector have been increasing more rapidly than clinical personnel

The processes of underwriting and claims processing are more complex in the private for-profit sector (mainly because of procedures to reduce risk and “medical loss” through denial of coverage and rejection of claims).

Rules, fee schedules, forms differ among 1,500 private for-profit insurers, rendering the process complex for providers

Delay and complications in recovering costs (receiving payment) give providers cash flow problems requiring additional personnel and expense

A chart (Cohn) of the existing system shows a similar or greater level of size and complexity.

Overall: UHI is much less complex than private for-profit health bureaucracy

For providers and patients, UHI is simple and secure; while US is horrifically complex and insecure

Myth: Governments in other countries interfere in doctor-patient autonomy and ability to do what’s best for the patient

US private for-profit insurance plans require case-by-case preauthorization, often by a “medical consultant” communicating by telephone from a distant location

US private for-profit insurance plans impose formulary, protocol, amount of service, indications for service, referral and other restrictions—imposed by corporate bureaucrats for business, not clinical reasons

Beyond insurance company intervention in-person and by rules and procedures,

The elephant in the doctor’s office is ability to pay—the constant distraction from medical necessity.

Other countries rely upon total “available amount”; total practitioner remuneration; and annual facility budget for cost control.

Practice standards and performance oversight—self-regulation—is delegated to professional organizations.

Government does not intervene in clinical practice with few exceptions (pre-approval may be required for experimental drugs and treatments).

Coverage of all “medically necessary” services means “as determined by a physician.”

Overall: private for-profit insurance companies interfere with doctor-patient autonomy—UHI governments do not

Myth: Free health care promotes excess utilization and cost (moral hazard)

“Free” does not usually attract excess utilization

—although it does permit people with legitimate medical need to access appropriate care.

People do not like to be poked, prodded, stuck with needs, given unpleasant medicine with side-effects, having their daily schedules interrupted with office visits or hospital stays,

US facilities—facades, waiting rooms, offices, hospital rooms—are often luxurious to attract customers

Facilities in other countries are often merely comfortable, clean and functional. OK for service, but not a “destination

Patients don’t drive utilization:

Utilization begins with care-seeking (5% Evans), but thereafter Utilization is mainly driven by providers (95% Evans). Physicians diagnose and prescribe and refer.

Doctors don’t drive utilization as hard under UHI:

If the supply of doctors is kept from becoming excessive, they have plenty of business

There is no competition for paying patients because every patient is paid for

As a profession, they are working within an “available amount” under the oversight of professional associations

Without the distraction of payment pressures, doctors can focus on medical necessity—not encouraging, and even discouraging, unbeneficial utilization

Utilization is also driven—measurably—by DTC advertising by for-profit providers (e.g., drug companies)—if you suffer…ask your doctor about…—does increase care-seeking.

Overall: appropriate utilization—neither under- nor over-utilization—is promoted by UHI

  1. II. Canada: The Facts

Structure

10 provinces and 3 territories

Constitution, written like the US (unlike UK)

Constitution consists of 30 documents (vs 1 in US)

Constitution also has “conventions” –sort of less formal amendments

Executive and legislative branches are fused

Federal system is defined

A clear distinction between the powers of levels of governments is made

Feds have “Peace, order, and good government”

Provinces have “health”

Courts have power of “judicial review” (like US)

Charter of Rights and Freedoms (like US bill of rights or First 10 Amendments)

But rights are considered in balance rather than as absolute

And groups have explicit rights and privileges (minority and indigenous peoples) as well as individuals

1)    Fundamental freedoms (individual rights)

2)    Democratic rights

3)    Legal rights

4)    Equality rights

5)    Language rights

Federal and Provincial governments have senates and legislatures consisting of members elected from ridings (electoral districts)

Members are members of political parties (usually 4). Parties with the most members form a government; other parties form the opposition. The governing party is led by a Prime Minister (federal) or Premier (provincial) with a cabinet of Ministers. Ministers are designated as heads of Ministries (departments).

History of Canada Medicare

1946/1947     Saskatchewan         hospital insurance (my tonsils)

1957/              Canada                      Hospital Insurance plus Diagnostic services (HIDS)

50% federal contribution to provinces implementing principles

Principles: public administration, comprehensiveness; universality; portability and access principles

1961/              Canada                      all provinces on HIDS

1961/1962     Saskatchewan         Medicare

Doctor strike (23 days)

1964               Canada                      Hall Report

Unanimous passage of Canada Health Act

50% federal contribution to provinces implementing principles

1971               Canada                      all provinces on CHA

1977               Canada                      Established programs funding (block funding)

1984               Canada                      Medicare Act

Banning extra-billing and facility user fees

1996               Canada                      Health and social transfer funding

1999               Canada                      Social Union Framework Agreement

Reaffirmation of Medicare principles

Romanow RJ. (November 2002). Building on values: the future of health care in Canada—final report. Saskatoon, Saskatchewan. Royal Commission on the Future of Health Care in Canada.

Canada’s Health Care System

Timeline

1867

British North American Act passed: federal government responsible for marine hospitals and quarantine; provincial/territorial governments responsible for hospitals, asylums, charities and charitable institutions.

1897 to 1919

Federal Department of Agriculture handles federal health responsibilities until Sept. 1, 1919, when first federal Department of Health created.

1920s

Municipal hospital plans established in Manitoba, Saskatchewan and Alberta.

1921

Royal Commission on Health Insurance, British Columbia.

1936

British Columbia and Alberta pass health insurance legislation, but without an operating program.

1940

Federal Dominion Council of Health created.

1942

Federal Interdepartmental Advisory Committee on Health Insurance created.

1947

Saskatchewan initiates provincial universal public hospital insurance plan, January 1.

1948

National Health Grants Program, federal; provides grants to provinces and territories to support health-related initiatives, including hospital construction, public health, professional training, provincial surveys and public health research.

1949

British Columbia creates limited provincial hospital insurance plan.

Newfoundland joins Canada, has a cottage hospital insurance plan.

1950

Alberta creates limited provincial hospital insurance plan, July 1.

1957

Hospital Insurance and Diagnostic Services Act, federal, proclaimed (Royal Assent) May 1; provides 50/50 cost sharing for provincial and territorial hospital insurance plans, in force July 1, 1958.

1958

Manitoba, Newfoundland, Alberta and British Columbia create hospital insurance plans with federal cost sharing, July 1.

Saskatchewan hospital insurance plan brought in under federal cost sharing, July 1.

1959

Ontario, New Brunswick and Nova Scotia create hospital insurance plans with federal cost sharing, January 1.

Prince Edward Island creates hospital insurance plan with federal cost sharing, October 1.

1960

Northwest Territories creates hospital insurance plan with federal cost sharing, April 1.

Yukon creates hospital insurance plan with federal cost sharing, July 1.

1961

Québec creates hospital insurance plan with federal cost sharing, January 1.

Federal government creates Royal Commission on Health Services to study need for health insurance and health services; appoint Emmet M. Hall as Chair.

1962

Saskatchewan creates medical insurance plan for physicians’ services, July 1; doctors in province strike for 23 days.

1964

Royal Commission on Health Services, federal, reports; recommends national health care program.

1965

British Columbia creates provincial medical plan.

1966

Canada Assistance Plan (CAP), federal, introduced; provides cost-sharing for social services, including health care not covered under hospital plans, for those in need, Royal Assent July, effective April 1.

Medical Care Act, federal, proclaimed (Royal Assent), December 19; provides 50/50 cost sharing for provincial/territorial medical insurance plans, in force July 1, 1968.

1968

Saskatchewan and British Columbia create medical insurance plans with federal cost sharing, July 1.

1969

Newfoundland, Nova Scotia and Manitoba create medical insurance plans with federal cost sharing, April 1.

Alberta creates medical insurance plan with federal cost sharing, July 1.

Ontario creates medical insurance plan with federal cost sharing, October 1.

1970

Québec creates medical insurance plan with federal cost sharing, November 1.

Prince Edward Island creates medical insurance plan with federal cost sharing, December 1.

1971

New Brunswick creates medical insurance plan with federal cost sharing, January 1.

Northwest Territories creates medical insurance plan with federal cost sharing, April 1.

1972

Yukon creates medical insurance plans with federal cost sharing, April 1.

1977

Federal-Provincial Fiscal Arrangements and Established Programs Financing Act (EPF) federal cost-sharing shifts to block funding.

1979

Federal government creates Health Services Review; Emmet M. Hall appointed Special Commissioner to re-evaluate publicly funded health care system.

1980

Health Services Review report released August 29; recommends ending user fees, extra billing, setting national standards.

1981

Provincial/territorial reciprocal billing agreement for in-patient hospital services provided out-of-province/territory.

1982

Federal EPF amended; revenue guarantee removed, funding formula amended.

1983

Royal Commission on Hospital and Nursing Home Costs, Newfoundland, begins April, reports February 1984.

Comite d’étude sur la promotion de la santé, Quebec, begins, ends 1984.

La Commission d’énquête sur les services de santé et les services sociaux, Quebec, begins January, reports December 1987.

Federal Task Force on the Allocation of Health Care Resources begins June, reports 1984.

1984

The Canada Health Act, federal, passes (Royal Assent April 17), combines hospital and medical acts; sets conditions and criteria on portability, accessibility, universality, comprehensiveness, public administration; bans user fees and extra billing.

Provincial/territorial reciprocal billing agreement for out-patient hospital services provided out-of province/ territory.

1985

Health Services Review Committee, Manitoba, begins, reports November.

1986

Federal transfer payments rate of growth reduced.

Health Review Panel, Ontario, begins November, reports June 1987.

1987

Premier’s Council on Health Strategy, Ontario, begins, ends in 1991.

Royal Commission on Health Care, Nova Scotia, begins August 25, reports December 1989.

Advisory Committee on the Utilization of Medical Services, Alberta, begins September, reports September 1989.

All provinces and territories in compliance with the Canada Health Act by April 1.

1988

Provincial/territorial governments (except Québec) sign reciprocal billing agreement for physicians’ services provided out-of-province/territory.

Commission on Directions in Health Care, Saskatchewan, begins July 1, reports March 1990.

Premier’s Commission on Future Health Care for Albertans, Alberta, begins December, reports December 1989.

Commission on Selected Health Care Programs, New Brunswick, begins November, reports June 1989.

1989 to 1994

Further reductions in federal transfer payments.

1990

Royal Commission on Health Care and Costs, British Columbia, begins, reports 1991.

1991

National Task Force on Health Information, federal, reports; leads to creation of Canadian Institute of Health Information.

Task Force on Health, Prince Edward Island, begins June, reports March 1992.

1994

National Forum on Health, federal, created to discuss health care with Canadians and recommend reforms, begins October, reports 1997.

1995

Federal EPF and CAP merged into block funding under the Canada Health and Social Transfer (CHST), to support health care, post-secondary education and social services.

1996

Federal CHST transfers begin April 1.

1998

Health Services Review, New Brunswick, begins, reports February 1999.

1999

Social Union Framework Agreement (SUFA) in force; federal, provincial and territorial governments (except Québec) agree to collective approach to social policy and program development, including health.

Minister’s Forum on Health and Social Services, Northwest Territories, begins July, reports January 2000.

2000

First ministers’ Communiqué on Health, announced September 11.

Commission of Study on Health and Social Services (Clair Commission), Québec, created June 15, reports December 18.

Saskatchewan Commission on Medicare (Fyke Commission), Saskatchewan, begins June 14, reports April 11, 2001.

Premier’s Advisory Council on Health for Alberta (Mazankowski Council), Alberta, established January 31, reports January 8, 2002.

Premier’s Health Quality Council, New Brunswick, begins January, reports January 22, 2002.

2001

Standing Senate Committee on Social Affairs, Science and Technology review (Kirby Committee), federal, begins March 1, publishes recommendations October 2002.

Commission on the Future of Health Care in Canada (Romanow Commission), federal, begins April 4, reports November 2002.

British Columbia Select Standing Committee on Health (Roddick Committee), begins August, reports December 10.

Northwest Territories Action Plan, begins November, reports January 2002.

[Health] Consultation Process, Ontario, begins July, results released January 21, 2002.

Health Choices – A Public Discussion on the Future of Manitoba’s Public Health Care Services, Manitoba, begins January, reports December.

2003

First ministers’ Accord on Health Care Renewal, announced February 5.

Health Council of Canada established to monitor and report on progress of Accord reforms, December 9.

2004

Federal CHST split into two transfers: the Canada Health Transfer (CHT) and the Canada Social Transfer (CST), April 1.

First ministers’ A 10-Year Plan to Strengthen Health Care, September 16.

Canada’s Medicare: Organization

Governance and management

  • Federal government: legal framework; standards; funding contributions
  • Provincial government: all regulatory and funding responsibility
  • Regional: delegated planning and management
  • Provider oversight: government regulatory bodies; Colleges; Boards of Trustees

Public source coverage:

  • 71% (2000) of Canadian health spending has a public source
  • Treasury general funds (income-based progressive taxation and other government revenues) are major public source of health funding
  • All “medically necessary” hospital and physician services (no deductibles; no co-insurance)
    • Negotiated annual hospital budget (costs-, plan-, and utilization-based)
    • Negotiated, uniform fee schedule (per province)
    • Negotiated pharmaceuticals prices (per formulary)
    • Partial coverage for extended care; dentistry; mental health; some prescription pharmaceuticals
      • Provincial health budget
      • No coverage: private hospital rooms; cosmetic surgery; and others
      • Hospitals: Not-for-profit (Board of Trustees); annual budget funding
      • Other health care institutions (e.g., extended care; skilled nursing; long term care): individual, corporation, community group ownership; per diem funding
      • Physicians: self-employed private practice (College of Physicians & Surgeons); fee-for-service; or alternative payment system (e.g., “sessions”); or employed and salaried
      • Other covered health care professionals: self-employed private practice (College of the profession); fee-for-service; or alternative payment system (e.g., “sessions”); or employed and salaried
      • Ambulatory Labs: private, fee-for-service
      • Ambulatory prescription pharmacy: private, price plus dispensing fees
      • Equity
      • Fairness
      • Solidarity
      • Timely access
      • Based on need
      • Right and defining aspect of citizenship
      • Public good, moral enterprise (not business venture)
      • National symbol
      • Universal coverage
      • Reasonable access
      • Portability of benefits
      • Coverage for all medically necessary services (comprehensiveness)
      • Public administration
      • Affordability/sustainability
      • Choice
      • Universal, comprehensive coverage
      • Access by lower income groups is better than US
      • Financial distress and medical bankruptcy (from medical expenses) are unknown
      • Quality of care standards and scores are about equivalent
      • More MD visits, hospital care days, delivered
      • Less insurance and administration overhead (16 vs 31%)
      • Affordability: Health spending per capita about half of US; per GDP about 2/3rds
      • Clinical outcomes: equal or better (per outcome studies of procedures)
      • Population health status better (life expectancy; infant mortality)
      • Satisfaction of patients, providers, and general public is higher
      • Free choice of physician, hospital, etc.
      • International competitiveness (direct burden of health benefit)
      • Quality and productivity of workforce
      • Access (especially rural and remote) and maldistribution of HHR
      • Wait lists
      • Coverage gaps (especially pharmaceutical and home care)
      • Rational service delivery system (private and independent providers)
      • Incursions of privatization, including US diplomatic pressure
      • Mobilization of public opinion/dissatisfaction by high income tax-payers and for-profit providers
      • NAFTA and other international trade and law agreements are threats to monopsody and regulation (including prohibition of DTC advertising)

Insurance Coverage

Service Providers

Values[1]


System Minimum Standards (federal law)

Performance Indicators (compared to US)

Challenges

US Myths about Canadian Medicare

  • “Socialized medicine”
    • Canadian health insurance is “socialized”
    • Canadian health service delivery is more private than US: Canada’s health services are not government agencies or employees
    • Rationing
      • All “medically necessary” services are covered
      • More MD and hospital services are delivered per capita
      • Canadian Medicare is a supply-side controlled monopsody—MRIs etc., are limited to “medically necessary”
      • Wait times
        • can get on waiting lists
        • not denied necessary service
        • waiting times are subject of intense management (wait lists are also political football and front page news!)
        • Quality of care
          • same standards and scores from same/similar accreditation
          • “Snow bird” cross-border medical shopping
            • extremely small numbers get services in US
            • Emigration of physicians
              • Immigration + return of émigrés from US = net gain
              • Public financing is inherently less efficient than private; private purchaser is more price sensitive
                • Canadian health spending is Half GDP; 2/3rds GNP
                • US prices are much higher
                • Canadian provincial government health insurance overhead is under 2%; US MCS is about 4%, as is Kaiser Permanente, vs around 15% for Humana, Aetna, etc.

HOW CANADIAN MEDICARE WORKS: BC Provincial Medicare Protection Act

9 parts encompassing 51sub-parts of simple text

Defining the institution that manages insurance; principles governing insurance coverage; eligible persons (residents of BC); practitioners covered (all who don’t opt out); limitations on billing (no extra billing); payment mechanisms and schedules; diagnostic facility regulation; audits, inspections, appeals; and general provisions (governing private insurance, information confidentiality).

2 The purpose of this Act is to preserve a publicly managed and fiscally sustainable health care system for British Columbia in which access to necessary medical care is based on need and not an individual’s ability

45 (1) A person must not provide, offer or enter into a contract of insurance with a resident for the payment, reimbursement or indemnification of all or part of the cost of services that would be benefits if performed by a practitioner.

(2) Subsection (1) does not apply to

(a) all or part of the cost of a service

(i)  for which a beneficiary cannot be reimbursed under the plan, and

(ii)  that is rendered by a health care practitioner who has made an election under section 14 (1),

(b) insurance obtained to cover health care costs outside of Canada, or

(c) insurance obtained by a person who is not eligible to be a beneficiary.

(3) A contract that is prohibited under subsection (1) is void

HOW CANADIAN MEDICARE WORKS:

Purpose of the Ministry (BC)

The Ministry of Health Services has overall responsibility for ensuring that quality, appropriate and timely health services are available to all British Columbians. The B.C. health system is one of our most valued social programs — virtually every person in the province will access some level of health care or health service during their lives. Good health is a fundamental building block of a happy and productive life. The Ministry of Health Services works collaboratively with the Ministry of Healthy Living and Sport to guide and enhance the Province’s health services to ensure British Columbians are supported in their efforts to maintain and improve their health. The Ministry works with health authorities, care providers, agencies and other groups to provide access to care. The Ministry provides leadership, direction and support to these service delivery partners and sets province-wide goals, standards and expectations for health service delivery by health authorities.

The Ministry enacts this leadership role through the development of social policy, legislation and professional regulation, through funding decisions, negotiations and bargaining, and through its accountability framework for health authorities and oversight of health professional regulatory bodies.

The Ministry directly manages a number of provincial programs and services. These programs include: the Medical Services Plan, which covers most physician services; PharmaCare, which provides prescription drug insurance for British Columbians; the B.C. Vital Statistics Agency, which registers and reports on vital events such as a birth, death or marriage; and the Emergency and Health Services Commission, which provides ambulance services across the province and operates HealthLink BC, a confidential health information, advice and health navigation system available by telephone or on the web (see www.healthlinkbc.ca). HealthLink BC also publishes the BC HealthGuide which is available through local pharmacies and operates bcbedline, the provincial acute bed management system.

The Province’s six health authorities are the organizations primarily responsible for health service delivery. Five regional health authorities deliver a full continuum of health services to meet the needs of the population within their respective geographic regions.

A sixth health authority, the Provincial Health Services Authority, is responsible for managing the quality, coordination and accessibility of selected province-wide health programs and services. These include the specialized programs and services provided through the following agencies: BC Cancer Agency, BC Centre for Disease Control, BC Children’s Hospital and Sunny Hill Health Centre for Children, BC Women’s Hospital and Health Centre, BC Provincial Renal Agency, BC Transplant Society, Cardiac Services BC, and BC Mental Health and Addiction Services including Riverview Hospital and the Forensic Psychiatric Services Commission.

The delivery of health services and the health of the population are monitored by the Ministry on a regular basis. These activities inform the Ministry’s strategic planning and policy direction to ensure the delivery of health services continues to meet the needs of British Columbians.

Strategic Context (BC)

The health system in British Columbia is a complex network of skilled professionals, organizations and groups that work together to provide value for patients, the public and taxpayers. A key issue facing the health system is to continue improving the quality of services provided to citizens while also paying attention to the cost of the system.

The British Columbia health system continues to be challenged by an increasing demand for health services. The most significant drivers of rising demand are the aging population, the increasing need to provide care to the frail elderly, a rising burden of illness from chronic diseases and advances in technology and pharmaceuticals that are enabling new procedures and treatments.

The pressure is compounded by worldwide competition for health professionals and health care workers, and the need to maintain and improve the health system’s physical infrastructure (i.e. buildings and equipment). In the current economic climate it is even more important for the health system to find new and creative ways to make sure the resources available for health care services are used effectively and in ways that most benefit the people of British Columbia.

British Columbia also faces a challenge in ensuring that all parts of society and all populations can access health services and enjoy good health. While the health status of Aboriginal people has improved significantly in several respects over the past few decades, the Aboriginal population in B.C. continues to experience poorer health and a disproportionate rate of chronic diseases and injuries compared to other B.C. residents. Government is working with First Nations, Metis and other partners to improve Aboriginal people’s health and to close this gap in health status.

This year the province is also challenged by the potential of an influenza pandemic. Although every pandemic causes worldwide illness – as they have done throughout history – some are more widespread and deadly than others. Effective planning is a key to ensuring a coordinated and effective response to a pandemic that will minimize the spread and impact of illness, the number of fatalities and the disruption to society. The recent spread of the H1N1 flu virus (human swine flu) needs to be monitored and precautionary measures taken.

HOW CANADIAN MEDICARE WORKS:

BC Medical Services Commission

Manages the provision of medical services

Manages payment from the “Available Amount” (sets the fee schedule)

3 MDs; 3 public members; 3 government representatives

Advisory committees:

Guidelines and protocols

Education and information

Promotion of guidelines (CME Conferences)

Web-based guidelines

PDA-based guidelines

Review applications for diagnostic and lab facilities

Audit and inspection

Billing integrity

Health Insurance BC

Administration and operation of the payment system

HOW CANADIAN MEDICARE WORKS: Drug Access

Drugs provided in hospitals are free under CHA

Drugs provided outside hospitals, not free under CHA

Drugs provided outside hospitals for seniors and designated groups covered, but with co-pays

Drug costs paid by:

Provincial government: 39%

Other government: 7%

Private insurance: 34%

Households: 20%

Provincial governments establish formularies

DTC advertising is prohibited in CAN (and OECD, except for US)—but happens anyway

Supplier-to-dispenser incentives (rebates, free goods) are limited in PC and ONT

Detailing, sponsorship of CME, and advertising to MD exists

Drug Development and Production

R&D in CAN about equal to R&D in US (per Cap and per GDP)

R&D in OECD > US; Sweden, Denmark, UK, Belgium, France >>>US

CAN develops fewer “me-too” drugs

CAN strong on biotech drug development

CAN product launches about = UK, Switzerland; 2 x US

CAN R&D = 8.8% R&D-to-sales ratio

CAN has strong patent protection

CAN dug trade balance is negative (like US) (Europe has positive drug trade balance)

Drug Price Regulation

Federal regulation of prices for patented drugs (generics not regulated)

Patent act (1987) was a deal between drug industry and federal govt: protection was traded for price regulation and R&D assurances)

Patent Medicine Price Review Board (PMPRB): independent, quasi-legal

Mandate: protect public from excessive prices

Compares proposed prices with existing prices in CAN plus France, Germany, Italy, Sweden, Switzerland, UK, US

Maximum allowable price increase: CPI

Price < highest price in 7 markets

Innovation categories:

New strength or dose

Substantial therapeutic  improvement

Me-too

(source: Paris V, Docteur P. (22 Dec 2006))

HOW CANADIAN MEDICARE WORKS:

Reasonable Access and Supply-side Control

Canadian geography, demography, and economy

Rural and Remote: the Canadian challenge

Premise:

Supply drives demand, appropriateness of intervention involves uncertain risks and uncertain benefits

When less supply is better

Effect of supply on output, quality, and outcomes (Gwande)

Effect of supply on medical response to uncertain risk-benefit balance for intervention (Gwande)

Hi tech equipment drives excess, inappropriate utilization (indications with high type I error)

Supply-side control tools:

“available amount”

Hospital budgets

Approval of capital costs

Financing of professional training

Goals:

Supply to meet patient need: goal of stimulating supply

Supply to meet supplier economic interests beyond patient need: goal of supply restraint

Specialist medical students/interns

Keeping up with Dr Jones (e.g., MRIs in hospitals)

Fee-for-service providers seek quantity (that’s the purpose of FFS!)

Specialist supply drives excess specialty interventions when brought into the picture too early—every carpenter…

Application of Supply-side Control:

Emergency treatment: priority to fully meet need immediately

MRI and other high tech diagnostic equipment: supply management

Hospital bed supply management: hospital budgets; capital expenditures

World-wide decline in beds due to increasingly effective outpatient (e.g., day surgery)

Hospital unions resist

HHR supply management

MDs

RNs

Other health professions

Specialists supply management:

Canada uses primary care for prevention, early diagnosis and treatment, and as a gate-keeper to specialty and hospital services.

How much supply, how much restraint:

A highly public process

MSC: MD, public, gov’t members; media; published reports and policy papers; meetings

Overall: Canada controls supply through a public process to meet need, while restraining cost. Movement in either direction—oversupply or undersupply—is corrected by the public process. Canadians can choose as much, or as little Medicare as they wish.

MEDICARE PERFORMANCE: Inputs

Spending per cap, 2004: Canada 3,165 vs US 6,102 (Anderson, 2004)

Hospitals: 914 vs 1,636

Outpatient: 792 vs 2,668

Spending as a percent of GDP, 2004: Canada 9.9 vs US 15.3

Public spending as a percent of GDP, 2005: Canada 6 vs US 6

Prescription drug spending per cap, 2005: 559 Canada vs 792 US (OECD, 2007)

Insurance overhead spending per cap, 2003: Canada 50 vs US 300

MRI units per million, 2005: Canada 5.5 vs US 26.6 (vs Japan 40.1)(OECD, 2007)

MDs per 1,000 pop, 2004: Canada 2.2 vs US 2.4 (OECD, 2007)

Hospital beds per 1,000 pop: Canada 2.9 vs US 2.7 (OECD, 2007)

MEDICARE PERFORMANCE: Costs

Hospital costs for Aortic aneurysm repair: Canada 8,647 vs US 13,432 (Brox, et al. (2003). Arch Internal Med, 153, 2500

CABG: Canada 10,000 vs US 20,000 (Arch Intern Med, 165, 1506

MEDICARE PERFORMANCE: Quality

US and Canadian medical schools are based on the same design (Abraham Flexnor)

Flexner, A., 1910. Medical Education in the United States and Canada. Carnegie Foundation for Higher Education.

Physician credentialing and licensing are similar in both countries

Accreditation Canada (itself accredited by the International Society for Quality in Health Care) was developed out of the US Joint Commission on Accreditation of Healthcare Organizations (now the Joint Commission) which previous did accredit Canadian hospitals.


MEDICARE PERFORMANCE: Outputs

Physician visits per cap: Canada 6.4 vs US 5.8 (OECD, 2002; Anderson, 2003)

Hospital admissions per cap: Canada 99 vs US 125 (OECD, 2002; Anderson, 2003)

Average length of hospital stay (days): Canada 8.6 vs US 7.3 (OECD, 2002; Anderson, 2003)

Acute inpatient days per cap: Canada 1.0 vs US 0.7 (OECD, 2002; Anderson, 2003)

Renal transplants per million: Canada 35 vs US 34

Coronary angioplasties per 100K: Canada 80.8 vs US 388.1 (OECD, 2002; Anderson, 2003)

Dialysis (patients) per 100K: Canada 45.7 vs US 86.5 (OECD, 2002; Anderson, 2003)

MEDICARE PERFORMANCE: Outcomes

Outcomes of surgical intervention:

Outcomes (mortality) measured in 38 studies found showed:

5 favoring US

14 favoring Canada

19 mixed or equivocal

e.g., head/neck cancers better outcomes in Canada; breast cancers better in US

e.g., risk-adjusted surgery better in Canada, except for hip fracture and cataract surgeries which have better outcomes in US

e.g., fewer strokes and bleeding after cardiac surgery in Canada; less angina in US

Better outcomes due to:

Diagnosis and treatment at early stages of illness

Better treatment of late-stage illness

Outcomes differ for SES groups (due to both risk and access)

Overall results: 5% reduction in relative risk

But large variation

Sampling of population outcomes is not perfect

(Guyatt et al, 2007).

Breast cancer 5 year survival rate: Canada 104 vs US 114 score (better) (Hussey, 2004 in Davis 2007).

Kidney transplant 5 year survival rate: Canada 113 (better) vs US 100 (Hussey, 2004, in Davis 2007)


MEDICARE PERFORMANCE: Impact on Population Health

Health Adjusted Life Expectancy

Life expectancy, 2003: Canada 79.7 years vs US 77.2 (OECD, 2005)

Infant mortality per cap, 2003: Canada 5.4 vs US 7 (OECD, 2005)

Maternal mortality per 100k births, 2004: Canada 6 vs US 12 (OECD, 2006)

Preventable years of life lost per 100,000 pop: Canada 3,000 vs US 5,200 (OECD, 2006)

Mortality amenable to health Care per 100,000 pop: Canada 92 vs US 115 (Davis, 2007)

Overall: Canadian Medicare performs equal or better than US on all parameters, at substantially less cost. Canadians have health insurance SECURITY and SIMPLISITY as well as reasonable access, good quality, greater amounts of primary care, reasonable amounts of high tech care, good or better outcomes, and definitely better population health.

ISSUE: Wait List: Management of Reasonable Access; Supply-side Control

Waiting lists/waiting times are important: care delayed can be care denied.

All countries have problems with some excessive waiting…

not entirely due to insufficient medical budgets, MDs, hospital beds

20k people/year die from treatable conditions in the US…

…many couldn’t get on a waiting list

In countries with UHI, e.g., Canada…People with medically treatable conditions are entitled to be put on waiting list.

Waiting lists/times are as long or short as a democratically elected government, and electorate are willing to make them.

In UHI systems, where the government is the single payer, waiting times/lists are a negotiator’s blackjack …as are strikes

…claims about excessive waiting are in the headlines.

…hospitals, specialists, and unions have an interest in rallying public support and pressuring government to increase spending (“orchestrated outrage”)

It helps to understand the wait list/time news in context. That is one of the realities of single payer systems.

But wait lists/times are becoming the focus of innovation and quality improvement.

[Later. First: wait lists/times are not what they seem. ]

Wait lists have been unaudited and unmanaged in the past, with many of the persons on the wait list not actually waiting. Audits of waiting lists have found large percentages of people who:

  • have moved
  • have changed their minds
  • never knew they were on the waiting list
  • are on several waiting lists at the same time for the same procedure
  • have improved
  • have died

Waiting time and waiting lists are issues everywhere. There are serious negative consequences of waiting too long.

Setting the right level of resources is part of the challenge in managing waiting lists.

However, increasing resources has been found to have no effect in some cases, and even to worsen medical outcomes

A much bigger task is process innovation whereby both efficiencies in processing patients and quality are improved.

Management of Waiting Time/Lists

Analysis of waiting times/lists

J curve

Waiting for whom?

Primary care

Specialists (4 weeks)

Diagnostic/lab (3 weeks)

Hospital

Waiting for what?

Emergency (less than one day)

Urgent

Time sensitive, not urgent

Not time-sensitive

Causes of waiting times

Steps in the process:

Complaint, assessment, tests, specialist, booking, procedure

Multiple players—coordinating schedules:

Passive coordination

Management of the process by a solo practitioner

Larger causes of waiting time

Medical emergencies, periods of peak demand,

Growing demand and technical capabilities of medicine and surgery

Thresh-hold creep (risk-benefit balance for intervention)

Solutions for excessive waiting times

Public and provider information and understanding (get on board, innovate, implement)

Align incentives with quality improvement goals

Clinical teams, case managers, system managers

Patient education: take control of own health care; active participation in team effort

Flow/queue management (like traffic flow management)

Consolidations of separated processes:

e.g., one-stop booking,

e.g., mammogram-ultrasound-biopsy

Critical path analysis (care maps, care pathways)

e.g., St Paul’s joint replacement

Coordination of multiple queues

e.g., www.bcbedline.ca

Specialized short-stay surgical clinics

e.g., cataract

Clearing back-log (short-term, focused funding and effort)

Audit waitlist, evaluate patients (placement and prioritization)

Assessment and forecasting of population needs

Overall: Process innovation is used instead of massive oversupply

ISSUE: Health Human Resources

MD migration

Canada is a net gainer in in/out migration

Highest out-migration = 3.5% (1978) with 2.7% returning

Out-migrating MDs return at a high rate

1999 net MD migration = 0.4%

2004 net MD migration = net gain 55 (CIHI)

Hi-end specialists most likely to out-migrate (Wayne Gretzky effect)

Access to MDs

Rural and remote access problems:

Solutions tried: Bonuses, relief coverage, med-vac, teaching hospital outreach

GP shift toward patients requiring shorter visits (FFS effect)

Private markets drawing off MD supply

RNs

World-wide shortage

More occupations to choose from

RN workforce aging; fewer recruits

Fluxuating demand (training planning not based on demand forecasting)

MD satisfaction

Overall: HHR monitoring and planning is used; HHR satisfaction is high due to good practice conditions (low administrative burdens; low economic issues involved in patient care)

ISSUE: Cross-border Medical Shopping

Kinds of cross-border utilization:

  • Wait-list reduction during peak periods (buy it cheaper than make it)
  • Leading edge technology (try it before you buy it)
  • Proximal location (invisible borders)
  • Incidental to travel
  • Magnet services (MAYO, etc.)

Contracts:

To accommodate peak demand periods, access leading edge technology before implementing domestically, access to geographically proximal providers in remote and rural areas.

Price to Canadian Medicare at US marginal cost is a sensible solution for peak demand periods

Volume:

Admissions of Canadians in US hospitals: 0.23% of Canadian admissions (80% for emergencies)

Canadian contracts with US (for surges in demand and temporary loss of supply):

Radiation oncology: 8.5% of Canadian admissions

Leading edge tx: 100 cases per year (in PC)

Private travelers’ insurance (to cover higher cost of emergency care in US)

Overall: Very low volume of cross-border utilization, and that for sensible reasons.

(source: Katz, 2002).

ISSUE: Privatization

Canada Health Act:

Federal disincentives for private insurance/charges-to-patient for covered services

Provincial laws and regulations prohibiting private insurance

Opt-out for providers

Private providers

Private for-profit providers

Charges to public insurer are negotiated as a fee schedule

Organizations exist to advocate for private insurance and for-profit providers

Frazer Institute: advocating for private insurance and for-profit providers

Brian Day, new President of CMA: advocating for private for-profit

PC Supreme Court decision: over-rules prohibit on private insurance

NAFTA/WTO hazard: any private insurance or private for-profit activity within Canada may result in demand by US providers for access to Canadian market

Federal and provincial governments; provider organizations; others working very hard to protect and sustain Medicare

Overall: a severe threat to Canada’s Medicare is stimulating constructive action

US UHI Reform Strategy

Long-term Goal: Universal, Comprehensive, Accessible, Portable, Affordable, Publicly Administered health financing

Interim Goal (2009 Health Reform): Essential precursors of UHI

  1. Mount a sustained, intensive public awareness program reporting current US experience with health insurance and health care, compared with experience of US public insurance and health care programs, and international experience with UHI; Building alliances and coalitions with sectors having a genuine interest in health cost containment and health outcomes for patients; avoid co-opting  alliances with organizations with interests contrary to HUH
  2. Regulate private for-profit insurance including public control of enrollment, disenrollment, rules/processes/forms, fee schedules (for policies within the scope of “medically necessary”)
  3. Transfer tax subsidy from employer to employee for employer-based health insurance (to increase portability and establish a tax-based mechanism for premium payment)
  4. Facilitate development of standardized Electronic Medical Record and information system (capable of supporting both medical services communication and management of a UHI program).
  5. Take “regional variation” studies, “process innovation,” “continuous quality improvement,” and dissemination of “best (evidence-based) practices” to scale (reduce cost and improve quality).
  6. Create an institutional venue/mechanism for negotiation of prices with providers and establishing standard fee schedules;  Empower existing public insurance (CMA) and providers to negotiate prices (building upon the “exchange”) (to begin process of cost control for UHI)
  7. Create professional oversight, policy, and administrative institutions able to define “medical necessity,” to evaluate medical technology (to determine efficacy and relative value and, therefore, what is “comprehensive”) and to formulate health economic management plans (to achieve “affordability” in the long run)
  8. Replace medical malpractice litigation with professional self-regulation, discipline, and remediation administration with public oversight (to ensure quality, protection of patients, and remediation of consequences of misadventure, error, and malpractice)
  9. Create capacity in existing public insurance and providers to accept enrollment from increasing segments of the population—Medicare for More—(to achieve universality progressively)

F:\Canadian Medicare\KP City Club Presentation\US Health System Reform.docx,, Douglas Bigelow PhD.  OHSU


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  1. On behalf of seniors and their physicians, the AMA is urging Congress to act before a Medicare meltdown begins on December 1. Congressional action this month is the only way to stop the Medicare cut. Congress needs to keep Medicare strong for our senior patients and ensure that baby boomers will have access to physicians when they begin receiving their Medicare cards for the first time this January.

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