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June 16, 2004

News > Canadian Health Care

Via SayUncle I found a couple columnists going over the latest results of a poll in Canada. Result: a 51% majority of Canadias prefer a two-tier system that provides public healthcare yet still allows private healthcare.

The reason is simple: the Canadian public-health-only system is failing to deliver quality medical care in a timely fashion. To give one example from the above articles: the average wait for an MRI scan in Canada is half a year. In the U.S., the average wait is just three days.

In a capitalist system, finite goods and services are rationed by price: dollars determine who gets what, and individuals decide how much they're willing to pay. It's an imperfect system, but no one has invented a better one.

All other attempts to distribute wealth have resulted in less wealth, but the same inequalities. Only the system of rationing changes.

In communist Soviet Union, goods and services were rationed according to politics rather than dollars: the size of your paycheck and your apartment were related to your loyalty to the Communist Party. Rationing by political connection is happening now in Canada's healthcare system.

Even though medical emergencies allow some people to jump ahead in the waiting line — making others wait longer — a survey published in the Annals of Internal Medicine medical journal found that more than 90 percent of heart specialists had "been involved in the care of a patient who received preferential access" to cardiac care based on non-medical reasons including the patient's social standing or personal connections with the treating physician.

Paul Jacob notes another way to ration goods and services without using money as the deciding factor:

Calling something "free" and paying for it with taxes doesn't take away the need to make hard choices. Demand for medical services is almost limitless, especially when you make the "demand" little more than a request. So some means of rationing has to be put in place. And in Canada, doctors and administrators naturally choose the easiest method: delay.

Like socialist systems elsewhere, Canada's health care system rations by procrastination.

Here's the fundamental point: why should the state run the health care system? If you say it's because health care is essential, then what about farming and food production and distribution - they're essential, so shouldn't the state run those, too?

Then look at the Soviet Union, North Korea, and now Zimbabwe to see what happens when the state rather than the free market is allowed to control the production and distribution of food. You turn prosperity into empty shelves, fertile soil into bread lines, and the bounty of the earth into starvation. Expect the same from socialized medicine.

Posted by lesjones



Comments

Canada's system could certainly use improvement, but that doesn't mean it's a failure or needs to be scrapped. We in the US hardly have room to talk about disastrous health care systems, after all.

Let's look at how "efficient" our free market health care system really is. In 1999, Canada spent $1,939 per person on health care, while the US spent $4,271 per person. Canada spent 6.6% of its GDP on public health care, plus an additional 2.7% of private dollars, for a total of 9.3% of GDP on health care. During the same time frame, the US spent 5.7% of GDP in public dollars on health care (only covering seniors and the poor), while spending 7.1% of its GDP in private funds on health care. Meaning that health care expenditures made up 12.8% of the GDP in 1999.

Bottom line: our "system" costs substantially more, while not covering everyone. Their system covers everyone (albeit slowly sometimes) for a fraction of the per capita dollars that ours costs.

If Canadians altered their laws to allow people to partake in private services at their own cost for speedier service, that would pretty much fix what ails the Canadian system. Fixing our system is a much taller order.

Meanwhile:

To give one example from the above articles: the average wait for an MRI scan in Canada is half a year. In the U.S., the average wait is just three days.

That's assuming you can afford the MRI or, alternatively, get your HMO to approve it. The average MRI cost in the US is about $2,800. My wife needed one earlier this year, and it took several doctor visits, three prescriptions, and half a dozen visits to a specialist before the HMO would even authorize the MRI. The total time from the time the doctor initially recommended the MRI and the time the MRI was approved and given was about four months (still less than the Canadian wait, granted), and our out-of-pocket cost was over $500 (most of it for the needless interim office visits that the HMO insisted upon), not including the health insurance premiums I pay for the privelege of being dicked around by the HMO.

In a capitalist system, finite goods and services are rationed by price: dollars determine who gets what, and individuals decide how much they're willing to pay.

As such, if you can't afford decent health care, you don't deserve it.

Here's the fundamental point: why should the state run the health care system?

For the same reasons the state should run defense and education and transportation (highways/airports).

If you say it's because health care is essential, then what about farming and food production and distribution - they're essential, so shouldn't the state run those, too?

That example is different because in that case, the free market is able to meet the demands of the entire nation. Nobody starves in this country because food is too expensive or too hard to get. People do go without health care in this country because it's too expensive and too hard to get.

See that's the thing here: the "free market" has had its chance with health care, and it has failed to deliver. Unless that you feel that a 45% increase in health care costs from 2003 to 2004 (actual increase in my company's health premiums) is a good thing.

Posted by: tgirsch at June 16, 2004

"Here's the fundamental point: why should the state run the health care system?

For the same reasons the state should run defense and education and transportation (highways/airports).
"

And why is that? Seriously. It's fairly obvious why the state runs defense and interstate transportation, and besides the first is an enumerated federal power in Article I, Section 8 of the constitution. I don't see any compelling reason for the federal government to be involved in education, since it's a local issue. And at the local level I'd prefer vouchers be available to allow parents to choose private schools.

I understand that in some situations (like space exploration or basic medical research) the government has to step in and get things rolling. However, the market is already providing health care. We don't need the government to move in and take over.

Being more expensive doesn't mean it's less efficient if it's also better. If people spend months out of work for lack of treatment, that may in fact be a money loser. With privately-funded healthcare, the choice is left to the individual.

"Nobody starves in this country because food is too expensive or too hard to get."

How is that possible, since we don't give out food for free? I'm not against programs (like TennCare) that help out the poor, but the question is whether we can afford them. I certainly don't want them to be the model for our healthcare system.

Costs for private insurance is growing at an alarming rate, but so is the cost of public healthcare, with the bill for prescription drugs in the UK increasing 50% in three years. There's no magic wand that will make health care free or cheap.

In fact, it's exactly the reverse: the less people pay for it, the more they use it. Notice that while the cost of most medical services covered by insurance has gone up, the cost of elective procedures has gone down. Lasik eye surgery costs less than it used to, not in spite of the fact that it isn't covered by insurance, but because it isn't covered by insurance.

Posted by: Les Jones at June 16, 2004

Les:
I don't see any compelling reason for the federal government to be involved in education, since it's a local issue. And at the local level I'd prefer vouchers be available to allow parents to choose private schools.

Would you also agree, then, that people who don't have any children shouldn't have to pay any taxes toward supporting the educational system. Sorry, dude, but the Constitution specifically provides for the federal government's ability and responsibility to provide for the general welfare, and you'd have a hard time showing that an educated populace is not in the interests of the country's general welfare.

Being more expensive doesn't mean it's less efficient if it's also better.

Except that there's zero evidence that the US health care system is objectively "better," and a lot of evidence that it's not nearly as good:

It is hard to believe that the U.S., a country that spends more per person on health than any other nation on the planet, comes in at number 37. But the WHO's rankings were based on the quality of the health delivery system in place, not the marketing costs of delivering that system.

The WHO study used five performance measures: life expectancy (U.S. ranks 24th); child survival rates; health care responsiveness; minority health care; and health care financing.

Nearly 14 percent of the U.S. gross domestic product is spent on health-related costs.

Heart disease, cancer, lung disease and diabetes are the top four causes of death in the U.S. (accounting for 72 percent of deaths in this country), and it doesn't appear that we are gaining much ground in controlling these diseases.

Lasik eye surgery costs less than it used to, not in spite of the fact that it isn't covered by insurance, but because it isn't covered by insurance.

Wrong-o. My vision plan covers part of the cost, and I have a couple of friends who had it done with help from their vision plans.

In any case, you're not comparing apples-to-apples. The reason elective services are cheaper is because people can do without them, so companies have to price them attractively to Joe Consumer. But if you have something that everyone needs, and they can't get it anywhere else, you can pretty much charge whatever the hell you want.

At this point, whether you like to admit it or not, there are two options available: do something to make health care substantially more affordable in this country (which almost certainly requires extensive government intervention, either through heavy regulation or takeover), or concede that an ever-increasing percentage of Americans will have to go without health care.

It's a sad, sad day when the richest nation on the planet claims to be unable to afford to give decent health care to all its citizens, while much less-well-off nations do exactly that.

Posted by: tgirsch at June 16, 2004

By the way, have a look at our health care stats versus Canada's stats. There's not a single category in which the USA is better. Canada spends less than 60% per capita what the US does on health care, has lower mortality rights, and longer life expectancies. They also spend a much smaller percentage of their GDP (9.5% versus our 13.9%) on health care, and they cover everyone.

Sure, the Canadian health care system has its problems, but it's pretty damn hard to argue that they have anything to learn from us.

Posted by: tgirsch at June 16, 2004

I followed the link for the WHO healthcare rating. Two of the five criteria don't reflect quality, Namely, minority health care and health care financing.

"Except that there's zero evidence that the US health care system is objectively "better,""

Not true. This study found that the U.S. was better than the UK and Germany in all categories. The one exception was that the UK did better at treating diabetes.

Incidentally, one reason our health care cost is so high is because of the high cost of prescription drugs. Note that drug companies charge Americans higher drug prices than Canadians and many other nationalities, even though many of those drugs are developed in the U.S.. That's why there's a push in Congress to allow drug re-importation from other countries.

I followed the link to your eye coverage. It doesn't pay for Lasik surgery. It only pays for 15%. It wouldn't surprise me at all if the lasik outfits are dicounting most of that in return for advertising and goodwill.

Posted by: Les Jones at June 16, 2004

Les:
Not true. This study found that the U.S. was better than the UK and Germany in all categories.

I misunderstood. Somehow I thought we were talking about Canada's health care system specifically, and not state-run health care in general. In the head-to-head comparison, the US loses in virtually every category (even if you think two of them are "meaningless.") I honestly haven't looked at Germany's system or the UK's, so I can't really comment.

Incidentally, one reason our health care cost is so high is because of the high cost of prescription drugs. Note that drug companies charge Americans higher drug prices than Canadians and many other nationalities, even though many of those drugs are developed in the U.S.. That's why there's a push in Congress to allow drug re-importation from other countries.

But that doesn't explain why those drugs are cheaper there than here. Why would pharmaceutical companies sell their drugs to Canada for a mere fraction of what thy charge domestically? If the drug companies can sell to Canada at a profit, and the Canadians can re-sell those back to us at an additional profit, and that's still significantly less than what the drug companies charge domestically, wouldn't that tell you that there's something Very Very Wrong with our system?

Shouldn't the drug companies be able to under-sell the Canadians and still make an even larger profit than the one they make selling to Canada? Of course they could, but because Canada regulates drug prices and the US doesn't, there's not incentive for the US drug companies to do so. Unless, of course, the reimportation doors are opened, which the pharmaceutical lobby is unlikely to take lying down. Greed is the rule of the day, which is to be expected in an unregulated market in which there's no consumer choice.

I followed the link to your eye coverage. It doesn't pay for Lasik surgery. It only pays for 15%.

But it pays for some of it. My co-pay for an office visit to a specialist on my current health plan is $45. An office visit doesn't cost much more than that, maybe $60. The health care plan pays maybe 25% of my office visit cost. Does that mean that "it's not covered?"

Posted by: tgirsch at June 16, 2004

I have a few friends who are doctors in Canada and they all report the same thing about MRIs..any patient that NEEDS an MRI immediately, GETS an MRI immediately. Much of the waiting list is for people who don't need MRIs, but want MRIs.

One of the big expenses in the US system is ironically the uninsured. Hospitals end up doing more and more care for free, because they can't refuse it. They don't end up getting paid for caring for the uninsured and they have to make the money back by charging the paying customers more..similar to how department stores have signs that say "shoplifting costs us all". The end result is that hospitals have to charge insurers more who in turn raise premiums and the higher premiums lead to more uninsured who get cared for by hospitals for free, who.....

In terms of why the government should run healthcare, the simple answer is that the free market has failed miserably in this regard. Costs are far higher in the US than anywhere else and we get very little for the extra cost. Resources are directed at things that don't make us any healthier, such as MRIs and emergency room care rather than preventative care, because there is little incentive to do so. Part of the problem of the uninsured is that those people who need coverage the most (i.e. the sick) can't get it because insurers don't want to cover sick people. Thus, if you don't work for a decent-sized company with medical benefits, you are in a bad position.

Posted by: Manish at June 17, 2004

Sorry, dude, but the Constitution specifically provides for the federal government's ability and responsibility to provide for the general welfare

If you really READ the Constitution, you'll see that the "general welfare" bit is actually limited to a set of bullet points that IMMEDIATELY FOLLOW.

I know you and Chris Wage and some judges and most people in general don't see it that way, but quite frankly, you're wrong. Period.

End of discussion as far as I'm concerned.

Posted by: Thibodeaux at June 17, 2004

"But that doesn't explain why those drugs are cheaper there than here. Why would pharmaceutical companies sell their drugs to Canada for a mere fraction of what thy charge domestically?"

Price discrimination. It's the reason software companies have one price for the commerical market and a lower price for the education market. Or the reason movie theaters give senior citizen discounts. Or the reason sell on service instead of price when you drive up in a BMW.

Americans value their health (in pill form, at least), and we have lots of money, so they charge us more because they know we want it and they know we can afford it. Therefore they charge Americans more for blood pressure medicine than they do some guy in a third world country. The marginal cost of stamping out one more pill is pennies once your enormous research bill is paid for.

"But it pays for some of it. "

Or to put it another way, you pay for most of the operation that's going to keep your insurance company from having to buy you any more glasses under your vision plan. Sounds like a great deal. For them. :-)

Manish: agreed about the abuse of ERs for routine procedures. My wife worked at one for a while. She saw people going to the ER for pregnancy tests, for Pete's sake. And in general, I think co-pays should be higher (though Tom's are already high). Everything I've ever read about finance says that insurance is to cover risks (like getting cancer or being in a debilitating accident) that you can't afford to save for or go in debt for, and that getting a large deductible is the best hedge against high rates.

I'm unconvinced that we're not getting our money's worth. I think it's also true that we're serving as the world's teaching hospital in terms of techniques and new medicines. Part of our health costs are basicaly research costs that the rest of the world benefits from. Call it capitalist goodwill.

Posted by: Les Jones at June 17, 2004

The two-tier system will fast become a reality here in Canada. General perception here, at least in Ontario, is that we are being failed by the health system. While this isn't necessarily the case, many services are no longer covered, and as mentioned wait times have increased.

At HealthQuotes.ca we are seeing a steady increase in the purchase of private health care plans, I do not have any reason to believe this trend will decrease.

Posted by: Martin at May 28, 2005

What do you think about this
http://news.bellinghamherald.com/special-pub/ontheborder/232788.shtml
???

Posted by: at October 03, 2006

Quality

With limited funds available for investment in such capital expenditures as technologically advanced equipment and building maintenance and renovations, the quality of care has suffered in Canada.

Consider, for example, a straightforward arthroscopic surgery on the shoulder described in a 1997 article in the Canadian Medical Association Journal. The older equipment currently in use in the medicare system requires an incision of 15cm (6 inches). An incision of that length affects recovery time: The patient will miss four months of work.

With state-of-the-art equipment, the same surgery would require only a tiny incision and a six-week recovery. In both cases, the shoulder heals ... but there's a clear difference in the quality of care.

http://home.gwi.net/global/canadian_health_care_fails_5_ways.htm

Posted by: Canadian at July 04, 2007

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