A model for health insurance
Fein, Rashi
Universal medical insurance and universal access to care under a system of responsible cost containment remain on the American agenda. Since Harry Truman proposed national health...
...Federal authorities permit the individual provinces to add additional benefits deemed important and affordable...
...Instead, they are the product of countless encounters between medical care providers and vulnerable persons who are trapped in a system that offers few choices and exhibits few restraints and little competition...
...I estimate that if full account of the various "unnecessary" activities in the U.S...
...Failure to ban extra payments reduces federal financial support for the provincial program by an equal amount...
...Even as they consider alternative mechanisms to cap expenditures (Quebec has instituted physician income ceilings), both government and physician unions know that today's behavior will affect next year's fee bargaining...
...The Canadian system is much simpler for both patients and providers (though less profitable for paper manufacturers...
...Since Harry Truman proposed national health insurance (NHI), debates about this vital policy issue have waxed (as in the early 1970s) and waned (as in the 1980s...
...Such system differences as do exist, say, between Quebec and Alberta, are at a level that does not directly impinge on the individual who seeks medical care...
...Under the Canadian system—which costs the taxpayer less than the American system—people can choose their own doctors and hospitals...
...physicians hold government responsible for what they perceive as threats to their independence and clinical freedom...
...Millions more, with some (but quite inadequate) insurance, would find themselves in severe financial straits if their medical care required more than minimal expenditures...
...All individuals have the same benefits and are covered for most of the medical care they receive...
...Organized labor and concerned consumers are becoming more informed about how our insurance system is coming apart, and what is more, the American College of Physicians (the second largest medical association after the AMA) is willing to discuss broad and comprehensive reform...
...expenditures continued to grow at an explosive rate...
...The Canadian share is less than 9 percent...
...In return for federal funds (whose expansion is now constrained by a transfer formula related to the growth of health care expenditures and the gross national product, which, consequently, places the provincial authorities at increased financial risk), federal authorities and Canadian residents are assured of a set of uniform and basic (but not Spartan) benefits that are universally available...
...Consider that in the United States over one thousand firms offer health insurance and that each is willing to market many different policies at rates determined by the experience of the individuals whom it enrolls (a process that requires data and analysis...
...Our physicians are under constant review...
...expansion has had important consequences...
...Most American policy analysts who approve of the Canadian system behave as if it is totally irrelevant because of political considerations: "Interesting, but . . . " The editorials that begin with a description of the Canadian approach to financing health care usually end by endorsing more modest changes that use approaches contradicting the Canadian experience (for example, continuing the multiplicity of programs and negating universality by requiring employers to offer insurance to their employees while exhibiting less concern for individuals who are not employed or who are part-time workers...
...Americans who import foreign cars, audio equipment, and apparel may be willing to consider importing ideas...
...Many states have legislation, political action, or study commissions seeking to advance programs to meet the health care needs of all residents...
...Physicians are paid on the basis of a fee schedule negotiated between government and physician unions...
...and Canadian percentages, both of which had been increasing, were virtually identical up to 1971 (when the Canadian insurance system became fully operational...
...It is conservatively estimated that the administrative expenditures in the U.S...
...The oft-cited figure that almost forty million Americans are without any private or public health insurance or payment assistance for medical services (that is, Medicaid) is, unfortunately, correct...
...That argument may prove less effective in the future...
...Consider that hospitals are paid on the basis of a prospective budget and do not have to devote resources to posting every medication for reimbursement purposes (for example, aspirin: $2.00...
...Ottawa contributes its share to the various provinces (in a manner that takes account of economic disparities...
...system, where administrative expenditures are the most rapidly increasing cost in the health sector...
...The original universal health insurance system legislation, adopted in 1966, placed the administrative structure of responsibility at the provincial level...
...Millions of Americans are aware that other nations are successfully addressing this problem...
...There are no apparent differences in morbidity, mortality, or health outcomes associated with particular conditions (Canadians do better on some indices, we on others), so that contrasts in coverage and expenditure cannot be explained away on grounds of quality...
...Nor is it linked to changing socioeconomic and demographic characteristics...
...Providers (not patients) do the billing to the single payer: the public insurance authority...
...We cannot be cavalier about the health care dollar...
...Individuals sort themselves and are sorted into the various programs according to how individual characteristics fit eligibility requirements...
...The increases in medical care expenditure have driven out expenditures in other fields: we spend a smaller percentage on education as well as on research and development than once we did...
...Hardly a surprise...
...I do not mean that everyone studying the problem supports a Canadian-type system...
...As a consequence of these arrangements, Canadian physicians have more clinical freedom than do their American counterparts...
...Because there is no guarantee of continuous coverage, it is not surprising (though it is shocking) that over one-quarter of Americans report they were without health insurance at some time during the previous twenty-eight months...
...system absorb five to six times as high a percentage of the GNP as is the case in Canada...
...q Notes All data from Robert J. Blendon et al., "Satisfaction with Health Systems in Ten Nations," Health Affairs (Summer 1990), pp...
...The respective figures for Canada, 38 percent and 5 percent, indicate that Canadians have a much higher level of satisfaction.' In health care, the adage that "you get what you pay for" is fallacious...
...Patients do not face the cost-sharing measures (deductibles, co-insurance, or copayments) that characterize U.S...
...Because we all use our health care system, we are concerned about its state of health...
...Though government plays a much larger role in financing the Canadian system than is the case here, Canadian physicians do not practice medicine by rote or government directive and are not suffering from malaise...
...Commissions, committees, and task forces continue to expand...
...Less Paperwork, More Freedom for Doctors Although each of the Canadian provinces is different, the general contours of the various systems are similar...
...113-116...
...care system were made—that is, things that we do in order to be "efficient" within an inherently inefficient system—the potential savings might be in excess of $60 billion...
...no computers to track the financial transactions...
...That this policing is done by private organizations acting at the behest of firms that pay premiums on behalf of their employees, rather than by government, does not make the policing more palatable...
...Under the Canadian system national standards and equity prevail across provincial boundaries...
...Federal-Provincial Partnership in Canada How do the Canadians do it...
...Consider that there are no billing clerks (except to handle the U.S...
...One nation that has something to teach us is Canada...
...As a consequence of 1984 legislation, the provinces have banned extra billing by physicians and hospitals (that is, collecting more from the patient than the amount provided for in the provincial fee schedule—a practice all U.S...
...individual cases are scrutinized to make certain that no one is "cheating" by over-utilizing services, admitting the patient too early before surgery, keeping the patient in the hospital longer than necessary, and so on...
...There is now considerable evidence that we are entering a period of extensive discussion of proposed "solutions...
...In earlier periods, those who opposed national health insurance often used the argument that it was an alien import, a product of "left-wing" ideology (of the kind, presumably, represented by Bismarck, Lenin, and Churchill/Attlee...
...One does not have to be an expert to know that American health care is deficient in very important respects...
...the plan had to be publicly administered...
...On balance, would you prefer the Canadian system or the system we have here in the United States...
...An individual's insurance protection does not depend upon ever-changing relationships to the labor force, employment, or a particular employer...
...Medicare beneficiaries have encountered...
...185-192...
...Consider that there is only one insurer in a province, no marketing, no complex enrollment arrangements...
...WINTER • 1991 • 17...
...By 1971 each province had developed a universal health insurance program that met crucially important central government requirements: the provincial programs had to be universal and had to cover all necessary medical care (physicians' services in and outside of hospitals, hospital inpatient services, a broad range of special outpatient services, and so on...
...Assuming they are enrolled in some program, their benefits will vary with each program...
...toothbrush: $4.00) and to filing claims forms...
...the benefits had to be portable across provincial lines...
...share of GNP devoted to health care expenditures is almost 12 percent...
...Because the United States has not altered basic system incentives, we try to police practitioners...
...Because of cost considerations, the benefits they most need may be the very ones they are denied...
...Their task is to stay within the discipline of the prospective budget...
...Operating under negotiated budget agreements, they receive allocations at periodic intervals...
...They are free to develop their own methods to raise the required funds, their own cost-containment approaches, and their own ways of paying health professionals and institutional-care providers...
...patient who is treated in a Canadian institution), no persons whose task it is to determine the patient's eligibility...
...Spending ever-larger percentages on medical care WINTER • 1991 • 15 Comments and Opinions and allocating smaller percentages to education, research, and development is hardly the way to keep up with the Joneses, let alone with a united Germany or Japan...
...Those of us in the United States who have argued that the additional tax burden for a universal health 16 • DISSENT Comments and Opinions insurance program would be more than counterbalanced by the reduction in present private premium payments can point to Canadian experience: arrangements for public responsibility, authority, and accountability have saved money even while providing universal access...
...Public debate on the priority accorded medical care as contrasted with education, transportation infrastructure, research and development, space exploration, or new weapon systems is conspicuously absent in the United States...
...While the Canadian allocation to health care flattened out for almost a decade and increased slightly in recent years, U.S...
...Because government payments (physician incomes) are the product of the number of services rendered times the fee per service, all provinces monitor physician billings to guard against excess use...
...The Canadian health care system faces much, much lower administrative costs than does the U.S...
...Finally, of course, the important inevitable question: how is the Canadian program paid for...
...Canadian expenditures for health care are not inconsiderable: almost $1,500 per person per year...
...Of equal importance, the individual citizen is assured that there will be a public debate about the appropriate amount to spend for medical care as compared with other spending...
...Though the provincial programs have much in common (especially in their benefit structures), each province has substantial discretion in organizing and financing its program...
...The administrative savings are in the tens of billions of dollars (a sum that could finance health care for those now uninsured...
...The American reality would sound bizarre to Canadians with universally available insurance...
...Here, local, state, and federal programs, each with its own definition and structure, are superimposed on a private insurance system that is largely employment linked...
...The individual provinces raise the additional money they need to operate the program through whatever tax mechanisms they elect (some provinces use supplementary premiums...
...Nor are these expenditure patterns the result of a collective decision-making process with which you or I might agree or differ...
...We have the dubious distinction of protecting a smaller proportion of the population 14 • DISSENT Comments and Opinions and spending more to do so...
...respondents preferred the Canadian system of national health insurance in response to the following question: In the Canadian system of national health insurance, the government pays most of the cost of health care out of taxes and the government sets all fees charged by doctors and hospitals...
...The U.S...
...As a consequence of untrammeled growth rather than deliberate choice, the U.S...
...The significance of the federal requirements must be underscored...
...But the fact that we can point to the Canadian experience, and that many of us have been doing so for years, has not led to legislation or, indeed, even serious discussion at the public policy, rather than the scholarly and academic, level about what parts of the Canadian system might be applied to the United States...
...Hospitals do not file claim forms...
...The U.S...
...Yet, in the United States, in a system that is less universal and that severely restricts access for many persons, per capita expenditures are almost $2,100 (38 percent higher...
...insurance (including Medicare) programs, nor do they need to file claims for reimbursement...
...The survey also found that only 10 percent of Americans, but 56 percent of Canadians, felt that "on the whole, the health care system [in their country] works pretty well...
...2 Robert G. Evans, "Tension, Compression, and Shear: Directions, Stresses, and Outcomes of Health Care Cost Control," Journal of Health Politics, Policy and Law (Spring 1990), pp...
...In contrast, 60 percent of Americans felt that fundamental changes are needed, and 29 percent felt that it would be necessary to rebuild our health care system completely...
...All residents of Canada have comprehensive insurance protection based on residency...
...This contribution is simply one additional federal expenditure, financed through general revenues...
...It is troubling that many (if not most) U.S...
...The answer is simple: largely through taxes...
...This optimism is based, in part, on the new interest by some of our largest firms (often, with experience in Canada) in a plan that would control costs...
...I do suggest that there is a growing desire to achieve equity and cost containment and that as the debate unfolds we will need to learn from Canada and to discuss which of its numerous lessons can be applied here...
...Nevertheless, I am optimistic that in the next few years, and especially if George Bush should be a one-term president, we will not only discuss but enact meaningful legislation that will move us a long way toward universality...
...In 1990, 66 percent of U.S...
...This, of course, is in sharp (and ever sharper) contrast with the United States...
Vol. 38 • January 1991 • No. 1
