Tuesday, July 28, 2009

Comparing US and Canadian health care

They say that you should never talk about sensitive topics like sex and religion in polite company, the topic of health care is also one of those topics. Nevertheless, I am going to wade into this touchy topic.

I lived in Canada from 1967-94. I moved to the US in 1994 and I returned to Canada a couple of years ago. Given the extensive debate on the Obama health care proposals, I feel compelled to speak up about the differences between the Canadian and American health care systems.

Much of these experiences are personal and your own mileage will vary.

Canada: The grass isn’t necessarily greener
The overriding feature of the Canadian health care system is universal access. Canada is a giant HMO, with health being managed by the provinces.

Fist, some words about access and waiting times. For essential procedures, waiting times are excellent. During the early 1990s, I went into a retail eyeglass store for new glasses and an eye exam. The optometrist saw something that he didn’t like and referred me to an ophthalmologist at the local hospital, who discovered that I had a retinal detachment and scheduled me for surgery. The total time from the day I walked into the optometrist to the day of the scheduled surgery was two days. You can’t ask for anything better than that.

Yet the waiting times for non-emergency routine exams can be maddening. Waiting times to see a specialist, like a dermatologist, can be two or three months. This is the point at which many Americans get upset. If we examine outcomes, life expectancy is higher in Canada than the US. The CIA Handbook shows US life expectancy at 78.11 years, behind Canada at 81.23 and many other developed countries (Australia 81.63, France 80.98, Sweden 80.86, Israel 80.73, Italy 80.20, etc.)

A New Yorker article also indicates that more and faster health care isn’t necessarily better:
Americans like to believe that, with most things, more is better. But research suggests that where medicine is concerned it may actually be worse.

In a 2003 study, another Dartmouth team, led by the internist Elliott Fisher, examined the treatment received by a million elderly Americans diagnosed with colon or rectal cancer, a hip fracture, or a heart attack. They found that patients in higher-spending regions received sixty per cent more care than elsewhere. They got more frequent tests and procedures, more visits with specialists, and more frequent admission to hospitals. Yet they did no better than other patients, whether this was measured in terms of survival, their ability to function, or satisfaction with the care they received. If anything, they seemed to do worse.
The issue here is coordination. Remember the original idea of the HMO (before it became a dirty word)? In an ideal world, an HMO assesses the patient’s health and risk factors and then puts resources into preventative care, which is a lot cheaper, rather than being reactive with treatment, which can be enormously expensive. Under the current system, many doctors are siloed in their own specialties and there is little coordination and consideration of overall care.

Ironically, I found that I received better care and better insight for a chronic condition from a Canadian organization which can be best described as a wellness clinic, to which I pay a fee, than I did in the US. In the US, my American physicians included doctors from world class hospitals such as Mass General Hospital in Boston, which was part of Harvard Medical School, and people listed in the Who’s Who for my condition. I have no complaint about any of these individuals. All of them were knowledgeable and dedicated to their jobs, but coordination was lacking.

Problems on both sides of the border
Opponents of the Canadian system cite horror stories. Yet there are horror stories on both sides of the border. People drop the ball everywhere and it doesn't necessarily have to an indictment of the system. Here are two stories to which I have first or second hand knowledge. One occurred in a world class US hospital, to which people come from all over the world, the other occurred in a regional hospital in Canada.

Case 1: A expectant mother is rushed to hospital because her water broke and there is risk of infection if the baby isn’t born soon. She is told that they need to induce labor right away. After she is admitted, hospital staff put her in a room and forgot about her.

Case 2: A woman visits her terminally ill father in the hospital. When she arrives, he appears to be asleep so she sits down and reads a book. After about half an hour, she tries to wake him and discovers that he seems to be dead. She goes to the nursing station and is informed that the patient had passed away about two hours ago, but no one bothered to call and notify the next of kin.

Anecdotes make good headlines and they make good stories, but they don’t tell what’s wrong with the system. The Canadian health care system’s problems aren’t necessarily the waiting times, which can be frustrating, but extra and unexpected costs that were not part of the initial design. The system was conceived and financed in a day when the practice of medicine consisted mainly of doctors and nurses, either in a standalone practice or in a hospital. Fast forward a few decades, we now have a huge array of medical equipment and drugs that are available to the practitioner.

When I returned to Canada, I found the system glaringly short of medical diagnostic equipment (like MRIs). Given the structure built into the system of nurses’ unions, medical associations (which are in effect doctors’ unions), there is little left in the budget for equipment and drugs.

This state of affairs has resulted in a two-tiered system, much like the British NHS. You are entitled to a basic level of care, but if you don’t want to wait for an MRI, then you need to cough up money. Several months ago, my wife broke her foot and went to the hospital. She was offered a plaster cast for free. If she wanted a removable walking cast, she had to pay.

The American system: Great access, but…
When I lived in Boston, I was fortunate to have worked for a company that took care of its employees well with a gold-plated health plan. You had access to any doctor in the Boston area and the co-pays were extremely low.

The lack of waiting times was great and so the lack of requirement for a referral to see a specialist, but I wasn’t sure if the care because I wasn’t necessarily qualified to make decisions. Here is the perspective from the New Yorker:
Providing health care is like building a house. The task requires experts, expensive equipment and materials, and a huge amount of co√∂rdination. Imagine that, instead of paying a contractor to pull a team together and keep them on track, you paid an electrician for every outlet he recommends, a plumber for every faucet, and a carpenter for every cabinet. Would you be surprised if you got a house with a thousand outlets, faucets, and cabinets, at three times the cost you expected, and the whole thing fell apart a couple of years later? Getting the country’s best electrician on the job (he trained at Harvard, somebody tells you) isn’t going to solve this problem. Nor will changing the person who writes him the check.

A question of incentives
In Canada, much of the practice of medicine is just that, the practice of medicine. Most doctors are engaged in well-paid piecework ($X for an examination, $Y for an operation, etc.) The government takes care of much of the practice management by functioning like a giant HMO. In the US, physicians take on much more of the burden of practice management themselves.

Economists know that people respond to incentives.

During my time in the US, I met many doctors who were dedicated to their profession. The US has built a health care system where doctors become salesmen. In a number of cases where the diagnosis or the solution is not so clear-cut, I encountered numerous situations where the doctor was subtly, or in one case not so subtly, selling the patient on a procedure.

About the same cost
Overall, I found that my out of pocket costs under the US system were roughly the same under the Canadian system. Under the US system, the main cost was health insurance. Under the Canadian system, the main costs were drugs and medical equipment and tests, which were discretionary.

The difference is universal access. There is something wrong when a former supreme court justice (a Reagan appointee no less!) worries about health care availability for her own family [emphasis mine]:

BIG NUMBERS, like 45 million uninsured Americans, are hard to grasp. But that number came home to me at a recent conference. The keynote speaker was former Supreme Court justice Sandra Day O'Connor. Her topic was our healthcare system, and her message was personal and anguished.

The gist was that even she lives in constant fear of major uninsured health bills. Not her own -- those of her son. He can't afford insurance because his son -- her grandchild -- has a preexisting condition.
I know that this post won’t win me many friends. For Democrats who look north for a model health care system, the Canadian system has many warts – and they are major ones. Cost pressures are relentless and the Canadian solution doesn’t address all the problems.

To the Republicans who say that they don’t want a government bureaucrat to make health care decisions for individual, I have two answers. Is having an accountant with green eyeshades make decisions, which is what is happening now, any better? Moreover, we have a legion of government bureaucrats in uniforms (that you most likely support) making decisions for you in faraway places like Iraq and Afghanistan. If you truly embraced free market principles, would the likes of Eisenhower, Westmoreland, Schwarzkopf and Petraeus performed any better if they had been given option based incentives to pursue their wars?

I have written before that the difference between the entrepreneurial spirits in America and Europe young engineers in the US want to grow up to be Bill Gates, where young engineers in Europe want a job with Siemens. If we were to transpose that analysis to health care, should young medical researchers aspire to discovering the cure for cancer or to commercialize the cure for cancer?

How you answer that question frames your response to the health care conundrum.


keithpiccirillo said...

One solution Europe has rendered Trans Fats illegal, and it was only this week UniLever decided to eliminate its use.
Sin taxes need to be increased dramatically but lobbyists usually prohibit action.
Like most issues that elicit emotion, extremists bog down passing legislation under the auspices that more study is needed. So it goes.
From an investment prospective generic TEVA has been a choice selection.

Telly said...

From a cost/benefit analysis point of view, wellness makes more sense than medical intervention. Sin taxes are one avenue, however education is essential. We cannot take for granted the stuff we put into our bodies. Not just food and drink, but creams, soaps, and lotions too. We need education about the side effects. We label all of our food, but how many people actually read the labels? Then how many of them know what they are reading and why. High fructose corn syrup is a horrible additive and has no nutritional value whatsoever. If it is the first or second listed ingredient, then the item is not really food. Highly processed ingredients are to be questioned too.

Then there is the issue of information overload.

Good article. You raise some really good questions. Thanks from another Canadian traveller.


Thomas J Venner said...

Well thought out comparison. As a Canadian I realize our system has its problems, but few people go bankrupt, lose their homes etc due to medical expenses. While wait times can be a problem, emergency care is fairly rapid. From the stories I've heard about the American HMO's, I'll take the gov't bureaucrats here (less likely to let me die to save a few bucks). I also understand it is common for medical insurers in the US to raise a persons premiums to unrealistic levels when they get a diagnosis of AIDS, cancer etc that will require a long period of expensive treatments.
That being said, I don't see the US moving very far on health care reform. To many powerful lobbies (promoting the status quo) and to much ideological arguing (mostly based on patently false. information).

Senta said...

The problem in the US "health care reform" is not a debate any more, its become a jihad between the left and the right.

I remember chatting with a older American man who (after learning I was Canadian) condescendingly told me about all the horror stories they hear about socialized medicine in Canada. I told him it is mostly not true and cited stats showing Canadian are generally healthier and live longer than Americans.

He told me that not because of health-care but because Americans die earlier because of homicides due to gun violence.