Saturday, January 21, 2006


Demolishing a 'Universal Health Care' Canard

[Bumped to the top by popular demand! --Charles]

Shrimplate demolishes the argument promulgated by opponents of health-care reform that providing universal health care will lead to infernal waiting lists for surgery. Short version: Those waiting lists in Canada that the opponents use to scare us are for elective surgery. There's no delay for emergency surgery. Really. You could look it up. Shrimplate also makes the point the opponents of universal health care want us to ignore:

Carping about wait times for surgery is ridiculous in light of the millions of uninsured here for whom the only waiting list is the one we are all on: to heaven's gates, with a stop at the E.R. to run up a bill first.

See also: PRI's "Marketplace" program today. In which they did yet another of those stories about Canadians coming south when they don't want to wait for a test or proceedure available in Canada but not on a time schedule the patient wants. Trying to remember I believe the story considted mostly of a Canadian woman who paid more than 28 thousand dollars for a proceedure she would have had to wait ten months for in Canada and a spokesman from an American hospital who is marketing itself to Canadians wealthy enough to pay out of pocket for their services.

If "Market Place" wanted to do a story which hasn't been done to death already they should look at Americans who are forced to go to Mexico to seek treatments that they can't afford in the U.S. I'll bet there are tens of thousands more of those. Not that the market gives a damn about them. But you would think "journalists" might.

Yeah, right. PRI is selling out just as NPR has.
I bet there are more people crossing into Canada to get affordable prescription drugs than coming out of Canada so they don't have to wait in line for surgery.

Do you remember what the procedure was? I'm thinking it wasn't a heart bypass cancer treatment or some other procedure for a real health problem.

And it just occurred to me that one of the reasons there are waiting lists for elective surgery may well be that more medical resources are devoted to real medical necessities -- reconstructive surgery instead of nose jobs, for example. With the market-driven medical industry in the U.S., we have "boutique" clinics opening where we can't provide basic medical care for the nonrich.
I love the blog, always searching for people discussing these pressing problems. I run a non-proft organization devoted to helping individuals find affordable quality health insurance, and I believe the situation in the States is untenable. The idea that 45 million people in the richest nation in the world are without insurance is absurd.

I think the natural reaction is to look around to find a country that is doing it right and Canada is often cited as that country - but here are some facts about the single payer system reality that Canadians are faced with.

1) In a five country survey of health care conducted by Harvard School of Public Health specialists were asked if the quality of care has declined in their area. 63% of Canadian specialists said yes.

2) In the same study researchers looked at waiting times for an irregular breast mass biopsy (obviously not an elective procedure). They found that specialist in Canada stated that a woman needing such a proceedure had a 19% chance of waiting longer than a month for a biopsy. In the US 90 percent of patients are biopsied within two weeks. This study was published in Health Affairs in 2001. (Citation - Rober J. Blendon, Cathy Schoen, Karen Donelan, Robin Osborn, Catherine M. DesRoches, Kimberly Scoles, Karen Davis, Katherine Binns, and Kinga Zaperts, "Physicians' Views of Quality of Care: A Five Country Comparison," Health Affairs 20 (May/June 2001): 233-43).

This doesn't mean that the US system is superior, because there are 45 million Americans that wouldn't even get to see a doctor to find the irregular mass. Facts and figures like this do sugest, however, that the single payer system in Canada works to reduce quality of care in that country. I think we need to work harder then just relying on Canada to guide our health care policy. At AAESEP, we believe in strength in numbers and that by creating larger risk pools for the individual market and by educating our members on how they can maximize their health care under particular policies we can give more Americans quality health care. We are always looking for guests to write health insurance pieces for our newscenter area - if you or any of your readers are interested contact me at If not I look forward to reading more of your opinions here.
Thanks for the invitation, Tyler. I find my days are too full to write the articles I have committed to writing. But perhaps MEC or PW would like to take you up on it.

I agree that Canada has a waiting list problem and a quality of care problem. The issues you mention are serious and need remediation.

However, they look to me as if they could be solved by adding a little bit of money to the system, by better use of diagnostics, or perhaps by use of physician's assistants. The Canadian system consumes so much less than the US system that it could substantially increase funding without coming anywherer near being the financial burden the US system is.

By contrast, US spending would have to increase substantially just to cover everyone (contrary to the myth, not everyone gets treated; many stay away from doctors even in case of fatal illness for cost reasons and others are outright denied care). That's the fair comparison, and by that standard, Canadians get better care on *average* for half the price.
There is plenty of delay in the American non-system. If you can't qualify for free care, and the large majority can't and you can't afford out of pocket healthcare your only choice is to wait until you are so badly off that they have to take you in the emergency room. This is no secret, especially to those of us who have spent long parts of our lives without health insurance.

Healthcare is rationed on the ablity to pay in the United States. It is rationed on a less arbitrary basis in Canada. What Charles says about the cost comparison is true. If Canada fully funded its system (their federalism is as crazy as ours) then it would be a lot better.

One thing that has come to my attention lately is the assumption of economists, politicians, "journalists" that the middle and lower classes are an unaffordable luxury and that their basic needs have to be neglected for the economy to be healthy. Of course, they do this trick by defining a healthy economy in terms most favorable to the wealthiest people. They do it in countries around the world through the World Bank etc.

So. My fellow citizens, it's just too bad. The country can't afford for you to live, nevermind be healthy.
I agree with your comments Charles and ept - my point is only that as bloggers, journalists, etc - if we want to create change we have to have a compelling alternative to the current system. So much of the conversation in the blogosphere is centered around US v. Canada.I think both systems are broken and that if we hope to win the hearts and minds of a wider audience we need to come up with new ideas to create what we all really want which is "quality affordable health care for everyone in this country." That goal is not being met in either the US or Canada right now - in the US the "everyone" and "affordable" parts of our goal are not being met, in Canada the "quality" is missing.
You know what the cost drivers are, Tyler:
1. Insurance company profits.
2. Doctors's (and to a lesser degree RN's) salaries.
3. Unnecessary charges especially in the last six months of life.
4. Duplications in high tech equipment.
5. Some ineffective, generally wildly overpriced medications.
6. The failure to prevent, especially by giving the poor access to medicine.
7. Medical fraud.

Canada's system costs roughly half as much as ours because they have essentially eliminated #1, #3, #4, #5, #6, and in large measure #2 and #7. They probably should ease back and pay doctors more (and have more of them) and have more high tech equipment.

As with the Hebrew children told to make bricks without straw, looking for care solutions cheaper than Canada's is likely to end up as a muddy mess. At least in the short term. In the longer term, there is productivity. How can productivity be improved? I would suggest the following:

0. Start from Canada's system of universal coverage and improve on it. Then,

1. Increase the role of PA's.
2. Make walk-in screenings universally available for diabetes, cholesterol, and so on.
3. Increase basic medical education, including sex, reproductive, and child rearing education in the public schools.
4. Promote competition in the pharmaceutical industry.
5. Increase research on conditions that require long-term care (e.g., schizophrenia, autism).
6. Create community clinics to provide basic medical care to everyone.
7. Promote in-home care for the elderly, possibly by providing tax subsidies to family members who care for them.

The point is that Canada has a system that is more or less functional. It needs tweaking at the edges, but its faults are minor compared to the horror stories that are becoming ever more characteristic of the US system.

If you instead try to get to a functional system starting from the unholy mess the US system of healthcare is becoming, well, you just can't get there from here.
Another thought: visions are nice, but it's generally better to work incrementally.

This is what productivity ultimately *will* bring, assuming only we can hold the planet together long enough is this:

1. Everyone will be provided a completely confidential analysis of their genetic risk factors at birth.
2. A computer program will replace standard diagnostics (this actually exists in prototype form), replacing most physicians.
3. The major health threats-- alcohol and tobacco-- will have been eliminated or replaced with safe substitutes. Clean energy will mean that heavy metals and pollution will have been all but eliminated. Environmental remediation to remove dioxins, PCBs, and other persistent pollutants will have been done-- using technology that has been available for at least 10 years.
4. Public health to guard against bacterial and viral diseases will be one of the major medical expenditures.
5. Assistive devices will permit the elderly to remain in-home.
6. Our heirs will wonder why we made such a big fuss over it.

If you need a vision, that's where we are headed.

Assuming we don't destroy the world that sustains us in the meantime.
That is a fantastic vision Charles. Your suggestion that we start from Canada and improve upon it in increments is a good one too.

However, each of your suggestions for improvement adds cost to an already costly switch for the country. I think that starting from our current policy and working towards Canada might work just as well. Further, I don't think you go far enough to answer questions about quality loss - which is my primary concern with the switch.

The media is buzzing about the "consumer driven health care" revolution that technology promises to bring, how costs will be down, insurance affordable and the country healthier. While I don't necessarily agree that CDHC is the answer to all of the ills of the American system, I do believe it will help because of the level of individualization it affords.

Yesterday I had a conference call with a company called health A to Z ( they are offering complete online health coaching through various disease management programs, they offer a risk assessment that points to various diagnostic testing that should occur and specific times and questions to ask health care providers. This is the type of innovation that will work to reduce costs and premiums making care affordable. Actually if you get a chance to look at the website let me know if you think it is worth the rather large sum of money they are asking to provide the service to my membership, I actually think it is.

When you take a larger view then America v. Canada you will see a world that is moving towards privatized health - in Sweden major health services are being privatized, German public hospitals are being privatized and the Australian government has granted tax incentives for people who purchase private insurance. The worldwide move is towards our system and away from Canada's and the reason, I believe, is quality of care. If I believe that we should start with our system and improve upon it to make it rival Canada in the percentage of population it offers services to the question becomes - What should we do now to improve the American system?

1) Allow individuals a tax credit for health insurance expenses - why not we give it to corporations; this fix makes logical and fiscal sense.

2) Fund CDHC innovation - use technology to create cost conscience educated health care consumers. This lowers cost and increases health.

3) Pass AHP legislation that ends state by state insurance regulation for insurers that have proven to the federal government that they meet necessary bonding requirements. This allows associations to move beyond State by State insurance for their members allowing large risk pools and the rationalization of highly regionalized price differences.

Sorry this is a kind of rambling response – just have a ton of thoughts and ideas in my head right now and had a couple too many cups of coffee this morning. Thank you very much for sharing your vision.
Since this is a topic of interest, Tyler, I will re-date the post on Saturday so that it appears at the top of the page, rather than scrolling off into archives.

As for knocking down state barriers, it's ok if it isn't coopted (as is so much federal legislation) into lowering standards. The Internet is great for educating people, including on issues of cost consciousness. The problem you have to get around is that private interests want to dominate that process of "education," and they can end up turning it into advertising.

As for tax credits, they tend to work for upper middle class and wealthy taxpayers. Everyone less well off ends up getting screwed. One reason is that they generally involve putting aside money up front. Second, it often costs CPA money and extensive recordkeeping to prove you qualify. And, of course, they often get turned into tax deductions, which only help the affluent.

So, I am not opposed to any of these ideas. Whether they help or hurt really depends on execution.

There may be moves here and there toward privatization, but I don't see it as the future. We were told the same thing about pensions, that people could be so much richer if they would just invest in the market. Ask Britons or Chileans if they would repeat privatization now, and they'd say no. Enron was yet another "brilliant" privatization scheme until it was suddenly discovered to be not quite so much brilliance as burglary.

There's a simple fact in every profit-based business: you must increase revenues or cut costs. When cost-cutting is achieved through genuine improvements in the business process, great! Everyone wins. If companies raise prices too much or cut quality, the market brings in competition.

But insurance is a very different game than most businesses. First off, the easiest way to cut costs is by dumping anyone who gets sick-- or figure out who is likely to get sick and deny them insurance. Second, if Detroit raises its prices or cuts its quality, there are plenty of substitutes. Not just Japanese cars, but bicycles, buses, and legs. But HMOs achieve near-monopoly (or at least oligopoly) status in many areas and there are no real substitutes. Some doctors and many hospitals won't even take uninsured patients. There are clear statistics to show that uninsured people die far more often from the same condition than insured people. The clear implication is that, whatever we say we are doing, we end up denying them care.

Not to belabor the point. All of this stuff has been beaten into the ground by The American Prospect and the EPN affiliates. Bottom line is that Americans don't live as long as people in many industrialized nations, despite the huge amounts poured into medical costs and despite major advantages that the US had in terms of communication and research.

So, instead of thinking of my proposals as adding to the cost of the system, consider that universal health care begins from a cost base so much lower than privatized health that you can afford to add services. Indeed, one of the main services you want to add is insuring the uninsured and underinsured.

Second, recognize that I have proposed what is called a "cut-and-invest" strategy. In simple terms, stop doing wasteful things (like making poor people go through the emergency room to get basic medical care) and use the money so saved to improve productivity and further reduce costs.

Let's take a relatively simple example, care of the elderly, and permit me to use very round figures in calculations. Option 1 is a nursing home. Depending on their medical condition and the quality of care they get, that will costs no less than $20,000 and up to, well, whatever you want to pay. A reasonable figure might be $40,000/year for an essentially healthy person.

Option 2 is professional home health care. A paid home health aide costs something on the order of $3,000 for one hour of care administered daily. But because most people want pre-screened aides, the cost doubles. And, since most aides (and their agencies) don't want to send people for fewer than three hours per day, an elderly person with moderate disability costs $18,000 to stay at home. This doesn't count property taxes, utilities, and food costs that would be paid by the nursing home, but it's less than the $40,000 that I propose as a figure for nursing home cost.

If the person required round the clock care, though, this could easily run to as much as $150,000. So, there's a crossover point at which it is cheaper to ship people to nursing homes.

But Option 3 is to remove one person from the labor force-- probably a child of the older person-- to care for that person full time. For most American families, this would be the most cost-effective option, except they can't afford the income loss and so they dump their parent on Medicaid.

But what if we paid children to take care of their parents? Median family income amounts to about $30/hour. Many families have a wife earning $7.50-$10 an hour, and the husband making up the difference. If the government paid the wife $20,000 per year to take care of her Mom at home, it would amount to a raise for the wife and savings to the government!

In fact, you could throw in 40 hours of training from an RN on patient care and a monthly home visit by a physician and still come out way ahead.

Now, take this to a national level. If we could cut elder care costs through intelligent use of home healthcare, we could use the money to invest... in child healthcare, another area where we squander national wealth. Through, e.g. untreated heavy metal poisoning, we leave children incapable of being productive members of society. Or maybe in reducing tobacco use, another unaddressed health issue.

As for HealthAtoZ, it's interesting. Some of these are the services that physicians are supposed to provide their patients, like risk appraisal. Some services (like E-Health) risk becoming mechanisms for cost dumping, as we found Wal-Mart excluding applicants based on perceived health risks, but they could also be used responsibly. Many companies simply exclude people at hire on the basis of age or weight or health. It saves them money but wastes huge amounts of national wealth.

So, some companies will find this a means to cut healthcare costs. But why does it need to be a service external to a company? What I would wish is that managers would be trained to understand basic medicine and to see their employees health as a resource to be conserved and developed.

Despite buckets of rhetoric, I have never seen that done in the workplace. In the US, employees are just fruit to be squeezed until the juice is gone, then thrown away.

Until there is a change of national heart, I foresee no sustained gains to national health.
Sorry for the delay in responding to your well thought out....well thoughts. I have been traveling but wanted to respond.

Your add on's to the Canadian system included:
1. Increase the role of PA's.
2. Make walk-in screenings universally available for diabetes, cholesterol, and so on.
3. Increase basic medical education, including sex, reproductive, and child rearing education in the public schools.
4. Promote competition in the pharmaceutical industry.
5. Increase research on conditions that require long-term care (e.g., schizophrenia, autism).
6. Create community clinics to provide basic medical care to everyone.
7. Promote in-home care for the elderly, possibly by providing tax subsidies to family members who care for them.

I think that each of these goes a long way towards dealing with the quality issue I have raised. And, maybe because I just got off a plane and am tired, I really can't think of anything original to respond with, other then these two rather boring comments

1) Single Payer Systems stifle innovation - I know I don't have to go too far in depth with this argument as it is a big one on the right. Is it true? Well money obviously does spur innovation in this country, one only need look at the pharacuetical advances of the past 15 years to gauge the effectiveness of money as a carrot to innovation. Does it matter? We might be willing to risk some innovations for increased quality of care for all Americans - I think we all agree that we all deserve it. Which brings me to ----

2) The National Will - you brought this up yourself, we are working within a system that is adverse to change, and within a country where creating change is very difficult. This is why I think I base my pragmatic approach (well I like to consider it pragmatic anyhow) on doing our best to fix our current system, rather then arguing the other way. It is sad that this point is the last because the discussion moves from imaginative and exciting to depressing rather quickly when we are limited in our potential solutions.

I wanted to thank you for your thoughtful comments, and I will check back often. In the meantime if you need a platform for innovative solutions to the current system please feel free to contact me. Regards.
Well, we're glad to have you posting, Tyler. And no rush. If you want, I can bump the thread or we could start a new one.

Tyler asks whether "Single Payer Systems stifle innovation"

Insurance is one of those areas where I am not too fond of innovation, having just been innovated out of a few thousand bucks by those [insert sound of rushing waterfall].

As for the business end, as long as there's any economic return, there will be market entrants. This is basic economics. If there's lots of economic return, there will be lots of entrants, unless there are large entry barriers. In pharmaceutics, entry barriers are large. So, despite the rich profits enjoyed by pharmaceutics, it has consolidated and consolidated until it's ceased to be a genuinely competitive system. Pouring more money into such a system, as was done with Medicare D, simply increases shareholder profits.

Single payer doesn't mean single provider, of course. But what it does is create a common price that each provider must use as a benchmark, and that creates the cost pressure that is the real source of innovation. Let's suppose there are two eye surgeons, and that the net economic return for the procedure they use is zero. They can either leave the market or change their cost structures. One surgeon chooses to use less experienced staff and set up shop in a cheap office. The other surgeon comes up with a new technique that allows him to do the same work in half the time. Over time, two things happen. First, the skinflint surgeon figures out the new technique. And the inventive surgeon comes up with an even better technique. So, over time, the cost of the procedure falls. And then taxpayers say they want to lower the reimbursement for this procedure and add other necessary services from the savings. It's a virtuous circle.

As for whether reform will occur incrementally or discontinuously, I don't know. My guess is on the latter. Harry Truman proposed national health care half a century ago, and the proposal was very popular. The right wing succeeded in repressing it for ca. 17 years, and then there was a discontinuous change with Medicare A. This was popular. Then another discontinous change came through SSA, and again this was popular. A third through child health services. Every time, the government solution proved to be less expensive than for-profit medicine and radically improved the general health level of the nation.

What has exploded is the cost of the for-profit side, although demographics will also strain Medicare. At this point, we're headed for a crash, because energy price pressures are going to collide with deficit service costs and health costs. My guess is that when enough middle class families know what it's like to put off going to a doctor because they're afraid they'll end up the modern day equivalent of an indentured service, change will become inevitable.

At that point, big dreams will trump small. Until then, every little bit helps.
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