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March 09, 2006

Against CanadaCare

As Matt alludes to here, international comparisons are a little tricky. But he's wrong to defend Canada's health care system. Now, it is true that Americans spend way more on health care, per capita, than other countries do. Taking the Canada example, our neighbors up north spend $2,535 per citizen. We spend $4,631. And the difference isn't in utilization: Americans pay much more for the same services as other countries do (the importance of this point, by the way, cannot be overstated, it's the primary reason our health care costs so much. Countries that bargain as a whole get far lower prices. It's exactly what Wal-Mart does. America, by contrast, has a bunch of mom-and-pop stores doing health care purchasing, and we pay the premiums because, in that system, suppliers have all the power). Presumably, given Canada's lower prices, if they wanted to match our spending and sink in another $1,900 or so per citizen, they could buy a lot more MRI machines, and probably make hospital food into haute cuisine to boot.

That said, Matt's wrong to hold Canada up as any sort of example. When the WHO ranked health systems, we came in 37th, they came in 30th. That we're truly terrible doesn't change the fact that Canada gets far worse health care than other nations do for the same price. Making America your benchmark is like recruiting for your beauty pageant at fat camp: it makes winning easier, but it doesn't mean you're the best. We can compare Canada to its competitors -- just as we can compare America to its competitors -- and see that, objectively, they get worse outcomes for their money. Canada offers mediocre care on their own terms, decent on ours, and poor on France's. Moving to their quality level wouldn't be worth the disruption.

Further, Canada's system is weirdly limiting and, for us, downright dangerous. Unlike, say, France, where private insurance has a secondary role, Canada allows for no entrance of private money into the system. Unlike other countries that guarantee floor coverage for all but allows those with more discretionary income to decide their own ceiling, Canada sets both the floor and the ceiling, capping the conceivable quality of care (they've instituted the old adage about socialism: everyone suffers together).

In addition to being a strange place to bar private spending (what could possibly be a more logical use of extra cash than better health care?), this has the secondary impact of reducing innovation and the entrance of new technologies. Since the only game in town is the Canadian government and they're markedly cautious, there's no space for the cutting edge to flourish, no way for new technologies to rapidly burst into the market. Given the size, wealth, and ingenuity of the American health care sector, a similar situation, transposed here, would be genuinely catastrophic for the speed of health care innovation, hurting both us and the world. A French style system would not bring the same problems.

March 9, 2006 | Permalink

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» [Ezra Klein] Against CanadaCare from Marketplace.MD Blog
Ezra Klein: [Matthew Yglesias is] wrong to hold Canada up as any sort of example...Canada's system... [Read More]

Tracked on Mar 9, 2006 11:31:34 AM

» Against CanadaCare from Dean's World
Ezra Klein, who's usually got something good to say, is a liberal who isn't afraid to say Canada's health-care system isn't the world's greatest and shouldn... [Read More]

Tracked on Mar 9, 2006 1:03:18 PM

» The Road to Serfdom: Communists among us? from Hayek, MD
Amidst a groundswell of progressivesupport for "Universal Health Care," Max Sawickyenvokes... [Read More]

Tracked on Mar 9, 2006 1:20:05 PM

Comments

This will be changing soon, with the recent Supreme Court ruling and the Province of Alberta's decision to allow private health care.

Posted by: Jacob | Mar 9, 2006 1:37:15 AM

True dat.

Posted by: Ezra | Mar 9, 2006 1:39:23 AM

Speaking as a Canadian (currently expatriated) I wouldn't think the first or even biggest problem facing healthcare in the U.S. would be in deciding what example to emulate, be it "CanadaCare" or "FranceCare" or what-have-you-care. I would think that the first and biggest problem would be in somehow convincing the vested parties concerned that healthcare is paradigmatically one of provision, not profit. I think profit can and should be a consideration, but not as it is the primary one. Until that shift occurs, such speculation is fairly meaningless I would think.

Also, while it may be a good thing for Canada to allow in private health insurance, I am exceedingly skeptical for the same reason I was skeptical a Free Trade Agreement was somehow going to be good for every Canadian. The FTA has proven to be spectacularly good for a small percentage at the top of the income scale, but neutral at best for just about everybody else.

Posted by: spark | Mar 9, 2006 2:24:59 AM

It has long struck me that a compromise that it would be possible to get most of the medical industry to agree to, if not all ideologues, would be to reform health insurance thusly:

1) Make each entire state one medical group. No medical groups defined by employers or anything else. Maryland is a medical group. California is a medical group. North Dakota is a medical group. Insurance companies put together their actuarial tables based on that, and are required to insure anyone who walks in the door with a basic 80/20 plan with a max out of pocket of $2,000/year or so.

2) Present all citizens with a cafe plan to choose from. Government picks up the tab, you pick the insurer. One of these is Medicare, which is available as an option to anyone who doesn't want a private insurer (and anyone who doesn't like the Gub'mint insurance can pick a private plan).


Since this is too wonkish for some people, and actually requires creative thinking, there's an even faster reform:

1) Put everyone on Medicare from birth.

2) Any private insurers who want to offer additional coverage may do so based on whatever they want.

It's quick, it's easy, and it fixes most of our problems without being a panacea. It also has the benefit of leaving neither the hard left nor the hard right particularly ecstatic.

Posted by: Dean Esmay | Mar 9, 2006 3:36:46 AM

Pretty good suggestions, Dean.

Ezra has it right on not using comparisons of the US and Canada/UK, but no argument based on other countries except those two will get off the ground. The language thing, proximity, and long-time friendships dictate only media and political consideration of Canada and the UK. As a people, we are surely among the least understanding countries in the world of foreign cultures and politics - and people are proud rather than embarrassed about this.

We probably should save the comparisons for the wonk community, especially regarding cost, program structure, and effectiveness. Americans just don't want to think anybody could have done it better already, on almost anything.

We have enough different kinds of US programs that we can point to as models:

- The Federal Employees Health Benefit Program (FEHBP) as a large risk pool that takes all applicants, negotiated/mandated minimum coverages, but administered by private insurance companies in a narrow and affordable range of prices.

- Medicare (without the new Medicare Part D drug coverage)

- Medicare Supplemental Insurance (private)

- The VA Health/Hospital system

- Medicaid for the poor and disabled

- Large employer models which provide a choice of health coverage - HMOs, PPO, HSAs, etc.

Each of these tools would need some modifications to be appropriate as elements of a hybrid plan for providing universal health coverage, and single payer UHC for some of the people, but probably not all.

Posted by: JimPortandOR | Mar 9, 2006 4:04:02 AM

Excellent post, I agree with you completely and the substance but:

Making America your benchmark is like recruiting for your beauty pageant at fat camp: it makes winning easier, but it doesn't mean you're the best.

did you have to go there? I'm not the world's most sensitive to casual sexism, but boy, did that simile clang.

Posted by: LizardBreath | Mar 9, 2006 10:29:51 AM

Not to make light of a fair point, but technically, isn't that fat-ism, not sexism? And I say this having been a very fat dude -- I wasn't winning any beauty contests.

Posted by: Ezra | Mar 9, 2006 11:32:54 AM

Excellent Ezra.

Posted by: Trapier K. Michael | Mar 9, 2006 11:34:18 AM

Fair enough -- I have a tendency to lump the two together.

On using Canada as an example -- isn't it at least somewhat rhetorically effective to say: "Canada's sysem is messed up in X, Y, and Z easily avoidable ways, and they're still doing better than we are"?

Posted by: LizardBreath | Mar 9, 2006 12:12:29 PM

Jim makes a good point about our knowledge of other systems, but I think we're the 'wonk community', so it's worth looking at.

Is there a good resource (preferably free and on-line, so I don't have to get up from my desk and leave the house) with decently complete information about how other systems work? Europe, Australia, and New Zealand all have enough in common with us to be worth looking at.

Posted by: johnmc1104 | Mar 9, 2006 4:47:55 PM

Try this.

It doesn't cover all nations, but gives a great overview of some representative systems.

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