The Health of Nations: Oh, Canada!

Next on our tour of health care systems would have to come Canada. I've been debating whether or not to do them because their setup is so well-known, on the other hand, it's also something of an anomaly that's often romanticized to a degree it shouldn't be, so it seems worth the effort. If you're new to the series, you can find France here and England here. Off we go.

Da Basics: Canada care is unapologetic, no-holds-barred single-payer. The single-payer, by the way, is not Canada as a whole, but each specific province, so it's not quite as monolithic as we think. It's financed by taxes, but the taxes vary from province to province, so there is a certain amount of variation in how the system pays its bills. But I'm going to stay away from that -- keeping you guys still for health policy is dicey enough, if I start throwing in tax policy, my blog will have tumbleweeds blowing through it (and maybe a shoot-out in the saloon, but that's another story).

Like England, Canada's insurance has nothing to do with occupation, age, citizenship, or any other variable. If you're on the grounds of our Northern neighbor, you're covered. The system covers everything, though drug benefits and long-term care vary a bit across provinces. What's interesting about Canada's incarnation of single-payer, though, is how pure it's kept. France and England, as we saw, both have a significant role for supplementary insurance beyond the government's basic offering. Not so in Canada, where add-on insurance isn't even allowed. That makes for a remarkably level playing field. Care varies only according to province (and, assumedly, individual doctors and hospitals), not according to class. Interestingly, low-income Canadians actually receive more care than do the affluent, owing to the higher rates of disease in poorer communities.

To be clear, there is a little bit of supplementary insurance floating around, but it can only be used for certain amenities, like private rooms. Hospitals are simply not allowed to bill private insurers for services covered by the provincial plans. So say nighty-night to the private sector.

Canada is a gatekeeper system, and 55% of their doctors are general practitioners playing that role. Specialists can see patients without a GP referral, but they don't receive the highest compensation from the government and so most won't do it. As that alludes to, Canada's doctors are paid on a fee-for-service basis, so there's no incentive (a la Britain) to withhold treatment. Hospitals, on the other hand, negotiate a global budget with provincial government, which is to say they get a lump sum rather than a fee-for-service. That makes adapting to changing circumstances or varying needs harder than it'd otherwise be, as the money is allocated from the start, rather than in response to circumstances.

Cost: In 1970, the year before Canada's health care system came online, Canada and the US spent about the same on health care, 7.2% and 7.4% of GDP respectively. By 1990, it was 9% and 11.9%. And by 2002, it was 9.6% and 14.6%. So while our health care spending shot up by 7.6% of GDP and still doesn't cover out citizenry, theirs had a 4.5% climb and got everyone in the goddamn country covered (remember: the first number is pre-universal health insurance). During the 90's, Canada's health care costs (as a % of GDP) actually dropped. Dropped! And these differences aren't a result of fewer services rendered. Indeed, Canadians, on average, spend more days in the hospital and have more visits with their physicians than Americans do. The lower costs are accounted for by three things:

1) Lower administrative costs. This one will blow some minds. Despite being a bureaucratic leviathan or whatever, America's administrative costs are 300% greater per capita than Canada's. So much for the vaunted efficiency of the private market.

2) When Canadians do spend a day in the hospital, it's much cheaper. Costs per patient per day are quite a bit higher on our side of the border.

3) Physician's fees and pharmaceutical prices, which are way higher on this side of the border.

The fiscal austerity of the 90's, which helped drop costs of the program, did make for a worse health care system, or at least one that netted less satisfaction. Wait times for elective surgeries increased, though it should be noted that Canadians wait, on average, less time for vital operations such as transplants. Oh, and the "hordes of Canadians rushing across the border for care thing"? Mostly myth.

The only verified cases are a) folks in the US on vacation or b) folks who don't want to wait for an elective procedure and can pay to do it out of pocket. Think about that for a second -- the primary criticism of the Canadian system is the "wait times/they come here" combo, but what's really going on is a prioritization of procedures and a few rich folks deciding not stand in line. So in Canada, it's the rich who can't get the care they want, but everybody can get the care they need. Here, the rich can get all the care they want, and many of our poor and lower-middle class can't simply wait in line for elective procedures -- they simply can't get them. It's all about priorities.

Recently, the Canadian government, In response to the drop in citizen satisfaction, substantially increased the program's funding (by $33 billion, I think) and began some restructuring. The effects of those changes aren't in yet, as they were just passed in 2003.

How Do We Stack Up? In simple ratings, Canada is 30th while we're 37th (according to the OECD). So they're a bit better, but it's not like the giant disparity we had with France, whose system takes the coveted top slot. As noted above, the Canadian system is significantly cheaper as a percentage of GDP than is the American system, despite the fact that the former covers everyone and the latter leaves a fair chunk of its population out in the cold. On the years of life lost metric, American women lose 3,836 years per 100,000 women and the men give up 6,648. The comparable Canadian figures are 2,768 and 4,698 respectively.

Canada's health care system, much more so than the others we've looked at, is a pure single-payer effort. It's really run by the government, private insurance is barred from interfering in any significant way, and so on. And despite the vaunted inefficiencies of government, they manage to cover their entire population with administration costs that're 300% less than ours per capita. Considering that 42 million of our folks aren't even in the system, the difference is even greater than that. Much of it comes from the simplicity of having the government pick up the tab rather than forcing doctors to haggle with insurers, but not all. In any case, that metric blows my mind.

In any case, Canada's got some problems. Wait times for elective surgeries can suck real bad and, according to an LA Times article from April 10th, some folks do cross the border to speed things up. But vital procedures are done quicker and, amazingly, any Canadian can get any necessary surgery done that they want. If elective, it may take some time, but there's never a question over whether they'll be treated. So next time someone goes off on Canadians-in-line to you, remember: the question they're facing is whether to allow the rich to pole vault over the poor. America looked at that calculus and chose the rich; our poor don't have mere waiting times to face, many of them simply can't get any non-emergency medical care. That doesn't happen in Canada, and it doesn't happen because their system is aimed at never letting it happen. Frankly, if our uninsured knew they could do it, it'd make much more sense for to flee to Canada for treatment than it does for the Canadian rich to cut their wait times by paying out-of-pocket here.

Sources: LA Times articles from Lexis-Nexis, Thomas Bodenheimer's Understanding Health Policy, OECD data sets, Matthew Holt.