Canada risks losing the health advantage
In a dramatic show of physician support for deep health care reform in the U.S, more than 2,200 physician leaders have signed a “Physician’s Proposal” calling for sweeping change. The proposal, published May 5 2016 in the American Journal of Public Health, calls for the creation of a publicly-financed, single-payer, national health program to cover all Americans for all medically necessary care.
If that sounds familiar, it should. These American doctors are calling for Canadian-style medicare. They want a decisive break from the expensive and inefficient private insurance industry at the heart of the U.S. health care system.
How ironic that at the same time U.S. physicians are calling for a single-payer health system like ours, Canada is in the midst of a legal battle threatening to pave the way for a multi-payer system resembling what has failed Americans.
What’s at stake? A trial about to begin in British Columbia threatens to make the Canada Health Act unenforceable.
The Canada Health Act is federal legislation that guides our health care system. It strongly discourages private payment for medically necessary hospital and physician services covered under our publicly-funded medicare plans. This includes out-of-pocket payments in the form of extra billing or other user charges. Legislation in most provinces further prohibits private insurance that duplicates what is already covered under provincial plans.
If patients are billed for medically necessary hospital and physician care, the federal government is mandated to withhold an equivalent amount from federal cash transfers to provinces or territories violating the Act.
At least that’s what supposed to happen.
Unfortunately, the last decade saw a proliferation of extra billing in several provinces, and few instances of government clawing back fiscal transfers. Perhaps, things will change. Minister Philpott recently stated that the government will “absolutely uphold the Canada Health Act.”
In BC’s upcoming trial, the plaintiffs – including two for-profit investor-owned facilities, Cambie Surgery Centre and the Specialist Referral Clinic – are attempting to have the court strike down limits on private payment. They support the creation of a constitutionally protected right for physicians to bill patients, either out-of-pocket or through private insurance, for medically necessary care, while also billing the public plan.
In other words, the plaintiffs want to undo our elegantly simple single payer system for hospital and physician care, creating instead a multi-payer system like the U.S. If their constitutional challenge is successful, the door will swing wide open in BC – and across Canada — for insurers to sell what will amount to “private queue jumping insurance” for those who can afford it, potentially harming the rest of us who can’t.
The outcome of this trial could be that those who can pay for care would jump the queue, drawing doctors and other resources out of the public system. Those who can’t pay would likely wait longer. Rather than a solution for wait times, private payment in the Canadian context would make them worse.
Global evidence shows that private insurance does not reduce public system wait times. The Achilles’ heel of health care in several European countries, such as Sweden, has been long waiting times for diagnosis and treatment in several areas, despite some private insurance. After Australia introduced private insurance to save the government money, those with private insurance have faster access to elective surgery than those without. Divisions in equitable access to care is one of the biggest challenges now facing countries that have adopted multi-payer systems.
Multi-payer systems are administratively complex and expensive, explaining why the U.S. health insurance industry spends about 18 percent of its health care dollars on billing and insurance-related administration for its many private plans, compared to just two percent in Canada for our streamlined single payer insurance plans. Hospital administrative costs are lowest in Canada and Scotland — both single payer systems – and highest in the US, the Netherlands, and the UK — all multi-payer systems.
For all of its warts in how we deliver health care in Canada, the way in which we pay for care – a single public payer in each province or territory — avoids the high administrative costs of multi-payer systems.
Abundant evidence shows private insurance is at the root of what ails the U.S. system. Dr. Marcia Angell, co-author of the Physicians’ Proposal, Harvard Medical School faculty, and former editor-in-chief of the New England Journal of Medicine, sums it up: “We can no longer afford to waste the vast resources we do on the administrative costs, executive salaries, and profiteering of the private insurance system.” A Canadian-style single payer financing system would save the U.S. about $500 billion annually.
Meanwhile, in Canada, abandoning our single payer health care system for a U.S.-style multi-payer system would be the worst possible outcome for Canadians. Let’s hope the evidence convinces the judge. The trial begins September 2016.
Karen Palmer is an advisor with EvidenceNetwork.ca, a health policy analyst, and Adjunct Professor in the Faculty of Health Sciences at Simon Fraser University.