Disease Insurance
By William McArthur, former chief coroner for British Columbia. He is a palliative care physician and senior fellow in health policy studies at the Fraser Institute.
It is obvious by now that Bill Clinton and Al Gore intend to make health care a big issue in this year's presidential race. My country, Canada, has been cited often as a health-care model for the U.S. by virtue of the availability of "free" care and low-cost pharmaceuticals. Yet it would be a costly and tragic error for American seniors to conclude that they would be better served by Canadian-style health care or for American legislators to assume that they can selectively opt for price controls on pharmaceuticals without damage to health-care quality.
The Organization for Economic Cooperation and Development (OECD), which does comparative economic research for its 29 member countries, recently noted that disability-free life expectancy for female Canadians had fallen to 63.8 years in 1991 from 66.1 years in 1978. Could this reflect the fact that Canadians are increasingly denied health care by long waiting lists for most medical and surgical procedures?
At a median level, Canadians wait six weeks to see a specialist after their family doctors ask for the consultation. Having seen the specialist they will wait a further seven weeks before treatment is provided. In between, they will wait for tests, most of which rely on technology that is limited in supply. The median wait for magnetic resonance imaging is 11 weeks; five weeks for a CAT scan.
It used to be claimed that waiting times did not impair patients' health. Now, Toronto-area hospitals, reflecting legal concerns about lawsuits, ask patients to sign a legal release accepting that while delays in their access to treatment may have jeopardized their health they nevertheless hold the hospital blameless.
Meanwhile, a survey of technology availability by the OECD and the Fraser Institute shows that Canada ranks 21st in availability of CT scanners, 19th in availability of MRIs, sixth in availability of cancer radiation machines, while ranking fifth in terms of overall spending on health care. A survey of teaching hospitals in British Columbia, Washington state and Oregon revealed that at least 18 surgical and diagnostic procedures readily available in the U.S. are unavailable in Canada.
Canadians over the age of 65 use health care at four times the rate of those under 65 and thus are more exposed to the deficiencies. Moreover, the treatments elders need most often are the ones where the worst shortages exist. According to the Fraser Institute's annual survey of hospital waiting lists, the median patient waits 70% longer than is medically reasonable, in the view of their physicians. Waits for cardiac surgery are 145% longer than medically reasonable, 90% longer for orthopedics (hips and knees) and 75% longer for ophthalmologic (cataracts and lens replacement) surgery.
American politicians often claim that the Canadian health-care system controls costs. It controls some costs but certainly not wage costs. The average Canadian hospital spends about 80% of its budget on labor compared to 55% in a typical U.S. hospital. That's what happens when you have a single, politicized purchaser of labor services. A recent comparison of wages for unionized hospital employees and for unionized workers at private hotels found that hospital grounds keepers were paid 40% more, hospital painters 63.3% more and hospital cooks 28.9% more.
Where costs are minimized, it is often at the expense of patient access and comfort. As part of this model, all provinces subsidize pharmaceuticals for seniors. As is typical in such cases, the provinces have sought to contain budget outlays by applying vigorous cost containment to pharmaceutical suppliers. Savings have been claimed, but at the expense of the elderly.
Because of these price controls, Naderite organizations in the U.S. have been backing bus trips to Quebec to buy drugs for seniors in New York and New England. But few Americans know how they would be treated if they were residents of Quebec. A National Post article in 1998 claimed that a government study--not made public--had catalogued deaths in Quebec resulting from the lack of availability of lifesaving drugs. Efforts to reduce spending on pharmaceuticals doesn't take account of the fact that drugs are often the cheapest, most cost-effective way of treating many ailments. Nor do they acknowledge that government spending on drugs is less than 5% of the total health-care budget. Efforts to control drug costs also mean that many drugs available in the U.S. and Europe are delayed entry to the Canadian market.
All provinces require that when chemically identical and cheaper generic drugs are available that they be substituted for more expensive brand-name products. No one quarrels with this unless, as in British Columbia, newer and more effective drugs are replaced with older, chemically different agents that produce changed effects. A 64-year-old male patient of mine had serious peptic ulcers controlled for more than five years with a drug called omeprazole. The government required that he be switched to an older, less effective drug. Within three days he required hospitalization and a lifesaving blood transfusion. It took 10 days and several transfusions to stabilize his condition and he was, after huge needless expense, discharged on omeprazole, the drug that he had been on in the first place.
The extent to which my patient's experience is generalized is not yet known but is currently the object of careful study at the Fraser Institute. Similar "cost control" experiences have produced great increases in the costs of U.S. HMOs.
The experience that Canada has had with government oversight of its health-care system suggests that a narrow-minded focus on the cost of particular aspects of health care produces unanticipated consequences that directly affect the health status of populations. The fact that some drugs can, for the short term, be secured more cheaply in Canada does not mean that the American pharmaceutical policy should be shaped in our image. That some changes are necessary cannot be denied, but they should be made slowly, carefully and in the context of a primary concern for patients' health, not some short-term price discounts. As too many Canadians have discovered, you get what you pay for--or somewhat less.
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