Thursday, August 21, 2003
International notes from all over.
Canada. As reported in the Toronto Globe and Mail this morning, Steffi Woolhandler et al. have an article in today's New England Journal of Medicine that says the U.S. health system's overhead expenses $450 billion per year, triple that of Canada, and the gap appears to be growing. They attribute our overhead to the costs of maintaining a fractured private system of health care finance and delivery. After calculating each country's expenditures to a common currency and recalculating the difference based upon per capita expenditures, the real difference is said to be $209 billion. (See abstract here; full text requires subscription) Even if Henry Aaron of Brookings is correct (extract) that Woolhandler's group has overestimated our overhead expenses by $50 billion, the difference is striking. More fundamentally, however, he questions whether the exercise is a significant one for purposes of developing health care policy. A comparison of dollars spent on administrative expenses, or any other category of health care spending, ignores something fundamental about the health care system of any country, including ours:
"More fundamentally, the administrative structure of any nation’s health care system, and certainly those of Canada and the United States, evolves out of its political history and institutions. The U.S. health care administration, weird though it may be, exists for fundamental reasons, including a pervasive popular distrust of centralized authority, a federalist governmental structure, insistence on individual choice (even when, as it appears to me, choice sometimes yields no demonstrable benefit), the continuing and unabated power of large economic interests, and the virtual impossibility (during normal times in a democracy whose Constitution potentiates the power of dissenting minorities) of radically restructuring the nation’s largest industry — an industry as big as the entire economy of France. For these reasons, careful scrutiny of how the United States administers its health care system, with an eye to how it can be improved within the limits imposed by history, politics, and economics, is useful. But analytically flawed comparisons with other nations, whose systems differ greatly from our own and that we are most unlikely to emulate, may titillate policymakers and others but provide them with little useful guidance."The same issue of NEJM has a piece by Detsky & Naylor entitled, "Canada's Health Care System -- Reform Delayed" (extract). It is a useful political and social history of Canada's national Medicare system, often held up by health-reform advocates as a model worth emulating by the U.S. Taking a page from Henry Aaron, a reader would be wise not to try to draw explicit policy conclusions for the United States from Canada's experience. For example, the constitutional structure of Canada's system
"puts the authority for taxation largely in the federal sphere but the management of health care systems under provincial jurisdiction. The inevitable byproduct of this division of powers is recurrent squabbling among levels of government about health care. Because the federal government has very limited powers to promulgate legislation or regulations that control provincial health services, it can lead only by persuading the provinces to accept conditions on funds that it transfers to them. If the provinces fail to comply with the conditions set by the federal government, the only recourse is to impose financial penalties by withholding portions of the transfer payments. Most provinces, in turn, have resisted the imposition of conditions on federal transfers, and the resulting negotiations among provinces and with the federal government are usually intense. As a result, Canada’s health care system is best described as a collection of plans administered by the 10 provinces and 3 territories, each differing from the others in some respects but similarly structured to meet the federal conditions for funding. The simplicity of the five federal conditions is arguably one of the beauties of the Canadian system. They are the provision of all medically necessary services (defined as most physician and hospital services), the public administration of the system, the portability of coverage throughout Canada, the universal coverage of all citizens and residents, and the absence of user charges at the point of care for core medical and hospital services."Detsky & Naylor also point out that
"[t]he system is unique in the world in that it bans coverage of these core services by private insurance companies, allowing supplemental insurance only for perquisites such as private hospital rooms. This ban constrains the emergence of a parallel private medical or hospital sector and puts pressure on the provinces to meet the expectations of middle-classInterestingly, CanadaEast.com reports today that the Canadian Medical Association has joined a case before the Canadian Supreme Court challenging Medicare's government monopoly. CMA says it isn't advocating the creation of a private-care option, which is being advocated by others in the suit, but instead wants stirct guidelines to limit the long waits Canadian patients sometimes have to endure before getting care covered by Medicare. The alternative that CMA wants is a right to go outside the province or even outside the country (guess where?) at home-province expense once the maximum waiting period has been exceeded. Stay tuned . . . .