COLUMN

Expensive and dangerous myths

Canada’s medical system is one sick puppy, and the provinces that manage it had better find a cure

DIANE FRANCIS September 2 1991
COLUMN

Expensive and dangerous myths

Canada’s medical system is one sick puppy, and the provinces that manage it had better find a cure

DIANE FRANCIS September 2 1991

Expensive and dangerous myths

COLUMN

DIANE FRANCIS

A lower crime rate and access for everyone to health care make the quality of life in Canada considerably more agreeable than that enjoyed by most residents south of the border. But contrary to popular mythology, our medical system, as constituted, is flawed. While no one in his right mind, least of all me, would ever want to adopt a system so mutated, unfair and expensive as the U.S. system—which tries to function along free-market principles—let’s not kid ourselves. Canada’s medical system is one sick puppy and our provinces, which manage it, had better find a cure.

Ironically, the fiction that Canada’s system is unblemished is perpetuated by U.S. Democrats itching to bring the United States into the 20th century through public health care. While the Americans should be ashamed of themselves for not bringing care to everyone as we and virtually every other industrialized country have, Canadians should not be smug. All publicly funded health systems should draw a handful of lessons from the free-market approach of the United States.

The basic problem with Canada’s system is that it imposes no responsibility on either users or providers of services to be prudent in their use of facilities and services. Totally openended and gold-plated, our medical system is wasteful and is destined, this decade, to result in wholesale rationing of services and cancerous cost increases due to our aging population. The system is inefficient because there is no competition, nor are there any built-in incentives to save money while achieving results.

The result is abuse. And we are all guilty whenever we opt for an overnight stay in a hospital rather than for outpatient care; put grandmother in a nursing home when we could look after her at home; run to a doctor for an antibiotic rather than spend a day or two in bed; or insist on second and third opinions without regard to the cost. We are over-doctored, overserviced and overdemanding.

Proponents of Canada’s medical myth should

Canada’s medical system is one sick puppy, and the provinces that manage it had better find a cure

contemplate the fact that our costs are growing exponentially and are now the second-highest per capita in the world, after the United States. According to the Organization for Economic Co-operation and Development, the United States spent $2,683 per person in 1989 on medical care despite the fact that some 35 million Americans have no health insurance at all. Canada spent $1,918 per person, compared with the next-highest-cost countries like France, at $1,452, Germany, at $1,404, or Japan, at $1,179.

Japan gets the biggest bang for its bucks with longer life expectancies for both males and females plus lower infant-mortality rates than any of the 24 developed countries that belong to the OECD. Of course, such statistics belie the fact that education, pollution, culture, lifestyles, diet and the degree of poverty are equally important determinants of the health of a nation. Put another way, an ignorant, junkfood, chain-smoking culture can spend a fortune on health care without any increase in life spans. Education is preventive medicine.

Another factor in costs is demographics, or the population mix of a country. And it is in this regard that Canada has a great deal to be worried about. No satisfaction should be drawn

from the fact the Americans spend nearly 40 per cent more per capita on health care. Much of the difference is due to the fact that their population is older than ours, demographically speaking, which profoundly affects costs. In fact, Canada is one of the youngest countries among the OECD members and yet has the second-highest health costs. If demographic apples are compared with demographic apples, Canada probably has the world’s most expensive health-care system—an overhead that is already lowering our living standards by swelling government deficits and causing excessively high taxes.

The United States has 3.9 workers for every pensioner, while Canada has 4.5 workers for every pensioner. This ratio is important on two counts. Workers bear the cost of the system through income taxes. The number of pensioners is critical because they use health services significantly more than younger citizens. People over 75 rack up 10 times more medical expenses than people between 20 and 50 years of age. Obviously, the greying of Canada has grave implications for our economy as costs will soar this decade as the already overstrained system is put on the critical list.

Some 40 per cent of Canada’s $41.6-billion publicly funded health tab is borne by Ottawa in the form of transfer payments to the provinces, but the management of health care is up to the provinces. There are small moves towards responsibility. Some provinces, like British Columbia, require an annual user fee in the form of a premium. Alberta is considering sending regular statements to users so they realize how much they have benefited from the system, while Quebec is studying whether to make certain medical benefits a taxable benefit, thus costing the wealthy more and exempting the poor or untaxed. But most are doing nothing.

The venerable Economist magazine says that the fees-for-services payment method of paying doctors, used in Britain and Canada, be scrapped because it encourages over-servicing and overdemand by patients who are not directly charged. It suggests, instead, that doctors be organized into group practices serving a large number of patients. People could choose a group practice, just like Canadians choose their general practitioners. The doctors would be paid an annual set amount based on the number of patients in their group. Excess costs encountered by one patient would be subsidized by those who rarely used the system. If they keep their patients healthy and there are few visits to their offices, the doctors stand to make a lot of money. This scheme—known as Health Maintenance Organizations (HMOs) in the United States—would discourage needless office visits, treatments, hospitalizations and testing. It would get to the root of the cost problem, which is the lack of incentives to make the system efficient as well as effective.

But no matter what our doctors/health ministers prescribe as cures, the system must first be seen to be chronically ill. Too few Canadians agree with the diagnosis that our system is seriously ill. And unless we all agree to that diagnosis and scrap the mythology, there’s little hope for the patient.