How is hospital insurance working out?
The government plans have won their big objective— twelve million Canadians are no longer haunted by ruinous hospital bills. But what about the critics’ predictions? Are the hospitals going broke? Are their standards falling?
A national report by ERIC HUTTON
WITHIN THE LAST fifteen months federal-government agreements with nine provinces (Quebec is the exception) have put into operation hospital insurance programs that virtually end hospital bills for twelve million Canadians—more than nine out of ten of the people who live in those provinces. Now it’s in effect, how is government hospital insurance working out?
Doctors, hospital officials, hospital employees and sellers of commercial insurance regard it with varying degrees of favor, reservation or disfavor. It w’as not, however, designed for them but for a group so large and important that it includes just about everybody: the patients and future patients of Canadian hospitals. Therefore all questions about hospital insurance can be answered most pertinently by inquiring what it means to the public.
What docs government hospital insurance do for the individual? Is his health better protected? Does hospital care cost him less or more? Are his hospitals better run? Is he able to get into a hospital in time of need or have they become seriously overcrowded because they are free? Has the plan affected doctors’ services to the sick?
To answer the first question—What does hospital insurance do for the individual?—the patient’s type of insurance coverage depends on the province in which he lives. In Newfoundland, Nova Scotia, Alberta and British Columbia, all residents are automatically covered, without having to pay premiums. ín New Brunswick, Manitoba and Saskatchewan all residents are required by la.w to join the plan and pay premiums continued on page 38
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How is hospital insurance working out? continued from page 29
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“It's as though all patients suddenly inherited a fortune,” says a Vancouver medical director
of approximately two dollars a month for individuals and four dollars for families. The Ontario program requires all employee groups of fifteen or more to belong and pay similar premiums. For others, membership is voluntary. Prince
Edward Island, which joined October 1. uses the Ontario system, but with employee groups of five or more.
What an insured person is entitled to can best be described as “everything that is done for him in a hospital.” This in-
cludes bed. meals and nursing; drugs and medicines; laboratory, X-ray and other diagnostic procedures; use of operating room, anesthetic equipment and surgical supplies; use of therapy equipment. and all services done by persons
who are paid by the hospital, including staff doctors and technicians. The only costs not covered by government hospital insurance are for such trivial items as telephone calls and the cost of drugs or equipment he takes home for use during convalescence — rental of crutches, for example.
If a patient is treated by his persona] physician in hospital, the doctor’s fee is not covered by insurance. But the range of diseases and disabilities for which a patient can receive free hospitalization is wide. He can even be admitted for plastic surgery — provided it is “medically indicated” and not for motives of mere vanity. He can go into hospital for dental surgery, provided the operation requires hospital facilities beyond what are available to a dentist in his own office. If a patient needs a skin graft, the donor’s stay in hospital is covered by the patient’s insurance. Mental illness and tuberculosis are not covered by the program, however.
Is the insured person’s health better protected? On several counts, the answer is yes. First, the patient’s freedom from hospital bills plays a measurable part in his recovery in many cases. This “psychological medicine” is well recognized by doctors. “I count a patient two steps on his way to recovery if he doesn’t have to worry about money,” says one doctor.
No doubt of what to do
Another benefit to the patient is closely related to this fact. Doctors, too. worry about their patients’ finances—and quite ethically. A patient’s symptoms and his solvency may both influence the doctor’s diagnosis. And with hospital insurance the doctor can concentrate on the symptoms and disregard the cost.
"A man comes to me with a bellyache,” explains a doctor with a smalltown practice. “My office examination shows nothing suspicious. I know that man’s and his family's medical history. They’ve been my patients for years. I feel it’s almost certainly not cancer. I also know he has no savings and is having a hard struggle to make ends meet.
“What shall I decide? Give him a simple prescription for indigestion—or send him off to a city hospital for an expensive series of X-rays? I know that the costs of travel, hospitalization, diagnostic procedures and loss of pay at his job are going to mean real hardship for him and his family. Before hospital insurance I would probably have given him the prescription. Today, there's no doubt what I would decide: off to the hospital with him.”
Not only is a doctor more likely to place a patient in hospital if that offers even a slight advantage in diagnosis and treatment, but he is also inclined to prescribe what he considers the ideal amount of drugs, medication and therapy since those are part of the “hospital insurance package,” and have no bearing on the patient's ability to pay.
"It is,” comments Dr. Lawrence Ranta. assistant medical director of Vancouver General Hospital, "as though all patients suddenly inherited a fortune. Each of them has a bank account, a nest egg, that can be used only to buy hospital service.”
Is that hospital service, which has to be
paid for by taxation and insurance premiums, costing more? The answer, as far as Canada as a whole is concerned, is yes, on two counts. First, hospital costs have been going up for several years in much the same way that shoes, beefsteak and everything else has been going up. The government hospital insurance plans budgeted for a sixto eight-percent increase in hospital operating costs in the insurance year 1959. approximately the same increase as in recent pre-insurance years.
Second, the increased use of hospitals will result in a larger national hospital bill. Just how much larger, nobody wil' know until figures for the first full year of government hospital insurance are compiled. But insurance officials believe this increase will be moderate. For one thing, many hospitals — especially the larger ones — have been operating at or near full capacity for years. For another, insurance regulations tend to replace chronic patients with active-treatment cases who can benefit from the use of expensive equipment which forms part of the cost of operating a hospital whether it is used or not.
But the cost of hospitalization to the individual patient is very much lower under hospital insurance. Like any other form of insurance, government hospital insurance spreads the risk of unexpected “catastrophic" costs among everyone to whom an emergency might happen instead of among the fewer persons to whom it does happen.
In the year before government hospital insurance, for example, two and a quarter million residents of the nine provinces were patients in public hospitals and paid bills amounting to two hundred and thirty-five million dollars. This year the number will be somewhat larger, but the cost to individual patients will be nominal.
The actual cash outlay will vary with the provinces. In Newfoundland the only cost is an unidentifiable part of the provincial taxes. Alberta covers all residents without premium or special tax, but charges patients one to two dollars a day while they are in hospital as a deterrent to unnecessary use of facilities. British Columbia charges a similar deterrent fee, and raises part of its share of the cost of the program by a sales tax. Thus visitors from other parts of Canada and even the United States contribute to the hospital costs of B. C. residents. Nova Scotia, also through a sales tax, adds to its hospital insurance fund through visitors’ contributions. Quebec, which has not entered the plan, involuntarily contributes to the hospital costs of other Canadian provinces through federal taxes.
The plan falls about seven percent short of full coverage of the residents of the nine provinces for two reasons: In Ontario and P. E. I. not all the people who may volunteer to join have done so; and in the provinces where membership — and the payment of premiums — is compulsory, about three percent of the people are “holdouts." They are subject to prosecution and fines.
Flow much will patients actually save in hospital bills? For a few' extreme cases hospitalized for the whole year, the saving will be as much as $7,500. The average bill for all patients covered by government hospital insurance this year will range from $120 to $250, depending on w'hat it costs a particular hospital to care for its patients during their stay, which averages ten days. One financial break insured patients lose is deduction of hospital costs from income tax, permitted when they paid the bills
themselves or by means of commercial insurance policies.
The quoted rate of hospital care has gone up sharply. To take a typical example. at the Oshawa. Ont., general hospital the old ward rate was nine dollars, the new rate $19.80. But. as in all other hospitals covered by the plan, that is because the old rate covered only bed, meals and nursing. The new' rate covers use of all the hospitals’ facilities. Insurance pays for standard ward accommodation. Semi-private or private rooms cost patients three to six dollars a day extra.
Is insurance overcrowding hospitals?
When hospital insurance started, hospitals already operating at capacity found their waiting lists doubled in some cases; hospitals that usually had beds to spare quickly filled up. It seemed that warnings from many sources, including the Canadian Medical Association, w'ere proving valid: insurance would lead to serious overcrowding. Yet by the middle of the year most hospitals could report that if the demand for beds was not back to normal, it was back to manageable proportions.
There were several reasons for this. January brings a heavy demand for hospitalization. anyw'ay. People put olf entering hospital until after the ChristmasNew Year holiday. People go home for the holiday and want to get back in. People break bones in falls on ice, get heart attacks shoveling snow or pushing frozen cars. In addition, many people postponed entering hospital for operations or treatment in the late months of 1958. waiting for hospital insurance to take effect.
But even when this temporary log-jam
of patients cleared, the supply of hospital beds still couldn’t meet the demand. The chief bottleneck was the high proportion of chronic patients, most of them holdovers from pre-insurance times, who stayed on long after active treatment was completed. A typical complaint was that of Earl Davey, board president of the Greater Niagara General Hospital:
"Fifty percent of our beds are occupied by people who shouldn't be there, while we have a waiting list for operations as long as your arm. We have our operating rooms and an excellent staff,
but no beds. The situation is a mess."
At the Kitchener-Waterloo, Ont., hospital, patients who overstayed their medical needs during January prevented ninety other patients from being admitted. The Oshawa. Ont., general hospital had seventy chronic patients occupying activetreatment beds.
Today most of these patients have been placed in less expensive accommodation, at home, in nursing homes, or in institutions for the chronically ill. This feat of hospital logistics was achieved by a new implement in hospital management.
admission and discharge committees. A and D committees, as they are called, consist of about a dozen staff doctors, and have the final decision, in consultation with the patient's own doctor, as to whether a patient needs hospital facilities in the first place, and as to when a patient no longer needs active treatment in a general hospital and should be discharged or transferred.
Decisions of the A and D committees are based purely on medical considerations. The committees’ activities have not resulted in patients being discharged be-
fore their condition warrants it, hospital authorities say. In fact, the average patient stays in hospital a fraction of a day longer than before insurance came into effect.
Are hospitals better run under government insurance? The program has cer tainly eased the financial problems 01 day-to-day operation for many hospitals that formerly struggled along under stringencies imposed by recurrent deficits. (In the year before government insurance hospitals in the nine provinces ran sixteen million dollars in the red.)
Government insurance officials keep close watch on hospital budgets—but not as close as hospitals themselves often were forced to keep. Operating costs allowed now. for example, stretch to such comparative luxuries as new sheets. A year ago many women in hospital auxiliaries were kept busy darning hospital linen. Now they can turn their efforts to more constructive measures for the welfare and comfort of patients.
Hospitals can be run more efficiently, too, because their budgets let them compete on slightly more even terms with other employers for the services of technicians and nurses. The non-professional hospital workers w'ho serve patients— orderlies, maids, cleaners, kitchen help —have been getting better pay and shorter hours since hospitals have been financed by government insurance.
“We haven't tried for as much as we think the workers are entitled to,” says Albert Hearn, Canadian head of the Building Services Employees’ International Union, "because we know that hospital financing will always be tight. But we’ve noticed that hospital board members— many of them businessmen accustomed to dealing with much tougher union demands—seem relieved to be able to give hospital workers a better deal.”
But the better deal for hospitals and their staffs, and therefore for patients, may be temporary, the Canadian Hospital Association has warned. This is because although the government plan pays the operating expenses of hospitals, it does not cover payment of interest or principal, or allow for depreciation.
Some hospitals, built by fund-raising campaigns supplemented by government grants amounting to about one third the cost, are free of capital debt. Others have raised building funds principally by bond issues and are heavily in debt. Many of these are hospitals operated by nuns in Roman Catholic religious orders.
Religious hospitals carry five times the interest burden of lay hospitals. One hospital alone. Ottawa General, operated by the Grey Nuns of the Cross, must find more than half a million dollars a year to cover interest on its capital debt and depreciation.
Hospitals do get some help with capital debts. This year the Ontario government granted Si50 per bed for this purpose. Salaries that would otherwise go to unpaid sisters in Roman Catholic hospitals are included in operating costs granted by government insurance, and this money swells the hospital treasury. Half the extra charge for semi-private and private rooms is kept by the hospitals.
But the Ontario Hospital Association contends that in some cases this help is not enough, that already hospitals are finding it difficult to borrow money for refunding, and that fund-raising cam-
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paigns may meet with indifference from the public under the mistaken impression that “the government is looking after the hospitals.”
Future patients are not. however, likely to be deprived of hospital accommodation because hospitals “go out of business.” The people concerned agree that the problem will be worked out somehow. “No government would ever allow a hospital to close for debt," said one official. "The public needs hospitals too badly.”
Have doctors’ services to patients been affected by hospital insurance? The answer is that insurance has made patients both less of a problem and more of a problem to doctors.
Apart from the fact, mentioned earlier, that doctors can prescribe fuller treatment for patients who do not have to bear hospital costs, the collection of fees is easier—both on the patient and for the doctor who does not have to feel he must share his fee with the cost of hospitalization.
"We cannot deny this is a factor,” said an official of the Ontario Medical Association, “especially in areas where few people belong to medical service plans.” (In big cities and industrial towns doctors find that as many as eighty percent of patients carry some medical-fee insurance.)
But government hospital insurance posed one serious problem for the medical profession. Medical students have traditionally received an important part of their training in the wards of “teaching hospitals” associated with medical schools. Seventy of Canada’s largest hospitals are in this class. The ward patient was often a charity case, and even if he were not. all ward patients in teaching hospitals are treated only by staff doctors who in many cases were also medical professors who made their rounds with a retinue of students. This often resulted in more thorough attention than the patient might get from his own doctor, and many patients enjoyed the attention.
Others did not. They resented the "charity case" implication. They resented the impersonal attitude toward them that teachers and students sometimes took. Women in particular were reluctant to submit to intimate examinations by a group of students.
When government hospital insurance came in and, in effect, made all patients private patients, the Association of Canadian Medical Colleges expressed concern to Federal Health Minister Monteith over the availability of patients for teaching purposes. Monteith said he recognized the problem, and gave the colleges a hint that could solve it—and incidentally give the patient s role in medical teaching new importance.
I can do no better,” said the minister, than point to the experience of British Columbia and Saskatchewan which have had public insurance plans for a number of years and which, I understand, have evolved satisfactory arrangements."
The methods used in British Columbia and Saskatchewan to secure patients’ cooperation as “teaching material” turns out to be simple yet effective: Take the patient into your confidence, treat him considerately, make him part of the team.
Dr. Irw'in Hilliard, professor of medicine at the University of Saskatchewan, gives an example of why only one out of every sixty patients in the university’s hospital at Saskatoon decline to be "taught on” by professors:
"Patients are never whisked away to
a lecture without consultation. Their meals are arranged ahead of time or kept warm until after the lecture. Adjacent to the lecture theatres are comfortable, private waiting rooms with a pleasant nurse in attendance. The staff is responsible for seeing that the patient arrives just in time and is not kept waiting. The student is made to realize that whatever he does has to be for the patient's good as well as his own training. He learns to treat the patient wfith the same consideration he will give his first patient in practice.” Canadian insurance companies, which
lost about fifteen percent of their business in the field of health insurance when the government took over hospitalization coverage, are making determined efforts to hold on to what remains. Companies that write ninety-seven percent of health policies have formed the Canadian Health Insurance Association, both to prevent what they call “further government encroachment" and to devise attractive plans to supplement government hospital insurance.
How does the group principally affected—the public—express its feelings about
hospital insurance? One answer is that in Ontario, after six months of operation during which four hundred thousand people had been saved about fifty million dollars in hospital bills, the Hospital Services Commission received just one letter of thanks from a grateful beneficiary.
"But that doesn't make us feel badly," says David Ogilvie, Ontario director of hospital insurance. “We consider that the matter-of-fact acceptance of the plan proves that the public both needed it and was ready for it." ★