The exploding crisis in medicare

Linda McQuaig,Val Ross May 17 1982

The exploding crisis in medicare

Linda McQuaig,Val Ross May 17 1982

The exploding crisis in medicare


Linda McQuaig

Val Ross

With his vigorous pitch for free enterprise, Alex McPherson sounds like a rancher or an oil baron. In fact, he is a doctor, head of the Alberta Medical Association, and his tough talk amounts to nothing less than an assault on Canada’s medicare system. “It’s a most beautiful idea from a philosophical point of view,” he says. “But realistically it’s impossible.” While McPherson and a number of other Canadian doctors believe Canada should have a limited public health care system to provide “acceptable” care for everyone, they adamantly insist on their right to practise a kind of highpriced medicine wherein the rich would pay more—and get more, including a wider choice of surgeons and the right to go straight to the front of a waiting list for elective surgery. “Volkswagen care can be provided through the public system,” he says. “But if you want Cadillac care, you’re going to have to pay more for it.” McPherson concedes that Volkswagen care could jeopardize a patient’s health in some cases: “It could make a difference,” he declares.

Recent outbursts of doctor militancy across the country have alerted Canadians to just how determined doctors are to practise medicine as they want to, even if it means imperilling the future

of medicare. Last week the Ontario Medical Association (OMA) and its president, Dr. Lionel Reese, grumbled as they walked away from the bargaining table with a new fee schedule that will bring the average net income for a doctor to $122,000 in three years. In Quebec and Manitoba, doctors in the throes of fee negotiations will naturally be influenced by the new Ontario fees and have already threatened their own

strikes. And unionized hospital workers, long constrained by government bans on strikes and tight lids on salary increases, have vowed to become more militant.

The recent wave of doctor unrest is only the latest signal that medicare is in trouble, staggering under wage demands, inflation and faltering political commitment. To many Canadians it already looks patchy, mangy, crisisprone. Its twin principles of universal

coverage and universal access to quality treatment at times seem as faint as a fading pulse. Taxpayers search with growing frustration among opted-out, extra-billing doctors, overcrowded hospitals and rising premiums for the affordable, reliable health care they thought they had been guaranteed when universal medicare became effective in 1968.

The system is increasingly beleaguered in other countries too. Even in Britain, where, in 1946, a miner’s son, Health Minister Aneurin Bevan, introduced the National Health Service (NHS), medicare today is a feeble skeleton of its former self, picked apart by doctors and Margaret Thatcher’s government. Britain increasingly has a two-tier system, similar to the one envisioned by Alberta’s McPherson. The gap between high-class private treatment and the NHS is getting wider. Australia’s government has dismantled Medibank, the public plan modelled in part on Canada’s medicare, leaving two million Australians with no coverage at all.

But if public health schemes appear to be ailing, the alternative seems even worse. In the United States, which has never had universal public health insurance, medical costs have soared dramatically since the early 1970s, to a staggering $247 billion, or 9.4 per cent of

Taxpayers are forced to choose among opted-out doctors, overcrowded hospitals and rising premiums

the Gross National Product. (Canada has held the figure to about seven per cent for the past 12 years.) From the individual’s point of view, the cost difference is even more striking. Americans pay roughly $2,000 a year for comprehensive family health insurance-more than triple the highest Canadian premiums.

With such high rates, many Americans opt for less than comprehensive coverage, and some 25 million Americans have inadequate insurance or none at all.

That uninsured group includes some of the most vulnerable members of society—low-income workers, small-business owners, the unemployed and people with health problems that make them unattractive risks to private companies.

Even those with comprehensive coverage can face personal ruin if medical bills mount high enough.

One Chicago woman, Loretta Wilson, testified at special U.S. Senate hearings that her extensive Blue Cross and Blue Shield policies were cut off by the companies after her medical bills for a series of heart operations had risen to $45,000. She was left owing $20,000. Even people who do not need medical care end up paying part of the huge national health bill because companies pass along the cost of employee health care benefits to consumers. The Ford Motor Co. estimated that, in 1980, $290 of the price of every new car went to pay for health benefits for Ford workers.

Everywhere, health costs are multiplying, largely because of the explosion in recent years of complex medical technology. Long-term cancer treatments can now cost hundreds of thousands of dollars. Ironically, health insurance has only helped drive the costs up by providing the patient with financial protection. With that comfortable cushion there is little incentive for patients—or doctors—to keep spending down, since an anonymous insurance company ends up paying the bills. Furthermore, American doctors now order almost every diagnostic test available to protect themselves from possible malpractice suits. Deryck Adamson, a Toronto senior citizen visiting Florida last winter, was shocked to find himself checked into an intensive-care unit for four days of tests after he merely dropped by a hospital for treatment of a mild case of flu. His bill: $2,505.

While any insurance scheme can foster that kind of frenzied cost spiral, the public system seems to have a better control record. In part, it is because the cost of administering centralized public

schemes in Canada represents only 2.5 per cent of premiums, while in the United States, where companies compete for consumer business, administration can be as high as 18 per cent.

More importantly, the private system offers almost no built-in checks on spending. The costly coronary bypass operation is a good example of what can happen. Once time-consuming and innovative, the operation continues to command high prices even though it is now a well-established procedure that can be performed in three to four hours. California heart surgeon Dr. Benson Roe says the situation has become a “boondoggle.” In June, 1980, California

surgeons were charging-

anywhere from $3,500 to $6,000 for a bypass, and some were performing two or three a day. In comparison, the Ontario government would only compensate heart surgeons $700 to $1,000 for a bypass in 1980.

In terms of costs, Canada has fared relatively well. But even here, inflation high-tech medicine and, increasingly, wage demands have forced costs upward.

This spring, strikes by Alberta nurses and Sas-

katchewan hospital workers halted service in the West until the provincial governments legis lated them back to work. What galls the strikers is the double standard they see operating: Sas katchewan pleaded poverty in re fusing to grant hospital workers (who earn $13,000 to $17,000) a 13per-cent increase although it had just awarded its doctors a 17-per cent raise. And while Ontario doc tors were allowed almost to shut down hospitals last month, leaders of Ontario's hospital workers, including 62-year-old Grace Hartman, were sent to jail after a bitter strike last year. Warns Jim Holmes, Saskatche wan rep for the Canadian Union of Public Employees: "Govern ments have to budget for us, too, especially when we can't extrabill." Doctors simply have more po litical clout. One of the most ef fective cards played by the medi cal associations has been the threat that, if dissatisfied here, doctors will take their marketable skills to the greenback pastures south of the border-as 662 Cana dian doctors did last year. And they have not hesitated to hold this threat over those who contest

their fee demands. Dr. Jamie Meuser, a Toronto-area physician, recalls an OMA representative urging his thirdyear medical school class to write the U.S. entrance boards whether they wanted to emigrate to the United States or not; he told the students it would improve the OMA’s bargaining position.

If the threat of exodus still alarms the public, it rings hollow with governments. Canada already has one of the world’s highest doctor-patient ratios (1:551). Seven years ago the federal government showed its lack of interest in recruiting doctors by disallowing merit points for medical degrees on immigration applications. A University of Ot-

tawa professor of health administration and physician, Dr. Ralph Sutherland, argues that medical school enrolments should be curtailed to free up funds for less costly workers such as nurses, dieticians and physiotherapists. Sutherland suggests, “The government should, in fact, subsidize special doctors’ flights south.” Those who stay are scarcely on the breadlines: they are the highest-paid income group in Canada. Medical associations have managed to bring the average income figures down partly by mathematical sleight of hand, including part-time doctors in their calculations. One Canadian

doctor who has gone south observes that while the United States offers lusher fees, he does not think Canadian doctors are underpaid. “From what I can see, their incomes are pretty good,” says Washington opthalmologist Dr. Mervin Zimmerman. (Ironically, as doctors head south, patients are heading north. The Ontario Health Insurance Plan is currently investigating Americans who own summer properties in Canada and who use their Canadian addresses to sign up for medicare here.)

Negotiated fee increases tell only part of the income story. Doctors in almost all provinces have seized de facto increases by simply extra-billing. Only Quebec and B.C. have had the political will to ban this first step toward a two-tier medical system. Although only two per cent of all bills handled by provincial insurance schemes last year had extra bills tacked on, the practice has become a major sore spot. For one thing, its practitioners tend to cluster in specialties or geographic areas. Fifty per cent of Nova Scotia’s GPs, most of them in the Halifax area, do some extra-billing. So do most Torontoarea obstetricians and anesthetists, many of Saskatchewan’s ear, nose and throat specialists and 80 per cent of all doctors in Medicine Hat, Alta.

The doctors defend extrabilling as a civil right, the right of any worker to negotiate a fair fee rather than accept one imposed by government. Dr. Alex Mandeville, former president of the B.C. Medical Association, echoes his profession’s widespread opinion that billing some portion of a medical fee directly to the patient imparts a greater sense of responsibility about health costs, “which would deter unnecessary blood Josh

tests, X-rays, second opinions and -

ambulance rides.” And, say the doctors, any patient who objects to extra-billing can simply refuse to pay up if not informed in advance—or take his medical problems elsewhere.

Not everyone is reassured by these arguments. Don Aitken, spokesman for Alberta’s 100,000-member Friends of Medicare group, tells of cases where patients were already on their backs, about to be wheeled toward an operating room for life-saving cardiac surgery, before they were told about the extra $750 their surgeon intended to charge. Such news may have wonderfully concentrated the patients’ minds, but they were hardly in a position to protest—or to seek another doctor. In fact, according to a McMaster Univer-

sity study, extra-billing simply means the poor cut back on their visits to the doctor. More than 25 per cent of Ontario’s poor surveyed for the 1980 report by Mr. Justice Emmett Hall claimed they had difficulty finding any affordable doctor in their community.

Far from eliminating inefficiency, extra-billing actually exacerbates it. Studies conducted after the Saskatchewan government briefly introduced

user charges in the late 1960s show that while the poor cut back, the middle class actually visited doctors more often. Adds Bob James, a Dundas, Ont., family practitioner: “Studies are showing that the largest segment of unwarranted visits to a doctor are initiated by third parties—like the boss who sends a healthy employee to see me on Monday for a note saying he was sick last week.” In fact, the only efficiency of extrabilling may be that it provides a safety valve for doctors’ dissatisfaction. Threatens the Canadian Medical Association’s (CMA) president-elect, Dr. Marc Baltzan: “Take it away, and you get more strikes.”

The prognosis of galloping labor strife is only one of many threats

undermining public faith in the future of Canada’s health care system. Compounding the doubts are stories about the sickly state of Canada’s hospitals, their lengthening waiting lists, the declining quality of care and the dramatic staff cutbacks. Margaret Ethier, president of the United Nurses of Alberta, says a single night-duty nurse may be expected to staff both maternity and emergency wards in smaller hospitals. In one instance, while a nurse ran for assistance, a baby suffered an oxygen shortage in its mother’s womb and later developed cerebral palsy.

The problem is cash. According to a CMA survey, more than 60 per cent of all hospitals are operating at a deficit. This month, B.C. Health Minister Jim Nielsen confirmed that 1983 budgets would be insufficient to fund the province’s projected hospital deficit of $84 million. Vancouver General promptly announced that it, alone, would lose 175 beds and up to 700 jobs.

Doctors have eagerly championed the cause of the underfunded hospitals, partly out of a desire to retain professional control over health care. But University of British Columbia economist Robert Evans adds that doctors have their own vested interest in keeping hospitals well funded: they need facilities to perform operations and carry out treatments. “An anesthetist can’t make money unless he’s in a hospital. Hospital cutbacks affect incomes.” Evans points out that the ¿number of hospital beds per capgita in B.C. has remained constant I for the past decade, leaving a ¡¿growing number of doctors in increasing competition for available space.

I In fact, doctors may be putting Ont. people into hospital too enthusiastically: Canadians spend more

time in hospital than any other nationality. Says Evans: “The more surgeons there are, the more surgery gets done.” And the more beds there are, Evans suggests, the longer patients stay in them. In Britain, a hernia operation and post-op care can take a day; in Canada, three to six days. California mothers check out of maternity wards after an average two-day stay; B.C. mothers are encouraged to stay for five.

Nevertheless, the very real problems of Canada’s under-funded, understaffed—and overused—hospitals are being touted by both doctors and governments as an argument for bringing the private sector back into the public health system. Last December, the Ontario government announced that hos-

pitáis could raise funds by subdividing wards into private rooms priced according to whatever the market would bear. Meanwhile, the Alberta, B.C. and Newfoundland governments have passed the buck shortage back to the hospitals, which must levy “user fees,” or rates tacked onto public-insurance-covered bills. Now, chasing bad debts has become just one more burdensome job for the hospitals. According to Vancouver General’s accounting department, even middle-class families are defaulting on debts owed for children’s cancer treatment.

The real problem with health spending may not be underfunding but lack of rational planning. Being paid on a fee-forservice basis is an incentive to perform as many services as possible. And while it may serve the doctors’ desire to feel independent, it does not emphasize the health needs of the patients.

Health care consultant Jonathan Lomas says that, instead, it encourages doctors to deal with medical problems only as they arise. The ancient Chinese had exactly the opposite system: a doctor was paid only when a patient did not visit him, on the principle that if the patient had to come in, the doctor had not done his job properly. In the United States the free market has turned this simple logic on its head, with hospitals offering generous perks to “productive” doctors who will provide business by filling up beds.

The Group Health Centre in Sault Ste. Marie, Ont., has tried to get around this problem by collecting payment from the province on the basis of the number of patients it serves, not the number of services it performs. The result is that patients end up spending less time in hospital, and the province estimates that the system reduces the health care costs of its subscribers by about 20 per cent. Without the financial incentive for doctors to provide all services themselves, there is also a greater tendency to let paramedics—nurses, nurse practitioners, dieticians—handle simple medical work. The clinic, which has been in operation since 1963, has some 60,000 patients on file—including 1,000 Americans.

Despite those votes of confidence, Canadian medicare today is stalked by the spectre of medicare’s fate in Britain.

There, American medical entrepreneurs have opened private clinics specializing in such quick, lucrative, low-overhead operations as hernias and hip replacements. The care they provide is very good indeed—Cadillac service. In part, that is because they piggyback on nearby National Health facilities, borrowing labs, diagnostic services, occasionally even staff. Meanwhile the NHS shoulders the most costly burdens— caring for everyone else, including the chronically ill and the elderly.

The same disintegration haunts medicare in Canada—unless there is renewed political commitment to keeping public medicine affordable and of high quality. Recent fee victories will probably be funded through higher premiums and more user fees. And still the health care system grows patchier and costlier, overmanned by high-priced professionals and oriented to highScost acute-care intervention. Says University of Ottawa’s Sutherland: “If you - really want to improve the health of Canadians, you must spend money outside the health care system—on the environment, pollution control, sane urban planning.” Sutherland points out that if one-tenth of the $1 billion granted to Ontario doctors had been allocated instead to community mental health, it would more than quadruple the budgets of that severely strapped sector.

Some doctors argue that the real problem with health care in Canada is not too little but too much government involvement. And they insist that their fight for higher fees and funds for hospitals is motivated by their concern for the interests of the patient. As B.C.’s Mandeville puts it, “By paying 100 per cent of the shot, government is infringing on your liberty to find and choose the health care you need.” But if the present drift from the principles of universal access and quality coverage continues, it is the patient’s liberty to choose medicare that could disappear. For many Canadians already plagued by economic woes, that prognosis is bleak.


Anne Beirne

in Montreal,

Peter Carlyle-Gordge

in Winnipeg,

Philip Grenard

in Sydney and

William Lowther