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What’s Wrong With Canada’s Healthcare System?

This post is a continuation of my discussion of foreign healthcare systems, and what the US can learn from them… I’ve summarized one particularly provocative and outspoken Canadian’s opinion below:

Is Canada’s healthcare system a political monopoly?

Dr. Brian Crowley is the Founder and President of the Atlantic Institute for Market Studies in Halifax, Nova Scotia. He describes the Canadian healthcare system this way:

Canadian Medicare operates in an unregulated, tax-financed, pay-as-you-go model. Our provincial governments are our monopoly provider. They not only pay for necessary care, but they also govern, administer, and evaluate the services that they themselves provide. They define what we call “medically necessary services” and pay for 99% of all physician services. They also forbid the use of private insurance for medically necessary services. They set the budgets for nominally private healthcare institutions. They appoint the majority of their board members and have explicit power to override management decisions.

Under these circumstances, no hospital or hospital administrator can be expected to take any responsibility or initiative because decisions will always be second-guessed by those in political power.

Before the advent of competition in our telephone industry, dissatisfied customers faced the massive indifference of a bureaucracy that took their business for granted, despite some theoretically powerful regulatory agencies. Administrators of the Canadian healthcare system likewise suffer no direct consequences for poor customer service. They aren’t even answerable to a regulatory agency. Accountability is a vague political concept which cannot be enforced in any meaningful way. Like all monopolists, Canada’s healthcare authorities abuse their positions of power.

Dr. Crowley argued that the provincial governments have no desire to measure how many people are waiting for health services, how long they’ve been waiting, or how many people leave Canada to get treatment south of the border. (He claims that the US is Canada’s secret safety valve.) Apparently the province of Ontario contracted with New York State for cancer care for their patients when wait times became politically untenable.

A couple of years ago, the Supreme Court of Canada ruled that the healthcare system violates Quebec’s charter of rights because it collects taxes, promises healthcare in return, forbids competing suppliers and then often doesn’t deliver the care. The justices summarized the situation this way: “A place in a queue is not healthcare.”

Canada-wide average wait times for surgery is 17.8 weeks, though in Saskatchewan, wait times for hip replacements are as long as a year and a half. That’s after a physician has ordered the surgery. Getting to see a physician in the first place is very difficult. Statistics Canada reports that 1/5 of Canadians do not have a family doctor.

In Canada, family physicians are the gatekeepers of the health care system. Patients cannot obtain access to specialist services without having a general practitioner referral. The doctor shortage is so severe now that doctors have begun resorting to lotteries to kick people off their patient rosters, (see Tom Blackwell, MD Uses Lottery to Cull Patient ListNational Post, August 06, 2008); and Canada is about to face a wave of retirements in the system that will greatly exacerbate the shortage.

As for the comparability of wait times in the US and Canada, Dr. Crowley suggests reviewing a letter from a US physician published in the Wall Street Journal a few years ago (Susan Weathers, MD, published April 30th, 2004). Dr. Weathers works in a county hospital and in reference to her  uninsured patients she writes,

[The Canadian health care system] resembles the county hospital where I work. Our patients pay little or nothing. They wait three months for an elective MRI scan and a couple of months to get into a subspecialty clinic. Our cancer patients fare better than the Canadians, getting radiotherapy within one to three weeks. The difference is that our patients are said to have no insurance (a term used interchangeably with “no health care”), whereas Canadians have “universal coverage.”

Dr. Crowley suggested that the Canadian healthcare system has become an unresponsive monopoly though it wasn’t supposed to be that way. It was designed to usher in a “grand era of choice.” It was supposed to be a healthcare system in which people would be able to get all the healthcare they needed without having to “worry about the cost.” Dr. Crowley concluded that “some of the ideas bandied about in Washington will lead to the worst features of the Canadian system without that having been anybody’s intention.”

A Time for Doctors to Stand up and be Heard

Over the centuries, many societies have elevated the medical profession in thought and deed.  Not that long ago this was true in the U.S., when our citizens showed more respect for doctors as professionals and fellow citizens than is demonstrated today. Now, everyone seems to agree that healthcare reform is drastically needed, and many are speaking out. Yet, the frank indifference to the opinions of doctors by those outside the medical profession mutes the voice and counsel of doctors on the subject.  The AMA (American Medical Association) and many other physician groups are speaking out on reform, but their voice is diluted by a cacophony of assumptions, opinions, and by legislation existing and proposed. A new healthcare system has been formed, in large part, without seeking the input of those needed to make it work:  practicing physicians.

Recently, I overheard a discussion regarding healthcare reform while eating lunch at a local restaurant.  The debate hinged on who is most qualified to make healthcare-related decisions.  The following consensus was reached:  no one today should complain about the government taking over healthcare because allowing insurance companies to make all the decisions in the past resulted in a broken healthcare system.  Those surrounding this particular lunch table agreed that the time had come for government to have their turn, while opposition could best be characterized as siding with the insurance companies. I wonder: can the debate really be so simply framed?

Saddened by the realization that such a discussion could be loudly and passionately debated without mentioning doctors, I resisted the urge to point out that physicians had made the healthcare decisions before insurance companies gained control.  The fact physicians were not even mentioned attests to the sad truth that for many people doctors are merely seen as one part of a broken healthcare machine.  Most physicians see their lot differently, and consider themselves as being in a veritable state of conflict with health insurance companies; however, our participation in a failing healthcare system has afforded these very same companies with the opportunity to put physician’s faces on their failed practices, with public opinion supporting this assumption.

Regardless of your opinion on Medicare, this last major government intervention into healthcare can help illustrate the very point that I am trying to make.  On May 20, 1962, President Kennedy argued for Medicare, addressing a crowd of 20,000 at Madison Square Garden. The President was televised gratis by the three major networks reaching an additional 20 million people in their homes.  Two days later, the AMA rebutted his argument, purchasing thirty minutes on NBC, with their speaker reaching an estimated audience of 30 million people. This broadcast, more far-reaching and influential than the President’s, delayed the proposed Medicare system by several years.  Forty-seven years ago, people in this country wanted to know what doctors had to say before major decisions regarding healthcare were made.  Today, they do not.

As the discussion about healthcare reform continues, practicing physicians must be heard from to interject real medical experience into the debate and, hopefully, guide the future of healthcare by influencing legislation existing and proposed.  I am trying to remain optimistic despite the concern I feel in noting that the American Recovery and Reinvestment Act of 2009, section 3000 (pages 511, 518, 540-541) exemplifies the minimization of medical practitioners, using terminology like “Meaningful” ‘USERS’ to describe physicians.

The question is now raised: what should medical practitioners do to be heard, to influence healthcare reform, to play a leadership role in this time of change?  When I write next time; I will share some of our ideas, put them on the table, if you will.  But, I would encourage you to proffer those suggestions that you might have.  It appears we can either speak up now or choose to be “meaningful” later.

Until next week, I remain yours in primary care,

Steve Simmons, MD

Lessons From Abroad: Mandatory Insurance Creates Powerful Health Plan Cartels

I attended a conference entitled, “Lessons From Abroad for Health Reform in the U.S.” at the Kaiser Family Foundation on March 9th in Washington DC. The event was sponsored by the Galen Institute and the International Policy Network, both of whom are politically rightward-leaning non-profit organizations.

I wasn’t sure what to expect from the conference, and assumed that speakers would offer a blend of pluses and minuses culled from Canadian and European healthcare reform experiences. I have to say that the pluses were hard to come by – and that the minuses were so provocative that I have decided to repeat them here for you, and let you make what you will of them.

Switzerland – Lessons About Insurance Mandates

Dr. Alphonse Crespo, an orthopedic surgeon who practices in Lausanne, Switzerland, described what sounded like the utter decimation of a perfectly good healthcare system. He said that in the 1960s Swiss healthcare was decentralized and quality-oriented. The government provided subsidies for health insurance for the poor, and subsidized public hospitals who took care of the poor and/or uninsured at a 50% rate. Overall, according to Dr. Crespo, Swiss healthcare was efficient, effective, and had high patient satisfaction ratings.

In 1994, socialism came into vogue and reformers called for a redistributive model of healthcare, with centralization of infrastructure and electronic medical records systems that would be compatible with those in use by other European countries. Mandatory insurance was introduced, which shifted disproportionate power to third party payors. The payors focused primarily on cost containment measures and profitability, rather than expanding access to quality care. Regional hospitals were forced to merge with larger ones or else shut down. Wait times increased, lengths of stay decreased, and there was an increase in “critical incidents” (i.e. medical errors) by 40%.

In 2002 the health insurers decided that “more doctors result in higher costs” and successfully lobbied for a cap on the total number of physician licenses, so that in order to practice medicine, a physician would need to take over the practice of a retiring physician or one who died.

In 2008, the third party payors attempted to legislate their ability to decide which physicians could practice within the healthcare system, and which would be excluded from coverage. This did not sit well with patients, and they voted for “freedom of choice” in a referendum on the issue. Fortunately, they blocked the insurer move to ban certain physicians from insurance coverage. Unfortunately, the insurers succeeded in forcing a reduction in reimbursement for basic laboratory testing by 20%, thus forcing physicians to close their labs and send samples to a centralized location.  Apparently physicians are planning to strike in Lausanne and Bern next week over this issue.

Dr. Crespo argued that the unforeseen consequence of the move to compulsory insurance was the emergence of a powerful cartel of health insurers without any apparent cost savings, and a measurable decrease in care quality. In fact, Switzerland’s healthcare system rapidly plummeted from 4th place in the Euro Health Consumer Index, to 8th place over the course of a few short years.

He concludes:

“Once cartels have entrenched themselves, there is no easy way to dislodge them. Americans should think twice before opting for compulsory insurance, unless they believe that cartelized and rationed healthcare is really in the best interest of patients.”

**You may view materials from Dr. Crespo’s lecture here.**

In my next post I’ll review what the Canadians had to say about their healthcare system.

Quote Of The Month: The Dean Ornish Debate

Dean Ornish writes:

…let’s use science to evaluate ideas that might seem a little weird or offbeat, but deciding a priori that an idea is stupid or worthless just because it doesn’t fit the conventional paradigm is, in my humble opinion, the epitome of being unscientific.

Dr. Benway responds:

There’s weird and then there is weird.

Diet and excercise affecting cancer? Plausible.

Naturopathy? Weird.

Subluxations? Homeopathy? Delusional.

MDs selling self-branded supplements? Embarrassing.

Chelation and coffee enemas for kids with autism? Evil.

I believe you are the plausible wrapping paper surrounding a coalition of crazy, weird, embarrasing, and evil ideas that some want to “integrate” into the universal health care bill.

Sneaky Things Doctors Do To Survive: Financial Reality Part 3

By Alan Dappen, M.D.

What Goes On In the Back Office

The Funnel” details how physicians’ must treat patients if they expect to stay in business. Herding patients through “The Funnel” is meant to depersonalize every problem into 10-15 minute slots. It’s not that doctors don’t care, in fact, morale on the assembly line of primary care is terrible. It’s just that there seems to be no solution doctors have found to sustain the financial realities they face under the insurance-driven system. I’d like to show you some cold hard numbers.

The healthcare system has been a gold rush of opportunity.  In sixty short years the healthcare has brought wealth to lawyers, drug reps, insurance companies, malpractice coverage, transcriptionists, billing specialists, authorization departments, performance evaluators, and certification organizations, just mention a few.  Each fill their niche, presumably to add value and quality to the service.  As they’ve tagged along in the healthcare system, the patient’s $20 co-pay covers less and less, while a physician’s office pays for more and more.  Those that are making money off of the healthcare system are often predatory, inadvertently driving up the cost to the patient, hence causing insurance premiums to double by 2016.

Below details the monthly expenses for a typical primary care physicians practice (not supporting obstetrics). Most of the expenses listed are in line with a those costs for running a typical business. However, what is alarming are the salaries for administrative, or non-physician, staff salaries, which consume about one third of the incoming money received. Many members of this staff are billing specialists needed to negotiate the ever-changing rules and regulations of the third-party insurance providers and receptionists, as well as schedulers and managers to get you into The Funnel.


Table based on both Medical and Dental Income and Expense Averages, 2004 Report Based on 2003 Data, published by the National Association of Healthcare Consultants; and expense records provided by doctokr Family Medicine.

Doctors, like all of us, can’t work for free, and want to receive a paycheck that will allow them to live comfortably, raise a family and pay off their large debts from medical school. Let’s say the above medical office paid their doctor a yearly salary and benefits of $162,750, the office then would need to bill $36,845 a month to stay in business. Since a doctor can only physically see patients a total of six hours per day (or 120 hours per month), this equates to a doctor needing to bill $307/hour to simply break even. At a more granular level, each minute costs the doctor roughly $5. Doctors have figured out that they can further reduce this per minute cost if they band into larger group practices.

But here’s the rub: the patient pays for 3-4 minutes of the physicians overhead (the $20.00 co-pay), leaving the doctor and his staff to bill and fight for every dollar they can make from the insurance company. Six hours of “patient care” translates to another four hours of uncompensated work while the physician completes medical notes, follows up with hospitals, specialists, and labs, answers patient call and prepares for the next day. The standard work week is 50+ hours before adding nights on call and weekend coverage which is done for free.

How do doctors survive? They employ billing specialists, they speed up their visits, they “upcode” their notes when possible. But most importantly, doctors deploy “The Funnel,” which brings us back to where we’ve started.

Until next week, I remain yours in primary care,

Alan Dappen, M.D.

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