A better health care model needed
Sure, our system trumps that offered in the U. S. but the U. K., Dutch plans are superior
Canadians are proud of our health care system which has become, in the minds of many, a defining national characteristic. So it may raise hackles when a study that looks at the efficiency of health care delivery asks, “If health insurance and health care could be imported, would our system be able to compete with those in other countries?”
The conclusion of C. D. Howe authors Ake Blomqvist and Colin Busby doesn’t definitively endorse either side of this question, so it’s not likely to please either critics or defenders of the Canadian system. But it does provide interesting food for thought, and it suggests some lessons for our strapped- for- cash Medicare system.
First, to get the obvious out of the way, Canada looks good in comparison to the United States when it comes to health care costs. But so does everybody else.
The U. S. “does not just have a health care system that is more expensive than Canada’s,” the authors write. “It is much more expensive, in per capita terms, than that of any other country.”
Not to mention that their system, which leaves millions uninsured, is much less equitable than ours, which covers everybody.
Yet look beyond our nearest neighbour and the lustre of Canada’s performance dims.
“If Canada’s system is compared with those of other developed nations, it appears to be a little less costly than some – for example, those of the advanced welfare states in continental Europe, such as France, Germany and the Netherlands – but considerably more expensive than those in the United Kingdom, Australia or Japan,” Blomqvist and Busby write.
More worrisomely, “Canada’s relative position has been deteriorating in recent years.”
The study hones in on two systems, the Netherlands and the U. K. These operate not only unlike Canada’s but also unlike each other’s.
For example, more than 80 per cent of health care spending in the Netherlands is private, compared with about 30 per cent in Canada and just 19 per cent in the U. K.
“In contrast to the Canadian system,” the study notes, “the [ U. K.’ s] NHS also covers all or part of outpatient drug costs, some dental care and most of the cost of long- term care in nursing homes.”
Yet both countries spend the same — about seven per cent of GDP — on the public financing of health care. In other words, the Brits get more bang for their buck.
A key difference is how doctors are paid — in the U. K. primarily on a system that gives GPS, who have much more clout in determining patient care, a fixed amount for each patient on their roster, compared to Canada where physicians are paid mainly on the basis of how many patients they see and what services they provide.
The Dutch system has been even more expensive than Canada’s, but the authors chose it because it’s undergoing major changes — especially the introduction of new aspects of competition — that could hold lessons for Canada.
Since 2006, all Dutch citizens must have insurance over and above a governmentfunded catastrophic injury or chronic illness plan, but they’re free to choose among competing private plans.
“While these rules reflect an attempt to induce health insurance competition, the Dutch government still intervenes in the market in three important ways. First ... each plan must offer coverage that meets minimum criteria. Second, government pays a substantial subsidy toward the cost of every individual’s insurance. A fundamental property of this subsidy is that it is risk- adjusted. That is, it is higher for individuals with high risk of serious illness, and hence higher costs, because of factors such as age, previous illness history and so on. Third, although plans are allowed to set their own premiums, the government stipulates that any premium over and above the risk- adjusted subsidy — the individual premium — must be the same for every enrolled client.
“Furthermore, a plan cannot deny coverage to anyone who wants it and is willing to pay the individual premium.”
Although the authors, whose study is accessible at www. cdhowe. org, provide considerably more detail on both these approaches, they don’t claim either one has all the answers to fix Canada’s system. Neither do I.
But Canada can’t afford to ignore models that are proving to be more costeffective than ours. Our smug assertion — even though it’s quite correct — that our system is better than the Americans’ doesn’t mean it can’t be improved. Or that it doesn’t need to be.