We have skyrocketing costs in our system too. I think the costs associated with new technologies and an aging population are the same in most western countries. The big savings in our system come from the reduction in administration costs, and from the fact that there isn’t a profit component per se. There is certainly a strong motivation to be efficient because it is a highly scrutinized system and the public is very sensitive to waste in the health care system, and the people who manage it are generally genuinely interested in doing what’s best for their community too. Critical surgeries are always moved to the head of the line and done immediately. It’s the ones that aren’t deemed critical that have at times become the problem. If a hip transplant was not deemed critical then it wouldn’t be given a priority spot on the waiting list and it could sometimes be months before it got done in some provinces. (Again, each province runs its own system and so the exact issues and wait times vary from province to province). Also, the technology is here but at times there have been shortages of certain kinds of equipment that have led to some of these waiting lists, but this problem was largely a problem with how our particular system was set up. Maybe I should expand on that at this point. A quirk of our system is that it’s funded by both federal and provincial governments but largely run by the provincial government. In the 90s the economy wasn’t as good and we were running deficits. At the same time a “all taxes are bad” kind of free lunch mentality became popular, so the federal government felt political pressured to make big cuts to spending to deal with budget shortfalls, and cutting funding to healthcare seemed like a place where they could cut spending and not suffer as much direct political heat. Provinces were also strapped and couldn’t make up the whole shortfall so they started pinching the health care systems. Waiting lists began to grow and in some places new Hospitals weren’t getting built and emergency rooms were getting busier, and then people figured out that there is in fact no free lunch. You don’t get something for nothing, and they started calling for more health care spending and the government complied and now more new hospitals are being built and new equipment bought. (We have a bit of a shortage of nurses now but I think that’s a problem in the US as well). The problem then became about how to set some kind of firm minimum standards, such as maximum wait list times, to prevent this kind of political game from having an impact on the health care system in the future. You might as why something like that wasn’t part of the legislation to begin with but you have remember that our system was 40 years old and not all of today’s problems were contemplated back then. Doctor’s salaries aren’t capped per se. They are paid a certain amount for a given procedure and if they do more of them they get more money, but they don’t get more money for that procedure. Some doctors do go to the US to make more money, but that’s really the only reason they go, and many come back after a while because they don’t like other things about the US system. If we start losing too many doctors for money reasons then a province will boost it’s fees to doctors and more will decide to stay, or come back, or come in the first place, which is I’m sure very similar to how it works with the private companies, simple supply and demand. (There is a quirk to our system which works to our disadvantage. As many of you know secondary education in Canada is subsidised more than it is in the US and so when we train our doctors we pay for a big percentage of their education costs. Education is seen as something that pays a country back because it produces a more skilled and productive work force, but if after taking the governments money for their education doctors then turn around and head to the US for the top dollar, then they’re working the system to get the best of both worlds. I don’t blame them for that, but I think we should adjust our education system to include some kind of kicker that says if you earn a degree and then leave to work outside the country within say 10 years you then have to pay back all or a portion of what the government spent on your education.) You’re not understanding the basics of how the system works and its benefits. One of the biggest benefits of the single payer system is that it greatly reduces bureaucracy. This is where a big chunk of the savings come from. I do agree with your concern that big, non-transparent, bureaucracies do tend to increase the problem of fraud, however, and that’s why that has never been a major problem with the Canadian system, and it is apparently a problem with the US system, and I’d bet that a whole lot more of it goes on in the private companies that you never hear about. Here’s a recent paper comparing administration costs. Department of Medicine, Cambridge Hospital and Harvard Medical School, Cambridge, Mass, USA. BACKGROUND: A decade ago, the administrative costs of health care in the United States greatly exceeded those in Canada. We investigated whether the ascendancy of computerization, managed care, and the adoption of more businesslike approaches to health care have decreased administrative costs. METHODS: For the United States and Canada, we calculated the administrative costs of health insurers, employers' health benefit programs, hospitals, practitioners' offices, nursing homes, and home care agencies in 1999. We analyzed published data, surveys of physicians, employment data, and detailed cost reports filed by hospitals, nursing homes, and home care agencies. In calculating the administrative share of health care spending, we excluded retail pharmacy sales and a few other categories for which data on administrative costs were unavailable. We used census surveys to explore trends over time in administrative employment in health care settings. Costs are reported in U.S. dollars. RESULTS: In 1999, health administration costs totaled at least 294.3 billion dollars in the United States, or 1,059 dollars per capita, as compared with 307 dollars per capita in Canada. After exclusions, administration accounted for 31.0 percent of health care expenditures in the United States and 16.7 percent of health care expenditures in Canada. Canada's national health insurance program had overhead of 1.3 percent; the overhead among Canada's private insurers was higher than that in the United States (13.2 percent vs. 11.7 percent). Providers' administrative costs were far lower in Canada. Between 1969 and 1999, the share of the U.S. health care labor force accounted for by administrative workers grew from 18.2 percent to 27.3 percent. In Canada, it grew from 16.0 percent in 1971 to 19.1 percent in 1996. (Both nations' figures exclude insurance-industry personnel.) CONCLUSIONS: The gap between U.S. and Canadian spending on health care administration has grown to 752 dollars per capita. A large sum might be saved in the United States if administrative costs could be trimmed by implementing a Canadian-style health care system. Copyright 2003 Massachusetts Medical Society http://www.ncbi.nlm.nih.gov/entrez/...ve&db=PubMed&list_uids=12930930&dopt=Abstract But this still leaves you bogged down with the bloated bureaucracies, and the associated corruption, of your system. I think the best way to go is to have a single payer system, either state by state or perhaps some smaller states could band tother, and to make the system more directly accountable to the people by having an elected person head it up, and CEO elected by the people who pay for the system and are covered by it. This isn’t the kind of thing we have a history for in Canada but you Americans seem to love electing minor officials, and this would be a pretty important position. You’d also want to put in minimum standards as a fail safe in case some crazy person decided that they wanted to cut spending to the bone, but if you do it on a state or regional basis then you have competing systems that can learn from each other drive efficiencies. In the same way that Toyota looked to Canada because of our health care system they would also look to see which state had the best system and that could be the deciding factor in where they chose to locate. In closing, here is a list of countries with universal health care, although many don’t call their systems single payer systems. I think most are hybrids, but then Canada’s is too in a lot of ways, so I think the definition gets a little foggy: Argentina, Australia, Austria, Belgium, Canada, Cuba, Denmark, Finland, France, Germany, Greece, Ireland, Israel, Italy, Japan, The Netherlands, New Zealand, Norway, Portugal, Russia, Saudi Arabia, Seychelles, South Korea, Spain, Sri Lanka, Sweden, The Republic of China (Taiwan), and the United Kingdom http://en.wikipedia.org/wiki/Publicly_funded_health_care
when everyone b****es about the desparity in access to services in canada versus american can we please take into account that they also spend a lot less on healthcare as a percentage of their gdp than we do? if we adopt their system, but put more money in we can have a higher level of accessability and shorter 'lines' while affording healthcare to everyone. its not brain surgery. but if you keep the 14% of gdp in a universal coverage system you could have brain surgery.
I agree that everyone in America should have access to health care. However; I do not agree that it has to all be the same quality.
Canada and other 'single payer systems' tell the pharm companies 'we only will pay x low price for drugs.' The R&D burden is borne by the US which is why our drug prices are so much higher than everyone else's. The US is where they make their profit. I point this out for two reasons: 1) if we also do this then we aren't going to be seeing new drugs to treat diseases - it is simple economics and is empirically proven in single payer systems like France, and 2) these are artificial cost benefits for systems like Canada that can't be duplicated for the US because we can't free ride like Canada is. As for access beyond walking in the doctor's door - I put up a chart earlier that detailed how for more in depth needs we are better off than Canadians. Grizzled says there is no wait for critical needs but I don't think that's the case - for example 10,000 breast cancer patients filed suit in Quebec because they had to wait more than 10 weeks for radiology treatment. That's a pretty fast moving and serious illness. That doesn't happen here. Brain drain - I think this is just glossed over by Grizzled. Not only does it happen in those countries that have single payer systems, but part of the incentive to become a doctor is removed (maybe every doctor doesn't do it to become rich - they do it because they want to 'help' people, but a hell of lot of them do). Bureaucracy - administrative costs seem to be one of the two main points people in favor of these systems constantly harp on, and as far as I can tell they are higher in our system. Most of that is due to choice - there are simply more choices and subsequently more administrative personnel in the system. But don't confuse that with waste and corruption. Single payer systems of every size and shape are RIFE with waste and corruption. Technology: Grizzled's answer is just 'well we can buy more if you want it.' That's rather simplistic. Consider Canadians pay 48% of their income in taxes and their system is perpetually in financial crisis, as is every other single payer system. Where does that extra money come from? It simply doesn't, which is why Canada doesn't have the technology we do. Again, I am for those who don't have basic healthcare getting it. But switching out one system in crisis for another makes no sense.
I went 3 years without healthcare because I didn't make enough to afford the $5,000 a year premiums for basic healthcare, and wasn't poor enough to get Medicaid. The health insurance industry is as callous and beauracractic as any dysfunctional government agency, the only difference is they make billions off of us every year. I don't know why anyone who is in the middle class would object to this. Have you ever tried filing a claim? How long did it take you to get your money? Stop sipping the kool-aid and think about your children's future.
You should know we have the best health care quality, when you have good insurance, who told you to not make enough or have company insurance? It is obviously your fault!
Drug companies aren't going to suddenly stop researching drugs - their future profits depend on it. They will simply negotiate a higher price with all the countries to get to the net profit point they want. If the country says they won't pay it, they'll stop providing it. The US being able to negotiate prices with drug companies would lower the cost of drugs here and raise it elsewhere.
You really ought to do some basic fact checking before posting Hayes. I don’t expect you to get every little detail right, but it would be nice if you were in the ballpark. In Canada the drug companies themselves set the price. "But they know what the rules are, so they set the price within that context," says Wayne Critchley, executive director of Canada's Patented Medicine Prices Review Board. This government agency, with a staff of 40 and an annual budget of $4 million Canadian (about $3 million U.S.), was set up in 1987 under a new patent law that favored brand-name manufacturers and was designed to stimulate the growth of Canada's own small drug industry. Under its mandate, the board must ensure that prices of brand-name drugs still under patent protection are "not excessive." It reviews the prices of these drugs twice a year. (Generics and brand-name medicines whose patents have expired—about 35 percent of the market—are not regulated.) To meet the "not excessive" yardstick, manufacturers must meet these guidelines: * Prices must not exceed the highest Canadian price of existing drugs used to treat the same disease. * For "breakthrough" drugs, which are unique and have no competitors, prices must be no higher than the median of the price for the same drug charged in seven other countries: Britain, France, Germany, Italy, Sweden, Switzerland and the United States. * Over time, prices cannot be increased beyond the general rate of inflation, as reflected in Canada's Consumer Price Index. http://www.aarp.org/bulletin/prescription/a2003-08-12-whydrugs.html In short, we made a deal with the drug companies and gave them longer patent rights in exchange for lower prices. Their r&d costs are still recouped but over a longer time frame. This is good news for the consumer, neutral news for the companies developing new products, and bad news for the generic companies. (Ironically two of Canada's wealthiest individuals run own generic drug manufacturing companies, Barry Sherman and Eugene Melnyk). I couldn’t quickly find a nice comparison between the amounts of research done in Canada and the US but I did find this letter to the editor of one of our national papers that claims that our pharmaceutical companies hadcommitted to a development to sales ratio of 10%, presumably as part of the original deal, and that they have met or exceeded this amount for 10 years. http://www.canadapharma.org/Media_C...06/GM-ResponsetoGoldStatement-June23-2006.pdf Don’t you think that it’s just a little silly to suggest that we have people dying on wait lists here? Don’t you think there would be a huge outcry if that was happening? People in need of immediate care get moved to the front of the line and have their surgeries and treatments immediately. It’s the people who were not in critical need of a procedure that had to wait. Isn’t that just common sense? The dispute you mention was about whether or not those were priority cases, and I believe they won their case. The background to that situation I believe I’ve already discussed and the outcry about that issue and other wait lists issues led to a major Royal Commission and ultimately very significant changes. Again, this was a reassessment and updating process for a system that was almost 40 years old at the time. http://www.hc-sc.gc.ca/english/care/romanow/hcc0396.html Doctors in Canada aren’t poor, and again simple laws of supply and demand mean that if a province starts to lose too many doctors because of low pay, and it has happened, they increase their fees, and then they stop going and even come back. Pretty basic. I believe that the average income right now is around $250,000, but it actually varies quite a bit from province to province. In Quebec I believe it’s under $200,000 and in Ontario and BC it’s closer to $300,000. (Note that Quebec is a bit of a special case too. Most of the doctors there will have french as their first language and they will tend to have strong cultural ties to the province and so they will tend not to want to leave, and so the government can probably get away with paying them less). Specialists get paid more and there are all kinds of other breakdowns. Also note that the cost of medical insurance is a lot less here, but that has to do with the different legal climate that exists in the US. Think about it. How easy would it be for a Canadian doctor to move less than a day’s drive away in many cases to work in the US. If the working conditions and pay were that much better in the US then we would have a mass exodus of doctors, but we don’t. The issue is the duplication, redundancy, billing departments and collections, advertising, managing shareholder relations, etc. I’m not sure how many different choices there would be, and you didn’t give any examples. Can you buy insurance that covers broken legs but not heart attacks? I’m not sure that would be a positive thing in any event. As long as we’re having fun with ridiculous hyperbole ... Haystreet is an OGRE! Everyone named Haystreet is... Everyone knows that. He eats babies for BREAKFAST!! And he jumps old ladies and steals their purses too. But seriously folks, I’m not going to say that there isn’t a janitor somewhere pilfering Lysol from a hospital’s janitorial supplies but there really isn’t much room for much waste and certainly not corruption. It’s a very open and transparent system with a few elected people making decisions, and a few very high paid administrators making other decisions, and a lot of volunteers from the community to round out the various boards. It is not a private company and there are no trade or business secrets, so there are no closed books. These people are in the business of providing good heath care to the citizens of this province. If the high paid people don’t do their jobs they get canned. If the elected people don’t to their jobs they get tossed out of office, and health care issues are ones that can single handedly defeat someone, so the politicians listen. I’m not saying that all is sweetness and light all the time. Committees can be cantankerous things at times, but there really isn’t room for any major kind of corruption, and the bottom line numbers already discussed show that pretty clearly. http://www.health.gov.ab.ca/about/about.html If you feel the need to just make this stuff up, what does that say about your argument? http://www.kpmg.ca/en/services/tax/documents/PersTable2006.pdf And if every single payer system was “perpetually in crisis” why aren’t any of them considering switching to a different system?? Maybe the perpetual crisis exists in that Canada where everyone pays 48% income tax, but that Canada exists only in the dark corners of your paranoid mind.
Developing one new drug can cost a lot and if they can't recoup that investment plus a large profit it simply isn't viable to sink the money into R&D. I'm not saying that all drug R&D will stop but anything that has less than a large projected ROI now will never get made in the future. In some cases a new drug isn't a breakout all new idea but one that is 10-15% more effective. Systems like Canada's simply won't pay for those drugs and only reapprove the older drugs that address the same issue, albeit less effectively. So if our system is like theirs then there is no place to increase the prices - hence they won't get made. I don't want to die or someone else to die because they need that margin. "In light of their stringent price control systems, it is not surprising that France's contribution to global drug research is a measly 3 percent, while Italy's is even less. The United States contributes about 45 percent of the world's new drugs. Our closest competitor in drug research is the United Kingdom, which contributes 14 percent. It is the free market in the United States that allows us to be the world's leader when it comes to valuable research and development. But if price controls are implemented in our drug market, then soon we too will do less research. Not only will we suffer; the entire world will suffer with us." http://www.cagw.org/site/PageServer?pagename=reports_pricecontrol back at you. I already posted the article where I took the 48% number from earlier in the thread (your KPMG number doesn't disprove the AP number, btw). It's pretty absurd of you to accuse me of making the number up in light of that fact. I don't mean to piss on your self congratulatory parade, Grizzled, but everything I've written was done after some fact checking. You're now on record as making wild and conclusively false accusations without even reading the thread, so I think you could save the snide attitude and rolleyes. The reason there is a debate about the issue is that there are differing opinions. None of this answers my point. It only confirms that Canada caps profit on pharmaceuticals. This doesn't at all address would happen were the US to follow suit and mandate pricing like Canada and Europe. Such a policy would cripple pharm companies R&D for several reasons including the effect on incoming investment (why would you invest in a pharm with a capped profit when you could put the money elsewhere). Everyone could currently follow your 'longer time frame' argument, buy T-Bills, and get less profit over a longer time period - but for some reason they aren't. Nor does this quantify how your system spurs enough R&D to replace what would be lost if the US used price controls like Canada. According to what you posted Canada had to mandate a 10% investment and that's not going to supplant what's lost if the US goes the same route. The Canadian solution also seems to have a bit of policy creep in it. OK, we want lower drug prices so we'll mandate them. That makes R&D a poor decision for investment so we'll mandate that - no matter what the stock holders (read owners) want to do. What's next? And please save us the 'you're just a fearmonger' crap unless you think there is something wrong with asking questions. Again, not sure how this answers my point. Maybe there is some confusion from my earlier post - I didn't mean there would be NO pharm companies in existence anymore - rather that R&D is going to take a severe downturn. It isn't 'small companies' developing most of these new drugs because a small pharmaceutical investing 10% of their sales from toe cream can't finance the type of drug research we are talking about. And at the end of the letter he says: "A declining environment has had an impact on our ability to invest in R&D in Canada." Sounds about right. No. What is silly about a breast cancer patient waiting TWELVE weeks and still being told to wait? That isn't silly it is tragic. I'm a little baffled that you seem oblivious to waiting times, a central complaint of single payer systems. Further, check out the chart I posted earlier (again not just making this stuff up) that shows survival rates are better in the US for a lot of these serious illnessed despite your much ballyhooed administrative savings. Common sense is not having government waiting lists. But hey, it isn't just me 'making this stuff up: Through its features of universality and absence of prohibitive out-of-pocket costs, the system in the past has served the population well. However, over the past decade or more the system increasingly has not met key needs of Canadians within a reasonable time frame...With an aging population and advances in healthcare requiring ever-increasing funding, governments have not had the finances available to meet demand. Wait lists have grown substantially, and have the effect of rationing healthcare. The situation has reached crisis proportions, as acknowledged in a landmark case decided by the Supreme Court of Canada in June 2005. An excerpt from the reasons for judgment succinctly describes the situation: "The evidence in this case shows that delays in the public healthcare system are widespread, and that, in some serious cases, patients die as a result of waiting lists. The evidence also demonstrates that the prohibition against private health insurance and its consequence of denying people vital healthcare result in physical and psychological suffering that meets a threshold test of seriousness." Supreme Court of Canada Chaoulli vs. Quebec June 9, 2005 http://www.boardoftrade.com/policy/Healthcare_FINAL15may06.pdf "The data above indicates that waiting times for medical treatment in Canada were much higher in 2005 than in 1993. Behind the statistics are the vast majority of patients who are affected adversely and experience physical and psychological pain and suffering. Examples include those patients who wait for a year or longer for joint replacements, enduring increasing pain and facing increasingly poorer prognoses due to delayed treatment. Cancer patients have to endure unacceptably long waits for diagnostic tests, surgery and radiation treatment while fearing the likely spread of their disease.36 In particular, in the overcrowded emergency rooms, patients have to wait for hours even when their life is threatened. Such phenomena are common and dangerous in Canada." Maybe you should turn inward with your fact checking-o-meter. The Royal Commission you linked to gave their findings in 2002. The breast cancer patient waiting list issue was in 2004. The chart I posted earlier was also post 2002. Oops. Again from 2006: "Against this background, public dissatisfaction with and concern regarding the Canadian healthcare system has reached a high level. The federal and provincial governments have acted to increase funding for the system, but the fundamental problem remains." "At the same time, public dissatisfaction with the level of timely access to the Canadian healthcare system has been growing. In a survey released by Statistics Canada in June 2002, an estimated 4.3 million Canadians reported difficulties accessing first contact services and approximately 1.4 million Canadians reported difficulties accessing specialized services such as specialist visits, non-emergency surgery and selected diagnostic tests...Actual waiting time exceeded clinically reasonable waiting time in 85 percent of comparisons undertaken in the study." http://www.boardoftrade.com/policy/Healthcare_FINAL15may06.pdf I already said these costs seem higher here. But even that may not be as it seems considering the hidden costs of your system (see below). For instance, you are using statistics that count billing and collection for the US but don't count the government's cost for billing and tax collection in Canada. I think there are similar hidden costs that make the trumpeting of this advantage skewed larger than it should be, if at all. "In Code Blue, David Gratzer systematically points out how the Canadian healthcare system is deteriorating. His book takes a close look at the economics involved in Canada's medicare system, which are at the core of the nation's healthcare woes. Because patients don't know the expense of services and doctors have the incentive to provide more services than are necessary, there is over-utilization and skyrocketing costs. Unlike a private market system, which uses competition to control costs, the Canadian government restricts access to new technologies and drugs and uses price controls." http://www.cagw.org/site/PageServer?pagename=reports_pricecontrol "But the public insurer imposes hidden costs of moral-hazard control on patients that are the analogue of private-sector claims administration expenses. These hidden costs include excessive patient time costs that result from proliferation of multiple short visits in response to controls on physicians’ fees; diminished productivity and quality of life from delay or unavailability of surgical procedures; and loss of productivity due to underuse of some medical inputs.23 Rough estimates suggest that these hidden overhead costs of public insurers exceed the measured overhead costs of private insurance. This is not surprising, since monopoly public insurers have weaker incentives than private insurers to minimize overhead borne by patients and providers." http://content.healthaffairs.org/cgi/reprint/11/1/21.pdf Waste is RIFE in other single payer systems as well: "Mismanagement and waste compound the burden of the health care system. The majority of France's state-owned hospitals are managed in a way that is reminiscent of the old U.S.S.R. For example, in the average French public hospital, it is not uncommon for every window to be open, even in winter, because the heating system for the building cannot be regulated. With the only options being no heat or unbearably high heat, everyone opts for the latter and lives with open windows. Predictably, this is not very cheap. Hospital staffing brings an added fiscal burden. No tasks are outsourced, since outsourcing is something that unions strongly oppose. The staff of an average French hospital includes carpenters, electricians, cooks, and people in charge of laundry." http://www.heritage.org/Research/HealthCare/HL711.cfm This blanket policy is irresponsible. In certain fields of medicine, more investment is needed to support research and development. In other fields, there may be so much waste that prices should be cut not only by 5 percent, but by 30 to 50 percent. But to develop a well-targeted policy would require investigation and reform, which seems to be unthinkable to those who are currently managing the system. http://www.heritage.org/Research/HealthCare/HL711.cfm Uh, look at Germany and Britain. In both places they are trying to figure out what they are going to do because their current systems are unsustainable. Get your head out of the sand, man. Or...look at Canada: "Canada’s healthcare system, however, is facing obvious pressure. With rapidly escalating costs, longer waitlists and less impressive healthcare outcomes compared to some leading European countries, the long-term sustainability of Canadian healthcare system has been called into question and requires policy makers to seek radical changes." http://www.boardoftrade.com/policy/Healthcare_FINAL15may06.pdf With healthcare absorbing an increasing share of available government financial resources in Canada, it is crowding other important areas such as education and infrastructure. If present spending trends continue, it is projected that by 2020 public spending on healthcare will outpace other spending by a 2:1 ratio and spending on other public services, in real per capita terms, will be below pre-1990-1991 recession levels. 13 Despite an element of exaggeration, Quebec Premier Jean Charest was right when he sounded the alarm this way: “The way things are going, there will be just one government department in 15 years, the department of health...the others will no long exist.”14 http://www.boardoftrade.com/policy/Healthcare_FINAL15may06.pdf
