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Marchildon: O Canada — Exploding the Myths About Its Health Care System

Canadian health care always ends up being the constant point of comparison in the perennial debate about the future of American health care.

Those opposing change in the United States caricature the Canadian system as command-and-control socialism, not only foreign to the American way of life but on life support in Canada itself. Conversely, those advocating major change often point to Canada as the (northern) house on the hill offering a relatively inexpensive model of access based on need rather than ability to pay.

I lived in the United States for five years. Simply because I was Canadian, I was often drawn into discussions about health care reform. I was forced to conclude that most Americans do not understand the Canadian health system, although a significant number think they do. And it is exactly the same north of the border — despite that fact that Canadians think they understand the American health system, most do not have a clue.

So as neighbors, we think we understand each other’s public health system but we don’t, and there are few things as dangerous as not knowing what you don’t know. So allow me to explain a few misunderstood facts about Canadian health care.

First, there is no single health system because Canada is a highly decentralized federation. The 10 provinces (and three northern territories) have most of the responsibility for public health care. But by virtue of transferring some money to the provinces, the federal government is able to ensure some very high-level standards including universal access and national portability of benefits for a core set of hospital and physician care services. These are the “insured services” that are free at the point of service to all Canadians with provincial governments (i.e., single- payers) rather than insurance companies paying the bills.

Constituting little more than 40 percent of all health care services, this is the privileged part of the Canadian system. Providing first-dollar coverage, the system is “deep” in terms of its insurance coverage, but it is also “narrow” coverage in that it is largely limited to hospital and physician services. Prescription drugs, dentistry, long-term care, home care and vision care are not universally available free of charge at the point of service.

For these other goods and services, now worth more in value than the universally available health care, Canada looks much like the United States. Job-based private insurance does most of the heavy lifting while governments try to fill in the cracks through targeted programs and income-based benefits. As in the United States, administrative costs for these non-universal services are high and cost controls are limited.

With the debate on health care reform heating up in the United States, Canada is once again in the cross hairs of many commentators. To offset some of the disinformation that is gaining currency, I think it is worthwhile to review the real strengths and the real weaknesses of Canada’s health system.

Starting with strengths is the fact that all Canadians, irrespective of income or job (or the lack of one) have immediate access to urgent as well as primary care based on need rather than ability to pay. Moreover, the single-payer administrative mechanism has proved its effectiveness, at least for part of Canadian health care that it actually covers. The money saved from determining risk, assessing coverage and the many other tasks associated with administering insurance can be reallocated to improving health care services on the ground.

It is also a simple system for the patient — Canadians only have to present their provincial health cards to access insured services anywhere in the country. Through this tax-based system introduced a half century ago, Canadians have forgotten what it means to face medical bankruptcy from hospital and doctor bills.

Finally, provincial governments have a built-in incentive to encourage wellness and invest in illness-prevention programs in order to reduce public health care expenditures. Most provinces have chosen to do this through regional health authorities, arm’s-length public bodies that integrate or coordinate a broad spectrum of illness and wellness programs and services.

Now, let me describe some of the real weaknesses of the Canadian system. First, universality is narrowly limited, for historical rather than good health reasons, to hospitals and physicians even though other care modalities — critical prescription drug therapies or important rehabilitation services — are excluded. As a consequence, some Canadians, particularly the working poor, can’t afford to get some important health care. Second, while extremely good at providing urgent care at all times, the system has been lousy in delivering solid chronic care, including mental health services.

Finally, a word about surgical wait lists. Although limited to non-urgent care (and not urgent care as some suggest), wait lists became an issue in the early to mid-1990s when provincial governments rapidly reduced spending on “insured” services through their control of the purse strings. The end result was public-sector rationing, shifting resources from less urgent areas such as elective hip and knee surgeries to more urgent interventions and treatments. Fortunately, reinvestment by provincial governments along with major changes to how wait lists are managed in the past decade has reduced wait times, significantly in some cases, for elective surgery.

I am sure this is not the disastrous situation presented by those opposed to any major change in health care. Nor (perhaps) is it the rosy picture painted by some of the Canadian system’s biggest boosters in the United States. But it reflects the messy truth that no country has a perfect system and no single model provides the full answer to the complexity of health care reform.

Dr. Gregory P. Marchildon is a comparative health system scholar who lives in Saskatchewan. He was executive director of the Royal Commission on the Future of Health Care in Canada and lead drafter on the final report delivered to the Canadian Parliament in 2002. He was also a senior government official in Canada and a professor at Johns Hopkins University’s School of Advanced International Studies in Washington, D.C.

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