The summer before starting medical school, I trekked through Europe carrying an oversized nylon backpack draped with a giant red maple leaf. I would run into many other travelers sporting similar colors, naively assuming that their choice of emblem identified them as fellow Canadians. But two weeks into the trip, I became suspicious after bumping into a group of four guys from El Paso. They spoke with lazy Texas drawls, yet claimed to hail from Vancouver, which turned out to be the only Canadian city they could name. To add insult to injury, they failed to correctly answer the most basic of all Canadian questions: Who won the Stanley Cup that year? Over a couple of beers, they intimated that their reception in Europe became far more pleasant after they donned the Canadian colors.
To many Americans, Canada is that vast, friendly swath of land to the north inhabited by folks who speak English with a funny accent (maybe not as funny as a Texan?). Its major exports include cold weather (since most of Canada has two seasons, winter and July), hockey players, and great comedians who end up performing on Saturday Night Live (see Mike Myers, Jim Carrey, John Candy, Leslie Nielsen, Dan Ackroyd, and Lorne Michaels, to name a few).
The Canadian Healthcare Experience
Let me start by stating my own personal view, which is that healthcare is a basic right. Everyone should have access to affordable healthcare. Canada accomplishes this goal by providing coverage through a government-sponsored system, with each province administering the system in its own way. There are many advantages to this approach. First, coverage is universal and portable. This means that each citizen or legal immigrant is covered at any age and regardless of his or her occupation—or lack of one. There are no preexisting medical conditions that deny access to affordable healthcare. Having a child diagnosed with a chronic disease such as juvenile arthritis, lupus, or diabetes; losing one’s job; or starting a new small business does not create insurance angst. Turning 26 does not throw you off your family’s health plan as it does in the United States. What a relief! Canadians pay about 11.4% of national gross domestic product (GDP) to insure 100% of citizens in their single-payer system, compared with more than 17.4% of GDP to insure 85% of Americans. According to the latest available data from the Organization for Economic Cooperation and Development, in 2009 healthcare expenditures per capita amounted to $7,960 in the United States compared with $4,363 in Canada.
Second, the Canadian system delivers care privately (such as office, clinics, or hospitals) yet is financed by taxpayer dollars. For the most part, doctors are free to run their practices as private businesses. Depending on the province, physicians can bill patients separately for noncovered services, such as cosmetic dermatology or certain imaging and lab studies. Some rheumatologists in Quebec will charge their patients an additional $40 for the cost of supplies for joint injections. Other physicians have taken a page out of the American concierge medicine experience and adapted it to their system. Because there is a dire shortage of primary care physicians (PCPs), many are charging patients annual membership fees of about $200–$500 in order to join a practice. If a patient chooses not to join, then they must contend with an a la carte menu of eye-popping charges for the work their doctors perform. For example, the fee to fax a prescription refill can run as high as $30, and an e-mail reply to a patient costs about $50 to $75. Many of the provincial regulators have allowed these charges to continue, preferring not to clash with the dwindling number of PCPs.
Third, the system is fairly simple to operate. Everyone is issued a healthcare card, which serves as the “credit card” to cover services. This is great for the patient because there is no paperwork to complete and for the most part few, if any, copayments. Physicians submit their charges electronically so that most offices can run on a skeleton support staff. There is only one insurance plan to deal with and the rules and coverage are universal. According to a recent study in Health Affairs, physicians in Ontario only spent about 27% of the total money spent by the average U.S. physician in administrative costs. The per-physician cost of dealing with payers was $22,205 a year in Canada and $82,975 in the United States. They also wasted (my word) only 1/10th the amount of time spent by U.S. physicians in dealing with health plans, according to the study.
This ties into the fourth point; there is single list of covered procedures and charges. This is fairly straightforward when compared with the Untied States, where there are separate lists for Medicare, Medicare advantage plans, Medicaid, the Blues, the privates, the indemnities, the HMOs, and so on. In Canada, the submitted physician charge and the payment are identical. It is a non-negotiable amount and does not vary from provider to provider. No more bloated “paper charges” in an effort to drive up the cost of the receivable.
Potential Problems with Single Payer
So these are some of the wonderful attributes of the single-payer universal healthcare system. A casual observer may wonder why this type of plan has met with so much resistance in the United States. I think I can offer a few reasons.
The problem with a single-payer system is that it is just that—a single-payer system. The government is the sole source for the financing of the entire healthcare system. Since there is a tendency for governments to trim budgets in tough economic times, rising healthcare costs and inflation tend to outpace the allocated revenues. Over time, it is inevitable that this will result in reductions in the level of care. This may not have been as much of an issue in the earliest days of the Canadian experiment, when technology was in its infancy, drug charges were modest, and hospitalization expenditures could be controlled. However, over time these costs have exploded. Access to timely and appropriate care in Canada began to lag behind other industrialized nations because the governments (federal and provincial) were unwilling to recognize the need for investment in these new technologies. For example, during the 1990s and the first decade of this century, there had been an unofficial moratorium on the integration of magnetic resonance imaging (MRI) technology into the healthcare system. This resulted in a situation where a single Boston teaching hospital owned more MRI machines than the entire province of Quebec (population 7 million). Today, the wait time for most outpatient MRI imaging is measured in months. The slots for elective surgical procedures are rationed. In most provinces, total joint replacement wait times average six to 12 months or longer. Referrals to specialists can take six months or longer to book. The perverse consolation in all this waiting is that patients rarely miss appointments! There are few, if any, “no shows,” because if you miss your turn, you must start all over again, at the back of a very long line.
Keep in mind that there is no such thing as a perfect healthcare system anywhere. We have the high-capacity and costly U.S. system, where an anxious patient of mine…can get an abdominal ultrasound, computed tomography, and MRI of the liver, all within 48 hours. Or there is the Canadian system, where such speed is nonexistent. Is there a way to incorporate universal coverage without bankrupting the whole system? This is a daunting challenge.
Cost Control Is Key
In some ways, the delivery of healthcare is like a superhighway; in the United States, it might consist of four lanes of traffic moving at various speeds. In Canada, the traffic is narrowed to a single lane. It moves slowly. Sometimes it crawls. There are tie-ups everywhere. Governments are keenly aware that this is the way to control costs. By limiting access, you limit costs. Since few doctors take call at night or weekends, most patients are told to go the local emergency rooms, where admitted patients must lay and wait for days for an available inpatient bed. The inpatient beds turn over slowly because rehabilitation and long-term placement beds for patients awaiting discharge are also in short supply. Hospital budgets are centralized; they are closely regulated by each provincial healthcare authority. To stay within budget, administrators try to keep their census numbers high with patients who are not consuming too many medical resources. This creates a relative disincentive for getting patients discharged quickly. This appears to be the complete opposite of the U.S. system, where the Diagnostic Related Group (DRG) drives discharges.
Another way that the Canadian system reins in costs is by limiting physician licensure. The province must sign off on the region in which a doctor chooses to practice. There are restrictions on foreign medical graduates practicing and Canadian medical school enrollment has not kept up with population growth.
For a rheumatologist in private practice, what is life like in Canada? As I noted, the simplicity of the payment structure allows physicians to run their offices with barely any staff. Overhead costs are low. But then so are payments for care. In general, reimbursements appear to be in the range between Medicare and Medicaid. My rheumatology friends tell me that their office waits times are lengthy (just like here). Charts are still handwritten and, of course, barely legible! The ability to order biologic therapies and advanced imaging is restricted. For example, some provincial rules require a three-month trial for each of two to five consecutive disease-modifying antirheumatic drug (DMARD) therapies before accepting a request for biologic therapy for patients with rheumatoid arthritis. Once approved, patients must wait additional time before getting the prescription filled. Since the costs of these drugs are covered by the government, there is a constant pressure to stay within budget. Remember the adage—a slower traffic flow consumes fewer resources.
Practice Challenges
Before my American colleagues get too smug, there are some other practice-related issues that need to be considered. In Canada, I believe that doctors are more widely respected by their patients, and even by the bureaucrats. The bureaucrats need physicians to keep the system moving along. Recall that medical cost containment in Canada is achieved by limiting access to technology and inpatient bed availability and by keeping physician salaries at what they perceive to be reasonable levels. This is a key point. Although internists and “cognitivists” (e.g., rheumatologists, endocrinologists, and infectious disease specialists, to name a few) in both countries earn about the same salary, there is a huge salary gap between “interventionalists” (such as cardiologists, gastroenterologists, and surgeons) on both sides of the border. Their salaries in Canada are about half to one-third of their American counterparts. This means that many Canadian graduates have less of a financial incentive to choose the higher-paying specialties. Recently, some provincial programs have started paying rheumatologists and other internists modest stipends to teach residents in their clinics (Hallelujah!). Inpatient consults performed after hours or on weekends are now rewarded with extra compensation, too. In Canada, the onus of dealing with the denial of coverage is not thrust upon the individual doctor. The patient understands that the doctor cannot do much to change the rules or to hurry up the waiting game. This is very different from what American doctors face. For example, a recent denial of a drug that I requested for a patient with severe, ulcerating Raynaud’s disease resulted in a 14-page fax being sent to me (twice) listing my rights to appeal the decision. Does a 14-page legal document really serve anyone’s interests? In Canada this would never happen because, in all likelihood, this costly third-line drug would not even be listed in the government-approved formulary, so there would be no point applying in the first place.
Finally, Canadian medical charts are not audited the way they are here. My Canadian friends look puzzled when I ask them about compliance issues. They have no idea what I am talking about. The U.S. system has spawned an entire industry serving the burgeoning needs of medical compliance. We are constantly under the microscope. Our notes and letters are scanned to see whether we have used all the requisite buzzwords to justify the charge for a certain level of care. This whole concept of excessive chart documentation recently took a startling turn. The following paragraph began appearing at the end of the office notes of physicians belonging to a prominent academic practice in Massachusetts:
“I hereby attest that the medical record entry accurately reflects signatures/notations that I made when I treated/diagnosed the above listed beneficiary. I do hereby attest that this information is true, accurate, and complete to the best of my knowledge and I understand that any falsification, omission, or concealment of material fact may subject me to administrative, civil, or criminal liability.”
Wow. Those last two words resonate: criminal liability. Isn’t this a medical note and not a legal document? Or is it the other way around? Attention Canadian friends, keep scribbling in your paper charts. This cannot happen without a cut-and-paste option.
As we head toward the November presidential election and the debates heat up, keep in mind that there is no such thing as a perfect healthcare system anywhere. We have the high-capacity and costly U.S. system, where an anxious patient of mine with persistently abnormal liver enzymes can get an abdominal ultrasound, computed tomography, and MRI of the liver, all within 48 hours. Or there is the Canadian system, where such speed is nonexistent. Is there a way to incorporate universal coverage without bankrupting the whole system? This is a daunting challenge.
Dr. Helfgott is physician editor of The Rheumatologist and associate professor of medicine in the division of rheumatology, immunology, and allergy at Harvard Medical School in Boston.
