[P&R] Public Integrity - The Canadian health care system I disparaged

[Kersus]

http://www.publicintegrity.org/2014/04/2...disparaged

The Canadian health care system I disparaged
Commentary: single-payer regime up north represents a better way
By Wendell Potter 6:00 am, April 28, 2014 Updated: 12:19 pm, May 19, 2014

When I returned home after a two-week speaking tour of Canada and began catching up on news about Obamacare, I was angry and upset, and not just at politicians and special interests that benefit from deception-based PR tactics. I was — and still am — mostly angry and upset with myself. And I know I always will be.

Over the course of a two-decade career as a health insurance executive, I spent hours and hours implementing my industry’s ongoing propaganda campaign to mislead people about the Canadian health care system. We spread horror stories about “rationed care” and long waiting times for medically necessary care. Our anecdotes were not at all representative of most Canadians’ experiences, but we spent millions of dollars to persuade Americans that they were.

At every stop between Halifax and Vancouver this month, I explained how the United States had achieved the dubious distinction of having both the most expensive health care system on the planet and also one of the most inequitable. While Canadian lawmakers in the 1960s were implementing a partnership between the federal and provincial governments to create the country’s publicly funded universal health insurance system — known as Medicare — our lawmakers in Washington were establishing America’s own single-payer Medicare program, but only for folks 65 and older and some younger disabled people. Congress also created the federal and state-administered Medicaid program for the nation’s poor.

Ever since, most of the rest of us have had to deal with private insurance companies and pay whatever they felt like charging us for coverage. Canadians are also paying more for coverage these days because of medical inflation and an aging population, but not nearly as much more as we in the U.S. are paying. Just about everybody in every audience I stood before gasped when I told them that health insurance premiums in the U.S. increased 131 percent between 1999 and 2009 — the main reason why 50 million of us were uninsured at the end of the last decade — and that by 2013 the average employer-based family policy cost $16,351.

At one stop in Toronto, I was asked if there was anything about the U.S. system that Canadians should consider adopting. I was stumped. I noted that while we had some of the world’s best doctors and hospitals, they were in many cases off-limits to millions of Americans, many of whom were uninsured because of preexisting conditions that made them “uninsurable” in the eyes of private insurance companies.

Later, on reflection, I realized I should have mentioned some aspects of our Medicare system and our other single-payer program — the Veterans Health Administration — both of which consistently out-perform private insurers in customer satisfaction surveys.

The two aspects of our Medicare system worth emulating are: (1) the fact that it’s a federal arrangement, meaning that benefits and services do not vary from state to state, and (2) the prescription drug benefit (Medicare Part D) that Congress added a few years ago. The Canadian Medicare program is akin to our Medicaid program in that the provinces have broad latitude in administering benefits and services. As a consequence, Albertans’ experience with Medicare can be quite different from that of Newfoundlanders. And the Canadian Medicare program still does not cover medications. Canadians have to buy private insurance for their prescriptions. Consumer advocates there continue to push for the adoption of a nationwide drug benefit.

As for the Veterans Health Administration, which owns and operates its own hospitals, it not only gets higher customer-service scores than private hospitals, it is frequently cited for better health outcomes. For example, the RAND Corporation found in a 2004 study published in the Annals of Internal Medicine that the VHA outperformed all other sectors of the U.S. health care system in 294 measures of quality.

In other words, Canadians should consider making their system even more public than it is, rather than more private.

I usually began my remarks in Canada with an apology — for all the misinformation I helped spread in the U.S. about their system, which, by the way, continues to have overwhelming support. I didn’t encounter a single Canadian who didn’t talk about their Medicare program with pride.

Back in the states, among the distressing pieces I read was a New York Times story last Monday based on interviews with Americans who said they had decided to remain uninsured either because they couldn’t afford to pay the premiums or had just decided to gamble with their health and personal finances.

Those are decisions completely unknown and unnecessary in Canada, where the per capita spending on health care is far lower than it is here and where people live longer.

[Lunamancer]

I feel this is a topic on which the people who express opinions are woefully uneducated. It's a big and complicated one, so I'd like to simply start by making a few notes on some key areas that are almost universally mis-represented in the debate. I wouldn't expect them to be compelling to people who have taken sides politically, but for a thinking person, or one who truly cares, it should be cause to re-think everything you know and believe about health care.

First, regarding equality, opponents of universal health care--the more savvy opponents, anyway, would be quick to point out that the equality measure is in itself bogus, crafted specifically for political reasons. I would be so bold as to take that a step further and say equality itself is a myth. Time and time again, we see Pareto's 80/20 law hold true. I have no doubt that if you could look at who's actually using health care resources in Canada that you'd find 80% of the resources are being used by 20% of the patients.

These won't necessarily fall into neat demographic categories such as the 20% oldest or the 20% wealthiest are using 80% of the resources; though they might be. What I am saying is if you had a complete database of all health services usage and you sorted it by patient according to how much health care they used, you'd find that the top 20% did indeed use up 80% of Canada's health care resources. That doesn't sound like equality to me. Merely a re-shuffling of the deck.


My second point is the conflation of the "health care system" with "health insurance". Or more specifically, the conflation of health insurance with insurance. Because here in the US (and I imagine most countries tangled up in this debate as well), health insurance is an aberration. It's the only type of insurance where the insurance company does not cut a check to the beneficiary.

I won't go into the economic mechanics of it here. Suffice to say, this creates a warped incentive system that bloats the whole system. Insurance companies benefit because they get to write bigger policies. Hospitals benefit because they get to charge outrageous prices knowing that they will either a) be paid by deep-pocketed insurance companies, or b) be written off as losses for patients who cannot pay, those losses insuring the hospital maintains its "non-profit" status.

It's misleading, however, to say that this is what the American system looks like. Americans still like to think we have the freedom of choice. In the US, there are for-profit, cash-only clinics that have nothing to do with the "health care system" that typically charge only One-Tenth what a "mainstream" hospital charges. In many cases, the total tab comes out to less than the insured patient's co-pay.

Moreover, and this is really obscure knowledge that I just happen to have because it ties into what I do professionally, some insurance companies do offer certain riders and living benefit provisions on their life insurance policies--and these are becoming more and more popular--that provide cash pay-outs for critical illness. This allows the patient to take the cash to shop around for treatment, including at cash-only clinics.

Now I'd say insurance + clinics constitutes a health care system, and a totally free market one at that. When has anyone even heard of what I described? When is it ever included in the debates? How many people do you know who would jump on it if you said, "Hey, how would you like health care to only cost a fraction of what it is, and your insurance company to give you a cash pay-out so you don't have to worry if the doctor is on the right network?"


My third and final point is that single payer simply doesn't work. It never has worked. It never will work. It's not even working anywhere right now. We have the illusion of it working. Allow me to dispel it. The waiting list is itself the damning evidence. It's proof that under the single payer system, supply cannot keep up with demand. Oh, they won't ever admit it. Everyone will still get treatment. Just come back tomorrow, or next week, or next month.

But if it takes even One Day and One Hour to supply a Day's worth of demand, then at that rate, after 24 days the wait time will be 2 days. After a year, it will take 15 days, and after 12 years, the waiting list will be 6 months long. If that goes on long enough, everyone who gets sick will be dead before they ever get treatment. In my generous example it may take 2000 years to reach that point, but the real world is not so forgiving. The question is, do you have to wait until that day before you admit that system is unable to provide healthcare at all?

[Kersus]

There are waiting lists in any system I know off, except that in a free-market, the privileged can skip ahead.

That said, I was impressed to be able to schedule my own surgery around my schedule in a socialized health care system. I even had them wait extra time so I could recover in the time period most convenient for me. There was no push-back on this.

However in the free-market, my cousin was unable to get treatment for Pneumonia because blue-cross didn't want to pay out. The same for a friend with gall-bladder stones. The stones were identified by socialist doctors and hand waived in the free-market until it came to emergency time. They would have been better served to have their surgery in the socialist hospital of the nation they visited than to have to fight to get their capitalist doctors to listen... which they didn't and the friend could have died as my cousin did.

Ultimately it's not about left or right to me, it's about freedom and for me that means all people have equal access to goods and services regardless of rank or financial station. Can that be perfectly executed? Probably not, but the closer, the better.

Of course that system doesn't make everyone happy. It's not one system to rule them all. It may well be good to have different places with different systems to choose from. It becomes a problem when one system is leeching from another.

Moreover, and this is really obscure knowledge that I just happen to have

This is one of my issues where I am now. It's hard to find out what all is available to you sometimes. A sick or injured person needs an advocate. Regardless of the system in place, it would be nice if all information was readily available. Perhaps it is somewhere, but it appears that those who know, gain an advantage. It's the same in grants, business, etc..

[Lunamancer]

There's free as in freedom, and then there's free as in beer.

As I mentioned in the freedom thread, freedom is simply voluntary action. If a man voluntarily gives a woman a drink, the result is that she gets free beer, but that's an example of freedom. Simply demanding the beer as if it's a right is the "free beer" philosophy, and it just doesn't work because we live in a world of scarcity. It's not a policy choice or a philosophical leaning. It's reality, and we ignore it at our peril.

The same holds for food, clothing, shelter, and healthcare. And it's funny, that. I remember when I was in third grade and we were learning about the caveman days, we were taught that the three necessities of life are food, clothing, and shelter. I don't know when healthcare was added to the list. But it seems absurd to even talk about universal healthcare when we don't even have universal nutrition or housing, both of which would relieve some of the demand on healthcare. A person will certainly die of starvation or dehydration quicker than most illnesses.


But the big thing here I need to point it, it probably should have been among my original points, is that I do not consider Blue Cross, or really any health insurance provider (again, I consider health insurance to be an aberration), to be part of the free market system. It'll take too long to delve into it, so I'll simply say that when you look closely into the incentives, it's got government hands all over it.

The big thing I should point out, though, is Blue Cross cannot deny you treatment to anything. They're not the ones that actually treat anybody. They merely offer solutions to financing health expenses. It's the health providers themselves--hospitals and doctors--that deny treatment (presumably in absence of payment).

At this point, you're faced with one of two choices, and the ethical choice here should be easy. Either you enslave the care providers, force them to administer healthcare so The People can claim their Sacred Right. Or else realize that the real challenge has nothing to do with the healthcare itself, but in how to plan your finances so that you will be able to make the payment when the need arises to get your healthcare.


Once you understand it's not a healthcare problem but a finance problem, you take to solving it very differently. Give me the average amount of money Americans are spending on healthcare, and I'd structure their finances so they not only have their healthcare needs taken care of, but they also retire with millionaire level income as well.

[Kersus]

The same holds for food, clothing, shelter, and healthcare. And it's funny, that. I remember when I was in third grade and we were learning about the caveman days, we were taught that the three necessities of life are food, clothing, and shelter. I don't know when healthcare was added to the list. But it seems absurd to even talk about universal healthcare when we don't even have universal nutrition or housing, both of which would relieve some of the demand on healthcare. A person will certainly die of starvation or dehydration quicker than most illnesses.

In some areas Internet is now officially considered an essential service with electricity.

Nutrition andd housing is most definately essential and while housing isn't free, anyone who wishes can usually find a health clinic nearby who is pushing programs on living well and they usually if not always have a nutritionist on staff. These programs find funding through various sources and often supply subsidized food.

[Lunamancer]

In some areas Internet is now officially considered an essential service with electricity.

I think this makes my point exactly. When I think of all the "necessities" I've gone without. And I'm no rugged woodsman by any means. I live a very modern life. I live in a city.

But when it comes to buying a car, paying for healthcare, cable TV, electricity, and cell phone service, a quick back-of-the-envelope calculation shows that whereas the average American spends $850/month combined on those things, I'm only spending $85/month on average. And I really don't feel I'm living a life of basic subsistence down to only the barest essentials. This would seem to suggest that better than 9 out of 10 goods and/or services that are considered "necessities" just clearly are not at all.

Do I make sacrifices? Sure. I ask myself what I really need. I don't let others dictate to me what is supposed to be necessary.

What kind of security do you imagine I've built up over 15+ years of saving $765/month? The most money I've ever earned in a year was $60,000, but if you averaged my earnings for the past 15 years, it's a meager $30k per year on average (this is all before taxes), but I am well on my way to being a millionaire. When I'm able to pay in cash for the things I need, have I not earned my ability to skip ahead in line for doing without so many "necessities" for so long?

[Kersus]

It's very true that what many consider necessary simply isn't, when we're talking about survival. I recall people vehemently complaining and spearheading campaigns to get their cable tv back up and running in Florida after a hurricane. They didn't care if they had electricity or many times, even a roof. They expected cable tv. Nevermind the logic behind cable working without electricity. It was something that really stuck with me.

I would guess that Internet is becoming an essential service because it's the only means of communication in a crisis that many would have. That may not be the reason, it's just a guess. The big difference between an essential service and a non-essential service officially is just who is allowed to repair their equipment during and after a crisis. Essential goes first. I don't think it means it's required to live. It does sound funny in a quip though.

I don't have cable myself, but I do spend increasingly insane amounts of money on electricity and my cell phone bill alone is probably your monthly average for everything. Add my Internet and phone line. Now, the cell and Internet are part of how I make a living, and the landline is actual just an emergency line but it costs $50 to have it sit there in case of emergency.

To answer your question though, I'd say no. The ideal system for me is one where all people regardless of race, sex, station, intelligence, ability, etc., have exactly the same access to all goods and services. Those who work hard may very well merit more goods and services but do not get to skip ahead in line over others.

I used to believe in a cash only society. In fact, I still believe in it, I just stopped living in it as credit cards became cheaper.

[Lunamancer]

It's very true that what many consider necessary simply isn't, when we're talking about survival. I recall people vehemently complaining and spearheading campaigns to get their cable tv back up and running in Florida after a hurricane. They didn't care if they had electricity or many times, even a roof. They expected cable tv. Nevermind the logic behind cable working without electricity. It was something that really stuck with me.

A couple points here. I was trying to be clear that with all the corners I cut and the money I saved, I was still living a modern life. I would never have considered myself barely surviving. I had a digital projector and a 5.1 surround sound DVD (in the days before 7.1). Whenever I had the urge to go see a movie, I'd instead buy a DVD. At my home, it was just as good as going out to see a movie. It would cost the same. Less if I got it out of the bargain bin. But I could also re-play it any number of times. If on average I watched a DVD 4 times, I saved 75% compared to going to the movies. And now, after all these years, I have a library of over 300 movies.

The second point is the sense of priorities you raise in regarding Florida after a hurricane. For one, I'm sure the people demanding cable service back on were not necessarily the same people who were without electricity. But the point is taken. And that point is one man's need is another man's desire, and vice versa. I say "need" is nothing but a "want" that is more immediate. There is no big red line separating the two. No reason to hold one up on a pedestal as somehow worthy of special treatment.

I don't have cable myself, but I do spend increasingly insane amounts of money on electricity and my cell phone bill alone is probably your monthly average for everything. Add my Internet and phone line. Now, the cell and Internet are part of how I make a living, and the landline is actual just an emergency line but it costs $50 to have it sit there in case of emergency.

And this in itself is a point that if this discussion continues far enough down the line that will re-surface as absolutely vital. During the days when I was a musician, if I was down to my last $10, buying guitar strings trumped food. Now even I, on authority of some bullshit I learned in the 3rd grade, will agree that food is a necessity of life. Guitar strings are not. But if spending $10 on guitar strings allows me to play the next 8 gigs, on which I earn $500, suddenly that's a no-brainer and the "necessity" argument begins to look pretty weak.

In economics, we call this a capital investment. You'd be strung up in polite society for suggesting capital investment is worth taking food off of poor schmuck's table. But you and I both can point to real world examples where capital investments obviously are the only sensible priorities.

Now I'd agree that we don't want J.P. Morgan taking food off of Farmer Brown's table. But the welfare mom who's got food stamps can only use them to buy food. Not to make capital investments. We can't just give her cash, which she could invest, because we're paranoid she'll buy crack instead of milk for her kids. This demonstrates how the nanny-state mentality does not solve the poverty problem, but rather does more to extend it.

To answer your question though, I'd say no. The ideal system for me is one where all people regardless of race, sex, station, intelligence, ability, etc., have exactly the same access to all goods and services. Those who work hard may very well merit more goods and services but do not get to skip ahead in line over others.

So allow me to follow up with this question. Suppose a heart surgeon himself needs heart surgery. Doesn't it make sense his heart surgery is skipped ahead of all others? After all, saving his life will enable him to perform 50 such surgeries in the future.

How about a baker? Should he not be the first to eat? After all, him staying nourished is in society's best interest since he will contribute so much more staple-of-life bread than he will ever consume.

I myself was a baker for 15 years. But towards the end, those last 2 years, I came under the belief that bread was actually very unhealthy for me. If you agree that I should have first dibs on that which I create with my own hands, should I not be allowed to make a trade for an alternative form of nourishment, especially as a life-or-death health decision, the priority argument still holding?

(Side note, I would argue that choice really was life-or-death for me. At age 30, I was in many ways in the best shape of my life as I exercised regularly and was able to do some pretty hard-core yoga stuff, which is insane for a man of my body frame. Yet still, at age 30, my blood pressure was just a little high and I would frequently experience chest pains. After changing my diet, 7 years later, I no longer exercise regularly, no longer do physical labor, but my blood pressure is normal and I haven't experienced chest pains in more than 5 years, despite having more stress and less fun than I used to have.)

[Kersus]

I'm sure the people demanding cable service back on were not necessarily the same people who were without electricity.

If only that was true. I recall my first customer like that and trying to help. The first problem was that we couldn't fix their cable until emergency services were done in the area. It was a bit into the conversation before I realized he didn't have power and then later I was overheard in an astonished voice asking "Wait, did you say your roof is gone?"

Then it was customer after customer with similar issues. Whole areas out of electricity but demanding cable. I quickly gave up trying to explain that the cable line requires electricity to people with their TVs attached to generators. There were only a couple that actually could see stars from their living room - that I dealt with personally anyway.

Also, no, I would prefer that the doctor should have the same access as the baker to any goods or services.