The Voice of Pro-Medicare Physicians in Canada
Evidence-informed, Values-driven
e-Rounds Issue 14, February 2009
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Privatizing Health Care is not the answer: Lessons from the United States.
Marcia Angell. CMAJ 179(9): 916-919, 2008.
Background: From time to time, a compelling analysis of private health care is published in the
peer-reviewed literature. Arising out of a lecture to the American and Canadian Orthopedic
Associations in Quebec (2008), Dr. Marcia Angell reviews a wide range of topics and evidence
on what Canada might learn from the United States as it relates to both private funding and for-
profit delivery of services currently covered under Canada's Medicare program.
Methods and Limitations: Dr. Marcia Angell is a physician and senior lecturer in social
medicine, Department of Global Health and Social Medicine, Harvard University, Boston. Dr.
Angell is recognized for her work on health reform and offers a compelling perspective to inform
Canada's experiments and practices in private health care delivery and funding. This analysis,
however, represents the perspective of a single physician academic and may not be representative
of the perspectives of other US-based physicians.
Analysis: Proponents for an American-style system argue there is more choice, better quality,
faster access, and less public expenditure. Dr. Angell's essay suggests anything but. She reminds
us that before Canada's Medicare Act (1966), Canada and the U.S. had similar systems of health
care, partially public and partially private, and of a similar cost. Once the last jurisdiction joined
Canadian Medicare, the Yukon Territories in 1972, the two systems began to diverge, with the
result being that by 2005, U.S. expenditures were $6697 per person (a figure that has risen to
$7421 as of 20071), compared to Canada's $3326 per person. Moreover, Canada insures all of its
people for necessary doctor and hospital care, yet 15% of Americans have no insurance
whatsoever and 37% of the population report they have foregone needed care because of cost
(compared to 12.6% Canadians).
A critical question is whether there are better outcomes in the U.S. given this divergence in cost.
The answer is a resounding "no". Americans now live 2.5 years less than Canadians, have higher
infant mortality rates, more preventable deaths, and fewer doctor visits, acute care hospital beds,
and nurses. Even with slightly more doctors per capita and more MRI units, US health indicators
are worse than those in Canada. The paradox of paying more and getting less is attributed to
enormous inefficiency, with healthcare treated as a market commodity as opposed to a social
service. Americans under age 65 are dependant on tax-free health care benefits offered only by
some employers (not all), who contract with largely private investor-owned, for-profit insurance
companies. Insurers shift costs back to beneficiaries through deductibles, co-payments and claims
denial, and they avoid sick patients all together through adverse risk-selection practices. Not
surprisingly, the cost of administering these practices, together with marketing costs, profit-
skimming, and revenues siphoned off by other components of the medical industrial complex,
resulted in overhead costs conservatively estimated in 1999 at 31% for every health care dollar,
the highest in the world.
Embedded within the U.S. system is the most popular component of American healthcare,
Medicare, the single-payer, government funded program for the aged. Medicare is highly
efficient, with about 2% overhead (similar to Canada's 1.3% overhead drawn by the provincial
single payers) and with universal coverage. However, changes brought about by past US
government administrations have weakened the system, increased out-of-pocket expenses, and
set off cost inflation to potentially unsustainable levels.
Commenting on Canada's system, Dr. Angell's perspective is that neither the payment or
delivery structure of our system are the problems but, rather, constrained funding, which has
resulted in some long waiting times for elective procedures and corresponding calls for
privatization. She points out, as other Medicare e-Rounds have, that private health care shortens
waiting lists for the private system but increases them in the public system by drawing off
resources Ð physicians and other assets. For -profit health care is also more expensive, but no
more efficient, than not-for-profit health care, and often of lower quality.
Summary: Dr. Angell's rebuke of the U.S. system is striking. Her caution is that privatizing
Canada's health care system, even a little, will increase costs, decrease quality, and lower access.
Accordingly, her advice is to "expand and reinforce the public system, not undermine it."
In the near future, we are likely to see changes in the US health care, with 2/3 of Americans and
3/5 of doctors wanting a Canadian-style publicly-financed system. Vigorously opposing this are
big private insurance, for-profit facilities, and procedure-orientated specialists.
1 Hartman, M., Martin, A., McDonnell, P., Catlin, A. et al. National Health Spending in
2007: Slower Drug Spending Contributes to Lowest Rate of Overall Growth since 1998,
Health Affairs, 28, no. 1: 246-261, 2009.
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