Healthcare reforms warnings from France and Canada

healthcare-combo– Brian Lee Crowley is the founding president of Atlantic Institute for Market Studies (AIMS), a public policy think tank in Canada (pictured left) and Valentin Petkantchin is director of research at the Paris-and Brussels-based Institut Ă©conomique Molinari. The views expressed are their own. –

President Barack Obama’s package of heathcare reforms – mandatory health insurance, public health option and increased federal government financing – is being sold as preserving independent high quality care and choice for patients while keeping down costs. Taxpayers and patients in both Canada and France know better.

Unfortunately, our experience is that once the government gets its nose in the healthcare tent, not only is spending not contained, but health care professionals lose their freedom to practice. Left with few choices, patients face shortages and waiting lists.

Washington’s proposed new public health insurance option, while not imposing Canadian-style single-payer monopolistic public health insurance immediately, will almost certainly lead to that result in the end.

One of two things will happen. If doctors prove reluctant to accept patients covered by the public option and it is thus unable to compete successfully with private insurers, the politicians will not stand idly by.

Physicians’ freedom to practice outside the public option will become increasingly hedged with restrictions, perhaps ultimately ending up, as in Canada, with doctors in the public system being prohibited from taking private patients.

Or, more plausibly, in the short term at least, private insurers will gradually withdraw from the business, incapable of winning against a government-subsidized “competitor.”

In both cases, competition in the health insurance sector will progressively vanish and the U.S. will wake up with a monopolistic-style health insurance system, Ă  la France or Canada.

Consider yourself warned.

Our respective health care systems have proven incapable of reining in rising costs. Health spending in France, while lower than the U.S., is among the highest in the world, whatever the indicator, despite decades of mandatory, subsidized health insurance. After 1988, the public health care system has regularly been in the red, with deficits numbered in the billions of euros. The forecast deficit for 2009 alone: 9.4 billion euros (over US$13 billion).

French officials are scrambling to take more control of the system to bring these costs down, but Canada, where government controls all “medically necessary care,” shows that this is no solution at all. A growing share of Canadian provincial budgets is also swallowed by the health care system, going in 20 years (1983-2003) from 32% to 41% and on the way to 50% in a few short years. As a portion of GDP, and adjusting for population age, Canadian health care spending even ranked ahead of France’s in 2005.

But the oxymoron of government cost containment is not the only problem. In the name of restraining costs – so fashionable currently in Washington – governments are adding further inefficiencies by piling on more bureaucracy.

Since 1996, there is a cap on national health care spending in France and growing pressure on health care professionals in the public system to cut costs. In 2004, patients’ choice of physician and specialist was also severely limited.

Independent private medicine – once one of the main pillars guaranteeing quality and timely care in the French system – is being slowly strangled. At the end of 2008, nurses lost their freedom to practice where they please, while a new law will do the same for physicians by imposing an annual financial penalty if they refuse to practice where the government tells them to. Specialists’ fees are increasingly regulated. The last pillars of competition among providers, and choice for French patients, are thus undermined.

Canada again is a good example of where the logic of such policies will lead the French and the Americans in the future.

North of the border, decades of total government control over health care have led to chronic doctor shortages and waiting lists. Roughly 1.7 million Canadians were unable to find a family doctor in 2007 and have to queue in impersonal clinics where they exist. Yet only a physician can order tests or get a patient in to see a specialist.

Despite continual infusions of fresh tax dollars, waiting times for hospital treatment went from an average of 7.3 weeks in 1993 to 17.3 weeks in 2008, although there was a minuscule decline last year as a result of massive political pressure. The problem is so severe that the Supreme Court of Canada acknowledged in a historical 2005 ruling that patients die as a result of waiting lists for public health care.

Finally, coverage of new drugs is delayed by a year or more for patients relying on the public system. Even with this delay, by October 2007 less than half of new drugs launched between 2004 and 2006 had been listed for payment.

Based on experience in both our countries, government health insurance and government financing inescapably lead to a crackdown on health care providers and bureaucratization of the entire health care system. Americans should look carefully at our experiences before going any further down the slippery slope of state-controlled health care.

58 comments

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Unfortunately we are focusing on the wrong thing. The issue is not that we can’t afford health care. The problem is we can’t afford anything. Our entire economy is falling apart. Health care is just one more nice thing we can’t afford (public or private) in a failing economy. Fix the economy and all the sudden health care becomes affordable. The public option is always the least efficient of course.

GDP has been sliding in relation to total money supply (M3), ie Velocity of money (VOM), for 100 years. Use of credit rather than cash as the primary source of our money supply has been rising for 100 years and now stands at 97% credit and 3% cash. In 1865 we were 50/50. Wonder if that could have something to do with the stagnant GDP? Sure could use another Abraham Lincoln / Henry Charles Carey combo with their clear thinking on Macro-Economics. They faced a seemingly insurmountable problem in their day, paying for the civil war. They managed to pay for the war and stimulate the economy, tripling the VOM/economy. Wonder how they did that? These problems aren’t new and have all been solved in the past, just have to study a bit of history.

Posted by Henry HOLLENBERG | Report as abusive

If America goes with single payer system, then I would be glad to have the same medical benefits as our President and Government Senators and Congressmen.

Am I asking too much? If they are covered by Government Medical Insurance why CAN’T the regular Joe Six-Pack have the same benefits?

I pay $1200 year on Point of Service health care I pay a premium and co-pay with $500 deductible. I am fairly happy with my Insurance. However, once I get on Social Security and medicare, I will have to drop my Company Insurance and wait in long lines with inferior care-not able to CHHOOSE my own Doctor.

I will then have to buy supplemental insurance to cover what Medicare refuses to insure.

God help us all!

Posted by General_Mortars | Report as abusive

Wake up people! You only get what you pay for. It is time to make the hard choices as to what you really need and how you are going to pay for it. Don’t expect a government mandate that everyone gets free health insurance to be a reality. At some point the money runs out and you have to decide who gets what treatment and who doesn’t get treated. I’m talking about cost / benefit ratios. Are you going to spend 1/2 of a person’s total health care costs in the last year of life like we presently do, or allocate that money to patients that have many years of life?

The medical malpractice situation must change because 15 to 20% of your dollars are going to lawyers and the few people who file these lawsuits. 75% of malpractice suits are frivolous and need to be squashed before they ever reach a court. The other 25 % need to be adjudicated by a medical review board, not a court of law. A board composed of elected members representing the people, and the medical profession would hear cases and decide guilt or not. The monetary awards would be appropriate to the injury. No lawyer’s contingency fees, no excessive pain and suffering fees.
It is time to decide what you want, or the forces of special interests and financial necessity will decide for you!

Posted by william scott | Report as abusive

You collectively described the financial pressures that Canada and France are facing. They pale in comparison to what the US government is facing. Health care outcomes are across the board better in both countries than in the US. They are by and large getting what they pay for. Infants don’t die as often, people, on average live longer. Without hard data to support this, much like the authors, I would say from my experience practicing medicine for 10+ years in Washington, DC, a far greater percentage of Americans “die waiting for care” than in either country combined. Very few Canadian or French politicians or news outlets are calling for a fully-privatized system of insurance that ensures that care is unequally available. This despite the fact that both countries provide care for all citizen and non-citizen alike.

One last point: please stop implying that waiting a year for a physical exam by a family physician is somehow bad. If you’re between the ages of 16 and about 40 and have no significant family history to speak of (i.e. most people in most countries, although that’s shifting) you don’t need an annual physical. Its in no one’s interest to delay finding a serious illness, more advanced disease is much more expensive to care for than early stage disease. No well-designed, implemented and managed system created in this era would deliberately push people into greater degrees of illness, the system and the payors (that’s us) couldn’t afford to. Stop peddling fear, start thinking of ways to get the best of private and government plans. The US military does it exceedingly well, driving innovation and keeping private industry fat. Surely the health of our fellow citizen is worth the effort, yes?

Posted by Michael Williams, MD | Report as abusive

Again the Canadian perspective, we have a government scandal here involving tax payer money and abuse of health care funds. E-health is a disgrace in this province (google: E-health scandal Ontario).

Scumbag insurance companies are one thing…but giving your hard earned money to the government is not a lesser evil. Your taxes, your political freedom might be at risk, in my opinion. Canada has the highest taxes in the world, also one of the lowest birthrates. Taxes kill jobs. Canada has a generation of its best and brightest living in their parents basement…

Your Cash for Clunkers is a great example. The government now owns the U.S. automakers. And if the government sees competition it eliminates it. Look what they are doing to the competition: old cars. Destroying old cars forever is a ass-backwards way for your government to be touting the environment while pulling this crap.

But this is the thing…State-run healthcare will have consequences, good or bad depending on if you like the nanny state…Good luck. You’ll need it.

Your Canadian Neighbour,
Drew
Bracebridge, Ontario

Posted by Drew | Report as abusive

OK! I get it, all of the US’s problems are the fault of worthless-workless people like me? OMG thank you for that insight. When a bag of potato chips and a soda cost less than a bag of crisp veggies and a bottle of water, then you can criticize me for my choices. I am more than sick to death of your types. I am ‘diseased’ of them. I put in my time as a drone..did an honest job in construction fed my children healthier and all of that, now I have been unable to even get an interview for a new job, so we rely on California’s medi-cal to keep my daughter from being an ADD nightmare and to keep my wife from dropping into a coma from hypothyroidism. Get off these forums if you can’t acknowledge what simultaniously advances and bankrupts the US is GREED. And a healthy dose of hate for those who have fallen on hardships. And I will proudly use my EBT card to feed my family and hope this subsidized healthcare for all comes into play, so when I am forced to take a minimum wage job after my unimployment ensurance runs out…I can affordthe same medicines that some in my family need to survive, sure it will cost more taxes. But I’ll be lgad to pay em whenever someone decides that I am worthy to be their employee. Hate sucks and so do you.

And I wasn’t even going to comment until I kept reading that somehow the problems were all my income groups fault, instead of blame sitting on elitist well-to-do who think they can stand on our backs to remain ridiculously weathly.

Posted by Fat Lazy Low-income Slob | Report as abusive

Did you know that the US is the only industrialised country in the world that still lacks a wholly public health care system?

What does private health care cost? Studies show that Americans pay more money for less health care than other countries. American corporations cannot compete with other corporations from around the world because they are burdened with the financial and bureaucratic difficulties associated with insuring their employees’ health. And while bankruptcies can result from any number of financial difficulties, half of the bankruptcies filed in the US are a direct result of medical costs. This is not solely the problem of the uninsured: the vast majority of those health care-related bankruptcies come from those who are insured.

But the cost is much more than dollars and cents. It is about human lives. Our infant mortality rate is higher than that of Taiwan and Cuba, in addition to most European countries including Croatia. Entire cities’ worth of American babies die each year in the US compared to Canada because our infant mortality rate is that much higher than theirs. 18,000 people die in the US every year because they could not access health care. This number includes the insured and uninsured. 47 million people in the United States do not have health insurance.

How much longer will we force ourselves and our fellow Americans to suffer from our pride and our unwillingness to stand up to the message streaming from the lobbyists of our corporate HMOs? How much longer will we watch our corporations struggle and fall while those in other countries struggle and survive? When will we regain our sense of pride and take back this system which has been controlled by impersonal, uncaring corporations for far too long?

Posted by Pink Muslimah | Report as abusive

Without going into specifics, I will say only one thing. The Canadian health care system is imperfect but improving. Would I trade the Canadian system for the American system, or what is being proposed? No bloody way.

Posted by Jon | Report as abusive