What Hillary could learn from Canada and Germany - national health care - includes related article

Washington Monthly, March, 1994 by Susan Fitzgerald, Mark Jaffe

To some degree, this is similar to the imperatives Katherine Neubach faces or the efforts of Canadian surgeons to prioritize their patients. But the essential difference is that unlike German or Canadian patients who can switch doctors, under the Clinton plan people would be stuck for at least a year. The time most people want to see another doctor or go to another hospital is when they disagree with a diagnosis or treatment.

But guess who will be able to switch at any time under Clinton? The "managed" market will offer options and additional coverage so that those willing to pay more in premiums and deductibles will have more choices. In Canada and Germany, an individual can buy perks with extra insurance, but extra insurance does not buy better medical care.

Although the Clinton plan would subsidize the poor and the unemployed, it does not give them the option of choosing plans that cost more unless they pay the difference themselves. Stephanie Woolhandler of the Harvard Medical School, a Clinton critic who favors a Canadianstyle system, contends that the Clinton plan "is really ratifying a multi-tiered health-care system."

* Cost controls: The Clinton plan, unlike Canada and Germany, does not cap medical costs. But without curbing costs, every other goal--the comprehensive benefits, the universal coverage--is jeopardized. The economic hallmark of the Canadian and German approaches is setting budgets and then negotiating with private health care providers over how that money is to be spent. Both systems believe that hard choices have to be made in the public arena, and sometimes those choices are very hard. This past December, to stay within its global budget, North York General was forced to shift to a reduced emergency schedule for 12 days--deferring all elective procedures and furloughing most of its staff. The German system has begun to resort to additional co-payments for items such as pharmaceuticals in an effort to blunt demand. (Germans consume twice as many prescription drugs per person as Americans.)

But the Clinton plan envisions no global budgets and no direct negotiations, the features which control costs in the other systems. So how will it save money? How will the hard choices be made? The program's key line of defense against spiraling costs is limits on premiums set by the National Health Board. But under a market system there are two risks. First, there could be pressure from consumers or health care providers that push the premium caps higher and higher. The second risk is that the caps hold and providers are faced with the dilemma of balancing patient care against making money.

The tough decisions that will have to be made--limiting access to specialists, telling people they must wait for an MRI scan or not have one at all, closing some hospitals while beefing up others--will be made by companies whose main concern is not universal coverage or equal access, but rather profit. So the final question posed by the Clinton approach to health care is which will ultimately be served: the public good or the bottom line?