Lessons from Canada about a single-payer system - Eye on Washington - US states consider adopting a Canadian-style single-payer system

Healthcare Financial Management, May, 2003 by Jeanne Schulte Scott

"Canadian-style single-payer." I thought I had heard these words for the last time when the infamous Clinton health plan of 1993-94 came crashing down, costing the Democrats control of Congress after nearly 40 years.

And yet, just this year, new legislation has been introduced by none other than Massachusetts senator Ted Kennedy that would bring a Canadian-style single-payer system south of the border. And there's more. Last fall, Oregon voters beat back a referendum that would have made that state the first in the nation to move to a Canadian provincial-style system of universal health insurance.

This year, Massachusetts, Maine, Vermont, and New York have seen proposals to move to a single-payer system. Democratic presidential candidate Howard Dean, a physician and the former governor of Vermont, has resurrected the issue of universal health care by making it his campaign theme. Physician associations in Wisconsin and Texas have called for the adoption of universal health coverage, including mandatory employment coverage and/or what is called "play or pay, under which employers would either buy health insurance for their employees or pay into a statewide insurance pool that would help the uninsured purchase health coverage.

Touching the Third Rail

With all of this renewed effort to move the nation toward some sort of single-payer system, it behooves us to take a look at our neighbors to the north. The Canadian healthcare system, founded in the 1960s, has long been heralded for providing essentially free health insurance for all Canadians. In recent years, the Canadian health system has become the "third rail" of Canadian politics, like the Social Security and Medicare programs in the United States: touch it and die (politically)!

But is the Canadian system really so popular? Growing complaints about long waiting periods for treatment and surgery as well as widespread "line-jumping" by the affluent and well-connected are eroding public confidence in Canada's national healthcare system. Just as health care may dominate next year's presidential election in the United States, Canadians want to debate their national system before their national elections, also scheduled for 2004.

Queuing for Care

A recent government study indicated that 4.3 million Canadian adults--or 18 percent of those who accessed the healthcare system in 2001--reported they had difficulty seeing a physician or getting a test or surgery done in a timely fashion. Three million Canadians are unable to find a family physician, according to several private studies. Canada spends $66 billion a year on health care--only the United States, Germany, and Switzerland spend more as a proportion of total economic output--but budget cutbacks since the early 1990s have impeded efforts to keep health care up to date. For example, a recent report by the Canadian Senate's Standing Committee on Social Affairs, Science, and Technology indicates that well over 30 percent of the country's medical imaging devices are obsolete.

Outdated technology is one reason for the long lines; others include a shortage of nurses and inefficient management of hospitals and other healthcare facilities, according to several studies. Waiting times have increased because an aging population has put more demands on the system, while the current generation of physicians is working fewer hours than in the past. Waiting can occur at every step of treatment. One conservative study concluded that in patients across Canada experienced average waiting times of 16.5 weeks between receiving a referral from a general practitioner and undergoing treatment, a rate 77 percent higher than during 1993. The recent Canadian Senate report noted that waiting times for MRI, CT, and ultrasound scans have grown by 40 percent since 1994.

Defenders of the Canadian system note that patients waiting for nonemergency care, like treatment for cataracts and hernias, skew the waiting time statistics. And they argue that with a life expectancy of 79 years, Canadians still enjoy one of the longest life expectancies in the world, slightly higher than life expectancy in the United States, where more than 41 million people have no health insurance and upward of 75 million went without coverage for at least part of 2002 (according to a recent Kaiser Family Foundation report). Still, recent polls show that although Canadians want to keep their national system, they are worried about its future effectiveness.

So, while we in the United States are hearing renewed calls for a national single-payer system patterned at least in part on Canada's system, in Canada there is a growing acceptance of privately managed medical services and user fees in return for quicker service. A hospital in Montreal has begun charging fees for some surgical procedures and renting operating rooms to patients for several hundred dollars an hour. A Vancouver hospital has begun selling full-body CT scans for $66o. To reduce waiting lists, the provinces of Alberta, Nova Scotia, and Ontario have established about 30 private MRI and CT clinics, some of which offer nonemergency services to be paid for by private insurance.