Strict contract between American and Canadian health care

excerpt from A short primer on why cancer persists.

The United States has the most expensive healthcare system in the world. It spends about twice as much as the Canadian system per American each year on Canadians. Per capita, the United States spends significantly more than Canada on drugs each year. The United States also has much greater healthcare capacity, with more specialists, nurses, hospital beds, CT scanners, MRIs, PET scanners, and radiotherapy units per capita than Canada. This higher capacity can be useful, but it costs a lot of money.

The high spending on health care in the United States is primarily due to the high price of each medical procedure. This is not due to more procedures being done in the United States

Having a single payer system in Canada makes the Canadian system much less expensive to operate. In Canada, hospitals and doctors easily submit a single monthly bill electronically to the provincial government. In the United States, doctors and hospitals cannot automate sending their bills to hundreds of insurance companies. Instead, it involves a great deal of time and expensive paperwork. Thus, the administrative costs of health care are almost five times higher than in Canada. In this case, the government bureaucracy is surprisingly more cost-effective than the private sector.

Insurance company bills are not the only costly part of the US system. Any non-emergency tests, procedures, or treatments must be approved by the insurance company before they can be performed. This additional administrative burden is costly.

When we moved to Texas, my wife, who is Canadian, was concerned about the number of people working in doctors’ offices in the United States. The average Canadian doctor shares a receptionist and possibly a nurse with a few other doctors. Conversely, the doctor’s office in Houston is overcrowded with staff, most of whom deal with insurance companies.

The Canadian approach is much simpler: provincial governments are building limited capacity. Canadian patients use this limited capacity to the maximum extent permitted by available resources. If capacity is insufficient, health care providers must apply for permission to build more capacity. This takes time. The end result is that there is absolutely not enough capacity. This increases wait times, but is also administratively cost effective. Bottlenecks effectively control usage, without the need for daily calls to insurance companies.

Because American health care is so expensive, American companies have to pay a lot more to insure health care for employees. This raises labor costs in the United States, while keeping wages paradoxically low. Thus, it is more expensive to produce something in the United States than in Canada and elsewhere. This is one of the main driving forces behind the shift of American jobs to other countries.

US doctors have a brutal fear of responsibility. An American doctor is more likely to be sued than a Canadian doctor. This and other factors increase the cost of malpractice insurance in the United States. US doctors also follow more expensive “defensive medicine” processes, ordering tests that may not be medically necessary but reduce the risk of a successful lawsuit.

The costs of complying with government regulations are also likely to be higher in the United States. When I worked at MD Anderson, I received frequent emails from the compliance office that I had to do or avoid different specific things. I could be fired and could face a criminal prosecution if I ignored them. For example, it was illegal to fill out forms requesting a wheelchair for a patient. These forms can only be completed by very specific professionals. I would have faced severe criminal penalties if I completed one because I am not authorized to do so. We were also told that if we tried to arrange free chemotherapy for underinsured patients, the government might force us to use coercion to try to attract patients.

Such legal threats from the government are less common in Canada. The Canadian physician must maintain a high standard of professional conduct, in line with the standards of regional medical licensing bodies. However, there are no constant threats from the government, and no need for an institution to have a compliance office.

While in Houston, I was generally shocked, as the relationship between the American people and their government seemed rather uncomfortable. This is in line with the incarceration rate in the United States. It is the highest in the world (639 inmates per 100,000 population, compared to 104 per 100,000 in Canada). In the United States, prisons can be very profitable, privately owned capital projects in which politicians and others may invest.

I suspect that US unease with government plays at least some role in the strong support for the Second Amendment. It may also have played a role in Donald Trump’s 2016 election as a president who promised to “drain the Washington swamp.” In the “frozen north”, Canadians may strongly disagree with their government. We may despise it, but we generally do not fear it. In Canada, governments control healthcare spending to a large extent through strategic budget constraints, albeit misguided rather than harsh threats.

Life expectancy: Despite the huge amount spent on health care in the United States, American men live an average of 4.5 years less than Canadian men. American women live three years less than Canadian women. In fact, the United States ranks 46th in the world in terms of life expectancy.

Part of this is because many young Americans are underinsured. A country’s life expectancy would decrease if many young people died prematurely because they did not have health insurance. When we moved to Texas in 2003, we hired a company to install a pool in our new home. Speaking to one of the young workers, my wife was concerned to find that he had relentless stomach pains. He told my wife he couldn’t afford medical care because he didn’t have insurance. This was not a problem in Canada. A Canadian can always see a doctor. They can go to any clinic without an appointment if they have trouble finding a family doctor. They may have to wait a few days or weeks for an appointment if they have a family doctor, but a lack of insurance won’t stop them from seeing one.

David J Stewart He is an oncologist and author A short primer on why cancer persists.

image credit: Shutterstock.com


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