A life and death drama is unfolding in South Africa at this very moment as a consortium of pharmaceutical corporations, many based in the United States, fight to preserve their property rights in the face of the AIDS pandemic and the outrage of progressive humanity. Complete coverage can be accessed by going to
The Canadian Cure
http://www.newrules.org/journal/nrwin01health.html
Just because the federal government can’t overhaul the health care system doesn’t mean it can’t be done. In a similar situation, Canada’s provinces established individual systems founded on equity, public administration and decentralized control. Fifty years later, all Canadians are covered and the plan still costs less per capita (and a smaller percentage of the GDP) than U.S. citizens pay. Maybe we should take another look. By Daniel Kraker
In 1946 Tommy Douglass, the colorful premier of the huge but sparsely inhabited Saskatchewan, revolutionized CanadaÕs health care system. Using the authority that CanadaÕs courts had given provinces over health care, Douglass crafted North AmericaÕs first universal health insurance scheme. He did so at a time when Saskatchewan was heavily in debt and suffered from a severe shortage of doctors and nurses. Douglass had no model to follow and little data on actual costs.
Before Douglass shook the foundations of Canadian health care it looked much like the current American system. The federal government had tried to institute a national health care plan immediately after World War II, but abandoned the effort when the provinces failed to reach consensus.
By 1949 both British Columbia and Alberta had followed SaskatechewanÕs lead. In 1957 the federal government adopted the Hospital Insurance and Diagnostic Services Act. A paltry six pages, the bill stipulated that once a majority of the provinces, representing a majority of the population, adopted a universal hospital insurance plan, the federal government would pay approximately half of the costs of normal maintenance and operating expenditures for hospital care. Four years later all provinces had universal hospital insurance plans in place.
Provincial innovation had become federal policy. The ink was barely dry on provincial hospital insurance before Douglass was at work on a plan to cover all essential medical coverage, regardless of where it was provided. Despite a massive propaganda campaign (in which Douglas was likened to Marx) and a three-week strike by Saskatchewan doctors, a universal health care plan went into effect on July 1, 1962.
Once again, the federal government followed SaskatchewanÕs lead. The Medical Care Act of 1966, or medicare (with a small “m”) as it is referred to in Canada, is only eight pages in length (by contrast, American Medicare is governed by 35,000 pages of statutes, regulations and program manuals).
By 1971, all Canadians were guaranteed access to essential medical services, regardless of employment, income or health.
CanadaÕs universal medical care system was designed from the bottom up, by provinces and for provinces. There is no “Canadian” health care system, but rather ten distinct provincial systems, tailored to the needs of their citizens and to their unique political philosophies. To qualify for federal support (originally about half of total provincial costs), the provinces are required to meet five principles: comprehensiveness, universality, portability, accessibility and public administration. These elements ensure that all essential services are covered; that everyone is covered and can receive care in any province; and that health care is administered by a nonprofit public agency.
As a result, CanadaÕs version of national public health insurance is characterized by local control, doctor autonomy and consumer choice. Ironically, with the increasing dominance of HMOs and the increasing complexity of rules covering federal medical payments, the United States health system is quickly becoming characterized by absentee ownership, centralized control, little consumer choice and doctors who must ask bureaucrats permission to dispense medical care and advice.
The key to the Canadian system is that there is only one insurerÐthe government. Doctors generally work on a fee-for-service basis, as they do in the U.S., but instead of sending the bill to one of hundreds of insurance companies, they send it to their provincial government. In both countries there is a continual tug over the dollar between health care providers and insurers. The difference is that in Canada the insurance company is owned not by shareholders, but by the taxpayersÐwho, as one analyst explains, must constantly balance “their desire for more and better service against their collective ability to pay for it.”
During our own year-long debate on universal health care back in 1993, the Canadian option was rejected by both the Republican and Democratic parties. Thus Americans know little about CanadaÕs system, and what we think we know is usually wrong. Remember the late Senator Paul TsongasÕ oft-repeated claim that he would have died in Canada with his form of lymphoma? The truth is that the experimental bone marrow transplant operation that saved his life was pioneered in Canada.
Now that George W. Bush has moved into the Oval Office, it will likely be at least four more years before the word “universal” is uttered in the same breath as health care. During the presidential debates George W. echoed his fatherÕs sentiment that the Canadian model was a “cure worse than the disease. When you nationalize health you push costs higher, far higher.”
Costs and outcomes: American and Canadian systems compared
The statistics paint a starkly different picture. In 1971, the year that all ten provinces adopted universal hospital and medical insurance programs, Canadian health care costs consumed 7.4 percent of national income in Canada, compared to 7.6 percent in the United States. In the thirty years since, however, AmericansÕ health care expenditures as a percentage of Gross Domestic Product (GDP) have nearly doubledÐto 14 percentÐwhile CanadiansÕ have remained relatively stable, increasing only to about 9 percent. And despite its high cost, the U.S. system fails to insure more than 44 million of its citizens. Some analysts predict that figure will grow to 60 million by 2008.
CanadaÕs system is not only efficient; it is immensely popular. A 1993 Gallup Poll found that 96 percent of Canadians prefer their health care system to that of the United States. As Saskatchewan doctor E.W. Barootes, originally an opponent of universal health care, puts it, “today a politician in Saskatchewan or in Canada is more likely to get away with canceling Christmas than … with canceling CanadaÕs health insurance program.”
In a 1998 poll conducted in the five major English-speaking countries (Australia, Canada, New Zealand, U.K., U.S.), 24 percent of Canadians thought they received excellent care in the past twelve months: the highest figure out of the five countries. Nineteen percent of Americans felt that they had received excellent care, which tied for third with Australia.
Comparing the effectiveness and quality of health system across borders is a challenging process. Nevertheless, it is instructive to note that the empirical evidence indicates that CanadaÕs system is more effective than AmericaÕs. The World Health Organization (WHO) has devised an index that measures how efficiently health systems translate expenditures into health. One yardstick they use is known as the average disability adjusted life expectancy (DALE) of a population, which measures a populationÕs health rather than strict life expectancy. WHO combines this data with figures on the amount of choice patients have, the autonomy of health care providers, the equity of health care distribution and related issues. In 1997, Canada ranked 35th on this index. The U.S. ranked 72nd.
Life expectancy and similar statistics are admittedly crude measurements of the quality of medical care. Such figures are influenced not only by the quality of health services but by social, environmental and demographic factors. Nevertheless, Canada consistently outperforms the United States on such measures. Canadians have the second longest life expectancy of all countries (79 years). The United States ranks 25th at under 77 years. This may seem like an insignificant difference, but it has been estimated that to raise the life expectancy by only five years would require the elimination of all deaths from cardiovascular disease and almost all deaths from cancer, the two leading causes of death in the U.S. and Canada. More importantly, Canadians have a better chance of living free of disability. Canadians average 70 years of disability-free life, compared to 68 in the United States.
Infant mortality rates are also frequently used to grade the health of a particular population. Here the U.S. fares even worse. In countries belonging to the Organization for Economic Cooperation and Development (OECD), the median infant mortality rate was 5.8 deaths per thousand live births in 1996. The U.S. rate was 7.8, better only than Hungary, Korea, Mexico, Poland and Turkey. CanadaÕs was 5.6. Maternal mortality rates in the United States were double those in Canada in 1988, with seven out of every 100,000 dying in Canada compared to 14 in the U.S.
WHO has developed sophisticated criteria to measure the effectiveness of health care services. These indexes measure a systemÕs level of responsiveness (which includes autonomy, confidentiality, choice of care providers, quality of basic amenities, etc.); distribution (to all members of society); and fairness of financial contribution (which reflects inequality in household contributions to their health care costs). The U.S. scores better than Canada only on the responsiveness index, where it ranks 1st to CanadaÕs 7th. When all these criteria are combined with basic health measurements, the WHO ranks Canada 7th, the U.S. 15th.
Canada has been able to maintain high-quality care at minimum per-capita expense largely because of one of the five criteria mandated by the federal governmentÐpublic administration. Single-payer public insurance creates enormous administrative savings compared to a multi-payer managed care system. The difference is due to huge insurance bureaucracies and the duplication of administrative efforts between companies and marketing expenses: in a public program, such duplication would be superfluous.
During the debate over ClintonÕs national health care proposal, the New England Journal of Medicine calculated that the U.S. could save as much as $67 billion in administrative costs (easily enough to cover every uninsured American) by cutting out the 1,500 private insurers and going to a single government insurer in each state. HMOs consume anywhere from 9 to 30 percent of their revenue on overhead. That doesnÕt include the significant cost to physicians and hospitals of dealing with the paperwork required under the American system. Administrative costs are sucking up an ever-greater portion of the health care spending pie. Between 1968 and 1993 the number of U.S. physicians rose 77 percent, while the number of administrators rose 288 percent. According to federal government figures, U.S. health care spending (excluding administrative costs) rose 196 percent between 1980 and 1991. Over that same period administrative costs rose 350 percent.
Nor do these figures include the most important, albeit unquantifiable cost of all: the psychological and emotional burden that comes with patients having to answer the dreaded question, “Do you have insurance?”
Dr. David U. Himmelstein of HarvardÕs Medical School puts it bluntly. “If you want to cover everybody in society at a reasonable cost,” he says, “the only way to do it is single-payer. The savings are on administration and waste. Basically, you get more health care and less bureaucracy from a single-payer system than from any other alternative.”
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The changing face of Canadian health care
CanadaÕs health care system has changed significantly over the past 30 years. In the late 1970s, worried about its open-ended agreement to pay half of each provinceÕs medical bills, the federal government began to transfer a lump sum per capita payment to each province, based on past practices. Since it was no longer picking up precisely half the tab, the federal government no longer required the provinces to mail in their bills. This reduced the administrative costs to the federal government.
Doctors continued to send their bills to their provincial government. Their fee schedules for various services were, and still are, negotiated by the provincial medical associations and the provincial governments. The province establishes the overall level of payments to hospitals and physicians. The setting of specific fees is left to the provincial medical associations.
In the early 1980s, many provinces placed limits on the fees doctors could collect for their servicesÐessentially capping their incomes. These caps, however, were seldom effective. Many doctors simply imposed additional fees on patients for servicesÐa practice called “extra billing.” This controversial practice led to the passage of the Canada Health Act in 1984, which established penalties for provinces that permitted extra billing and combined the hospital and medical insurance bills into one comprehensive piece of legislation. Within two years all the provinces had passed legislation banning extra billing, despite vehement physician opposition, including a strike by Ontario doctors. Doctors must choose to work within the confines of the publicly funded system or to accept only those patients who can afford to pay out-of-pocket. Most have chosen the former.
The ban on extra billing has not left physicians impoverished. In 1997 Canadian doctors averaged about $120,000 in annual income, while American doctors averaged about $165,000.
In 1996 the federal government began to lump health care payments to provinces together with payments for post-secondary education and social assistance. The intent was to give provinces the flexibility to set their own priorities among these broad purposes. But it also slashed the federal contribution to these social programs from $18.5 billion Canadian to $12.5 billion in 1998. The provincial health plans absorbed half of this cut. Thus today federal payments make up only slightly more than 20 percent of provincial medical care costs, on average. In some provinces this figure is even lower. British Columbia, for example, which has a population about that of Chicago or the Bay Area, pays for 88 percent of its health-care costs.
Many Canadians worry that a continued reduction in payments will reduce the incentive for the provinces to continue to enforce the five basic health care principles that most of the country holds sacrosanct. The principle of portability has in fact already been violated by Quebec. According to the Canada Health Act, a physician treating an out-of-province patient is to be paid at the rate in the physicianÕs, not the patientÕs, province. In accordance with the federal law, all provinces have signed a Reciprocal Billing AgreementÐexcept Quebec, which will only pay doctors in other provinces up to its own set of fees. As a result, many clinics and emergency departments across the country have posted signs advising patients that Quebec medicare will not be accepted. The federal government has done little to punish the province.
As federal contributions to health care decline, provinces are finding themselves trapped, according to former Canadian Medical Association President John OÕBrien-Bell, “between the publicÕs unlimited expectations of a free systemÐexpectations which are fueled by politiciansÐand a federal government intent on reducing the debt.” On a per capita basis, CanadaÕs national debt is about twice as high as that of the United States.
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Feeling the squeeze
Canadian provinces are discovering that costs can only be cut so far before quality is sacrificed. Waiting times are probably the most serious concern with Canadian medical care. Canadians are often forced to wait not only for nonemergency surgeries but for simpler services such as hospital beds and diagnostic tests like angiograms. They do not wait, however, for care that is required immediately. A recent survey found that 12 percent of Canadians waited four months or more for nonemergency surgery, compared to only one percent of Americans. (Compared to other industrialized countries Canadian patients fared relatively well. In the U.K., one-third of respondents to the same survey reported waiting times of more than four months.)
“Canada rations by queuing,” explains Morton Lowe, M.D., coordinator of health sciences at the University of British Columbia. “You have to wait your turn for a hip transplant even if there are three poorer people in front of you. Which I think is damn fine. In the U.S., if youÕre rich, you get it fast, and if youÕre poor, you donÕt get it at all. ThatÕs how they ration.”
It is useful to note that if Canada increased its per capita health care spending to American levels, waiting lists would likely be largely eliminated.
The spiraling costs of prescription drugs in Canada is a problem shared by Americans, but CanadaÕs response has been much different. In Canada per capita spending on drugs increased by over 100 percent in real terms between 1975 and 1996. This increase is of special concern because prescription drugs provided outside of the hospital are not covered by medicare.
While politicians in the U.S. bicker over the best way to deliver cheaper drugs through Medicaid and Medicare, a number of Canadian provinces have already introduced universal “pharmacare” plans. The plans have varying deductibles and copayments, with seniors and social assistance recipients paying the lowest out-of-pocket costs. Most plans also feature special drug programs for residents with AIDS, cystic fibrosis or organ transplant recipients, among other conditions.
British ColumbiaÕs scheme is the most innovative. It uses a reference-based pricing scheme to help control costs, through which it generally pays for only the lowest-cost drug. (Denmark, New Zealand and Australia have similar plans.) The policy obligates family doctors to prescribe the lowest-cost, or “reference” version of a drug.
The logic behind reference-based pricing is that in some drug classes, an older, cheaper drug works just as well as a newer “copycat” drug. If a doctor believes the reference drug isnÕt suitable for a particular patient, he or she must get permission to prescribe another by faxing a special authority request to Pharmacare. British Columbia doctors send in about 6,000 of these a month, which at times overwhelms the province, resulting in delayed responses.
Today, between the different provincial government drug plans already in existence and private health insurance coverage, 97 percent of the Canadian population is protected by some form of drug coverage. Meanwhile, senior citizens in the northern U.S. are taking well-publicized bus trips to Canada to fill their prescriptions.
Another problem shared by both countries is access to health care. Canada guarantees access to basic care, but services such as dental and vision care are not covered by medicare. Access to these types of care, therefore, is determined in much the same way as in the U.S.Ðthe rich get it, the poor in most cases do not. In 1999, for example, only 40 percent of low-income citizens received dental care, compared to nearly 80 percent for the wealthiest citizens.
Specialty care also tends to be more accessible to the wealthy. Studies have shown that while poorer Canadians are more likely to visit doctors and receive hospital care, they are less likely to have certain types of surgery, such as bypass and cardiac surgeries. A 1999 survey found that 46 percent of Canadians had trouble getting access to specialty care in the previous year.
Interestingly, access to specialty care is also limited in the American system. Obviously the 44 million Americans without any insurance experience grave difficulties in accessing health care. But so do Americans in managed care plansÐ40 percent reported difficulties similar to Canadians in obtaining specialty care.
One national plan, ten provincial plans
The provincial plans that have evolved in Canada are similar but not identical. All medically necessary services provided by licensed practitioners in hospitals, clinics and doctorsÕ offices are covered by the provincial plans, as required by the Canada Health Act. The services of psychiatrists and psychiatric hospitals are fully covered in all provinces, but by provincial choice, not federal requirements.
Provinces are distinguished mostly by how far they have decided to extend coverage beyond physician services and general hospital costs. As noted above, four provinces offer nominally universal Pharmacare plans. Routine dentistry and optical care are not covered by any provinceÐmedicare coverage in these areas commonly includes only inpatient dental surgery, refractions and partial payment for corrective lenses. Five provincesÐOntario, Alberta, British Columbia, Manitoba and SaskatchewanÐprovide partial coverage for chiropractic care.
Long-term care and home care coverage, also not covered under medicare, differ only slightly among provinces. For nursing home care, accommodation and overhead costs are usually charged back to the patient, whereas all health service and drug costs are insured. Public coverage for home health care is growing, and most of the provinces already provide at least partial funding for both transient postacute home care and chronic home support services. However, the design and scope of home care services vary widely across the provinces.
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Private care, public money?
The cutback in federal funding has led provinces to adopt cost-cutting strategies. One of the most popularÐand controversialÐhas been the introduction of for-profit care. Although virtually all hospitals are nonprofit institutions, with global budgets established by provinces, the Canada Health Act does not prohibit private providers. Only a handful of provinces, including Saskatchewan, have passed legislation expressly forbidding for-profit hospitals and clinics.
Other provinces are moving in the opposite direction. OntarioÕs Community Care Access Centres (which provide the provinceÕs home care services) are not only required to establish competitive bidding mechanisms for the services they fund, they are also prevented from awarding all their contracts to the established nonprofit provider, ensuring that for-profit (often U.S.-based) firms will be introduced, whatever their quality and price. Nova Scotia, Prince Edward Island and New Brunswick have hired private firms to handle their billing.
Alberta has taken this reality a step further with its recent passage of Bill 11. The legislation allows care at private, overnight surgery clinics to be covered by provincial medicare insurance. It also allows doctors to work in both public and private systems.
The bill was passed despite weeks of demonstrations in the province. Critics claim that Bill 11 violates the Canada Health Act and is only the first step in a greater movement toward an American-style two-tiered system. In exchange for an additional fee, these facilities offer quicker access to medicare-insured servicesÐbut according to the principle of universality, citizens must get insured services “on uniform terms and conditions.” Critics also argue that it violates the accessibility principle because those unable to pay would be excluded from private clinics.
Ominously, once Canada embraces privatization it will be very costly for it to reverse course. According to the provisions of the North American Free Trade Agreement (NAFTA), if Canada privatizes any part of its health system it must handsomely compensate U.S. (or Mexican) companies if it decides later to end this practice.
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Is regionalization the cure?
Most provinces have also tried to cut costs and improve delivery by decentralizing control over health care to the district, or local board, level.
The jury is still out on the effectiveness of regionalization. Many districts have instituted cost-cutting programs that read like a corporationÕs after a merger, often including lay-offs and reductions in hospital beds. In most provinces these districts will eventually be managed by elected board members, who will be responsible for their own hospitals, nursing homes, ambulances, home care and public health services. They will receive annual grants from the government based on their populations and specific health care needs. Doctors still send their bills to the province.
Ironically, regionalization may result in a loss of authority of individual hospitals, clinics and agency boards. For example, 30 district boards in Saskatchewan have replaced more than 400 local boards. These new districts sit strategically between the expectations of the provincial government, the interests of health care providers, and the wants and needs of citizens. The idea is that a healthy tension between these three actors will result in an efficient and successful system.
The only long-term solution to CanadaÕs health care concerns is increased federal funding. A vast majority of CanadiansÐnine out of ten, according to government pollsÐfavor spending any federal budget surplus on medical care. Popular opinion holds that provinces should not have to (and in most cases canÕt afford to) shoulder the majority of health care costs. It remains to be seen whether the Canadian government will act on its citizensÕ wishes. If it doesnÕt, calls for a two-tiered system will grow louder.
CanadaÕs system is trying to cope with the same problems the U.S. hasÐan aging population and increased cost of drugs and technologies. But because of the pioneering work of Tommy Douglass, the strategies Canada is embracing are founded on equity, public administration and decentralized control. The U.S., on the other hand, is struggling to find solutions within a structure based on a paper-hungry, profit-motivated private insurance bureaucracy. In trying to fix the health care system, we would do well to learn from our neighbors to the northÐand in fact, Massachusetts Representative John Tierney made the first move in that direction last year with a proposal to fund the research and development of state health care plans. (See “States’ Right to Innovate in Health Care Act” on the New Rules site)
Daniel Kraker
Research Associate, Institute for Local Self-Reliance
© 2001 Institute for Local Self-Reliance
**Alert** – Support the MEDS Plan!
Today, the Congressional Progressive Caucus introduced:
The Medicare Extension of Drugs to Seniors (MEDS) Plan
It is a genuine Medicare prescription drug proposal.
Features:
*Ê All Medicare beneficiaries are eligible when they enroll in Medicare
*Ê Initially, the premium is $24/month
*Ê All necessary FDA-approved medications are covered
*Ê The plan pays 80%, with no deductible
*Ê When phased in, catastrophic coverage begins at $5000
*Ê Maximum out-of-pocket expense is $1600/year
*Ê Low income individuals would have costs subsidized
*Ê Pharmaceutical firms would be subjected to “reasonable price”
agreements
*Ê The benefit would be publicly administered
A description of the plan is available at:
http://progressive.house.gov/issues/medsplanblueprint.pdf
This plan warrants massive grass roots support!Ê Begin organizing now!
"Revitalizing Medicare: Shared Problems, Public Solutions"
By Michael Rachlis, Robert G. Evans, Patrick Lewis, & Morris L. Barer
Tommy Douglas Research Institute
“The implementation of Medicare thirty years ago was a major fork in the road for Canadian health care.Ê We could have continued to drift, as we were doing, down the road taken by the United States.Ê The road has led, as some foresaw, to ‘the most expensive and… most inadequate system in the developed world…’ (Marcia Angel, former editor, New England Journal of Medicine).Ê Instead, following the trail blazed by Tommy Douglas in Saskatchewan, we established Medicare.
“Medicare has been a great success.Ê It has achieved its primary purpose – protecting people from the financial consequences of illness and injury – and has done it for considerably less than the price paid by our American neighbours.Ê At a deeper level it has become an integral component of our national identity.”
Comment from PNHP Board member Dr. Don McCanne:Ê “This report provides a precise, accurate description of the current status of the Canadian health care system with special attention given to its problems.Ê It is must reading for those of us that have to respond to criticisms of the Canadian system as we advocate for health care justice in the United States.”
The full report is available at:
http://www.tommydouglas.ca/papers/medicare.pdf
Resistance to Attacks on Universal Health Care Mounts in Canada
by Linda Gouriluk
Health care was the number one issue for Canadians who went to the polls November 27 to elect a new government but, in Canada, the battle for universal health care is galvanizing outside the arena of electoral politics. Health care activists remain convinced they must organize the public to resist their government to save Canada’s Medicare system. While no government could expect reelection on a platform to dismantle public health care, rather than give citizens what they want on this score, the Canadian government has engaged in dissimulation regarding the preservation of Medicare for more than a decade. This has prompted hundreds of thousands of Canadians to become defenders of universal health care.
The current Liberal government’s primary method of subterfuge is to make public promises to protect Medicare while simultaneously acting to undermine it. They had taken over this role from the Conservative party after winning the 1993 election. The Liberal’s first duplicitous actions were unprecedented cuts to federal government funding of the health care system, despite loud and sustained public protests and eventually, pleas for the contrary. Starving Medicare was part of a plan for the federal government’s withdrawal from its responsibilities under the Canada Health Act, the opposite of the platform the Liberals had run upon in the 1993 election.
Like real estate agents that disparage houses to homeowners that refuse a low bid, politicians claimed Canada could no longer afford its health care system and kept on calling it costly.
The entire time that the government made this unwanted retreat from the principles of universal health care, citizens were falsely told that rising health care costs justified “reform.” Like real estate agents that disparage houses to homeowners that refuse a low bid, politicians claimed Canada could no longer afford its health care system and kept on calling it “costly.” Health care costs politicians claimed to be out-of-control were actually stable. Government reductions in healthcare spending precluded the possibility of such a claim being true. The only health care costs that went up were out -of- pocket expenses for individuals as governments “delisted” services, de-regulated pharmaceuticals and cutback drug plans.
In 1995-96, there appeared to be an attempt to gain a mandate to reform the health care system in light of what can only be called a manufactured crisis. Most likely seeking a mandate the government never received electorally, the Liberals held a series of public discussions about the supposed crisis.
The National Forum on Health conducted the discussions and released a report in 1997. It did not indicate public approval for downsizing Medicare. Although Forum literature suggested to Canadians, for the first time, that public-private partnerships and a role for the private sector ought to be examined, this was not an idea Canadians were interested in discussing. Instead, they talked about improving and enhancing the health care system and keeping a strong social safety net to address the social and economic determinants of health.
In the meantime, the Liberal government deliberately hid from Canadians its plans to sign the Multilateral Agreement on Investment (MAI) at the OECD in November of 1996. The secret agreement, kept from municipal and provincial governments and even some Federal Members of Parliament, would, said critics, undermine Canadian sovereignty as well as health care and other social programs. The secret got out and the MAI was quashed by public protests organized through an international ground swell.
The Liberals also had signed the North American Free Trade Agreement (NAFTA) which came effective on that famous day of insurrection in Chiapas, Mexico, January 1, 1994. NAFTA was a legacy of the previous Conservative government that had also failed, despite pronounced claims to the contrary, to protect Medicare in its negotiations of the Free Trade Agreement (FTA) with the United States. There was tremendous public agitation against these agreements precisely because critics felt that Canadians were going to lose good full time jobs along with Medicare. The Canadian government tried to placate protesters with more promises to protect Medicare but gradually, it has weakened this promise which so many said was lame in the first place.
According to a document recently released by the Canadian Union of Public Employees (CUPE), “Trade Minister Pierre Pettigrew won’t offer blanket, iron-clad protection of health care and education from any trade deals. This represents a dangerous retreat from Canada’s historic position.”
The government fails to inform Canadians of the implications of major restructuring of the health care system that involves inviting large private corporations, many based in the United States, to sit on new independent “private-public” bodies that now administer public funds.
Such a retreat is reflected by the fact that the government fails to acknowledge nor inform Canadians of the implications of major restructuring of the health care system that involves inviting large private corporations, many based in the United States, to sit on new independent “private-public” bodies that now administer public funds previously administered by government departments. Two examples of such bodies are the Canadian Institute of Health Information and the Canadian Health Services Research Foundation.
The passage of Bill 11, a bill establishing private, for-profit hospitals in the province of Alberta last May, is a more blatant act that reflects the federal government’s abandonment of its commitment to Medicare. While still issuing continual denials of its disregard for the Canada Health Act and the wishes and needs of Canadians, the Minister of Health has refused to intervene in regards to Bill 11.
Opponents view Bill 11 as a dangerous threat to Medicare because of NAFTA. According to Heather Smith, President of the United Nurses of Alberta (UNA), under the provisions of NAFTA, since business opportunities opened in any one province must be opened up across the country, all Canadians are in danger of two-tiered health care and queue-jumping. In the weeks before its passage, UNA nurses gathered for nightly vigils outside the Alberta Legislature. In Edmonton, a quiet parkland city where deer still wander, the peaceful nurses among others were confronted by police dressed in riot gear.
Smith pledged that UNA, with coalition group, Friends of Medicare, will “make every effort to preserve our universal and equitable health system.” They have been joined by Canadians in other provinces and by the Canadian Health Coalition (CHC), a coalition of labour and citizen groups including the Canadian Labour Congress (CLC), the Canadian Federation of Nurses Unions (CFNU) and the National Action Committee on the Status of Women (NAC). They called upon the federal government to instruct the lieutenant governor of Alberta to delay Royal Assent of Bill 11 until the passage of emergency Federal legislation to stop the bill. But Prime Minister Chretin thwarted his own Minister of Health, Allan Rock, by siding with the Alberta government.
Concern about a lack of democracy in Canada has escalated since the passing ofÊ Bill 11.
The Canadian Health Coalition has posted on its web site a “Working Understanding” agreed to by the Federal Government with Alberta in 1996. (www.healthcoalition.ca/working understanding.html ). The document illustrates the forked-tongue syndrome plaguing Canada over this issue. One “key” principle cited is to “Ensure access to a full range of appropriate, universal, insured health services, without charge at point of service.” Another reads: “Ensure a strong role for the private sector in health care, both within and outside the publicly funded systems.” Such contradictory statements have generated public mistrust. Concern about a lack of democracy in Canada has escalated since the passing of Bill 11.
“The government has no mandate to trade away what we hold most sacred.” Judy Darcy, President of the largest union in Canada. Canadian Union of Public Employees President, Judy Darcy, has declared to the half million CUPE membership, and to Canadians via the CUPE web site, that “The government has no mandate to trade away what we hold most sacred (universal health care).”
No Mandate, No Democracy
Government can’t get a mandate to dismantle universal health care in Canada butÊ an alliance between the federal government (and some provincial governments) and the private sector is becoming more clear not just by the formation of so-called public-private partnerships and increased rhetoric to support such partnerships but through attempts to get at least the appearance of a mandate by means other than the electoral process.
Province by Province Strategy
Last spring, before Alberta passed Bill 11, the Province distributed copies of the proposed law (which contained falsehoods and contradictions) to each Alberta household. The provincial government spent millions of dollars promoting the bill, clearly an attempt to garner public support that never materialized.
In October, the Saskatchewan government sent out an information package to 400,000 households in the province. Entitled “Caring for Medicare,” this twelve page brochure is for use at public forums intended to discuss the so-called health care crisis. This brochure also points misleadingly to out-of-control health care costs. Written in a breezy tone, the transfer of control of public assets to private corporate entities is depicted as harmless.
Colleen Fuller, author of Caring for Profit: How Corporations are Taking Over Canada’s Health Care System says, “When public officials talk about privatization, they suggest a benign process but they are talking about corporate controlled health care. If this happens in Saskatchewan, hospital services will be lost and so will outpatient programs. Certain services will disappear in rural areas such as obstetrics, gynaecology, physiotherapy and occupational therapy programs.”
The “Caring for Medicare” brochure is excerpted from a longer version posted on the Saskatchewan government web site. Its distribution, along with the passage of Bill 11 and the federal government’s lack of intervention, has led to plans for a confrontationÊ meant to stop the attacks on Canada’s health care system.
Showdown in Saskatchewan
The Health Care Union Council, a Saskatchewan coalition between unions such as the Saskatchewan Union of Nurses (SUN), the Saskatchewan Government Employees Union (SGEU) and the Service Employees International Union (SEIU) aims to reverse the erosion of the present system that occurred over the last decade. They also plan to do what Tommy Douglas did at the inception of universal health care in Canada: use Saskatchewan as the beach head for a country-wide campaign. The goal is an Rabout faceS in a new effort to do what Canadians have wanted all along, to expand and improve CanadaUs health care system.
According to Rosalee Longmoore, President of SUN, “It is essential that the role of the federal government remain paramount in the funding, planning and administration of Medicare.” She admonishes the government for selling out the health care system to corporate interests. “It’s imperative that the province and the federal government quit compromising the rights of citizens to control their public services by capitulating to legislation such as Alberta’s Bill 11, NAFTA and the General Agreement on Trade in Services (GATS). These are written as irrevocable invitations to import costly, inefficient American for-profit health care delivery corporations.”
The Council has wrote a five page declaration that demands that governments recognize that equality rights are essential to good health. Says Barb Byers, President of the Saskatchewan Federation of Labour, “Comprehensive health policy must be linked with policies to reduce poverty and unemployment.” The declaration says that achieving “health for all” means increased opportunities for education, housing, paid maternity leave, family income support and increased minimum wages, among other things. The declaration and an action plan was adopted unanimously on November 2 in Regina by the Saskatchewan Federation
of Labour.
It’s understandable why the “Caring for Medicare” document has provoked a confrontation in Saskatchewan. Frustration has mounted over a decade. The immediate catalyst comes from the casual suggestion in the package that Canadians just give up on universal health care. This “possible choice” was presented as a legal, benign and somewhat economically pressing policy option in “Caring for Medicare.” Yet this effectively means not just turning over care of Canadians’ bodies to profit corporations, emulating health care American-style but giving American corporations access to their bodies as a market. Adult Canadians consider Medicare to be a defining feature of Canada’s national identity.
Members of First Nations and Quebecois, substantial numbers of whom do not identify themselves as Canadian, also bitterly resent the suggestion that they give up the right to universal health care. The right to health care is a right under the United Nations Declaration of Universal Human Rights, something the Americans still refuse to sign but which is deeply embedded in the moral standards of most residents of Canada.
The “Caring for Medicare” packet reads: “It is time to move toward a private health care system, which allows people to buy the services they need and want, when the public system cannot meet those needs and wants.” Nowhere in the package is there any mention of how much US health care corporations will profit from such a change.
Although the long version of the package mentions higher mortality rates in the US, it fails to mention the logical corollary that Canadians are in store for death rates comparable to the US if they “Americanize” their system. The pronounced lack of financial and moral analysis in the package as well as the failure to connect interrelated facts is a major cause of alarm for the Saskatchewan universal health care advocates. Canadians are in store for death rates comparable to the US if they “Americanize” their system.
The author of the package is Kenneth Fyke, a National Advisor on the Canadian Institute for Health Information (CIHI), chaired by Michael Dector. Dector is vice president of US-based APM, Inc., a firm that advises hospitals on how to partner with corporations. CIHI is a major privatization project in Canada whereby huge amounts of public monies are used, according to Fuller, to generate health information that primarily serves commercial interests. CIHI covers roles previously played by government departments such as Health Canada and Statistics Canada. These departments used to provide information to the public as a free service.
Since 1994, relying on consultants to shape Canada’s health policy has been a part of a general dramatic shift in public procedures and policy that increasingly exclude the public. CIHI and outcomes measurement is an example. CIHI is funded by 180 partners including private companies such as IBM, Hewlet-Packard, Smarthealth, a subsidiary of the Royal Bank, SHL Systemhouse, a subsidiary of US-based telecommunications giant, MCI, Walmart, Glaxo Wellcome, 3M, and Data General. Measuring outcomes was originally suggested by doctors, nurses and citizens concerned about accountability in the health care system. Outcomes measurement could reveal when unnecessary surgeries were performed e.g. cesarean sections, gall bladder removal, hysterectomies, or, when certain health problems went unnoticed (e.g. environmental illness).
“The direction of outcomes measurement in North America has been influenced more by insurance and pharmaceutical industries than by concerns about accountability.” according to Fuller. CIHI sells back health information to the governments as well as to private corporations. Fuller is concerned that community groups such as women health networks or the disability movement are not only not consulted about research parameters but they cannot afford to purchase information they need in order to assess and suggest health
policies.
Individual researchers and reporters may also be at a disadvantage. They may need to rely on government departments for information but these departments have been greatly reduced as a part of the dramatic shift mentioned above. “If you are a member of CIHI’s ‘Core Plan’ (which costs between $8,000 and $160,000 annually) you don’t have to pay for bits of information such as the Annual Hospital Survey for which a non-member would pay about $500.” says Fuller.
Fuller concludes, “With respect to one of the most important debates in the country how to protect medicare and remove profits from our health care system QCIHIUs role is limited and conservative. The participation of global corporations precludes a more useful role for CIHI.”
The Canadian Health Services Research Foundation (CHSRF) was given $65 million in start-up funds in 1996. A public-private operation, CHSRF is described on its web site as structured “to promote partnership and sharing.” The site invites partners to join and this requires a financial committment. Their goal is to “Invest between $200 and $300 million in health services research over the next five years and build an endowment to sustain operations for the long term.” The language used by the CHSRF promotes privatization and ignores entirely negative consequences of this. By “putting knowledge to work” the foundation intends to improve the health care system by weighing “costs and benefits” and aims to “organize health services to maximize value for every dollar invested.”
The web site provides this imperative: “Achieving this goal is not just the government’s business – not when private health spending accounts for more than a quarter of the country’s health bill – and not when a variety of organizations are concerned with health research. This is everybody’s business.”
The posting also reads: “The Foundation is an investment in maintaining the best health services in the world.” This claim requires some scrutiny since the Foundation reflects the will of the Canadian government when it comes to health care. If health care in Canada is going to go the way of corporate controlled health care as in the United States, then the question arises, does the US have the best health care system?
During the 1990’s corporate medicine in the United States has clearly failed to deliver adequate health services to that nation’s population. Over 40 million have no health insurance. Deaths due to hospital error caused by cost-cutting hence profit-making activities such as short staffing and using faulty monitoring equipment run at 100,000 deaths annually. Health insurance costs 4 to 10 times more than in Canada but covers less. Pharmaceutical drugs are relied upon in leau of disease prevention programs and often cost four, five or more times as much as they do in Canada.
In order to generate profits, American health corporations have resorted to crime and been successfully charged with criminal offenses.
According to American doctor, Deborah Richter, President of Physicians for a National Health Program (PNHP). In order to generate profits, American health corporations have resorted to crime and been successfully charged with criminal offenses. Major corporations such as Tenet and Columbia HCA were charged hundreds of million of dollars in fines for fraud and other offenses. An especially bizarre case was NME (later called Tenet) which was caught paying bounty hunters to capture psychiatric patients for forced “treatment”. NME then released their patients/prisoners on the day their insurance ran out. “Many of them were children who were denied contact with family members.” says Richter.
Richter had two patients, a brother and a sister, young people with low paying work and no health insurance. They couldn’t afford needed medication for diabetes. Rather than quit work and social life to go on welfare to get health benefits denied to the working poor, they chose to live as long as they could without proper medication. They both died painfully in their early twenties.
Canadian, Kevin Taft co-authored with Gillian Stewart, Clear Answers: The Economics and Politics of For-Profit Medicine published this year. He found that “…there was a striking consistency in studies of health economics: study after study, decade after decade and in country after country has found that health care is a market failure.” What this means is that according to economic theory, caring for our health simply isn’t profitable. The corollary of this is that if profit is made, then it is at the expense of our health. Taft asks, “If, as the research consistently shows, for-profit medicine cannot be described as being in the public interest, then in whose interest is it?”
The story of Richter’s patients brings tears to the eyes of nearly all who hear her tell the story. This tragic story gives the answer to another question raised by Taft and Stewart. “Trust is at the heart of the debate of public versus private health care. People in need of health care must be able to trust that their weakness will not be exploited. Will we be able to trust for-profit clinics and hospitals to serve our needs above their own?”
Canadians are resisting attacks on their health care system now as attacks on the public good Q as attacks against humanity. Some Canadians are unaware of the situation but substantial numbers of health care advocates are armed with knowledge, and now a moral outrage has ignited in Saskatchewan.
Saskatchewan advocates want to rid their province of so-called private-public partnerships that will otherwise pave the way for corporate controlled health care, especially by American corporations that are capable of a swift takeover. A major contract in Health District Number One with US-based Marriott will not be renewed due to public outcry.
Since Saskatchewan still has a high degree of public control over it’s resources, it’s citizens have an excellent chance of successful resistance. In a world of concentrated corporate and financial control, Saskatchewan is a new kind of battleground that bears watching by the outside world.
“Trading Health Care Away? GATS, Public Services and Privatisation”
by Sarah Sexton
Even before its meeting in November this year in Qatar, the WTO has already begun talks to expand one of its agreements – the General Agreement on Trade in Services or GATS.
Services are now a significant part of the economies of industrialised countries and are governed by complex domestic regulations. These countries are now trying to revise the Agreement to increase international trade in services. If they are successful, GATS could be used to overturn almost any legislation governing services from national to local level.
Particularly under threat from GATS are public services – health care, education, energy, water and sanitation, for instance. A revised GATS could give the for-profit sector further access and could make existing privatisations effectively irreversible.
Experience in the United States and several Latin American countries, where health services have been run for profit over the past decade or so, suggests that the result will be a decline in accessibility to health care worldwide.
This briefing outlines the growth in services in recent years, the main provisions of GATS and its proposed revisions, and some key corporate aims in extending the Agreement. It details how public services may not in fact be excluded from GATS.
It considers what may happen if private companies are enabled to capture the most profitable components of publicly-provided and -funded health care services: a two-tier health system in which a reduced public sector has to cope with the elderly, chronically sick and the poor who most need health care and who can least afford it..
Sarah Sexton/Larry Lohmann/Nicholas HildyardÊ
THE CORNER HOUSEÊ
PO Box 3137Ê
Station RoadÊ
Sturminster NewtonÊ
Dorset DT10 1YJÊ
BRITAINÊ
Tel: +44 (0)1258 473795 Fax: +44 (0)1258 473748 Email
Website: http://cornerhouse.icaap.org/
National Coalition on Health Care’s report “A Perfect Storm”
Adobe PDF, downloadable here.
Getting What We Pay For: Myths and Realities about Financing Canada’s Health Care System
by Raisa B. Deber, PhD
Department of Health Administration, University of Toronto
Dr. Raisa Deber presented this paper at the symposium on Canadian and American health care, at the Canadian Consulate General in NYC.
Download the article (Adobe PDF, Acrobat required).
This and other papers are available here: http://www.utoronto.ca/hlthadmn/dhr/4.html
“Revitalizing Medicare: Shared Problems, Public Solutions”
By Michael Rachlis, Robert G. Evans, Patrick Lewis, & Morris L. Barer
Tommy Douglas Research Institute
“The implementation of Medicare thirty years ago was a major fork in the road for Canadian health care.Ê We could have continued to drift, as we were doing, down the road taken by the United States.Ê The road has led, as some foresaw, to ‘the most expensive and… most inadequate system in the developed world…’ (Marcia Angel, former editor, New England Journal of Medicine).Ê Instead, following the trail blazed by Tommy Douglas in Saskatchewan, we established Medicare.
“Medicare has been a great success.Ê It has achieved its primary purpose – protecting people from the financial consequences of illness and injury – and has done it for considerably less than the price paid by our American neighbours.Ê At a deeper level it has become an integral component of our national identity.”
Comment from PNHP Board member Dr. Don McCanne:Ê “This report provides a precise, accurate description of the current status of the Canadian health care system with special attention given to its problems.Ê It is must reading for those of us that have to respond to criticisms of the Canadian system as we advocate for health care justice in the United States.”
The full report is available at:
http://www.tommydouglas.ca/papers/medicare.pdf
COSATU STATEMENT ON THE HIGH COURT CASE BY PHARMACEUTICAL COMPANIES
COSATU Communications Department – 2001-01-15
Ê
The democratic parliament passed the Medicines and Related Substance Control Amendments Act in 1997 as means to facilitate access to cheap medication. This was in view of the exorbitant cost of medicines in South Africa, especially in the case of HIV/AIDS related drug.
The act allows for parallel importation of generic drugs and issuing of compulsory license. From its inception, the legislation was strenuously opposed by opposition parties and the pharmaceutical companies on the grounds of protecting intellectual property rights. The Act has been in limbo due to the court challenge brought by the pharmaceutical companies which is now due to be heard in March 2001 in the Pretoria High Court.
COSATU regards the court case by the pharmaceutical companies as a serious stumbling bloc to the transformation of the health care system. It is also tantamount to profiteering at the expense of the health of the majority of South Africans who currently face prohibitively expensive cost of drugs. COSATU reaffirms its support to the Medicines and Related Substance Control Amendment Act particularly the objective to ensure cheaper drugs.
The drug company’s patents cannot be allowed to hold at ransom the health of our nation. COSATU therefore calls for the acceleration of the court case. Further, COSATU calls on the democratic forces to mobilise against this contemptuous action by the pharmaceutical companies.
PNHP Comments on AAFP Reform
Lanny Copeland, MD
Chair, Task Force on Universal Coverage
American Academy of Family Physicians
2512 Westgate Blvd, #6
Albany, GA 31707
American Academy of Family Physicians
Attn: Health Care Coverage
11400 Tomahawk Creek Parkway
Leawood, Kansas 66211-2672
Dear Dr. Copeland,
Physicians for a National Health Program (PNHP) applauds the efforts of the AAFP Task Force on Universal Coverage in coming up with a draft proposal that is thoughtful, innovative, and bold.
We find the “guidelines” to be especially relevant and on target. In addition, we are extremely pleased that this proposal is truly for universal coverage, not for incremental steps or merely reducing the numbers of the uninsured.
The following comments on the Draft Proposal have been put together by family physicians in PNHP who have many years of caring for the uninsured and advocating for health care reform.� Some, like me, have worked with the uninsured in community and migrant health centers for over 20 years.� Other authors have worked in inner city hospitals and clinics or other parts of our tattered “safety net” for the sick poor.
While these comments come from a family physician perspective, they represent the views of our organization as a whole. PNHP has 9,000 members and includes physicians from every state and specialty, and a growing number of medical students determined to work for a system better for their future patients.
We hope that our comments will help improve the proposal. We have also e-mailed a copy of our comments to unicov@aafp.org.
We would be pleased to meet with you to discuss these comments or, more generally, strategies to promote real health care reform over the coming period. The struggle for universal health care is going to be a long and hard one and we share your belief that family physicians should play a leading role.
Sincerely,
Bob LeBow, MD
Coordinator, PNHP Family Practice Working Group
Past President, PNHP
Medical Director, Terry Reilly Health Services
Boise, Idaho
Phone: (208) 466-7869
E-mail: Rlebow@micron.net
Comments on the American Academy of Family Physicians’ (AAFP) Draft Health Care Coverage Proposal
Executive Summary:
* The AAFP Task Force deserves much credit for a proposal that is truly universal.
* PNHP agrees that the U.S. health care system is fundamentally flawed and has fragmented funding and delivery systems.
* The draft proposal’s support for the concept of balancing individual needs and community resources is appropriate. The U.S. already spends over $4,000 per capita for health care, more than enough to provide care to all.
* The draft proposal’s support for tax-based financing of health care is appropriate. However, PNHP would support expanding tax-based financing to cover all medically necessary care, including the draft proposal’s “middle tier” of care. A separate “middle tier” of services would perpetuate disparities in access to care and fragmentation in the funding and delivery of care.
* PNHP agrees that “all people” in the U.S. should be covered, regardless of legal status.
* PNHP agrees that administrative costs should be minimized (see below).
* The draft proposal preserves a role for private insurance for a “middle tier” of benefits. In addition to perpetuating fragmentation, it sharply limits administrative savings (to less than 10% of the savings possible). It also perpetuates fraud and abuse as private insurers evade payment and attempt to shift costs to patients and government. PNHP suggests that the role of private insurance should be limited to “extra” services that are not medically necessary, such as private hospital rooms and cosmetic surgery. Sale of parallel private insurance that duplicates benefits for medically necessary care should be proscribed.
* Thus, PNHP suggests the proposal cover “all medically necessary” health care, not just “basic” and catastrophic coverage.
* PNHP feels that all federal programs should be comprehensively included in the plan, especially Medicare and the VA, in order to improve benefits for seniors and veterans, and to allow for more effective cost-containment mechanisms system-wide (e.g. globally budgeting hospitals – which also reduces overhead).
* PNHP agrees that no co-payments should be charged for primary and preventive services, but encourages AAFP to eliminate co-pays for all medically necessary care. Co-pays do not control costs, are expensive to administer, and reduce access to health care for the poor and the sick.
* Finally, PNHP believes that AAFP should ban or place a moratorium on investor-owned, for-profit health care providers. Investor-ownership pits physicians against patients; care for patients against shareholder profits (every dollar spent on clinical services is a “loss” to the profit-seeking entity).
On the Findings:
* We agree wholeheartedly with the “findings,” especially as to the Task Force’s conclusion that the insurance-based “philosophy” based on risk-avoidance is fundamentally flawed and must be changed, and that the degree of fragmentation of our current financing and delivery system is a significant barrier to addressing the problems. We also agree that system-wide change is needed, that the goal must be truly universal coverage, and that the “social good” concept is valid.
* As regards the four conceptual approaches, the “employer mandate” model as outlined resembles the solution recently proposed by Karen Davis, President of the Commonwealth Fund. We believe that this option would be very costly and perpetuate systems that are increasingly failing and expensive.
* The “individual mandate” approach again does little to reform our broken system. It leaves control over health care in the hands of the private insurance industry, and (given our experience with the uninsured) is totally unrealistic to reach those most in need.
* PNHP has always been a supporter of single-payer (“one risk pool”) as the fair-est, most equitable and cost-effective way to finance universal coverage. We realize there are political challenges to this solution because of the opposition of the powerful HMO/insurance and pharmaceutical lobbies. However, we believe that by educating and mobilizing the public that these special interests can overcome. Also, these industries cynically use their vast resources (garnered from our health care premiums) to oppose any and all reforms, so pursuing a less comprehensive strategy does not confer any real advantage. Finally, with HMO premiums rising in the double digits, belying the myth of HMO “efficiency,” the possibility of gaining business support for the most cost-effective reform (“one risk pool”) is a distinct possibility.
* “Single Purchaser”- or vouchers- would do nothing to cure the ills of our present system. Cherry-picking andinsurance company control (based on the pricing of the product) would continue to prevail.
On the Guidelines:
Question: Are these the guidelines that we should follow in developing a plan for universal coverage?
Overall, with a few exceptions, yes. PNHP agrees that:
* (a) the current U.S. health system is fundamentally flawed, and that we as a society have a moral imperative to provide ethical care to individuals while providing responsible stewardship of community resources;
* (c) a uniform, outcome-based package of health services will be available to all, though we have a problem with the word “basic” (see below);
* (d) we will fund only evidence-based, high-quality, and cost-efficient health care services;
* (f) the system should balance the needs of the individual patient with the greater good of the community as a whole, and there need to be fiscal limitations;
* (g) sufficient funds for public health, research, and education are available to meet the nations’ needs;
* (h) administrative costs should be minimized.
On (b) and (e) – and we will elaborate later – PNHP has a problem with the concept of “basic health services” as it applies in the draft proposal. We feel that the lack of coverage for the “in between” or “middle tier” services (specialist and hospital services not covered in the “catastrophic” part) are the weak point of this proposal. We will address this item below.
Program Elements and Fiscal Implications:
Question: What do you think of the overall approach and of the individual elements?
* PNHP strongly supports changing the source of funding from an employment-based system to a tax-based one. Current incentives in employment-based funding are based on costs rather than on the genuine health needs of employees. Small employers and the self-employed are also unduly penalized. A tax-based system would be simpler, more equitable, and easier to administer. Universal coverage would be much more difficult to attain without a tax-based system.
* Element I: “Basic health services”: This is the part of the proposal with which PNHP has the greatest problem, especially given our members’ extensive experience dealing with health care for the uninsured. Our comments are elaborated in several points below.
* PNHP agrees fully that there should be no co-payments or deductibles for “basic” services. We also advise that there be no co-payments for all medically necessary services, not just “basic” care. As the Rand study and other studies have shown (Rasell, “Cost Sharing in Health Insurance: A Re-examination,” NEJM April 27, 1995) co-payments are true barriers to care – especially preventive care. We have seen patients delay or defer needed care, or not fill a prescription, because of co-payments and means-tested nominal fees (as low as $5 – $10). Patients often feel ashamed to come in when they can’t pay a minimum charge – yet we would all agree that our poor, sick patients are the very ones we want to see most.
* The draft proposal defines “basic” as those “services…that most people need at some point in their lifetime”: Would this also include the care our poor uninsured patients need, such as a cardiac catheterization, surgery to correct a prolapsed uterus or repair a torn knee ligament, neurological evaluation and treatment for a complex seizure disorder, cataract surgery, etc.? We’re afraid our most vulnerable patients would continue to fall through the cracks.
* Those of us who have worked in the “safety net,” e.g. in community and migrant health centers, feel that we’re fairly well able to cover the primary (or “basic”) health care needs of our patients, but when it comes to secondary care, which in the proposal seems to be defined as specialist care short of something catastrophic, we usually have to beg, borrow, and steal (so-to-speak) to get care for our patients. We don’t see our patients as being able to go out on the market and purchase a plan or insurance to cover these “middle tier” needs, especially when they have multiple pre-existing conditions. Should we leave these patients (and their “in-between” needs) at the mercy of the for-profit insurance industry? We believe that this approach won’t achieve the AAFP’s goal of universal coverage. It will leave millions of patients underinsured, resulting in predictably delayed care, with larger expenses – and totally avoidable patient suffering — in the long run. It will perpetuate multi-tiered care, where one patient will get a needed hip replacement, while the next patient, who is poor and without “middle tier” coverage, is sent home with a walker.
* PNHP believes that it makes more sense to cover all medically necessary care with a seamless, comprehensive benefit package. While the for-profit HMO/insurance and pharmaceutical industries will oppose this reform (as they do all reforms – witness the $30 million television advertising campaign the drug companies recently ran opposing a prescription drug benefit in Medicare), we believe physicians should place the interests of our patients first.
* As family physicians, we are trained to look at patients holistically. We don’t see a patient’s chronic mental illness as part of “catastrophic” coverage, their “pap” smear as “basic” and their congestive heart failure as “middle tier”. We take care of the whole person during a visit. It’s contrary to the philosophy of family medicine (and an administrative nightmare – see below) to create arbitrary categories.
* Should a plan cover all people as described above?: Absolutely. The plan should apply to all people in the U.S., including those who are undocumented. We have a commitment as physicians to care for every person when they need care. For public health reasons and to reduce the threat of treatable conditions becoming catastrophic it also makes sense to cover everyone.
* The draft proposal defines “basic” as services “most people” would need. What about the “basic” care people with rare conditions need to prevent complications? One of us has three patients with Fabry’s disease, a fairly rare genetic disorder with severe consequences. Would they be excluded from new treatments (which could be expensive) as they become available? If they have a heart attack at age 40, their treatment would be covered under catastrophic coverage, but what about their “middle tier” medical care until then? There are hundreds of similar examples. We believe it would be simpler, and more ethical, to cover “all medically necessary services,” and have an administrative body (with representatives from the NIH, the CDC, the public and the medical profession) define a seamless benefits package and meet periodically to evaluate new treatments and technology.
* Would the individual’s financial participation – through co-payments, for example – discourage appropriate utilization of basic health services or simply discourage inappropriate utilization?: As we noted above, the medical literature and our experience show that such payments do discourage appropriate utilization and lead to delayed care. If we want appropriate access to primary care and (especially) prevention, co-payments are a mistake. We feel there should be less worry about inappropriate utilization. In primary care, those “inappropriate utilization” episodes are opportunities for prevention and improved continuity of care. Education with better patient information (a public health approach) is the path to take, not co-payments, to discourage inappropriate utilization.
* What process should be used to define basic benefits? We have already discussed the problems with both the definition and use of a “basic benefits” approach to health care reform. We gave some examples (above) which highlighted the vagueness and ambiguity of the “what most people need” criterion for basic benefits. The definition of “catastrophic” and “middle tier” care is just as problematic. Is all inpatient care considered catastrophic? How about a hernia repair as an outpatient? Colonoscopy for someone with positive stool hemoccults? An infertility work-up? Arthroscopy or an MRI ordered by an orthopedist for an injured knee? Would people who could not afford to buy private insurance (i.e. because of a low wage job or pre-existing conditions) for this “in-between” category be denied these kinds of procedures?
* It is more profitable for an insurer to cherry-pick patients in subtle ways than to provide care, even if rates are risk-adjusted. Also, insurers will exploit the arbitrary nature of the definition of “middle tier” to shift costs to patients and the government. This part of the draft proposal leaves the health system wide-open to continued fraud and abuse.
* PNHP feels we need to cover “all medically necessary” measures that are proven to be effective, not just “basic benefits” with a catastrophic caveat as this plan proposes. Otherwise, we will find ourselves in a quagmire of ambiguity, with little or no improvement from our current fragmented systems of health care financing and delivery. Moreover, the proposal could be interpreted as very self-serving for family practitioners, as it seems to indicate that the basic coverage would ensure payment for primary care practitioners, but (generally) not specialists. What if a gastroenterologist does EGD instead of a family practitioner? Would that be covered by the “basic” plan?
* As regards administrative savings, the savings projected by Lewin are tiny ($7.8 billion, less than ten percent of the $100 billion in administrative savings projected under single payer by the GAO and the CBO). These savings could be much greater, and the system much more effective and seamless, if everyone didn’t have to re-enter the insurance market to buy their “in-between” or “middle-tier” insurance.
* Another part of the administrative waste in this proposal is that it maintains the Medicaid and CHIP programs to assure that this group has the “in-between” coverage. If the benefits package was seamless, these programs could be largely eliminated, increasing the administrative savings that could be used for clinical care. The sub-question of “Should physician payments be reduced to reflect lower administrative costs?”: Yes, without a doubt, as long as the administrative office/etc. costs are truly diminished. It is doubtful that this would be the case if multiple systems of payment (many private insurance plans, basic plan, Medicaid, CHIP, Medicare, CHAMPUS) are retained.
Element 2: The Oversight Body:
What model of public/private oversight would be appropriate?: Oversight is critical at both the federal and state level. There should be representation from the public, public health, physicians, government agencies such as the CDC and the NIH, allied health professionals, and academic health centers. There should be substantial (perhaps half) representation that is non-medical, from the public. It could be modeled like a utility regulatory board, with decision-making authority, not just advisory status. And it should be empowered with setting and enforcing global budgets. PNHP is opposed to oversight by investor-owned interests, because that would be like “the wolf guarding the henhouse.”
Element 3: Programs left in place:
Should some existing federal programs…remain as separate programs…or should these programs be eliminated? [And status of Medicaid] …as part of the universal coverage plan?
* PNHP believes that all federal programs should be folded into any proposal for universal coverage. The administrative savings could be increased if there were integration of the government health programs into the AAFP health plan, but probably only if the AAFP plan were expanded to cover “medically necessary and effective” treatment instead of “basic” and catastrophic services.
* There would be public resistance to integrating government programs into the AAFP proposal if the beneficiaries were offered worse benefits. Similarly, people in comprehensive private health plans might also object. As mentioned above, PNHP feels that the AAFP proposal should be upgraded to include a more comprehensive set of benefits, thus facilitating inclusion of people from federal programs as well as private plans. Also, allowing patients to choose and stay with their physicians is a major advantage of this proposal over existing health plans, but only if it includes choice and coverage of specialty care as well as primary care. Secure, comprehensive coverage that allows choice of physician would be attractive to the public and could be used to “sell” the program (for-profit HMOs would of course be opposed as they hope to expand their profits and share of the Medicaid/Medicare market).
* There have been many complaints from people about the current CHAMPUS and Indian Health Service programs. They seem to be insufficient and could probably be integrated into the AAFP plan without much complaint, and with added benefit to the people in these plans. The same could apply for the VA. To retain their usefulness for their beneficiaries, these programs could offer “extra” services not covered in the AAFP plan, such as social services, long-term care and rehabilitation, home visits by health teams, etc.
* The Medicaid program should be integrated into the AAFP plan, again with expanded benefits. Why duplicate bureaucracies, especially one like Medicaid with a separate bureaucracy in every state and beneficiaries who cycle in and out of the program, sometimes on a monthly basis? Continuity of care would be better with a seamless benefits package. Also, there wouldn’t be the administrative nightmare of trying to determine which care is covered by Medicaid vs. the “basic” plan. Conversely, a Medicaid agency could be maintained to deal with “extra” benefits not covered under the AAFP plan, be it eyeglasses, durable medical equipment, transportation, etc., and these benefits could vary from state to state.
* PNHP believes Medicare should be included in any universal coverage plan. Medicare is in sore need of improved benefits. Shouldn’t we be addressing the problems of Medicare if we’re really interested in improving access for everyone? We see Medicare patients every day who postpone care, take medications every other day instead of every day, and cut corners because they can’t afford the care we prescribe for them. Seniors spend close to 25% of their total income on health care despite Medicare. Can we ignore this? Can we really talk about “universal coverage and access” unless we deal with Medicare? Yes, it’s a big political football, but the public supports Medicare, and it already has a funding mechanism. The AAFP plan is much superior to Medicare with regard to primary care, especially with respect to co-payments. But Medicare largely covers the “middle tier” care not in the current proposal. Integrating Medicare into “one risk pool” (such as a more comprehensive and seamless AAFP plan) or vice versa would also allow for more effective cost-containment (and administrative savings) system-wide.
* Consolidation of federal and state programs would allow increased administrative savings, much in excess of the Lewin estimate – savings that could be used to fund clinical health care. As a point of reference, the outgoing CEO of Aetna recently confirmed that administrative costs in the U.S. health system are about 25 percent of all health care costs (although we’re tempted to think that if he admits to 25 percent, the truth is probably closer to 35 percent). We could cut that by half or more if we truly rationalized our payment system. Additional optional services could remain at the discretion of each state or program.
Element 4: Catastrophic Coverage:
Yes, in the absence of a truly comprehensive and seamless plan, there should be catastrophic coverage. One of the great inequities of our current system is the incredible financial burden a family must endure if they should be so unlucky to have a catastrophic health event. This burden currently applies in the U.S. not only to the uninsured, but to the underinsured as well. People in other countries shake their heads in disbelief that we tolerate such a situation.
* Should co-payments for catastrophic coverage be uniform or means-tested?
Neither. Co-payments and deductibles should be eliminated, especially in the case of chronic or catastrophic illness. Co-payments in these cases penalize the sick at the worst possible time in their lives. Not only are the patients too sick to work, but family members may also have to reduce their working hours to act as unpaid caregivers.
* Should catastrophic protection be provided in this way? PNHP feels strongly that there should be no out-of-pocket expenses for any necessary and effective medical care. Our experience with our low-income patients tells us that cost sharing is a burden. Even means-tested and capped out-of-pocket expenses are a major obstacle to access for families with little disposable income. Also, co-pays are administratively unwieldy and do not control health care costs.
Element 5: The “in-between” or “middle tier” services:
We gave examples in the section on “basic” coverage on how ambiguous and difficult the distinction of “middle tier” services would be. In addition, maintaining a separate tier covered by private insurers opens the door to fraud and abuse, as insurers “cherry pick” the healthy and cost shift expenditures for the sick onto patients and the government. Why perpetuate a system that is broken? Why keep a large portion of medical services under the old fragmented payment system with multiple tiers of care? The affluent will buy expensive plans; those who cannot afford them will scrape by with bare bones coverage, millions will continue to go without contrary to the goal of “universal coverage”. What will insurers charge a person with angina to cover their “middle tier” of health care – and what lengths will they go to to deny coverage for any services they actually use. Finally, as we pointed out above, if we only endorse “basic” (primary) care as part of the plan, we family physicians could be perceived as self-serving
* [As an employer]… how likely would you be to offer…coverage [for non-covered]…services? The link between employment and insurance is a historical accident that should not be maintained. This is a major flaw in the AAFP draft proposal, and should be remedied in the final version. Private employers pay for private insurance for less than half (43%) of Americans, and millions of Americans are uninsured because of the unfortunate link between insurance and employment. As family physicians, we know all too well the devastation caused by lack of insurance in our low-income patients – despite the fact that they are working two or three jobs.
* Those of us involved in purchasing insurance for our employees would try to price a plan, but it would be the same kind of game we play now, more or less at the mercy of the insurance companies, with ever more complex co-payments and deductibles. Once a plan is purchased, the insurer then denies paying for care, creating problems that are time consuming to resolve for us and our employees (and creates hassles for their physicians). With the basic and catastrophic parts in effect, why perpetuate the agony, increased complexity, and costly overhead of a “middle tier”?
* Besides sharply limiting administrative savings, maintaining a separate “middle tier” limits effective cost containment. As much as the guarantee of rising costs and a slice of the health care spending pie pleases insurers (and presumably this part of the proposal is intended to fend off their opposition) the HMO/insurers and drug companies will oppose the plan just as fiercely as they have other reforms.
* PNHP suggests that the AAFP have Lewin price out what it would cost to fund the “middle tier” through taxes as part of a unified system that would allow for improved continuity of care and fewer barriers to access. Administrative savings would be vastly increased, and cost-containment much more effective system-wide. The overall cost of a unified system should be much lower and help avoid fragmentation of care and administrative nightmares.
* Is it appropriate to leave to individuals whether to seek coverage for this tier of benefits? Should the plan incorporate individual accountability for patients’ own health behaviors?
Part I: “Individual fiscal responsibility” is a concept that should have no place in the reform of health care. Health care is most ethically viewed as a social responsibility and a human right. The concept of the “irresponsible health care consumer” is a myth perpetuated by entrepreneurs and MBA’s seeking to profit off the $1 trillion U.S. health care “market.” As physicians, we need to debunk the myth of the patient as “greedy consumer” and the physician as “self-serving provider”. Our relationship with our patients is not the same as the widget salesman to their customer – and we must not allow it to be reduced to that. A large measure of what needs to be accomplished in reform is to restore physicians’ professionalism and eliminate the notion that a sick patient receiving care is somehow a “loss.” Health care is a social “good.” By putting forth a proposal for reform that is inclusive and comprehensive, and explicitly rejecting a corporate model of health care, the AAFP will be taking a large step in the right direction.
Part II: We affluent physicians often gripe about smokers, drinkers, drug-abusers, etc. Yet those of us with more experience realize that discriminating against people is a slippery slope. What about a physician (one of us) who bicycles in New York City or travels in malaria-infested rural West Africa? Or a person who does ice climbing or Class V rapids in a kayak? And how can we discriminate between a genetically-based mental illness and substance abuse? We should not include this type of “health behavior accountability,” but provide the kind of educational, preventive, and rehabilitative services to help deal with these behaviors.
Element 6: The financing strategy
PNHP fully agrees with tax-based financing as the most equitable and efficient way to fund health care. The requirement that all employers participate will meet with resistance from some established business groups (e.g. the Chamber of Commerce), but others are likely to show renewed interest in health care reform. With HMO premiums rising 15-30% at many businesses this year, and the growing hassle and cost of managing employee health benefits, business can’t afford to reject a proposal that will reduce their long-term costs out-of-hand.
The amount that employers and employees contribute could be changed over time. Gradually shifting more of the tax burden to income taxes (and having employers increase wages to account for their reduced contribution) would be one way to make the tax burden more progressive. PNHP supports either method.
One item that appears not to have been discussed in the proposal is the effect of the current tax-free benefit in present employer-paid health insurance. This benefit has been estimated to be a $100 billion subsidy from the government – i.e., money that would have been paid in taxes otherwise. The government could re-direct this money to pay for added services if this factor hasn’t already been taken into account.
Element 7: State Administration:
What do you think of the fund distribution and the state administration provisions of this plan? PNHP feels that state-by-state (or maybe regional) administration makes sense as long as there are national guidelines to be followed and public oversight. We support negotiated fees (by the state or regional body) with the possibility of increased payments in areas where there is a shortage of physicians.
Psst. The real scoop on Patient Assistance Programs
ZNET commentary, December 26, 2000
By Dorothy Guellec
Drug companies are giving away medications if you know how to ask. This is the best-kept secret because it is not widely known. All of the top 30 pharmaceutical companies make prescriptions available free, and these programs are horribly underutilized. PHRMA, an industry trade group, told me that 2.8 million prescriptions nationwide (not including samples) valued at about $500 million were given away in 1998.
Getting prescriptions to the people who need them is vital nowadays. Costs are rising and, contrary to the mainstream media stories, few older citizens can just hop on a bus and go to Canada for a prescription every 30 days. There are several vehicles physicians can and should use to make sure needy patients get prescriptions. “We have a responsibility to care for the poor,” said Herbert Rakatansky, MD, chair of the AMA Council on Ethical and Judicial Affairs.
I spoke with Bob Huber at Pfizer on December 9th, 2000. He told me that after the merger with Warner Lambert this summer, the combined companies’ projected earnings for this next fiscal year would be $30 billion and of that, $5 billion would go for research and development. I asked about the other $25 billion, but he just laughed.
Of the patient population most dependent on medications – those older than 65-31% lack coverage for prescription drugs. Seniors who have coverage typically use 21 prescriptions a year. About 45% of the elderly have incomes at 200% or less of the poverty line. That’s $16,000 to $18,000 a year before taxes. The average senior citizen today has 2 to 2 ½ chronic conditions, and a drug just for one chronic condition can cost between $500 and $3,000 a year if bought in the U.S. Of course one could always go to India and purchase a copycat for 1/50th the price. Trying to understand the regulations is very tricky as the pharmaceutical companies are not forthcoming, just the opposite. The drug companies will not discuss criteria; believe me I’ve tried. Patient-advocacy groups say they have seen families with incomes of $50,000 or more get free prescriptions.
Most programs require the patients to apply through their doctors. The doctors are not informed because generally it falls to the sales reps to promote the programs. In today’s climate, with the average doctor allowing 10 minutes per patient, one can understand why doctors are not aware of these benefits. To qualify, applicants must show they have no coverage for outpatient prescription drugs; that their income must be low enough that paying for medicine would pose a hardship; and that they do not qualify for Medicaid. In reality the doctor writes a two-sentence letter to the pharmaceutical company without any other documentation. Most companies supply three months at a time on a case-by-case basis.
The corporate drug programs are underutilized. I see this as political not philanthropic. They want to keep it a secret. They do it so they can tell Congress, “We give away medicine for free,” but then, they don’t tell anybody about it and make it very hard for people to apply. After researching this program for hours, I came up with one article from the Wall St. Journal and a few stories from local mid-western papers. Actually the Journal article described the program as being “difficult to apply for.”
This isn’t true. Every company has guidelines and some require lengthy paperwork, but not uniformly. There is a non-profit organization called the Medicine Program that can help to simplify the process in some cases, but I would advise patients to first try on their own. Dan Hogg of the Medicine Program said, “We just serve as the patient’s advocate.” For $5, refundable if you do not qualify for the free drugs, this non-profit organization will help with the paperwork and get them to the right pharmaceutical company. Most pharmaceutical programs look at income and expenses and do not count assets, which can often disqualify people from government programs. Last year Glaxo Wellcome gave away $28 million in drugs, it fills more than 14,000 free prescriptions each month.
The Medicine Program’s website is www.themedicineprogram.com. It appears strange that they claim to be non-profit with a com., and not org, but buyer beware I guess.
Physicians should be aware that a large number of people might have difficulty affording a drug without insurance coverage. Doctors are obligated in my opinion, to advocate for their patients. They should get involved and help to access medications. Some physicians feel that there are limits to their obligations. One said, “While physicians have a responsibility to help care for medically indigent patients in a variety of ways, using their own financial resources to make that happen is above and beyond the call of duty.” Doctors, however, agreed that their implied social contract calls on them to help needy patients. I wonder if they feel that ensuring that patients obtain prescription drugs is part of that contract.
Handing out free samples from the manufacturers is the easiest option, but the industry opposes this – I wonder why. Of course it’s not a long-term solution for patients with chronic conditions. A more viable option is the patient assistance programs. If physicians cannot keep on top of what pharmaceutical companies offer, then its up to the patients . Can’t lose anything by asking. Pfizer Inc. is relies on the physician’s word not the patient’s tax forms.
Libby Overly was working as a home health social worker in Alabama when she recognized that the personal database she’d developed to navigate the patient assistance programs might encourage doctors to access them as well.
With the help of Richard J. Sagall, MD, she created Need Meds, an online database of companies and the free drugs they offer. Patients can also access a Directory of Drug Patient Assistance Programs by PhRMA a trade group for the pharmaceutical industry. It is a handy directory of 33 companies who provide drugs to physicians for patients who otherwise could not afford them. Of course ultimately society has the responsibility to make sure that people have access to all the health care they need.
The prestigious AARP devoted their November publication “Bulletin” to the array of problems that their sample of 11,000 members might encounter. Not once did they mention the Prescription Assistance Program. What is one to think? It is obvious that the top honchos do not want all the members of AARP asking their doctors for free medicines. A psychiatrist on a listserv wrote “many of my patients are provided medications through pharmaceutical company patient assistance programs.these provide for 2-3 month supply of meds for uninsured, low income patients. I rarely have had any patient turned down and have never had a patient taken off the program, unless of course they obtained insurance. My routine and the routine of many doctors in my clinic is to begin a patient on samples and then, once you find that the medication is working for the patient, transition them to the patient assistance program.” The natural question to wonder about is why is this doctor so well informed, and most of the others are not? Is it not incumbent upon them to know about these programs? Maybe it’s the fault of the drug reps., but if the reps can only see the nurses, or have 5 minutes with a doctor to explain a new medication, when can they promote patient assistance programs?
It finally and logically falls to the media, and the pharmaceutical companies themselves, to promote these programs vigorously. I did a very thorough search and spoke with lots of so-called informed people – they never heard of free medications from 33 of the leading companies. There are about 980 pharmaceuticals amongst all the companies, and new ones are being added all the time.
Anyone reading this is encouraged either to email me, or to insist that the doctor or someone on his or her staff research the availability of the medication. The chances are that there is at least one non-generic (expensive) drug that is available free of charge.
Dorothy Guellec
guellec@purvid.purchase.edu
Tel 914 271-5644
Fax 914 271-6188