What's right about our health-care system

by Robert Evans and Noralou Roos

Economics Prof. Robert Evans is a director of population health with UBC's Canadian Institute for Advanced Research; Noralou Roos is co-director of the Manitoba Centre for Health Policy and Evaluation. The following appeared recently in The Toronto Star.

Canadians are remarkably masochistic. Year after year, the United Nations says Canada is the most liveable country in the world, yet we seem to discuss nothing but how to dismember it.

Canada has one of the world's most successful health-care systems, yet we cannot shake the belief that, despite all evidence, the grass is always greener south of the border.

While our fundamentally sound system has some problems, we dwell on them and insistently look for magical fixes from the Americans, whose health-care system is generally recognized to be among the least satisfactory in the developed world.

The truth is there is no shortage of good news about the Canadian health-care system; why we hear this so rarely is something that should concern us.

For example, Canadians are healthy. On average, we are among the healthiest peoples in the world, and are becoming healthier. Wide variations exist by region and social group, and we rightly hear much about these. But the overall health of Canadians is high and rising.

In particular, on the standard measures of life expectancy and infant mortality, we outperform the U.S. The U.S. has eight infant deaths per 1,000 live births -- in the same leagues with the Czech Republic and Greece -- while Canada has six per 1,000.

Canadians also live longer and our advantage is growing. From 1990 to 1995, the gap in life expectancy between Canadian and American males grew from two to 2.8 years; for women, it went from 1.6 to 1.9 years.

Different health-care systems are not the whole, or even the principal, explanation for Canadians' better health. The whole American social environment is more brutal for the less successful. In simple economic terms, for example, everyone knows that Americans enjoy higher incomes, on average, than do Canadians.

So while the rich in America are much richer, the poor are much poorer than their Canadian counterparts. In 1995, while the top 20 per cent of U.S. families were substantially better off than their Canadian counterparts, most of the rest were absolutely worse off. The difference is largely attributable to Canada's tax-financed social programs.

There is strong evidence of a link between income distribution and overall health status -- non-egalitarian societies, like the American, that concentrate wealth in the hands of a few, tend to be unhealthy.

But obviously health care also matters, and the Canadian health-care system is very good at getting care to the people who need it, whether or not they can pay.

Cross-border studies suggest that both Canadian and American systems serve people in middle- and upper-income groups well, but that there are marked differences in access for people with lower incomes.

It would be very surprising if this were not so. About 40 million Americans have no insurance at all, and those who do increasingly face larger user fees.

So Canada does a better job of looking after poor people, and getting what care there is to where it is needed most. But most of us are not poor. Aren't we being shortchanged by an underfunded system that is simply incapable of meeting all our needs? The U.S. may not distribute care equitably, but at least it delivers the goods, and ours does not. Or does it?

Americans certainly spend a lot more on health care than we do or than anyone else in the world. One-seventh of their national income, 14.2 per cent, goes to health care, compared with 9.2 per cent in Canada, and eight to 10 per cent in most developed countries. This works out to $3,708 per capita yearly, compared with $2,002 (US) spent in Canada.

It is not that Canada spends so little, it's that the U.S. spends so much. To match these levels, Canada would have to add $45 billion a year to our health-care spending.

But do we really want to do that? The truth of the matter is that more money does not necessarily buy more health care, any more than it buys more health.

Americans do not receive more hospital care and they don't receive more physician services, though they pay a lot more for what they do get. (Yes, their rates of some types of surgical procedures are higher, but overall, Canadians get more surgery.)

Americans do not get higher quality care for their money; follow-up studies of patients on both sides of the border usually show similar outcomes. There is no clear advantage to either side.

The Canadian health-care system is also remarkably efficient.

A universal, comprehensive, tax-financed public insurance system with negotiated fee schedules is administratively lean. The American multi-payer system with diverse and complex coverage restrictions and elaborate forms of user payments is fat.

The American private insurance bureaucracy is huge; its excess administrative costs, compared with a Canadian approach, are estimated to be between 10 percent and 15 per cent of total system costs -- that is, well over $100 billion (US) per year.

But what about the "Canadian problem" -- waiting lists? In the U.S., people without money or insurance do not even get on a waiting list. Access is rationed by ability to pay, not by waiting. (They may be able to get care at some public facilities, but then they wait.)

If the Canadian waiting lists indicate a problem, it is not one for which the Americans have an acceptable solution. Canada could do a better job of managing patients waiting for surgery. Most provinces don't have systems in place to prioritize patients.

However, reviews of waiting lists in Canada have found the system to provide immediate access for emergency cases, and rapid access for urgent care. Since there have been remarkable increases in the numbers of cataract, bypass, hip and knee procedures performed in Canada in recent years, rationing of care here is not a real issue.

Claims of excessive waiting lists are the political theatre of publicly funded health care everywhere in the world. In fact, when asked, most Canadians on waiting lists do not find their waits problematic.

Claims of underfunding play an obvious role in the bargaining process between providers and governments. The former cry "More money for health!" when they mean higher incomes for providers.

Why, then, do American notions keep pushing north? There is a great deal of money to be made by wrecking Medicare.

All the excess costs of an American- style payment system represent higher incomes for the insurance industry and for providers of care. The extra $45 billion it would cost us to match American expenditure patterns is a big enough carrot to motivate those who promote the illusion of American superiority.

So what's really right about the Canadian health-care system? Well, compared to the American, just about everything. We do have problems but the Americans don't have the solutions.