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Understanding Canadian health care.

THE UNITED STATES has long received a wide variety of Canadian exports from timber to Molson's Beer. However, one potential export from up north which has yet to arrive in this country has sparked a major controversy within the American political, medical and risk management communities: the Canadian health care system.

Among the system's supporters and critics, there seems to be varying degrees of misconception on just how the system works. Some view it as a federal monopoly bordering on socialism while others see it as the only means of assuring total and all-encompassing coverage for every person. These views have one thing in common-both have nothing to do with the Canadian health care system.

Rather than rehash long-running debates on the pros and cons of the system, what follows is an unbiased overview of Canadian health care and the way it functions. Much of this information comes from two recent reports from separate investigations by the United States General Accounting Office, and the Economic and Social Research Institute of Washington, D.C.

Fully implemented in 1971, Canada's health care system is a publicly financed single payer system that provides coverage to all 26.5 million Canadians, regardless of income level or state of health. It is not solely a federally administered system; only 40 percent of funding comes from Ottawa, with the nation's ten provinces and two territories financing their respective shares through income, sales and payroll taxes. The system is flexible enough to allow the provinces and territories to add services, benefits and insurance regulations not present in the national system.

It is a universal system, but it does not cover all medical services. The basics, such as physician services, hospital care, X-rays and laboratory tests make up the heart of the coverage, although certain segments of the population receive additional benefits, such as coverage for prescription drugs for the elderly.

Health insurance in Canada is not tied to employment, although many employers offer supplemental private health insurance to cover what is not available in the national system, such as dental care, and semiprivate hospital rooms. The law prohibits private health insurance from duplicating the coverage offered in the national or provincial plans. More than 70 percent of Canadians purchase supplemental private insurance.

The Canadian medical care industry is primarily a private-sector operation. Ninety percent of the hospitals are private, non-profit corporations, and 95 percent of Canadian doctors are self-employed. There are more physicians per person in Canada than in the United States, with the ratio of generalists and specialists kept about equal in Canada. This ratio is maintained through residency training quotas; in the United States, no such quotas exist and only about one-third of all physicians are generalists.

Patients are free to select their physician. Fees are set in negotiations between provincial health ministries and medical associations. Patients do not pay for covered services because the physicians send their bills to the government to be fully reimbursed; there are no co-payments or deductibles in this system. The average Canadian physician enjoys a net income of $82,740 (American currency, 1987 statistic); his American counterpart earns $132,300. Professional expenses for self-employed Canadian physicians are $46,000, compared to $123,700 for the same sector in the United States.

The government pays hospitals on a 'global budget" system where hospitals receive a fixed sum that is adjusted annually. A hospital wanting to add services not covered in the global budget must cut back on other services to cover expenses until the global budget is adjusted. The volume of billing and accounting paperwork in Canadian hospitals is considerably smaller than in American hospitals.

The Waiting Game

TWO MAJOR PROBLEMS exist within the system, which even its supporters acknowledge. The first is the waiting period for surgery. Waiting lists, known in Canada as queues, are ranked by patient priority, divided among the categories emergency, urgent and elective. There is no waiting for emergency surgery, though elective surgery queues have been stretched for more than six months. Urgent queues are considerably shorter than elective ones, usually lasting no more than a week.

Canada's waiting list problem is not static, as the provinces are trying to shorten the wait. According to the Canadian magazine Health Affairs, a 1989 study by the Ontario government of queues for elective heart surgery patients resulted in the construction of an open-heart surgery unit and the expansion of existing facilities. The queue dropped by 700 to 1,000 patients who waited only a few weeks. Similar corrective situations have occurred in other provinces.

Canadians who want to avoid waiting may seek surgery in the United States. Provincial governments have contracted several American hospitals to admit Canadian surgery patients when queues become too long. The provincial health ministries pay most or all of the medical costs incurred and some even pick up the tab for travel expenses. Despite these incentives, which can be coupled with marketing efforts by American medical centers to attract Canadian patients, there isn't much travel across the border for surgery. A 1989 American Medical Association study found that less than 1 percent of all hospital admissions in nine border states were from Canada.

A second problem affecting the system are controls over the distribution of high-technology equipment and services. Acquisition of new equipment by hospitals requires permission from the provincial health ministries to receive government funding; hospitals that do not receive permission often raise money independently.

Technology limitations affect the amount of surgery performed in Canada, aggravating the length of queues. A 1989 study in Health Affairs showed that Canada trailed the United States in the availability of medical technology for open-heart surgery, cardiac catheterization, organ transplants, radiation therapy, extracorporeal shock wave lithotripsy and magnetic resonance imaging. Questions of how the provincial governments determine which hospitals receive new equipment has been debated in Canada. However, this situation has not limited the overall nature of Canadian-based medical research, which has resulted in breakthroughs for diabetes, lung transplants and cystic fibrosis.

Finally, the costs of the Canadian system account for 8.9 percent of the nation's gross national product (1989 statistic), with per capita annual health care costs at $1,700. In comparison, the United States spends 11.6 percent of the GNP on health care, with per capita annual health care costing $2,300.
COPYRIGHT 1992 Risk Management Society Publishing, Inc.
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Author:Hall, Phil
Publication:Risk Management
Date:Mar 1, 1992
Previous Article:The effects of the Right to Know More Act.
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