Existing Models for Universal Health Care

Question: Aren’t all the existing models of universal health care actually the same model? Namely, a government run health care system?

Not by a long shot. An analysis of 1998 data from 15 industrialized countries and comparison to the U.S. system shows that a country with UHC is more likely to have a mixed system with some purchase of private insurance or some out of pocket expense to the residents. In most cases though, those purchasing private insurance have chosen to opt out and are the highest income earners and the “born wealthy”. Furthermore even a 100% government paid system (single-payer) doesn’t mean the government runs the hospitals, clinics and pharmacies. Single-payer health care means that all necessary medical procedures and health care services are paid out of public funds (47 to 65% already are in the U.S. even though such services are not available to all taxpayers).

Question: One thing you guys never seem to get is that in the USA people do not want more government and don’t trust the government to control health care financing? It doesn’t matter if it works in other countries.

In the first place a small fraction of Americans are ready to give up Medicare which operates on 3% overhead instead of the 16% or more taken out by private for profit insurers. Furthermore, this mythology of anti-government sentiment is just that a myth. As reported by the Wall Street Journal in February of 2004, Online/Harris Interactive Health-Care Poll found that “Most people do not think of health care as a business and would prefer health care services to be provided by non-profits or government. The nearest exception is pharmaceutical manufacturing that a plurality but only a 37% plurality thinks should be run mainly by for-profit business. There is little appetite for businesses to run home care, health insurance, nursing homes, hospitals or medical research,” says Humphrey Taylor, chairman of The Harris Poll® at Harris Interactive.

Thirty-one percent (31%) of the U.S. public thinks that government should provide most health insurance, 25% say non-profit organizations should do so. Only 22% would prefer for-profit insurance. A 42% plurality thinks that universities should conduct most medical research, followed by 16% who thinks companies should do so. Many people say they are not sure who should provide or run pharmaceutical manufacturing (22%), in-home care (23%),  health insurance (21%), nursing homes (22%), hospitals (19%) or medical research (16%). That means that just over one in five Americans (22%) think that health insurance is best left to for-profit private companies. To access a downloadable PDF of this Wall Street Journal Online/Harris Interactive Health-Care Poll with complete data table, please CLICK HERE . Anyway it seems like all Americans could agree that it’s best if hard work is rewarded with benefits and security like great health care and a comfortable retirement.

Question: I thought that one state in this country was already operating with a universal system and not doing that great.

Actually, in 1974 with a special (only for that state) allowance from the federal government in use of funds, Hawaii mandated that all employers cover their workers. But there were various loopholes in whether the mandate extended to ALL workers and also failed to make any changes to the problems of unemployed persons (seasonal, temporary and more permanent). The officially published rate of health uninsurance never decreased below 6% and by the end of 2001 was nearly 12%. These figures also do not take into account people who are (not covered for all the appropriate care they need).

Question: What is so great about the way health care is run in other countries?

If your neighbor or brother buys the same new car you just bought except that it is guaranteed to run a little longer and provide greatly improved safety to you and your family in the case of an accident AND if they only paid half for it what you did wouldn’t that be “so great”? Well, that’s basicly what the other developed nations of the world are able to do in the health care arena in comparison to us.

Even more exactly it’s like we have bought a house at twice market value and have found that unlike every other one in the neighborhood ours has no plumbing at all, the toilets and sinks are just attached to the floorboards. Not only that but we have been going around the neighborhood shouting about how we have the best house and have gotten the greatest deal! Because of our patchwork system even the areas where we do have some coverage for a broad section of the population (inadequate quality and breadth) like with US medicare, we fare worse than do the Canadian elderly.

Question: How about discussing some model nation that’s about the size of a US state, after all that’s what your project is proposing, state universal health care?

Okay, let’s consider Taiwan with a population of 23 million. Official figures showed that Taiwanese people pay 15.4 visits to physicians per year and that the country spends about 6 percent of GDP on healthcare — a relatively low figure compared to the US’ 15 percent. Reinhardt said that the real issue is to share the insurance burden and foster a spirit of fraternity.

“While 80 percent of health spending is used on 20 percent of the population who are severely or chronically ill, it is only natural that not every one feels their money is fully spent on their own health,” he noted. On the sideline of the NHI’s financial difficulties, Reinhardt advised Taiwan to steer away from the US example where many families go bankrupt because of health costs. *2

Want a model closer to home? Take a look at Medicare. Think the US public wants the federal government to abandon the program? Think the public distrusts public funding of health care that much? See next FAQ.

Question: Why don’t we use Medicare as a model of the possible program covering all Americans?

Medicare is a decent model, we agree. Some advocates for single-payer actually call explicitly for “Medicare for All”. This has the organizing advantage of pretty much all Americans understanding what we’re talking about -which we miss out on, if we begin talking about “Single Payer health care”. It has the disadvantage though that Medicare is increasingly a government programs with restrictions and holes in coverage. It’s been under a concerted attack, especially under the GW Bush Administration (see scores of articles in our News Archives).

It’s even gotten to the point recently when large sections of so-called “medicare” have been turned over to private insurers (some of us argue these are not parts of Medicare at all, just misnamed private programs). Those include the Medicare Part D program that the GW Bush set up to handle prescription drugs for seniors according to the pharmaceutical industry’s desires and allowing the Medicare Advantage (advantage of the insurers, that is) program to flourish.

Medicare Part D was arranged so that drug prices in the USA could not be negotiated (as every other industrialized nation does for its public programs). The Medicare Advantage program is dominated by two giant firms, UnitedHealth and Humana. UnitedHealth, the nation’s largest insurance company, received roughly 15% of its projected pre-tax profit of $7.5 BIL in 2007 from Medicare Advantage (from our fixed income elderly population who are at greatest risk of having high medical costs). Humana derives about two thirds of its profit from the Medicare Advantage program, with an annual gross margin of about $1,650 per Humana beneficiary. They manage to milk out the profits by covering little of the potentially expensive health care needs of their clients (that’s still picked up by taxpayers, as before). Good business, eh? (Goldstein, Bloomberg, 10/29/07 NY Times and Freudenheim, New York Times, 12/5/07).

Question: But in none of the comparisons you have prepared is the country as large and complex as the U.S., we are going to continue needing a more complex system of health care delivery aren’t we?

As to size, most economists would argue that the greater the overall resources and risk pool (number of patients) the greater the opportunity for efficiencies and savings. Furthermore, look at how we compare with Japan (half our size) with regard to health care. As to complexity, its definitely true that we have the most uneven health care delivery in the world with some localized districts of states having more than three times the rate of uninsured as the country as a whole. This “complexity” is almost always related to ethnic diversity in our country. But this uneveness is a core problem not something we should adapt to or of which we should be proud. What sense is there to “the right to vote” or “right to an education” for examples, if one ethnic group is kept so much less healthy and able to take full advantage of those rights that exist on paper?

Question: If you are going to discuss the Canadian model of health care, don’t you need to consider also how they are paying for it, who pays and would that be acceptable in the USA??

Yes, that should definitely be discussed in making such a comparison and we should consider what is acceptable to the American public. Even the wealthiest Canadians are not “burdened” by their single-payer system, since the efficiencies are so much higher than our wasteful system. In the good ole USA the lowest income (and many of the hardest working) Americans pay in way beyond their fair share for health care. This is particularly outrageous since most of the Americans excluded from health care coverage are these same unduly-burdened hard working families. What kind of “family values” based society are we supposed to be? Something does not compute.
Question: But we are a much wealthier nation, why should we get a second rate system like other countries?

No one we know of is advocating getting a health care system of lesser quality. However, we doubt whether we can be considered relatively wealthy among the industrialized nations. Even a high GDP can be a misleading measure of the nation’s wealth. The world’s highest health care costs, in fact, contribute to a loss in disposable income (that part of income people can enjoy). We believe that our foremost experts in health policy under publicly accountable leadership should decide what features of our system need to be preserved and enhanced to insure a FIRST RATE system for our populace into the future. Currently such public planning is nil and our health security is being bargained away “under the table” of public scrutiny by companies looking for the best returns to shareholders.

Also see below on quality of care in U.S. and Canada.
Question: Are there any recent examples of advanced capitalist economies switching to UHC after experiencing problems similar to those we are having?

Yes, Taiwan is a good example of this. Taiwan’s single-payer NHI system enabled Taiwan to manage health spending inflation and that the resulting savings largely offset the incremental cost of covering the previously uninsured. Under the NHI, the Taiwanese have more equal access to health care, greater financial risk protection, and equity in health care financing.

Taiwan offers an opportunity to study how an advanced economy can structure its health care system to advance societal goals. Taiwan learned from worldwide experience that while the free market can often produce products and goods efficiently, it is incapable of distributing the goods equitably because the income and wealth of households are not distributed equitably. Moreover, the health insurance market suffers major market failures from adverse selection and risk selection. When a society is seriously concerned about its people having equitable access to care and about pooling health risks efficiently, the free market is not a good choice. Evidence from the United States amply supports this conclusion also.1

Taiwan established a compulsory national health insurance program that provided universal coverage and a comprehensive benefit package to all of its residents. Besides providing more equal access to health care and financial risk protection, the single-payer NHI also provides tools to manage health spending increases. Our data show that Taiwan was able to adopt the NHI without using measurably more resources than what it would have spent without the program. It seems that the additional resources that had to be spent to cover the uninsured were largely offset by the savings resulting from reduced overcharges, duplication and overuse of health services and tests, transaction costs, and other costs. The total increase in national health spending between 1995 and 2000 was not more than the amount that Taiwan would have spent, based on historical trends.

Additionally, Taiwan did not experience any reported increase in queues or waiting time under the NHI. Meanwhile, the government has taken regular public opinion polls every three months to gauge the public’s satisfaction with the NHI. It continuously enjoys a public satisfaction rate of around 70 percent, one of the highest for Taiwanese public programs.

One notable result that should interest Americans is that Taiwan’s universal insurance single-payer system greatly reduced transaction costs and also offered the information and tools to manage health care costs. Alex Preker, a leading health economist at the World Bank, came to a similar conclusion from his research of OECD countries. He concluded that universal health care led to cost containment, not cost explosion. Equally important, a single-payer system can gather comprehensive information on patients and providers, which can be used to monitor and improve clinical quality and health outcomes.

Question: But everything I hear says that the system in Canada, for example, is completely falling apart and that the Canadians themselves do not wish to keep it. In fact, they want a private system like ours.?

A Canadian survey by NUPGE in mid-2000 showed that Canadians remain committed to the five first principles of the health care. Equal accesses to medical treatment regardless of income and treatment for every illness are the two most important elements of the health system for an overwhelming majority. Nearly 9 out of 10 people say it is “very important” everyone gets the same care no matter what their income. Nearly as many (83%) say it is very important that the same procedures and treatments are covered no matter where people live.

A strong majority says it is very important that health care not be run for profit (70%) and covers all medical treatments (69%). Some 60% of Canadians feel it is very important that patients pay no fees for health services. More Canadians say the federal government is making the health system worse than say the government is making it better. Women are more likely than men to say the provinces are making health care worse. Men are split evenly with 35% saying better and 35% saying worse. Women, however, by 41%-26% say their provincial government is having a negative impact on health care.

The National Union of Public and General Employees (NUPGE) is a family of 14 component unions and the second largest union in Canada. Most of their 325,000 members work to deliver public services of every kind to the citizens of their home provinces. A large and growing number of their members work for private businesses. Read what their President James Clancy says about the priority that medicare remains for working Canadians. Visit their website on Canadian health care.

Question: I have heard from friends that the quality, though, of the Canadian system is dreadful. That the waits and poor facilities compare very poorly to the U.S., why should we want anything similar here?

In 1998 Canada spent $1828 per person on health care, while we spent $4178. Spending more than twice as much per person would go a long way towards assuring high quality here. Of course the 43 million uninsured in the U.S. might not be so impressed with the quality of their treatment currently. Furthermore, we have almost 10-fold the overhead & administrative cost in our US private insurance system as in our own medicare. What quality could we provide to our population if we were to recover most or all of that waste?

Proponents of the Canadian system such as NUPGE are quite explicit that they have now completed just one of the two critical phases of developing their system. They now have a system affording care to everyone. They are now in Phase 2, a struggle for adequate and stable public spending to improve quality and secure top notch facilities for many years to come. Read more about the current challenges for the Canadian system Conditions in Canadian health care are changing rapidly, this is evidenced by, among other things, the net flow of physicians northward across the border (even though specialists can still command much higher salaries in the USA).

Speaking of “waits”, you know the one place where waiting is sure to kill you or you loved one would be in an Emergency Department. Waits for emergency care in the USA increased 36% between 1997 and 2004. Among all patients, the average wait increased to 30 minutes. Even the severely ill are waiting longer. Waits for patients suffering heart attacks increased 150%, to 20 minutes, and a quarter of heart attack victims in 2004 waited 60 minutes or more before seeing a doctor.

Question: Doesn’t all evidence show that the lines in Canada and waits imposed for needed treatments are unreasonable. In fact, many Canadians find it easier to come south to the U.S. for needed treatment.

NUPGE uses the example of some of the care in Alberta province where the provinicial government has gone furthest in the last few years towards allowing privatization and profit-making back into their system. For the past three years, the Calgary Regional Health Authority has contracted out all of its cataract operations to private companies. Calgary patients now wait 13 months or mor for their surgey. Meanwhile across the border in Lethbridge, where all cataract surgeries are still done within Medicare, the wait is just 3 to 4 months. The same thing happened in Britain, Australia and New Zealand. Going private increases waiting times. Download their free paper on three major myths (Acrobat).

It has also come to light that reports of longer waits in Canada for surgery have been fabricated and spread by right-wing think tanks, to support their mythologies. And evidence from other countries also is showing that privatization can mean longer waits and lower quality ref-A, or ref-B .

Question: I understand that these two problems that of poor quality and long lines in Canada result, in fact, in Canadians pouring south across the border to fulfill their  health care needs. What other explanation could there be?

This is actually one of the myths propagating through mainstream media originating with the corporate insurers to both turn the clock back in Canada and maintain their profitable foothold in the U.S. without restrictions. Quite the contrary has been shown where the situation has been carefully studied and evidence collected. Similarly, there is a myth being spread about Candian physicians deserting their sinking ship. More recently (2005) studies show that the net flow of physicians has reversed, with more physicians moving north into Canada (certainly not for the balmy winters either)..

A telephone survey conducted by U.S. researchers of likely U.S. providers of wait-listed services such as advanced imaging and eye procedures strongly suggested that very few Canadians sought care for these services south of the border. Relative to the large volume of these procedures provided to Canadians within adjacent provinces, the numbers are almost undetectable. Hospital administrative data from states bordering Canadian population centers reinforce this picture. State inpatient discharge data show that most Canadian admissions to these hospitals were unrelated to waiting time or to leading-edge-technology scenarios commonly associated with cross- border care-seeking arguments. The vast majority of services provided to Canadians were emergency or urgent care, presumably coincidental with travel to the United States for other purposes. They were clearly unrelated either to advanced technologies or to waiting times north of the border.

This is consistent with the findings from our previous study in Ontario of provincial plan records of reimbursement for out-of-country use of care. Additional findings from the current study showed that a small amount of cross-border use was related to proximal services, primarily in rural or remote areas where provincial payers have made arrangements to reimburse nearby U.S. providers. Finally, information from a sample of “America’s Best Hospitals” revealed very few Canadians being seen for the magnet referral services they provide.

These findings from U.S. data are supported by responses to a large population-based health survey, the NPHS, in Canada undertaken during our study period (1996). As noted above, 0.5 percent of respondents indicated that they had received health care in the United States in the prior year, but only 0.11 percent (20 of 18,000 respondents) said that they had gone there for the purpose of obtaining any type of health care, whether or not covered by the public plans.

QUESTIONEveryone knows the health care we get in the USA is so far superior, though, to what Canadians have. How can that be argued?

In health, Canada tops U.S.A. Our neighbors to the north live longer and pay less for care.

The reasons why are being debated, but some cite the gap between rich and poor in the U.S. According to a Los Angeles Times article An impressive array of data shows that Canadians live longer, healthier lives than we do. What’s more, they pay roughly half as much per capita as we do ($2,163 versus $4,887 in 2001) for the privilege. *1 Exactly why Canadians fare better is the subject of considerable academic debate. Some policy experts say it’s Canada’s single-payer, universal health coverage system. Some think it’s because our neighbors to the north use fewer illegal drugs and shoot each other less often with guns (though they smoke and drink with gusto).

Still others think Canadians are healthier because their medical system is tilted more toward primary care doctors and less toward specialists. And some believe it’s something more fundamental: a smaller gap between rich and poor. Perhaps it’s all of the above. But there’s no arguing the basics.”By all measures, Canadians’ health is better,” says Dr. Barbara Starfield, a university distinguished professor at Johns Hopkins Medical Institutions. Canadians “do better on a whole variety of health outcomes,” she says, including life expectancy at various ages.

To counter the argument that racial differences play a major role, Hertzman compared infant mortality for all Canadians with that for white Americans between 1970 and 1998. The white U.S. infant mortality rate was roughly six deaths per 1,000 babies, compared with slightly more than five for Canadians. Maternal mortality shows a substantial gap as well. According to the Paris-based Organisation for Economic Co-operation and Development (OECD), a 30-nation think tank, there were 3.4 maternal deaths for every 100,000 births among Canadians, compared with 9.8 deaths per 100,000 Americans.

And more than half of Canadians with severe mental disorders received treatment, compared with little more than a third of Americans, according to the May-June 2003 issue of Health Affairs. “The summary of the evidence has to be that national health insurance has improved the health of Canadians and is responsible for some of the longer life expectancy,” says Dr. Steffie Woolhandler, an associate professor at Harvard Medical School and staunch advocate of a single-payer system.