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TECH/POLICY/INTERNATIONAL: Canada is more efficient user of MRIs compared to U.S., U.K.

Ian Morrison said in his talk at the P4P conference the other day that no Canadian had ever had an MRI. As a sweeping generalization that’s true. But in actual fact a few of them have had one, and they use their machines a lot more efficiently.

(BTW Ian was joking, for you literal conservatives out there).

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18 replies »

  1. Please let me know if it is wise to open an MRI center in Canada? Thanks

  2. You nail it, Trapier.
    I would like to hear Matthew explain why “there [should not be] compromises between the opulence [means US] and utter poverty [means Canada] of healthcare quality?”
    A real marketplace would have a smooth scale with consumer choice, while government taking care of the universal baseline.
    Is there any reason why it is not possible?

  3. You’re absolutely correct Harvey! How silly is it that the only choices available to consumers are ‘feast’ or ‘famine’ such that one can go from “Bentleys to…dying in the street,” as Matthew says?
    But Matthew is absolutely correct. Such is the reality of our current medical marketplace.
    So where are the healthcare Hondas? Why is everything a medical Mercedes? In a time when “rampant, rising costs” is the rallying cry of health policy reformers, why isn’t everyone aghast that there are not compromises between the opulence and utter poverty of healthcare quality?

  4. I’m disappointed that everyone has so easily accepted the proposition that Efficiency is the only desideratum of medical care. Shouldn’t we give SOME consideration to Patient Outcomes? How many patients waited how many weeks in pain because they couldn’t get a prompt diagnosis? How many had cheaper procedures which failed to give correct diagnoses?
    And even in economic terms, how many of the expenses were externalized to the rest of the economy, in terms of lost time on the job, disability payments, etc.?
    Mere “efficiency” could be maximized by firing all doctors but one, selling all x-ray machines but one, closing all hospitals but one.
    Health Care is NOT like Bentleys!
    Harvey

  5. Re: “…so I guess everyone can be happy!”
    Not so fast, Matthew.
    I’d like to have a word with you, if I may.
    I’m quite excited by your assertion that Trapper’s “theoretical BS” is trumped by “the Canadian reality.”
    Does that mean that if The Canadian Reality turned out to be a Massive Myth of Moose-Like Proportions, that you would surrender your case? Would it spell an end to the US vs. Canada nonsense that you call a debate?
    What would happen if someone could demonstrate to you that the Canadian system is not “efficient” – in either your “sense” of the term, or in Trapper’s google-reviewed one?
    What if the data from the CIHI report that you’ve accepted as Truth was collected imprecisely?
    What if, not-so-hypothetically speaking, the Canadian system did not produce egalitarian outcomes? What if the Paris Hiltons and Paul Martins of this country bought their way to better care while the rest of the plebeians perished on waiting lists?
    What would you say to that, eh?
    I’m serious. This is not a rhetorical question.

  6. In the absense of peer-review practices on the blogosphere, I’d like to submit the “Google” theory of intellectual value.
    Compare the returns you get by Google-searching the key terms of my arguments – ‘marginal utility,’ ‘demand function,’ ‘equations’ – to what happens when you search for “Paris Hilton” and “Bull S#@t”.

  7. BS is code Trapier.
    Meanwhile, even if we had the perfect market on the payment side, the imbalance of information and the uncertainty of outcome means that we cannot fathom out what real value from the MRI will be. You may think it’s OK to leave it to whether someone can afford it or not, but that means we’ll end up distributing MRIs (or care) in the same way we do ith Bentleys or Coach handbags or whatever else Paris Hilton can afford but you or I can’t.
    As a practical matter, we’re not prepared to do that with health care, because we’re not prepared to see people go without Bentleys if that means that they’ll be dying in the streets. So there will always be some kind of thrid party/socialized payment, and so we need to find a better way of making the system more efficient given that fact.
    Which means that your theoretical BS is trumped by the Candian reality.

  8. Re: “And it really tweaks your noses that the possible scenario we have here of unlimited payment for imaging from unquestioning third party payers might not be as good a solution as Canada’s constrained supply for large capital items. Even though all three of you actully OPPOSE such an unlimited third party payment system. And that under your idealized “consumer pays for more or less everything out of pocket” they’d be a hell of a lot less MRIs around here.”
    For anyone still with me on this…here’s an answer to this very good point Matthew makes.
    Just as the artificial input constraints of command and control policies distort the MC / MU comparison on the supply side, third party payment distorts the same comparison made by demanders of MRI services (assuming that consumers are actually demanding these services rather than being dictated what to how to consume them by providers, inurers, or governments).
    One good measure of MU (marginal utility) is ‘willingness to pay’. In fact, the two concepts are often interchangeable in some economic discussions. On the margin, the consumer makes a decision to consume an additional sevice right about the point where the value of the additional service is equal to the cost she must pay for it – this is what she is “willing to pay”…
    [5] MU = MC.
    Without third party payment the willingness to pay consideration is whether…
    [6] How much I enjoy another MRI = The full price of the MRI
    But with a 20% co-insurance the equation becomes…
    [7] How much I enjoy another MRI = 0.20(The full price of the MRI)
    And with a 20 dollar co-payment is becomes…
    [8] How much I enjoy another MRI = 20
    And with full coverage it becomes…
    [9] How much I enjoy another MRI = 0
    And it is reasonable to assume that…
    [10] The full price of the MRI > 0.20(The full price of the MRI) > 20 > 0.
    Since neither Eqs. 7,8, nor 9 is the same as Eq. 6, Matthew is correct to say that we would otherwise consumer a different amount of MRI exams in American absent third party payment. And by Eq. 10 he is even more correct to say that we would consume fewer MRI services absent third party payment.
    In truth, it is very hard to diagram the equilibrium that would clear a free market for MRI services absent third party payment distortions on the demand and distorting supply side command and control contraints on inputs.
    But Matthew’s still wrong.
    Trapier K. Michael
    http://www.Marketplace.MD
    http://www.blog.marketplace.md

  9. BS. Most economists view efficieny as a measure of productivity given a pre-determined input (e.g. unit labor cost). You are talking about maximizing utlility, which cannot exist as an economic concept outside of a free market that approaches the rule for perfect competition, which as you well know cannot exist in healthcare — because it’s damn near impossible to measure the “value” on the right hand side of equation #3.

  10. Re: “Let me expalin econ 101 to you. Per $ spent on MRI machine, Canada is getting more out of them. That is the economic definition of efficiency.”
    No. no. no. The economic measure of efficiency is cost compared to benefit; more technically, MRIs can be called “efficient” on the margin if, in the ‘short run’,
    [1] MC = or < MU
    (in other words, marginal cost is equal to or greater than marginal utility).
    In this 'short-run' you ignore fixed costs.
    In the 'long-run', however, costs formerlly known as 'fixed' beceme 'variable' and factor in Equation 1 above.
    How does this explain Canadian MRIs? Consider two types of MRI costs: 1) that of purchasing and installing a machince, and 2) that of running a single addition exam on an existing machine. The first can be considered 'fixed' in the short-run and 'variable' in the long-run while the second is always variable.
    If command and control policies set the number of machines at X and disallow the market from adjusting it, then the first type of cost will always be fixed and the equation for MRI efficiency at the margin would be…
    [2] Cost of Additional Exam = or < Value of Additional Exam
    Meanwhile, if the costs were allowed to be variable in a long-run, free market economy, the equation for efficiency at the margin would be…
    [3] Cost of Purchasing/Installing Machine + Cost of Additional Exam = or < Value of Additional Machine + Value of Additional Exam.
    Eqs. 2 & 3 are not the same, so it is no suprise that the aggregate number of MRI Exams, aggregate number of MRI machines, and MRI exams per machines are not the same across hybrid free market / socialezed systems (US) and more fully socialized systems (Canada) of care.
    Given the input constraints facing Canadian MRI technicians, I argue that their usage meets Eq. 2 and is thus "efficient". However, if, as I suspect, such constraints are artificially imposed by command and control policies, then usage DOES NOT meet equation 3 which is the true economic efficiency standard.
    Trapier K. Michael
    http://www.Marketplace.MD
    http://www.blog.marketplace.md

  11. This is a blast at the three of you, excepting Greg.
    Yup Canada probably was more efficient 5 years ago. I reccomend the lot of you get jobs in the airlines and suggest to them that they fly more planes at a lower load factor, and see how long you last with your idea of “efficiency”!
    Let me expalin econ 101 to you. Per $ spent on MRI machine, Canada is getting more out of them. That is the economic definition of efficiency.
    And it really tweaks your noses that the possible scenario we have here of unlimited payment for imaging from unquestioning third party payers might not be as good a solution as Canada’s constrained supply for large capital items. Even though all three of you actully OPPOSE such an unlimited third party payment system. And that under your idealized “consumer pays for more or less everything out of pocket” they’d be a hell of a lot less MRIs around here.
    I’m not “better than that” but at least I’m vaguely consistent!!

  12. Matt, bad example. Assuming demand is constant limiting supply while increase the utilization per unit no matter if you measuring MRI, CT, or gas stations. So they have fewer machines and the machines are used more often. This doesn’t tell me anything about efficiency. From a purely production standpoint, i doubt that a Canadian MRI actually takes less time than a UK or US MRI. The technology is the same. I wonder why they didn’t compare wait times for imaging across the 3 countries? Ooh, that’s right, that would make the US look good…and who wants that to happen 😉
    All I gathered is that Canada is trying to catch up in capacity with everyone else. The have 35% more MRI machines than 5 years ago! Wow, socialized medicine dictated by political realities and funding constraints is so much better. Go figure, that if you were to use Matt’s flawed measure of efficiency, Canada was more efficient 5 years ago than today.

  13. Many times it’s not what “kind” (or amount) of toys a medical facility has, but how well they can use them (efficiently). I know of a very well respected medical facility in south-central Pennsylvania, who has utilized the MRI to the astonishment of a number of other medical institutions, who have all the toys, bells and whistles available to them. They were amazed at the way this hospital could find disease with what seemed like a simple tool (compared to Pet Scans, PET/CT Scans, T1-SPECT scans).

  14. Efficient? Not really. The article simply says that Canada has fewer MRIs and therefore each individual MRI works double time just to keep up with demand because there is a shortage in supply.
    There’s no surprise that this classic case of command-economy-induced-shortage pushes up the number of MRI exams per Canadian machine, but what a silly measure of efficiency! Hopefuly America will soon outlaw all but one plane, car, and train. That is sure to increase the number of rides per respective vehicle as the only plane, only car, and only train left in the US drown in a sea of demand and utterly fail to get us from here to there.
    Nevermind waiting in line for years or decades to get transportation to visit Grandma at Christmas in 2030. We will have achieved Canadian style efficiency!
    Come on Matthew. You’re better than this.
    Trapier K. Michael
    http://www.Marketplace.MD
    http://www.blog.marketplace.md

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