OP-ED

The Canadian Health Care System I Disparaged

Screen Shot 2014-05-06 at 6.44.13 PMWhen I recently returned home after a two-week speaking tour of Canada and began catching up on news about Obamacare, I was angry and upset, and not just at politicians and special interests that benefit from deception-based PR tactics.

I was — and still am — mostly angry and upset with myself. And I know I always will be.

Over the course of a two-decade career as a health insurance executive, I spent hours and hours implementing my industry’s ongoing propaganda campaign to mislead people about the Canadian health care system.

We spread horror stories about “rationed care” and long waiting times for medically necessary care. Our anecdotes were not at all representative of most Canadians’ experiences, but we spent millions of dollars to persuade Americans that they were.

At every stop between Halifax and Vancouver last month, I explained how the United States had achieved the dubious distinction of having both the most expensive health care system on the planet and also one of the most inequitable.

While Canadian lawmakers in the 1960s were implementing a partnership between the federal and provincial governments to create the country’s publicly funded universal health insurance system — known as Medicare — our lawmakers in Washington were establishing America’s own single-payer Medicare program, but only for folks 65 and older and some younger disabled people.

Congress also created the federal and state-administered Medicaid program for the nation’s poor.

Ever since, most of the rest of us have had to deal with private insurance companies and pay whatever they felt like charging us for coverage.

Canadians are also paying more for coverage these days because of medical inflation and an aging population, but not nearly as much more as we in the U.S. are paying.

Just about everybody in every audience I stood before gasped when I told them that health insurance premiums in the U.S. increased 131 percent between 1999 and 2009 — the main reason why 50 million of us were uninsured at the end of the last decade — and that by 2013 the average employer-based family policy cost $16,351.

At one stop in Toronto, I was asked if there was anything about the U.S. system that Canadians should consider adopting. I was stumped.

I noted that while we had some of the world’s best doctors and hospitals, they were in many cases off-limits to millions of Americans, many of whom were uninsured because of preexisting conditions that made them “uninsurable” in the eyes of private insurance companies.

Later, on reflection, I realized I should have mentioned some aspects of our Medicare system and our other single-payer program — the Veterans Health Administration — both of which consistently out-perform private insurers in customer satisfaction surveys.

The two aspects of our Medicare system worth emulating are: (1) the fact that it’s a federal arrangement, meaning that benefits and services do not vary from state to state, and (2) the prescription drug benefit (Medicare Part D) that Congress added a few years ago.

The Canadian Medicare program is akin to our Medicaid program in that the provinces have broad latitude in administering benefits and services. As a consequence, Albertans’ experience with Medicare can be quite different from that of Newfoundlanders. And the Canadian Medicare program still does not cover medications.

Canadians have to buy private insurance for their prescriptions. Consumer advocates there continue to push for the adoption of a nationwide drug benefit.

As for the Veterans Health Administration, which owns and operates its own hospitals, it not only gets higher customer-service scores than private hospitals, it is frequently cited for better health outcomes.

For example, the RAND Corporation found in a 2004 study published in the Annals of Internal Medicine that the VHA outperformed all other sectors of the U.S. health care system in 294 measures of quality.

In other words, Canadians should consider making their system even more public than it is, rather than more private.

I usually began my remarks in Canada with an apology — for all the misinformation I helped spread in the U.S. about their system, which, by the way, continues to have overwhelming support. I didn’t encounter a single Canadian who didn’t talk about their Medicare program with pride.

Back in the states, among the distressing pieces I read was a recent New York Times story based on interviews with Americans who said they had decided to remain uninsured either because they couldn’t afford to pay the premiums or had just decided to gamble with their health and personal finances.

Those are decisions completely unknown and unnecessary in Canada, where the per capita spending on health care is far lower than it is here and where people live longer.

Wendell Potter (@wendellpotter) is a former CIGNA corporate relations executive. Following a 20-year career with CIGNA, Potter has served as a industry whistleblower and outspoken advocate for health reform. He is the author of Deadly Spin: An Insurance Company Insider Speaks Out on How Corporate PR is Killing Health Care and Deceiving Americans and Obamacare: What’s in It for Me? What Everyone Needs to Know About the Affordable Care Act. Potter is a freelance analyst and regular columnist for the Center for Public Integrity, where this post first appeared. 

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DesmondMak GMark Gjr23Bob Hertz Recent comment authors
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Desmond
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Mak G
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Mak G

There is something different about the discourse underlying this topic post. As I’m living – albeit remotely an engagement with the Quebec Canadian system, one of the key differences I see between the US and QC system is the patient engagement expectation/demand level to effectively use the QC system s a higher barrier than it is in the US, at least for those in the US with financial coverage. The overall health statistics between CA and the US seem to suggest that health outcomes don’t differ much. But that may be of limited relevance to how each medical system works.… Read more »

jr23
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jr23

several things i doubt the statistics on the VA hospitals in light of the current problems now in the news about dual appointment books so they would look good enough to get bonuses. i suspect the also tampered with the satisfaction surveys. as for canada a smaller population, the ability of coming to the US for care I saw many working around Florida hospitals in my 10 years in allied medical, and canada only has around 100,000 illegal aliens the us estimates 13 to 30 million and only about 1.7 million on welfare. we definitely needed reforms but the aca… Read more »

Bob Hertz
Guest

I believe that under current law, Vermont cannot force large multistate employers to join the single payer system.

These firms will not accept a scenario where they have to maintain their private plans and pay a large payroll tax.

Yet these firms generally pay the highest salaries.

Big collision coming there.

Barry Carol
Guest
Barry Carol

A VAT as broadly based as those in Western Europe of 20% would raise about 8% of GDP or $1.3 trillion. That’s probably the minimum it would take to replace private commercial insurance, Medicaid and cover the uninsured. It will be a mighty tough sell, especially to the public sector unions and the rest of organized labor.

Barry Carol
Guest
Barry Carol

A single payer system in the U.S., if we ever got it, would likely be either Medicare for all or Medicare Advantage for all or some combination of both. The existing Medicare program already spends about $11,000 per beneficiary per year including premiums paid by beneficiaries. If Medicaid were folded into a single payer Medicare system, those medical prices would go up. If we committed to paying primary care doctors more as well, that’s another cost increase. People with current private commercial insurance would see their prices per service, test, procedure and drug go down some and there would be… Read more »

Bob Hertz
Guest

A national sales tax or VAT is crucial for single payer, as Barry suggests. There is effectively a limit on what income and wealth taxes can bring in By comparison, a well-enforced sales tax is a gusher of revenue. We are seeing this play out in Vermont. Without a new sales tax, the partisans of single payer are apparently stymied in how to pay for their system. (I am not saying this gleefully, just stating the facts as I know them.) I would fear a new national sales tax. If it was large enough to handle single payer, it could… Read more »

Peter1
Guest
Peter1

“I would fear a new national sales tax.”

Bob, it would not be as if you’d pay the tax AND health care premiums – there’d be value for money spent.

However just using a tax to pay for an already the most expensive system in the world would not work either. Costs have to be reduced, not something providers (donors) want to see.

Barry Carol
Guest
Barry Carol

I wonder if anyone has any information regarding the percentage of income most middle class and upper middle class Canadians pay in federal and provincial taxes to support their healthcare system. Also, how much do prescription drug plans cost? Under the ACA, Americans earning between 300% and 400% of the federal poverty level of income are expected to pay 9.5% of income for health insurance before subsidies kick in. This excludes deductibles and coinsurance amounts.

Peter1
Guest
Peter1

Barry, the last time I looked at CA taxes for possible return to Canada the income taxes were about the same for our income range. The rich pay more in Canada. Property taxes are higher and there’s a federal GST (VAT tax) which is about 7% on top of provincial sales tax – total take is about 15%. Alberta has no sales tax but has oil.

Peter1
Guest
Peter1

Forgot to mention that Ontario instituted a health care surcharge several years ago of about $800 per year depending on income. Not sure if that’s still in place.

Barry Carol
Guest
Barry Carol

Interestingly, the breakdown of healthcare spending in Canada is essentially the same as it is in the United States – roughly 30% goes for hospital based care and 16% for prescription drugs. Canada spends 15% of their healthcare dollars for physician fees while we spend 21% for what we call physician and clinical services which includes imaging, labs, rehab, etc. Total healthcare spending per person in Canada for 2012 was about 35% lower than in the U.S. but Canada’s per capita GDP was also 18% lower which is important from an affordability standpoint. While there is considerable variation, about 40%… Read more »

Hans Duvefelt, MD
Guest

I live fifteen miles from the Canadian border and work within shouting distance of our neighboring country. I have a few patients who get some of their care here and some of it in Canada. What most of them tell me is that they appreciate the coverage there but value the freedom of choice and the quicker access they have here. I also hear comments in favor of the comprehensiveness of specialist physicians on this side of the border. I never hear outright negative comments about the Canadian healthcare system. As others have pointed out, Canadians, like my own Swedish… Read more »

Medical Victory Strategist
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Medical Victory Strategist

Alas, it looks like Mr. Potter’s praise for the Veterans Administration’s health care system was ill-timed:

http://www.cnn.com/2014/04/23/health/veterans-dying-health-care-delays/

with the previous story by CNN being:

http://www.cnn.com/2014/01/30/health/veterans-dying-health-care-delays/

and

http://www.cnn.com/2013/11/19/health/veterans-dying-health-care-delays/index.html

In sum:

“[VA] Hospital delays are killing America’s war veterans”

So yes, the VA bureaucrats have been *reporting* that they deliver great care at low prices. I hope it’s generally true, but we will have to see how this story plays out.

Peter1
Guest
Peter1

“Alas, it looks like Mr. Potter’s praise for the Veterans Administration’s health care system was ill-timed:”

The private for profit system;

http://www.forbes.com/sites/leahbinder/2013/09/23/stunning-news-on-preventable-deaths-in-hospitals/

Saurabh Jha
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Saurabh Jha

Chuckle!

Lobsters can get boring after a while! You might want to consider a bit of broccoli. Without the inter state commerce clause!

Mak G
Guest
Mak G

Saute some seasoned tofu with that broccoli. Try a marinate with Old Bay spice, then pan sear. Comes close to the taste of Lobster, and much less inflammatory -> lower cancer risk!

Saurabh Jha
Guest
Saurabh Jha

Regarding single payer systems, I see disingenuity on two sides. One side excessively demonizes the systems; as if people are dying left, right and centre. They are not. On the other side, people excessively eulogize these systems as if they are some utopian paradise. They are not. There is a trade off. You want a Canadian system or NHS? Government covered healthcare for all, free of service at point of care? Then there is a trade off. The trade off is the fact that not everyone can get instant service, like instant latte, all the time. This doesn’t mean that… Read more »

Perry
Guest
Perry

I’m an American, and I don’t think they would put up with it. We want steak and lobster care for McDonald’s service.

Dino
Guest

I have never heard anyone sing the praises of two tiers in heal systems. But it seems to me there is no way to build a single payer system without oppressing free market principles and impossible to build a purely free market system without destroying the underprivileged. There has to be an acceptable middle road. Has the UK found it?

Saurabh Jha
Guest
Saurabh Jha

The UK healthcare system is 2 tier, or at least 1.5 tier.

If by “acceptable” if you mean that the masses have not put the politicians to the guillotine, then yes UK has found it.

I doubt Americans will find it very palatable though.

Medical Victory Strategist
Guest
Medical Victory Strategist

The Canadian system has the American system as its safety valve. In 2005 Canada’s supreme court invalidated the ban on private systems covering services also covered by Canada’s public system, rendering being able to escape that system as a civil right. Where would we Americans go? In my home town of Houston, medical services are a major export industry. Saudi princes fly in on their private jets and willingly pay the full “Chargemaster” price for oncology services at M. D. Anderson. They also rent out entire floors of hotels near the Texas Medical Center. Congress should (and perhaps in ACA… Read more »

Peter1
Guest
Peter1

“In 2005 Canada’s supreme court invalidated the ban on private systems covering services also covered by Canada’s public system, rendering being able to escape that system as a civil right.” Based on a Quebec case whereby Quebecers could purchase private insurance. So tell me how many Canadians actually purchased insurance after that decision? “Saudi princes fly in on their private jets and willingly pay the full “Chargemaster” price for oncology services at M. D. Anderson. They also rent out entire floors of hotels near the Texas Medical Center.” What no Canadians in private jets paying chargemaster? Yes, Arab princes would… Read more »

Medical Victory Strategist
Guest
Medical Victory Strategist

Peter1, How many Canadians purchased private insurance after their Supreme Court said it could cover procedures Canadian Medicare also covers? http://en.wikipedia.org/wiki/Health_care_in_Canada says that 15% of Canada’s total health care spend is paid via private insurance. So the number does not sound trivial. However, Medicare never did pay for Rx drugs, and Rx drugs are included in what is insured. As for Canadians flying to Houston on their private jets, according to: http://www.huffingtonpost.ca/2014/03/03/richest-canadians-forbes_n_4892478.html Canada has 32 billionaires, so I will have to defer to your specific knowledge that none of them have flown into Houston for oncology services at M.D. Anderson… Read more »

Saurabh Jha
Guest
Saurabh Jha

Trans national capitalism! Trotsky is turning in his grave!

Aurthur
Guest
Aurthur

“Ever since, most of the rest of us have had to deal with private insurance companies and pay whatever they felt like charging us for coverage.” “Over the course of a two-decade career as a health insurance executive, I spent hours and hours implementing my industry’s ongoing propaganda campaign to mislead people about the Canadian health care system.” My understanding is Cigna works primarily in the commercial markets. Why would Cigna pay you for 20 years to bad mouth another country’s health care system when they could simply charge and get paid whatever they felt like for coverage? Are they… Read more »

Peter1
Guest
Peter1

“so other countries like Canada can free load off the USA’s productivity.”

How is “free loading” taking place? Canada pays it’s own way for health care through taxes.

Saurabh Jha
Guest
Saurabh Jha

The rationale, and it’s a pretty plausible one, is that single payers are a monopsony and bargain down drug and device prices. These products would not exist if companies do not recuperate fixed costs (R&D and regulatory costs), which they do by fleecing Americans.

Peter1
Guest
Peter1

Your “plausible” does not stand up when you use, “by fleecing Americans”.

Saurabh Jha
Guest
Saurabh Jha

ok, making Americans pay more for the same goods and services!

Is that better now?

Peter1
Guest
Peter1

You might want to see this Aurthur.

http://www.cdrd.ca/

Aurthur
Guest
Aurthur
Peter1
Guest
Peter1

Your link: “The trio can cure 90 percent of chronic hepatitis patients within 3 months, but its official price is $1,000 USD a day, so that treatment is roughly $90,000 USD. For those able to afford longer treatment regimens, the cost may accumulate to a couple hundred thousand dollars, but the cure rate rises to 100 percent.” The picture of the protests against the price don’t look like they can afford to pay more because they are paid more that take advantage of their higher “productivity”. The price in the U.S. looks to be because they can, not that higher… Read more »

Aurthur
Guest
Aurthur

“Pretty lame argument that only you would think is credible.”

Let’s review: Not really an argument; rather a restatement of summary. Someone else put this idea forward, so I am not the only one that thinks it is credible.

Why will Canadians, Brits, and every other country’s citizens or governments pay less than what is charged in the USA? Why is it illegal for a US citizen to purchase this drug in Canada?

Is it because US citizens cannot afford it? US productivity sited is overall, not just protesters such as Occupy No Wall Street Job.

Peter1
Guest
Peter1

“Why will Canadians, Brits, and every other country’s citizens or governments pay less than what is charged in the USA? Why is it illegal for a US citizen to purchase this drug in Canada?”

That’s right, the U.S. drug corps have the price juuust right. Only you would want to accept that.

Can’t import drugs at less cost because that would create competition not in favor of the drug companies, however we can import goods made with under priced labor to under cut our own labor. I guess that’s OK with you.

Aurthur
Guest
Aurthur

So taxes should be ultra progressive and drug costs should be flat?

Peter1
Guest
Peter1

Aurthur, what do you mean by “ultra”?

If you mean “flat” as in the same for each market I can’t say. I do know that drug companies are under no obligation to sell “below cost” to any country – the fact that they can sell for less does not mean Americans are subsidizing those prices – it may mean the profits here are “ultra” high – protected by U.S. law.

Serious Medicine Strategist
Guest
Serious Medicine Strategist

Pharmaceuticals are weird. In trade policy, selling in overseas markets at lower prices than one sells in one’s domestic market is called “dumping” and ignites a trade war. But in pharmaceuticals it is *demanded* by the overseas buyers! Congress needs to withhold the protection of the U.S. patent system from companies that sell their medical products overseas for less than what Medicare pays times the ratio of each foreign nations GDP per capita to ours. This would result in the price of Gilead’s hepatitis drug to either be a lot higher in Egypt or a lot lower here. Meanwhile, all… Read more »

Aurthur
Guest
Aurthur

Ultra could mean the wealthiest 53% of nations pay 100% of the cost, including all profits, while the lower 47% pay nothing or may even be paid to take the drug. Selling drugs in the USA at higher margins can mean that some countries can pay at cost that contains no profit margin while some countries are offered the drug at below cost for purposes of contributing to the fixed cost of bring the drug to market, and maybe as a way to offset revenues to lower tax liabilities. It even could be as a goodwill gesture. What kind of… Read more »

Peter1
Guest
Peter1

“Selling drugs in the USA at higher margins can mean that some countries can pay at cost that contains no profit margin”

Yea, that’s drug company altruism. It’s their global give away marketing plan to make sure everyone (except poor people here) get the life saving drug.

Peter1
Guest
Peter1

“Over the course of a two-decade career as a health insurance executive, I spent hours and hours implementing my industry’s ongoing propaganda campaign to mislead people about the Canadian health care system.” If you are Catholic just go to confession and say a few hail mary’s – God will forgive you. “I know of virtually no one going to Canada for care.” Because Canada’s system stinks? No, how would they get care with Canadians on wait lists (long, short non-existent) and paying taxes for the available care? Now ask how many Americans are going to India. “there are Canadians coming… Read more »

Vik Khanna
Guest

Oh, Canada, we stand on guard for thee! Love that national anthem. My second favorite, after ours, of course. By all means let’s model our system after Canada’s. Yes, let’s apply a system that works for an overwhelmingly homogenous (i.e., about 90% white) population of 34M (less than California and only 8M more than Texas) who workout more than we do, are less obese than we are, and have expressed through their parlimentary system of goverment that they are willing to live within their system’s constraints and quirks. Of course, that probably does not include the legions of Canadians whose… Read more »

Dino
Guest

Dude, I love your work but sometimes the spin makes me cringe… Canad a is less diverse than the US???!? Have you eve been to Vancouver, it will be the first majority Asian city in North America within a couple of decades. BTW, diversity in Canada is embraced as cultural, not just by degree of tan, although it encompasses skin color as well, so saying 90% white means nothing if you’re a 3rd generation Ukrainian that’s still speaks the language and identifies with the culture. My college lunch table was Hungarian, Jewish, Phillipino, French, Ethiopian, French, French-Canadian (distinct), Byelorussian, Icelandic,… Read more »

Vik Khanna
Guest

Dino, glad you like my work and sorry I made you cringe. Well, sort of sorry, anyway. According to Statistics Canada, 86% of Canadians are white and of European descent, hence, termed European Canadians. By contrast, 72% of the US is now white. The fact that there are lots of people from differents lands in Canada is a good thing, as it is in the US (speaking as an American of Asian ancestry). But race matters, as do numbers. And using Vancouver as a barometer offers a limited metric. With around 600,000 people it accounts for less than 2% of… Read more »

Dino William Ramzi
Guest

I appreciate your points, but you may have missed one of my more subtle points: race only matters when the “political economy and … cultural value system” makes it relevant. I would be remiss to suggest that race is a uniquely American concern, but it is relevant in the US in ways that it is not in many other continents and countries. If you take race out of the picture, the cultural heterogeneity of Canada is breathtaking.

Perhaps we should start thinking about diversity in broader ways than the current American social/economic/political paradigm allows?

Vik Khanna
Guest

Actually, I loathe thinking about diversity at all, especially in the framework that shoves someone’s else’s idea of diversity down my throat, as happens in the US. I agree with you that it is a uniquely American dysfunction. Telling me the “right” racial mix for my neighborhood, or how many inner city kids need to be bused to my kid’s school (and bring their “values” with them) isn’t diversity, it’s engineering. And, it is repugnant. As for the rest of the world, I am quite nonchalant about the whole idea. The world is, by definition, diverse, and I am free… Read more »

Mark G
Guest
Mark G

Actually looking at the richness of the data on visible minorities in Canada (16.3% in 2006, project 30.6% in 2031) is breathtaking. http://www.statcan.gc.ca/pub/12-581-x/2012000/pop-eng.htm#t03

Medical Victory Strategist
Guest
Medical Victory Strategist

The issue is not “diversity” *per se* but diversity “how”. “Diverse” population components are fine as long as their families turn out children who can gain admission to medical school on their academic merits.