Category: Health Policy

POLICY: Florida solves Medicaid cost problem (well, not really)

Jan 26, 2005• 1

As you’d expect from the most efficient, transparent, clean-government minded state in the nation, Florida has figured out how to solve its Medicaid cost problem. It’s planning on privatizing Medicaid and making recipients buy in with a voucher into managed care plans. I said plenty about Medicaid in a post last week, so I won’t repeat it all. But three things struck me. First, according to the leader of Florida’s Democrats, the Medicaid budget is about to overtake the education budget. I know they have lots of old and poor people down there, but can that really be true? (I’d like to understand this explanatory page but unless I’m pretty dumb it contradicts itself in the notes below the table). In California where we rival Mississippi in propping up the table on per capita education spending, health spending is only a third of education spending. So is Florida really spending no money on educating its kids? The California state budget division is below, and it shows that we spend a lot less on health than on education.

(From California Budget Basics, by Stephen Levy).

Secondly, 70% of Medicaid dollars in most states go on the care of the poor, elderly and disabled, mostly on nursing home care. No managed care organization has a clue how to deal with those folks, so really we are talking about saving money (potentially) by going after only the other 30% of the dollars. Not really much likelihood of big savings there.

Finally, states are the FILOs of budget deficits (first in, last out). But if you believe the Bush rhetoric about how the economy is getting better (and assuming you are a governor named Bush you should do), shouldn’t this picture be getting better? And if it is, why does it need radical surgery now?

If you want to dive a little deeper into Medicaid, you might take a look at this McKinsey report on what’s wrong with Medicaid which gives some ideas for fixing it. While it’s not dumb as far as it goes, the report doesn’t unfortunately mention the actual ways Medicaid really needs to get fixed which are:a) rolling it into a universal health insurance system,b) creating a national long term care policy, andc) doing something about the scandalous state of the poor in America.

Jonathan Cohn summed it up well in an email in which he said that:

What I love is the constant dismay at the way Medicaid keeps eating up larger shares of state budgets, as if it didn’t have something to do with the fact that more and more people are becoming eligible as employer-sponsored insurance withers away.

QUALITY: Diabetes and the modern disease management girl

Jan 24, 2005• 2

So I spent the last couple of days at a disease management conference that focused on diabetes care.

There is general agreement that — at least 15 years since everyone has understood the problem — the health care system suffers from a lack of transparency, information systems, rational incentives, and care quality. Diabetes care is a microcosm of that. Type II Diabetes is a disease that’s primarily caused by years of poor living and poor care (obesity and metabolic syndrome being typical precursors). Once people get it less than 50% of them are correctly diagnosed, and after that the care of diabetics tends to be poor. Only around half get all the recommended tests and care that they need. And yet for a long time (since the DCCT trial back in the early 1990s) it’s been well known that regular monitoring of blood glucose levels can reduce the risks of further damage from diabetes. And those risks are nasty and expensive–blindness, limb amputations and heart disease. Getting diabetics to do all the things that they should do to reduce their dependence on glucose, and control their insulin levels is a great application of the education, monitoring and bullying that is modern disease management.

Disease management really started out as a front for drug company marketing so that they could pretend that they could work with PBMs and wrap services around their pills that would improve patient care. Of course they were also taken by the concept that disease management programs tend to suggest that sick people should take more drugs than they currently do. Of course some of those drugs might be generics….

But when you get beyond the high meaning rhetoric, disease management is complicated and confusing. Within the population with diabetes there are levels of illness, not to mention co-morbidities. Within disease management there are different ways of getting to patients (such as occasional mailers, phone calls, and constant monitoring via telemedicine). Once you get into the management of diabetics (or any other disease management program) it gets more complicated depending on who you are. Integrated systems want to control the costs of their sickest members; health plans typically want to sell value added services to their customers; and employers (and government) want to try to prevent the costs with their disease. But we live in a world where most diabetes disease management is developed for the less sick diabetic patient in a commercial population, while the greatest need — and potentially greatest savings — may be for a much sicker diabetic on Medicare or Medicaid.

But at a practical level, that all means that there is no clear focus on which patients to pursue. Should health plans be looking at their healthy commercial populations, or should they be ignoring them and going after the really sick people in their plans –who may be on their way into Medicare within a few years and give them no return? In the commercial world disease management services for diabetics cost something like $3 pmpm. Intervention using a telemedicine system (like the Health Buddy) can be around $50 pmpm. Obviously you need some pretty immediate savings if you are spending that much, and the VA at least seems to have decided that it is getting a return. But then again, Florida Medicaid in a rather biting criticism of Pfizer Health Solutions last year, felt that the returns from phone-based DM weren’t so great. But overall I came away from the conference no clearer on where on the financial graph the lines of the cost of intervention versus the value of the benefit intersect. And I’m not sure that anyone else really knew either.

What was interesting is how little was known about what the real ROI of different interventions on different types of people. One plan sent out postcards even though they believed them to be ineffectual because a drug company sponsored them. I mentioned to the people next to me that DM had gone full circle and was back to being drugcompany marketing. Even the phone calls may or may not be effective depending on their frequency and what was communicated in the call.

There’s an initiative in Tennessee, run by the Center for Evidence-Based Medicine at Vanderbilt in which the Blues are paying primary care docs to act as educational coaches for diabetics. This seems to be working (although it’s early days) and is having some good results, as are the folks at the VA with their nurse practitioner-led interventions and monitoring. But overall this is an industry that really doesn’t have its story straight as to what works consistently, and what’s worth paying for.

And of course while most payers don’t know if they can look forward to reaping the benefits of a costly intervention down the line, selling DM services will remain problematic. That’s why the Medicare CCIP demonstration projects about to take place are so important. The Medicare population is ground zero for DM especially for diabetics. Let’s hope that the CCIP experience tells us what DM can hope to achieve, and give us a level playing field on which to judge the value of the various interventions.

PHARMA: Herbert on the legal protection measure for big pharma

Jan 14, 2005

In a NY Times op-ed piece called A Gift for Drug Makers, Bob Herbert writes that:

Tucked like a gleaming diamond in proposed legislation to curb malpractice lawsuits is a provision that would give an unconscionable degree of protection to firms responsible for drugs or medical devices that turn out to be harmful. The provision would go beyond caps on certain damages. It would actually prohibit punitive damages in cases in which the drug or medical device had received Food and Drug Administration approval. We know the F.D.A. has failed time and again to ensure that unsafe drugs are kept off the market. To provide blanket legal protection against punitive damages in such cases is both unwarranted and dangerous.

In fact the former head legal counsel at FDA Daniel Troy already pushed this policy–changing years of precedent at the FDA–by making it take the drug-makers side in legal cases. As California Health line reported when he finally quit late last year:

During his tenure, Troy worked in support of Bush administration efforts to block liability lawsuits against medical device manufacturers and drug makers. Troy argued in legal briefs that only FDA has the authority to determine when and how pharmaceutical companies should issue product warnings and that state court decisions could undermine the agency’s authority over product labels. FDA claimed in briefs that suits against FDA-approved products would “sabotage the agency’s authority”; critics called the agency’s position a “back-door approach to tort reform.”

While no one who’s been awake in the last 4 years can pretend to be surprised about how much the Bush administration is determined to gift the pharma industry, one suspects that someone in the corridors of power up and down the New Jersey turnpike must be having some doubts. As one of the few “moderates” clinging to the lonely position that pharma is indeed responsible for most of the good innovations in the health care system, and that a rational, reasonable and profitable pharma business is possible without the need to push for the current excesses on pricing and marketing misbehavior, I’ve been suggesting that in its own longer term interests pharma should look to compromise. If instead big pharma believes that it can make itself completely immune to the American legal system by simply getting what looks increasingly like a bought-and-paid-for FDA to sign off on its behavior, then the backlash that will be coming big pharma’s way when its protectors at either end of Pennsylvania avenue get booted out will not be pretty. And at some point they will be booted out.

Even Wall Street is generally comfortable that one of the risks of investing in pharmas is that damages will have to be paid out if bad things happen. Investors in Merck know that there’s a payment coming down the line for Vioxx and the stock reflects that. It’s stretching credulity to believe that pharma really needs this protection when no one else in America gets it, and it may well be time for wiser heads in New Jersey to suggest to their brethren that they take their snouts out of the trough less they miss the farmer coming up behind them with the butcher’s knife.

PHARMA: Everything you ever wanted to know about Vioxx but were too afraid to ask

Oct 1, 2004

So it may be that the doyen of American drug companies when I entered the business may be falling into a death spiral. Merck’s withdrawal of Vioxx from the market combined with its major statin Zocor going off patent in 2006 may relegate it to the second tier of international pharmas, falling well behind Pfizer, GSK and the new Aventis/Sanofi. The new Aventis/Sanofi combo has its anti-smoking anti-fat pill Acomplia coming out in a couple of years, which may end up being the biggest selling Rx product of all time.

Merck’s Vioxx had certainly had its problems. Today’s New York Times article details the very recent history of Vioxx. As THCB noted back in August, a Kaiser study suggested that there were instances of heart attack and stroke among Vioxx patients, though not for Pfizer’s Celebrex. Once Merck’s own clinical study (which was trying to extend the indication to stomach polyps) showed the same thing, the company in consult with the FDA and no doubt its legal staff and investment bankers decided to take the enormous step and bite the bullet.

Not since the withdrawal of Baycol has there been such as tizzy in big pharma land, and Vioxx was not a 5th in class drug like Baycol. However, the Cox-2’s are a interesting case where a drug that has a benefit for some patients was probably being used too widely anyway. The Cox-2s are no more effective at reducing pain but were introduced and marketed as being better for those 30-40% of NSAID and ibuprofen users who had stomach pain. Express Scripts has shown in its studies that many if not most of those using Cox-2s were not suffering that stomach pain in advance and should have been on a cheaper drug first. Another Expresss Scripts study showed that over half of older Cox-2 patients were taking aspirin anyway, which meant that they were still probably getting the pain relief and also stomach problems of aspirin, probably negating the value of the Cox-2 in the first place–if the Cox-2’s even worked for those stomach problems in the first place (and there’s some evidence that Celebrex doesn’t). As a PBM, Express Scripts of course wants its customers to take OTC ibuprofen and an OTC PPI for their associated stomach problems. And of course there are plenty of alternatives beyond the aspiring/PPI combination. Even the NY Times Editorial page weighs in on overuse of Cox-2s. All this of course will make the already delayed FDA approval of Merck’s delayed replacement for Vioxx, Arcoxia, and Prexige from Novartis, much trickier.

Longer term this is all very grim for Merck. Below (purloined from the Times and IMS) is a list of 2003’s top Rx sellers (by $$) in the US. Note that Merck has only Zocor, Fosamax and Vioxx on the list. (The list says that it has Nexium too, but of course that’s Astra-Zeneca’s).

Lipitor, $6.8 billion, cholesterol,Pfizer Inc
Zocor, $4.4 billion, cholesterol, Merck & Co.
Prevacid, $4.0 billion, heartburn, TAP Pharmaceutical Products Inc.
Procrit, $3.3 billion, anemia, Johnson & Johnson
Zyprexa, $3.2 billion, mental illness, Eli Lilly & Co.
Epogen, $3.1 billion, anemia, Amgen Inc
Nexium, $3.1 billion, heartburn, Merck & Co.
Zoloft, $2.9 billion, depression, Pfizer Inc.
Celebrex, $2.6 billion, arthritis, Pfizer Inc.
Neurontin, $2.4 billion, epilepsy, Pfizer Inc.
Advair Diskus, $2.3 billion, asthma,GlaxoSmithKline PLC
Plavix, $2.2 billion, blood clots,Bristol-Myers Squibb Co.
Norvasc, $2.2 billion, high blood pressure, Pfizer Inc.
Effexor XR, $2.1 billion, depression, Wyeth
Pravachol, $2.0 billion, cholesterol, Bristol-Myers Squibb Co.
Risperdal, $2.0 billion, mental illness, Johnson & Johnson
Oxycontin, $1.9 billion, pain, Perdue Pharma
Fosamax, $1.8 billion, osteoporosis, Merck & Co.
Protonix, $1.8 billion, gastrointestinal reflux disease, Wyeth
Vioxx, $1.8 billion, arthritis, Merck & Co.

So soon they’ll only have Fosamax on the list. Forbes has a hard hitting article suggesting that both the CEO Gilmartin’s days are numbered and that Merck itself will become a takeover target. For a company that was the leading pharma company in the world in the early to mid-1990s, that would be a mighty fall.

Of course, if this can happen in as big a market in Cox-2s, can it be long before there’s more analysis of the biggest market of all, the statins, to see if any share Baycol and now Vioxx’s fate? There are already (as reported by Medpundit) some dissident physicians questioning their value.

POLICY: Seniors continue to oppose new Medicare law. With UPDATE

Aug 11, 2004

By MATTHEW HOLT

Harvard’s Bob Blendon (a colleague of mine from my IFTF and Harris days), has new polling research out sponsored by the Kaiser Family Foundation showing that two thirds of seniors view the Medicare Modernization Act unfavorably. Here’s the end implication:

Nearly three in ten seniors and people with disabilities on Medicare say the passage of the new law will have an effect on their vote for president, and an even higher share– nearly four in ten–say it will have an effect on their vote for Congress in November. More people say that the law will make them more likely to vote for John Kerry and the Democrats than for President George W. Bush and the Republicans.

And here are some more details, which should ensure a huge amount of ads highlighting the shortcomings of the law from the Democrats filling the airwaves of Florida and Pennsylvania.

Nearly three in ten people on Medicare (28%) say that the passage of the Medicare law will have an effect on their vote for president. More than four in ten of those who say the new law will affect their vote (44%, or 12% of people on Medicare overall) say it will make them more likely to vote for John Kerry, while 18% of this group (5% of people on Medicare overall) say it will make them more likely to vote for George Bush.

Nearly four in ten (38%) say the passage of the law will have an effect on their vote for Congress. About half of those who say the law will affect their vote (53%, or 20% of people on Medicare overall) say it will make them more likely to vote for a Democrat, while 21% of this group (8% of people on Medicare overall) say it will make them more likely to vote for a Republican. When it comes to handling Medicare prescription drug benefits, people on Medicare are nearly evenly divided on whether they trust John Kerry (39%) or President Bush (34%) more, while about one in ten (11%) say they trust neither or trust both equally. Not surprisingly, Republicans (76%) are more likely to say they trust President Bush more on the issue, while Democrats (67%) are more likely to say they trust John Kerry.

UPDATE: This survey has sure gotten alot of press, which must make Drew Altman and the crowd at Kaiser FF happy. It has two articles in the NY Times, plus it was a lead on NPR last night and might even have made the network news (I don’t tend to watch those but judging from the DTC drug ads many seniors do!) This NY Times article points out the obvious–the elderly are a vulnerable Republican voting block. They vote proportionally more than any other group, and they tend to vote on health care. Last time around white seniors voted 52 to 47 for Bush partly because he promised drug coverage (as did Gore) but partly because they were the group most appalled by blowjobs in the Oval Office. Remember Bush promising to restore “Honor and Decency” to the White House? Well I guess if that only means no blowjobs in the Oval Office then that’s Mission Accomplished. But when seniors have got something serious to vote about like the Iraq war and drug reimportation — both of which the elderly oppose–then “Honor and Decency” may not be enough to keep them happy.

PHARMA: Even The New York Times has noticed that pharma has PR problems

Jul 8, 2004

In an article picking up on the Harris data TCHB shared with its stellar, avid readers (that’s you BTW) last week, the NY Times this morning places Pfizer’s decision to give cheap drugs to the uninsured next to the polling data about pharma’s unpopularity next to several examples of egregious price rises. They also quote extensively Roy Vagelos, scientist CEO of Merck in its 80s and 90s heyday, as basically saying that the industry has blown it.

It’s well worth reading the article because it shows that the mainstreaming of the anti-pharma opinion will have a political impact on the industry, and by extension on the election. (Need I remind you again that the two states with the oldest populations are Florida and Pennsylvania, both extremely close at the moment).

However, the Times lumps several reasons together as to why pharma is so profitable in the US:

The pharmaceutical industry earns nearly two-thirds of its profits in the United States since drug prices in the rest of the industrialized world are largely government controlled. Those profits rely almost entirely on laws that protect the industry from cheap imports, delay home-grown knockoffs, give away government medical discoveries, allow steep tax breaks for research expenditures and forbid government officials from demanding discounts while requiring them to buy certain drugs.

It is not the case that each of these "privileges" has equal weighting for the industry. The fact is that allowing personal imports would not have that big an impact on the overall market. Allowing Medicare to bargain as aggressively as say the VA (or worse, the Spanish or Australian governments) would bring what are called "price controls" by Americans talking about the EU or "discounts" by PBMs to a large section of the market.

That would certainly have a big impact on the industry’s margins. But the pharma industry can take note that, under a similar environment of strict price controls from Medicare and Medicaid, its colleagues on the inpatient, outpatient and ambulatory care side have seen their share of the overall economy grow dramatically in the past 40 years. So, if forced to, pharma companies could manage the potential change in their environment. As a potentially relevant example which also works under monopsony purchasing, the defense industry seems to struggle by OK.

Not that the industry would want to go there, and it will continue to do what it can to fight what is increasingly looking like a rearguard action. Of course in a rearguard action a strategic retreat can often work wonders. I stick by my guns and think that big pharma, looking out strictly for its own self-interest, should cave on the Canadian imports but try to continue to muddy the waters on discounts and price controls. After all 15 years of allegedly aggressive discount seeking by the PBMs hasn’t exactly reminded observers of the way Wal-mart treats its suppliers!

POLICY: Oh Canada

Nov 11, 2003• 23

This article is about Canada’s health system and its relationship to the US health policy debate. It is not meant to be an endorsement of Canada’s system, or an endorsement of single payer for the US. From my personal point of view, while I think serious health care reform is unlikely in the next few years in the US, some foreign models of health insurance are very useful for the US debate. But the combined local/employer insurance systems seen in Japan, Germany and Holland provide a more likely and familiar model for the US, than the Canadian or UK single-payer systems. However, this article isn’t about what might happen here or which system is better. This article is about the distortions that are frequently heard in the US, and in Canada for that matter, about the Canadian system. It’s also a lot longer than the average post, such as my recent post on Canada, Steffi and Ken, and you can download it as a separate document here if you want to print it out and savor/criticize it over a cup of coffee.

This article is dedicated to the amazing Medpundit. Despite the fact that I disagree with a huge percentage of what she says, Sydney Smith manages to cover virtually all of health care and medicine in her excellent blog, while writing book reviews, keeping up a full time solo family practice, and claiming that she’s not posting as much as she used to. Her article on Canadian physician emigration and the vigorous support she got from her commenters finally got me to get off the dime and put in my several cents worth.

Before I jump into this it’s worth noting that some of the differences between these health care systems are cultural. There have been several interesting descriptions of the international variations in medical practices. In one great book written in the 1980s, The Painful Prescription, Aaron and Schwartz describe rationing of hospital care in Europe and the UK compared to the US. For instance they pointed out that in the UK kidney dialysis was not used at nearly the levels among the elderly as it was in the US (or in fact in Europe). So they concluded that care was rationed and as a direct consequence people died. (If you have ESRD and don’t get treatment eventually your kidneys shut down and you die). However, many other commentators, including Lynn Payer in her book Medicine and Culture which is very well described by Humphrey Taylor from Harris, have shown fairly conclusively that many cultures just regard "care" in a different way. In that sense the dialysis-use figures could be seen as the aggrandizement of hundreds of decisions not to over-tax elderly patients with a long and difficult treatment that wouldn’t help their quality of life, even as it extended it slightly. Indeed, it’s equally cultural relative to accuse Americans of "over-care" by doing CABGs on 95 year olds who are soon going to die anyway. So while you’re reading the rest of this article you need to bear in mind that some of the differences that are ascribed to policy are due to culture. Having said that; many are not.

Before we start, recall that Canada has a single payer in each province that provides uniform health insurance to all its citizens. To provide that care it contracts directly and exclusively with physicians and hospitals, who remain largely autonomous but have no other customers. The US in contrast has a mixed-private-public system for which the government provides about half the money. Insurance is only universal for those over 65, and roughly 14% of the population has no insurance coverage, with very varying levels of coverage for the rest–mostly coming through employers. The latest comparable numbers have the US spending roughly 14% of GDP on health care while that number is around 11% in Canada. So at a macro level, the Canadians pay less as a share of their income to cover more of their people. (In fact as its GDP per capita is lower than America’s Canada spends considerably less per citizen). While single-payer advocates tout those numbers, many critics claim that Canada rations care, and that both patients and physicians are leaving Canada to give and receive care that’s not available at home.

Given that, it’s worth looking at two main aspects of the Canadian system that frequently come up for criticism. How are patients doing? What’s going on with physicians? And are they really all leaving the Great White North to escape its health care system?

The Patient Experience

It’s simplistic and true to say that Canadians have free access to basic health care. Americans have varied access based mostly on insurance. And it’s accepted that, as a corollary, all Canadians have less access to high-technology health care than do most Americans, However, googling around the web you’ll find indications that 18% of Canadians cannot get access to first contact care, (although only 10% have had trouble getting routine day time care). Still even 10% lacking access to care isn’t nothing, especially in a universal insurance system. Luckily the Commonwealth Fund has over the years funded my old colleagues at Harris and Harvard, led by Bob Blendon, to do several studies over the years about these issues. They asked consumers’ views in several countries, but we’ll concentrate on Canada and the US. (Note: When you open a link that is a powerpoint slide, hit the page down button as there might be 2 or 3 slides in that one link)

System satisfaction: Canadians were very happy with their system in the late 1980s but were much less happy by 1998 and also in 2001, after a period of funding reduction. But they are still happier than Americans, or at least only 18% want to completely rebuild the system, as opposed to over 28% of Americans. (The 2003 American number is over 30%–I don’t have the latest Canadian numbers, but they have been spending increasingly more and their incoming PM has promised to maintain that level. So as satisfaction went down due to less money you can expect that level to increase when there’s more. It’s also worth noting that the Canadians saved the rest of their economy some money, while during the large boom in the US in the 1990s, the health care sector stayed steady as a share of GDP.

Access to care: In terms of actually getting care and accessing doctors, both Americans and Canadians felt access was about the same. But in terms of access to care, by 2001 26% of Canadians thought it was getting worse, and only 6% getting better. 20% of Americans thought their access was getting worse too, but 17% thought it was getting better.

But then we get to some of the key issues. In Canada for elective surgery you have to wait; two thirds of Americans can get it within a month. Most Canadians have to wait more than a month and more than 25% have waited more than 4 months. No one waits that long in the US (presumably so long as they can qualify for coverage).

Costs matter: But in the US costs really matter. Over a quarter of Americans had out-of-pocket costs of over $1,000, compared to less than 5% of Canadians. Americans were two to five times more likely than Canadians to have an access problem due to cost, such as not getting a needed drug or not seeing a doctor. And when you look at those with below average incomes, in Canada only 9% failed to get recommended follow up care due to cost. In the US, over one third did not. More than a quarter of Americans (26%)–including 39% of those with below average incomes–didn’t fill a prescription because of costs, more than twice the number than in Canada. 21% of Americans have problems paying medical bills compared to only 5% in Canada, and that goes for 35% of Americans with below average incomes. So on a macro level it’s true that nationally Canadians sacrifice getting access to expensive resources (such as MRIs and surgeons). But in turn they don’t have to put up with the individual cost issues that are a problem for many Americans, especially the poorer ones.

If you look at the same type of indicators amongst those who are sick in similar study (also from Blendon’s group) they are virtually all the same, with problems of access to specialty care and hospitals in Canada matched by access problems due to cost being 2-3 times worse for the sick in the US. Here are the sources for the full charts for the "healthys" and the "sick".

The impatient inpatient: This is where the arguments get anecdotal, and little ridiculous. I never understand, for instance, why American small business owners who have to buy insurance in the world’s most dysfunctional market complain so much about the prospect of Canadian-style health care. In 1993 I talked to a Rotary Club where, before I even got my international comparisons slide out, the small business owners in the room came after me with the classic anti-Canadian argument that goes something like "When he needed care the Prime Minister of Alberta/Nova Scotia/Yukon Territory/Canada came down to the US". There has always been an extremely limited number of Canadians getting new high-tech care in the US that isn’t available in Canada, almost always paid for by their province. However this has been transposed into the argument that thousands of Canadians are flooding across the border to get care that is unavailable at home. There is even the very occasional and underfilled patient bus trip coming down to get prescriptions and treatments unavailable in Canada, of course massively outnumbered by the buses taking Americans to buy cheaper drugs up north.

While the argument about Canadians flooding south to get medical care withheld from them up north is widely heard, it’s bullshit. Yup, lots of Canadians get care in the US, but that’s because, due to the better weather, the higher incomes, going to college or that NAFTA thing, they eitherlive here, or are on vacation in Florida to escape that terrible winter. Work done by a team led by Steve Katz at University of Michigan with the Evans/Barer/Cardiff team at UBC which looked into this in obsessive detail found essentially no evidence of Canadians crossing the border to get care. (Incidentally plenty of Americans are still going up there for non-covered surgery like laser corrective eye surgery, which is cheaper and just as good up north). In fact according to Canadian insurers there appears to be no interest amongst Canadian consumers in commercial insurance products to cover care abroad, other than standard holiday cover. Note that this is not the case in the UK, where private insurance allows about 10% of Brits to jump the queue to get surgery in a private hospital. So it looks like the Canadians accept the fact that they have to wait for surgery, and not surprisingly don’t want to come down here to pay for it out of pocket.

The Grumpy Doctors

As mentioned earlier, I started working on this article partly because Sydney Smith over at Medpundit wrote a piece saying essentially that Canadian doctors felt that their system sucked, they all wanted to move to the US and that many of them already had–leading to a doctor shortage in Canada. She concluded:

And why are Canadian physicians leaving their patients in the lurch? Not for the money. They leave for better research opportunities, for greater professional and clinical autonomy, better job choices, and better medical facilities. They leave, in other words, for all the advantages conferred by a free-market healthcare system–the same advantages that we American physicians take for granted when we yearn for a Canadian-style system. We should look to Canada, all right, but not as a role model. We should look to them instead as a warning. There but for the grace of God–and a strong independent streak–go we.

Before we look more at the emigration factor, again it’s worth looking at a relatively recent study by the Harvard team. In 2000 they asked a set of questions to doctors in the same five (English-speaking nations) nations where they surveyed patients in 1998 and 2001. It was indeed true that doctors in Canada were pretty miserable, and you certainly can trawl the Internet and easily find grumpy Canadian doctors, and many anecdotal stories of them leaving for the good life in the US. In the Harvard study, Canadian doctors did believe that their ability to provide quality care had got worse in the last five years, but only slightly more Canadian doctors believed this (59% v 56% for generalists and 67% v 60% for specialists) than did Americans. And Canadians were only slightly more pessimistic that the quality of care would decline (61% v 54%) in the future. But when asked about major problems in their practice, compared to Americans they were one-third less likely to regard external review of clinical decisions to control costs as a problem (13% v 36%), and less than one-half as likely to see limitations on drugs they could prescribe (18% v 43%), or to be concerned that their patients couldn’t afford necessary prescription drugs (17% v 48%). These of course are the typical hassles that make up the drudgery of a physician’s daily practice. The real concerns of Canadian physicians compared to Americans were, of course, limitations on specialist referrals (66% v 29%) and access to hospital care (64% v 8%) for their patients.

Then things get really interesting. When asked, more directly if their actual patients often lacked access to newest drugs or medical technology only 26% of Canadian doctors said so–roughly the same as the 27% of Americans. And when asked if their patients get sicker because they are not able to get the health care they need, instead of the high numbers you might expect, only 12% of Canadian doctors said so, as opposed to 18% of Americans. So it appears that Canadian physicians think that by and large that Canadian patients do actually get the care they need, or if they don’t, it seems not to impact their health.

Then when asked about their satisfaction with their own practice 72% were very or somewhat satisfied compared to 68% of Americans. And when you ask the classic three Harris questions about satisfaction with the system and the need for reform, Canadian docs are much less likely to want "complete rebuilding" (4% vs 12%), and similarly much more likely (25% vs 16%) to think that their system "works well." Here is the full physician chart set.

There’s no question that Canadian doctors are less happy than they were, but that’s more to do with the funding (and pay) cuts they saw over the previous decade (which were a symptom of the Canadian government getting its health care spending under control) than anything fundamentally wrong with the system.

The dissatisfied disappearing physician. But what about all those Canadian doctors fleeing the country? Well let’s first look at why they are fleeing. There are several Canadian researchers or specialists in the US taking advantage of bigger budgets for their research, or training in something Canada leaves to its bigger, richer neighbor. A 1994 survey of Canadian physicians living in the United States found that postgraduate training in the United States was associated with subsequent emigration–in other words they went there, they liked it and stayed or went back later. Other reasons for staying in the US included professional/clinical autonomy, availability of medical facilities and jobs, and remuneration, although this last factor was curiously considered equally important by Canada-based docs as a reason for staying behind. (They clearly hadn’t asked their émigré colleagues what they were making!)

Now we’re starting to get somewhere. Just as Canada takes advantage of America’s over abundance of facilities to buy high-tech services for its patients on the margin (usually before it later adopts them in its own facilities) it also does the same for doctors who want to work in highly-specialized cutting edge technology areas. As in many other industries, the opportunities to do the coolest stuff tend to be here in the States. For an example, look to this somewhat tongue-in-cheek debate between Robert Califf, a Duke cardiologist and a Canadian colleague David Naylor which asked if American cardiac care is better than Canadian care?

By now you know the answer. If as a patient or a cardiologist you make it to Duke (or another high-end American institution), you find quicker access to more expensive technologies.

Califf noted that Americans experienced "differences in mortality over time largely because of the difference in the rate of revascularization between the countries" Conversely, "simply stated, for people with heart disease, the US offers greater access, better technology, and greater creativity in solving clinical problems," Califf said. "There’s no question when you look at the systems, the US has better access to cardiologists, better access to technology-not because as cardiologists you’re not smart enough to use it, you’re just not allowed to use it when you want to-and very rapid access to new technologies."

But then he admitted some more interesting nuggets

Yes, we cost more to the patient, and we have problems with prescription drugs, but in the category of respect for cardiovascular practitioners, there’s no question who gets more respect, and if you want to make more money, just move south"

His debating partner, Dr David Naylor responded that:

Revascularization may provide a mortality advantage. From a broader population perspective, though, these differences are unlikely to change the fact that in overall survival after the age of 65, Canadians come out ahead of the US. "The US does of course come out ahead in what is spent," he added, roughly double that spent in Canada on care of the elderly

In the last part of what was a pretty funny debate for a bunch of dry heart docs, Califf got rather serious and actually came over as a fan of the Canadian system but felt that it just needed more money:

"I would submit that the US is going to have to become more like Canada in terms of its healthcare system, because there’s no other solution in sight, but I would also submit that if you don’t ratchet up your expenditures on healthcare with the demographic that you and we share, you’re going to be facing an even more explosive situation than you currently have."

However part of what he said in jest is true. It is logical for Canadian doctors who need no additional qualifications to work in the US to go south for another reason. It pays better; much better! Canadian physician incomes averaged about C$135,000, and even surgical specialists get only about C$180,000. In the US specialists in groups averaged somewhere between $150,000 and $350,000, primary care around $150,000–and don’t forget that Canadian dollars are worth 1/3 less than their American namesakes! In fact this chart of international physician incomes shows that virtually any doctor would be better off moving to the US. (Actually FYI Japanese doctors make more than Americans). So when Medpundit says that Canadian doctors are coming here in droves, you can’t exactly blame them. Only one little thing is a bit strange; they are not!

The brave folks from UBC led again by my old colleagues Morris Barer and Bob Evans, as reported in this issue brief called The myth of Canadian physician emigration, show that although roughly 500 doctors a year are leaving to the US, somewhere between 250 and 300 were coming back the other way, and that the deficit was more than made up of other doctors immigrating to Canada–mostly Brits who thought that Canadian pay scales were pretty good compared to what they got at home! Even at its greatest extent Canada was losing 1.4% gross of its physicians and more than making it up through returning Canadians and importing foreigners. And even though Canada has fewer docs per head than the US (2.1 per 1,000 v 2.6) it has more than the UK or Japan (1.7 & 1.6) so these numbers are not significant either as a share of all doctors or proportionally to the population. It is worth pointing out that the other 99% of Canadian doctors didn’t believe that doubling their salary was enough to compensate for the associated unpleasantness of having to move to the US!

Conclusion: There are No Easy Answers

My primary objective in writing this piece is not to deride the good work done by those on all sides of this issue. Instead it’s to show that while looking at international comparisons is valuable, it’s not OK to look on the surface and ignore the many complexities underneath that surface. Worse it’s totally dishonest to take "facts" out of context or tell blatant lies–but there’s no tax on lying.

Health systems everywhere are under financial strain–always have been and always will be. Canada certainly limits access to high technology and specialists by limiting investment in them upstream. The US does not, but citizens living in Canada are very unlikely to run into severe financial trouble because of their health–not so here. Meanwhile, poorer Canadians have a roughly comparable experience with their medical system as do other Canadians. Poor Americans certainly do not enjoy the benefits of their system as much as their richer compatriots. You might also have a sneaking suspicion that as their health system is more popular with Canadians than with their doctors (while the opposite is true in the US) perhaps the Canadian system is actually run in favor of the consumers rather than the producers of health care!

There are certainly cultural differences between Americans and Canadians, as Michael Moore pointed out in Bowling For Columbine. But there are also structural ones that are creations of policy. We are heading into a period of policy discussion again, and inevitably the Canadian system will come up in the conversation. It would be nice if that conversation was based somewhat in reality.