Universal Health Care; The Canadian Experience - Part 3

Here's To Your Wealth!  Comparative Costs of Private and Public Health Systems
Part 3 of a 3-Part Series

Everything comes with a cost and health care is no exception.  But which type of health care model costs the most – the universal public type or the for-profit private system?  The answer depends on the source and perhaps what political stripes that source wears.

While President Obama’s camp continues to promote the public option and what they say will be a lower overall cost to consumers, many conservative politicians and talk show hosts have, of course, campaigned hard to make the opposite seem true.  Their take is that industrialized nations with universal public health care pay far more per capita for sub-standard services compared to their US counterpart.

It’s easy to accept without question, this latter position as fact, particularly if you buy-into another popular view that suggests everything and anything the government administers suffers from waste, inefficiency, ineffectiveness and bloated costs.  Let’s face it, you don’t have to look very far to find examples of poor public governance.  (Does anyone remember stories about a certain stars-and-stripes military outfit paying $750 for hammers and hundreds more for toilets?)


Is Public Sector Governance Necessarily Bad?
What some people seem far too eager to ignore is the fact that given proper governance, a publicly administered system providing an essential service has an important advantage.  That advantage is a missing link of sorts.  The ‘chain’ of service provision has many various links that make up the total cost of providing that service.  Consider that the profit link is often one of the biggest links in the chain.  Somewhere along the line, that profit link will necessarily impact the total cost of providing the service as well as the amount of investment that’s diverted back into the system.

Therefore, in operating a for-profit health care system, regardless of whether the gross profit margin is ten or thirty per cent, at some point along the way a markup must occur to generate the extra revenue needed to feed that profit.  A properly managed public health care system need not implement markups.  In theory, then, the taxpayer isn’t overcharged just in order to meet the profit margin goal.  Does it actually work that way?  Just as with other aspects of the public vs. private health care debate, there are both success and horror stories on each side.


Are Canadian Patients Dissatisfied With Their Health Care System?
So much of the chatter we hear today slams the inefficiency and overboard costs of Canada’s health care system.  But consider that for each story from a Canadian patient who experienced mediocre treatment or long delays, there are far more success stories from patients who are sincerely happy with their treatment and who wouldn’t trade their system for the world. 

Take, for instance, the case of a woman from Windsor, Ontario, whose story was revealed this past summer in an article in a Florida newspaper, the St. Petersburg Times.  This Canadian patient was billed a grand total of $16.95 after having been in hospital for over two months.  Her friend who lives across the river in Michigan spent two or three days in hospital and was billed over $3,000.  Those are some real numbers to chew on.

So, what are the rest of the numbers, vis-à-vis the comparative costs of Canadian and American health systems?  More on that in a bit, but first consider the example of education.  Education is one of the untouchables; a cornerstone of most wealthy nations.  It’s one of those essential services.  The quality of a nation’s education determines, to a great extent, that nation’s future prosperity.  Most kids go to public school and most of those parents would never consider scrapping their district’s public system in favor of a for-profit pay-as-you-go private system.


Public Education is in a Shambles, Right?
Education has for long been as politicized as health care has lately become.  Pour the education facts through a political filter and you get a skewed take.  Just as with the health care debate, those on the right champion the superiority of private schools, citing lower costs per student and higher test scores.  They would also have us believe that public education costs are far more expensive per student compared with that of private school.  Both of these ideas are easily challenged.

A widely accepted figure pegs the average cost per student for public education systems nationwide at under $10,000.  Comparatively, according to the National Association of Independent Schools, an organization comprised of private schools, the average cost of annual private school tuition per school-aged child is over $14,000.  Reports about this seem to be easily overlooked by those wishing to cash-in on the profit potential of the education business.

But isn’t the quality of education better at most of those private schools as compared to the much more heavily attended public schools?  Private schools’ high teacher-to-student ratio and their more selective community are features that are hard to deny.  However we hear little about the fact that public education systems must follow a host of state and federal laws and guidelines; many of which the private schools need not and do not observe.

Further bolstering the argument was a study out of Washington released in October, 2007, confirming that 12th-grade private and parochial school students had matching scores in core academic subjects when compared to their public school counterparts with similar family and income backgrounds.  Other more recent studies by the University of Illinois showed that public school students actually outperformed their private school counterparts in standardized math tests.

Universal Public Education is a Sacred Cow; Why Isn’t Health Care?
It can therefore be easily argued that a service as essential as education can and is provided both efficiently and effectively by the public sector.  Why, then, are so many opposed to the same idea with health care; another service that’s just as essential?

It’s Not a Free-For-All in Canada
First of all, don’t think that every aspect of health care is included in the package.  The government does not pay for most Canadians’ prescription medicines.  Just like the American experience, most Canadian prescriptions are paid for by way of employment benefits packages or it’s a self-pay deal.  (But the Canadian government does cover prescription costs during in-hospital treatment and for patients in certain income and age brackets.)  Another thing that most Canadians pay for is just about any surgery that is elective and not medically necessary.  So that face-lift, laser scar removal or tummy tuck – well - you’re on your own.  The same applies when it comes to dentistry, orthodontics, optometry and eyewear, chiropractic care, and other medical areas that fall outside traditional physician-provided necessary care; for the most part, Canadian patients or their employer insurance carriers pay for these services and treatments.  These things are generally not coming out of the public purse.

The Canadian medicare system covers, in full and without question, all necessary visits to family physicians and specialists, all necessary medical tests, and all necessary hospital stays.  Quite simply that means no bill and no nasty surprise.


What are the specific costs north of the border?
According a report by the Canadian Institute for Health Spending, in 2008 health care spending in Canada was just over $170 billion.  That covers all aspects of costs and comes out to $5,170 per person.  Which nation boasts the highest spending?  Spending in the US is now over $7,000 per person annually.  A recent analysis in Memphis Tennessee’s Commercial Appeal newspaper showed that the average American needs to work through the months of January, February and March just to pay for his or her share of the health care bill.

How does the old axiom about statistics go?  Liars figure and figures lie.  Yes, it’s easy to skew the truth with statistics, but it’s hard to argue with bottom-line costs from trusted sources and the real-life experiences of real people.

Regardless of whether you sit on the left, the right or on the fence itself, there’s no denying one more fact.  Since universal medicare was legislated in Canada by Tommy Douglas in 1961, Canadian patients have not had to worry about losing their homes, going bankrupt or plundering their retirement savings as a result of the cost of treating a major illness or disease.

Ask any Canadian and they’ll tell you that knowing they’ll always be covered is peace of mind; which, in itself, is quite therapeutic.


Read Part 1 of this series, The Truth About Canadian Health Care; and Part 2, Real Life Stories About Canadian Health Care.

Visit http://www.themorethingschange.weebly.com for more articles and columns by Stephen J. Kristof.