The state and fate of health care in Canada (1-4)

Commission Castonguay

(This is the first of a four-part series of articles examining the state and fate of health care in Canada.)
Finding the perfect mix of public and private financing (1)
Castonguay commission is looking at European models to discover best practices
As 2007 draws to a close, so too does the probability that the report of the Castonguay working group on health-care financing will be made public by the end of the year. Finance Minister Monique Jérôme-Forget asked the group, led by Claude Castonguay, the former health minister who designed Quebec's original public health-insurance plan, to find new ways of financing health care and to reassess the role of the private sector.
For years, Castonguay has lamented the inefficiency of Quebec's health-care system and underlined the need for increased private investment in infrastructure and technology. He sees the development of a parallel private system based on European experience as the only way financially to salvage health care in Quebec.

That Castonguay might shop abroad for ideas for health reform is not new. Indeed, he did as much in the late 1960s while preparing the background for Quebec's original health-insurance laws. Senator Michael Kirby took similar inspiration from European cases to suggest that there might be a better mix of public and private delivery of health care in his 2002 health-reform report. Even the Supreme Court, in the narrow majority ruling on Chaoulli vs. Quebec in 2005, referred to comparative evidence that such reform is necessary. More recently, B.C. Premier Gordon Campbell took the European tour of health-care systems to examine the potential of private sector initiatives for British Columbia.
In each of these examples, the European experience in health- care reform is touted as a way in which privatization and universality can co-exist.
Political leaders and pundits like to remind Canadians that we are way behind our European counterparts in not allowing private insurance markets in health care; now the Supreme Court has said as much .
In Canada, health-care reform has long been positioned as a zero-sum game between the public system and private alternatives, between government monopoly and private markets, and as if the lines between public and private financing of health care were neatly cut and dried. In European countries, meanwhile, the real debate about health-care is in the "mix" of public and private money, and even more important, the way in which governments regulate that mix.
In the 1990s, at the same time that governments here took a slash-and-burn approach to the public funding of health care, many European governments chose to experiment instead with mixing the financing options in the health-care sectors, from allowing parallel private delivery systems to permitting individual co-payments for patients and introducing internal markets to generate competition among providers.
How we can learn from European countries that have introduced privatization in the health care? What exactly has this reform entailed? And to what extent have these reforms been successful? In the spirit of look before you leap, it is important to understand the context and portent of comparative lessons in health care reform.
Take, for example, how the complex arrangements of mixed systems have proven to be difficult to administer, leading in some cases to higher overall health-care costs, not less. When private markets start taking up space in the health-care system, governments are often forced to become more interventionist because of the need to regulate health-care markets. In other words, the spread of private markets in countries with existing public health-care systems requires heavy regulatory mechanisms that only governments can provide.
Do Quebec and other Canadian policy-makers have or can they develop the necessary policy instruments to be able to do so - both in terms of the jurisdictional issues in health care between the federal government and the provinces, and in terms of the larger North American economic environment in which private markets for health care will be developed?
In addition, there is the realization that there are other, more portentous, costs in terms of equity and access. Do private markets in health care really provide more services, or more services to those who can pay more for them? Has this helped to control overall costs and improve the distribution of physicians, or has it exacerbated the situation? Have private markets in and of themselves improved overall access to care?

As Quebec wades into the search for the perfect mix of public and private markets in health care, the experience of countries that have been faced with the real challenge of implementing change can be instructive. That the Quebec health-care system is still due for reform to face organizational and financial challenges ahead is an absolute certainty; but are the answers to be found shopping for models abroad?
Antonia Maioni is the director of the McGill Institute for the Study of Canada.
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(This is the second of a four-part series of articles examining the state and fate of health care in Canada. You can read yesterday's article at Antonia Maioni
Europe offers two different models for Quebec to consider (2)
German and British examples reflect different historical developments

The Gazette, samedi 29 décembre 2007
As Quebec looks toward another chapter in health-care reform with the report of the Castonguay working group on health-care financing, it is expected some recommendations will focus on examples from abroad and the European experience. Yet, do we really know how to understand and evaluate that experience for Quebec?
A starting point would be to understand that health-care systems are rooted in very different contexts. Scholars of European health policy tend to distinguish between "Bismarckian" and "Beveridge" models.

The first set are inspired by the German initiatives of the end of the 19th century in which "social insurance" was developed for workers and their families, for which workers and their employers, and later government, were obliged to contribute funds. The German, French, Dutch, and Swiss health-care systems, for example, are based on this contributory model of health-care financing.
The Beveridge model, meanwhile, developed in post-Second World War Britain, with a different logic based on universal coverage and public financing in which the general revenues of the state were used to fund more centralized health-care systems. This is the basis for the British National Health System, as well as the Swedish and Italian health-care systems.
Since health-care systems that are financed through the social- insurance model are based on people's employment status, they tend to allow for more diversity in coverage and a larger supply of services. Because of this, there is the risk of inequality of access and higher overall costs of health care. That is why governments in these countries tend to exercise extensive regulation to keep the health-care system in check.
In France, for example, physicians are paid on a fee-for-service basis, the way they are in Quebec. But in France, doctors are free to extra-bill (that is, set their fees higher than the official schedule) and patients can choose either public or private hospitals, although typically, private hospitals have offered a narrower range of services. And, unlike the RAMQ, French patients pay directly for their care, and are then reimbursed by the Sécurité sociale, the government-insurance system.
Two other differences stand out: Doctors are more abundant than in Quebec, yet their fees are considerably lower; and patients are usually faced with hefty co-payments. To meet these charges, a plethora of private insurance companies offer supplementary insurance policies. These have become even more important in recent years as prescription- drug use in France has soared.
Government regulation is still quite extensive, though, especially in setting fee schedules for physicians and per diems for hospitals, and in making sure insurers do not discriminate in coverage on the basis of individuals' health status. And even though patients are responsible for payment and co-insurance, the acute or chronically ill as well as the very poor, are usually exempted from these charges in the public system.
Health-care financing has become a sore spot in France, where deficits are rising and many are unable to afford supplemental insurance. And, as you might expect, since patients have to foot part of the bill, insurance coverage is a key factor in access to and use of health- care services. And, because the French can access care at multiple entry points, the system is considered inefficient and is becoming very expensive.
In neighbouring Germany, health-care costs also are an issue, especially in hospital expenditures and the reimbursement of prescription drugs. Germans are obliged to pay into one of several hundred occupational-based health-insurance plans, or into a growing number of private insurance plans.
The "modernizing" of health care has allowed for an expansion of private health-insurance contracts between providers and certain "classes" of well-off or self- employed patients. The German states have had to build extensive new regulatory mechanisms to ensure there is real competition among these contracts and to ensure there is some form of equalization of risk so insurers are not able to cherry-pick their beneficiaries.

The good news is wait times are low, even for elective surgery, compared to Canada. Still, there are extensive concerns in German public opinion that the system is in a cost crisis, and that the extension of private insurance will lead to a "two-tier" system of care.
Like Quebec, health care in France and Germany is stymied by lack of co-ordination between doctors and hospitals, and by the problems of multiple access points into the system. At the same time, health reform has been focused on budget limits for providers of care and reimbursement limits for consumers of care, but without trying to link such cost control with overall reform of the organization of the health-care systems.
Antonia Maioni is visiting scholar at the McGill Institute for Health and Social Policy.
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(This is the third of a four-part series examining the state and fate of health care in Canada. You can read the first two articles at montrealgazette .com)
The Battle of Britain: one country's experience with reform (3)
It was the Labour Party, not the Tories, that aggressively changed the health system
The Gazette, 31 décembre 2007
In the wake of the Second World War, battle-weary Britons turned to the Labour Party to usher in one of the most important social reforms in Europe: the National Health Service. Set up in 1948, the NHS was the first health-care system to offer universal and comprehensive coverage. The NHS was funded by general taxation and organized around an integrated system of care in which GPs were considered the "gatekeepers" of the system, physicians were salaried , and the hospital system effectively nationalized.
Some of the parallels to Quebec's health-care system are obvious. And, historically speaking, health-care systems in the Canadian provinces resemble more this Beveridge model (named for British social reformer Lord William Beveridge) of equal access based on need, regardless of income and employment status, than they do the Bismarckian models of social-insurance systems prevalent in continental Europe.

Still, the NHS was far more centralized than anything in the North America. For decades, this effectively constrained costs through the state monopoly on funding and delivery. But by the end of the 1980s, the model had become financially unviable, and complaints abounded from patients and doctors alike. By the 1990s, for example, Britons were facing some of the longest waiting lists for treatment in the industrialized world and the NHS had become an easy target for critics of "socialized medicine."
Ironically, it was not Conservative Prime Minister Maggie Thatcher but rather New Labour's Tony Blair who introduced the most aggressive changes into the NHS. Thatcher's proposals for alternative sources of financing through a dedicated health tax, and tax incentives for private insurance, were rejected as costly and inequitable. And the introduction of U.S.-inspired "internal markets" to foster competition among hospitals and doctors never really worked effectively under her successor John Major.
Enter Blair and the Third Way, which promised to address shortages of doctors and nurses, set targets for waiting times, modify contracts for GPs and hospital consultants, and allow a regulated market for private health services. Primary Care Trusts, which co-ordinate care between doctors and other providers, became the main access points for patients, while independent "foundation trusts" were set up to allow some autonomy within the NHS.
Blair's reforms were based on the principle of "payment by results" in which money followed the patient in the public system and in which doctors, hospitals, and other service providers had to compete for contracts and patients. In addition, the NHS decentralized into constituent parts (English NHS, Scottish NHS, etc.) each with considerable autonomy. Still, it is not quite a federal arrangement as in Canada, since Whitehall still controls the purse when it comes to funding.
All of this came at a price. Health professionals and the health-care workforce were understandably fatigued by the pace of constant change, often implemented by new "management experts" at hefty fees. Indeed, the NHS reforms have turned out to be hugely expensive. Some of them were considered necessary reinvestment in the health-care sector, including hundreds of millions of pounds for electronic patient records. Today, increasing costs all through system are considered practically unsustainable.
n addition, Blair was accused of "creeping privatization" - even from within his own party- in persisting with the initiatives to allow doctors to practise privately and in setting up "independent sector" treatment. Waiting lists have been reduced but, say critics, at the cost of coherence in the delivery of care, equality of access, and in big increases in overall health care spending. The Scottish NHS, for example, has decided not to use public money to encourage more private sector initiatives. There is also the on-going controversy over the recruitment of doctors from abroad.
The introduction of competition into the delivery of care and the development of parallel private markets have also been features of health reform in other national health systems in Europe.
In Italy, for example, managed competition among health care providers was attempted in the 1990s, along with devolution to the regional level. The results have not been altogether positive: Health budgets have soared, with most regions in deficit and under increased pressure to raise their tax rates; while disparities between poorer and richer regions have worsened. In addition, the country now faces the development of a "patchwork" system, in which Italians are covered by a nominally "national" health service (the Servizio Sanitario Nazionale) but where access to and quality of many services can vary greatly depending on place of residence and income.

Antonia Maioni is visiting scholar at the McGill Institute for Health and Social Policy.
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This is the last of a four-part series examining the state and fate of health care in Canada. You can read the first three articles at montrealgazette .com
There is no existing model that will solve all of Quebec's problems (4)
We are not alone in grappling with medicare - there is no perfect system

mercredi le 2 janvier 2008
A French adage suggests, "Quand je me regarde, je me désole, mais quand je me compare, je me console." Can the same be said of Quebec's health care system?
Certainly, Quebec is not alone in the challenges it faces. Health care is rapidly becoming the most expensive of social programs the world over, and one in which the complexities of expanding needs, rising expectations, and new technologies are reshaping the policy agenda.

Yet, as the Commonwealth Fund's 2007 International Health Policy Survey pointed out, "no country systematically leads in performance." In other words, there is no perfect system out there. Indeed, the main similarity among different health systems across the industrialized world is the extent to which they need to face organizational challenges in health care, perhaps even more urgently than financial ones. These were summarized as better primary care, better co-ordination of care, and better management of chronic care.
For observers of the Quebec health-care system, it is a spot-on assessment. It also reminded me of a discussion on health-care reform at a recent Queen's University conference. When health- care leaders from across Canada were asked to suggest what they would do if they had "unlimited resources" to address health-reform challenges, they systematically downplayed the need for more money in the system (except for investments in electronic-data technology) and instead insisted on better tools for the organization and integration of care.
This is old news, and yet the recent comparative evidence bears it out in spades. Even the most cursory glance at European health-care systems shows that the introduction of competition among providers and insurers, and the rush to implement new payment systems or sources of revenue, have often exacerbated attempts to undertake coherent planning for reforming the delivery and organization of care.
With regard to private financing of health care, the Organization for Economic Co-operation and Development (which provides the most reliable cross-national indicators across the industrialized world) found that Canada already has one of the largest markets for private insurance with over half of the population covered. Indeed, Canada is the leader in terms of the market for supplementary private insurance for big-ticket items like prescription drugs and dental care, which are usually covered to some extent in public European health plans. This fact reminds us that Quebec and the other provinces choose to cover 100 per cent of what is considered medically necessary in legislation, but not 100 per cent of what would be considered health-care services elsewhere.
In addition, while social health-insurance models as in those in France and Germany have allowed considerable growth of private coverage and faster access to medical care, this has not, on the whole, made the public system better able to deal with health-care challenges, nor constrained the overall growth of health-care spending, even as governments have had to become more active in their regulation functions.
In national health systems, such as Britain's and Italy's, devolution and deregulation have led to the potential for more privatization of certain types of non-urgent care. Again, there is little evidence to suggest that this has reduced overall health spending, or that it has alleviated the burdens on the public system, as the competition for scarce resources and personnel increases.
Comparative analysis informs us about how and why countries, faced with similar challenges or problems, might end up with different choices of solutions. Even though countries might resemble one another or aspire to similar goals - for example, universality in health-care coverage - they might have different approaches and routes to get to these objectives. In health-care reform, much of that difference has to do with political, economic and social context on the ground.
Had the Supreme Court looked at the experience of European countries through this lens in the Chaoulli-vs.-Quebec decision on access to care, its majority decision might have been framed differently. As Quebec awaits the report of the Castonguay working group on health-care financing, we might do well to pause and take stock of the comparative evidence from other countries.

In so doing, we might realize that lessons from abroad are just that: lessons about what works, or what doesn't, in specific settings, rather than models to transplant, awkwardly and perhaps inappropriately, into Quebec's health-care system.
Antonia Maioni is visiting scholar at the McGill Institute for Health and Social Policy.
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