Thursday, November 04, 2004

Canadian versus American Health Care Systems

I am the Moderator/Executive Director of FASlink. FASlink is a website and international discussion forum for families and professionals dealing with Fetal Alcohol Spectrum Disorders. FASD is caused by prenatal alcohol exposure when a pregnant woman drinks alcohol. We often discuss health care and related political issues in our various countries. As most members are either in Canada or the USA, most such discussions center on our respective systems. I am Canadian so these comments reflect my experience primarily with the Canadian health care system. However, I have also had to use the US health care system and have many family and friends in the USA, so I also have some personal knowledge of both systems.

Canadian taxes are competitive with the USA and in some areas may be a bit higher, but we more than get it back in services. Since the income tax system is graduated, as it is in the USA, those with low income pay little or no income tax, but here they are still fully covered as if they were in the highest income brackets. And we are covered across Canada. Although each province runs its own system, my Ontario coverage still applies in BC, etc. I can even get services in the USA if needed and have them covered by our OHIP (Ontario Health Insurance Plan).

Yes we have provincial sales taxes in most, but not all, provinces. Same in the USA. We do have a federal Goods and Services Tax (GST sales tax) that replaced the old Federal Sales Tax. In some provinces the taxes are kept separate (such as Ontario) and in others they are Harmonized (HST) with one tax collected and shared between the feds and the provinces.

I live on the border with Michigan and shop frequently in Port Huron, MI. Michigan state sales tax is 6%, non-refundable even if I am taking the goodies out of the country. Ontario provincial sales tax is 7% and GST is 8%, both fully refundable at the border to US citizens if the goods are being taken back to the USA.

Our tax systems are not all that different in many ways. However, we cannot deduct our mortgage interest, but the profit from the sale of the principle residence is also not taxable. In the USA mortgage interest is deductible, but if you sell your house and do not buy another one within a specified time, you are fully taxable on all the gain. Our lottery/gaming winnings are not taxable. So those who win $20 million here get to keep it all, tax free. (The government already took over 50% from ticket sales as "overhead" before the draw). Only future interest earnings are taxable as income. In the USA, all winnings are fully taxable, even on Jeopardy. Win a $35,000 car and you get to pay full income tax on it before you take delivery. Win a $20 million lottery and you have to take payments over many years to reduce the tax impact, or lose perhaps 80% on the commuted value. Our top combined income tax rate is about 47%.

It takes money to run any country and the money that governments need to do it comes from taxes and fees. The greatest pressure on our Canadian taxes come because we are a small population (32 million) spread over a territory larger than the entire USA. The cost of building and servicing the infrastructure over such a huge area is shared by a population 1/10 that of the USA. We have more elbow room but fewer people to pay the bills.

The cost of health care is tightly controlled in several ways. It assumes the entire population will be covered, womb to tomb. It schedules the exact amount doctors will be paid for each procedure. Extra billing over the base rate is illegal. These fees are negotiated between the provincial government and the provincial medical association.

A doctor can opt in or opt out of the provincial health care system, but they can not have it both ways. If they want to bill whatever they want, as in the USA, they cannot make ANY claims under the provincial health care system. If they choose to be under the provincial health care system, they will be paid the exact scheduled amounts by the Ministry of Health for each service rendered, and they will not have to sue anyone for unpaid bills. No bad debts. I know many physicians in the USA have a big problem with uncollectible accounts.

Canadian physicians can focus on their medical specialty without the worry of being paid or the moral dilemmas of denying treatment to someone in need because they don't have the money to pay. Health care is a fundamental human right, not an economically dictated privilege for the wealthy and a death sentence for the poor and lower income families.

Government negotiates with the drug companies exactly what they will pay for specific drugs that are covered by OHIP or the Ontario Drug Insurance Plan. After a small annual deductible ($100), seniors and low income families are covered for $2 for each prescription filled. OHIP also covers hospitalization at ward rates (usually 4 beds to a room) and private or semi-private if room is available and medically necessary (i.e. contagious or vulnerable).

Canadian courts do not award tens of millions of dollars in malpractice lawsuits, as the courts do in the USA. Here you can be compensated for actual economic loss, lost past and estimated realistic lost future earnings, but not the outrageous awards seen in the US courts. It is those awards that drive your health premiums up and slap on nasty restrictions on coverage. For example, OBGYNs are at huge risk there and their malpractice insurance premiums are astronomical, which is reflected in their fees.

Until recently, it has been illegal for a lawyer in Ontario to take a case on "contingency", i.e. he only gets paid if he wins, and then he gets a percentage of the award. Even now in almost all cases, you pay as you play. It is a real disincentive to frivolous lawsuits - actually any lawsuits. You had better have a really good case, deep pockets and lots of time before you pick a fight in court here. The Canadian Medical Protective Association (the doctors liability insurer) will fight every case to the highest courts, or until you run out of money. They are litigious SOBs, but that helps keep down medical malpractice premiums and the overall cost of providing health care to everyone.

In the USA contingency lawsuits are completely legal, even the norm. There are so many lawyers starving that many will sue for anything on the odd chance they might make some money, between their hours as tow truck drivers. They are called "ambulance chasers". No matter what happens to you, it is NEVER your fault and the blame can be pinned on someone else (with money). The US awards can be astronomical and the lawyers taking 25% to 50%, paid by the doctors' insurance companies, which are the same insurance companies that set your health insurance conditions and premiums.

Most lawsuits are settled out of court, and the losses billed back to the consumers by the insurance companies as premiums. 90% of lawyers give the rest a bad name. OK 99%.

There are so many powerful money interests vested in the US health care system that it is almost political suicide for your politicians in either major party to take them on. A politician has only two goals - the first is to get elected and the second is to get re-elected. Nothing else really matters. Do I sound a tad cynical?

Canadians look at the mess in the US health care system and thank God we have the little issues we do. I know some Canadian doctors have moved south to practice where they think they will make more money. A few do make more gross money, but they have horrible overhead costs, such as higher premiums for malpractice insurance, and an extremely high risk of being sued, not for what they did, but because they are an easy target. It is like taking a hostage and extorting a ransom. The lawyers only target people with bucks and insurance. Then in many communities the doctors live in gated communities for security, a rarity in Canada. And they have to sue to collect their bills. And they have to deny services when someone cannot pay. Many have simply packed up and returned to the land of milk, honey, ice, snow and the Looney.

Perhaps this describes why we Canadians are so zealous for our system. If we ever lose it (and there are powerful financial interests trying to encroach), then we will be in deep meadow muffins.

As I sit here writing this letter, I cannot see with my left eye. A week ago my Iritis (arthritis of the eye) came back with a vengeance. Untreated, the pain would be excruciating and would lead to a detached retina and blindness. I was able to call one of the top specialists in the country (who happens to practice in Sarnia), get an immediate appointment to see him (come NOW), have a prednisone injection in the lower eye lid and see him for 3 follow-up visits since. Cost to me = $0.00. The Iritis has stabilized and is improving and there is no pain. It still looks like I am in a Newfoundland fog with my left eye and a light fog with my right eye. There will likely be another 3 to 5 visits related to this attack and the recovery period, all covered completely by our provincial health care system. I have similar service with my family physician, urologist (cancer scare) and the kids' pediatrician. Throw that protection away? Not on your life.

My mother, brother, sister and aunt have all had knee joint replacements. Mom had catarac surgery and I will eventually need it too. Cost to us $0.00.

My aunt had a major stroke and lived in a hospital and then a beautiful new nursing home for 10 months until her death. All costs were fully covered, including a $3,500 wheel chair and other assistive devices.

My son (in Iraq) and his wife (in Florida) pay $1,200 per month for their health care premiums (no kids).

I would much rather pay a bit more in taxes than pay US health premiums.

You can fix your health system, but you are almost going to have to have a revolution to do it. There are too many powerful vested interests in keeping your system as it is. You also have to have a political party in power with the philosophical motive and will to bring equal health care to everyone, not just those who can afford it. Health care is a fundamental human right in Canada. I hope that it becomes such a fundamental human right in the USA too. It is a mark of a civilization's progress when even the weakest are protected. Yes I know that was a bit of a zinger, but many US FASlinkers would agree too.

A major new issue will be genetic testing to determine if you have a higher than normal risk of developing cancer and a thousand other conditions. Then those exclusions will be written into health care contracts. The same genetic screening will be tried for job applicants so group insurance rates are not adversely affected. Vigilance on this issue is absolutely necessary. A newborn with FAS could be deprived of health coverage for life because of known and potential health issues. Health insurance is much like life insurance. You are betting the company you are going to die soon, and they are betting you that you are going to live longer than the last premium you pay, generally about 8 years. Most life insurance policies lapse within 8 years. They calculate the risk and premiums to age 65 but bet you will drop the policy by age 45. They want to hedge their bets and get the biggest bucks possible. DNA testing is very tempting to them.

We may have cold weather in the winter (no bugs, scorpions, spiders, skunks or rattlesnakes) but we won't go broke or die for lack of money to pay for health care.