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Ten Health Care Myths:
Understanding Canada's Medicare Debate

By Ulli Diemer

Note: This article was written in 1995. For a more current (2012) version of this article, see Medicare Myths and Realities .

An overview of the Canadian health care system compared with the United States.

"To Every Complex Problem there is a Simple Answer: Neat, Plausible, and Wrong".

— H.L. Mencken

Medicare is a Canadian success story. Not perfect, but good enough to be envied by much of the world.

Canadians now take it for granted they will receive high-quality health care when they need it, without financial or other barriers. In a country where we compare everything we do with what happens south of the border, we are surprised but pleased to find we have fashioned a health care program which delivers better care, with better results, to a much higher proportion of the population, at a much lower cost, than in the United States.

Confronted with these facts, policy-makers and the media have drawn the predictable conclusion: Canada's health care system is in crisis -- gravely ill at best, perhaps even on its death-bed.

The air is thick with prophecies of doom and prescriptions for drastic surgery. The health care debate has become a highly ideological battleground where pre-determined political and economic assumptions count for more than evidence and where myth is treated as fact thanks to uncritical media repetition.

What follows is a brief guide to 10 common health care myths:

Myth #1: Costs are out of control.

Reality: Health care costs are actually being quite tightly controlled, to the point where spending on publicly funded health care services is not even keeping pace with population growth. As a percentage of GNP, health care spending has levelled off at about 9%.

In the 24 years since 1971, when medicare became a national program, the proportion of Canada's GNP spent on health care increased from 7 1/2% to 9%. The increasing share going to health care by the 1980s was due, not to "spiralling costs", but to a shrinking economy caused by two major recessions in the 1980s and by the introduction of the Free Trade Agreements. Were it not for the resulting declines in GNP, Canada would still be spending about the same share (7 1/2%) on health care as it did in 1971.

When discussing health care costs, it is important to remember the public sector accounts for only 72% of total health care spending in Canada: well below the 80% average in OECD countries. The costs which are growing most rapidly are not those in the public sector, but those in the private sector: for example, drugs and dental services.

Myth #2: We can't afford our current "free" system. We have to institute user fees.

Reality: It is logically absurd, on the face of it, to suggest that if costs are too high, the solution is to raise them even higher. User fees don't reduce costs, they increase them.Taxes, user fees, or insurance premiums: the money still comes out of the same pockets.

However, the real advantage of user fees, from the point of view of those who advocate them, is that they deter the poor from seeking medical care. If the poor can be denied medical care, then those who are not poor can avoid helping to pay for their care.

When Saskatchewan introduced user fees under the Liberals in the 1970s, physician visits by low-income people decreased by 18%.

Despite this, overall costs rose, because of changes in "utilization patterns" and the "mix of services." In plain English, doctors maintained their incomes by calling back higher-income patients for more frequent visits and more tests.

In the end, more money was being spent to provide care to fewer people.

Myth #3: A major cause of rising health care costs is people abusing the system.

Reality: Patients don't write their own prescriptions, book their own tests, schedule themselves for a series of follow-up appointments, or admit themselves to hospital for surgery.People normally go to the doctor because they think something is wrong, not because their idea of fun is sitting in a waiting room for a couple of hours.

Myth #4: Government-run health care programs are bureaucratic and inefficient. Introducing private health insurance and competition would make the system more efficient.

Reality: The evidence from all OECD countries shows that the private sector is far more bureaucratic and much less efficient than the public sector when it comes to providing health care.

The United States, which has the most privatized health care system of any OECD country, spends 14% of its GNP on health care, compared to 9% for Canada.

The U.S. pays $911 per person per year in administrative costs. Canada by contrast pays $270 per person.

The disproportion in insurance overhead costs is even more marked: insurance overhead per capita comes to $212 in the U.S., $34 in Canada. Blue Cross/Blue Shield of Massachusetts, a typical major insurer, employs 6680 people to administer insurance for 2 1/2 million customers, more than are employed to administer public health insurance for all 28 million Canadians.

When Germany recently shifted dental services from the public system to private insurance, administrative costs tripled from 5% to 15%.

Myth #5: Americans may pay more for health care, but they get better health care as a result.

Reality: Studies show that on average, Canadians are more likely to receive needed care quickly than Americans. Canadians get more physicians visits per capita than Americans, more immunizations, more hospital admissions, and more surgical procedures. A survey of 10 OECD countries showed that Canadians were the most satisfied with the care they received, while Americans were the least satisfied. In fact, Canadians are more than five times as likely to be satisfied with the health care they receive than Americans.

Infant mortality, maternal mortality, and life expectancy were worse in Canada than in the U.S. before the introduction of medicare. Canada's infant mortality rate is now only 70% of that in the U.S., while American women are almost twice as likely to die during childbirth as their Canadian counterparts. The average Canadian now lives two years longer than the average American.

Myth #6: Private clinics will improve access to services by taking pressure off the public system.

Reality: Private clinics suck resources out of the public system. Private clinics give the well-to-do preferential access to health care, while the public picks up most of the tab.

Because they have access to additional sources of revenue in the form of fees from well-off patients, while still being able to fully bill the public system for the procedures they perform, physicians are able to make significantly more money working at a private clinic. Physicians therefore seek to maximize the number of patients they see in their (publicly-subsidized) private clinics, while minimizing the number of patients they see in a public facility. As physicians withdraw their services, waiting lists at public facilities grow longer and the motivation to seek services in the private sector is increased for those who can afford to do so.

As long as well-off patients receive their health care through the same system as everyone else, they continue to demand the health care system provide excellent care. In a two-tier system, well-off patients are no longer dependent on public facilities for their health care and lose their vested interest in ensuring the excellence of the public system. They demand instead that the taxes they pay to support the public system be reduced, thereby ensuring a further erosion of access and services.

Myth #7: We can save money by relying more on community care and less on hospital care.

Reality: "Community care" has usually been a code word for ceasing to provide care. When Ontario closed psychiatric institutions in the 1980s in order to institute "communitycare" for psychiatric patients, it simply dumped people onto the street with no provision for proper housing or support services.

Applied to frail seniors and those with physical and mental disabilities, "community care" is a polite way of saying that families (especially women, of course) will be expected to provide care for free because the health care system won't.

Real community care is not cheap. It may often be better for people to receive care in their own homes or in a community setting, but there is no convincing evidence that it's any cheaper if the care is provided by qualified professionals. It may even be more expensive. For example, a doctor can see a lot more patients if they come to her than if she makes house calls to see them.

Myth #8: Instead of our current system of "illness care" we should be moving to a system that emphasizes prevention and "wellness."

Reality: People tend to go to the doctor when they're sick, not because they're feeling in the mood for a lecture about how they should eat better, exercise more, and stop smoking.

Prevention is a fine idea, but aside from a few standard procedures like pre-natal examinations, immunizations, eye exams, and pap smears, most of the things that contribute to long-term good health can't be obtained in a doctor's office.

The primary determinants of ill-health have been established by any number of epidemiological studies. They include poor nutrition, especially maternal nutrition, unemployment, poverty, powerlessness, inadequate housing, and family stress. Social and economics policies can certainly contribute to making these problems better or worse, but it's hard to see how the health care system can do much about them, even if it is re-labelled "the wellness system".

Myth #9: The money isn't there. Governments can no longer afford to provide high-quality medical care to all Canadians.

Reality: Money is being drained from the system, not by a force of nature, but by deliberate government decisions. Large-scale reductions in federal transfer payments are indeed undermining medicare and other social programs. Federal contributions have been systematically cut back since the early 1980s. The cash portion of federal transfer payments for all social programs is due to disappear entirely by around 2005. The result is increasing financial pressure on the provincial health care plans, leading various provincial governments to move in the direction of dismantling universal medicare coverage and instituting a two-tier system. If these funding cuts continue as planned, medicare will not survive.

Myth #10: Government deficits make funding cuts inevitable.

Reality: Government deficits are the result of conscious policy decisions. The tax reforms of the Trudeau and Mulroney governments set in motion a dramatic reduction in the amount of taxes paid by wealthy Canadians and by corporations. With the public treasury deprived of billions of dollars in revenue, governments have made up the shortfall by borrowing from the beneficiaries of the tax holiday, at high rates of interest. If governments were serious about eliminating deficits, they would reverse the tax giveaways of the 1970s and 1980s.

 

References

1. Evans, Robert G., Barer, Morris L., Stoddart, Greg L., Bhatia, Vandna. Who Are the Zombie Masters, and What Do They Want? The Premier's Council on Health, Well-being and Social Justice. June 1994.
2. Himmelstein, David U., Woolhandler, Steffie. The National Health Program Book: A Source Guide for Advocates. Common Courage Press. 1994.
3. Stoddart, Greg L., Barer, Morris L., Evans, Robert G., Bhatia, Vandna. Why Not User Charges? The Real Issues. The Premier's Council on Health, Well-being and Social Justice.

This article originally appeared in Volume 2, Number 2 (Autumn 1995 issue) of Parliamentary Names & Numbers, published by Sources.

Aussi disponible en français: 10 mythes des soins de santé.
También disponible en español: Diez Mitos del Cuidado de la Salud: Entendiendo el Debate del Servicio Medico en Canadá.
Auch auf Deutsch vorhanden: Zehn Mythen über das Gesundheitssystem: Krankenversicherung in Kanada.
Also available in Chinese.
Also available in Vietnamese.

Note: This article was written in 1995. For a more current (2012) version of this article, see Medicare Myths and Realities .

Subject Headings:
Health Care Costs - Health Care in Canada - Medicare - Private Clinics - Privatization - User Fees