Health Care: Americans deserve better ROI Part 2

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A few years ago I wrote a blog suggesting that American critics should not be smearing Canada’s health care system, particularly when there is tremendous waste in the US health system . No question that Americans deserve better ROI from there health care system ( and so should Canadians). This is not to suggest that our system here in Canada is perfect by any means and that we we should not be improving our system but any thoughts of moving to anything close to the American system should be considered as “simply not on”. According to a recent study  The U.S. medical system squanders 30 cents of every dollar spent on health care, according to new calculations by the respected Institute of Medicine.

In essence, 30 per cent of health-care dollars are frittered away.

Unnecessary care, $210-billion: Over-treatment has reached epidemic proportions in the profit-driven U.S. system; there is much truth to the stereotype that patients with a headache and good insurance get MRIs.

Excessive administration, $190-billion: Cataloguing expenses and multiple insurance plans makes lots of paperwork.

Inefficient delivery of care, $130-billion: Administration is not centralized, so patients get shuffled among specialists and facilities, with much overlap.

Inflated prices, $105-billion: An appendectomy can cost $1,529 to $182,955, depending on where it is performed. Unlike other countries that depend on private providers and insurance, the U.S. has very little price regulation.

Fraud, $75-billion: Health care involves so much money that it attracts crime; common fraudulent practices include providers that double-bill, suppliers that don’t deliver and patients who cheat on their insurance.

Prevention failures, $55-billion: A common example is diabetics who have to have limbs amputated because they couldn’t afford medication.

(The total does not equal $750-billion because some categories overlap.)

And that’s just the money.

The IOM estimates that poor-quality care – specifically the lack of standards that leads to huge variations in treatment –causes about 75,000 premature deaths a year. 

We don’t have a similar study in Canada but one can assume that we would have many of the same problems. As André Picard of the The Globe and Mail points out the only area where Canada’s medicare system is clearly better is administrative costs. Officially, our administrative costs are 3.5 per cent of health spending, compared to about 30 per cent in the United States, but most are hidden in other categories and, if anything, our system is under-managed. So Canada, like the United States, has few checks and balances and tends to reward volume rather than innovation and results. That’s why many costly inefficiencies are ingrained.

The report depicts a system that saves lives in miraculous fashion but is also expensive and outmoded and in some cases downright Kafkaesque.“If banking were like health care, automated teller machine transactions would take not seconds but perhaps days or longer as a result of unavailable or misplaced records,” the report said. “If home building were like health care, carpenters, electricians and plumbers each would work with different blueprints, with very little coordination.” source

Wendy Everett, the president of NEHI, a health care research group based in Cambridge, Mass stated  she expected to see more and more adoption of best practices in the next few years, spurred by President Barack Obama’s Affordable Care Act, other changes to Medicare and Medicaid and a recognition among doctors and insurers that the current trajectory of health care spending is unsustainable. source

Of course if the Republicans win the next presidential election all bets are off of what will happen . The GOP seems to think that a total freemarket system in health care is the answer to rising costs and inefficiencies.


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What Americans decide to do with their health system should be left to Americans to decide, however when critics smear the Canadian health system unjustifiably, Canadians need to speak up. A few weeks ago I wrote a blog about the misinformation about the Canadian health system and received a significant response, so here comes another blog on the same topic. These blogs are a real departure from my  topics on public sector marketing but knowing that I have a significant readership in the USA, I want to ensure that readers of my blog are up to speed  on the  health care debate as it relates to Canada. Also, when you consider the amount of money Americans spend on health care in the US they definitely should not have a system that is ranked 37th in the world. Americans do deserve better and congratulations to Obama for trying to improve the present “clearly broken” system.

As Bob Rae from the Liberal Party of Canada points out, the questions are simple.

  • “Should anyone be denied health care because of their income, disability, or illness?
  • Should patients be able to choose their doctors, and advocate for speedy, effective treatment?
  • Should insurers, taxpayers, and premium payers be worried about how to control costs as an ageing society combines with great technological advance to produce an expensive mix? “

The Canadian health care system should not be included in the debate on health care in the US. Frankly, the US is not really set up to have a system similar to ours. We hope our friends in the U.S. will find answers to the questions that lie at the heart of their health care system.

However, since there is so much misinformation being spewed by vested interests in the US about the Canadian health system and most of it is taking specific situations out of context and providing skewed stats, I will try to provide some clarification about our system as it is compared to the US.

Here are some excerpts from which may help clarify the differences between the US and Canadian health systems.

  • “The U.S. has the most bureaucratic health care system in the world. More than 31 percent of every dollar spent on health care in the U.S. goes to paperwork, overhead, CEO salaries, profits, etc. The provincial single-payer system in Canada operates with just a 1 percent overhead.
  • 10% of Canada’s GDP is spent on health care for 100 percent of the population. The U.S. spends 17 % of its GDP but 15 percent of its population has no coverage whatsoever and millions of others have inadequate coverage. In essence, the U.S. system is considerably more expensive than Canada’s. Part of the reason for this is uninsured and underinsured people in the U.S. still get sick and eventually seek care. People who cannot afford care wait until advanced stages of an illness to see a doctor and then do so through emergency rooms, which cost considerably more than primary care services. What the American taxpayer may not realize is that such care costs about $45 billion per year, and someone has to pay it. This is why insurance premiums increase every year for insured patients while co-pays and deductibles also rise rapidly.


  • One of the myths is the Canada’s government decides who gets health care and when they get it.While HMOs and other private medical insurers in the U.S. do indeed make such decisions, the only people in Canada to do so are physicians. In Canada, the government has absolutely no say in who gets care or how they get it. Medical decisions are left entirely up to doctors, as they should be. There are no requirements for pre-authorization whatsoever. If your family doctor says you need an MRI, you get one. In the U.S., if an insurance administrator says you are not getting an MRI, you don’t get one no matter what your doctor thinks – unless, of course, you have the money to cover the cost.


  • There are no waits for urgent or primary care in Canada. There are reasonable waits for most specialists’ care, and much longer waits for elective surgery. Yes, there are those instances where a patient can wait up to a month for radiation therapy for breast cancer or prostate cancer, for example. However, the wait has nothing to do with money per se, but everything to do with the lack of radiation therapists. Despite such waits, however, it is noteworthy that Canada boasts lower incident and mortality rates than the U.S. for all cancers combined, according to the U.S. Cancer Statistics Working Group and the Canadian Cancer Society. Moreover, fewer Canadians (11.3 percent) than Americans (14.4 percent) admit unmet health care needs.


  • Princeton University health economist Uwe Reinhardt says single-payer systems are not “socialized medicine” but “social insurance” systems because doctors work in the private sector while their pay comes from a public source. Most physicians in Canada are self-employed. They are not employees of the government nor are they accountable to the government. Doctors are accountable to their patients only. More than 90 percent of physicians in Canada are paid on a fee-for-service basis. Claims are submitted to a single provincial health care plan for reimbursement, whereas in the U.S., claims are submitted to a multitude of insurance providers. Moreover, Canadian hospitals are controlled by private boards and/or regional health authorities rather than being part of or run by the government.”

Here are comments from Michael M. Rachlis a Canadian physician, health policy analyst and author.

  • “On coverage, all Canadians have insurance for hospital and physician services. There are no deductibles or co-pays. Most provinces also provide coverage for programs for home care, long-term care, pharmaceuticals and durable medical equipment, although there are co-pays.
  • On costs, Canada spends 10% of its economy on health care; the U.S. spends 16%. The extra 6% of GDP amounts to more than $800 billion per year. The spending gap between the two nations is almost entirely because of higher overhead. Canadians don’t need thousands of actuaries to set premiums or thousands of lawyers to deny care. Even the U.S. Medicare program has 80% to 90% lower administrative costs than private Medicare Advantage policies. And providers and suppliers can’t charge as much when they have to deal with a single payer.
  • Because most of the difference in spending is for non-patient care, Canadians actually get more of most services. We see the doctor more often and take more drugs.
  • The U.S. media, legislators have claimed that our “socialized” system doesn’t let us choose our own doctors. In fact, Canadians have free choice of physicians. It’s Americans these days that are restricted to “in-plan” doctors”.

Here is piece from “former American” newspaper columnist Diane Francis

“Just who is this jerk, Rick Scott of propaganda-mongering Conservatives for Patients’ Rights? He and his group are fabricating negatives about Canada’s health care system and I resent this. I am an American who has lived in Canada for more than 35 years. I can vouch that the system is more than adequate and is not run by civil servants but by doctors who are able to treat everyone, rich or poor. Mr. Scott and other conservatives are against universal health care without any justification whatsoever. Their criticisms are inaccurate.

Here are the facts as to why Canada’s medical system, far from perfect, is dramatically better than America’s:

1.    It is cheaper even though it takes care of the entire population, i.e. 10% of GDP compared with 15% in the U.S.

2.    Canada’s health care system which fully looks after 32 million people costs roughly what the private-sector health insurance companies make in profits in the United States looking after less than half the population for excessive premiums.

3.    Canada’s health care system is cheaper still if the litigation costs of fighting over medical bills are eliminated as it is when the government is the sole-insurer. Estimates are that court costs and judgments add another 2 to 3% of GDP to the total medical tab.

4.    Canada’s health care system enhances economic productivity. Workers diagnosed with illnesses can still change employers and be employable because they are not rejected by employers with health benefits due to pre-conditions.

5.    Outcomes with major illnesses, such as cancer and heart disease, is better than in the United States.

6.    Longevity is better in Canada and Europe than in the U.S.

7.    No emergency is neglected in Canada.

8.    Some elective procedures may take longer if compared to blue-ribbon U.S. health care but that’s not comparing apples with apples. More appropriately, the overall population’s care should be compared and there are tens of millions of Americans who are uninsured or uninsurable.

9..    No one in Canada goes broke because of medical bills whereas ARP estimates half of personal bankruptcies are due to unpaid, high medical bills.

10.    Canadians are able to choose their own physicians and to seek multiple opinions.

11.    Canadian doctors and nurses are better trained than American counterparts and U.S. physicians must study for at least a year in order to qualify to practice in Canada.

12.  Drugs made and invented in the United States are cheaper in Canada, Europe and Japan because our communal health care means volume discounts and savings passed along to society. Americans are overpaying.

13.    Americans are being cheated by a patchwork quilt system where the highest risk people – veterans, the indigent and elderly – are insured by governments but the “gravy” or young, healthy people are handed over to private insurance companies.

Is Canada’s system perfect? No and nobody said it was. The media should stop allowing propagandists to tell lies and any arguments about other countries’ practices should be ignored as totally irrelevant.The United States is a rich and talented nation and it’s very upsetting to me, as an American, that it does not have the world’s best medical care for its citizens instead of one of the worst.
Americans deserve better

Well hopefully this will assist those involved in the health care system debate in the US. It is quite unfortunate that health care has become a political football in the US, rather than a debate about improving the health of Americans.

Good health to our American friends and hopefully you will get a health system that is citizen centric.

Diane Francis is right… you do deserve better!!!

2 Replies to “Health Care: Americans deserve better ROI Part 2”

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