1. Canadian Governments Should Not Encourage more Private Finance and For Profit Delivery Canadian Pension and Benefits Institute Winnipeg June 15, 2007 Michael M. Rachlis MD MSc FRCPC

2. Outline The goals of Canadian Health Policy are equity and efficiency
Private finance and for-profit delivery are incompatible with equity and efficiency
We can fix our health system’s problems without private finance, for profit delivery, or a lot of new public money

3. What are the goals of Canadian Health Policy?

4. British North America Act
“It shall be lawful for the Queen, by and with the Advice and Consent of the Senate and House of Commons, to make Laws for the Peace, Order, and good Government of Canada…”

5. Canadian Constitution
Section 36. (1) Without altering the legislative authority of Parliament or of the provincial legislatures, or the rights of any of them with respect to the exercise of their legislative authority, Parliament and the legislatures, together with the government of Canada and the provincial governments, are committed to (a) promoting equal opportunities for the well-being of Canadians; (b) furthering economic development to reduce disparity in opportunities; and (c) providing essential public services of reasonable quality to all Canadians.

6. Canada Health Act – “Whereas…
that Canadians, through their system of insured health services, have made outstanding progress in treating sickness and alleviating the consequences of disease and disability among all income groups;
that continued access to quality health care without financial or other barriers will be critical to maintaining and improving the health and well-being of Canadians;”

7. Canada Health Act – “Whereas…
AND WHEREAS the Parliament of Canada wishes to encourage the development of health services throughout Canada by assisting the provinces in meeting the costs thereof;”

8. From the BNA Act through the Constitution of 1982 to the Canada Health Act it is clear that most, but not all, Canadians value:
Equitable health care
Between provinces
Between different income groups
Efficient health care
Good government

9. Canada at its best: Social Justice and Efficiency
Hon Tommy Douglas
Social Democrat
Justice Emmett Hall
Tory

10. Outline The goals of Canadian Health Policy are equity and efficiency
Private finance and for-profit delivery are incompatible with equity and efficiency
We can fix our health system’s problems without private finance, for profit delivery, or a lot of new public money

11. Private finance is inefficient and inequitable
Single payer systems have much lower administration costs
Single Payers can keep prices down
Relying on private finance leads to large numbers of uninsured
When people have to pay out of pocket, the poor are less likely to get needed care

12. Royal Commission on Health Services. 1964.
“Hence, the decision which Canadians have to make…is whether they wish to pay $1.020 million…in 1971 for a programme administered by the insurance industry, or $837 million for a programme administered by government agencies” “In our opinion it would be…uneconomic…to spend an extra $193 million. We must chose the most frugal method.”
Royal Commission on Health Services

14. S Woolhandler Int J H Serv 2004;34:65-78.

15. Private finance for health care leads to large numbers of uninsured
People who are not part of a group often find they cannot get health insurance at any price
Private insurers deny coverage to people who are “poor risks” and are most likely to need care
No private insurer would have sold Mr. Zeliotis a policy
One in six Americans have no coverage whatsoever and tens of millions more have inadequate coverage
One in two Canadians lacked medical insurance prior to Medicare

16. When people have to pay out of pocket, the poor are less likely to get needed care

18. For-profit delivery tends to be more expensive and delivers poorer outcomes. Therefore, it is incompatible with efficiency, which by definition integrates quality and costs

19. For profit delivery: In general --higher costs, no better outcomes
PJ Devereaux et al (CMAJ. 2002;166:1399–1406. CMAJ 2004;170:1817–1824)
For profit hospitals had 2% higher death rates and 20% higher costs

20. For profit delivery: In general --higher costs, no better outcomes
PJ Devereaux et al (JAMA. 2002;288: 2449–2457.)
For profit dialysis clinics had 8% more deaths
For-profit clinics had fewer and less trained staff
For profit clinics dialyzed patients for less time and used lower doses of erythropoietin
In the US, 2,000 premature deaths occur every year among dialysis patients using for-profit clinics.

21. Contracting out clinical services isn’t nearly as easy as the advocates claim (Deber 2002)
low contestability
high complexity
low measurability
susceptibility to cream skimming
externalities

22. Externalities -- Non Profits are more likely to:
expend resources on linking different organizations together to plan community networks
engage their communities and enlist volunteers
Provide benefits, continuing education, and training to their staff

23. Outline The goals of Canadian Health Policy are equity and efficiency
Private finance and for-profit delivery are incompatible with equity and efficiency
We can fix our health system’s problems without private finance or for profit delivery

24. We could have prevented Medicare’s problems, but we can fix them!
Medicare was the right road to take
The real problem with Medicare is that it was designed for another time and was implemented as a compromise
Costs are not out of control but neither is the system drastically underfunded
We can (and are) fixing Medicare's problems -- The Second Stage of Medicare

25. Medicare was the right road to take
Canada & US had same system < 1960
Now 47 million US uninsured
Canada spends a lot less than the US but Canadians get more services
Canadians live 2 1/2 years longer and Canada has a 30% lower infant mortality
Medicare boosts Canadian business
Health care costs: 1.5% of Canadian manufacturers’ payroll and 9% of those in US

26. Medicare was designed for another time and was a compromise
We designed our system for acute care, but now the main problems are chronic illness
Douglas originally planned a very different delivery system

27. Chronic diseases have a major impact
Chronic diseases account for 70% of all deaths.
Chronic diseases account for more than 60% of health care costs.

28. Our health system has problems managing chronic disease
< 30% of Canadians hypertensives have their blood pressure properly controlled
60% of diabetics have gone > 1 yr without an eye exam or a check for proteinuria
60% of asthmatics are not properly controlled
Up to one in six seniors is re-admitted to hospital within 30 days of discharge

29. We could prevent most chronic diseases
> 80% of ischemic heart disease, lung cancer, chronic lung disease, and diabetes cases could theoretically be prevented with what we know now
This would free up over 6000 hospital beds across Canada

30. Douglas originally planned a very different delivery system
Swift Current Region: A regional authority model with a public health focus
The Saskatchewan MDs fought off changes to the delivery system
The models that were implemented, e.g. Sault Ste. Marie Group Health Centre and Saskatoon Community Clinic, have proved fonts of innovation

31. Medicare in the crucible: 1945 and Swift Current Region #1
Prepaid funding Services available on a universal basis, with little or no charge to users.
Integrated coordination of health care delivery through the creation of a local integrated health region which funded a comprehensive service package
Group medical practice with doctors working in teams with nurses, social workers and other providers.
A focus on prevention
Democratic community governance of health care delivery by local, elected boards.

32. Health Care Costs are not out of Control but neither is the Health Care System Drastically Underfunded

37. We can fix Medicare's problems with the Second Stage of Medicare
“Removing the financial barriers between the provider of health care and the recipient is a minor matter, a matter of law, a matter of taxation. The real problem is how do we reorganize the health delivery system. We have a health delivery system that is lamentably out of date.”
Tommy Douglas

38. “Only through the practice of preventive medicine will we keep the costs from becoming so excessive that the public will decide that Medicare is not in the best interests of the people of the country.” Tommy Douglas

39. We Could Have Seamless Access to All Services

40. Advanced Access in Ambulatory Care
Cambridge’s Grandview Medical Centre and Toronto’s Rexdale and Lawrence Heights CHCs have gone to same day servicing
Ten MDs in Penticton and Prince George
The Saskatoon Community Clinic (20,000 + patients) went on Advanced Access in 2004.
Saskatchewan is aiming for 20% of family practices on AA this year and 100% by 2010

41. Reducing Waits for Specialty Care
The Hamilton HSO Mental Health Program increased access for mental health patients by 1100% while decreasing referrals to the psychiatry outpatients’ clinic by 70%.
Capital Health Edmonton decreased delays for diabetic education from 8 months to 2 weeks by not insisting patients see a diabetologist on the first visit to the centre

42. Reducing waits for diagnosis
Toronto East General Hospital reduced the overall time from a suspicious x-ray to definitive diagnosis of lung cancer from 128 days to 31 day – a reduction of 75%

43. Reducing waits for treatment
Alberta Orthopedic pilot project
From 82 weeks to 11 weeks from family doctor to arthroplasty
Cost neutral

44. Summary:
Private finance and for-profit delivery are incompatible with Canadian values of equity and efficiency
We can fix our health system’s problems without private finance, for profit delivery, or a lot of new public money
Let’s demand governments and providers deliver the care we deserve!

45. “Courage my Friends, ‘Tis Not Too Late to Make a Better World!”
Tommy Douglas
(per Alfred Lord Tennyson)