Exploring Human Potential

Words Matter When It Comes To Health Reform: Part I.

Posted on | October 22, 2018 | Comments Off on Words Matter When It Comes To Health Reform: Part I.

Mike Magee

Americans views on healthcare reform are evolving. The decade long battle by Republicans to “repeal and replace” Obamacare is fading slowly into the background. Now those same  voices who worked so diligently to destroy the plan pledge undying support to prevent denials based on prior conditions, even as they pick away with “skinny plan” intrusions.

Today the greatest risk to continued movement toward universal coverage and rational health planning is nomenclature. To avoid talking past each other, we need to define the terms of this debate while agreeing on common end points.

For example, “universal health care” is an end point goal which reinforces the principle that health is a human right rather than a privilege for the most entitled. “Single payer” is one strategy or tactic for efficiently delivering on the promise of universal coverage. It is something of a misnomer, a term that suggests a comprehensive and centralized public approach to health coverage, but one that may be less than comprehensive and paired with additional private plans which are allowed to emerge on the side. More on that in a moment.

As Americans have struggled to accommodate and absorb a new vision of health care, they have often leaned heavily on other national approaches, notably Canada, with careless approximations rather than laser accurate descriptions of what these systems are or are not.

Let’s take a careful survey of Canada and consider each word. Here are a few key questions with answers:

1. Does Canada have a universal health care system?

Yes. Canada provides equal access to defined “essential health services” to all of its citizens.

2. Who pays for the care?

Canadian citizens fund the care through targeted national and provincial tax payments. Provinces, with some level of federal financial support, are responsible for health planning, budgeting, negotiations with providers, and delivery of quality care.

3. What is the national or federal government’s role?

The 1985 Canada Health Act on a national level requires that each province maintain coverage for “medically necessary” hospital, diagnostic, and physician services. The formal plan must be “publicly administered, comprehensive in coverage, universal for citizens, portable (providing coverage when in other provinces), and accessible (without additional co-pays/user fees).”

Health Canada is also responsible for promoting nationwide health objectives, addressing the needs of vulnerable populations, food and drug safety, and medical device and technology review.

Separate from Health Canada, the nation also maintains the Public Health Agency of Canada which is responsible for public health programming, emergency preparedness, infectious disease prevention, and chronic disease management programs.

4. What is the national versus provincial financial contribution?

The national government funded 24% of the provincial health budget in 2017, while provinces covered 76% of public plan funding.  Combined public coverage paid for 70% of total health expenditures, with 30% coming from private supplemental coverage/private pay plans.

5. What major services are not covered by the Canadian plan?

Prescription drugs, dental care, vision care, long-term care/nursing homes, and over-the-counter medications are not covered. These may be covered in part or whole by widespread use of supplemental health plans offered by employers, unions and other organizations.

6. How are physicians paid?

Reimbursement of physicians is based on fees-for-service using bills that are created using the same diagnostic (ICD-10) and procedural (CPT) coding systems used in the United States. Some physicians are private while others are paid on salary by hospital or health care organizations. Physicians are not allowed to “balance bill” – add charges beyond the agreed upon annual government rates. On average, Canadian physicians earn slightly more than their American counterparts ($324K vs. $303K).

7. Do patients pay any “co-pays” or “deductibles” with the Canadian plan?

No. There is no cost-sharing for professional, diagnostic or hospital services. Patients are not involved in billing. Providers bill the government, while patients receive the agreed upon care services.

8. How are hospitals organized and paid?

There is a mixture of public and private hospitals. Private hospitals are mostly non-profit and often have a religious delineation. Hospitals are traditionally paid through annual global budget allotments negotiated directly with the provincial government or through regional health authorities empowered by the provincial government. Recently, certain provinces have begun to explore the use of “activity based funding” to incentivize efficient “through-put” of cases to address wait times in the system.

9. How does the government control health care costs of its plans?

Cost-control strategies are intrinsic to public plan design and include mandatory annual global budgets for hospitals/health organizations, negotiating of physician fee schedules with provincial medical societies, restrictions on approval of new technology, and negotiated drug pricing.

Introductory prices of new patented medicines are set by the government after review of prices in other “reference nations.” Provinces through the Pan-Canadian Pharmaceutical Alliance have negotiated price reductions on nearly 100 brand name drugs and many generic drugs. Direct-to-Consumer broadcast advertising is illegal.

10. How does the government control health care quality of its plans?

The provincial government is responsible for managing the quality of their public plans. Expectations for quality service through Health Canada is clearly defined and largely delegated to the responsibility of provincial physician and hospital organizations servicing their fellow citizens.

A range of quasi-public organizations collect and distribute quality outcomes data to providers for their quality improvement reviews. Accreditation Canada is a non-profit voluntary accreditation service that accredits approximately 1200 hospital and heath service organizations across Canada.

The Canadian Institute for Health Information is a nationally endorsed non-profit established in 1994 and governed by a cross-province board of mostly governmental health executives which oversees data collection from 28 pan-Canadian databases, and manages their analysis and sharing with health system providers. Among other programs, they manage the Canadian Patient Safety Initiative which issues regular transparent reports on preventable patient safety problems in Canada’s acute care hospitals.

11. Is Canada technically a “single payer” system?

No. More accurately, it is a “single payer/multi-plan” system. It is “single” in the sense that  “essential services” are required of all provinces, portable coverage between provinces is assured, all tax payers contribute, and rules that govern provider-patient interaction and reimbursement procedures are generally consistent across all provinces.

But, the various plans in each province function largely independent of each other. Specifically, each province determines its own governance structure, negotiates its own annual global budgets and priorities, and customizes certain elements of the program including integration with other social services and protections.

Further, Canada’s national health program covers only 70% of the total health care costs of Canadians. Payment for uncovered services is an individual responsibility, often managed by the purchase of private supplemental health coverage plans.

12. What can we learn from Canada and what have we learned from the Affordable Care Act?

For that answer, tune in next time for Part II of “Words Matter.”


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