Queen s Global Markets A PREMIER UNDERGRADUATE THINK-TANK Canadian Healthcare Reform or Revolution? G. Randjelovic, K. Russell 11.21.2018
Agenda What we will be discussing today 1 Introduction 2 History and Current Issues 3 Overview of Single-Payer and Two-Tier Systems 4 Debate: Reform Position 5 Debate: Revolution Position 2
A Brief History of Canadian Healthcare How Canada s system came to be Making Medicare Universal health coverage was one of the last large social programs considered by the federal government of Canada Nationally implemented in 1964 by Lester B. Pearson s Liberal government, the movement was initiated and championed by Saskatchewan Premier, Tommy Douglas Initially, universal healthcare was met with intense backlash and strikes by doctors Today, 85% of Canadians claim it is an integral part of Canadian society 1950 1962 1964 1965 1966 Evolution of Health Coverage Prior to post-war changes, Canada used a private healthcare system Passing of many socialist reforms. Canadian politics became focused on ensuring citizens received a minimum standard of care Saskatchewan implements first universal healthcare program under Tommy Douglas, which was met with immense criticism The Royal Commission of Health Services, led by Justice Emmett Hall of Saskatchewan, recommends national universal healthcare Federal Liberal government led by Lester B. Pearson announced his government was prepared to pay 50% of the cost of any provincial Medicare plans Canadian Federal Government passes the Medical Care Insurance Act Above: Tommy Douglas, The Father of Medicare Source: Canada s History Sources: Canada s History, 3
Current Healthcare Issues A strained system High Wait Times Growing Costs >4 weeks specialist wait >4 hours ER wait 250 200 Subtopic After-hours care Same-day general care 0% 10% 20% 30% 40% 50% 60% Study Average Canada Poor Outcomes 150 100 2001 2016 Health spending: GDP: (2001 = 100) Jurisdictional Differences Ranking out of 11, in 2017 Total time to see a specialist, by province, in weeks 11 10 10 10 43 43 43 22 21 14 19 14 16 26 Infant mortality Chronic condition incidence Stroke mortality 10-year mortality improvement BC AB SK MB ON QC NB NS PEI NL Overall, Canada s healthcare system was ranked 9 th out of 11 advanced economies in a 2017 study, beating out only France and the United States Sources: BBC The Economist, United Nations Sources: Commonwealth Fund, Fraser Institute 4
Single-Payer System A public tier for essential medicine; a private tier for dental, drugs, and a few other services Federal Government Provincial / Territorial Government Payment and Patient-Access Structure 1. Public (Single-Payer) System 2. Private Subsystem Private Firms Out-of-Pocket $ ~70% $ ~30% $ $ Individual $ Insurance $ Dental Drugs Employers Physicians and Clinics Drugs* *Dependent on province / territory Hospitals & Emergency Other services (optometry, etc.) 5
Two-Tier System Parallel systems, common goal Payment and Patient-Access Structure 1. Public Tier 2. Private Tier Federal Government Private Firms Out-of-Pocket $ >60% $ 40% $ $ Individual $ Insurance Provincial / Territorial Governments Physicians and Clinics Drugs Hospitals & Emergency Physicians and Clinics Drugs* *Dependent on province / territory Hospitals & Emergency Dental Mental Health Specialized Care 6
Debate 7
The Advantages of Single Payer A fair, simple system Equitable and Universal Complete essential medical coverage that is equal and truly universal - Income and other factors are not determinants in a person s access to quality care - Maintains equality of wellness despite growing income and wealth inequality Medical access for communities and regions where privatized care is unprofitable - Especially important to marginalized and geographically isolated groups, such as Aboriginal communities Percent difference between low and highincome individuals rating their care as poor Simple and Popular Single, centralized system is simple and yields numerous benefits Subtopic - Low complexity improves overall spending efficiency - One source of funding creates leverage in negotiations and lowers overall costs - Services are rarely maimed to reduce costs; no incentive to cut corners Widespread public approval - Enduring support for the single payer system persists Percentage of Canadians answering "yes" 3% 4% 5% 6% Sources: BBC, The Economist, United Nations Sources: Commonwealth Fund, Nanos Polls, Strategic Counsel 7% Canada Netherlands Sweden Germany United States 14% France "Do you prefer Canada's public system to America's mixed system?" "Do you support public solutions to improve Canadian healthcare?" 91% 86% 8
Position: Reform the Present System The problem is not a lack of competition; it is a lack of cohesion 1 Emphasize Preventative Care and Education Canadians live relatively unhealthy, sedentary lifestyles with high rates of obesity and heart disease - The costs of treating conditions are significantly greater than the costs of preventing them Canadians often do not consult their family doctors with sufficient frequency - Walk-in clinics and emergency wards are then selected when problems arise 2 Coordinate Better Between Care Providers Limited coordination and siloing between physicians creates gaps in care - Multidisciplinary virtual networks can be used between physicians, specialists, and hospitals to improve information flow The synergies associated with greater coordination are easier to realize in a more centralized system - The growing number of patients with chronic conditions can be treated without consuming acute care resources 3 Avoid Unnecessary Care; Leverage More Resources Up to 30% of healthcare resources expended end up being unnecessary - Tests are often over-ordered by siloed departments due to a lack of coordination Canadians rely on medical doctors for care more than any country - Nurse practitioners and occupational therapists are underused, despite being more numerous Technological advancements such as blockchain can be used to securely store records and facilitate communication Sources: BBC, The Economist, United Nations Sources: CIHI, The Globe and Mail, MacLeans, Open Medicine 9
Case Study: The United Kingdom Socialized yet efficient The Nature of British Healthcare Rankings A functionally single payer system, but all medical workers are DIRECT employees of government healthcare agencies - NHS England has 1.6 million employees Small private segment for specialized care; over 80% of spending is government - Strict regulation barring public doctors from private work Ranking out of 11, in 2017 Equity Efficiency Access Care Process Overall 1 Subtopic 1 1 3 3 What s the Deal? One centralized system means better coordination and more cohesion - A patient s medical history is more readily referenceable - Collaboration between physicians is more common More efficient allocation of medical resources - Cost efficiencies from centralization and fewer information asymmetries; above average results despite below average spending As a % of GDP Healthcare Spending by Country 9.88% 10.44% 11.07% 11.15% United Kingdom 16.84% Canada France Germany United States Sources: BBC, The Economist, United Nations Sources: Commonwealth Fund, NHS, World Bank 10
Two-Tier Troubles Disadvantages of a two-tiered system Effect on the Public System With the introduction of a separate private system, the quality of the public healthcare system will decline - Private services absorb a significant amount of vital resources from the public sector, such as specialists - More resources than users would switch to the private sector, reducing the per-capita availability of resources in the public sector - Users of the private sector are likely to be healthier on average; the already overburdened public sector would generally be given the most complex and costly patients - The lack of centralization would make useful coordination efforts more difficult - Per-unit costs would increase for the public sector, given that they would have to bid against the private sector Exacerbating Inequality Given the required capex and resultant high price point of private care, access to it would be stratified based on income - This would worsen growing inequalities; healthcare outcomes both influence and are influenced by economic outcomes - Countries with two-tier systems, such as Germany, usually have lower income inequality than Canada Two-Tier Down Under Australia had a single-payer system like Canada s until a separate private system was introduced in 1999 - Waiting times in the public sector grew substantially over the following number of years - Australia still ranks below average in equity measures of healthcare, despite the overall strength of their system and the country s wealth A two-tier system is not simply an added option it would have real effects on the public healthcare system in Canada and would undermine its service capabilities Sources: BBC, The Economist, United Nations Sources: Australian Health Review, The Globe and Mail 11
An Anecdote About Reform and Revolution The positivism debate Reform! Revolution! Sources: BBC, The Economist, United Nations Sources: Gav 12
1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 Canada s Healthcare Needs a Revolution A case for the future Why Adopt a Two-Tier System? 1. Dramatically lower wait times 2. Competition will increase standard of care 3. Lower financial burden on public system 4. Incentivizes medical students to work in Canada The Most Pressing Concern to our Country In a 2016 survey conducted by The Commonwealth Fund, 55.1% held the view that, there are some good things in our healthcare system, but fundamental changes are needed to make it work better Greater Funding is Just a Band-aid Implicit Inequality 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 National Average Public-Sector per Capita Health Expenditure in Current Dollars $6,910 Public health funds are allocated to cities, leaving rural healthcare to fall behind the national standard of quality Ultra-rich have already created a two-tier system by seeking care internationally 63,459 Canadians sought healthcare abroad in 2016 Canadians living in rural areas represents 18% of the population, but are served by only 8% of physicians Sources: Fraser Institute, Statistics Canada, The College of Family Physicians of Canada 13
Benefits of Two-Tier System More efficient provision of services Wait Times Private health resources enable patients to quickly access health resources Patients who opt-out of the public system reduce the capacity burden on public systems Only 43% of Canadians were able to see a doctor or nurse in the same or next day when they needed care Lower Financial Burden Canada ranks 3 rd in the world for highest healthcare spending Two-tier healthcare system would enable governments to better allocate funds to core healthcare duties (e.g. hospital beds, nurses, MRIs, etc.) 11% of Canadian GDP is spent on healthcare Increase Standard of Care As separate models working together to provide universal care, the public system will be forced to compete with the private system on key metrics Canada is a leader in innovating and developing medical technology. Yet the level of technology used in Canada ranks below the OECD median Retain Medical Acumen Canada is in a unique position because of its proximity to the US quasi-private system Medical education in Canada and the US are similar, however the financial outcomes, opportunities and access to technology vary greatly Would you rather make an annual salary of $186,582 or $125,000? Sources: Financial Post, Fraser Institute, Macleans, National Post, New York Times, OECD 14
Case Study: Germany Two-tiered universal health care S A New Form of Universal Health Care Germany has successfully implemented a twotier system, whereby patients can purchase private health insurance or access healthcare Health insurance is mandatory for all citizens and permanent residents in Germany How it Works 1) Public Health System Competing, not-for-profit, nongovernmental health insurance funds Competition among public health providers enhances the quality received and enables competition with PHI 2) Substitutive Private Health Insurance Patients can choose to opt-out of public health care and use PHI for certain coverage or conditions Results Germany has successfully implemented a twotier system, whereby patients can purchase private health insurance or access healthcare Health insurance is mandatory for all citizens and permanent residents in Germany Although PHI is offered, 90% of the population is covered by statutory health insurances (i.e. public healthcare) Germany spends approximately the same percentage of GDP on healthcare as Canada, however Germany s median age is 46.1; Canada s is 40.5 Hospitals, both public and private, compete for patients, who are free to choose which hospitals they want to use in the public or private systems Germany s two-tier system has developed a patient-oriented healthcare system that minimizes rationing, prioritization of treatments and waitlists Sources: Fraser Institute, Statistics Canada, The Commonwealth Fund 15
Questions? 16