Single-Payer - Good, Bad, and Ugly of the Canadian System

Written by Clay Smith

Why talk about this?

Universal healthcare coverage is a hot topic but one that many of us know surprisingly little about, beyond surface level slogans from campaign signs or bumper stickers.  I'm hoping to learn more with this JAMA Internal Medicine article about the Canadian single-payer system.  What little I know about Canadian healthcare comes from this article.  I am summarizing what these authors have written and make it clear when I am speaking my own opinion.  My interpretation or understanding may not be correct.  Feel free to comment at the bottom and set the record straight publicly, but please put your real name on it when you do.  I also don't mean this to be political, although that may be inescapable.  I want to understand more about what it means when we say "single-payer" and to be a little better informed as a citizen and physician.  And I hope this will help you as well.

Healthcare Financing - Canadian Style

Satisfaction over Time
There was initial patient enthusiasm for the single-payer model begun in Canada.  Since, 2000 satisfaction has fallen in the rankings, still above the U.S., but third from last in 2016.

The Good
Every Canadian with legal status has healthcare covered.  The process is simple with very low administrative costs.  "Physicians are paid promptly and fully, with low collection costs and almost no preapproval, adjudication, or other barriers that patients and physicians often face in the United States."  Patients may choose any physician or hospital, usually have no copay, and don't get a complex bill.  This allows them to seek care earlier without fear of being unable to pay or facing bankruptcy for medical bills.  Health outcomes are generally very good.  Almost all Canadians have a primary care doctor.  Overall healthcare quality ranking is still among the best in the world, beats the U.S., and does so with 10.3% of gross domestic product (GDP) compared to 17.8% of the U.S. GDP.

The Bad
Hospital closures and physician income caps have led to some physicians leaving, an increase in wait times, and decrease in access for some patients.  They summarized it best by saying Canada is single-payer - but not a system.  It is still primarily designed to cover acute care payment to hospitals and physicians but does not cover chronic disease management or prescriptions as effectively.  It is still essentially fee-for-service for physicians, and hospitals get a lump sum to cover their global budgets.  This incentivizes provision of less care by hospitals and perhaps excessive care by doctors.  Authors stated, "the Canadian health system typically runs at full capacity but with little resiliency."  Long wait times to see specialists, often over 2 months, are common, and hospitals are overcrowded.  There is no national electronic health record (EHR) to help with countrywide continuity of care.  Outpatient medications may not be covered for children and working-age adults in most provinces, though that is evolving.  They note the Canadian system is, "undermanaged...a series of independently operating institutions and professionals, representing predominantly 'private' delivery of care, regulated and paid by a single government insurer."

The Ugly
It is unlikely the system will change.  Most people who actually vote are happy that major illness is covered and are less concerned about chronic care.  Physicians like the simplicity of getting paid and fee-for-service.  Most Canadians are content that they may not be the best in the world, but at least they're better than the U.S.  In reality, it is not a single-payer.  Canada's constitution demands the payments come from the provinces.  Healthcare makes up 40% of provincial spending.  Leaders of provinces don't want to give up cost control in the form of lump sum hospital payments, or they risk increasing cost and losing power by being voted out.  Even if the federal government increased provincial payment, there is little incentive to spend on health infrastructure, like a provincial or national EHR.  Rather, increasing physician or nurse salaries goes a long way toward keeping peace and getting votes.

Canadian single-payer healthcare covers every person with legal status, and it does so with a lower percentage of GDP than the U.S. and has good overall health outcomes.  It is not without its problems, and the authors’ main point was that making significant changes seems unlikely given the current system.

My Thoughts

I now leave the confines of the JAMA Internal Medicine article.  These thoughts reflect my opinion. You know the drill - this doesn’t reflect the opinion of other JournalFeed authors, my employer, or anyone else.

Absolute power…
There are pros and cons to a single-payer model.  More people get coverage, but the government then owns healthcare.  The U.S. already owns two-thirds of it.  My biggest concern when imagining a single-payer system in the U.S. is that this would give an even greater amount of power to the Federal government, particularly the Executive branch.  I'd like to think the U.S. would not abuse this, but I get concerned when power becomes concentrated and unchecked.  Imagine your least favorite candidate is running for president and gets elected. Suddenly, checks and balances sound like a really good idea.  I think many of us in the U.S. are quite thankful for the prescient wisdom of the founders for the current limits on Executive power.

Simply put - whoever pays the bills is in charge.  Having checks and balances on this kind of power seems wise.  It’s not hypothetical that the Federal government might abuse its purse-string power.  It’s already happening.  Consider adherence to SEP-1 CMS sepsis care mandates.  The government penalizes hospitals for “omissions in sepsis care” that have no impact on quality or mortality.  So, why are we scrambling to perform meaningless repeat lactates and bolusing everyone 30mL/kg?  Because Medicare requires it in order to get paid.  Whoever pays the bills is in charge.

…Corrupts absolutely.
I recently learned of a hospital that sees a large proportion of Medicaid patients.  They are beholden to Medicaid as a major payer, which gives Medicaid a lot of power over them.  Recently, Medicaid fined this hospital for spending more than their peer institutions on pediatric UTI antibiotics - for using cefixime rather than cefdinir or TMP/SMX.  The problem is, cefidinir is not FDA-approved for the indication of UTI; cefixime is, and happens to be more expensive.  Resistance of urinary E. coli to TMP/SMX is high at that institution, compared with 3rd generation cephalosporins.  Not to mention, the hospital was never told this was a problem nor given an opportunity to explain, defend, or change their practice prior to being fined.  So, they were penalized for doing what was right for patients.  There was no appeal, no concern for the non-existent profit margin of the hospital.  They were forced to pay and to play along.  Whoever pays the bills is in charge.  In this case, it means this hospital has been coerced by the Federal government into doing something for the patient that may not be in their best interest.  Medicaid pays the bills, and they are in charge.  This is just one example of an abuse of power on a micro-scale.  Yet we are assured that single-payer Medicare for All will be, “a health care system that works for patients and providers.”  I fear it could be the other way around without protections from government overreach.

In the UK (which is, of course, different than the Canadian system), one patient said, after learning his surgery would be deferred a third time, “This is a disgrace. We injure ourselves while working to pay our taxes, and the government just leaves us to suffer.”  The same NYT article noted that over, “nine million people at emergency wards in the 2016-17 fiscal year were sent home after receiving only guidance that in many cases could have been obtained from a pharmacist.”  When the government owns all of healthcare, they have total control over how it is delivered.  Too bad if you don’t like it.  The voice of the patient and physician is lost.

Finger on the pulse?
Not only do I have concerns about the abuse of power worsening under a U.S. single-payer model, the current performance of the Federal government does not inspire confidence.  My in-laws lived with us for 6 months after their house flooded in 2010.  They did an address change, and mail from Medicare was redirected to our home.  They then moved into a new home.  After 8 years of phone calls, snail mails, government forms, and multiple other communications to change the address to their new home, we still get their mail from Medicare at our address.  Small wonder that Medicare fraud and waste cost taxpayers $60 billion in 2015; 10% of the Medicare budget.  To put that in perspective, that is almost twice what the U.S. spent on all NIH funding that same year.  In defense of the U.S., efforts to reduce fraud have ramped up.  Medicare improper payments were down to a mere $51.9 billion in 2017.  However, Medicaid improper payments were $36.7 billion in 2017.  So we are still wasting $88.6 billion per year in U.S. government spending on healthcare alone.  Do we really think the U.S. will succeed with “Medicare for All” if they are unable to manage the current system of “Medicare for Some?”

Single Payer Sum-Up
I want every American to have healthcare.  This affects many of us on a deeply personal level.  My brother, an innovative small business owner and incredibly hard worker, doesn’t have health insurance for himself or his family.  He can't afford it under the, ironically named, Affordable Care Act.  Is single-payer the right answer for the U.S.?  I have concerns.  If we did this, we would need protections, checks and balances, so that the payer doesn't hold all the power; patients and physicians must have a seat at the table.  It also would need to be done with a level of excellence I don't currently see from our Federal government.  And it would have to be financially sustainable and not burden our children and grandchildren with an unpayable debt.  I don’t know if single-payer is the best solution for the U.S., though I feel torn and would very much like to see all our citizens have healthcare coverage.  Some may argue that it would be better than the current system.  In many ways, I agree.  But with a price tag of $32.6 trillion over the first ten years, we need to consider how that will affect the people it is trying to help.  What’s the best way to achieve universal coverage?  Maybe we need to consider the Singapore model.

At the very least, I’ve learned a little more from our highly esteemed northern neighbor about the pros and cons of single-payer health insurance.  I would be interested in what others think.  Please comment if I don’t have my facts straight or you would like to share your thoughts.


Thanks to Thomas Davis for reviewing this and making helpful suggestions.

P.S. - Where’s the Weekly Quiz?

It was clear from the JournalFeed community that you don’t want only a quiz on the weekend.  I know this because the emails weren’t opened as often.  However, quizzes are a great way to retain this info long-term.  And I got feedback that many of you really liked them!  So, we plan to do a monthly quiz rather than weekly and will resume weekend features that offer a little variety, like this one.

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