As always before a major election, there's the chorus of threats. "If so and so wins, I'm moving to Canada." (Groan.) "This country is broke, and out of control, and we're all going to hell in a hand-basket."
And so it went this year, except that in 2012, many a Twitter tirade blamed the healthcare reform law—aka Obamacare, aka the Patient Protection and Affordable Care Act—now on its way to full implementation, for the urge among the electorate to flee the country.
I paraphrase, but some of the unenlightened comments went like this: "I'm moving to Winnipeg. Don't want the government controlling my life or my healthcare."
Here's the irony: The Maple Leaf nation's government-paid healthcare system, which requires few if any co-payments or deductibles, may provide much higher quality of healthcare services at a fraction of the spending compared with the Medicare program in the United States.
In a research letter in the Archives of Internal Medicine Oct. 29, Harvard physicians and professors David Himmelstein, MD and Steffie Woolhandler, MD, put the comparison into perspective for people 65 and older.
They used U.S. Medicare actuarial data dating back 30 years. They excluded payments for the disabled and patients on dialysis under 65, but included Medicare Advantage, and compared it with comparable Canadian Medicare healthcare cost data from three sources.
Here's what they found:
- Between 1980 and 2009, Medicare spending per beneficiary in the U.S. rose from $1,215 to $9,446, which was a 198% increase after adjusting for inflation. But in Canada, comparable spending rose from $2,141 to $9,292, or an inflation-adjusted rate of 73%. Think of it this way: for every $10 spent on services in the U.S., Canada spent $3.36.
- In Canada, government healthcare spending paid for a greater offering of benefits (which is why Canada's 1980 spending was higher than that in America), covering 80% of total healthcare costs for seniors. In the United States, Medicare pays for about 50% of seniors' healthcare expenses.
- If Medicare costs had risen at Canada's pace, projected savings would have totaled $154.2 billion in 2009 and $2.156 trillion from 1980 to 2009.
I know what you're thinking. These two idealists are notorious and unrepentant single-payer advocates who founded Physicians for a National Health Program. But like it or not, these are the numbers they got.
Woolhandler and Himmelstein also point out that quality of care apparently has not suffered in Canada because of its parsimony.
"Life expectancy at age 65 years is longer and has grown faster in Canada than in the United States since 1980... offering reassurance that cost control has not compromised quality," they wrote. "A meta-analysis suggests that clinical outcomes are, if anything, better than for insured Americans."
And this is despite the fact that in Canada, there are many more smokers than in the U.S., although the demographics of poverty, arguably, are much different than they are south of the Canadian border.
So how do Canadians save so much money on healthcare?
Woolhandler tells me that the overriding secrets seem to be two-fold.
First, she says, primary care physicians far outnumber specialists in Canada relative to their ratios in the United States. That translates to less invasive care and fewer surgeries and a more medical approach to treatment to keep conditions from worsening.
"What we do know is that primary care-based healthcare systems tend to be thriftier. We know that from international evidence, as well as evidence from within the U.S.," she says.
"I'm a primary care doctor," she adds. "And when my patients need specialists, I rely on those specialists and appreciate them. But you need to have an ample supply of primary care doctors and focus on primary care, and that’s one of the things that works so much better in Canada."
Related to physician supply is the element of planning, she says. You have to have the right number of surgeons and the right number of high acuity, complex programs to preserve the provider volume so they get really good at doing those procedures.
"I think that in many parts of the U.S., we have too many, and each hospital that has a particular program performs too few surgeries to get good at it," she says.
The second major reason for lower costs in Canada, she says, has to do with administrative costs. I experienced this myself a year ago when it took five phone calls with a physician's office manager, three calls to my health plan, and two to a lab, and three detailed letters to correct two billing code errors.
"Administrative costs are sky high in the U.S.," Woolhandler says, "Thirty-one percent of all healthcare spending goes to billing and administration. But in Canada, you're talking about 16.7% going for paperwork and administration. In the U.S., everybody is fighting over who pays the bill; the doctors fight to get paid and the insurance companies fight to avoid payment by demanding documentation before they pay. That's just tremendously expensive."
In Canada, hospitals have global budgets, and while physicians are still paid on a fee-for-service basis, there is a binding fee schedule and very little amount of time and resources devoted to paperwork, she says.
"Many Canadian physicians don't employ any billing personnel, and some will have a receptionist put in a couple of hours a week—a world of difference that anyone who's ever practiced in the United States knows."
And there are a few more reasons why Canada spends less, she says.
Canada also has the advantage of enjoying bulk purchasing to obtain lower prices on drugs and devices, which reduces their cost to 40% of what American payers must shell out, she says. The cost of malpractice insurance is lower.
And, the same system pays for all care, including care required to deal with medical errors. "If you got injured while you were in the hospital, you'd know that your future healthcare costs would automatically be covered, so with a national healthcare insurance program you wouldn't have to sue providers to recover that," she says.
I acknowledge that Woolhandler and Himmelstein are controversial lefties. Their view of the world would eliminate health insurance plans and move the country to one source of payment for healthcare.
But given the fiscal cliff, sequestration, and the fact that healthcare spending takes up roughly 16% of our gross domestic product, their point may have some merit.
Medicare has worked well for 50 million people in the U.S. enrolled today. But the way it works is just too darn expensive.