Tuesday, October 20, 2009

The Scary Canadian Health Care System

By all of the statistical measures comparing United States health care with Canadian health care, we're stupid by not adopting the Canadian system. We would live 1.3 years longer, have a lower infant mortality rate, increase our standing in world health care from 37 th to 30 th, or there about, and decrease per-capita spending on health care by half. Why is that? My question is not why the Canadian system is better. My question is why are we stupid.

The answer is that we don't get it. Whether we like it or not, and whether we agree with it or not, we all are a health care statistic. And, whether we like it or not, all insurance companies, hospitals, laboratories, nurses and doctors treat us as such, even with a smile. Our medical treatment, from the time we enter through the door to the time we're sent home, dead or alive, is statistically engineered and statistically tracked. If you don't believe me, ask my brother Dan. He's a nuclear medicine technologist. Ask him what statistics he reports per patient.

But, we sure are afraid of being a statistic. The fact is that when your health condition does not fall into that “average” statistical cost, you are an outlier and you will have a problem getting health insurance in the United States. For example, insurance companies know that if you're pregnant, you are going to cost more than the average woman patient will. You're an outlier. You're going to cost too much for the company to make a profit. It's also true that when your health declines, whether by some contracted disease or broken bone, your insurance may be canceled because you've suddenly become too expensive for your policy. You become unprofitable.

Canada, on the other hand, has taken away many of the medical costs patients, insurance companies and customer companies (i.e., General Motors) usually pay for, such as administrative claim processing costs and medical equipment costs and that broadens or widens the scope of care allowable to include outliers.

Canada's system is a single payer system. That means that the Canadian Government pays the claims and THAT MEANS that the claim system is standardized for one system. All the claims for the entire country are in one format, on one computer network and transmitted over one system. A doctor in Alberta submits the same claim form as a doctor in Montreal. So, instead of four claims clerks, a doctor needs only one clerk and that reduces the doctor's cost.

It's the same with medical equipment. Take Pleasanton, California. It is a small city in the Bay Area of about 30,000 people, but it has at least 20 Magnetic Resonance Imaging (MRI) machines in the city. An MRI machine cost between $1 to $3 million each and each facility cost around $500 thousand each, so Pleasanton has between $20 million to $60 million invested in MRI machines. A city the size of Pleasanton in Canada will have two to three conveniently placed MRIs with a total investment of between $2 million to $9 million. All insurance companies, hospitals and doctors in the Canadian city send their patients to the nearest MRI.

Well, that sounds inconvenient! Why would I want to walk, take a car, or an ambulance to another location for an MRI? But, the fact is that the MRIs in Pleasanton are idle more than they are used and MRI staffing (statistically engineered by the way) in Pleasanton is sporadic at best and understaffed in many cases. So, even in Pleasanton, you will have to go to the MRI that's up and running, and staffed, at the time you need it, or you will have to wait until it is available. On the contrary, the MRI in Canada is more efficiently used (higher usage rate) and better staffed and will more than likely be available sooner and in a higher percentage number of cases when you need it. Canada also places its MRIs at locations where they are most needed (higher usage rates). So, it is more likely that you will not have to walk, take a car or an ambulance to an MRI in Canada. Maybe some aide will push you down the hall to the MRI in a wheelchair. That's nice.

Several years ago General Motors began building factories in Canada, and everyone in this country was outraged. But, GM made a good decision. It had figured out that medical costs in Canada were half of what they are in the United States, and that was just the difference between Canadian taxes GM paid for Canadian health care and the costs of paying for health insurance in the United States. There was another 25% savings to GM through staff reductions needed for developing health care plans (it didn't have to) for its employees and handling claims. And, to top it off, GM employees were happier because they could literally walk out of the factory door and go to any doctor in the community they wanted to. The total cost of the visit would be handled by the Canadian Government and charged to the insurance company that covered the employee, if the employee chose added coverage, and/or to the taxes GM paid for the care. Everyone was happy; GM saved billions of dollars, the employee could see any doctor they wanted and the insurance company still made a profit. When I say the employee can see “any doctor,” I don't mean that he has to choose the doctor first, then see that doctor. I mean he or she can see any Canadian doctor, any time they want.

So, why are we stupid? Because we want to be. We want to be afraid and ignorant and we emphatically deny that we are statistics. It's always been that way. Even as far back as the 1950s when W. Edwards Deming taught his statistical engineering methods to improve quality, service and performance in manufacturing, the United States manufacturers emphatically refused to believe him. The U.S. always knows better – just ask us. But, the truth is in the pudding. Deming went to Japan, became a national hero to manufacturing (they even have a “Deming Day” and a “Deming Prize”), Japan's cars went from junk to the best quality built automobiles in the world and the United States auto makers saw theirs take a back seat. So goes United States health care.

The only way to force cost-cutting efficiency on the U. S. health care system is the public option, a severe competition to the profit hungry insurance industry. Of course, even better than the public option is a single payer system like Canada's. But, alas, that would be getting too smart.


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