Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: MONDAY, March 18, 1991 TAG: 9103180234
SECTION: EDITORIAL PAGE: A-9 EDITION: METRO
SOURCE: EDMUND F. HAISLMAIER
DATELINE: LENGTH: Medium
Proponents note that some 31 million Americans have no health insurance, in spite of the fact that the United States spends more than 11 percent of its GNP on health care, while Canada spends only about 9 percent. In contrast, the Canadian system provides health insurance to all its citizens, at what seems a lower cost than in the United States. Furthermore, supporters claim the Canadian system delivers the same or better quality.
Recent research, however, reveals that these statistics are misleading, and that the Canadian system is not the bargain it appears.
When compared on equal terms - by eliminating the distortions caused by differences in the two countries' economies - Canadians are actually doing no better than Americans in keeping health costs down. In fact, Canada's rates of increase in health-care spending are virtually identical to those in the United States. The most recent data show that between 1967 and 1987, per-capita health spending, adjusted for inflation, rose at an average annual rate of 4.58 percent in Canada, vs. 4.38 percent in the United States.
Yet the price of implementing such a system would be staggering. Various proposals would boost the government's total share of national health-spending from the current 42 percent to 74 percent, as in Canada, or even more. Studies conducted last year put the cost of such expansions at between $189 billion and $339 billion a year.
Funding the most expensive proposals would require nearly doubling the payroll tax from 15 percent to 29 percent, or increasing all current income-tax rates by 14 percent, or imposing a new national sales tax of 10 percent.
Another problem with the Canadian system is the quality of care. While it is true that all Canadians have access to health insurance, more of them are finding it increasingly difficult to obtain medical treatment.
Offering health care - or any service - for "free" is a virtual guarantee that demand will always outstrip supply. Canadian health-care providers are trying to meet this constantly expanding demand - but must do so under perverse government regulations that encourage hospitals to deliver less, and physicians to provide more, than is needed. Strict, government- imposed budgets often force hospitals to close beds for part of the year or limit the number of operations they perform. Yet, government reductions in physician fees encourage doctors to provide more tests and procedures to make up in volume what they lose in price.
Thus, in Canada, waiting lists for major, non-emergency surgery are increasingly common and lengthy. Last year, the first scientific survey of Canadian waiting lists was conducted in the province of British Columbia. The study found that patients must wait three to seven months for heart surgery; two to five months for disc surgery; up to five months for hand surgery; and seven months for cataract removals.
The failings of the Canadian system and the obstacles to implementing it here do not mean that policy-makers should abandon the goal of providing affordable health care to all Americans. Rather, they should enact consumer-oriented reforms that would expand access, while unleashing market forces to control health-care costs and bring about efficiency.
The key to forging a consumer-oriented system is to give Americans control over the money now paid by their employers in health-insurance premiums, together with generous new tax credits for money spent on health insurance and out-of-pocket medical care. In this way, all Americans would get the same tax relief regardless of where or how they buy their insurance.
To eliminate the inequities of the current system, the new tax credits should be proportionately larger for those with lower incomes or higher health-care costs. In addition, Medicare and Medicaid should be restructured to provide added help to those Americans for whom even the new tax relief won't be sufficient.
Pursuing such policies will result not only in a better and less expensive system, but also one that stands the best chance of achieving the goal that has eluded Canada - affordable access to health care for all citizens.
by CNB