Soaring costs force Canada to reassess health model

[Zach]

Soaring costs force Canada to reassess health model

http://news.yahoo.com/s/nm/20100531/hl_nm/us_health

By Claire Sibonney - Analysis
Mon May 31, 2:38 pm ET

TORONTO (Reuters) – Pressured by an aging population and the need to rein in budget deficits, Canada's provinces are taking tough measures to curb healthcare costs, a trend that could erode the principles of the popular state-funded system.

Ontario, Canada's most populous province, kicked off a fierce battle with drug companies and pharmacies when it said earlier this year it would halve generic drug prices and eliminate "incentive fees" to generic drug manufacturers.

British Columbia is replacing block grants to hospitals with fee-for-procedure payments and Quebec has a new flat health tax and a proposal for payments on each medical visit -- an idea that critics say is an illegal user fee.

And a few provinces are also experimenting with private funding for procedures such as hip, knee and cataract surgery.
It's likely just a start as the provinces, responsible for delivering healthcare, cope with the demands of a retiring baby-boom generation. Official figures show that senior citizens will make up 25 percent of the population by 2036.

"There's got to be some change to the status quo whether it happens in three years or 10 years," said Derek Burleton, senior economist at Toronto-Dominion Bank.
"We can't continually see health spending growing above and beyond the growth rate in the economy because, at some point, it means crowding out of all the other government services.

"At some stage we're going to hit a breaking point."


MIRROR IMAGE DEBATE

In some ways the Canadian debate is the mirror image of discussions going on in the United States.

Canada, fretting over budget strains, wants to prune its system, while the United States, worrying about an army of uninsured, aims to create a state-backed safety net.
Healthcare in Canada is delivered through a publicly funded system, which covers all "medically necessary" hospital and physician care and curbs the role of private medicine. It ate up about 40 percent of provincial budgets, or some C$183 billion ($174 billion) last year.

Spending has been rising 6 percent a year under a deal that added C$41.3 billion of federal funding over 10 years.

But that deal ends in 2013, and the federal government is unlikely to be as generous in future, especially for one-off projects.

"As Ottawa looks to repair its budget balance ... one could see these one-time allocations to specific health projects might be curtailed," said Mary Webb, senior economist at Scotia Capital.

Brian Golden, a professor at University of Toronto's Rotman School of Business, said provinces are weighing new sources of funding, including "means-testing" and moving toward evidence-based and pay-for-performance models.

"Why are we paying more or the same for cataract surgery when it costs substantially less today than it did 10 years ago? There's going to be a finer look at what we're paying for and, more importantly, what we're getting for it," he said.

Other problems include trying to control independently set salaries for top hospital executives and doctors and rein in spiraling costs for new medical technologies and drugs.

Ontario says healthcare could eat up 70 percent of its budget in 12 years, if all these costs are left unchecked.

"Our objective is to preserve the quality healthcare system we have and indeed to enhance it. But there are difficult decisions ahead and we will continue to make them," Ontario Finance Minister Dwight Duncan told Reuters.

The province has introduced legislation that ties hospital chief executive pay with the quality of patient care and says it wants to put more physicians on salary to save money.

In a report released last week, TD Bank said Ontario should consider other proposals to help cut costs, including scaling back drug coverage for affluent seniors and paying doctors according to quality and efficiency of care.


WINNERS AND LOSERS

The losers could be drug companies and pharmacies, both of which are getting increasingly nervous.

"Many of the advances in healthcare and life expectancy are due to the pharmaceutical industry so we should never demonize them," said U of T's Golden. "We need to ensure that they maintain a profitable business but our ability to make it very very profitable is constrained right now."

Scotia Capital's Webb said one cost-saving idea may be to make patients aware of how much it costs each time they visit a healthcare professional. "(The public) will use the services more wisely if they know how much it's costing," she said.

"If it's absolutely free with no information on the cost and the information of an alternative that would be have been more practical, then how can we expect the public to wisely use the service?"

But change may come slowly. Universal healthcare is central to Canada's national identity, and decisions are made as much on politics as economics.

"It's an area that Canadians don't want to see touched," said TD's Burleton. "Essentially it boils down the wishes of the population. But I think, from an economist's standpoint, we point to the fact that sometimes Canadians in the short term may not realize the cost."

($1=$1.05 Canadian)

(Reporting by Claire Sibonney; editing by Janet Guttsman and Peter Galloway)
Copyright © 2010 Yahoo! Inc. All rights reserved.

[paul.karen]

Hummm......

[MooseMom]

I don't think most people, whether they are in the US or in Canada, have any idea how much this procedure costs or what that lab charges to look at your grotty little sample.  I just recently had my gall bladder taken out, and no one gave me a price list for anything.  We are not given the opportunity to become well educated and informed consumers of health care resources.  I think that is a very fundamental problem in any Western health care system.

[cariad]

MM, don't you receive an EOB from your insurance? I'm in the US and I know exactly what my medical care costs - what the providers bill and what is actually paid them. For example, my former nephrologist had the cheek to bill nearly $700 per visit, or roughly $100/minute. Medicare and Insurance knocked that figure down to $160 and I had a $20 copay. I even get statements for the clinical trial procedures that are fully covered by NIH grants, which is how I know that Northwestern prices their tunneled line placement at around $9000. It's a 15 minute or less procedure, but I did insist on lots of drugs.

I would be interested to hear what Monrein feels about this if she wants to get into it. I think it's crucial to let the public know what their healthcare costs, but I somehow doubt that most Canadians are frivolously going to the doctor. I certainly tried my level best to avoid many of these screenings that they wanted me to have for my eval, by calling the coordinator and saying "look, I don't have colon cancer, I don't have breast cancer, why all of these tests?" If I wanted on to Northwestern's list, I was going to go even though I knew it was a pointless exercise.

I really don't see the parallel with the US, other than the worldwide problem of soaring health costs, which have so many factors playing into them: buying and maintaining equipment, facility costs, salaries (some are too high, but others are too low), and on it goes. The US absorbs outrageous costs from people who don't have insurance and then pop to the ER when things really go sideways for them. I'd prefer they go to their $150/hour GP and catch these illnesses and injuries before they become a $5000/hour problem.

[MooseMom]

Nope, I don't get EOBs from my HMO.  When I go to see my neph every three months, first I get a complete set of labs done.  I never get a bill...it goes directly to my HMO.  The only reason I have any idea what these tests cost is because a couple of times, the lab billed my old insurance co instead of my current one, and the old ins co sent me a claim denial.  When I see my neph, I pay a co-pay, but I have no idea what he charges by the hour. Who would tell me, and if I asked, would anyone answer?  My HMO tells me that this is the neph I have to see, so it's not like I can shop around and compare prices. And when I have surgery, I MAY get the occasional statement from the path lab or some other provider, but I don't know what these costs are going to be BEFORE the procedure.  Again, even if I did know what a gallbladder removal was going to cost before I had it done, I don't have the luxury of going to a cheaper hospital or to another state for a cheaper surgeon because my insurance won't allow it.

cariad, are you ever given the cost of procedures before you have them done?  If so, do you ever "shop around" for cheaper services?

[cariad]

cariad, are you ever given the cost of procedures before you have them done?  If so, do you ever "shop around" for cheaper services?

Oh, no, never! I only shop for doctor personalities - do we get on well enough? I pay so much for insurance, there is no way I would lift a finger to save them any money. Medicare already has their limits in place, so if something is not covered by them, it goes straight to Blue Shield. If we had universal health coverage here, and the government properly educated people about how their choices could impact everyone in the form of higher taxes or fewer services, then I would be happy to do my part. The uninsured pay taxes, pay for our congressional reps to get amazing health coverage, and they get vicious, ugly accusations leveled at them about why they don't have health insurance and how dare they use our resources by going to the ER for services and then being unable to afford the bill. (I read one editorial that called the argument that all people can get healthcare in the US via the emergency room the "Let them eat the ER" defense.) I know I'm probably preaching to the converted in your case, but every once in a while I just need to let these frustrations out!

Medicare is primary for me because I have a PPO via COBRA (and if a company has less than 100 employees, Medicare will be primary anyway). My prescriptions are only covered by insurance ( Have fun paying for Valcyte and Prograf, Blue Shield!) and I am just not sure about labs, because I have so many of them and Medicare generally limits those. Perhaps you could phone your HMO for a start and ask if you can access doctor and hospital statements via the Internet, or get them by post? I should think they would appreciate this, as they are almost certainly paying for the odd procedure that you did not actually get. This happens with alarming frequency.

I was being facetious about the per hour salary - it's by the appointment or procedure. I don't think there is anything wrong with asking how much the cash price would be for a particular procedure if you want to know. That will not be what they are paid by insurance, of course. If I had no coverage, I would stick with the doctors that I like but ask if I could just pay their insurance rate.

The dialysis billing made me laugh (although it is so not funny to people who live it day after day). There were nephrologists on the hospital statement getting paid $70/run for the four days that I had dialysis in the hospital. I had met these nephrologists in the past - they were nice guys - but I did not see them at all during dialysis. It must be nice to turn up for work and people hand you paychecks just because you were in the building at that moment in time.

[MooseMom]

I'm sure I could request billing records, etc, but I don't think that having that information would help me to contain costs.  I wish it would.  If getting on the transplant list means that I HAVE to have this done and then that done, knowing how much it costs becomes irrelevant.  I can't say, "Oh gee, transplant committee, I can't justify the cost of having an ultrasound of my iliac vessels done AGAIN because the pics from the first weren't clear enough for you, so in an effort to save my insurance company and/or the American taxpayer some money, I respectfully decline."

Sometimes I think working in the medical field is a license to print money.  We all want to be safe and healthy and reassured that everything is being done to keep us that way, and we don't care what it costs.  The difficulty is since we don't get to choose when we need medical services, free market principles just don't apply.  I honestly don't know how to contain costs. 

Further to your hospital dialysis story, I had a mysterious infection about 7 years ago and was hospitalized.  I was really, really sick and pretty much out of it a lot of the time.  Once I got home, the bills started coming in, and I got several bills from doctors who I wasn't even conscious enough to remember.  I have no idea if these people really came in to see me.  I had to call their offices and ask who the hell they were!  It was creepy having to pay for services that I didn't get the chance to even request.

[cariad]

I'm sure I could request billing records, etc, but I don't think that having that information would help me to contain costs.  I wish it would.  If getting on the transplant list means that I HAVE to have this done and then that done, knowing how much it costs becomes irrelevant.  I can't say, "Oh gee, transplant committee, I can't justify the cost of having an ultrasound of my iliac vessels done AGAIN because the pics from the first weren't clear enough for you, so in an effort to save my insurance company and/or the American taxpayer some money, I respectfully decline."

Sometimes I think working in the medical field is a license to print money.  We all want to be safe and healthy and reassured that everything is being done to keep us that way, and we don't care what it costs.  The difficulty is since we don't get to choose when we need medical services, free market principles just don't apply.  I honestly don't know how to contain costs. 

Further to your hospital dialysis story, I had a mysterious infection about 7 years ago and was hospitalized.  I was really, really sick and pretty much out of it a lot of the time.  Once I got home, the bills started coming in, and I got several bills from doctors who I wasn't even conscious enough to remember.  I have no idea if these people really came in to see me.  I had to call their offices and ask who the hell they were!  It was creepy having to pay for services that I didn't get the chance to even request.

I hear what you're saying and that is exactly why I don't think over-consumption of medical services is the real problem in Canada. I believe a big problem in the US is people not getting enough preventative services because they just don't want to or can't afford to pay for these services. Or, it is just too great a hassle. They end up in the ER, they never pay the bill, the hospital writes it off or must increase prices, we all pay.

Then there is the opposite problem in the US of big medical centres not knowing when to let it go. My son once fell off the climber at school and hurt his shoulder. Our private practice GP had him take his shirt off so he could see how well he could still move his shoulder. Then he said get him some Motrin, you're done. He added something at the end like "Did you want the full experience today? Because I could send you to Children's, they'll put him in a gown, x-ray him, draw blood, whatever you like!" So very true. Once a hospital gets you in their grasp, dollar signs go off in front of their eyes like fireworks.

Transplant evals are a special case. It varies so enormously by centre that if your goal is to just get on a list, find the centre with the easiest requirements. I am wedded for life to my centre, so no one was going to convince me to go elsewhere, and I tolerated their paranoia, and continue to do so. Once the eval is over, you will surely have moments in life where you can decide if you want a particular procedure or not. I make the decision for myself based on whether I really feel it is necessary, not cost, but I am in general extremely easygoing in regards my health. Shortly after my transplant, they wanted me to go to the ER for an abscess that appeared on my wrist on, of course, a Friday night. I was already on two antibiotics, had spent the day at the hospital being infused with this and that and being threatened with a PICC line as all my veins collapsed. I told her I needed to get to sleep, that I would not be going to the ER and I would phone her the next day with an update. A court order would not have brought me back to that hospital that night, and I saved Medicare thousands of dollars in the process. A win-win!

[MooseMom]

I suspect it is human nature to just wait until catastrophe strikes before "preventative measures" enter the national lexicon.  It's a false economy to refuse to spend more now so that you don't have to spend MUCH more later down the road.  I think a lot of people (ie...men!   ) are just afraid of going to the doctor out of fear of possible bad news.  My DH won't even get a flu shot.  So a small problem gets bigger and, therefore, more costly.

Did I read in another of your posts that you are with Northwestern?  I am assuming that's Chicago?  I am going through Rush.  As much as I have complained about what they are making me go through to get on the list, I can't say that it has been particularly onerous, although I believe that no matter where you go, it will be an emotionally fraught time.  I understand why they are making me do the things they are making me do, and there comes a point where you just have to let go and allow yourself to trust the experts.  They have always answered my questions, but there is a reason that they are specialists and I am not.  I hope that once I get a transplant and become an old hat at this stuff like you are, I will be able to make equally accurate judgments on when ER visits are or are not gonna happen.

[monrein]

Our health care system, like all systems, IS indeed facing rising costs and this is especially true as the population ages.  We don't get detailed cost breakdowns and while I would be interested to see what exact costs are, I don't want anything that would add to the bottom line and take dollars away from direct care.  I already know I cost the system a fortune and I do my best, in partnership with my docs, to evaluate the necessity of particular tests and decide whether they are frivolous or not.  We have way less litigation here so I think there is significantly less "cover your butt" diagnostic testing done.  I do discuss with my docs whether a particular test will alter the course of treatment in any way or if it will simply give information that is in fact irrelevant.  I am always concerned about costs to the system. 
Just today, I was downtown at the pharmacy to pick up 3 months worth of prescriptions...I get 3 months at a time because then we can save money on dispensing fees...and they had "forgotten" two of them.  I was annoyed because I'd called and gone over it all a week ago etc so I spoke to the pharmacist about how we really needed to work together better and use more common sense.  He was apologetic and offered to courier then out to me but I declined and explained to him that that would only ADD to the cost to the system and as inconvenient as it is, I'll drop back down to pick them up.  I wish that every worker and patient in the system could be cognizant of how lucky we are to have this system...and I wish that they would refuse to abuse it and work as hard as possible to maximize efficiency.
One source of high cost to the system is a shortage of family physicians and this is in part due to the fact that our doctors train here (subsidized by taxpayer money) and sometimes (too often IMO) leave to make higher salaries in the U.S.  I particularly admire my neph because he chose NOT to do so.  Because of this shortage, we have too many people who end up using the emergency departments inappropriately.  That needs to be addressed.   I'd bill those who leave the full cost of their medical training here...to be repaid over time...totally impractical, ain't gonna happen I know, but I wish that those who suffer excess greed (just my opinion...I'm not talking about everyone here) would think more deeply about THEIR "abuse" of the system.   Whole other topic here.
I think that some people here do overuse the system and these are often people who have social issues (loneliness, depression, isolation) that are inadequately met through social services.  Computerized medical records might help to keep better track of these folks and find better, more cost-effective solutions. 
All in all, for me, we must continue to keep the principle of not-for-profit, universal health care intact whilst at the same time looking for ways to cut costs, take more personal interest in and responsibility for our own prevention of illness...(this is a huge area that needs to be explored and I go nuts  watching what an awful job so many people do of looking after their bodies) and be willing to accept the fact that we pay higher taxes for what comes down to a cultural value.  I'm willing to pay more taxes and have less fancy health care frills in order to have a more community based, rather than individualistic approach to health care.  I feel the same way about education.

One last thing I'd add is that our health care system varies considerably from place to place, province to province, urban to rural and so on but I suspect that's true any where.  Right here in Toronto, as a long-time consumer and participant in the system, I'm thankful every day for where I live and for my medical team.  Just the fact that I have ZERO paperwork to contend with, EVER, is enough to help me live longer.  Is our system perfect?  Absolutely not.  Worth keeping and fighting to improve?  Absolutely.

Here is the TD  (Toronto Dominion Bank) report in it's entirety.

http://www.td.com/economics/special/db0510_health_care.pdf

[cariad]

All in all, for me, we must continue to keep the principle of not-for-profit, universal health care intact whilst at the same time looking for ways to cut costs, take more personal interest in and responsibility for our own prevention of illness...(this is a huge area that needs to be explored and I go nuts  watching what an awful job so many people do of looking after their bodies) and be willing to accept the fact that we pay higher taxes for what comes down to a cultural value.  I'm willing to pay more taxes and have less fancy health care frills in order to have a more community based, rather than individualistic approach to health care.  I feel the same way about education.

Thanks for weighing in, Monrein, and with such a thorough reply. I love this paragraph above and I feel exactly the same way.

MooseMom, yes, I go to Northwestern in Chicago, as does Chris. They are slow and disorganized, but I am so lucky that I am going through this clinical trial with the hope that I will be off all immunosuppressants in a year. My surgeon is one of the nicest doctors I've ever met, and I feel as if I've met them all! Because it is a clinical trial, I get a lot of special attention to my concerns because careers ride on this. I wish they treated everyone as well as they treat me. I don't know anything about Rush, but so glad to hear that they are walking you through it. I do trust my surgeon, so letting go of a little control has not been too challenging. Rush can sort your flu shot problem right out, though. You are in kidney failure, which makes getting over illnesses like flu more challenging (and should a kidney come available, you won't get it if you have an active infection). Since he is around you, he NEEDS to get a flu shot each year, and most especially after you get your transplant. Even if you are vaccinated, he needs his jabs for your safety as well as his. He can ask Rush if he doesn't believe me.

[MooseMom]

Living in the UK as I did for many years, I met many people who wanted to see improvements in the NHS but never anyone who wanted to dismantle it.  The British felt that the ideal of the NHS was an important cultural ideal, and I suspect it is true that a nation's character is mirrored in it's approach to health care.  Like monrein, I suspect that taking more personal responsibility in our own health is not a message that is getting across in the US.  I work very hard to keep myself healthy despite my kidney problems, and I expect other people can do the same.

I have been loathe to use the "I have CKD and am fragile, so you need to get your shots so that you won't make me sick!" argument with my husband, but I just might think about it come flu season.  After all I've been through lately, I would have thought that he'd be too embarrassed to admit that he wouldn't get a shot.  Let's see which wins out...shame or fear.

My neph trained at Rush, so naturally he sent me there in 2004 for my first pre-transplant eval.  At the time, I didn't qualify because my numbers weren't bad enough, so now that they are, Rush was the logical place to go.  The coordinator had been there for only 3 weeks, so we are kinda going through this together.  She is very nice and worked as a dialysis nurse for many years, so she understands when I tell her that I do NOT want to have dialysis.  Through this whole process, she always finds some encouraging words for me, which is a new experience.  I'm very grateful for the smallest dab of comfort.