European-style healthcare anyone?

Not us, we are Canadian…

Creator & Copyright: Pietro Naj-Oleari

Whenever the topic of allowing Canadians to purchase private insurance or pay to access hospital or Doctor services, Canadians tend to shriek in terror at the thought of American-style healthcare. What they ignore is that all of this already exist, in a limited form, in Canada. This demonstrates how American focused we are, you don’t hear people who usually hold up European societies as the peak of enlightenment terrified at the thought of European-style healthcare.

Canadians have the option to purchase private insurance to cover things like prescription drugs, glasses, and physio, things that most would deem critical to health. Provincial healthcare systems already outsource and partner with private providers, be it for joint replacement surgeries, food services, or your local walk-in clinic, which operates as a private business paid for with public healthcare dollars. In many provinces, those covered by Workers Compensation often have access to parallel private care provided quicker, enabling them to jump long public system waitlists, because Workers’ Compensation wants that person back to work soon to reduce benefit costs. Why do these people get preference over you?

Creator & Copyright: Steven Depolo

In order to have a sensible debate about healthcare Canadians need to be aware of these facts. More importantly, they need to stop looking south for comparisons. Many European systems are rated by the Commonwealth Fund as outperforming Canada’s and Germany is known for having exactly zero patients waiting for surgery longer than 4 months, versus 25% for Canadians.

The topic of healthcare is currently top of mind for many Albertans, given recent media coverage around a United Conservative Party (“UCP”) motion to establish a parallel private system in Alberta. Rather than retreat back to the mantra ‘public is best’, why not consider the European, Asian, and Australian evidence of how a mixed funding and delivery model can reduce healthcare costs, increase accessibility, and result in better patient outcomes? Consider this possible future for Alberta orthopaedic surgery.

Imagine a hypothetical situation in Calgary where there is demand for 5,000 new hips a year and there are 4 hip surgeons. Each surgeon is allocated operating room time to perform 3 replacements a day and because of Alberta Health Services (“AHS”) budget constraints, equating to 3,120 surgeries a year. This leaves 1,880 waiting for a hip at the start of the following year, where another 5,000 patients join the queue.

Now imagine Alberta allows the construction of a privately funded and operated specialised hip replacement facility in Calgary. The facility is jointly owned by 3 orthopaedic surgeons who graduated but struggled to find work (the Canadian Orthopaedic Association found that nearly 50% of recent graduates could not find work or moved outside Canada for work) and the Canadian charitable arm of the Kaiser Foundation, a reputable US non-profit healthcare provider. By hiring underemployed Doctors and nurses, the facility helps stem the tide of professionals going to the US and keeps their taxpayer funded training investments in Canada. Albertans now have access to a facility built with no public money, so not draining the public system.

Then imagine that Alberta passes legislation allowing the purchase of private healthcare insurance that kicks in once a person waits more than 6 weeks for care. Axa Insurance offers a product like this in the UK for c. $60 a month, which includes cancer and psychiatry treatment. The private health insurance market is strictly regulated by a provincial regulator in terms of price, accessibility, and quality. Albertans now have access to care when the public system fails them in terms of timeliness of care.

At the same time, the government regulations could mandate that for each 10 private surgeries the private facility must perform 3 publicly funded surgeries at a cost 10% less than the public system. Because the facility operates 6 days a week and has capacity for 4 surgeries a day per surgeon driven by efficiencies through specialisation in hips only, it performs 3,744 surgeries a year, 864 for public AHS patients. Regulation requires that the facility be responsible for the costs of patient care from initial consultation to final discharge from the surgeon’s care, usually one year after the operation. This means that the public system does not pick up the cost of complications and incentivises the private facility to efficiently provide the full-suite of high quality care Albertans deserve.

In this model, Calgary has annual demand of 5,000 new hips, with capacity of 6,864 surgeries, meaning a surplus of 1,864. Calgarians will no longer suffer long-waits for hip replacements, with the opportunity for Calgary to take on other public or private patients in Alberta and even to become a medical tourism destination for Americans and other Canadians.

I struggle to see how this model undermines the public system or diverts resources from it, particularly given the current system does not use available resources to the fullest (e.g. unemployed surgeons). But it recognises that the public system is constrained, that a monopoly payer and provider system has to ration care, and that there are other public-private healthcare models other than the dreaded American-style system.

Imagining possible solutions, without shutting down debate with statements like “patients not profit” at a time when government revenues are way down and healthcare demands from an ageing society will only increase is paramount. With thoughtful regulation Alberta can develop a third-way in healthcare, bringing its model much more closely in line with those in Europe.

We need to accept certain facts about Alberta’s current system: it is one of the most expensive in the world on an age-adjusted per capita basis; has wait times nearly unheard of in some European nations; and prohibits people from using insurance to access care for themselves in a way that is unique in the developed world. Enabling well-regulated private operators into the market can improve access to care, increase both public and private funded capacity, better use taxpayer funded surplus medical graduates, and bring medical tourism to Alberta at a time when diversifying the economy is paramount.

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