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Karen PalmerIn a dramatic show of support for deep healthcare reform in the U.S, more than 2,200 physician leaders are calling for sweeping change. Their proposal published in the May 5 American Journal of Public Health calls for the creation of a publicly-financed, single-payer national health program to cover all Americans for all medically necessary care.

If that sounds familiar, it should. These American doctors are calling for Canadian-style medicare. They want a decisive break from the expensive and inefficient private insurance industry at the heart of the U.S. healthcare system.

How ironic that at the same time that U.S. physicians are calling for a single-payer health system like ours, Canada is in the midst of a legal battle threatening to pave the way for a multi-payer system resembling what has failed Americans.

What’s at stake? A trial later this year in British Columbia threatens to make the Canada Health Act unenforceable.

The Canada Health Act guides our healthcare system. The federal legislation strongly discourages private payment for medically necessary hospital and physician services covered under our publicly-funded medicare plans. This includes out-of-pocket payments in the form of extra billing or other user charges. Legislation in most provinces further prohibits private insurance that duplicates what is already covered under provincial plans.

If patients are billed for medically necessary hospital and physician care, the federal government is mandated to withhold an equivalent amount from federal cash transfers to provinces or territories violating the act.

At least that’s what supposed to happen.

Unfortunately, the last decade saw a proliferation of extra billing in several provinces and few instances of government clawing back fiscal transfers. Perhaps things will change. Federal Health Minister Jane Philpott recently stated that the government will “absolutely uphold the Canada Health Act.”

In B.C.’s upcoming trial, the plaintiffs – including two for-profit investor-owned facilities, Cambie Surgery Centre and the Specialist Referral Clinic – want the court to strike down limits on private payment. They support the creation of a constitutionally protected right for physicians to bill patients, either out-of-pocket or through private insurance, for medically necessary care, while also billing the public plan.

In other words, the plaintiffs want to undo our elegantly simple single-payer system for hospital and physician care, creating a multi-payer system like the U.S. If the constitutional challenge is successful, the door will swing wide open in B.C. – and across Canada.

The outcome could be that those who can pay for care will jump the queue, drawing doctors and other resources out of the public system. Those who can’t pay would likely wait longer.

Rather than a solution for wait times, private payment in the Canadian context would make them worse.

Global evidence shows that private insurance does not reduce public system wait times. The Achilles heel of healthcare in several European countries, such as Sweden, has been long waiting times for diagnosis and treatment in several areas, despite some private insurance. Since Australia introduced private insurance to save the government money, those with private insurance have faster access to elective surgery than those without. Divisions in equitable access to care is one of the biggest challenges facing countries that have adopted multi-payer systems.

Multi-payer systems are administratively complex and expensive. The U.S. health insurance industry spends about 18 percent of its healthcare dollars on billing and insurance-related administration for its many private plans, compared to just two percent in Canada for our streamlined single-payer insurance plans. Hospital administrative costs are lowest in Canada and Scotland – both single-payer systems – and highest in the U.S., the Netherlands, and the U.K. – all multi-payer systems.

For all of its warts in how we deliver healthcare in Canada, the way in which we pay for care avoids the high administrative costs of multi-payer systems.

Private insurance is at the root of what ails the U.S. system. Dr. Marcia Angell of Harvard Medical School and co-author of the physicians’ proposal sums it up: “We can no longer afford to waste the vast resources we do on the administrative costs, executive salaries and profiteering of the private insurance system.” A Canadian-style single-payer system would save the U.S. about $500 billion annually.

Abandoning our single-payer system for a U.S.-style system would be the worst possible outcome for Canadians. Let’s hope the evidence preserves our system. The trial begins in September.

Karen Palmer is a health policy analyst and adjunct professor in the Faculty of Health Sciences at Simon Fraser University.

Karen is a Troy Media contributor. Why aren’t you?

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Canadian-style medicare

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