Insurance is designed to protect people from ruinous financial loss. In most insurance schemes, a very small number of people receive major financial compensation, a small number receive some financial benefit from insurance, and the majority of policyholders receive no benefit other than knowing they were protected from catastrophic loss.
Automobile insurance is one example of insurance where most people pay premiums, and hope they do not receive a financial benefit. Each year, a very small number of insured drivers have major accidents and require large compensation to pay for a replacement automobile. A small number of drivers have minor accidents and the majority of drivers have no accidents, pay their premiums and only benefit from having had peace of mind.
On the other hand, political systems are designed to satisfy the majority of people. Political incentives encourage politicians to make choices aimed at satisfying the majority of voters.
In Canada, the majority of voters are healthy or marginally ill. Healthy people and those with inexpensive minor ailments rarely have difficulty getting timely care from a family doctor or walk-in clinic.
People realize the limits of Canadian healthcare insurance when they need certain expensive drugs or have to suffer unnecessarily while waiting for hip or knee surgery or certain diagnostic tests to detect cancer and other important diseases.
Most people are perplexed when they realize that the insurance cost of the most expensive treatments is similar to, or less than, the insurance cost of common and inexpensive care.
For example, doctors recommend the expensive, life prolonging drug Solaris (eculizumab) to prevent the breakdown of red blood cells in people with rare blood disorders.
The drug costs about $700,000 per year and helps about 180 Canadians. The cost to all Canadians for Solaris for everyone who needs the drug, would be about $126 million. However, Canada has a population of 36 million people. If each Canadian contributes $3.50 for health insurance, it would cover the drug costs for everyone who could benefit from Solaris. The insurance cost per Canadian would be $3.50.
On the other hand, levothyroxine is one of the most commonly prescribed drugs in Canada. The drug is mainly used for thyroid hormone deficiency. The Canadian thyroid foundation reports that about 700,000 Canadians suffer from hypothyroid disease. The cost of levothyroxine is about $1 per pill, so the cost for each patient is about $365 per year. The total cost for the 700,000 Canadians who have the disease is about $252 million. If all 35 million Canadians paid premiums to buy levothyroxine for everyone who needs it, we would have to contribute about $7.20 each.
The insurance cost per contributor of the expensive drug – $3.50 – is much less than the $7.20 insurance cost of the cheap drug.
Canadian governments are too poor to provide timely, comprehensive insurance coverage for every health need for every person. Unfortunately, provincial governments use their limited resources to provide timely access to inexpensive care, even though it means that a some Canadians suffer unnecessarily from limited or delayed access to life enhancing and life preserving care.
Perhaps this is why Tommy Douglas, known as the founder of Medicare, told the Saskatchewan legislature way back in 1961 that, “I think there is a value in having every family and every individual make some contribution.” Roy Romanow, another Saskatchewan premier and Medicare activist, also recognized the importance of catastrophic coverage, even if it means that individuals must pay some deductible amount based on their income.
Like the deductible on car insurance, wouldn’t it make more sense to encourage people who can afford it to pay some of the costs of inexpensive healthcare, and use the money government saves to support timely access to complex and expensive care?
David Zitner is a Professor, Post Retirement in the Faculty of Medicine at Dalhousie University.