No Payor System

Methods of cost containment

To accomplish this Canada relied on many techniques. The most direct was to restrict government’s budget for healthcare. Each year socialized medicine lost some of its tax-based allocation in the simple process of political compromise. After all, there are many mouths to feed out of tax revenue but few willing to impose new taxes. Sometimes deliberate but often subtle attrition took its toll year by year. Medicine is not like the “baby bonus.” Providing subsidies to families to help care for their children is predictable on an actuarial basis. There are no surprises. Moreover increases in population will bear future dividends as children mature into tax paying adults.

On the other hand healthcare’s expansion is perverse. Each new disease (e.g. HIV), diagnostic technique (e.g. MRI), or therapeutic modality (e.g. cancer chemotherapy) introduces an unanticipated event that expands the universe of health care without reference to anything other than our mutual desire to live. The political process is not equipped to accommodate this human economic reality. The inability to predict demand for these new services precludes rational budgetary planning. Only when each medical advance becomes absorbed into mainstream care can government cope with the fiscal demands imposed by science. But conscientious physicians cannot wait for so unresponsive a process. They will stretch their resources attempting to compensate for this lag time. This effort to provide under funded care will result in the accumulation of debt. In the wake of this process care givers struggle to provide necessary care out of an obsolete budget. In the end reinvestment suffers and the infrastructure deteriorates.

How does this actually happen? It starts at the top and trickles down. Out of the original definition of universal healthcare, the government has eliminated covered services based on economic need. Eyeglasses, once included, are no longer considered to be part of “health care.” Delays in approval for payment for new treatments are another budget technique to control cost. As demand continues to expand beyond anticipated government allotments, rationing of expensive technologies and services is introduced. Absolute caps on the number of CAT scans to be performed in each district, placing limits on the number of procedures an orthopedic surgeon can perform and controlling access to cardiac procedures and surgery reflect the removal of time and effort from healthcare as a means of controlling cost. The last technique is to exploit the most vulnerable aspect of healthcare, its physicians. Each physician has an internalized expectation of professional responsibility that will be met regardless of external events. It is this dedication that government exploits. The profession continues to perform despite repeated fiscal denial of its societal worth. Failing to increase remuneration for care in keeping with the cost and responsibilities of that care squeezes the very heart of the system. As government squeezes profit margins each practice must inevitably increase its efficiency. In an industry built upon service this can only be accomplished by removing time: shorter visits focused on fewer problems. Healthcare becomes an impersonal, languid endeavor. Everyone still has access; it only takes a little more time. But not every patient can afford time.

The Supreme Court decision

Enter Chaoulli. In a landmark Supreme Court of Canada decision (2005) this Quebec physician challenged the legality of these delays. Based upon the Canadian Bill of Rights the Supreme Court found that delays in treatment violate the individual’s right to “security of the person.” The Quebec government is now required to eliminate waiting times. The decision also challenged the prohibition on private healthcare endeavors. This decision exposed several flaws in a socialist organization of universal care. By placing a prohibition on private insurance government assumed the powers of a monopoly over healthcare. With this monopoly came the responsibility to protect the security of the person in the most vital area of their existence, life itself. As sole payor it must be as protective of each medical outcome as would both the physician and patient. This act forcibly appropriated a vital portion of the medical professions’ birthright. The government must therefore fulfill this obligation. A veil of paternal munificence wears thin when people suffer and die in the wake of government’s indifference to their changing needs.

This leads us to a second defect in socialized medicine. No health care system can exist without physicians. The monopoly that is socialized medicine must by definition curtail the rights of its physicians. They do not become slaves because they can choose to protect their personal freedom by not practicing medicine in Canada. They do become indentured servants unable, like other citizens, to establish their own worth in an open marketplace. Neither government nor its people have a right to any individual’s labor no matter how righteous the cause. When this system also fails to protect the lives of its people it loses all moral credibility. Socialized medicine might still be a sustainable argument if there were no alternative to the goal of universal care. A no payor system ends this defense.

The way out

The strength of the Canadian healthcare system lies in its already realized commitment to provide sufficient wealth from within the economy to sustain healthcare. This is a major accomplishment. But now its darker side is exposed. It is time to move on to the next step in the evolution of a just society. There are two components to its reform. The easiest is to redirect the nation’s resources out of the government’s budget back into the direct control of patients. Give each family a dedicated healthcare tax credit of sufficient size to allow them to purchase healthcare from a source of their choosing. Government no longer confiscates income but becomes a conduit for necessary financial resources. It becomes the arbiter of price.

But to allow emergence of private health insurance companies would be counter productive. Canada should not be in a hurry to duplicate American mistakes. The pitfalls of third party insurance are chronicled elsewhere on this website.

The second component is seemingly more difficult. Patients will need to purchase care from an entity that can manage pooled risk. Physicians must form these entities. They will need legislative encouragement and strong, trained, internal business leadership. But once formed the accountability that will emerge out this arrangement will pay huge dividends to the Canadian people. In the process Canada will develop a health-care marketplace with a verifiable price and a responsible physician community.

The courts have pushed Canada forward. The next steps are critical.