Universal Coverage – Massachusetts, Canada, and the U.S,

The November 25 New York Times, carried this article “Massachusetts Faces a Test on Health Care.” A year after its Universal Coverage bill was enacted, Massachusetts officials say between 200,000 and 400,000 residents haven’t signed up. Meanwhile, health insurers in Massachusetts may raise rates 10% to 12%, twice the national average; and there may be a budget overrun of $150 million. Universal coverage in the Bay State is in trouble.


Two years ago, I published a book Voices of Health Reform, based on 42 interviews with national reform authorities. One interviewee was Dr. David Himmelstein, a Harvard faculty member, who, with his wife, Dr. Stephanie Woolhandler, back a Canadian-type system for the U.S. Himmelstein and Woolhandler claim Canada has lower administrative costs, higher quality care, and better access at every income level.

John Goodman, PhD, a conservative economist, says these claims are myths. These are his words.

The Myth of Low Administrative Costs. Himmelstein and Woolhandler claim administrative costs of the Canadian system are much lower than our own - so much so that we could insure the uninsured through administrative savings alone. However, they aren’t economists. They count the cost of private insurance premium collection (e.g. advertising, agents' fees, etc.) but they ignore tax collection costs to pay for public insurance. Economic studies show cost of collecting taxes is very high. The excess burden of a universal Medicare program would be twice as high as the administrative costs of universal private coverage.

The Myth of High Quality. H&W say that Canadian life expectancy is two years longer than ours, implying the health care systems of the two countries have something to do with that result. Doctors don't control our overeating, overdrinking, etc. Where doctors make a difference, the comparison doesn’t favor Canada. In an NBER study, David and June O'Neill draw on a large US/Canadian patient survey to show that:

o The percent of middle-aged Canadian women who have never had a mammogram is double the US rate. o The percent of Canadian women who have never had a pap smear is triple the US rate.

o More than 8 in 10 Canadian males have never had a PSA test, compared with less than half of US males.

o More than 9 in 10 Canadians have never had a colonoscopy, compared with 7 in 10 in the US.These differences in screening may explain why US cancer patients do better than their Canadian counterparts. For example:

o The mortality rate for breast cancer is 25% higher in Canada.

o The mortality rate for prostate cancer is 18% higher in Canada.

o The mortality rate for colorectal cancer among Canadian men and women is about 13% higher than in the US.

o Among senior citizens, the fraction of Canadians with asthma, hypertension, and diabetes who are not getting care is twice the rate in the US.

o The fraction of Canadian seniors with coronary heart disease who are not being treated is nearly three times the US rate.

Apparently, putting everyone in (Canadian) Medicare leads to worse results than having only some people in (US) Medicare - ensconced in an otherwise private system.

The Myth of Equal Access. The most common argument for national health insurance is that it gives rich and poor the same access to health care. Surprisingly, there is no evidence of that outcome. Indeed, national health insurance in Canada may have created more inequality than otherwise would have existed. (Similar results have been reported for Britain.) The O'Neill's study shows that:

o Both in Canada and in the US health outcomes correlate with income; low-income people are more likely to be in poor health and less likely to be in good health than those with higher incomes.

o However, there is apparently more inequality in Canada; among the non-elderly white population of both countries, low-income Canadians are 22% more likely to be in poor health than American counterparts.

The Nub-of-It-All

Himmelstein and Woolhandler say Canadian medicine surpasses the U.S for three reasons --lower administrative costs, higher quality, and equal access. Not so, retorts John Goodman, of the National Policy Institute in Dallas, an American think tank. He rebukes Himmelstein and Woolhandler with data showing:

Canadians:

· undergo preventive tests and procedures (pap smears, mammograms, PSAs, and colonoscopies) much less often;

· have higher cancer rates with poorer results,

· get less care for diabetes, asthma, and coronary artery disease than U.S. counterparts;

· low-income Canadians are more likely to be in poor health.

Apparently the idea of having universal coverage, appealing as it may be, doesn’t translate into superior performance or healthier citizens.