Public health care cheaper say analysts

Frontier Centre, Healthcare, Media Appearances, Uncategorized

New research has found that contrary to the arguments of those advocating private health care, universal coverage is still the cheapest way to provide the best treatment for all.

In the summer of 2002 a debate concerning medical savings accounts (MSAs)-“pay as you go” health care-raged in the health policy world. For weeks, health columnists, academics and policy analysts exchanged jabs in the national press. Many of those jabs were directed at Dr. Raisa Deber, Professor of Health Policy at U of T, who, along with colleagues Evelyn Forget and Leslie Roos of the University of Manitoba, released a contentious piece of research showing that MSA-based health care would do the exact opposite of what it was supposed to. Instead of saving money, MSAs would actually cost the system more.

An MSA is basically a standardized savings account, one for each Canadian. The government would credit every individual a set amount of money for user fees for health services. In theory, people would seek medical attention less often, only when they really need to, making for a more efficient use of resources.

But the implications of MSAs are unclear-and highly controversial. One thing that is clear is that MSAs would mark a significant departure from Canada’s long-established universal health care system.

The debate two years ago fizzled out, but the issue never truly disappeared. Today Canadians are griping louder than ever about deteriorating health care services, and we are fresh off the heels of a divisive first ministers meeting. Our decision-makers seem poised to talk about major changes to health services, changes that could rekindle the MSA flame.

Deber and her colleagues are prepared. Armed with new research, published in the Journal of Health Policy, they have strengthened their original conclusions. “There are no real savings to be had from implementing medical savings accounts in Canada,” said Deber. “On average, most people don’t spend money on health care-it’s the sickest people who [tend to] cost money.” She points out that MSAs and user fees could actually cost far more money than our current system. Sick people would rack up health costs beyond what they could pay for with their MSA, leaving them to pay the remainder themselves, while healthy people would be left with an unused surplus of cash.

Proponents of MSAs and user fees, like President of the Frontier Centre for Public Policy Peter Holle, disagree. Holle argues that the current system, with government blindly paying for almost all health services, provides no incentive for Canadians to use their overburdened health resources wisely. “The advantage of MSAs is that money is controlled by the individual, and prices for health services control over-demand,” explained Holle from his office in Winnipeg. “It simply discourages frivolous use of the system.” He is skeptical of research like Deber’s that indicate increased costs from MSAs, and claims that Singapore successfully implemented MSAs in the 1980s. “Since then it has reduced its national spending on health care to a third of Canada’s rate.”

Deber sees these cross-country comparisons as a smokeshow. “Only 8.5 per cent of Sinagpore’s health revenue comes from MSAs. A full 57 per cent comes out-of-pocket from individuals,” she noted, adding that the level of inequity in provision of services in Singapore is very high-something a majority of Canadians would be unwilling to tolerate.

Essentially, the debate over MSAs rests on a more polarizing issue: public versus private health care.

Most Canadians believe in universal coverage, but there is a creeping interest to find alternative ways to pay for our health services. “You have to bring some element of competition into the system,” argues Holle. “You can’t just pour money into a monopoly and expect it to perform better.”

Deber, however, is equally adamant. “If we are going to provide universal medical coverage, the best way to do so is with a single payer.”

So far our leaders are dodging the public/private hot potato. Deber and Holle both agree that the political wrangling about dollars and cents in Ottawa last week did little to address the real issues. “They are fixated on the money and are not focusing on how to reorganize care,” noted Deber.

One thing that most experts seem to agree upon is that an influx of innovative health care thinking is required. To universalists like Deber, the traditional Canadian health care concept is sound but needs some targeted reorganization. To privatizationists like Holle, the system is flawed and needs new avenues for investment, best provided by the market. As Canadians face these issues, the debate over MSAs and user fees is likely to get louder.