Health Care Homework for the LA Times

How does the Canadian medical system actually work?

By now, it’s pretty clear that the U.S. is not going to adopt health reform that in any way resembles the systems in Canada, Germany, Great Britain, or any other country that gives all its citizens health care as a matter of right. But that hasn’t stopped reporters from mischaracterizing the nature of other countries’ national health systems, like the Los Angeles Times did a few days ago.

In a story about liberal Democrats threatening to reject the compromise crafted last week in the House Energy and Commerce Committee by conservative Blue Dog Democrats, the Times reported (emphasis mine):

Scores of liberal Democrats favor a single-payer system similar to those in Canada and Britain where the government controls the delivery of health care. (Eighty-six House Democrats are cosponsoring a bill to create a single-payer system in the U.S.)

Just what did the Times mean by delivery? Reporters have consistently misunderstood how other systems work, and have confused payment systems with delivery systems with medical judgments doctors make.

A good starting place for the Times and any other news outlet that wants to write about the Canadian system would be public radio station KQED, up the road in San Francisco, which aired a fine piece earlier this summer dispelling myths about Canadian health care. The station sent health reporter Sarah Varney to Vancouver, where she conducted a roundtable discussion with the country’s leading health economists.

They told Varney that the government does not control the health care delivery system in Canada. Doctors don’t work for the government; they are independent and run their own practices, just like doctors in the U.S. What is socialized, they told her, is the insurance pool. It is not fragmented the way insurance pools are in America. Every Canadian—sick or well, rich or poor, young or old—is in the pool, which makes it possible for the country to provide care for everyone at a lower cost.

In both Canada and the UK, the government is the payer of care just as the government is the payer of care under the U.S. Medicare and Medicaid programs and just as employers allied with private insurance companies are the payers of care for much of the insured population. In both countries and the U.S., doctors make their own judgments about what treatments their patients need.

To learn more, I checked in with The Commonwealth Fund, a philanthropic and research organization in New York, which has created profiles of health care systems in other countries. In Canada, doctors are paid on a fee-for-service basis like docs are here. As for the hospitals, the country has a mix of public and private not-profit facilities that negotiate annual global budgets with the provincial governments, although there are some fee-for-service payments.

It is precisely these global budgets that the U.S. health establishment fears, because they could mean reduced income for different stakeholders. All the talk about rationing and dying on the streets is designed to disguise this point. Canadians do not have to pay coinsurance and copayments or mess with deductibles for services covered by the health system, although they may pay for supplemental benefits for services not covered by the government system. Americans, on the other hand, face increasingly larger cost-sharing requirements for insured services imposed by their employers and private insurance companies.

The British system is somewhat different from Canada’s system. Andrew Dillon, who heads the National Institute for Health and Clinical Excellence (NICE) in the U.K., sent along this description of how doctors are paid:

Most general practitioners (GPs) are contracted to the National Health Service for 100 percent of their time. So, although not employees, they rely entirely on the NHS for their living. Most hospital doctors work for the NHS and are employed by hospital trusts, a kind of public sector agency.

The GPs act as gatekeepers for access to specialists, similar to the way American HMOs work. They are paid by the government’s primary care trusts in a variety of ways, including salaries, fee-for-service reimbursements, and capitation payments—that is, one payment to cover all the services their patients are likely to need for a given period of time. American doctors are paid under such arrangements as well. Each trust has its own budget and sets its own priorities within the framework established by the Department of Health.

The Brits can buy private supplementary insurance—to get a wider choice of specialists, for example—but most people don’t. Only about 12 percent of the population carries it, and private coverage accounts for only one percent of the country’s total health expenditures.

As the next few months wear on, special interests will no doubt spread more wrong information and attempt to vilify other countries’ health care. We’ll be on the lookout for such stuff. But honestly we hope that we don’t find it in the media. It really isn’t that hard to check out the facts.

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Trudy Lieberman is a longtime contributing editor to the Columbia Journalism Review. She is the lead writer for The Second Opinion, CJR's healthcare desk, which is part of our United States Project on the coverage of politics and policy. She also blogs for Health News Review. Follow her on Twitter @Trudy_Lieberman.