It is often argued that socialized medicine in the US would introduce a wealth of problems, worse than those currently faced. Government is often regarded as wasteful, rigid and out of touch with the real needs of its citizens. In comparison, private management of health care is often portrayed as offering increased flexibility, allowing consumer freedom of choice, sensitivity to client needs, innovative service delivery, and allowing free-market competition to dictate which private providers will succeed and which will fail.

This free-market argument is predicated on the assumption that same forces that shift consumers from economy cars to SUVs and back again can be applied realistically to brain surgeons and cardiologists. In reality, any profit-driven business model needs to cut costs wherever possible by minimizing low-profit services, maximizing high-profit services, and increasing throughput in order to pull ahead of the competition.

As Baicker and Chandra (2004) observed, the concentration of medical care, and particularly the concentration of specialists seems to occur in areas where the most money exists to be made; logical, for a profit-driven model. But is it reasonable to expect equality for all patients in a system where the most gifted and talented physicians are drawn towards the best paying specializations, providing services that are the most financially lucrative, and working in the most affluent geographical areas? More importantly, who does that leave to fill the lower echelon positions, providing the necessary but less profitable services to the middle and working classes, and what quality of services will they receive? While socialized medicine does have its problems, for-profit medicine can skew service availability and quality in way that is even more threatening.

The American media has given wide press coverage to the wait times associated with Canada’s universal health system. Ignoring its relatively low cost for high access, the U.S. has been able to portray the latency of a free system as indicative of overburdening and inflexibility. The contention is that by not being able to see patients in a timely manner, a public system wastes time, increases suffering and risks lives. As a fear-inducing argument this is very convincing, however, the fact that long waiting times lead to unmet health needs for only 3.5% of Canadians will probably reach few ears, and influence substantially fewer minds (Lasser et al., 2006).

Arguments for Change

Under a universal system with low overhead costs, Canadians are living longer, healthier lives than Americans. As of 2004, the average life expectancy in Canada was 78 for males and 83 for females, each 3 years longer than for the men and women living in the United States (WHO, 2006). Additionally, Canada has significantly better figures for adult mortality, maternal mortality, and HIV-related mortality (10.7% of the U.S. rate per 100,000) despite having a lower physician and nurse density (WHO, 2006).

In fact, an American study including data from over 26,000 U.S. hospitals and 38 million patients concluded that about 2,000 additional deaths would occur in Canada each year if Canada adopted privatized, for-profit health care (Devereaux et al., 2002).

Conclusion

The gulf between American and Canadian health care administration expenditures has grown to $752 per capita (Woolhandler et al, 2003). In the introduction to this blog series, I quoted Richard Nixon’s plea for a better health care system.  It makes me wonder: What might have happened in the United States had Watergate never occurred? While instituting a national health insurance program would have been difficult in 1974, it pales in comparison to the vertical climb required to scale such an obstacle over 30 years later. Three decades of lobbying, growth, and amalgamation have wrought immensely powerful corporations, fortified by deep pockets and deeper political connections. Deepest of all may be the social change that that these factors have created — the perception that resides within average American citizens that they already possess the best health care system in the world (Krugman, 2005).

In the final analysis, a single payer national health insurance system could reap the necessary administrative savings to allow universal coverage for all Americans without an increase in total health spending, but this is unlikely to occur (Himmelstein et al., 2004). In the very least, achieving effective reform will necessitate a complete paradigm shift at the individual level. People will need to acknowledge that change is necessary and desirable and will “need to shed some preconceptions – in particular, the ideologically driven belief that government is always the problem and market competition is always the solution” (Krugman, 2005).

The current developments in the US are exciting, and I’m continuing to watch the news with great interest. Just this Saturday, the US Senate voted 60-39 to debate the public health care option bill.  While it’s still too early to tell what might happen, Obama has already eclipsed the progress of Nixon in the 70s and Clinton in the 90s.  It’s promising.

• Baicker, K. & Chandra, A. (2004). Medicare spending, the physician workforce, and beneficiaries’ quality of care. Health Affairs, W4, 184-197.
• Devereaux P. J., Choi P. T. L., Lacchetti C., Weaver B., Schünemann H. J., Haines T., Lavis J. N., Grant B. J. B., Haslam D. R. S., Bhandari M., Sullivan T., Cook D. J., Walter, S. D., Meade M., Khan H., Bhatnagar N., & Guyatt H. (2002). A systematic review and meta-analysis of studies comparing mortality rates of private for-profit and private not-for-profit hospitals. Canadian Medical Association Journal, 166(11), 1399–1406.
• Himmelstein D. U., Woolhandler S., & Wolfe S. M. (2004). Administrative waste in the U.S. health care system in 2003: The cost to the nation, the states, and the District of Columbia, with state-specific estimates of potential savings. International Journal of Health Services, 34(1), 79–86.
• Krugman, P. (2005, April 11). Ailing Health Care. The New York Times
• Lasser, K. E., Himmelstein, D. U. & Woolhandler, S. (2006). Access to care, health status, and health disparities in the United States and Canada: Results of a cross-national population-based survey. American Journal of Public Health, 96(7), 1-7.
• Woolhandler, S., Campbell, T. & Himmelstein, D. U. (2003). Costs of health care administration in the United States and Canada. The New England Journal of Medicine, 349(8), 768-775.
• World Health Organization. (2006, September 30). Core Health Indicators.

It is a reality of our time that the same companies promoting health care products are also largely responsible for underwriting their research. Skepticism about this model of business has led to pharmacoeconomic studies of the popular antidepressants, which demonstrate a clear association between study sponsorship and quantitative outcome (Baker et al., 2003). But beyond concerns about the safety of the products we use and the efficacy of the medications we take (and these are valid concerns), we should also be wary of the increasing role of health care corporations as marketing machines, both to physicians and consumers.

Promotional spending in the form of direct-to-consumer advertising increased from $266 million in 1994 to $2.6 billion in 2002 (Donohue & Berndt, 2004), making the research and marketing of pharmaceuticals one of the most significant and salient initiatives competing for consumer attention today. In addition, health care companies have long courted physician approval by the provision of free samples, books, brochures, posters, videos and a myriad of branded and logoed promotional novelties including Frisbees, pens, clipboards, staplers, paperweights, ID tag holders, and even items of clothing (S. Sabesen, MD; J. Campbell, MD; & D. May, MSN, personal communication, 2001, 2005). In many respects, new health care products are launched the way that motion pictures are, and borrow freely from the product placement techniques now observed in recent movies. The items created are especially chosen to be highly visible, worn or used in a physician’s office, administrative desk, waiting area, or examination room. By their mere presence they convey the impression of approval, whether or not it is a favourite product or brand of the physician or clinic. Furthermore, this form of covert advertising has the potential to guide patient interest as much, if not more so, than a commercial on television. Trust of a physician generalizes to trust of the elements within their environment.

For the implications of this on efficient, quality health care, we need only return to the skewed pharmaceutical studies discovered by the research of Baker et al. (2003). These industry or manufacturer funded studies consistently favoured the latest products of the respective companies over older drugs, making the public most likely to ask for (and receive) products for which the least amount of longitudinal data is available, but which they have seen on television or in the office of their doctor.

Increased consumer demand paired with questionable efficacy may leave large numbers asking for and receiving treatment which may be of little use, and may be damaging given that side effects are only well understood by longitudinal study.

The most troubling aspect of industry marketing though, is the continuing education of doctors by way of the aforementioned promotional literature, videos and self-funded research. With long hours, high patient loads and limited time for reading, marketing represents the most consistently accessible source for current treatments. Even if a physician initially greets these with healthy skepticism it may be difficult to remain objective over the course of years where there has been a consistent lack of time, opportunity and energy for study and reflective thought. Additionally, a familiarity with these new products is required. How many print and video advertisements neglect to include the phrase “Ask your Doctor”?

Administration — A System-Wide Failure

The most inefficient aspect of American health care is not its treatment management, but its office management.

Woolhandler & Himmelstein (1997) found that for-profit hospitals spend 23 percent more on administrative costs than comparable private not-for-profit hospitals, spend 34 percent more than public hospitals, and have higher total costs per inpatient day and per discharge. While this begs the counter-argument that the tax exemptions for not-for-profit and public hospitals allow for their lower administrative costs, their study found no evidence of this.

Unfortunately, upsizing in administration is an industry-wide trend, and one shared by private, not-for-profit and public hospitals (Woolhandler & Himmelstein, 1997). The overhead of practitioners is similarly rising, with office administrative and clerical staff increasing from 613,000 to 819,000 full-time positions between 1990 and 1994. Over the same period, HMOs and other health insurers saw their expenses grow by $20.1 billion, from 12.8 percent to 14.8 percent of consumer premiums (Woolhandler & Himmelstein, 1997).

In a subsequent cross-border comparison, Woolhandler, Campbell, & Himmelstein (2003) observed the differences in health administration costs between Canada and the United States. Their analysis of 1999 figures showed that U.S. expenditures on administration totaled $294.3 billion, or $1,059 per capita – over three times the amount of the $307 per capita spent by Canada. After exclusions, this amounted to 31.0 percent of health care expenditures in the United States versus only 16.7 percent of Canadian health care expenditures.

This disparity is reflected in the relative percentages of administrative workers in terms of their numbers within the health care labour force as a whole. Excluding insurance industry personnel, the percentage of administrative workers within the U.S. health care labour force rose from 18.2 percent to 27.3 percent between 1969 and 1999. In Canada, the relative make-up grew from 16.0 percent to 19.1 percent between 1971 and 1996 (Woolhandler et al., 2003).

To put in this in a clearer perspective, and understand the significance that bureaucratic waste has on the lives of American citizens, consider the state of U.S. health care in 2003.  Administrative costs consumed at least $399.4 billion out of a total $1,660.5 billion spent that year. With this expenditure, the U.S. is wasting more on health care administration than it would cost to provide health care to all of the currently uninsured (Himmelstein, Woolhandler & Wolfe, 2004).

With its national health insurance program, Canada has an overhead of only 1.3 percent (Woolhandler et al., 2003). While this is much leaner than any U.S. program, Medicare compares favourably with a 2% to 3% administrative overhead. Lagging far behind, for-profit health maintenance organizations and insurance companies have an overhead of between 20% to 30%, which is necessary to cover the expenses unique to private sector businesses, including stockholder dividends, lobbyists, political action committees (and associated political donations), large executive salaries, marketing, and wasteful paperwork (Conyers, 2003).

By adopting the Canadian model of health care, New Mexico with 373,000 uninsured residents would have saved $1.5 billion on health administration costs in the year 2003 (or $4,022 per uninsured resident). Maine, which has 132,000 uninsured residents might have retained $1.325 billion in savings (or $10,037 per uninsured resident) if managed at Canadian levels. In Massachusetts, where there are 560,000 uninsured residents, a universal, single payer reform could have saved $8.556 billion (or $16,453 per uninsured resident) (Himmelstein et al., 2004).

In all, streamlining U.S. administrative health care overhead to that of Canadian levels would have saved $286 billion in 2003, or approximately $6,940 for each of the 41.2 million Americans who were without health care in 2001. This far exceeds the amount than would be needed to provide universal insurance coverage (Woolhandler et al., 2003). While this is one of the most recent studies of its kind, it is not the first to make this determination. In 1991, the U.S. Congressional Budget Office also concluded that a single-payer system (“Medicare for All”) would save $100 billion dollars per year. Economists estimated that not only would this provide coverage for all of the uninsured (in 1991), but would leave enough surplus to substantially help the underinsured as well (Conyers, 2003).

• Baker, C. B., Johnsrud, M. T., Crismon, M. L., Rosenheck, R. A., & Woods, S. W. (2003). Quantitative analysis of sponsorship bias in economic studies of antidepressants. British Journal of Psychiatry, 183, 498-506.
• Conyers, J. (2003). A fresh approach to health care in the United States: Improved and expanded Medicare for all [Editorial]. American Journal of Public Health, 93(2), 193.
• Donohue, J. M. & Berndt, E. R. (2004). Effects of direct-to-consumer advertising on medication choice: The case of antidepressants. Journal of Public Policy & Marketing, 23(2), 115-127.
• Himmelstein D. U., Woolhandler S., & Wolfe S. M. (2004). Administrative waste in the U.S. health care system in 2003: The cost to the nation, the states, and the District of Columbia, with state-specific estimates of potential savings. International Journal of Health Services, 34(1), 79–86.
• Woolhandler, S. & Himmelstein, D. U. (1997). Costs of care and administration at for-profit and other hospitals in the United States. The New England Journal of Medicine, 336(11), 769-774.
• Woolhandler, S., Campbell, T. & Himmelstein, D. U. (2003). Costs of health care administration in the United States and Canada. The New England Journal of Medicine, 349(8), 768-775.

Because of their identity as government programs, societal scepticism about the US government’s ability to manage efficiently, and the relative reduction of power and status allotted to the primary recipients of public health care (the poor and elderly), Medicare and Medicaid are often the target of spending criticisms. There are legitimate problems with public health care efficiency, however, to focus on Medicare and other public programs ignores a much larger problem. Inefficiency is a problem for health care in general, not just the programs that are widely understood to be paid for by taxpayers.

Contrary to popular belief, spending more money or providing more medical services does not necessarily equate to better quality of care for patients (Fisher & Welch, 1999). In terms of Medicare, a recent study determined that higher spending often results in more expensive care, more intensive interventions, and more services provided, though not ones necessarily likely to improve patient health (Baicker & Chandra, 2004).

In 2001, the state of New Hampshire spent approximately $5,000 per Medicare beneficiary and achieved the highest overall quality ranking. In comparison, Louisiana spent the most per Medicare beneficiary at $8,000 per person, and received the lowest overall quality ranking (Baicker & Chandra, 2004).

Baicker and Chandra (2004) note that higher spending does not cause lower-quality care, but reflects a particular style of health care delivery and resource utilization. Ballooning health spending by individual states may not be a reflection of commitment to improve health so much as they are a result of the ineffective management of services. Unfortunately, what is observed is that states that spend the most are also the most likely to attract a higher concentration of specialists, which may actually compound the problem.

The relative number of general practice (GP) doctors versus specialists in a particular area greatly influences how the system will be used in that area. A higher ratio of general practitioners in a given state correlates with higher ratings in quality of care, and lower spending per beneficiary, while the reverse is true for increased density of specialists (Baicker & Chandra, 2004; Davis et al., 2007). An increase of one GP per 10,000 people correlated with with a rise in quality ranking and a spending reduction of $684 per beneficiary. Comparatively, an increase of one specialist per 10,000 people resulted in an overall drop of rated quality of a state’s care, and a spending increase of $526 per beneficiary (Baicker & Chandra, 2004).

Defining Quality

In the aforementioned study, the ratings were based on an analysis of twenty-four quality measures developed by the Medicare Quality Improvement Organization (QIO) and data from the Dartmouth Atlas of Health Care.

States that were rated as providing high quality care tended to emphasize pro-active interventions and preventative methods in targeted areas such as cancer screening, post-heart-attack follow-up, and regular blood and vision tests for people with diabetes. Those rated as lower quality had more frequent hospitalizations and a higher use of intensive care units, suggesting that a reactive treatment model results in increased spending and a lower quality of life, particularly for those in their last 6 months of life (Baicker & Chandra, 2004).

Spending Cuts?

While increases in spending can foster an inefficient system, cutting Medicare spending in the hope of sparking a reactionary improvement in quality may have just the opposite effect — reducing the quality of care for patients in low-performing, high-spending states even further.  Baicker & Chandra (2004) recommend changes to policies, such as the establishment of national practice benchmarks for basic quality measures, improved access to general practitioners, and more focus on preventative care.

Paying More, Getting Less — The Private System

In recent years, double-digit increases in premiums have resulted in huge profits for insurance, health-care and pharmaceutical companies.

Providers
Mergers, which are often touted as positive developments in the creation of greater efficiency, reduction of duplication of services, and lowered costs, do not seem to be materialising that way in the hospital sector. In 2004, aggregate profits for U.S. hospitals reached a record $26.3 billion, having risen substantially each of the past number of years despite the number of hospitals and hospital beds declining over the same period (Institute for Health and Socio-Economic Policy [IHSP], 2005)

A 2003 study of the 100 most expensive hospitals in the U.S. (commissioned by the California Nurses Association) found that high profits margins, not high quality or efficiency was the primary cause of expense. Intriguingly, of the 100 hospitals, ninety-five were owned and operated by for-profit hospital chains (Mahar, 2006).

A related study examining the most expensive hospitals determined that for-profit hospitals had the highest average charges, billing 366% of their actual cost, while government hospitals the had the lowest, charging 181%.

In for-profit hospitals, markups on drugs, operating room use and medical supplies accounted for much of this profit. On average, the top 40 most expensive hospitals charged a 2,319% markup for drugs, 1,073% for operating room use, and 5,090% on medical supplies (IHSP, 2005). Because these charges are not standardized, and few consumers think to inquire about the markups on everything their treatment will require while they are being hospitalized, the selection of one hospital over another can have dire consequences. For those funded by a health maintenance organization (HMO), the negotiation gap between hospital charge and eventual payout may fall to the consumer if the charge exceeds the HMOs maximum coverage. In the case of self-payers or the uninsured, the entire charge — regardless of the variable markup — is their own.

Insurers
Just as hospitals consolidate their market power by merging into chains or larger organizations, so do insurance companies. In 2005, the ten largest private insurers managed 48% of the insured population. In 1995, the top ten controlled only 27% (Mahar, 2006).

Rather than creating well-funded, economically stable entities able to offer lower premiums, their premiums have increased. Rather than saving money by streamlining and eliminating duplication during the amalgamation process, they have instead become increasingly bloated and inefficient – but wealthy. The 20 largest HMOs in the U.S. made $10.8 billion in profits in 2004 (IHSP, 2005).

The fastest rising costs in health care spending over the last five years has been in the insurance companies administrative overhead. Between 2000 and 2005, net overhead (including profit) increased an average of 12 percent a year (Davis et al., 2007). The cost of this inefficiency is being passed along to employers, and to the employees in turn.

Premiums paid by businesses offering employer-based health insurance rose by 7.7 percent in 2006, and the smaller the business was, the greater the increase. Small employers saw their premiums increase an average of 8.8 percent; companies with less than 24 employees saw an increase of 10.5 percent (NCHC, 2007). In 2006, the annual premium that insurance companies charged an employer for an employee family health plan (4 people) averaged $11,500. For workers, this represented an average $300 increase over 2005. Additionally, this annual premium exceeded even the gross earnings of full-time, minimum-wage workers ($10,712), making family coverage an impossibility. The premiums for employee health insurance in the United States have been rising at a rate four times faster than employee earnings since 2000 (NCHC, 2007). Meanwhile, in 2004, the 12 top HMO executives earned $222.6 million in direct compensation for their efforts (IHSP, 2005).

The Pharmaceutical Industry
It sounds reasonable to assume that pharmaceutical research exists for the purpose of curing disease, and in an ideal world this would be the case, but in reality they exist to make money. The world’s 13 largest corporations earned $62 billion in profits in 2004, while the top 12 drug company executives earned $192.7 million over the same period (IHSP, 2005; NCHC, 2007).

In 2002, pharmaceutical corporations spent a combined $30 billion for various types of promotion. This amounts to about one-seventh of their total revenues, and considerably more than the $19 billion they re-invested for research and development initiatives (which in many cases were directed at me-too drugs to capture a share of an emerging market from competitors) (Mahar, 2006).

The industry’s contribution to inefficiency is in its choice of research areas. While it would make sense to aggressively pursue the most pressing health problems, increasing national health, lowering sick days, thereby improving American productivity and increasing GDP, this is not the dominant thinking. Markets are examined and products developed based on their potential to generate huge profits, regardless of the relative importance of the disease or condition in question.

In the U.S., a textbook example of this is the phenomenon of Viagra, which prompted the development of the me-too drugs Cialis and Levitra, as well as flood of lower-tier non-prescription alternatives like Enzyte and Maxoderm.

Meanwhile, there continue to exist a significant number of serious diseases which research has sidelined as unimportant. Sleeping sickness, malaria, schistosomiasis, and Ebola are a few examples. What they share in common is that they are primarily contracted by the poor in developing countries. In the case of schistosomiasis (a parasitic infection that can cause liver and urinary tract disease, and bladder cancer), the abundant availability of the endod berry (a natural treatment with some promise) made it difficult to for corporations to generate a desirable profit level. In the case of Ebola — a truly horrific and lethal disease — the expense and difficulty in developing a treatment was judged too high of an investment for the low potential returns. When asked about the possibility of an Ebola virus vaccine, Gordon Douglas — a retired chief of vaccines formerly of Merck, and one of the world’s leading developers — said, “There’s no market for this” (Perelman, 2002). Wall Street agrees.

Thus, the modus operandi of the U.S. research industry is: examine the market for opportunities, initiate research toward a product, patent it, fund or self-test the product’s efficacy, obtain FDA approval, price the product at the highest level the market will tolerate, examine potential off-label uses of the drug, expand it into other treatments if possible (if only informally, by physician word of mouth), make as much money as possible for as long as possible, and when the patent nears expiration — lobby for an extension (Perelman, 2002; Baker, Johnsrud, Crismon, Rosenheck & Woods, 2003; S. Sabesen, MD; & D. May, MSN, personal communication, 2001).

When the patent for Claritin was due to expire in 2002, Schering-Plough Pharmaceuticals attempted to protect their flagship product by requesting a 3 year special patent extension from Congress. Legislators were initially in favour of the “Claritin Monopoly Relief Act” (as it was nicknamed by Representative Henry Waxman) until a groundswell of negative publicity arose (Perelman, 2002).

While Schering-Plough may been unsuccessful in this instance, the industry as a whole has been enormously successful — not always in curing disease, nor substantially improving health, but generally in managing illnesses. Their highest achievements, however, have been in identifying and exploiting market niches, and shaping the American culture to alter their relationship with both physicians and clients.

• Baicker, K. & Chandra, A. (2004). Medicare spending, the physician workforce, and beneficiaries’ quality of care. Health Affairs, W4, 184-197.
• Baker, C. B., Johnsrud, M. T., Crismon, M. L., Rosenheck, R. A., & Woods, S. W. (2003). Quantitative analysis of sponsorship bias in economic studies of antidepressants. British Journal of Psychiatry, 183, 498-506.
• Davis, K., Schoen, C., Guterman, S., Shih, T., Schoenbaum, S. C. & Weinbaum, I. (2007). Slowing the growth of U.S. health care expenditures: What are the options? The Commonwealth Fund Report, 47.
• Fisher, E. S. & Welch, H. G. (1999). Avoiding the unintended consequences of growth in medical care: How might more be worse? Journal of the American Medical Association, 281(5), 446-453.
• Institute for Health and Socio-Economic Policy. (2005). Third annual IHSP hospital 200: The nation’s most—and least—expensive hospitals, fiscal year 2003/2004. Orinda, CA: Author.
• Mahar, M. (2006). Money-driven medicine: The real reason health care costs so much. New York: Collins.
• National Coalition On Health Care. (2007). Facts on health care costs. Washington, DC: Author.
• Perelman, M. (2002). Steal this idea: Intellectual property rights and the Corporate confiscation of creativity. New York: Palgrave.

Part 1 | Part 2 | Part 3 | Part 4
As I write this, the US Senate is debating a major overhaul to the American health care system — one that the US  House of Representatives has already passed (albeit by a close margin).  While it’s not firm enough to call it history in the making, it’s certainly closer to becoming reality than anyone expected, and something I never thought I would witness in my lifetime.

Having lived and worked in the United States for some time, I consider myself fortunate to have experienced health care from both a public and a “private” delivery system.  I’m placing that term in quotes because a truly privatized system doesn’t exist in America.  As Maggie Mahar discusses in her 2006 book Money-driven medicine: The real reason health care costs so much, America has a privately managed, publicly funded health care system which she describes as ‘the worst of both worlds’.

Characterized by high cost, poor (and misplaced) control, inefficient delivery, and extreme competition, it fails to fulfil the promise of a free-enterprise solution that is often discussed in Canada, as we ponder the future of our public but increasingly privatizing system. While the relative merit and costliness of the two systems will no doubt continue to be debated into the future, decades of studies continue to point to the fact that the American health care system is inefficient. Its market approach to delivering services to people inadequately serves those fortunate enough to have benefits, and fails to service many others at all. The most troubling aspect of this is that Americans recognized this fact about 40 years ago.

In a statement on July 10, 1969, President Richard Nixon stated:

“We face a massive crisis in this area [health care] and unless action is taken, both administratively and legislatively, to meet that crisis within the next 2 to 3 years, we will have a breakdown in our medical care system which could have consequences affecting millions of people throughout this country” (in Wolkstein, 1970, p. 702).

Regrettably, Nixon’s vision of a national health plan never materialized, and spiralling costs and increasing commercialization have continued to perpetuate what today still represents a massive crisis in American health care.

Rising Costs

In 1970, American spending on health care amounted to 7.1% of the U.S. GDP. By 2005 it had risen to 16%, and it is predicted to reach 20-21% by the year 2020 (Mahar, 2006; National Coalition on Health Care [NCHC], 2007). By comparison, Canada’s spending in 2003 was 65% of the United States’ allocation — 9.9% vs. 15.2% (World Health Organization [WHO], 2006).

At the present time, approximately 48 million U.S. residents have no health insurance, and at least half that number again who are either under-insured or insecurely insured, with potentially fatal outcomes — more than 18,000 Americans die each year because they lack health insurance (Conyers, 2003; Mahar, 2006). Among the ranks of uninsured are about a third of households earning over $50,000 a year. With the average premium for a family at $10,880 in 2005 and growing yearly, health care is out of reach of more people than we think (Mahar, 2006).

Who Pays?

The attribution of the United States as a “privately financed” health care system is a popular misnomer. While private enterprise is largely responsible for the provision of services, business actually pays less than 20 percent of the American health bill. Another 60 percent is paid for by taxes, while the remaining 20 percent comes from directly from users by out-of-pocket payments (Carrasquillo, Himmelstein, Woolhandler, & Bor, 1999). But while the majority of the privatized system is publicly funded, the public does not benefit from it equitably. Many Americans are one serious illness or hospitalization away from bankruptcy. In fact, half of all U.S. personal bankruptcies come as a result of medical bills (Himmelstein, Warren, Thorne & Woolhandler, 2005; NCHC, 2007).

In 2005, nearly two-thirds of families struggling to pay medical bills already had insurance (Mahar, 2006). Three-quarters of Americans that eventually had to declare bankruptcy had health insurance at the time they became ill or injured (Himmelstein et al., 2005).

As a means of coping with lack of health insurance, or co-payments they cannot afford, Americans are paying with their health by either rationing their use of needed treatment or simply going without. Compared to Canadian residents, Americans are are 33% less likely to have a regular doctor, 25% more likely to have unmet health care needs, and are more than twice as likely to forgo needed medicines, despite the fact that Canadians also lack universal prescription coverage (Lasser, Himmelstein & Woolhandler, 2006).

• Carrasquillo, O., Himmelstein, D. U., Woolhandler, S., & Bor, D. H. (1999). A reappraisal of private employers’ role in providing health insurance. The New England Journal of Medicine, 340, 109-114
• Conyers, J. (2003). A fresh approach to health care in the United States: Improved and expanded Medicare for all [Editorial]. American Journal of Public Health, 93(2), 193.
• Himmelstein, D. U., Warren, E., Thorne, D., & Woolhandler, S. (2005). Illness and injury as contributors to bankruptcy. Health Affairs, W5, 63-73.
• Lasser, K. E., Himmelstein, D. U. & Woolhandler, S. (2006). Access to care, health status, and health disparities in the United States and Canada: Results of a cross-national population-based survey. American Journal of Public Health, 96(7), 1-7.
• Mahar, M. (2006). Money-driven medicine: The real reason health care costs so much. New York: Collins.
• National Coalition On Health Care. (2007). Facts on health care costs. Washington, DC: Author.
• World Health Organization. (2006). Core Health Indicators.

To make “health maintenance” work, HMOs drop customers that are most in need, retain customers that are least in need, limit treatment, reward doctors with financial incentives for providing the least expensive option or minimum required treatment possible, and then pass along any remaining costs that cut into their profit margin, directly onto the consumer by way of premium hikes.

Why the United States insists on remaining the only major industrialized nation on earth that fails to provide free universal health care to its citizens is a mystery. Or is it?

If managed health care organizations have enough money laying around to reward doctors for billing them as little as possible, you can bet that they have plenty in their slush fund to pay lobbyists to strike down any bill that might threaten their monopoly over medical care with something free and universal. There are also plenty of persuasive arguments that Mr. and Mrs. Joe Citizen will identity with personally, so as to dissuade any uprisings on the grassroots level. Arguments like: “Too much government control is dangerous… it puts our free enterprise system one step closer to communism.” Or: “Free and universal health care will drive your taxes through the roof—you’ll lose your home, you won’t be able to meet your expenses anymore.” Arguments that invoke fear are always the most effective—they reduce the capacity for rational thought.

Need a second opinion? Ask someone born and raised in a country that embraces free and universal health care—somewhere like Canada. Canadians who have lived and worked temporarily in the US on work visas will tell you that their health never suffered as much as the years they lived here—and we’re talking about young workers in their 30′s and 40′s … not the elderly.

In Canada, you never have to put off a regular checkup at the doctor, or cease them completely . You never have to suffer through an illness hoping it will get better, meanwhile fearing that it may require an office visit and costly medications. In Canada, you’ll never have to save up to pay for needed surgery which an American HMO might refuse on the basis that “it isn’t really necessary”. And you will certainly never have to look at your budget to see which expense can be ignored this month (the light bill, food, your student loan) just so you can afford to see a doctor, when the need for treatment can be put off no longer.

Americans have suffer more under their “free enterprise” system than any Canadian ever will under our own country’s tax-funded health care system. Despite this, every now and then, Canadian politicians begin to toss around the idea of replacing our universal-pay universal-access system, and replacing it with a privately managed system. Not surprising, really (we have large, greedy corporations here, too, eager to get into the business). There are the usual fear-eliciting arguments, plus others meant to provoke outrage, like: “Under our present system, even the rich are entitled to free health care.” Those able to rationally consider this argument are well aware that even in Canada, the rich would rather pay to have state of the art medical treatment that get the level that you and I consider acceptable, for free.

But, there’s always the danger that we’ll succumb to the temptation to adopt a privatized system. Of course, it will be over my dead body. Epitaph: Here lies Todd Lyons, killed by his managed health care provider.