Health today and tomorrow

Outlook

Many Canadians are hoping Canada will establish a parallel private healthcare network comparable to the system in the US. A comparative study by the World Health Organization on healthcare performance may shed some light on this issue and help in any decision-making.

Among 191 countries in the 1997 WHO study, Canada ranked 30th for the performance of its health system, which was measured against eight indicators, including the overall level of health in the population, accessibility, quality of care and fairness. Western European countries such as Germany, Italy, Spain, Portugal, France and Britain all placed higher than Canada. Our only consolation is that the US placed 37th, the worst among the large industrialized nations.

Paradoxically, the US spent the most on healthcare. In fact, no correlation was noted between the level of expenditure and performance. Americans spend twice as much as Canadians for a system that doesn't perform as well as ours; and Britain, which invests less than any industrialized country, outranks the US.

The figures do not provide a clear answer for the debate on public versus private care. However, the strong private-- sector role in the US is clearly associated with mediocre performance and high costs. On the other hand, Italy's 43% private expenditure share did not prevent it from placing second for performance, with a less costly system than that of France, which spends less on private healthcare.

One may criticize the WHO's methodology. But there is no smoke without fire. The differences are too significant to dismiss the stark truth they reflect: Western Europe is doing much better than us, and at a lower cost. The situation in Europe The Romanow Commission on the Future of Health Care in Canada is spending millions to enlighten us on our healthcare system. It will surely try to understand the functioning of healthcare services in Western Europe and why countries there perform so much better than we do.

Of course, the issue is complex. The medical profession in Canada is based on US structures, which has an impact on our performance. Standards and practices in hospitals, the key expenditure area in the system, are also important factors.

In Europe, where there are

a wide variety of systems and strategies operating, the private sector plays a major role in several countries. But a common thread exists among all these systems - universal standards of quality for service delivery that apply to all citizens.

These standards are not as sacred in North America. As a result, more inefficiencies are tolerated in our healthcare systems.

Our neighbours to the south With its poor performance and high costs, the US healthcare system can charitably be described as a lemon. One of its most glaring flaws is the lack of universality that deprives tens of millions of Americans from accessing services that are taken for granted in Canada. But the problem is more deepseated than that, one of the causes being the key role played by private health insurance.

Insurance has a major flaw. An insured person is less costconscious as expenditures are picked up by the insurer. Health insurance is no exception. It's the attitude of "someone else is paying." Not only is the frequency with which people seek medical attention very high, but when their health is at stake, they want the best.

Health insurance is more prone to cost escalation than is other insurance, such as material damage to your automobile. Not only is the maximum value (i.e. replacement value) of a vehicle known, but claims are only made in specific circumstances, as in the case of theft or accident.

Healthcare patients demand the best at any cost and require healthcare frequently. There are a few self-constraining features.

It's not surprising, then, that the US health system, financed mainly by employerpaid private insurance, is twice as costly as that in Canada!

A parallel private system in Canada is inconceivable without private insurance funding, likely paid by employers. The risk with such a system is that we could end up with the inflated costs that characterize the US system.

If we want to truly reform our healthcare system, we should look to Europe and not to the US for solutions.

Before introducing a two-- tiered system in Canada patterned on the US system, we should ensure it won't lead to the high costs that have made the US model the most ineffective in the world.

[Author Affiliation]

Marcel Cote is a partner at SECOR Inc. in Montreal