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The US and Canada: Different Forms of Medical Rationing

The US and Canada: Different Forms of  Medical Rationing

by Susan Rosenthal

(Chapter 5 of SICK and SICKER)

A woman in severe pain with no medical insurance goes to the emergency department. She’s turned away because her pain does not qualify as an emergency. She takes a seat in the waiting room and collapses shortly after. At that point her condition qualifies as an emergency, and she is treated.

This outrage did not occur in the United States, but in Canada.1 In a capitalist world, all nations limit access to medical care, and Canada is no exception.

Why Ration Medical Care?

According to the Organization for Economic Co-operation and Development (OECD), the amount of social resources spent on health

“does not reflect the highest level of benefits obtainable within the socially determined level of resource boundaries. It is rather the result of successive  negotiations about how much nations consider reasonable to allocate to medical care…”2

Who decides how much is reasonable to allocate to medical care?

Most people consider medical care to be a human right and want everyone to have access. However, capitalism is all about making a profit. Because capitalism rules the world, its needs dominate and, therefore, medical care is rationed.Most people get only what they can pay for, or what employers, insurance companies and governments decide to provide.

Most people are unhappy with this arrangement and want more. The result is class conflict over what should come first – human need or corporate greed.

Ultimately, how much is spent on medical care is determined by the relative strength of the two classes. A stronger working class will push to increase spending and a weaker working class will accept the rationing imposed by the capitalist class.

Universal Access

The only way to provide medical care as a human right is to provide universal access to it, so that everyone gets the care they need.

Universal access is not the same as improved access. Improved access means providing more people with some, but not all, of the care they need. Universal access means no rationing and no class discrimination, so that the millionaire, the factory worker and the homeless addict all receive the best that society can provide.

Politicians who talk about universal access really mean improved access. They keep universal access off the agenda, because one cannot eliminate class inequality in medicine without also eliminating it in society.

The public is not permitted to question whether medical care should be rationed by class, because we are not allowed to question capitalism. We are allowed to dispute only the form and extent of class rationing.

Opposition to universal medical care is both political and financial. Politically, it is risky to give the majority a sense that they are entitled to anything. Financially, employers don’t want to pay the taxes required to fund a public medical system. And some capitalists reap gigantic profits from privatized medicine.

From a strictly health point of view, the best medical system would provide universal access with a strong emphasis on illness prevention and social health.

However, the priority of the capitalist class is to cut costs, seek profit-making opportunities and keep the working class subordinate. These goals are best achieved with a class-based, treatment-oriented medical system, where the rich get the best services, the middle class and skilled workers have limited access through pooled insurance programs, and the poor are provided with a bare-bones basket of government-funded services. All existing medical systems are based on this model of rationed care, with different nations displaying variations.

While the debate to reform the American medical system emphasizes the differences between Canada and the United States, both nations are deeply divided by class, and their medical systems reflect and perpetuate those divisions.

In the US, medical rationing is based on ability to pay. The resulting inequality is up-front and obvious. Canada rations medical care by under-funding the public system, bringing inequality through the back door.

Rationing in the US

All Americans can access medical services, if they can pay for them. Most can’t.

Sixty percent of the US workforce make less than $15 an hour. In 2005, the average annual insurance premium for a family of four ($10,880) cost more than the annual income of a full-time minimum-wage worker ($10,712), before deductibles, co-payments and the cost of non-insured treatments.3

The popular demand for national medicare has been blocked by a powerful for-profit medical industry and its political backers. They argue that it would cost too much. They lie.

In 2004, the US government spent two trillion dollars on medical care, an average of $6,820 per person, more than any other government in the world, including those that offer universal medical care. As Dr. Steffie Woolhandler points out, the US government already forks out enough money to provide medical care for all Americans.

“We pay the world’s highest health care taxes. But much of the money is squandered. The wealthy get tax [deductions for medical care]. And HMOs and drug companies pocket billions in profits at the taxpayers’ expense. But the politicians claim we can’t afford universal coverage…We already pay for it, but we don’t get it.”4

An estimated 45-50 million Americans have no medical insurance. Those who have insurance can’t count on getting the care they need because insurance companies refuse to cover many conditions and set limits on how much they will pay. Whenever possible, they deny payment.

A 2009 investigation by the California Nurses Association found that

“More than one of every five requests for medical claims for insured patients, even when recommended by a patient’s physician, are rejected by California’s largest private insurers…Every claim that is denied represents a real patient enduring pain and suffering. Every denial has real, sometimes fatal consequences.”5

When medical claims are denied, patients must go without or pay out of pocket, making medical bills a prime source of personal bankruptcy.

Obama’s Health Care Disaster

President Obama was elected on the promise of change, including major reform to the US medical system. Taking him seriously, thousands of activists mobilized support for a comprehensive public health-care system, only to be betrayed by a President and Democratic Party beholden to their corporate backers.6

The new legislation will force millions of people to buy high-cost, low coverage insurance policies. Those who don’t will be fined. Companies that employ mostly women can be charged higher rates, older people can be charged up to three times more than their younger counterparts, and people with existing medical conditions can also be charged more.

Many more people will have insurance, but it will do them little good. Of the two million Americans forced into bankruptcy by medical bills in 2001, three-quarters were insured when their problems began.7 New regulations that are supposed to protect policy holders have major loopholes and no means of enforcement.

This legislation is a giant boost for the medical industry and an outright attack on women and on the working class. Government-subsidized insurance programs will not be allowed to provide coverage for abortion services. Undocumented immigrants will not be eligible for federal subsidies. Workplace medical benefits will be taxed, and funds will be drained from Medicare to support an insurance industry that boasts $50 billion in annual profits.

This is not an historic victory but an historic failure to end profit-taking in the American medical system. It is not a step forward but a step backward. Cementing the central role of the medical-pharmaceutical-insurance industry will only increase its power to profit at the expense of people’s health.

This betrayal could not have happened without the support of liberals, whose cheerleading for “their” president and “their” party took priority over the fundamental right to health care. The liberal leaders of the labor movement also placed their faith in the Democratic Party and supported the sell-out legislation.8

National medicare could have been won. Most Americans wanted it, and many mobilized to demand it, but they were sold out by leaders who refused to push majority need ahead of corporate greed.

Rationing in Canada

Canada has established medical care as a legal right. In reality, Canada’s medical system is too poorly funded to provide comprehensive services to all, so some people are excluded altogether, and access is limited for everyone else.

To reduce the cost of medical programs, each province sets conditions on who qualifies for coverage. To obtain Ontario health insurance (OHIP), one must:

  • have one of the listed OHIP-eligible citizenship or immigration statuses, and
  • make their primary place of residence in Ontario, and
  • be physically present in the province for 153 days in any 12-month period.

Visitors, transients and foreign workers lacking work permits (and their dependents) are not covered.

A three-month waiting period is imposed before coverage begins, and the Ontario government web site

“strongly encourages new and returning residents to purchase private health insurance in case you become ill during the OHIP waiting period.”

Once a person has obtained a health card, there are further obstacles. New health cards are valid for five years. If these cards are not renewed before they expire, the cardholders are no longer eligible for coverage and can be charged for medical services. (If they can later prove that they were covered at the time of the service, they can request reimbursement.)

These policies were introduced in the late 1990s, “In an ongoing effort to implement the government’s ‘zero tolerance’ strategy for health care fraud.”9

In fact, these bureaucratic obstacles save money by denying people care.

The Ontario government refuses to pay for prescription drugs, physiotherapy, dentistry, optometry, eyeglasses, wheelchairs and a host of other medical services. Individuals must pay out of pocket or buy insurance to cover these necessities.

In British Columbia, the province with the highest rate of Hepatitis C infection in the country, the government refuses to pay for anti-viral treatment unless patients have detectible liver damage.10 Desperate patients have resorted to binge-drinking to inflame their livers so they will qualify for this life-saving treatment.11

Medical school enrollment has been restricted to the point that Canada needs 26,000 more doctors just to meet the OECD average number of physicians-per-population. Fewer doctors see fewer patients, which saves the system money by making patients wait longer for treatment. Half of Canadian patients report waiting longer than they consider reasonable.13

The extent of this problem is hotly debated on both sides of the border.

Advocates of privatized medicine emphasize how long Canadians wait in order to discredit all governmentfunded systems, even though millions of Americans without insurance essentially wait forever. In contrast, defenders of public medicine minimize the problem of wait times, making it harder to fight for more funding.

When people have to wait for essential services, those with money and connections find a way to get to the front of the line. The longer the line, the more inequality grows, and the more pressure there is to develop private sector alternatives.

Restricting Access

Insisting that they can help contain costs without compromising care, Canadian organizations of medical professionals have joined with government to implement medical rationing.

In 1997, the Ontario Medical Association (OMA) signed an agreement with the government of Ontario to help control the “rate of utilization growth and demand for medical services.”14 Their joint body, the Physician Services Commission (PSC), set a goal of cutting $120 million from the 1998 health budget. The PSC also launched a research project to reduce public use of the medical system by finding ways to “modify” patient behaviors that are “inefficient.”15 One result was a public relations campaign against healthcare fraud.

Oversized glossy posters, provided for all physicians’ waiting rooms, warned, “Every Dollar Lost To Health Fraud Is A Dollar Taken From a Patient Who Needs It!”

“Every year health fraud costs us millions of dollars. People who defraud the system are taking your tax dollars. Even worse, they’re taking dollars needed to provide vital medical services for patients who need them most. You can help put a stop to this. If you know or even suspect someone is defrauding your Ontario Health Insurance Plan, call the fraud line listed below. Together, we can stop the assault on our health system and make sure people get the care they need, when they need it.”

The reader is urged to “Help Stop Health Fraud,” by reporting suspected fraudulent use of the system to the provided toll-free number. Finally,

“Where fraud is suspected, cases are referred to the Ontario Provincial Police Anti-Rackets Health Fraud Investigation Unit for investigation and possible prosecution.”16

Who are the villains defrauding the medical system?

Are they the pharmaceutical companies whose inflated prices and profits make drugs the costliest component of Canadian medicare? Are they the politicians who have extended patent protection for drug companies to keep cheaper generic medicines off the market? Are they the army of bureaucrats who are employed to ensure that no one receives medical care to which they might not be entitled? Or are they the big corporations who benefit from the generous tax breaks being paid out of former health-care dollars?

None of the above are investigated because the Ministry of Health defines OHIP fraud as:

  • Someone knowingly using a health card that is not theirs
  • Someone receiving OHIP services who knows they are not eligible
  • Someone giving false information to the ministry to become or continue to be an insured person when they know that they are not eligible.

In other words, the villains are “undeserving” patients. They could be visitors, illegal immigrants, foreign workers without permits, or poor American cousins who slip over the border to get medical care they can’t afford at home. They could be anyone: my neighbors, my coworkers or even myself. Do I really need to see the doctor for that ailment? Am I misusing the system?

The message is that health care is a privilege, not a right, that undeserving patients threaten the system and that only by policing ourselves and each other can we serve the greater good.

The pressure to cut costs is corrupting. Dr. Michael Kramer, pediatrician and Distinguished Scientist of the Medical Research Council of Canada, recommended that funding research into the causes of pre-term births would

“provide a much greater return on Health Canada’s investment” than to ‘waste money’ funding programs that provide milk, eggs and orange juice to poor pregnant women.”17

As if a wealthy nation like Canada could not afford do both!

In December, 2008, the Ontario Health Coalition released a report detailing hospital cuts and restructuring plans underway across the province:

  • Provincial funding for hospital budgets is lower than the rate of inflation, making it impossible for hospitals to maintain existing programs and services.
  • At least 50 percent of the province’s hospitals are in deficit, and almost 70 percent are projected to be in deficit within a year. Hospitals are legally forbidden to run deficits and must submit plans to eliminate them by the end of the following fiscal year.
  • The government has provided a multi-step program to advise hospitals on how to raise fees and cut services.
  • Proposed cuts include: closing Emergency Departments;closing local birthing services; cutting hospital beds and departments; closing small and rural hospitals; privatizing support services;using lay-offs and attrition to reduce the size of the hospital workforce; and increasing fees for patients and visitors.

Despite regular media reports of people dying from lack of access to care, the government denies that the system is under-funded. We are told that nurses are lazy, doctors are greedy, patients expect too much and that we can’t afford more than we have.

While politicians pledge allegiance to the Canada Health Act, they withhold the funds required to fulfill its promise of universal access to comprehensive care.

Comparing the US and Canada

American advocates of State-funded medical services argue that, unlike profit-seeking insurance companies, the State will make health-care decisions based on what people need. That would be true if the State was committed to meeting human needs. However, the State serves the capitalist system and provides only what penny-pinching government bureaucrats decide to fund. This has been demonstrated in Britain, in Canada and in US-government-funded programs like the Veteran’s Administration and Medicare.

Despite their very different medical systems, both the United States and Canada use layers of bureaucracy to ration medical services.

In Canada, 13 provinces and territories administer medical care, resulting in 13 different payers with limited transferability between them. Across Canada, private companies sell workplace, group and individual insurance to cover the growing number of services that are no longer funded by provincial plans and to provide coverage to those who are ineligible for government-funded health care.

In the United States, a labyrinth of private insurers co-exists with a government that is the largest single provider of medical funding. About 100 million Americans (one in three) receive medical care through government-funded programs like Medicaid, Medicare, the military and government employee health benefits.

The basic difference between the Canadian and US medical systems is the proportion of government funding to private funding.

In Canada, government pays about 70 percent of medical costs, while individuals and private insurance companies pay the rest. In the United States, this proportion is reversed.

Government-funded medical systems offer two important advantages: the resources necessary to provide everyone with the care they need, so that no one goes without or is crippled by medical bills; and medical benefits that are removed from employers’ control, so that workers can change jobs without fear of losing access to care.

These advantages diminish when governments underfund the medical system, forcing individuals to pay privately, buy insurance or rely on workplace medical benefits.

The Global Assault on Health Care

In every nation, the capitalist class is pushing governments to cut taxes and services, including access to medical care.

Most Americans want government-funded Medicare, which is currently provided only to seniors, extended to the entire population. Instead, the government is reducing Medicare funding to pay for corporate tax cuts, bailouts and an expanded medical insurance system.

In countries like Canada and Britain, where national medicare systems have been established for decades, aspiring profiteers warn that government spending on healthcare is “unsustainable” and only privatization can improve efficiency and increase access.

The global assault on healthcare is rooted in the economic crisis of capitalism.

After World War II, most economies were booming, and the demand for basic health and social services could be met without compromising capital accumulation.

When periodic recessions resumed in the 1970s, the threat of “never-ending crisis” was raised to promote public acceptance of lower living standards to boost corporate profits.19 The magazine, Business Week, described the difficulty of this task,

“It will be a hard pill for many Americans to swallow – the idea of doing with less so that business can have more…. Nothing that this nation, or any other nation, has done in modern economic history compares in difficulty with the selling job that must be done to make people accept the new reality.”20

For the working class, the new reality has meant working longer and harder for less pay and fewer benefits. For the capitalist class, the new reality has meant something quite different – periodic transfusions of government subsidies, deregulation and rising profits.

Despite its success in cutting medical and social services, the capitalist class has not extinguished the demand for universal health care. In both the US and Canada, workers continue to push for health care as a human right.

References

1. Cited in Lepage-Monette, A. (2008). Programs that work: Ensuring health care for the uninsured. Medical Post. Toronto. March 4, p.6.

2. Organization for Economic Co-operation and Development. (1993). OECD health systems: facts and trends: 1960-1991. Vol.1, Paris, p.14.

3. Colliver, V. (2005). Health plans dwindle in US: Number of firms offering insurance drops as costs rise. San Francisco Chronicle. September 15, p.C-1.

4. Physicians for a National Health Plan. (2002). Harvard References study finds government health spending in US higher than in any other nation. Press release, July 9.

5. California Nurses Association. (2009). California’s real death panels: Insurers deny 21% of claims. Press release September 2.

6. To understand why the Democrats consistently sell out medicare, read Selfa, L. (2008). The Democrats: A critical history. Chicago: Haymarket.

7. Geyman, J.P. ( 2008). Missing the boat on health care? Tikkun, February 15.

8. Slaughter, J. (2010). Anger boils over health care bill. Labor Notes, February, #371, p.1.

9. Ministry of Health Processing Office. (1997). OHIP Bulletin 4303: Good faith claims policy. December 23.

10. CBC (2008). B.C. government failing to treat Hep C epidemic: Patients denied coverage for anti-viral drugs. July 29.

11. Reported on CBC radio, March 3, 2010.

12. Canadian Medical Association submission to the Standing Committee on Industry, Science and Technology, House of Commons, February 23, 2008.

13. The mortality risk for those who waited longer for hip surgery was 22 percent higher than for those treated within two days of admission to hospital. The Canadian Institute for Health Information. Health Indicators, 2007.

14. Orovan, W. (1998). Toward challenge and opportunity. OMA Fax Network, Vol. 3, No. 17, May, p.3.

15. Borsellino, M. (1998). Ontario to ‘modify’ patient behaviour to cut costs. The Medical Post. Toronto. April 14, p.1.

16. Ministry of Health and Long-Term Care. Fact Sheet: OHIP Fraud. April 2009.

17. Kramer, M.S. (1998). Maternal nutrition, pregnancy outcome and public health policy. CMAJ, Vol.159, No.6, September 22, p.663.

19. Editorial. (1995). Health economics: Selling the big sleep. The Medical Post. Toronto. August 5, p.63.

20. Quoted in Cockburn, A. & Silverstein, K. (1996). Washington Babylon. London: Verso, p.8.

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2 Comments For This Post

  1. roxan lucan Says:

    July 7/07

    I don’t know where you practice but the conditions you describe as so deplorable in Canada i.,e. nursing shortage, dirty hospitals, etc. are true of the US in spades.

    When HMOs came in during the 1990s, nursing staff was cut by 50% in the Philadelphia PA area where I nurse. A few months later, cut another 50%–it took me a year to find my first job due to such an excess of experienced nurses.

    At that time, they also stopped training new nurses in ‘specialties’ such as ER, OR, etc. Now, they complain they can’t find any. Wonder why?

    The nurses who had experience and were laid off have now retired or quit nursing in disgust, and no new grads were trained. Nor did any of the hospitals or nursing homes rehire to former levels. We continued to work with only 1/4 of the necessary staff.

    When I complained to management, I was told, “This is the way we want things. Shut up.” I got the picture. There are actually more nurses out there than realtors. They just refuse to destroy their bodies working like slaves.

    There IS no nursing shortage. That’s the way they save money. Similarly,many hospitals in Philly at that time, fired their cleaning staff and thought the RNs should scrub the floors, change light bulbs, etc, in addition to performing the tasks of the (no longer existent) IV stick team, respiratory therapy team, EKG team, and any other allied health team you can name.

    I am not speaking of some ghetto hospital but the top hospitals in the City, some of which now sit boarded up. I am speaking from personal experience.

    Likewise, most psych wards and facilities were closed. Then, it was nursing homes going bankrupt and changing hands several times a year.

    Meanwhile, there are ever more rules and regs that seem to change daily, ever more paperwork to waste our time. Constant State inspections that focus only on our notes, hoping to find some small error so they can take our license. Oh, and all the cupboards have to be clean and the coats hung up. They are not interested in how the patients are. Like everything else, it is a sham.

    Sometimes I have no medications for patients, or even the supplies to do wound care. I used to have 25 patients, then it went up to 30-40. Then, I moved down South, thinking a small town would be better–forget it! Here it’s 60-80 patients at less than 1/2 the pay. And during all this, I have no insurance. Now, tell me again, how bad medical care is in Canada.

  2. Susan Rosenthal Says:

    July 7/07

    Roxan: The conditions you describe are outrageous! No question that America’s medical system is worse than Canada’s. However, Canada’s system is far from adequate and deteriorating rapidly.

    We can’t let ourselves be tricked into thinking that the lesser evil is the best we can do. We deserve much better than that on both sides of the border.