Evidence-Based Legislation? Lessons From Abroad (socialist health care)

Skip to first unread message

Eric Gisin

Mar 12, 2009, 1:22:22 PM3/12/09
March 12, 2009, 06:00:10 | Val Jones
President Obama appears to be refreshingly pro-science in his outlook,
publicly lauding objectivity
and careful analysis. He has even been credited with saying that "we need
legislation" in regards to public policy. The New York Times reports:

Agencies will be expected to pick science advisers based on expertise, not
political ideology,
the memorandum said, and will offer whistle-blower protections to employees
who expose the misuse
or suppression of scientific information.

The idea, the president said in remarks before an audience of lawmakers,
scientists, patients
advocates and patients in the East Room, is to ensure that "we make
scientific decisions based on
facts, not ideology": a line that drew more applause than any other.

But when it comes to healthcare reform, many policy decisions put us in
uncharted territory, with
intelligent arguments on both sides of many legislative options and no
American historical frame of
reference to help us determine the best course of action. In times like
these, perhaps the best we
can do (to promote "evidence-based legislation") is to study similar policy
decisions made by our
Canadian and European counterparts.

In a quest to inform myself about healthcare reform and its consequences in
other countries, I
attended a conference entitled, "Lessons From Abroad for Health Reform in
the U.S." at the Kaiser
Family Foundation on March 9th in Washington DC. The event was sponsored by
the Galen Institute and
the International Policy Network, both of whom are politically
rightward-leaning non-profit
organizations. So I listened with interest, understanding that there may be
other perspectives not
fully represented.

I wasn't sure what to expect from the conference, and assumed that speakers
would offer a blend of
pluses and minuses culled from Canadian and European healthcare reform
experiences. I have to say
that the pluses were hard to come by - and that the minuses were so
provocative that I have decided
to repeat some here for you, and let you make what you will of them.

Switzerland: Mandatory Health Insurance Creates Payer Cartels

Dr. Alphonse Crespo, an orthopedic surgeon who practices in Lausanne,
Switzerland, described what
sounded like the utter decimation of a perfectly good healthcare system. He
said that in the 1960s
Swiss healthcare was decentralized and quality-oriented. The government
provided subsidies for
health insurance for the poor, and subsidized public hospitals who took care
of the poor and/or
uninsured at a 50% rate. Overall, according to Dr. Crespo, Swiss healthcare
was efficient,
effective, and had high patient satisfaction ratings.

In 1994, socialism came into vogue and reformers called for a redistributive
model of healthcare,
with centralization of infrastructure and electronic medical records systems
that would be
compatible with those in use by other European countries. Mandatory
insurance was introduced, which
shifted disproportionate power to third party payors. The payors focused
primarily on cost
containment measures and profitability, rather than expanding access to
quality care. Regional
hospitals were forced to merge with larger ones or else shut down. Wait
times increased, lengths of
stay decreased, and there was an increase in "critical incidents" (i.e.
medical errors) by 40%.

In 2002 the health insurers decided that "more doctors result in higher
costs" and successfully
lobbied for a cap on the total number of physician licenses, so that in
order to practice medicine,
a physician would need to take over the practice of a retiring physician or
one who died.

In 2008, the third party payers attempted to legislate their ability to
decide which physicians
could practice within the healthcare system, and which would be excluded
from coverage. This did
not sit well with patients, and they voted for "freedom of choice" in a
referendum on the issue.
Fortunately, they blocked the insurer move to ban certain physicians from
insurance coverage.
Unfortunately, the insurers succeeded in forcing a reduction in
reimbursement for basic laboratory
testing by 20%, thus forcing physicians to close their labs and send samples
to a centralized
location. Apparently physicians are planning to strike in Lausanne and Bern
next week over this

Dr. Crespo argued that the unforeseen consequence of the move to compulsory
insurance was the
emergence of a powerful cartel of health insurers without any apparent cost
savings, and a
measurable decrease in care quality. In fact, Switzerland's healthcare
system rapidly plummeted
from 4th place in the Euro Health Consumer Index, to 8th place over the
course of a few short

He concludes:

"Once cartels have entrenched themselves, there is no easy way to dislodge
them. Americans should
think twice before opting for compulsory insurance, unless they believe that
cartelized and
rationed healthcare is really in the best interest of patients."

Canada: A Political Healthcare Monopoly

Dr. Brian Crowley is the Founder and President of the Atlantic Institute for
Market Studies in
Halifax, Nova Scotia. He describes the Canadian healthcare system this way:

Canadian Medicare operates in an unregulated, tax-financed, pay-as-you-go
model. Our provincial
governments are our monopoly provider. They not only pay for necessary care,
but they also govern,
administer, and evaluate the services that they themselves provide. They
define what we call
"medically necessary services" and pay for 99% of all physician services.
They also forbid the use
of private insurance for medically necessary services. They set the budgets
for nominally private
healthcare institutions. They appoint the majority of their board members
and have explicit power
to override management decisions.

Under these circumstances, no hospital or hospital administrator can be
expected to take any
responsibility or initiative because decisions will always be second-guessed
by those in political

Before the advent of competition in our telephone industry, dissatisfied
customers faced the
massive indifference of a bureaucracy that took their business for granted,
despite some
theoretically powerful regulatory agencies. Administrators of the Canadian
healthcare system
likewise suffer no direct consequences for poor customer service. They
aren't even answerable to a
regulatory agency. Accountability is a vague political concept which cannot
be enforced in any
meaningful way. Like all monopolists, Canada's healthcare authorities abuse
their positions of

Dr. Crowley argued that the provincial governments have no desire to measure
how many people are
waiting for health services, how long they've been waiting, or how many
people leave Canada to get
treatment south of the border. (He claims that the US is Canada's secret
safety valve.) Apparently
the province of Ontario contracted with New York State for cancer care for
their patients when wait
times became politically untenable.

A couple of years ago, the Supreme Court of Canada ruled that the healthcare
system violates Canada's
charter of rights because it collects taxes, promises healthcare in return,
forbids competing
suppliers and then often doesn't deliver the care. The justices summarized
the situation this way:
"A place in a queue is not healthcare."

Canada-wide average wait times for surgery is 17.8 weeks, though in
Saskatchewan, wait times for
hip replacements are as long as a year and a half. That's after a physician
has ordered the
surgery. Getting to see a physician in the first place is very difficult.
Statistics Canada reports
that 1/5 of Canadians do not have a family doctor.

Dr. Crowley suggested that the Canadian healthcare system has become an
unresponsive monopoly
though it wasn't supposed to be that way. It was designed to usher in a
"grand era of choice." It
was supposed to be a healthcare system in which people would be able to get
all the healthcare they
needed without having to "worry about the cost." Dr. Crowley concluded that
"some of the ideas
bandied about in Washington will lead to the worst features of the Canadian
system without that
having been anybody's intention."


There is no healthcare utopia. As demand for services climb (with older and
sicker patient
populations) and expensive new drugs and technologies are developed, all
industrialized nations are
experiencing cost containment challenges. The need to ration care encourages
shifts in power that
can result in unintended consequences - including payer cartels and
indifferent bureaucracies. As
the United States congress prepares to legislate major health reform this
summer, they will do well
to gather all the evidence they can from countries who've previously enacted
similar legislation.

In the end, though, it is likely that limited resources, a weak economy, and
an aging population
will pretty much guarantee dissatisfaction with our healthcare system in the
decades to come. Will
"evidence-based legislation" help us to avoid others' mistakes? I hope so,
but I'm also not holding my breath.

Reply all
Reply to author
0 new messages