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Posts Tagged ‘regulation’

Foreigners are people too

March 13, 2012 2 comments

This is the second of two posts prompted by Dr. Robert Centor’s critique of a recent New York Times Magazine article accusing America of “stealing [sic] the world’s doctors.” In the first post, I show how US immigration policy for physicians is a boondoggle of near-comedic proportions that doesn’t even constitute an effort at “theft,” given that it’s hard-pressed to hold onto me after I graduate (as I explain, I should be one of the easier doctors to “steal”).

Now let’s look at the counterfactual situation. Suppose the it were actually easy and straightforward for physicians to immigrate to the US (or to remain, in my case), gain licensure, and be certified in their specialties. Suppose the immigration and licensure systems were designed with this very goal in mind. Would this be a bad thing?

The conventional wisdom is that the emigration of skilled professionals from less to more-developed countries is bad for the less-developed countries: this process is often referred to as “brain drain.” Critics argue that “brain drain” harms poorer countries by preventing the development of local talent, skills, and professionals that are often sorely needed. They also point to the fact that many countries subsidize education at least to some extent, only to see the investment in their citizens’ human capital slip away beyond their shores.

The conventional wisdom is wrong. As the 19th century economist Frederic Bastiat pointed out, it is best “not to judge things solely by what is seen, but rather by what is not seen.

What is “not seen” when it comes to emigration of skilled professionals? Networks of diaspora spread ideas and expertise, strengthen economic and social ties between countries, promote peace, and promote advances in the standards of living both at “home” and “abroad.” Emigrants usually earn much more in their new country, and their remittances home are not only better able to support their family and community, but are often enough (over a lifetime) to dwarf the amount their home government spent on their educations. The option of emigration to higher-income countries creates incentives for poor countries to invest in education, and for their citizens to take advantage of it. In short, emigration of skilled professionals to richer countries enhances their productivity, which in turn has positive effects for their home country, their adopted country, and all of us along the way.

Yet even this analysis misses the fundamental point. To insist, as the New York Times does, that foreign physicians somehow “belong” to their home countries is to objectify and commodify them. When you think about it, it’s a remarkable assumption for anyone to make. Foreigners are people too. We’re not chess pieces to be pushed around a board, traded for promises of foreign aid, trade preferences, or anything else one might imagine. The Canadian government has no more claim on me and my career than the American government does on anyone who has ever attended a public school in this country.

This is a universal principle. I don’t care how poor the country is, no government can claim to “own” its people in this way. It’s absurd to suggest that the United States government should alter its immigration policy to cater to other countries’ desire to engage in this form of subtle repression, and even more absurd to think that this would actually benefit anyone.

Physicians who voluntarily leave one country for another in the hopes of making a better life are not “being stolen.” Not unless you think they’re owned by someone other than themselves. At its core, that’s what this discussion is all about. And that’s why, in my mind, there should be no ambiguity as to the right conclusion.

It’s an AMSA Rodeo, and you’re invited!

March 8, 2012 1 comment

Upon arriving to Houston for the 2012 AMSA convention and learning that there is, in fact, a straight-up rodeo in town, my first thoughts turned to the concept of rodeo clowns, and then to clowns more generally.

Harsh? Perhaps. This is, however, the organization of medical students that:

 

Sounds a bit clownish to me. That’s what makes it fun to watch. So for the second year in a row, your intrepid blogger will brave the ghastly Houston weather (and jet lag!) and suffer the slings and arrows of those conference attendees who can’t bear disagreement.

Follow my postings to this blog and to Twitter (under the #amsaconv12 hashtag) to get a bug’s-eye view of the goings-on at the 2012 annual convention of the country’s largest association of medical students.

Cavalcade of Risk #149: Single Best Answer

January 25, 2012 9 comments

As I mentioned earlier, I’m starting to rev up the studying for the licensing exam. A lot of the studying takes the form of practice questions. They’re actually a lot of fun to do: they force you to think actively about the clinical scenario, keep you on your toes, and make it near-impossible for your eyes to glaze over as you semi-consciously read the same page for the 10th time in a row as your eyelids begin to feel heavy, droop, and you start to….

Yikes! Where was I? Right! The Cavalcade is back! Since I’m sure that most of you don’t believe me when I say that doing practice questions is actually fun, I’m going to use this opportunity to try to convince you. With the aid of sophisticated, peer-reviewed psychometric techniques (or not), I have converted each entry into a USMLE-style “single best answer” multiple choice question. Let’s see how you do!

 

Cavalcade of Risk: Step 1[49]

 

Instructions: For each of the following test items, select the one answer that best answers the question posed in the stem.

From Boomer at Boomer&Echo: Which of the following behaviours of financial advisors correlates with the lowest risk of defrauding investors?
a) Claiming to have secret/exclusive insider tips that “your broker doesn’t want you to know.”
b) Counseling clients that investments with higher expected returns tend to be riskier.
c) Offering to move your money offshore to avoid taxation.
d) Pressuring you into making a hasty decision on an “exploding offer.”
e) Charging abnormally high membership fees.

From Ken Faulkenberry at the AAAMP Blog: If shares of the Notwithstanding Blog Internet Empire (NBIE) earned a 8% return in 2011 and exhibited a beta of +1.2 relative to a benchmark of shares in all medical blogs that collectively earned a 5% return, then:
a) The alpha for NBIE in 2011 was +2, making it a good investment.
b) The alpha for NBIE in 2011 was +3, making it a good investment.
c) The alpha for NBIE in 2011 was -3, making it a bad investment.
d) The alpha for NBIE in 2011 was -6.8, making it a bad investment.
e) The alpha for NBIE in 2011 cannot be calculated with this information.

From Van R. Mayhall III at the Insurance Regulatory Law Blog: Which of the following statements DOES NOT accurately characterize insurance company insolvency:
a) Most state-based insurance guaranty associations are more comparable to private member-based associations than true state agencies.
b) Insurance companies are subject to unique state-based insolvency protocols in lieu of entering the federal bankruptcy system.
c) Payouts from state insurance guaranty associations are subject to statutory caps.
d) Insurance guaranty associations are intended to provide “bailout” financing to prop up faltering insurers.
e) None of the above.

From Emily Holbrook at Risk Management Monitor: The shoe-shopping website Zappos.com recently earned positive press for:
a) Losing your examiner’s personal information, along with that of millions of other customers.
b) Locking out customers from your examiner’s home country for 4 days after a data breach.
c) Being named in a potentially-class action lawsuit seeking damages as a result of a data breach.
d) Having “some analysts” criticize the company’s response.
e) Having “some analysts” praise the company’s response.

From Jason Shafrin, the Healthcare Economist: Medicare’s new value-based purchasing initiative, which aims to reduce payment to “low-quality” doctors, currently uses treatment costs for which of the following chronic diseases as an element of its cost measure (as distinct from its quality measure):
a) Hypertension
b) Alzheimer’s disease
c) Diabetes
d) Lung cancer
e) Breast cancer

From Louise Norris at Colorado Health Insurance Insider: Colorado’s Medicaid program has recently undergone much change and provoked a great deal of controversy. What happened at the end of 2010 to put Colorado’s Medicaid program on better financial footing?
a) Successful negotiations to lower the fee schedule for physicians’ services.
b) A 55% increase in enrollment relative to 2007.
c) A one-time $13.7 million grant from CMS.
d) New dedicated revenue from a sales tax increase.
e) The introduction of Medicaid Managed Care programs.

From Dr. Jaan Sidorov, the Disease Management Care Blog: Which of the following is an accurate characterization of Dr. Sidorov’s assessment of Health Insurance Exchanges (HIEs) and recent Kaiser Health News commentary on the subject?
a) The left is doing their best to nurture this fledgling institution to maturity in anticipation of the PPACA’s full rollout.
b) It’s reasonable for consumers to spend more time shopping for consumer electronics than for health insurance.
c) Government-run HIEs will eventually match the ease-of-use and “cool” factor of iPhone apps and online purchasing aids.
d) Multiple insurance options on HIEs include variations in provider tiers, out-of-pocket costs, and exclusions.
e) Consumer expectations for HIEs will eventually be exceeded.

From Julie Ferguson at Workers Comp Insider: Doctors’ deaths differ from the deaths of other Americans in that:
a) Doctors often choose to forgo lifesaving chemo, radiation, and procedures.
b) Paradoxically, doctors often do not have access to the full range of lifesaving technologies as the rest of society.
c) Non-physicians tend to be more ready to accept death.
d) Doctors have a cultural bias against accepting death that isn’t shared by society at large.
e) Non-physicians who choose to fight their disease are often pressured by friends and family to be serene in the face of death.

Answer Key
Of course, since you read all the entries, you don’t need one! But just in case: B; A; D; E; C; C; D; A.

Examiner’s Notes

As always, it’s an honour and a pleasure to host the Cavalcade of Risk! If this is your first time at the Notwithstanding Blog, or if you’re coming back after a prolonged absence, I encourage you to take a moment and poke around some of other posts here. From health care policy to health professions training (i.e. medical school), I’ve got it covered.

The 150th(!) Cavalcade will be hosted on February 8th at My Wealth Builder.


Baby Steps

January 23, 2012 1 comment

It seems that I still need to work on announcing my hiatuses (hiati?) from blogging prospectively. If even CMS has agreed to assign Medicare beneficiaries to ACOs on an ex ante basis, I really have no excuse.

*crickets chirping*

In my defence, I am a second-year medical student, though you might not know it from my taste in health reform jokes.

It isn’t that the content of medical school is intrinsically difficult. In a refreshing change from my previous education in economics and social sciences, there are usually right answers. Unambiguously right answers that rest on a foundation of the (usually) internally consistent logic of human pathophysiology. There are fewer clinically-relevant “models” per se, and their assumptions rarely engender as much bitter controversy as those in… say… macroeconomics. To be fair, my contention that the kidney only makes sense if you posit the existence of a sodium/unicorn dust exchanger in the loop of Henle took a while to gain acceptance.

*more crickets chirping*

What makes medical school hard isn’t the material. It’s the volume that gives us a run for our money. Not only do we have to learn “everything” in two years or less, we have to remember it. For Step 1.

(If you’re a second-year medical student, consider stopping here. For your sanity, of course)

Physicians in the United States are licensed, as are physicians in countries like Canada, the UK, Australia… probably most others. As one might expect, physicians in the US are expected to pass a nationally standardized exam to qualify for licensure. As in Canada, there is one part that is taken before entering post-graduate training, and another part that is taken after at least one year of residency.

However, as politicians are quick to remind us, the US is exceptional. Because in my poking around medical licensure systems of similar countries, the United States Medical Licensing Exam is the only test with anything like Step 1.

(I said it again. Second years, I warned you.)

The simplest way to describe Step 1 of the United States Medical Licensing Exam is as follows: a seven hour long, 322 multiple-choice question, 78 seconds-per-question final exam for the first two years of medical school.

An exam with sacred texts known to medical students across the country: First Aid; Goljan; Robbins Review; the Q-Books; BRS; High Yield

An exam for which completing a few thousand practice questions is considered “barely enough.”

An exam that plays a significant role in whether you’ll get accepted into the residency program, or even the specialty, of your choice.

An exam for which most students are given 5-8 weeks of time off in which to study full-time right before taking it.

An exam for which many students start studying six months in advance. Which for me is… now.

I tell you all of this because between now and mid-May (when 5 week journey of discovery and practice questions begins in earnest) my posting will be even more infrequent than before, and those posts that are written may well feature less of the policy commentary you’ve grown accustomed to and more… “medical student stuff.” That said, I assure you it will continue to be worth your time.

As for your intrepid blogger/test-taker… despite my flair for the dramatic, I’ll be fine. Just under six months from today, I take the next step on the road to licensure. I will take that seven-hour, 322-question exam. And I will crush it. You heard it here first.

Is it worth legislating science to have science-based regulation?

October 23, 2011 3 comments

I’m no fan of quackery, whether it’s of the homeopathic, naturopathic, chiropractic, craniosacral, ayurvedic, or other woo-tastic flavour. I’m even less of a fan when it’s practiced by people with the letters MD or DO after their name. I think it’s deceptive and unethical to promote these unproven and often disproven practices to patients who come to you for professional advice.

Earlier this year, a Florida-based lawyer wrote a piece at SBM arguing that many quacktitioners are likely committing misrepresentation, in the legal sense, and possibly fraud in some cases. This was followed up with a series examining the background and historical legal status of naturopathy, acupuncture, and chiropractic, and now a proposal to enshrine science-based medicine in law.

Read the whole blog post to get a better sense for what’s proposed. The short version is that the proposed law would limit the scope of practice of licensed healthcare professionals by imposing a two-part test to be interpreted “according to its generally accepted meaning in the scientific community”:

  1. Is it (a diagnosis, treatment, procedure, medication, etc.) plausible, based on “well-established laws, principles, or empirical findings in chemistry, biology, anatomy or physiology?”
  2. If not, is it “supported, to a reasonable degree of scientific certainty” by either “good quality randomized, placebo-controlled trials” or “by a Cochrane Collaboration Systematic Review or a systematic review or meta-analysis of like quality.” If not… it’s verboten.[a trial that would pass the legal test would have a placebo control group, random assignment, no more than 25% attrition, at least 50 participants in each study arm, and publication in a "high-impact, peer-reviewed journal."]

    If so, has its ineffectiveness been “demonstrate[d], within a reasonable degree of scientific certainty” by the aforementioned controlled trials or Cochrane Reviews? If so, plausibility won’t save it from being forbidden.

With a scheme like this, the devil is usually in the details. In this case, I don’t think one needs to dive in too deep to realize why this is a bad idea.

Politics is a sausage factory, and the science-based medical community should be hesitant to get it unnecessarily involved. Just because something is wrong/a bad idea (like quackery) does not necessarily mean that it should be forbidden in an ideal world. Just because something wouldn’t exist in an ideal world (like quackery), it doesn’t mean that it’s a good idea to use the force of law to ban it.

As narrowly-tailored as it aims to be, this proposed law will have the effect of legislating scientific truth. What constitutes scientific consensus? Plausibility? A high-impact journal? Do we really want these and other scientific questions that are now debated in the literature and the public sphere to be decided definitively by judge and jury? Do we want to give the power to certify science to our legislatures? The same legislatures that have already licensed all sorts of quacks at the behest of their lobbyists?

Science is politicized too easily. Where a scientific conclusion is translated by law into an inevitable legal and policy consequence, the science will make a better political target than the legislation. See this piece on the Endangered Species Act for an example of what I mean.

The best of policies can be undone by politics. I’ve given a fair bit of thought to how one might design an anti-quack law that doesn’t have the potential to go drastically awry. I can’t, though this is likely a result of insufficient creativity on my part.

In general, there are two types of people in government. “Our people” and “their people.” Who they are may vary based on the party or based on the issue, but both types will always be there. And both types win and lose elections.

Here’s the question: do you trust “their people” to exercise good stewardship of scientific truth? If not, let’s not be too hasty in handing over the reins to the politicians.

Some Friendly, Unsolicited Advice for PNHP

September 19, 2011 Leave a comment

Physicians for a National Health Plan (PNHP), as the name suggests, is the biggest and best-known group of American physicians who support replacing the current health care system with a national single-payer. I used to be a big booster of this idea, but it doesn’t take much poking around this website to figure out that my feelings towards American single-payer reform have cooled considerably (to say the least).

I’ve been fortunate to attend a number of events run by senior PNHP officers at SUMS and at other venues (e.g. the AMSA conference back in March). At one of the more recent events, I had the privilege of speaking at length to some of their representatives at length. As you might expect, the resulting discussion was direct but cordial.

Though I disagree with their proposed policies, I do respect PNHP as an organization. It is one of the biggest mobilizers of physicians and medical students who are in favour of radically changing how American health care operates. Their passion is palpable at even the most informal event. They do have a contribution to make to the health policy conversation. Unfortunately, while there is an intellectually-coherent case to be made for single-payer (a mistaken case, in my view, but respectable and honest), I have yet to hear it from anybody at PNHP (n=small).

I harbour no illusions about my ability to persuade hard-core single-payer believers in a short blog post. I do, however, have some friendly and hopefully helpful advice on how to talk to the uninitiated and the un-converted more productively:

1) Don’t try to twist the data to support your case. It shows. At best, data on Medicare-vs.-private administrative costs are equivocal, cross-country infant mortality comparisons are spurious, life expectancy at birth captures a lot of mortality that is out of the hands of the healthcare system, and so on. The empirical case for single-payer superiority is thin gruel.

2) When someone asks whether you’d trust a Republican President and Congress to implement single-payer well, don’t duck the question. It’s a more important one than you seem to acknowledge. If you want to centralize control in government, be prepared to talk about how you will deal with your ideological opponents who tend to win elections every now and then.

3) Your moral argument is a lot stronger than your empirical argument. Why not make it explicit? Americans don’t tend towards collectivism, but neither are most people data-oriented policy wonks. Instead of making a weak case based on weak data, you should be prepared to talk about the moral strengths of single-payer relative to the alternatives. Where are the mentions of equity, obligation, and collectivism? (I ask this seriously, not passive-aggressively)

4) Be fluent in the language business, politics, and economics. When your executives are being matched point-for-point by medical students who majored in biochemistry and similar fields, you know you have a problem. If you’re going to call for the dismantling of private insurance, have some idea of how the sector actually operates. If you want to give control of the health system to government, be able to discuss the nuances of Washington power structures. Be able to respond to phrases like “deadweight loss,” “price-vs.-income problems,” and “underwriting” with more than a blank stare.

5) Anecdotes are rarely dispositive of policy questions. When someone points this out about anecdotes involving people you know, don’t get offended; this rarely advances discussion. When you introduce your friend’s problems to the debate, it’s not your opponent who’s trying to use them to score “cheap points.”

6) Milton Friedman is said to have told an up-and-coming Walter Williams, after the latter appeared on TV to discuss school choice, that “[Williams] was right about everything but [had] made one mistake [...], when you talk about liberty, you have to smile.” You may not be talking about liberty as Friedman understood the term, but his advice is every bit as applicable.

 

Cavalcade of Risk #135: Independence Days Edition

July 13, 2011 5 comments

July 2011 has given us many causes to celebrate, and we’re not even half-way in! Early July is when we see Canada/Independence/Bastille Day celebrations in Canada, the United States, and France respectively. This past Saturday was the first day of independence for the brand-new Republic of South Sudan. And today, for the 135th iteration of the Cavalcade of Risk blog carnival, I am pleased to present nine incredibly informative and insightful submissions (plus one of my own) for your edification.

In recognition of all of the countries with July independence days, we’re going to be running a carnival sideshow at this blog carnival today. Interspersed with the submissions will be a small number of flags with trivia-esque hints for countries with July national days; the names of the countries will be at the end of the post. Hopefully this will be an entertaining mid-July “trivial pursuit” to accompany the serious business of risk discussed in the submissions!

This country's neighbours include Suriname and Brazil. (is this a trick question?!)

Two related posts from Jacob Irwin and a guest blogger at My Personal Finance Journey discuss the perils of e-commerce and sharing financial information online. Jacob dissects an example of a common ‘phishing’ scam, and the red flags that should cause one to be suspicious of an email that seems designed to separate you from your personal information (and eventually, your money!). His guest blogger, Les Roberts, talks about how to stay safe while shopping online, and discusses some of the basic technical aspects of secure online transactions.

Tom Drake at the Canadian Finance Blog has a comprehensive post addressing what he claims is the conventional wisdom regarding life insurance: buy term and invest the difference. He argues that while the strategy has its obvious appeal, it’s highly sensitive to the assumptions used in the term vs. permanent comparison. Well worth a read!

No, it's not an American flag, though their capital is named for one of America's Founding Fathers.

Hank Stern, writing at InsureBlog, notes in the context of recent floods in North Dakota that sometimes taking a risk with your insurance coverage can be justified, but as with the analysis in the previous post, that it all comes down to how robust your assumptions are. Come to think of it, isn’t that the case with just about anything?

This country currently leads the world for longest stretch without an official government. You might say they've been waffling for the past year or so.

Wondering about health insurance exchanges? Dr. Jaan Sidorov (aka the Disease Management Care Blog) took one for the team and dove into the depths of the details of Utah’s already-existing exchange. He notes that setting up an exchange is far more complicated than one might think at first glance, and that it’s unlikely that they will be functional in every state of the union come the 2014 deadline. He also ponders the potential for exchange listing/delisting to be used as a quasi-extra-legal cudgel (my words, not his!) by state insurance regulators seeking additional ways to force insurers into line.

“Oh no they didn’t!” is a common refrain from business owners wondering how that absurd claim could have been paid out by their workers’ compensation carrier. Nancy Germond has a clear and concise explanation of why, “oh yes they did!“, along with an interesting history of how workers’ comp came to be in the first place. Read on at Allbusiness.com.

Do you remember the Dodd-Frank bill? Thought it only applied to big banks and high-falutin’ investment securitization shenanigans? Van Mayhall III has a post at his Insurance Regulatory Law blog reminding us that the new provisions of the law could also affect larger insurance companies and their affiliates in ways that management will want to be aware of well in advance of anything going wrong.

St. Thomas isn't just one of the US Virgin Islands. This equatorial namesake, however, has a "princely" companion.

At Colorado Health Insurance Insider, Louise Norris asks whether eligibility criteria for the newly-established federal high-risk health insurance pools is hampering enrollment. Colorado is an interesting vantage point from which to observe this: the twenty-year-old program “CoverColorado” is very similar to the new federal one. The differences between the two programs’ eligibility rules generate good insight into where the federal program is going wrong in attracting enrollees.

If you asked this country for a date in 1995, you might find the time being pushed up unexpectedly.

Workers Comp Insider Julie Ferguson and I seem to have been on the same wavelength for this blog carnival! I recently wrote a post arguing that the problem of poor price transparency in health care may be an objection to the use of consumer-directed health plans now, but that early adopters will pave the way forward for the rest of us. The chicken-and-egg issue is not all that intractable! Julie Ferguson, on the other hand, has a far superior post addressing the same topic. She points out the immense price differences for the same medical services that exist across state lines and across street intersections alike, and provides links to seven (count’em!) different resources for employers and individuals to use to get the best bang for their medical buck.

***

This brings CoR-135 to a close. Thank you to all of the submitters for their quality posts on risk, and thank you to Hank Stern for his tireless work managing the behind-the-scenes logistics of every edition of this blog carnival. It really is an honour for this callow medical student to be invited to sit at the grown-ups’ table and host the Cavalcade!

The next edition of Cavalcade of Risk will be hosted by Jacob Irwin at My Personal Finance Journey on July 27th.

***

For those of you who tried your hand at the national flags-and-trivia sideshow, the answers are here.

The first one was something of a trick question. It’s France! French Guiana sits atop the northern coast of South America, and is every bit a part of France as Paris or Nice, and as such France has land borders with Brazil and Suriname. Bastille Day: July 14.

It’s not an American flag, but there is a reason it sorta-kinda looks like one. Liberia was established as a place to which to “repatriate” black Americans in the early 19th century, the idea being that they could live a life of greater freedom there than in the antebellum United States. James Monroe was one supporter of this effort: the Liberian capital is Monrovia, after him. Proclamation of independence from the United States: July 26.

Next up: Belgium! It’s been quite a while since they’ve had an official government, and the country is wracked by political tensions between the Flemish and Walloon communities. Oath of the first King of the Belgians: July 21.

St. Thomas in Portuguese is Sao Tome (can’t figure out accents, sorry!), and the flag is that of Sao Tome and Principe, a small island nation located along the Equator in the waters west of Gabon and Equatorial Guinea. Independence from Portugal: July 12.

Prior to 1995, the Pacific island country of Kiribati was split by the international date line. Makes inter-state time zone differences in the US seem incredibly convenient by comparison, doesn’t it? After kinking the IDL a bit to the east to accommodate the entire country on one side, Kiribati was positioned to be the first country in the world to see each new day. Independence from the UK: also July 12.

The Other “Medicare”

July 9, 2011 Leave a comment

I’m surprised that it’s taken me so long to devote even a cursory post to health care in Canada (or as it’s referred to back home, “medicare”). After all, as my disclaimers page says, “if the blog title didn’t give it away, I’m Canadian.” However, a recent series of posts at Medscape’s medical student blog “The Differential” [free registration required] inspired me to take on the subject.

I want to make clear at the outset that this post is intended to be descriptive. My thoughts on Canadian medicare and its implications for proponents of single-payer in the US can wait for another time.

Before delving into the Medscape commentary itself, we should begin with some general background on health care in Canada.[1]

***

[1] – Much of this background was assembled while preparing a presentation that for the first  health economics course I took in university. I have done my best to bring things up to date. Depending on the minutiae of when laws are introduced vs. passed (and which of the two you refer to), some of the earlier dates in the History section may be 1-2 years off from what you read in some other sources.


History


Canadians feel strongly about their medicare. Most of them love it, or at least love the idea of it. If you’re a politician wanting to discuss the system in terms of anything other than providing more funding for the system, you’re likely to be toast in short order. And don’t even think about promoting “two-tier” health care! Governments at the federal and provincial level have risen and fallen based on the health care issue; it’s a major component of provincial government spending, and many Canadians view medicare as a component of national identity.

Government involvement in Canadian health care began in earnest in 1944, when the government in the province of Saskatchewan introduced a system to provide free health care to the elderly and retirees. This was followed shortly in 1947 by a public hospital insurance plan featuring a $5/person/year premium. In 1959 the socialist government of Tommy Douglas (considered one of the “fathers of medicare“) announced the first universal public health insurance program in Canada. Needless to say, Saskatchewanian (Saskatchewanite? Saskatchewanish?) physicians were wildly opposed, even going on strike for a few weeks in 1962.

A decade later, the ideals that drove the new program in Saskatchewan came to fruition on the national stage, as medicare was introduced in the remaining Canadian provinces beginning in 1967. This was not done in one fell swoop. The constitution in Canada has established health care as the domain of the provinces. The federal government rolled out medicare across the country not by fiat, but by offering matching funds (now block grants) to provincial health plans that met certain legislative criteria; this has given the federal government an important role in both financing and “regulating” provincial health care plans, though in recent years the federal share of health financing has fallen as low as 15-20%, with the rest paid by the provinces. In this sense, the structure of Canadian health care financing more closely resembles that of US Medicaid than of US Medicare. It should also be noted that both the earlier and current iterations of provincial health plans covered mostly to exclusively hospital and physician services: no home care, drugs, devices, etc.


Federal Legal Framework


By the mid-1970s, the last Canadian province had signed on to medicare and the program was not due for another major shake-up until 1984, the year the Canada Health Act was passed. The CHA is still the current governing framework for public health care in Canada. It re-affirmed the five basic criteria and two conditions for federal funding, but unlike the previous federal legislation, the CHA more clearly authorized the federal government to withhold transfer payments as a penalty for provincial transgressions.

The CHA imposes 5 basic eligibility criteria for provincial plans to receive federal support.

  1. Public administration: each province’s health plan must be administered by a publicly-accountable, non-profit entity. In practice, this is usually a government agency or arm’s-length government-owned insurer.
  2. Comprehensiveness: all “medically necessary” services must be covered, though provinces get surprisingly wide latitude in defining what is medically necessary.
  3. Universality: all residents of a province must have access to public insurance on the same terms and conditions. In other words, all insured must be equal, and all are equally insured. The Act defines “insured persons” in such a way that treatment sought under worker’s compensation or auto insurance regimes escapes some of the dictates of the Act. In addition, provinces are allowed to impose minimum residency length requirements (e.g. 6 months in Ontario) before residents are eligible for coverage; in some provinces, this even applies to Canadians moving from other provinces.
  4. Portability: provincial plans must reimburse insured persons for medical services used during temporary absences from the province, at least at the rate specified in the provincial plan’s fee schedule.
  5. Accessibility: access to coverage must be uniform and barrier-free. There can be no discrimination or disparate treatment based on age, income, health, etc. On the provider side, provinces are required to have a clear and transparent fee schedule, with providers being “reasonably” compensated.

In addition, the CHA imposes two more specific conditions on funding that cut more closely towards health care delivery, as opposed to the five conditions that govern financing.

  1. Balance-billing (or “extra-billing” as it’s sometimes called in Canada) is banned. Physicians and hospitals are not allowed to charge provincially-insured persons for provincially-covered services in addition to the province’s payment for the service. This is similar to US Medicare’s ban on balance-billing.
  2. Provinces are not allowed to impose “user charges” for insured services. This became an issue recently as the government of Quebec toyed with the idea of introducing modest co-pays for some services for some insured. Not allowed.

The result is a “system” that’s not just one system. Each province (and possibly each territory?) has its own provincial health insurance plan that is run subject to the constraints of the Canada Health Act. The federal government administers health plans for members of the armed forces, the RCMP, and First Nations living on reservations. Worker’s compensation and auto liability insurance also play small roles.

The provincial plans are the major players, and are what most people in Canada and the US think of when they discuss the “Canadian health care system.” Though the criteria laid down by the CHA result in the appearance of national uniformity (and to be fair, a good deal of actual uniformity) in how health care is financed, administered, and delivered in Canada, there is a good deal of meaningful variation between provinces.


The Private Sector


One important dimension of variation is the role of the private sector in delivering and insuring services that are covered by provincial plans.  As of 2005 (I haven’t looked more recently, but am unaware of major changes since them):

  • Four provinces (QC, AB, BC, PEI) allowed physicians and other covered providers to set their own fees for providing covered services without billing the province. However, these provinces did not allow any reimbursement of patients or providers for covered services not billed to the province. In addition, these provinces banned private insurance coverage of any service covered under the provincial plan, even if delivered in the private setting.

    In 2005, a physician and his patient sued the Quebec government, arguing that the ban on private insurance coverage of privately-delivered publicly-covered medical services violated the Canadian Charter of Rights and Freedoms and the Quebec Charter of Rights and Freedoms, especially given long waiting times for treatment in the public system. The case made its way to the Supreme Court of Canada, which ruled that the prohibition violated the Quebec Charter of Rights and Freedoms. Given that the decision was grounded in QC provincial law, it had only limited direct impact in the other three provinces.

  • Three provinces (ON, NS, MB) forced providers going outside the public payment system to charge at the public fee schedule. They also banned private insurance coverage of privately-delivered care that was also covered by the provincial plan, though two of these provinces (ON, MB) reimburse patients for out-of-pocket expenses paid to private providers.
  • Three provinces (SK, NB, Nfld) allowed unfettered private delivery and private insurance for services covered by the provincial health plans. Newfoundland would reimburse patients for out-of-pocket expenditures to private providers up to the provincial fee schedule, whereas SK and NB provided no reimbursement for private expenditures.

     

  • Private diagnostic clinics were beginning to emerge in three provinces (QC, ON, AB) in response to a pervasive lack of timely access to diagnostic imaging services. Though these clinics operated outside the public system, Ontario and Alberta actually contracted with some of them to provide services to public patients. For those with the means, however, payment could secure an earlier appointment for imaging, shortening the amount of time waiting for a diagnosis, and where applicable allowing earlier entry into a queue for treatment.


A National Single-Payer?


One of the features of health care in Canada that is often overlooked by proponents of single-payer in the United States is that Canada as a whole does not have a “single payer,” which means it’s hard to make sweeping generalizations about details. Covered services, the quality and quantity of care provided, and physician/provider payment vary across provinces. Not earth-shatteringly so, but enough to introduce a small modicum of inter-provincial competition for physicians, and “competition” in services and benefits mediated through political pressure (e.g. “Patients in BC can get this drug, why won’t you pay for it here in Nova Scotia!”). Given the perennial importance of medicare as a political issue, the importance of popular pressure to increase funding and expand services should not be trivialized.

It’s also worth pointing out that about 30% of Canadian health care spending is individuals’ out-of-pocket payments for things like drugs, home health, hospital amenities, and other non-covered services. This is 2-3 times the fraction of health care spending in the US that comes directly out of individuals’ pockets in exchange for services received.


Unions, Public Employees, and Hospitals


Contrary to what I’m told is common belief in the US, most Canadian physicians are not government employees. Though some provinces hire doctors for what I surmise are analogues to Community Health Centers, the vast majority of physicians are independent contractors paid on a fee-for-service basis according to the provincial fee schedule. In Ontario, some family physicians practicing in so-called “Family Health Teams” are capitated, and some emergency physicians are paid by the hour. An interesting wrinkle is that some provinces have hard caps on how much a physician can earn in any year; obviously this creates disincentives to working so hard / so much that the cap would be reached in a year. (It’s not just hypothetical: I have a few physician friends in Canada who have made great strides in their golf game as a result of this cap).

Hospitals, on the other hand, are closer to highly-regulated public utilities. In Ontario, most hospitals are non-government or arms-length, non-profit entities. Most of their money comes from a “global budget” (i.e. “this is your budget for the year”), though there have been experiments with US Medicare-like prospective payment systems for certain conditions. Patients also pay per-diem fees for non-covered amenities (e.g. private inpatient rooms, phone and TV service as inpatients). Provinces (or regional health authorities, or whichever provincially-created entity is in charge in a given province) have at least some control over hospitals’ capital spending. In Ontario, regional health authorities determine what sorts of specialty services and facilities are available at which hospitals within their purview. Hospitals are allowed to engage in public fundraising for capital campaigns; I’m not sure how this interacts with provincial controls on capital spending.

Physician licensing and governance is a point of special interest to me. There is the usual plethora of physician groups, specialty societies, etc., similar to what is found in the US. However, given the effective monopsony power of provincial governments in the market for physicians’ services, provincial medical associations have emerged whose main function is to represent physicians in fee schedule negotiations with government. Canadian physicians seem to have more input into provincial fee schedules than American physicians do into Medicare fee schedules. Whereas American physicians set the relative weights of various services in the Medicare fee schedule (and only indirectly lobbying for changes in the monetary conversion factor), Canadian physician organizations typically negotiate for dollars directly with government.

The Ontario Medical Association is one of these organizations. Unlike groups such as the American Medical Association, their orientation (and their website!) is very physician-centric. In addition to negotiating the terms of the provincial fee schedule, the OMA also sets maximum rates that physicians can charge for certain non-covered services (phone consultations, insurance forms, etc.).

Physician licensure and discipline is also done at arm’s-length from government. Unlike in the US, where medical licenses and disciplinary action are typically the domain of state government medical board, most (if not all) Canadian provinces have allowed the medical profession to remain somewhat self-regulating. For instance, the College of Physicians and Surgeons of Ontario is the licensing and disciplinary body for physicians in Ontario. Its governing body is composed of 16 physicians elected by their peers, 3 physicians selected from Ontario’s 6 medical school faculties, and 13-15 members appointed by government. Also of note is the fact that many provinces, including Ontario, condition licensure on the Canadian equivalent of specialty board certification. The opposite conditionality holds in the US.


By the Numbers


It would be foolish to try to replicate this series of three posts at the Healthcare Economist, where Jason Shafrin does a wonderful job of collecting the major summary statistics for infant mortality, life expectancy, access to care measures, and physicians per capita.


Next Time


In an upcoming post, I’ll discuss common American medical student perceptions of Canadian health care (as exemplified by the post at The Differential mentioned at the outset, and with some telling anecdotes from March’s AMSA conference), along with the always-hot topic of waitlists for treatment.

AAFP Doubles Down on Government Trough, SGR

May 6, 2011 Leave a comment

Few physicians are fans of the Sustainable Growth Rate: the formula by which Medicare is (supposed) to make adjustments to physician payment each year. Primary care physicians would be especially hard hit by the massive payment cuts that the formula calls for. So far, these cuts have been staved off for months at a time over the course of the last few years, resulting in a cycle of impending doom followed by temporary relief as the can is kicked yet further down the road.

The Wall Street Journal’s Health Blog had this to say on physician organizations’ proposals to Congress for longer-term solutions to the SGR mess:

 American Medical Association: Repeal the SGR, then “implement a five-year period of stable Medicare physician payments that keep pace with the growth in medical practice costs.” During that period, pilot “a new generation of payment models” (medical homes, for example), then transition to those that improve quality, care coordination and costs. The AMA also wants Medicare to permit balance billing — physicians charging Medicare beneficiaries for an amount above and beyond what the government program covers.

American Academy of Family Physicians: After SGR repeal, there would be a five-year transition to the patient-centered medical home. Primary-care physicians would receive a higher reimbursement rate than other specialties, and primary-care incentives included in the health-care overhaul law would be increased and extended.

American College of Surgeons: After SGR repeal, set a “realistic budget baseline” for future payment increases, ” which should “fairly reflect the costs of providing quality health care and are sufficient to preserve the patient-physician relationship and ensure patients have continued access to the physician of their choice.” During a five-year transition to different payment models,  reimbursement growth would vary by service.

To my surprise, it’s the AMA that’s on to a nugget of something good: allow balance billing. Not a perfect solution, but it could be a major step towards something sustainable in the long run.

Somewhat less surprising is the willingness of the AAFP to double-down on the model that’s already failed them for so many years. It’s unfortunate. If primary care is going to be attractive to people like my classmates and me, the pay will have to be better, and the job will have to be better. Living an even more bureaucratic work experience and making a living that continues to be at Congress’s mercy aren’t on any medical student’s wish list.

AMSA Follies: Swagalicious

May 5, 2011 1 comment

I’ve alluded to AMSA’s… interesting choices regarding who they will and will not take money from (or at least, who they will claim not to take money from). Here’s the long-promised photographic evidence: the swag I collected from conference exhibitors.

What you’ll find below the cut includes:

  • A pamphlet, a bag, and some pens from Medical Protective, a professional liability insurance company owned by Berkshire Hathaway.
  • A Merck Manual (yes, that Merck… the one that makes all these ”pharms” of which AMSA claims to be ”free”).
  • Materials from various academies of quackery (as seen earlier).
  • A pen, a magnet, and some other swag from the FDA.
  • Application forms for various forms of insurance/consumer credit provided by or through AMSA.
  • Some stuff from banks.
  • Swag NOS.

Read more…

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