Foreigners are people too

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.

Theft? Madness is more like it

In the process of catching up on Google Reader post-convention, I came across this recent post from Robert Centor criticizing a recent NY Times Magazine article alleging that ‘America is stealing [sic] the world’s doctors.’ As Dr. Centor rightly points out, this is utter nonsense, on multiple levels. In this post, I want to address the aspect of the “foreign doctor/brain drain” question that applies to students like me; in the next I talk about physician and other “brain drain” more generally.

As a student at an LCME-accredited American medical school, I don’t fall into the “international medical graduate” (IMG) category in quite the same way as those in the article. And despite the fact that I’m “only” Canadian, I’m still foreign enough to have to figure out where my next visa will come from for residency, fellowship, and beyond. This post will not be an extended disquisition on the finer points of American immigration law and visa classifications (subjects with which I am far too familiar). You will, however, get a taste of how dysfunctional the American approach to foreign physicians is, especially at a time marked by widespread predictions of an impending doctor shortage.

Most public medical schools in the US and many private schools will not even consider non-citizen/non-permanent resident (foreign) applicants. Those of us who do get an offer somewhere find that we are not eligible for US government financial aid, and for a great deal of school-based aid as well. Despite this, we still benefit indirectly from taxpayer subsidies. Tuition makes up a minuscule fraction of medical school revenue; according to SUMS‘s tax returns, our tuition barely covers the costs of the medical education and educational technology support staff. Nothing more. The rest comes from patient care revenues and various grants, much of which in turn comes from the taxpayer.

After receiving a medical education at great personal financial cost (debt), yet one that’s also heavily subsidized by the US taxpayer, the expectation is that we go home. Or at least leave the country. Completing post-graduate training in the US requires finding residency programs that are willing to sponsor one of the two main types of visas that can be used for this purpose: the J-1 comes with a 95% iron-clad requirement to leave the US and work in one’s home country for two years upon completion of training before one can come back to this country; the H-1B comes with a 100% iron-clad time limit of six years (for reference, here is a list of residency length by field, not including sub-specialty fellowships). Even assuming one could find and be accepted into a program that will sponsor either visa, neither seems particularly conducive to “theft” of foreign physicians.

Unlike in medical school, foreigners in US residencies and fellowships often do benefit from direct US taxpayer subsidy, as Medicare pays for most residency positions, including salary and benefits. So what happens to foreigners who receive direct government subsidies to train in their specialty?

Again, the expectation is that we will go home (in the case of the J-1 visa), or at least leave the country (in the case of the H-1B). The United States is one of the few, perhaps the only, developed country that requires all long-term immigrants to be sponsored by an employer or a family member. There is no “points” system for independent applicants; no way for someone like me to prove that I’m smart, talented, possess in-demand skills, and probably ought to be allowed to stay indefinitely (not to mention the hundreds of thousands of dollars of subsidy I will have enjoyed by this point). More shockingly, there’s seemingly no desire on the part of the US government to hold on to the medical talent that it paid to develop.

What employer would sponsor a foreign physician? Moreover, what employer would sponsor any employee for permanent residence before at least a few years of full-time employment have passed? The H-1B comes with a six-year time limit; look at the length of various residencies at the link above. We’re short primary care physicians (3 years), yes, but we’ll be short general surgeons (5 years) and cardiologists (6 years) as well.

I, and those in my situation, are the lucky ones, comparatively. We don’t even have to jump through extra hoops for medical licensure and board certification the way “real” IMGs have to. It’s a wonder anyone manages this at all.

If the United States is “stealing” [sic] foreign physicians, it’s one of the most tragically/comically inept thieves I’ve heard of. Even in my “easy” case, after I will have spent 7+ years being educated at world-class American schools (11+ if you count college), the US is happy and indeed seemingly eager to see me go.

Some people would approach this conundrum entirely differently. They would argue that because foreigners in the American medical training process receive indirect and then direct government subsidies, the process should be closed to them in the first place. I understand the logic, but this strikes me as doubling-down on the foolishness of the current system. Getting into medical school and residency is frighteningly competitive. Being a foreigner only makes it harder. I make no claims as to myself, but one would therefore expect the marginal foreign applicant to be at least as good as the marginal American applicant… if not better. That some of them manage to stay in the US to practice medicine even in spite of the numerous hurdles along the way should suggest even more strongly that these are the people you want to hold on to.

Cavalcade of Risk #149: Single Best Answer

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.

Cavalcade of Risk #135: Independence Days Edition

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 CDHP Chicken and the Price/Quality Data Egg

There was a post at KevinMD.com not a few days ago that was as interesting for its comments as it was its content. In the post “Consumer-Driven Healthcare Will Only Shift Costs if Implemented Poorly,” the author argued that “consumer-driven” insurance requires consumers to have access to at least a minimum degree of information to guide their decision-making. If employers/insurers shift both the costs and decision-making about healthcare onto their employees/insured, the latter will require either structural “nudges” or other decision-making support to be able to access the care they need and save money.

A brief discussion in the comments brought out what is one of the more common objections I hear to any attempt to move health insurance in the direction of high-deductible catastrophic care policies: “how are patients supposed to find information on quality and price from physicians and hospitals? It’s not there? This can’t possibly work!”

It’s not a trivial objection, but when all is considered I can’t say that I’m convinced by it.

It’s not as though the health care industry hasn’t caught onto the need to devise, assign, and disseminate cost values for different tests and procedures (even if only for internal purposes), even where cost was never previously a consideration. See the recent highly-publicized study in Archives of Surgery finding that merely giving medical staff information on blood test costs reduced spending by lowering utilization.

As more and more patients start asking for real price and quality data, providers will have an incentive to find it and give it to them. With traditional third-party payment, what does it matter to the physician? They get paid what someone else says they get paid. If my classmates are representative of future physicians more generally, most would far rather not even have to think about pricing and bundling their own services if they don’t have to. That won’t change unless there’s a demand for it, and right now the main source of that is patients with consumer-directed plans.

We already have a great deal of beneficial, effective competition on both price and quality in areas of the health care market that are actually markets, and in which people tend to pay out of pocket. Think of the trends of both price and quality of laser eye correction over the last few decades, or cosmetic surgeries that aren’t covered by insurance. These are elective procedures with real risk of misadventure, as with many services provided by physicians and hospitals. The reason that price and quality data are easier to come by for LASIK than for cardiac catheterization is precisely because patients have an interest in knowing. This isn’t to say that the process of developing the data is necessarily quick and easy, but surely this should disprove claims that transparent pricing “could never happen” in health care more generally.

Right now, I’d imagine that the people most likely to sign up for consumer-directed health plans (though obviously there are many exceptions) are those who want to, or at least are comfortable with managing more of their health care spending in exchange for lower premiums and capped out-of-pocket spending. As with any other new product, it is the early adopters who will pave the way forward for other consumers. My prediction is that as a small but growing group of patients and physicians begin to leave the third-party payment model, whether via HSAs or by exiting insurance entirely for some services, the medical industry will get better at providing transparent price and quality information to everyone who asks. CDHPs (and the providers who accept them) today may be like the first cell phones in the 1980s: as the early adopters push for improvements, we’ll see the product evolve into something that can be used more widely in the future.

Yes, there is something of a chicken-and-egg problem right now. But it’s anything but intractable, and certainly won’t be a problem forever.

***

There is a strong argument to be made that transparency and competition on quality goes hand in hand with price competition. John Goodman from the NCPA makes the case here and here, among other places.

The Other “Medicare”

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]

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[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.

AMSA Follies: By Reader Demand

I was originally going to abandon any effort to post the remainder of my coverage of the American Medical Students Association’s 2011 annual convention when it become clear that it would be so delayed that it could hardly be considered topical. A small number of readers have encouraged me to post the highlight anyways, using the arguments: better late than never; the events left to be blogged were the most interesting; and finally, I may as well “complete the chronicle.”

Below the cut, for those interested in how health policy was presented at the AMSA convention, are highlights from two events: a debate between Michael Cannon (Cato Institute) and Robert Zarr (American Academy of Pediatrics, Physicians for a National Health Plan); and a later event featuring Walter Tsou (immediate past president, PNHP).

AMSA Follies: The Duck Pond

Q: What’s bipedal, featherless, and quacks like a duck?

A: The quacks representatives of the Association of Accredited Naturopathic Medical Colleges.

That’s right… AMSA sold them a booth at the 2011 convention, to say nothing of the smattering of naturopathic students in attendance as participants.

AMSA won’t quite take pharm money (more on that tomorrow), but they have no problem selling out to pseudoscience (that term is far too generous).

I went up to the booth and feigned ignorance as to what naturopathy is. I was told that they are “primary care physicians” who treat the “whole patient in a holistic way.” I pushed harder and harder, and for the longest time they continued to maintain that they’re “just like MD physicians.” Finally, one of their reps cracked, and poured forth the litany of quackery to which they subscribe: homeopathy, herbalism, acupuncture, therapeutic touch, and all sorts of other nonsense.

Fortunately, their written materials were more straightforward about their quackishness, though there were also some materials to recruit MD students for “integrative medicine” training at “Bastyr University“ in the Pacific Northwest (of course). Too bad they’re competing with AMSA’s own summer pseudoscience academy, whose flyers I also picked up.

For an organization that professes to support evidence-based medicine in other realms, and that ostensibly represents those students who are training to become applied scientists, this is really sad. The political gripes I might have with AMSA are one thing, but legitimizing quackery of this sort is truly beyond the pale. A poll of an unrepresentative convenience sample indicated that this is a non-partisan issue. “Open-mindedness” and “tolerance” are great, but when it comes to practices that don’t work, that mislead patients and that cast a pall on scientific medicine, organized medicine (AMSA included!) shouldn’t hesitate to take a stand.

If AMSA could be a forceful voice against pseudoscience much as they are a forceful voice for a variety of health policies with much less evidentiary support, they would be doing medicine, science, and patients a great service indeed.

***

I almost forgot, at the other end of the exhibition hall was the ayurvedic quack booth. I hope these pictures speak for themselves.

 

 

 

 

 

AMSA Follies: Primary Care and Health Policy

A pair of physician-researchers from an AAFP-funded research institute spoke about integrating a career in medicine with a career in policy research. That was interesting to me as a medical student, but of general policy interest was their take on the future of primary care:

• They were surprisingly genial about specialists, and avoided playing the blame and recrimination game. This was welcoming and refreshing. Medicine is divided enough as it is.
• They count Nurse Practitioners and Physician Assistants as primary care providers. I would think that this undermines their cause slightly (“hey, if non-physicians can do the job…”), but I’m sure they have their reasons.
• I overheard one of the speakers talking to a student in the hallway after the main presentation. I caught a bit of their discussion about Qliance. They were both of the opinion that that sort of market-based, patient-centred model will be important to revitalizing primary care. The AAFP speaker was trying to cram the Qliance model into the “ACO” box, but hey… no one’s perfect. It’s great to see some of the professional societies recognize the need to get off the government-dependence gravy train before it derails completely.

Also of note was the following… special moment: one of the students in the audience objected strenuously to the speakers’ use of “industrial,” “corporate” terms like — wait for it! — “supply,” “demand,” “surplus.” He wanted to know how the sky would keep from falling so long as we keep referencing “that paradigm.”

Oy.

AMSA Follies: Entrepreneurialism/Market Solutions *and* Social Justice?

Dr. Gloria Wilder, one of the “thought leaders” for this year’s AMSA convention, was introduced to us as someone who believes in “market solutions to social justice problems.” The program mentioned something about her being a fan of entrepreneurialism. Needless to say, I skipped out on the AAMC’s Chief Academic Officer to see what Dr. Wilder had on offer.

Turns out that it wasn’t quite what I was expecting. Silly me, expecting any sort of heterodoxy at an AMSA convention (besides the token non-liberal on one side of tomorrow’s policy debate).

I really wished that Dr. Wilder would have talked more about her business, Core Health and Wellness Centers. Aside from a throwaway mention of its $1 million+ profitability this year (treating mostly poor patients, at that!), and her lack of contempt for the wealthy, the talk was centered mostly on traditionally liberal conceptions of social justice (e.g. how the minimum wage ought to be higher, about how some have the temerity to claim that Medicaid might be associated with worse outcomes than uninsurance, how one might not want an all-mighty public sector union in Wisconsin, etc.).

Which is fine. Those are not unreasonable positions to hold, wrong though I may find them. What’s clear, however, is that Dr. Wilder does believe in an entrepreneurial manner of achieving the social justice goals that she advocates for. There was no mention of needing more grants, no mention of needing to beg government for more. At the end of the talk, she chided us not to be “robots” in “corporate (e.g. academic, government, managed care)” settings and instead to practice the sort of compassionate, patient-centred care we learn in medical school. That is an entrepreneurial vision. Unfortunately, when basic market principles and the idea of entrepreneurial are either foreign or anathema to many medical students here (see my Twitter feed for one egregious example), I would have been excited for her to take a stronger stand in favour of the market and entrepreneurial forces that she merely alluded to.

Unlike the conception of social justice that she shares with the majority here, those values (markets, entrepreneurialism) are in sore need of a strong defense at this conference. I can only do so much from the Internet!