North American Healthcare Systems Essay, Research Paper
I received an 78% in a third year Public Finance Course for this paper. Criticisms were that I did not detail why private enterprise does not work. Also that a couple of paragraphs were too long. I am a third year Bachelor of Science student majoring in Economics. EVALUATING NORTH AMERICAN HEALTH SYSTEMS INTRODUCTION Compensating the affairs of economic efficiency with the demands of sociopolitical rights is a constant source of tension in Canada and the United States alike. In no other element is this tension more apparent than in the group of complex markets we call the health care system. Canadians have been fortunate enough to receive a universal health care system for nearly forty years. This is a single-payer system funded by the governments, both provincial and federal, but at what costs? Is health care not unlike any other commodity, or is it the privilege of every citizen? Health care has elements of common economic behavior, however, there are also certain social values associated with it. It is this struggle of defining what health care is that causes such anxiety among economists. The Canadian health care system is slowly crippling the economy, and reforms must be devised to preserve the pride of Canada; our health care system itself. The pluralistic health care scheme of the United States, as well, has serious socioeconomic implications, and American policy makers are looking toward the model of the Canadian system for answers. Both the United States and Canada must reform health care policy, but to what extent? Obviously these questions cannot necessarily yield clear, concise answers, however they will provide insight into analyzing the current and proposed systems of health care. Certainly if Canada is to maintain a high standard of care it must adopt an economically efficient, revenue generating system. Moreover the United States must adopt the single-payer system of Canada while still retaining a strong revenue base. This paper will discuss the strengths and shortcomings of the Canadian health care system, and how health care is a sociopolitical enigma. Furthermore, how the single-payer system is the only realistic response to the growing inadequacies within the American socioeconomic status. CANADIAN HEALTH CARE STRUCTURE Serving as a general background in its appraisal, it is necessary to outline the history and the ambient factors of the Canada health care that is so sought after by the United States. The Canadian health-insurance program, called Medicare, is administered by provincial governments and regulated and partly financed by the national government. Medicare pays basic medical and hospital bills for all Canadians, where the governments determine the criterion of basic care, to insure and maintain a standard level of service. As early as 1919, Canada?s Liberal party promised national health insurance, but the first real step was taken in Saskatchewan, where in 1947 province wide hospital insurance was introduced. A national hospital-insurance act followed in 1958, and by 1960, 99% of Canadians were covered by government run hospital insurance. Saskatchewan was again the first in 1961 to introduce medical-care insurance which covered doctors? services as well. However, this was not an easy transformation. In 1962 when the medical insurance act was implemented, the doctors of Saskatchewan went on strike. As a part of the settlement the government agreed to a modified plan that addressed some of the doctors? grievances. Despite the opposition from provinces, doctors and insurance companies, national Medicare legislation was in place by 1967, and today health care is a constitutional right. The arrangement reached by all provinces by 1972 was that the federal government paid half the cost of the provincial plans, provided the plans met five principles: accessibility, universality of coverage, portability from province to province, comprehensiveness of service, and government administration. Under the system the health care provider bills the provincial plan directly. The Canadian Health Act, effective in 1984, clarified the national standards and may penalize provinces that allow doctors to bill for more than the Medicare rate. The Canadian provinces spend a third of their budgets on health and hospitals. High-tech medicine and an aging population have caused Canada?s medical costs to rise significantly over the past decade. Increasingly, governments attempt to control costs by promoting personal fitness, cutting back the number of hospital beds and establishing caps on doctors? earnings. The costs have become so overwhelming some provinces have considered revoking coverage of prescription drugs for seniors, optometry, physiotherapy, and chiropractic treatments. There are no doubt different views regarding spending for health care, however, few wish to revert to a free market system. In fact, most Canadians consider the health care program the pride of Canada and that they have an advantage over the United States system that costs Americans more. ?Canada spends $1000 less per capita on health care than the U.S., but delivers more care and greater choice for patients.? The Canadian health care system has gone through extensive transitions and is a part of an evolutionary process. AMERICAN HEALTH CARE STRUCTURE Over the past several years, the provision of medical services has increasingly become the responsibility of the state in developed nations, except for in the United States. ?Unlike the rest of the world?s systems, the United States medical care system remains largely private and entrepreneurial.? The popularity of free market health care systems was fueled by its successes in technological and pharmaceutical inventions that followed the wartime experiences. This reinforced the American public to resist government interference in health matters. Nevertheless, public funds have been used, and there has been a certain degree, public administration in the health system. ?The inability of millions of citizens to obtain or to pay for even minimal levels of care forced the federal government to intervene.? It was not until the early 1960?s the United States government passed the Medicare and Medicaid laws that established the federal government as an integral part of the health system. The U.S. medical care system is primarily based on the private practice of medicine and job related health insurance programs. American health care is essentially entrepreneurial, with physicians earning their income through a variety of reimbursement mechanisms other than salary, such as the following: fee-for-service, capitation, and per-session. However, this structure is changing as more and more doctors are employed by health maintenance organizations (HMOs). These organizations offer comprehensive service and maintain a certain level of control of spending by regulating doctors? billing. Costs have risen enormously forcing the government to raise more and more funds to accommodate the needs of the public. The following pie graphs illustrate the economic scope of the American health care system of 1990 and that of the dawn of the 21 century. FIGURE 1. FIGURE 2. Laborious efforts have been made to contain and control costs, without limiting access and the availability of service for the poor, aged, and debilitated. Consequently, the mixture of private and public health care systems is characterized by maldistribution of resources and serious inadequacies of access. The current health care system of the U.S. is laden with deficiencies. To illustrate these shortcomings; 17% of the population, some 40 million people, are not covered at all, and another 40 million are only partially covered. Some HMOs make it a condition of a physician?s salary that he or she not overstep the boundaries of insurance costs. This raises questions of whether the doctor may be tempted to limit needed services or fail to take adequate steps to establish a diagnosis, and may discharge a patient prematurely. In the early 1990?s the United States was in a state of uncertainty. Despite highly trained staff and stock piles of high technology, the United States health care system was a statistical failure. It ranked 16th in the world for infant mortality rates, and life expectancies fell short of that of most industrialized countries. President Clinton has made the most visible attempt to reform the health care program in the United States. Both he and his spouse, Hillary Rodham Clinton, have developed a strategy to prepare and propose a health reform program that the public would understand and accept, and that would neutralize opposition from pharmaceutical manufacturers and the health insurance industry. This illustrates the necessity not only for the evaluation, but the development of alternatives to attain greater economical and social efficiency. The current system is clearly inadequate, the problems are evident: a large percentage of the population cannot access sufficient medical care, and is not covered or protected against the climbing costs. A system whose costs are out of control, and a growing national deficit that the health care system heavily contributes. Unmistakably, the United States health care system is grossly incompetent in providing the public with a standard level of care, and reforms must be taken to contain the swelling costs. CONSTITUTIONAL RIGHT TO HEALTH CARE, FOR BETTER OR FOR WORSE? Economic efficiency and sociopolitical rights consistently clash in a capitalist democracy, and this tension is prevalent in the health care system. A basic economic concern is whether health care is like any other commodity. The health care industry can be analyzed with economic frames of reference: wealth, risk aversion, efficient transfers, and utility. However, there are certain symbolic elements of health care that cannot be easily measured. Cultures have fundamental beliefs that encompass the valuation of life and health. Bearing this in mind, it would only seem realistic that there is some sort of right to health care. Nowhere in the American Constitution is it stated that an individual has the right to some basic set of health care services, however, there are certain undefined responsibilities the government has. It can be argued that the Declaration of Independence supports the right for each and every citizen to have the basic care needed to sustain life so as to exercise one?s liberty and to allow the pursuit of happiness. It has been argued that there is a common-law right to equal services, a right of equal access to basic services: such as drinking water. Furthermore this right extends to all citizens and is beyond the reac