Economic Freedom of the World: Annual Report 2004

Report
What Bahamas Can
Learn from Global Experience
with Health Policy?

Nassau

June 21, 2007

Michael Walker
 Senior Fellow
 The Fraser Institute
1
Plan of Discussion

Why should you listen to what I have to
say?
 Health Care Policy in Context
 Myth Versus Reality about the Canadian
Model and its comparative performance
 Alternative futures for Bahamian Policy
2
Why Should You listen to me?

Bahamians -- like many Americans-- are
apparently attracted by the Canadian health care
model
 I have been researching the Canadian model since
1978 and public policy for nearly 40 years
 For 17 years my colleagues and I have been
measuring the extent of rationing in the Canadian
system and its comparative performance
 Recently, the Canadian Supreme Court agreed
with our research in finding that the combination
of the actual performance of the Canadian health
care system and the prohibition of private care in
Canada violated the constitutional rights of
Canadian citizens.
3
Background to the Health Care
Debate - General Issues?





Wealthy people and nations tend to be Healthy
Policy can increase the health care access of the
less wealthy by taxing the income of the wealthy
Human and financial capital try to avoid taxes and
the competition for both kinds of capital is global
Nations which attempt to solve the health problem
of the less wealthy by taxing human and financial
capital will attract less of both
Therefore, policy which pursues gains in
population health without careful attention to the
growth and per capita income effects of the
methods chosen may produce short term gains at
4
the expense of larger long term loses
Background to the Health Care
Debate – Specific Issues II?

Health care will become the largest non-traded
sector of the Bahamian Economy
 It will be the source of the most interesting jobs
and the highest tech employment in the economy.
 The policies you set there will have a huge impact
on the Economic Policy setting overall and your
economic success as:
–
–
–
–
-Tax Policy is affected by the health tax
-Labour policy is affected by GBE growth
-The structure of your politics is affected by PS unions
-The technological sophistication of you country is
affected by politicization of capital allocation
5
How has Overall Bahamian Policy
Been Doing?

Fraser Institute in conjunction with
Institutes in 70 countries has been
measuring policy in 130 countries since the
1970s
 The measures score 38 policies 1 to 10 and
rank the countries
 The following slides show how Bahamas
performance has changed over time
6
Bahamas Versus the Top Ten
Canada
20
Hong Kong
40
Ireland
Iceland
Luxembourg
New Zealand
60
Singapore
80
Switzerland
United Kingdom
100
United States
19
75
19
80
19
85
19
90
19
95
20
00
20
01
20
02
20
03
20
04
Rank
0
Bahamas
7
Source: The Fraser Institute.
Bahamas Competitive Policy Rank
0
Regulation
20
Trade
60
Tarrif Rate
80
Money Policy
100
Property Rights RofL
120
Size of Government
19
75
19
80
19
85
19
90
19
95
20
00
20
01
20
02
20
03
20
04
Rank
40
8
Source: The Fraser Institute.
The Quality of Policy Really Matters
9
Per Capita Income and Economic
Policy Quality Quartile
GDP Per Capita
(ppp), 2003
$25,000
$20,000
$15,000
$10,000
$5,000
$0
Lowest Policy
Quartile
3rd Quartile
2nd Quartile
Highest
Quartile
Worst Policy…………… Best Policy
Sources: The Fraser Institute; The World Bank, World Development
Indicators CD-ROM, 2005.
10
GDP Per Capita % Growth,
1994-2003
Growth in Real GDP Per Capita and
Policy Quality Quartile
2.5
2.0
1.5
1.0
0.5
0.0
-0.5
Lowest Quartile
3rd Quartile
2nd Quartile
Highest Quartile
Worst Policy …………….Best Policy
Sources: The Fraser Institute; The World Bank, World Development Indicators11
CD-ROM, 2005.
Human Poverty Index and Policy Quality
Quartile
Human Poverty Index
40
35
30
25
20
15
10
5
0
Lowest Quartile
3rd Quartile
2nd Quartile
Highest Quartile
Worst Policy …………..Best Policy
Sources: The Fraser Institute; United Nations Development Programmme, Human
Development Indicators 2005, available at
http://hdr.undp.org/statistics/data/index_indicators.cfm.
12
United Nations Human
Development Index
Human Development Index and Policy
Quality Quartiles
1.0
0.9
0.8
0.7
0.6
0.5
0.4
Lowest Quartile
3rd Quartile
2nd Quartile
Highest Quartile
Worst Policy …………Best Policy
Sources: The Fraser Institute; United Nations Development Programmme, Human
Development Indicators 2005, available at http://hdr.undp.org/.
13
Years
Life Expectancy at Birth and Policy
Quality Quartiles
80
75
70
65
60
55
50
45
40
Lowest Quartile
3rd Quartile
2nd Quartile
Highest Quartile
Worst Policy ………… Best Policy
Sources: The Fraser Institute; The World Bank, World Development Indicators CD-
ROM, 2005.
14
Infant Mortality and Policy Quartile
Per 1,000 live births, 2003
80
60
40
20
0
Lowest Quartile
3rd Quartile
2nd Quartile
Highest Quartile
Worst Policy………..….Best Policy
Sources: The Fraser Institute; The World Bank, World Development Indicators
CD-ROM, 2005.
15
% of Population Using Improved Water
Sources and Policy Quartile
100
Percentage
90
80
70
60
50
Lowest Quartile
3rd Quartile
2nd Quartile
Highest Quartile
Worst Policy ……………Best Policy
Sources: The Fraser Institute; The World Bank, World Development Indicators
CD-ROM, 2005.
16
As is clear from this global scan…
The Quality of Policy Really Matters
For Bahamians
And
We can se the effects of Bahamas’
policy decline
17
Bahamian Per Capita Income Rank declining
compared to the World
0
5
Rank
10
15
20
25
30
35
40
1970
1975
1980
1985
1990
1995
2000
18
Source: The Fraser Institute.
Bahamian Growth Rank Declining
Growth Rate Rank compared to
rest of world
0
-10
-20
-30
-40
-50
1970-85
Average
Per Capita
Growth
1.27%
1985-2000
Average
Per Capita
Growth
0.06%
-60
-70
-80
-90
19
So, The decline in Policy Quality is
showing up in lower average
incomes and lower growth rates.
Apart from any other development,
this is going to reduce the
comparative health status of
Bahamians
20
The Canadian Case

The only country in the OECD that has an
exclusively public sector single payer for heath
care is Canada
 The Canadian system should be carefully studied
before launching a National Health Insurance plan
in The Bahamas
 The following is a careful set of measurements of
the Canadian system.
 These measurements caused the Canadian
Supreme Court to rule that the provisions of the
sort of System we have were injurious to the
health of Canadians and violated their
Constitutional Rights.
21
Ic
e
Sw Ca lan
i tz n a d
e d
A rla a
us n
t d
N rali
o a
N F rwa
et ra y
he n
r c
N Ge lan e
ew r d
m s
Ze an
a y
A lan
us d
G tri
r a
B ee
el ce
Po giu
D rtu m
en g
O
m al
EC
a
D Irel rk
A an
ve d
r
K ag e
Sw ore
ed a
H
L
C u x un en
ze e g
U ch mb ary
ni R o
te e u
d pu rg
Ki b
ng li c
Fi d o
nl m
Po and
la
Sl
Sp n d
ov
ai
ak
R Ita n
ep l
ub y
Ja l ic
pa
n
Percent of GDP
Age-adjusted Health Spending in
the NHI OECD Nations 2003
14
12
10
8
6
4
2
0
Source: OECD (2006)
Calculations by Authors
22
99
04
05
06
-
07
f
06
f
05
04
-
20
03
-
20
03
02
02
-
20
01
-
20
01
00
00
-
20
99
-
19
98
-
19
98
97
97
-
19
20
96
96
-
19
95
-
19
95
94
94
-
19
20
93
93
-
19
92
-
19
92
91
91
-
19
90
-
19
$1997 Per Capita
Inflation Adjusted Provincial/Territorial
Spending Per Person
$3,000
Canada
$2,600
Ontario
$2,200
$1,800
$1,400
$1,000
Source: CIHI (2006)
23
Health Results:
Getting What We Pay For?
24
Health Results:
Waiting Times
25
Median Wait by Province, 2006
BC
7.4
AB
11.9
7.8
8.5
SK
8.4
MB
7.7
20.1
10.3
GP to Specialist
ON
7.4
QC
7.5
Specialist to Treatment
8.3
10.2
NB
11.1
20.8
NS
10.9
PE
11.8
NL
12.4
Canada
11.3
14.0
8.1
8.8
0.0
4.0
9.0
8.0
12.0
16.0
Weeks
20.0
24.0
28.0 26
32.0
Median Wait by Specialty, 2006
15.3
Plastic Surgery
Gynaecology
20.1
6.6
7.7
15.4
Ophthalmology
Otolaryngology
6.6
4.4
General Surg.
10.6
5.7
21.0
Neurosurgery
3.0
24.2
5.0
Urology
Internal Med.
10.7
16.2
Orthopaedic Surg.
Cardio. Surg.
11.8
6.4
4.8
5.1
GP to Specialist
6.7
Specialist to Treatment
Radiation Onc. 1.5 3.4
Medical Onc.
2.8 2.1
8.8
Overall
Weeks 0.0
4.0
9.0
8.0
12.0
16.0
20.0
24.0
28.0
32.0
36.0
27
40.0
Waiting For Care – 2006 v. 1993
Waiting Time Between Referral by GP and Treatment, by
Province, 1993 and 2006
35.0
1993
31.9
28.5
30.0
2006
25.8
25.0
22.2
Weeks
19.3
18.0
20.0
16.3
10.4
10.5
9.8
10.5
12.3
11.5
10.6
9.1
10.0
17.8
17.1
14.9
15.0
20.5
18.5
9.3
7.3
5.0
0.0
BC
AB
SK
MB
ON
QC
NB
NS
PE
NL
CAN
28
Actual Wait Time v. Reasonable
Actual versus Reasonable Waits Between Appointment with
Specialist and Treatment, Canada, 1994 through 2006
10
6
4
Actual
Reasonable
2
20
06
20
05
20
04
20
03
-0
2
20
01
-0
1
20
00
19
99
19
98
19
97
19
96
19
95
0
19
94
Weeks
8
29
Wait Times for Diagnostic
Technology
14
MRI
CT
Ultrasound
12
8
6
4
2
20
06
20
05
20
04
20
03
02
20
01
-
01
20
00
-
19
99
19
98
19
97
19
96
19
95
0
19
94
Weeks
10
30
Diagnostic Wait Times in 2006
12
Ontario
Canada
Wait Time (Weeks)
10
8
6
4
2
0
CT
M RI
Ultrasound
31
Canadians Wait Longer Than Others
90%
81%
Australia
Canada
Germany
New Zealand
United Kingdom
United States
80%
69%
66%
Percent of Respondents
70%
61%
60%
47%
50%
36%
36%
40%
30%
23%
15%
20%
10%
10%
13%
3%
0%
Sicker Adults: Ability to get an appointment to see
a doctor same day or next day
Sicker Adults: Wait 6 days or more or never get
an appointment to see a doctor 32
Source: Schoen et al. (2005 )
Canadians Wait Longer Than Others
60%
Percent of Respondents
50%
Australia
Canada
Germany
New Zealand
United Kingdom
United States
60%
57%
46%
40%
40%
27%
30%
22%
23%
20%
17%
20%
11% 10%
11%
10%
0%
Sicker Adults: Wait less than 1 week for
specialist appointment
Sicker Adults: Wait more than 4 weeks for
appointment with a specialist 33
Source: Schoen et al. (2005)
Canadians Wait Longer Than Others
60%
53%
59%
48%
Percent of Respondents
50%
Australia
Canada
Germany
New Zealand
United Kingdom
United States
41%
40%
32%
33%
25%
30%
20%
19%
20%
15%
6%
8%
10%
0%
Sicker Adults: Wait less than 1 month for elective Sicker Adults: Wait 4 months or more for elective
surgery
surgery
34
Source: Schoen et al. (2005)
Health Results:
Access to Doctors &
Technology
35
Doctors in the OECD
Iceland
Greece
Czech Republic
Netherlands
Slovakia
Belgium
Italy
Switzerland
Norway
Austria
France
Ireland
Hungary
Portugal
Denmark
OECD Average
Sweden
Australia
Germany
Spain
Luxembourg
Poland
New Zealand
Korea
Canada
Finland
United Kingdom
Japan (2002)
Turkey
0.0
24th
0.5
1.0
1.5
2.0
2.5
3.0
3.5
Doctors per 1000 population (Age Adjusted, 2003)
4.0
4.5
36
Source: OECD (2006)
Calculations by Authors
MRI Machines in the OECD
Japan (2002): 29.9
MRI Machines Per Million Population
(Age Adjusted, 2003)
20
15
10
13th
5
0
)
l
y
y
a
a
a
n
c
e
d
y
d
c
d rg aly rk ge
d
ria
ai ium an ad a nd dom rali uga rke bli nc gar bli 0 02 la n
t ma ra
an ore lan s t lan ou
I
p
l
e
S e lg rm a n e al ng
b
K e r Au in
s t ort Tu e pu Fra un pu (2 Po
n
ve
u
Ic
e
F em
C
e
i
A
B
H Re ce
Z
ti z
P
A
R
D D
K
G
e
x
w
w
d
h
37OECD (2006)
u
ak re Source:
S
c
L
e
Ne ite
EC
v
G
z
o
O
C
Calculations by Authors
Un
Sl
xe
m
b
Be ou
lg rg
i
Au um
s
Ic tri
el a
O
EC
an
d
D
Ita
A
Sw v ly
G it z era
re e g
e c rla e
e nd
(
De 20 0
nm 2)
N
a
Cz e w Fin rk
ec Ze lan
h al d
Re a n
p d
G ub
er lic
m
Po an
rtu y
ga
Sl
S
ov
p l
ak Ca ain
Re na
pu da
b
Fr lic
an
Un
Tu ce
rk
ite
P
d o ey
Ki la
ng nd
Hu do
ng m
ar
y
Lu
CT Scanners Per Million Population
(Age Adjusted, 2003)
CT Scanners in the OECD
Japan (2002): 78.4
30
15
Korea: 49.4
25
20
17th
10
5
0
Source: OECD (2006)
Calculations by Authors
38
nc
e
K
or
e
N Fi n a
ew
la
Ze nd
al
an
d
Lu Gre
xe ec
m
e
bo
u
C rg
an
ad
O
I
EC ce a
D lan
A
d
ve
r
B ag e
el
gi
u
Sl
ov P m
ak ol a
n
C
ze Rep d
ch
u
Re bl ic
pu
H bli c
un
g
Po ary
rt
ug
U
a
ni
te
Sp l
d
Ki ain
ng
do
Tu m
rk
ey
Fr
a
Mammographs Per Million Population
(Age Adjusted, 2003)
Mammographs in the OECD
40
30
7th
20
10
0
Source: OECD (2006)
Calculations by Authors
39
Ko
r
ak Ja e a
R p
Sw ep a n
it z ubl
e r ic
la
Ic nd
el
Cz
ec Be and
h lg
Re iu
pu m
O
EC P blic
D ola
A nd
ve
G rag
Lu er e
xe ma
m ny
bo
u
Au rg
st
r
Sp ia
Au a
s t in
Po rali
rtu a
Hu ga
ng l
a
Tu r y
rk
Fr ey
a
Ne C nc
w an e
Ze ad
al a
a
Fi nd
nl
an
d
Sl
ov
Lithotripters Per Million Population
(Age Adjusted, 2003)
Lithotriptors in the OECD
6
5
4
3
2
1
18th
0
Source: OECD (2006)
Calculations by Authors
40
Comparisons of Age Adjusted
Access

24th of 28 countries for access to physicians

13th of 24 countries for access to MRI machines

17th of 23 countries for access to CT scanners
 7th

of 17 countries for access to Mammographs
18th of 20 countries for access to Lithotriptors41
Health Results:
Health Outcomes
42
Sw
G ed
er e
m n
Lu
a
xe J ny
m ap
bo an
N urg
or
w
Sp ay
Sw
a
itz I in
er tal
N F lan y
et in d
he la
r n
A lan d
us d
C
ze
t s
ch A ral
i
Re ust a
pu ria
Fr blic
D an
en c
e
B ma
el rk
gi
C
u
O
an m
E
U C Ic ad
ni D e a
te A la
d ve nd
K r
in ag
N Ggdo e
ew
re m
Z
Sl
e a ece
ov
ak Ir lan
R el a d
ep nd
Po ub
r li
H t ug c
un a
g l
Po ar
la y
K nd
Tu ore
rk a
ey
HALE/LE (%) (2002)
Life Expectancy in Full Health
in the OECD
92%
91%
16th
90%
89%
88%
87%
86%
Source: OECD (2006); WHO
(2006)
43
Ic
el
a
Ja nd
Fi pa
Swnla n
ed nd
N
C
or en
ze
w
ch
a
Re Sp y
pu ain
Fr bli
a c
G nc
r
Po ee e
c
G rtu e
er g
m al
an
y
Sw B Ita
e
itz lg ly
e iu
D r la m
en nd
m
A
C u ark
ha s
rt tria
A
N u Av
e
Lu th stra g.
xe erla lia
m n
bo ds
Ire urg
K C la
U ore an nd
n a
O ite (2 ada
E d
N CD K 002
ew
i
A n... )
Ze ve
al ra
an ge
Sl
Po d.. .
ov
ak Hu lan
R ng d
ep ar
ub y
lic
Rate per 1,000 Live Births (2003)
Infant Mortality in the OECD
Turkey not shown
8.0
7.0
6.0
21st
5.0
4.0
3.0
2.0
1.0
0.0
44 Source:
OECD (2006)
Ic
el
a
C
ze A Ja nd
ch us pa
K Re tra n
or p lia
ea ub
(2 lic
Fi
00
nl
2
an
d Ita )
N P (2 ly
or o 00
w rt 2
ay u )
g
Lu S (20 al
xe we 02)
Sp mb de
ai ou n
n r
G (20 g
C erm 02)
ha a
rt ny
C Avg
an .
A ad
O
u
w EC G st a
Ze D re ria
D ala Av ec
en n e e
m d ( rag
F a 2 e
U ra rk ( 00
ni nc 2 2)
te e 00
d (2 1
N Kin 00 )
et g 1
he d )
Sl
rla om
o
w va
itz k P nds
er R ola
la ep n
nd u d
(2 blic
0
Ire 01)
H l an
un d
ga
ry
Rate per 1,000 Births (2003)
Perinatal Mortality in the
OECD
10.0
8.0
7.0
Turkey not shown
9.0
14th
6.0
5.0
4.0
3.0
2.0
1.0
0.0
Source: OECD (2006)
45
w Ja
it p
ze a
rl n
Fr and
A an
us c
tr e
Ic ali
e a
S la
w nd
ed
en
I
C ta
an ly
a
S da
N pai
or n
Fi wa
nl y
Lu
N x K and
ew e o
m r
Ze b ea
N al ou
et an rg
h d
er . .
la .
A nd
us s
G t
O G re ri a
E e e
C r c
D m e
A an
U
ni P ver y
D ted or ag
en K tu e
m in ga
ar g l
k do
(2 m
.
Ir ..
C
e
ze
ch P lan
S
lo R ol a d
va ep n
k ub d
R li
e
H pu c
un ..
g .
ar
y
S
Rate per 100,000 (2002)
Mortality from Disease in the OECD
900
800
700
600
8th
500
400
300
200
100
0
Source: OECD (2006)
Calculations by Authors
46
Ic
e
Sw la n
ed d
en
Sw
J
itz ap
er an
l
N and
o
A rw
us a
tr y
Fi alia
nl
an
d
I
t
C Can aly
Lu ha a
xe rt A da
m v
bo g.
u
A rg
us
Fr tria
a
G nce
G ree
er ce
m
an
N
e
N O th Sp y
ew E e a
Ze CD rlan in
al Av d
an e s
d rag
(2 e
D
en
00
U m Ire 0)
ni ar l
te k an
d (2 d
K 00
in 1
gd )
o
K m
or
ea
Years (2002)
Potential Years of Life Lost
in the OECD
2900
2500
Portugal, Czech Republic, Poland, Slovak
Republic, and Hungary not shown
2700
9th
2300
2100
1900
1700
1500
Source: OECD (2006)
Calculations by Authors
47
n
Ja ce
A p
us an
t
C rali
an a
S ad
w a
ed
en
Ita
S ly
p
N No ain
et r
h w
er a
la y
n
A ds
us
G tri
r a
D ee
e c
C nm e
ha a
rt rk
N
A
ew
Fi vg
Ze G nl .
al e an
r
O an ma d
d
E
C (2 ny
D 0
A 00
ve )
U
ni
ra
te
d Ko g e
K r
i n ea
gd
Ir om
C
e
ze P la
ch or nd
R tug
ep a
u l
P bli
ol c
an
d
Fr
a
Mortality per 100,000 (2000)
Medically Avoidable Mortality
(MAHC)
Slovak Republic, and Hungary not shown
160
140
120
100
4th
80
60
40
20
0
Source: WHO (2006)
Calculations by Authors
48
Sw
e
Fi de
nl n
a
K nd
o
Ic re
A ela a
us n
tr d
Lu
a
F
xe r lia
m an
bo ce
Sw N ur
g
itz orw
er a
l y
C and
an
ad
a
N
ew Ita
J ly
Ze ap
U
ni G a an
te e la
O d K rm nd
EC i a
n
D gd ny
A o
ve m
A rag
us e
G tri
r a
B ee
el ce
Po giu
rt m
u
Po ga
D l l
en an
m d
N
et S ark
he p
C
rla ain
ze
ch I nd
re s
R
Sl
e p l an
ov
u d
ak Hu bl
i
R ng c
a
ep r
u y
Tu bli
rk c
ey
Female Mortality (2002)
Breast Cancer Mortality
in the OECD
45%
40%
35%
30%
10th
25%
20%
15%
10%
5%
0%
Source: Ferlay et al. (2004)
Calculations by Authors
49
itz
e
A r la
us n
tr d
C ali
an a
ad
J
Lu
ap a
a
xe
m It n
bo aly
Ic urg
el
a
K nd
N S o
ew w re
e a
Ze de
al n
a
U
ni G Fr nd
te e an
d rm ce
K a
in n
gd y
Fi om
n
N N la
e
O t h or nd
EC e w
D rla ay
A nd
ve s
A rag
us e
t
Sp ria
G a
r in
B eec
el e
g
Ire ium
la
C
P
ze
ol nd
P
ch o an
Re rtu d
Sl
g
ov D pu al
ak en bl
i
R ma c
ep r
k
H ub
un li
g c
Tu ar
rk y
ey
Sw
Combined Male and Female Mortality (2002)
Colon/Rectum Cancer Mortality
in the OECD
70%
60%
50%
2nd
40%
30%
20%
10%
0%
Source: Ferlay et al. (2004)
Calculations by Authors
50
Health Results:
Getting What We Pay For?





High cost system.
Worsening waiting times.
Poor performance on waiting
times for elective medical care
Poor results on access to doctors
and technology.
Mediocre performance on health
outcomes.
51
Canada’s Policies are the
Problem
52
Cost Sharing – User Fees,
Deductibles and Co-payments – in
the OECD
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Overall
Hospital
Cost Sharing
GP
No Cost Sharing
Specialist
53
Cost Sharing in the OECD

Only 5 countries do not have some form of cost sharing
for major health care services in the public system:
Canada, Czech Republic, Denmark, Spain, and the
United Kingdom. Following reform in January 2006, The
Netherlands allows cost sharing.

Four of the 5 experience problems with waiting times—
Canada, Denmark, Spain, and the United Kingdom and
growing waiting lists are seen as a problem in the 5th.
54
Providers of Public Health Care
in the OECD
70%
60%
50%
40%
30%
20%
10%
0%
Public Ownership/Management
Mixed Ownership
55
Providers of Public Health Care
in the OECD




11 OECD countries rely exclusively on public hospitals
to deliver publicly-funded health care.
Of these 11, 8 experience problems with long waiting
times.
The remaining 3 are transition economies still in the
process of reforming their economies and social
service systems.
Not one of the countries with strictly public provision
exhibits attributes that would be counter to economic
theory which suggests that this would result in
inefficient provision of services.
56
Private Parallel Health Care
in the OECD
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Available
Not Available
57
Is Canada Unique?

Only 2 of the 28 countries surveyed
have no comprehensive private
provision of healthcare: Canada and
the Czech Republic.

Canada is the only country to have
full and complete public management
of hospital resources and no private
parallel insurance system.
 Canada is the only country to
effectively outlaw private parallel
58
A Look at the Most Successful
Universal Health Insurance Programs
59
Understanding Australia, Sweden,
and Japan
 Lower healthcare costs.
 Better healthcare outcomes.
 User fees or co-payments.
 Parallel private medical
treatment
 supply publicly funded care.
60
Australia

Cost sharing accounted for 16% of
total expenditure
 Benefit is 75% for professional inhospital services and 85% for all
other professional services
 No controls on physician fees (extra
billing), though physicians who
accept 85% of the “schedule” can
bill the government directly
 Private health insurance cover.
Community rated with tax
incentives
61
Sweden

County councils deliver care

Co-payments for physician services,
hospital care, outpatient care,
elderly care, dental, and drugs. Fees
vary by county but are capped. Less
than 2% of resources devoted to
health care come from patient fees.

No gatekeeping

Stockholm county contracting with
private providers – better care
62
Understanding Austria, Belgium, France,
Germany, Japan, Luxembourg, and
Switzerland
 Lower/similar healthcare costs.
 No Waiting Lists.
 User fees or co-payments.
 Parallel private medical
treatment
 Social Insurance Financing
 Private hospitals competing to
supply publicly funded care.
63
Japan

Cost sharing accounted for 11.7
percent of total health expenditures in
2001

User fees of between 25 and 30 percent
for physician services and hospital
care. Varying rates for drugs.

Almost total freedom to choose and use
private and public health care services
without a referral system.

Competitive private delivery of care
(79.9 percent of hospitals and 93.8
percent of clinics privately owned)
64
Switzerland

Competing insurance funds –
decentralized, self-administered,
private and public. (Risk
redistribution)

Various deductible arrangements
(varies between insurance policies)
and 10% coinsurance rate.

Direct patient payments accounted
for 28% of total expenditure (both
co-payments and private out of
pocket payments)
65

Competitive private delivery of care
So…
How Good Is Canadian Health Care?
 Less
than top performance in health
care outcomes
 Ranks
at the bottom in access to care,
supply of technologies, supply of
physicians
 Ranks
at the very top in spending
66
The Trojan Horse for the Budget

The Economics of the Canadian Health
Care system
67
Avg Ann % Growth in GDP, CPI, TREV and PHEX
2000/01 to 2004/05
8.1%
4.6%
3.5%
2.4%
National GDP
National CPI
Consolidated Provincial
Total Revenues
Consolidated Provincial
Public Health
Expenditures
68
Source: StatisticsCanada, Financial
2005
C Management System
Avg Ann % Growth in PHEX and TREV, by Province
2000/01 to 2004/05
11.2
9.2
9.0
8.4
7.7
7.2
6.5
7.0
6.4
6.1
5.3
4.5
3.5
NFLD
4.3
3.7
3.5
3.3
PEI
5.3
NS
NB
QB
PHEX
ON
4.0
MB
4.0
SK
AB
BC
TREV
69
Source: Statistics Canada, Financial Management System
2005
PHEX as % of TREV, by Province 1997 & 2005
39%
35%
31%
34%
31%
31%
28%
21%
NFLD
24%
23%
PEI
NS
36%
NB
32%
29%
28%
24%
QC
1997
30%
23%
ON
MB
SK
29% 30%
22%
AB
BC
2005
70
Source: Statistics Canada, Financial Management System
2005
ONTARIO: Projection based on 2000/01 to 2004/05 Avg
Ann % Growth in actual PHEX and TREV
200000
180000
PHEX = 100% of
TREV
160000
Millions Current $
140000
120000
100000
80000
PHEX > 66% TREV
60000
PHEX > 50%
TREV
40000
20000
0
32
31
30
29
28
27
26
25
24
23
71
20
20
20
20
20
20
20
20
20
22
21
20
19
18
17
16
15
14
13
12
11
10
09
08
07
06
TREV
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
PHEX
Why projections are cautious
1.
PHEX does not include the impact of aging population:

50% of per-capita, lifetime health expenditures occur after the age of 65.
(Brimacombe et al., 2001)
2.
PHEX includes drug delisting; reform efforts; rationalization
3.
TREV overstated:

Net of debt service costs, AVAILABLE revenues are lower
4.
TREV includes Federal transfers
5.
TREV includes tax increases
72
Other sustainability warnings
Government
 (QC) Clair 2000
 (SK) Fyke 2001
 (AB) Mazankowski
2001
 (Senate) Kirby 2001
 (QC) Menard 2005
 MacKinnon 2002
Private Sector
 Fraser Institute annually
since 1990
 C.D. Howe 2001
 AIMS 2002
 Fraser Institute 2004
– Mullins, Esmail, Skinner


Conference Board 2001
& 2005
PWC 2005
73
PROBLEM
CAUSE
SOLUTION
1.
Over utilization;
moral hazard
1.
1st $ coverage;
universal public
subsidy
1.
User fees; limited
eligibility for
public subsidy
2.
Inadequate
insurance
protection
2.
Insuring highfrequency,
affordable expenses
2.
Catastrophic
insurance design
3.
Inefficient
allocation of
resources
3.
Central planning
3.
Consumer
empowerment
and managed care
4.
Absence of payer
accountability
4.
Public monopoly
health insurance
4.
Allow private
insurance options
5.
Undercapitalization
5.
Non-profit
provision
5.
For-profit
provision 74
The Canadian System is not the one
to copy

But What should be done?

Lets consider the recommendations of the
Blue Ribbon Commission
75
Health Insurance should be
Universal

OK
76
Health Insurance must be legislated
– that is not optional for residents

OK
77
National Health Insurance should be
Administered by the National
Insurance Board

Not OK
 Commission notes that the NIB is hopelessly
inefficient – 25% overstaffed….this is not
coincidental
 Commission notes that the inefficiency of the NIB
will have to be dealt with…yes…but how??
 Commission doesn’t question “Central planning
model” and hidden costs of monopoly
78
The NHI plan should be
comprehensive





Not OK
This is the real Trojan horse
1. Cost of insuring for “oil changes”
2. Eliminates the private option because private
spending only permitted for services which exceed
or are not covered by NHI
3 This provision is the most sinister in the report
and is the Achilles heel of the Canadian Model –
recently rejected by the Supreme Court of Canada
79
Contributions set at a level Affordable
by the Majority

Not what the Commission actually advises
 Commission’s recommendation is that in
the summary but in the document the
Commission proposes a progressive Income
Tax to finance the program
80
No User Fees

Not OK
 Evidence shows that they don’t prevent
access
 Exempt the poor
 Involve the patient in the paying process
81
Conclusion

There are many models for Bahamians to follow
that will produce better outcomes than following
the Canadian Plan
 In considering the Commission’s report
Bahamians should note that it recommends the
adoption of the Canadian system while nobody
else in the world has thought it a good idea to do
so
 I wonder why?
82
www.freetheworld.com
www.fraserinstitute.ca
83

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