How aboot that Obamacare! Why health reform won’t turn us into Canada

July 1, 2013

Welcome to Health Reform Watch, Sarah Kliff’s regular look at how the Affordable Care Act is changing the American health-care system — and being changed by it. You can reach Sarah with questions, comments and suggestions here. Check back every Monday, Wednesday and Friday afternoon for the latest edition, and read previous columns here.


(Flickr)

My job at the Washington Post is to write about health policy, which on most days is fantastic. Except for today: It's Canada Day!  I mostly just want to write about our neighbors to the North (and my home and native land).

Consider this piece a bit of a compromise. It's a chance to explore a burning question I'm sure you anticipate just as eagerly as Canada anticipates one day reclaiming the Stanley Cup: Will Obamacare make the American health care system more like Canada? Let's get right to it.

Canada guarantees government-sponsored health insurance for all citizens. Our government-sponsored systems are about to get a lot bigger, but not universal.

The crux of the difference between the American and Canadian health care systems is who provides coverage.

The Canadian government sponsors health insurance for all citizens, regardless of income or age. While the Affordable Care Act will increase the prevalence of government-sponsored insurance, it will give access to all Americans.

The big expansion will happen in the Medicaid program, which will cover many Americans  under 133 percent of the poverty line. This will make Medicaid a very large program. In fact, according to projections the program will have 85 million enrollees by 2021. That would make it more than twice as large as Canada's anticipated population of 36 million.

Both systems rely on state-based health insurance. 

Traveling between Canadian provinces, so many health care possibilities! (Flickr)

Each of Canada's 10 provinces runs a universal health care system, which guarantees all citizens access to hospital and physician services. Provinces can decide whether to include supplemental benefits like dental insurance or prescription drug coverage.

States also play a big role under the Affordable Care Act, where each will have its own state health marketplace. And similar to Canada, the federal government sets certain benefits that health insurance plans must cover for all enrollees. States then can decide whether to supplement these services. The big difference though is that, in Canada, the health insurer is a public entity whereas here they're private companies.

Private spending is a big part of both systems.

It would take a lot of loonies to pay for any country's health care system (Flickr)

Most Canadians take out their own, private health insurance policy to help cover these costs. And that means that in Canada, about 29 percent of health care spending comes from private rather than public dollars. That leaves just about two-thirds of health care spending from the government.

This isn't totally dissimilar from the United States. Private spending certainly makes up a larger share of national health care spending, but the government also plays a big role. Between running Medicare and Medicaid, federal, state and local governments finance 48 percent of health care spending. That share is expected to to rise to cover a majority of health care spending, as the Affordable Care Act roles out. The law will expand Medicaid and provide subsidies to millions, significantly increasing the federal government's role in the health care system.

Will our wait times look like Canada's? 


This chart, from a Commonwealth Fund study in 2010, compares the wait times to see a specialist in 11 countries. Canada, all the way at the right, has notably longer wait times than the United States.

It's hard to know yet whether the United States will see its wait times inch upwards, as we add 30 million Americans into the health insurance system over the next decade. There are worries about a doctor shortage with all these new people receiving health insurance cards, and what doctors will accept them. The United States does have slightly more doctors per capita than Canada, which might be one factor that would prevent wait times from growing quite as long as our neighbor's.

Let's talk about rationing. 


Whatever you do, don't ration the poutine! (Flickr)

Canada's longer wait times are often cited as evidence of health care rationing; a capped budget on health care spending means that there's only a set amount of money to pay doctors and hospitals.

There's not much in the Affordable Care Act though that looks like Canada's financing system. It does not set any firm budget for the United States to hit for health care. Commitments to Medicaid and tax subsidies are open-ended. Rather than setting a budget, these are programs where anyone who qualifies gets in.

The closest thing to a global budget in the Affordable Care Act is probably the Accountable Care Organization program, which gives Medicare providers a set sum to care for their patients. To ward against rationing, the program requires providers to hit certain quality metrics that ensure that patient care does not get skimped on.

KLIFF NOTES: Top health policy reads from around the Web.

No health plans want to sell in some Mississippi counties. "Tens of thousands of uninsured residents in the poorest and most rural parts of Mississippi may be unable to get subsidies to buy health coverage when a new online marketplace opens this fall because private insurers are avoiding a wide swath of the state. No insurer is offering to sell plans through the federal health law’s marketplaces in 36 of the state’s 82 counties, including some of the poorest parts of the Delta region, said Mississippi Insurance Commissioner Mike Chaney." Julie Appleby and Jay Hancock in Kaiser Health News.

Shhhh! Your librarian would like to tell you about Obamacare. "The nation's librarians will be recruited to help people get signed up for insurance under President Barack Obama's health care overhaul. Up to 17,000 U.S. libraries will be part of the effort to get information and crucial computer time to the millions of uninsured Americans who need to get coverage under the law." Carla Johnson in the Associated Press. 

Giving birth in the United States is incredibly expensive. "Plenty of pregnant women are getting sticker shock in the United States, where charges for delivery have about tripled since 1996, according to an analysis done for The New York Times by Truven Health Analytics. Childbirth in the United States is uniquely expensive, and maternity and newborn care constitute the single biggest category of hospital payouts for most commercial insurers and state Medicaid programs. The cumulative costs of approximately four million annual births is well over $50 billion." Elisabeth Rosenthal in the New York Times.

 

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