What President Clinton Can Learn from Canada About Price Controls and Global Budgets

Policy Backgrounders | Health

No. 129
Tuesday, October 05, 1993
by Michael Walker & John C. Goodman


Rationing by Waiting

Figure II - Waiting Times in Canada

"More than 177,000 people are waiting for surgical procedures."

A recent 12,000-person survey by Canada's official statistical agency led to an estimate that 1,379,000 people (out of a total population of 26 million) are waiting for some medical service, ranging from a visit to their general practitioner to nursing home admission.7 Of those, more than 177,000 people are waiting for surgical procedures.8 These people must endure lengthy waits before meeting with a specialist and even longer waits before obtaining needed surgery.

The Length of Waiting. Because the demand for health care has proved insatiable, and because Canadian provincial governments severely limit hospital budgets:

  • The average wait to see an eye specialist in Prince Edward Island is six months- and it takes another six months on the average to be treated.
  • On the average, it takes almost seven weeks to see a gynecologist in New Brunswick and another six months to be treated.
  • To see an ear, nose and throat specialist takes a little more than two weeks in Newfoundland- but it takes another six months to be treated.

Note that these are averages for entire provinces. The wait for any particular patient can be much longer. For example:

  • Patients in British Columbia wait up to a year for routine procedures such as cholecystectomies, prostatectomies, hip replacements and surgery for hemorrhoids and varicose veins.9
  • In Ontario, patients wait up to six months for a CAT scan, up to a year for eye surgery and orthopedic surgery, up to a year and four months for an MRI scan and up to two years for lithotripsy treatment.10
  • All over Canada, patients wait for coronary bypass surgery, while the Canadian press tells of heart patients dying on the waiting list.11

Inequalities in Waiting. On the average, it takes about five weeks to see a specialist in all 10 Canadian provinces. However, the average wait varies widely from province to province. Moreover, as shown in Figure II, the waiting time for actual treatment varies even more.

  • After seeing a specialist, patients wait an additional 14.6 weeks for surgical procedures in Prince Edward Island but only 5.9 additional weeks in Ontario.
  • Following a diagnosis, a high proportion of patients in the Maritime provinces wait more than six months for treatment, but 96 percent of the waits in Ontario are less than three months.
Figure III - Per Capita Health Expenditure and Waiting

"45 percent of those waiting for surgery say they are in pain and some are risking their lives."

Case Study: Cardiovascular Cases. More people in Canada die of cardiovascular disease than of any other single cause. But hospital budgets for "conventional illness" and for high-cost procedures such as cardiac bypass surgery are separate. The result is lengthy waiting lists for such surgery, often as long as a year or more. Political pressures have prompted short term solutions:12

  • After a report that Newfoundland's waiting list was a year long, the hospital performing open heart surgery received a special temporary grant to deal with the waiting list.
  • After a public outcry over the six-month waiting list, British Columbia contracted with Washington state hospitals to perform some 200 cardiac operations in 1989.

It is estimated that 5 percent of heart patients inquire about surgery outside Canada and 1.5 percent actually have their heart surgery performed outside the country.13

Effects on Patients' Health. The average amount of time patients wait for surgery of all kinds appears to be about the same as in 1967, the year before Canada began implementing national health insurance. However, the makeup of the waiting list is different. More people are waiting, and those waiting are sicker. Recently published data by Statistics Canada indicate that 45 percent of those waiting describe themselves as "in pain."14 Others are risking their lives. In British Columbia, for example:15

  • Whereas only 7 percent of the patients waiting in 1967 were classified as urgent, 24 percent were classified as urgent in 1988.
  • Whereas 0.6 percent of the population was on the waiting list in 1967, 1.1 percent-almost double the fraction of the population-was on the waiting list in 1992.

On the surface, the number of people waiting may seem small relative to the total population. However, considering that only 16 percent of the people enter a hospital each year in developed countries16 and that only about 4 percent require most of the serious (and expensive) procedures,17 these numbers are quite high.18 They imply that one out of every four British Columbia residents needing expensive medical technology is unable to get it promptly.

"Americans can jump the queues at Canadian hospitals."

How Global Budgets Cause Rationing. The evidence shows that the severity of rationing is directly related to the stinginess of a province's global budget. Specifically, there is a close correlation between waiting times and the amount of money a province spends on health care. As Figure III shows:19

  • Provinces that spend $1,500 or more per capita on health care have shorter waiting times.
  • Ontario, the province with the shortest waiting times of all, spent $313.70 per capita more on health care than any other province in 1991, the latest year for which data are available.

How Americans Jump the Queue. The Canadian government has proclaimed health care to be a basic human "right." Yet the right is far from guaranteed. Not only do Canadians have no enforceable right to any particular medical service, they don't even have a right to a place in line when health care is rationed. The 100th person waiting for heart surgery is not "entitled" to the one hundredth surgery, for example. Other patients jump the queue for any number of reasons. Among the patients who jump the queue are Americans who pay out-of-pocket for care. U.S. patients add to hospital revenues, so hospital administrators value them. Since Canadians cannot legally pay for care at a national health insurance hospital, the typical Canadian patient must wait in line.20 In this sense, Americans have a greater right to health care in Canada than do Canadians.

"Even pets can sometimes jump the queue."

How Pets Jump the Queue. In addition to Americans, animals also have been able to jump the queue in some provinces. Ordinary people, other than those designated as emergencies, cannot get a CAT scan quickly at any price because they are not allowed to pay for it. However, in an 18-month period, York Central Hospital in a Toronto suburb did more than 70 CAT scans on animals suspected of having such problems as tumors. The tests were done at night and the charge was $300 each.21 The practice was stopped only in response to adverse publicity.

How U.S. Providers Profit from Canada's Health Care Rationing. As the waiting lines grow for virtually every type of treatment in every Canadian province, America serves as Canada's safety valve. In increasing numbers, Canadians cross the U.S. border to get care they cannot get at home. For example:

  • Because of the inadequate facilities in Canada, about half of the in vitro fertilization patients at the University of Washington Medical Center are Canadians, paying $5,000 out-of-pocket for each procedure.22
  • Enough Canadians come to the United States for heart surgery that a California heart surgery center has advertised its services in a Vancouver newspaper.23
  • In 1990, the Ontario Health Insurance Plan paid about $214 million to U.S. doctors and hospitals- up 45 percent over the previous year.
  • Of that amount, 40 percent went to Florida, 9 percent to New York, 5 percent to Michigan and Minnesota and 4 percent to California.
  • In 1993, the Canada-America Health Care Corporation, based in Winnipeg, began to offer Canadians an insurance policy providing for access to care in the United States if they had to wait 45 days or longer for care in Canada.24

"America serves as Canada's safety valve - delivering care that Canadian patients cannot get at home."

Because of large budgetary deficits, Ontario is no longer permitting its residents to take advantage of U.S. health care services, except in special circumstances such as for procedures that simply are not done in Canada.25


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