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In reversal, Canada dabbles with health care privatization

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Canada, once considered the bedrock of national health care systems, is in the beginning stages of change toward free-market health insurance.

But in a country where free health care is an afterthought, change comes slowly.

For the first time, private health care clinics are proliferating throughout Canada and arguments forallowing private physicians to practice freely are being heard.

"You are seeing the Medicare orthodoxy of the last 30 years being questioned in Canada," said Dr. David Gratzer, a registered physician in Canada and the U.S., and senior fellow at the Manhattan Institute, a nonprofit public-policy think tank. "Over the last two years, the health care system has dramatically changed to allow more private health care."

The Supreme Court of Canada, widely viewed as among the most liberal in the world, nearly two years ago allowed a man in Quebec to buy health care on his own — striking down 30 years of precedent and giving advocates for private health care a major victory.

The case is known as the Chaoulli decision, after Dr. Jacques Chaoulli, who took action against the system after a patient was forced to wait nearly one year for a hip replacement.

Chief Justice Beverley McLachlin and Justice John Major wrote in the decision: "The evidence in this case shows that delays in the public health care system are widespread, and that, in some serious cases, patients die as a result of waiting lists for public health care."

But the high court's decision is only a springboard for change — a major privatization wave won't occur until each of the 10 provincial governments and three territories moves to align its legislation with the Chaoulli decision and insurance companies step into the arena with new products, said Dr. Zoltan Nagy, executive vice president of the Canadian Independent Medical Clinics Association.

South of the border

In the United States, the buzz for a national health care system isat a fever pitch as Democraticpresidential contenders talk about implementing some form of a universal health care program, and Michael Moore's new documentary, "Sicko," shines the spotlight on inefficiencies in the U.S. health care model by comparing it with, among others, Canada's.

The U.S. system, considerably more costly and innovative, stands in sharp contrast to its Canadian counterpart in many ways. The Canadian system's universal coverage with its lower costs and its public, nonprofit administration has been a subject of fascination to many Americans, particularly during periods when Congress flirted with the enactment of national health insurance legislation.

The U.S. and Mexico are the only developed countries in the world not to have some form ofguaranteed health insurance for all citizens. Federal and state government funding of medical care for U.S. citizens is limited to senior citizens and poor or disabled people through the country's Medicare and Medicaid insurance programs, respectively.

In part because of the U.S. tax code, which gives individuals and businesses deductions for medical care, health insurance is uniquely tied to a person's employment status. Without a job, health insurance can be difficult to obtain. As a result, an estimated 45 million people have no coverage, according to the Centers for Disease Control and Prevention.

Not only are there millions of uninsured, but also health insurance premiums for businesses continue to increase annually at double-digit rates, twice that of the rate of inflation, putting a drag on employers' ability to compete domestically and abroad.

"Whether one agrees or disagrees with Michael Moore, the public interest in his new film demonstrates the growing anxiety that exists throughout the United States about health care costs and coverage. It is for this reason that health care reform has become the top domestic priority for America's voters," said Ron Pollack, executive director of Families USA, a national organization for health care consumers.

Swift Current experiment

In Canada, the gradual movement toward publicly insured medical care began in a small city in southwest Saskatchewan where, during the years following World War II, a Scottish-born Baptist minister who would eventually lead the country's first socialist government kick-started the drive.

Tommy Douglas eventually become the province's premier and is remembered for his relentless pursuit of universal health care. The town, dubbed Swift Current by its first inhabitants— after a creek that winds across a hundred miles of prairie — became the epicenter of Canada's quest to implement government-run health services for all who lived within its borders.

During the early years of the Swift Current Health Region, as it is still called today, many crises occurred, including a polio outbreak that nearly derailed the experimental system. But persistence in support of a public health care system prevailed, and the number of doctors practicing in Swift Current rose from 19 in 1946 to 36 in 1948.

Ultimately, its success provided a functioning model to the Saskatchewan government for a provincial medicare system, which was introduced in 1962 as the first universal hospital and medical care program in North America — two years ahead of the British Health Service.

Six years later, in 1968 on Canada's 101st birthday, Saskatchewan's model of public health insurance was adopted throughout the country's 10 provinces and three territories — although Ontario held out until 1971.

Several tweaks were made to the system over the years, but in 1984 the Canada Health Act cemented the country's approach to nationalized health care. The act established a protocol for public health services, allowing each province to create "medically necessary" services that the government would pay for. The law also set a strict tone for public health care by penalizing provinces that permitted hospital or physician user charges — known in the United States as co-payments.

"The first stage of Medicare has been very good to Canadians," said Dr. Michael Rachlis, a Toronto physician and author of four best-selling books on Canada's health care system. "Up until the late 1950s, Canadians and Americans had similar health status and similar health care systems with similar costs. Now Canadians are healthier and spend much less on health care."

Since the early 1980s, an estimated70 percent of Canada's health care services have been paid for by the government. The remaining 30 percent, which include such medical services as dentistry, optometry, pediatrics and physical therapy, are administered in the private sector and are paid for out-of-pocket.

Winds of change

The Canadian provinces currently use various legal tools to discourage private insurance so that access is based on need, not a person's ability to pay. Six provinces — British Columbia, Alberta, Manitoba, Ontario, Nova Scotia and Quebec — outlaw private insurance for medical services.

But as a result of theChaoulli decision, the health care debate turned in favor of private financing.

"The largest impact of the decision has been to change the consensus on whether or not the health care system is sustainable. It has changed the consensus on whether it's even just," said Brett Skinner, director of pharmaceutical-policy research at the Fraser Institute, an independent research organization in Canada.

"There's an evolutionary change that's under way that will be incremental, year over year — a slow expansion of private options, and the development of private insurance for those things," said Mr. Skinner.

But despite a groundswell for more privatization in Canada, it remains illegal under federal law to pay for health care that is deemed medically necessary by a provincial government.

Rick Anderson, a Toronto health care consultant, said that less than 1 percent of the health care deemed medically necessary by a province or territory is administered in the private sector.

"We're not there yet, and it's going to be a slow process," he said. "But there is more momentum than there has been in years."

It is difficult to accurately gauge the growth rate of the private health care industry since the Chaoulli decision because no organization in Canada tracks the number of private health care facilities. The best guess, Dr. Nagy said, is that there are now 23 private surgical centers offering medical services nationally, as well as 17 cataract clinics.

Patients must be patient

To stem the tide toward privatization, Canada will have to solve the national health care system's Achilles' heel: wait times to see physicians and for needed surgery.

Following a referral from a general practitioner, between 1993 and 2006, it took an average of 20 weeks in the province of New Brunswick to see a specialist, according to an ongoing study by the Fraser Institute. New Brunswick had by far the longest wait time of the provinces, with Ontario and British Columbia tying for the shortest wait time to see a specialist at seven weeks. The average for the entire country was about nine weeks.

The average wait time between a referral by a physician and an appointment with a neurosurgeon can take as long as 21 weeks, according to the Fraser Institute. Cancer patients in Canada experience the shortestwait times, generally waiting no longer than three weeks to see a doctor.

"If you're healthy and willing to wait, it is the best system in the world," Dr. Gratzer said. "What you discover is there are wait times in Canada for any condition."

Colin McMillan, president of the Canadian Medical Association, attributes long wait times to a lack of capacity in the health care system. During the 1990s in a money-saving effort, the federal government drastically cut back on medical training courses and cut off foreign doctors from legally practicing in Canada.

"We thought there was a surplus of doctors at the time. We thought we could save some money," he said. "The chief problem our health care system faces today is access due to a lack of doctors, nurses, hospitals and technology."

Turning around the problem of long wait times will not be an easy task, according to researchers.

"We don't have the resources to lower them despite now spending more on health care than every other country with a universal health care system outside of Ireland," said Nadeem Esmail, director of health system performance studies and manager of the Alberta Policy Research Centreat the Fraser Institute.

However, Dr. Rachlis, a staunch supporter of public health care, contends that while the wait time issue threatens the viability of the medical system, there are methods within the system to better manage wait lists.

"The government needs to champion public wait-list reforms. Physicians must work in teams, including health care professionals and nurses, rather than on their own, and accountability for wait-list management must be transferred from individual surgeons to health authorities working with groups of surgeons," he said.

According to Dr. Rachlis, these problems are related to a failure to move to a group medical practice and to organize modern patient-flow processes. "We're still using the Pony Express, but expecting communication at the speed of light," he said.

Innovation lags

Critics of a national health program point to a dearth of innovation in medical technology and prescription drugs, which can lead to decreased access to life-saving medical equipment and medications.

Throughout the 1990s, opponents of the Canadian system gained considerable political traction by pointing to the provincial governments that were increasingly constraining their health care budgets, which led to more rationing of services and facility shortages.

For instance, Canada uses its medical-imaging scanners more intensively than do the U.S. or Britain, largely because it ranks low among developed countries in the number of imaging machines available throughout the country.

At the beginning of 2005, Canada had 176 MRI scanners, magnetic resonance imaging machines used to provide clear pictures of the body to detect diseases. Compared with 20 developed countries reporting MRI data for 2005, Canada ranked 12th, with about five MRI scanners per 1 million people, according the Canadian Institute for Health Information.

"The lack of MRI and CAT scan machines in Canada is a direct result of the single-payer system," said Sally Pipes, president and chief executive officer of the Pacific Research Institute, a San Francisco health care think tank.

The U.S. reported the second-highest number of MRIs, behind Japan, with 27 machines per 1 million people.

A paucity in medical-imaging equipment is not the only consequence of a national health system. Because Canada's government pays for prescription drugs, prices for the medications cannot reach as high as in a free-market system.

Ms. Pipes points out that as the biotech industry heads toward major breakthroughs in life-saving medications, specifically for cancer, Canadians may not have access to the drugs as quickly.

"There are very few Canadian drug companies, and American drug companies often don't sell their drugs there," she said. "Because of the enormous cost of developing a drug, businesses must first recuperate their costs before entering a market that dictates prices, which are lower than other places."

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