Canada’s healthcare system and implications for the struggle in the US

Medicare in Canada: Under attack, but worth defending and improving

I am not a doctor. Neither am I an expert on health care. But like everyone in this room, I care about my health, I depend on access to good health services, and I know that they are threatened by the profit system everywhere, including in Canada. Tonight I want to share with you some information that may shed a little light on the source of our common problems, and point the way to some common solutions.

First, here are some basic statistics about Canada, from a health standpoint:

• Life expectancy: 81 years
• Infant mortality: 5 per 1,000 live births
• Health spending as a percentage of GDP: 10
• Percentage of health spending that is private: 30
• Doctors per 10,000 people: 19 Source: World Health Organization.

Q: How does the Canadian system provide health care at lower cost than the American system?

Canada’s national health insurance, called Medicare, provides hospital and physician insurance to all Canadian citizens. It does not provide health care directly from government hospitals or through publicly employed physicians. Just imagine 10 provincial nonprofit health insurance plans without deductibles, co-insurance or co-payments for medically prescribed treatment.

Canada pays for more hospital days and doctor visits per capita than the United States but spends about 40 percent less. Canadians pay their doctors, nurses and other medical personnel less, and provide fewer very expensive equipment and services. Open heart surgery, for example, would cost about 30 percent less in Toronto than in Chicago. The lower supply of expensive equipment means Canadians wait somewhat longer for those services, but in recent years improved management has reduced waiting lists for services like M.R.I. scans. Canada has more general practice doctors per capita than the United States does, so basic office visits are considerably less costly. Private spending, which is about 30 percent of all Canadian health spending, has increased more rapidly than public expenditures over the past 40 years.

The final reason Canada has lower costs is that the provincial governments are responsible for financing health care and directly face the pressure of rising health costs. They must act to control the costs because other government services compete for public funding.

Q. What does the Canadian health system do particularly well?

Two features stand out. One is that the financing of medical care is extraordinarily simple for patients, physicians and hospitals. Patients face no bills for acute services and no co-payments. Doctors are paid electronically each month according to a set payment rate, and the hospitals must follow a set budget. Bankruptcy from medical bills, insurance disputes and billing confusion do not exist as problems.

The second strength is clarity about the purposes public health insurance serves, and for many Canadians, there is a sense of pride that access to medical care is not treated as a market transaction. Medical care is allocated more by ability to benefit than by ability to pay. However, disparities in medical use still exist between people of different classes and educational backgrounds.

Q. What is one of our biggest criticisms of it?

The continued nastiness of federal-provincial negotiations about the shared financing of Medicare is one unappealing feature of the Canadian system. This dual responsibility leads to endless blaming between the national and provincial governments for the pressures of medical expenditures on the budgets of other public programs and tax levels. This, in turn, has partly prevented Canada from handling drug costs in the uncomplicated Medicare program.

Q. What is the most important lesson Americans should learn from the Canadian system?

Until the 1960s, Canada was very similar to the United States in its medical, hospital, economic and social context. Canada’s experience since then demonstrates that it is possible to have public health insurance that largely fulfills the explicit purposes set out in the Canada Health Act of 1984: universal insurance, comprehensive hospital and physician benefits (without hidden insurance policy constraints), portable coverage across the country, clear accountability through the political process and no significant financial barriers to care.

The great strength of the Canadian system was (and continues to be, to a great extent) is that it puts everbody, rich or poor, in the same boat. But of course after 30 years of neo-liberalism it is now a pretty leaky vessel, with the sharks circling. The weaknesses of the Canadian system are the following: 1. it was limited to an insurance plan, albeit a publicly administered one; 2. coverage was restricted and highly uneven regionally, and has become increasingly so under the impact of austerity instigated by Ottawa and implemented by the provinces; and 3. it failed to dismantle the fee-for-service payment system for physicians.

Contrast this with the British NHS which, from the beginning, was cast as a national service which would require conscious planning (leaving aside the question of a parallel private system which was conceded early on). There is nothing of this in Canadian medicare and so our system is significantly under-rationalized, chaotic and uneven, compared to the UK or indeed to private health care conglomerates in the US. Of course in the US we are talking about corporate rationalization to grab more market share which is tremendously wasteful for the system as a whole and subordinates the interests of patients and health care providers to the logic of profit. (Refer to Business Week article on HMO monopolies)

The current right-wing offensive in the US against even the timid reforms advanced by the Obama administration are reminiscent of the struggle for medicare as it unfolded in Saskatchewan in the spring and summer of 1962. At that time there was a massive extra-parliamentary campaign (the KOD-Keep Our Doctors) launched by the business class, the press and the medical profession to defeat the Cooperative Commonwealth Federation (CCF) government and its medicare plan. This culminated in a month-long doctors’ strike in July 1962. The campaign was hysterically anti-communist, a semi-insurrectionary free-enterprise crusade, playing on all manner of prejudice, ignorance and fear. On the other side were the pro-medicare forces – the unions, farmers and the base of the CCF- who were determined not only to defend the medicare legislation and break the doctor`s strike, but also to build a network of community clinics that would implement long-standing progressive health care demands (multi-disciplinary care, salaried physicians, consumer input and control). In some respects the dynamic escaped the control of the CCF government and social democratic party leadership who were almost paralyzed in the face of the right wing offensive. This episode was certainly a major political confrontation and time of class struggle which proved to be the midwife of Canadian medicare.
In the US today, a class confrontation is also taking place with a similar aggressive reactionary campaign but with a much weaker response from the left. These are different times. The workers’ movement is much more demobilized than 50 years ago, and the Democratic Party under Obama lacks even the limited reformist ambitions of Canadian social democracy in a hinterland province, riding the wave of post-depression radicalism which was still a force in the early 1960`s.

In Quebec province, privatization has advanced with the out-sourcing of certain procedures to be followed by others to ‘for-profit’ providers. The`free-standing`abortion clinics in Quebec, which recently were brought more fully under medicare, are now facing prohibitive costs to raise standards to the level required in the government`s new legislation for private surgical clinics. Whether this was an intended consequence is unclear. Although not anti-choice, the Jean Charest government would have no qualms about favouring bigger for-profit abortion clinics operated by gynecologists and requiring substantial patient co-payments.

On another front, the PPP`s (private-public partnerships) have run into quite stiff opposition from a broad array of forces including health care unions, medical specialists, architects and the Quebec branch of Physicians for Medicare (médécins pour un régime public). There will be a decision in the fall whether to proceed with the building of the big mega-hospitals in Montreal on the basis of a PPP. In Ontario there is a battle over PPPs too, including a lawn sign campaign. Elizabeth and I have such a sign on our front lawn in Toronto now.

The struggle to defend medicare, one of the most enduring legacies of the post-war Canadian welfare state, entered a new and more ominous phase since the 2005 Supreme Court ruling in the Chaouilli case. In a narrow 4 to 3 judgement, the Court upheld the right of Dr. Chaouilli`s patient, George Zeliotis, to pay privately for a hip replacement for which he lacked timely access through the public system. Subsequently, the Quebec Liberal government introduced legislation allowing patients to pay privately for three common surgical procedures (hip and knee replacements and cataract removal) if the public system is unable to provide them within a prescribed time. This represents a small but siginificant step toward parallel for-profit care competing with an increasingly stretched public system still reeling from 20 years of neo-liberal austerity.

At the same time, public pressure forced a retreat by the Alberta Tories from a law that would have permitted physicians to work in both the public and private for-profit sectors. The situation thus remains contradictory. On the one hand, service shortfalls in publicly funded hospital and primary care are undermining confidence in medicare. Market-driven austerity has taken its toll and market-style so-called reforms such as public-private partnerships (PPP`s), out-sourcing and managed competition are the favoured options of governments dominated by a business agenda. Yet the majority of working people in Canada and Quebec are committed to a public system provided that reasonable quality of care can be maintained.

A Focal Point of Class Struggle

As I mentioned before, medicare occupies an important place in Canadian political history. It is widely associated with Canadian social democracy, the Cooperative Commonwealth Federation (CCF) and its successor the New Democratic Party (NDP), and in particular to the crusading efforts of Saskatchewan CCF Premier and later federal NDP leader Tommy Douglas. NDP leaders regularly invoke this legacy in order to shore up the party`s popular standing. The federal Liberal Party too claims credit based on its role in brokering the deal with the provinces that made medicare a pan-Canadian reality. Medicare serves a key role in legitimizing not only the labour-based NDP but Canadian federalism itself, and the nationalist ideology that posits a kinder, gentler Canadian capitalism in contrast to the brutal, unrestrained market forces that prevail in the United States.

But two important historical realities are obscured by this official discourse. The first is that medicare was the product of class struggle. It was achieved only after a hard-fought battle by working people over several generations, from the first medical check-off won by the Glace Bay, Nova Scotia miners in the 1880`s, to the failed bid for public medical care in British Columbia in the 1930`s. Throughout we faced the determined opposition of the insurance industry, the Liberal and Conservative parties, and physicians who opposed even modest steps in the direction of socialized health care.

The decisive battle came in Saskatchewan pitting the provincial CCF government and its substantial worker and farmer base against the province`s business class led by the Liberal Party, the Sifton press monopoly and the medical profession culminating in the 1962 doctor`s strike. Reactionary forces mobilized thousands in a frenzied anti-communist, pro-free enterprise crusade. But a defensive counter-mobilization at the base of the CCF (largely abandoned by the party brass) succeeded in breaking the doctor`s strike by rapidly organizing a network of democratically controlled community health clinics across the province. The international dimensions of the struggle were highlighted by the active support given by the Canadian and American Medical Associations to the anti-medicare forces, and on the other hand, by the recruitment of dozens of pro-NHS physicians from the U.K. to break the strike.

The mystique surrounding medicare also glosses over the capitalist counter-offensive of the past three decades. The recession that hit the global economy in 1974-75 marked the end of the post-war boom ushering in a period of intensified competition between capitalist economies internationally. Like its counterparts elsewhere, the Canadian bourgeoisie began to jettison the post-war social contract and construct a new relationship of forces more favourable to Capital. Abandoning Keynesianism, Canada`s two business parties coalesced around a neo-liberal program and ideology leaving the NDP and the trade union leadership with the choice of complying with the new orthodoxy, or challenging it in a systematic way.

We have all experienced first-hand the regressive impact of this capitalist offensive: a drastic reduction in the role of government in favour of the private sector, the selling off of lucrative public monopolies, deregulation, liberalization of trade with the signing of NAFTA, relentless cutbacks to social programs, the loss of thousands of unionized jobs and the growth of precarious low-wage employment. With few exceptions, these changes met with no challenge from the formerly reform-oriented leaders of the NDP or the labour movement.

The attack on the social wage took the form in Canada of a massive withdrawal of federal transfer payments to the provinces under successive Liberal and Conservative regimes. Ottawa originally enticed the provinces into signing on to medicare in 1968 by paying 50% of the costs. By 1998, the federal contribution had sunk to 10% with only a modest rise in the last few years.

Medicare was somewhat shielded from provincial cuts to social services and education because of popular antipathy to attacks on health care and also because Canadian employers derived a significant competitive advantage from the public health insurance monopoly. Nevertheless, the public health care system has been profoundly affected by the shock therapy of the neo-liberal offensive. Hardest hit has been the hospital sector with the elimination of scores of hospitals, bed closures, emergency room congestion and increased wait times for important treatments and diagnostic procedures. The brunt of the cutbacks have been born by women who provide most of the labour needed to keep hospitals running and who have taken on almost all of the informal unpaid or low paid duties as care has been de-institutionalised and shifted onto individuals and families.

Countering the Misinformation Campaign of the Right

Canada`s single-payer public health insurance system has been the target of an ideological offensive by market fundamentalists which is as mendacious as it is relentless. The right wing mantra is that medicare is not financially sustainable, costs are spiralling out of control, the system would benefit from an influx of private investment and that competition and consumer choice would improve quality and efficiency.

It is important to counter these false claims.

The fact is that Canada has spent a fairly constant share of national wealth on health care over the past 30 years in contrast to the privatized multi-payer system in the United States. In 1970, both Canada and the U.S. spent the same amount of GDP on health care – about 7%. By 1998, U.S. costs had doubled to 14% (with 40 million persons still uninsured) while Canada`s had risen modestly to 9.4% (5^th highest of 17 OECD countries).

Moreover, relative spending on those areas covered by medicare – hospital care, physician services and administration – have remained more or less constant over three decades. Other sectors such as dental care, pharmaceuticals, long-term care, medical equipment and non-physician professional services are covered mainly by private insurance or else paid for privately out of pocket. And it is in this growing private sector where costs have risen dramatically, especially drug purchases which rose from 9% of total health expenditures in 1984 to 15% in 2001.

Thus, costs are rising most rapidly in those areas of health care that are most privatized. One of the major factors in rising U.S. medical costs is the absence of the single public payer that exists in Canada.

The claim that private provision of service improves quality is also bogus. A recent study by Devereaux and Associates published in the Canadian Medical Association Journal found a 2% higher mortality rate in `for-profit` hospitals as opposed to private non-profit or public hospitals.

The right wing likes to hide behind the slogan of ‘choice’, claiming that a private market in health care will “empower” patients. Choices for whom? Private investors in health care make choices on the basis of opportunities for profit and ability to pay, not on the basis of need and appropriateness. By siphoning off resources from the public sector, for-profit care actually reduces choice for the majority of patients. A parallel private system will only exacerbate the problems of the public system – diverting needed labour and expertise, increasing wait times, and exerting more pressure on those with money to jump the queue. Far from alleviating wait times in the public system, privatization will ultimately guarantee that you have to wait unless you pay.

The logic of profit maximization is at odds with the logic of care. Care is inefficient from a market standpoint and difficult to measure. For-profit run health care encourages the transfer of functions to lower paid and less qualified workers, while reducing overall personnel and intensifying the work for those who remain. Applying competition to publicly funded health services represents a fundamental shift from planning, solidarity and cooperation to division, conflict and fragmentation with any efficiency gained in service provision being eaten up by increased administrative costs, the alienation of staff and less coherent treatment of patients.

Privatization is not about governments tapping into sources of private capital to help fund health care. In fact, it`s just the opposite. It`s about health care entrepreneurs, insurance companies, the pharmaceutical industry and others laying their greedy hands on even more of the $70 billion plus spent in Canada on health care every year.

The right wing seeks to generate a sense of panic about the crisis in health care, the better to win acceptance for their destructive proposals. The left needs to counter this fear-mongering but also to acknowledge that the serious problems that do exist have their roots in over 20 years of calculated neglect and irresponsibility by our political rulers. The antiquated federal system has undoubtedly exacerbated the problem, but the fundamental cause lies in the neo-liberal consensus which has gripped Canada, as it has other capitalist nations. It has acted in advance to exclude any serious public investment and hence blocked genuine reform of the health care system.

Socialists call for a comprehensive program to re-structure the health care system, to extend socialization and to open up the possibility for rational planning of this vital human resource. Such a program would include:

1. Enforcement of the Canada Health Act to eliminate for-profit care and enforce standards; restore federal funding to previous levels (50%).

2. No contracting out of surgical, diagnostic or support services to the private for-profit sector. Fund public hospitals or clinics adequately to perform needed services so that expertise and the capacity for innovation are kept within the public domain.

3. Nullify Private-Public Partnerships in the conversion of existing hospitals, or the building of new health care institutions. PPP`s transform publicly funded organizations from being owners of assets and direct providers of services to purchasers of services from the private sector. They constitute a recipe for inflated costs and long-term guaranteed profits for investors feeding at the public trough. They cost more and deliver less.

4. Expand medicare to include comprehensive pharmacare, home care and dental care adhering to the principles of universality, public administration, not-for-profit delivery and first dollar coverage (no user fees, co-payments or deductibles).

5. Eliminate fee-for-service payment and the insurance model; bring physicians and other health professionals into salaried service under contract to multi-disciplinary clinics and hospitals which are accountable to their communities; expand the role of nurse practitioners, midwives and other health care providers.

6. Nationalize the pharmaceutical industry; short of that, repeal the monopolistic federal drug patent legislation (Bill C-22), create a single government purchasing agency to lower drug prices, and fund salaried pharmacists to promote and monitor appropriate drug utilization.

7. Empower health care consumers and health care workers to eliminate wasteful practices, monitor quality of care and determine how health care funds should be allocated based on the best clinical evidence and the consideration of broader social needs and priorities.

8. Increase government revenues to fund these and other progressive reforms by eliminating tax breaks for the affluent and by substantially increasing the corporate tax share.

These demands restore the link with the original struggle for socialized health care led by the early labour and socialist movements. Medicare was a significant but only partial advance along this path. Its survival against the privatizers will require not only a resolute defence of the principles embodied in the Canada Health Act, but also mobilizing for more far-reaching reforms.

Naturally, the tasks facing socialists, progressives and advocates of public health care in the USA are bigger, and if I may say so, they are linked to the need to establish a vehicle for independent working class political action, that is, a Labor Party in the U.S. Your progress on all fronts is extremely important, not only for Americans, but for Canadians and for everyone on this planet. Because, when for-profit health care is put to rest in America, it will reduce privatization pressure everywhere, it will be an important blow to capitalist rule, and it will be an important victory for the international working class. Hasta la victoria siempre!

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A Note on Cuba

One of the signal accomplishments of the Cuban Revolution has been the great strides taken in the development of the country`s health care system. The foundation of this achievement surely rests with the decision to make free health care available to all and in particular with the 1961 nationalization of health services when the government became the sole provider and was able to implement central planning and control over health care resources and programs. The introduction of socialized health care in Cuba has been associated with significant improvements in the health status of the population with dramatic declines in the incidence of infectious disease, an increase in life expectancy and improvements in infant mortality which approach that of many fully industrialized countries and in some cases even surpass them, as famously in the case of the United States.

This achievement is all the more remarkable when we consider that the island lost half of its physicians to emigration in the first years after the 1959 revolution. Because of this professional deficit and the influence of Che Guevara, himself a trained doctor, in the revolutionary leadership, there was from the beginning an emphasis on the quality of professional training. Cuban medical education has been highly effective so that the country now has over 50,000 physicians, a large skilled nursing work force and substantial increases in other health professionals such as dentists. Despite its dependence on the Soviet Union for almost three decades, the Cubans did not copy the Soviet model with its hyper-centralization, low-paid largely specialist physicians and weak primary care sector (the so-called Semashko system dating to the Bolshevik Revolution and later rigidified during the Stalin years). Instead the Cubans built up a strong decentralized system of primary care linked to hospital-based specialist care, with public health mobilizations appropriate to Cuban conditions (from Dengue Fever to Hurricane precautions). Cuba has been able to sustain relatively high levels of motivation amongst health care workers including physicians.

The high standard of professionalism and organization in Cuban health care has become an important component of Cuban internationalism. First of all in the opening of Cuban medical schools to accommodate over 3 thousand students from developing countries. And secondly by sending thousands of its own physicians and paramedical personnel to work in teams overseas notably in Latin America and the Caribbean but including such far flung destinations as Africa and South Asia as we saw recently in the dispatch of a Cuban emergency health care team to assist victims of a major earthquake in the mountain reaches of Pakistan. Cuban medical assistance of this type renders important solidarity to the revolutionary processes underway in Venezuela and Bolivia as well as to the struggling masses in Haiti.

It is important not to exaggerate Cuban achievements in health care. The island is in desperate need of investment in social and technical infrastructure and health facilities are often terribly dilapidated. The American embargo imposes acute shortages of important medicines and equipment. The Cubans have also been driven to market their expertise to cash paying patients from Latin America, the Caribbean and Europe which inevitably restricts access for the Cuban population.

The other side of the coin is that the Cuban medical system has had to become quite self-reliant. The embargo has stimulated a home-grown pharmaceutical and bio-technology industry which has registered some important innovative successes. This includes manufacture of a range of generic drugs for domestic use as well as developing new vaccines and other proven or promising pharmaceuticals for export.

Nor did the Cubans allow the economic crisis after the collapse of the Soviet Union to undermine their commitment to social equity in health care. In contrast, Vietnam, China and the former `socialist` states in Eastern Europe introduced market “reforms” with predictably negative consequences for equity and the possibility for planning.

The Cubans elected to ignore the market style reforms trumpeted by the World Bank and maintain their achievement based on the state as sole provider, centralized control and planning, a capacity for evaluation and innovation, a highly motivated health care work force and a commitment to equity.