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Thursday, October 24, 2013

The Future of Healthcare in North America: Is U.S.-Canada convergence in the cards?

Friday, October 18, 2013
Introductions and welcome by Moderator Anton Hart, Chair, the HealthcareBoard and Publisher, Longwoods Publishing. Mr. Hart thanked the event’s sponsors, the Health Council of Canada and Accenture, then introduced today’s chiefs: 
Trudy Lieberman is a past president of the Association of Health Care Journalists in the U.S. and currently covers health for the Columbia Journalism Review. Lieberman is visiting four cities across Canada as a Fulbright Scholar and guest of the Evidence Network of Canadian Health Policy, commonly known as 
André Picard is a health reporter and columnist at The Globe and Mail, with a new book launching through The Conference Board of Canada on October 30.


TRUDY LIEBERMAN began by indicating what she believed to be the main question people have, which is “what is Obamacare?” She then provided a brief overview while mentioning that André Picard would discuss the areas of convergence between the two country’s health care systems.

What is the “Affordable Care Act”? First off, says Lieberman, it does not provide health insurance to all Americans. It affects the individual market, where people go for healthcare when they do not have coverage.  Even so, pre-existing conditions, such as asthma are often not covered by insurance companies in this market. Obamacare makes it easier for people to shop in that market.

Lieberman has been writing about U.S. health care for more than twenty years and knows that people in the U.S. have trouble navigating that system.

Approximately 25 million people in the U.S. shop in the individual market, and that’s who Obamacare is aimed at helping. Some may have had healthcare coverage, while others are new to buying coverage. In order to coax people to buy in to the system, the government is offering subsidies . However, 40% of the individual market will not qualify for subsidies and yet, there are penalties for not purchasing insurance, even when a good policy could cost upwards of $16,000.

People are worried and do not know if the subsidies will be sufficient enough to buy an adequate healthcare policy, or if the subsidies will last over time. Those in the middle class are especially concerned.
The reform law called for an expansion of Medicaid, the federal-state program for the poor. But 27 states chose not to expand, leaving those with incomes below the poverty line with no options. They are barred from shopping in the exchanges and are too poor to buy coverage ion their own.

In her opinion, the Achilles heel of Obamacare is the lack of expansion of Medicaid.

The confusion about Obamacare also lies in the fact that the press and media not always explained it properly to the American public.

Obamacare does not build in equity.  There will be four types of plans sold in the exchanges. Most will/are expected to opt for the bronze plan which covers 60% of costs. Then there’s silver at 70%, gold at 80%  and platinum at 90%. However, many states won’t be able to offer a platinum plan because it will be too expensive for most shoppers.

Out of pocket spending is high. Deductables will be around $4,000 or $6,000 for a family policy but might be as high as $10,000 or $20,000. Co-insurance consists of the percentage of insurance a patient has to pay for, such as diagnostic imaging, which is not covered by plans.

There have been multiple cost-cutting moves, including moving services from the hospital to outpatient settings.  Insurance companies are asking people to pay for high cost sharing for he most commonly-used services. This is something that has not yet sunk in with the American public.

Obamacare also does not include a cost containment clause

Lieberman does not know if Obamacare will work and expects it will take at least two or three insurance cycles to see what companies are doing with the premiums and whether people actually buy and have insurance.

While the goal is affordable health care, she predicts Americans may not get it.

The administration and the media could have done a better job in promoting the new law, says Lieberman. As a result there’s been somewhat of a backlash against Obamacare. But there hasn’t been a sustained discussion as to what it can and will do. The individual mandate was never made clear; which was probably a deliberate act by the administration to prevent backlash. The irony is, this type of plan was first introduced by the Republicans in the nineties to counter the Clinton Administration’s plan.

Lieberman finds the press could have tied the threads together better for the public to make things more clear because most Americans are quite confused.

ANDRÉ PICARD thanked Trudy and indicated her talk better informs him every time.

His discussion centred around the common challenges existing between Canada and the U.S.

He stated that in many ways, we do many of the same things in Canada as in the U.S. but without the debate, so we should guard against self-righteousness. There is no “Affordable Care Act” in Canada. There are a lot of disparities between the provinces, Picard found, but we just don’t talk about them.

We also have many of the same financial challenges that exist in the U.S. but again, there’s no discussion. Health care in Canada covers only 70 per cent of the costs. Canadians pay about 30% of the medical costs because more things like drugs may not be covered.


      1. MOVING CARE TO THE COMMUNITY: Hospital-based models need to be turned into community-based models. There isn’t a plan or the organization to meet the demands and needs for homecare and nursing homecare.
2. PRIMARY CARE: Better primary care services are needed. A central coordinating point for healthcare is needed – one that provides support throughout the patient journey. We know all the bad things happen in transition through a lack of coordination, says Picard. So who is going to coordinate care and guide us through the complexity of care, he asks?

3. Need to move to a CHRONIC CARE MODEL from an ACUTE CARE MODEL.

4. DRUGS: Costs are high and this is a big void in the Canadian system. Only 45% of drugs are covered by public plans. Private plans are also tightening their strings. As a result, almost 600,000 Canadians do not have catastrophic drug coverage, which is a gaping hole in Medicare.

5. SOCIAL DETERMINANTS: Inequality is having a major impact on people’s welfare.

6. QUALITY: This is paramount. Medical errors or adverse events due to a lack of quality are some of the leading causes of avoidable death. People want affordable healthcare, but not at the sacrifice of quality.

7. RATIONING: The U.S. rations care economically. If you can’t afford it, you don’t get it.  In Canada, services bottleneck, create wait lists and people have to wait for certain kinds of care. Rationing is a reality, but the trick is to find the best way to do it.
8. PATIENTS WHO USE TOO MUCH HEALTHCARE: In Canada, 1% of the patients use 25% of care, while another 5% consume 50%. Costs can be controlled by better management of difficult patients. We need to be more innovative and smarter, says Picard. For instance, there was a man who had all sorts of health issues and visited Emergency 238 times a year, costing the system an estimated $1.5 million per year. So it was decided to assign him a full-time nurse at a cost of $60,000 per year.  This nurse even found the man an apartment. She was a guiding light of sorts. The following year the man reduced his ER visits to 60. This was a pragmatic solution that saved the system close to one million dollars.
9. PUBLIC VS. PRIVATE: Canada has both, whether we know it or not. The U.S. has both. We need to discuss the right mix of public and private healthcare. Currently it’s about 70-30.

Both countries need to have real conversations about healthcare. But what is the proper forum for such a debate. There is too much extremism. So how are we to have this much-needed discussion?, asks Picard.

TRUDY LIEBERMAN: Long term care is a real issue in the U.S.. It’s interesting to see what has been done in the U.S. The Affordable Care Act included a Class Act that was championed by the late Senator Ted Kennedy.  Originally it wasn’t very popular. The idea behind this was to pay a bit into the federal system then tap into that when older. But the provision was repealed because it wasn’t going to work. As a voluntary program, people weren’t going to pay into it.

Since the Class Act was repealed, there’s been virtually no discussion of homecare in the U.S.

But we do have something that has worked somewhat called the “Older Americans Act” which dates back to the Johnson administration. This provides services to keep elders at home. Unfortunately, it hasn’t received adequate funding for the last few decades. Now there’s a long wait list for homecare services in almost every jurisdiction. Some people wait months just to get a hot meal from “Meals on Wheels.” PEOPLE DO THE BEST THEY CAN, BUT THE BEST ON MANY DAYS ISN’T ENOUGH, one man said.

QUESTIONS/COMMENTS from the audience:

1. DR. CHARLES WRIGHT, Council Member, Health Council of Canada: That was enlightening for me. You used the word “rationing” which is a highly allergenic word. If we could only capture a portion of unnecessary care, some sort of rationing might be needed but at least the system would be more sustainable.

ANDRE PICARD: 25-30 % of healthcare is overdone. We need to ration care on what works and what is effective. Evidence-based rationed care.

      TRUDY LIEBERMAN: We’ve been talking about this for many years but nothing is being done about it. There are powerful interests who like doing extra tests, and it’s hard to deal with those forces.

      2. SHOLOM GLOUBERMAN, President, Patients Canada: We don’t have healthcare services in the community. We don’t partner with patients on chronic care. Bloated hospital care, very few community services -- we spend here in Canada a fraction of what is spent on community services in Britain. Insurance doesn’t cover it but covers hospital stays for example. We have an aging population, and chronic diseases become a part of life. We don’t deal or care for it properly. Patients aren’t partners in their care. What we need is to start to build up community services because they’re not covered by insurance.

ANDRÉ PICARD: There are definitely administration issues. Medicare was created in the fifties for a population demographic for that era. Now demographics have changed -- needs have changed. But the system has not been adjusted to account for the change in demographics.

3. QUESTION: Who gets to define when care is necessary or futile? What will happen based on the upcoming Supreme Court of Canada decision?

ANDRÉ PICARD: It’s unfortunate this has to be settled by the courts, and there isn’t the political courage in this country to deal with it. The larger question in my opinion is “what is in Medicare, and what is not?” It’s a tough issue. How should public services be rationed? In Canada, we do this by sidestepping the discussion. We’re moving towards a populist system, like in the U.S.

4. JOHN G. ABBOTT, CEO, Health Council of Canada: How does Obamacare tie into the American deficit and any comparisons to Canada?

TRUDY LIEBERMAN: Obamacare won’t break the bank, per se. Ultimately, opponents of Obamacare want to deal with entitlement and the privatization of Medicare – like drug benefits. People are okay with richer citizens paying more for healthcare, but what is the definition of “rich”? That’s a concern for those who support Medicare and that’s a big issue. The other is entitlement and Social Security. Many want to privatize it. But the cost of living formula may be changed in order to reduce the amount that government needs to spend, which will hurt low-income households, especially women. Long-term subsidies under Obamacare will then come into play. They are financed for ten years, but we don’t know whether subsidies will be secure in the long-term. Ultimately they could meet the same fate as Medicare, whatever that will be.


TRUDY LIEBERMAN: In the “Affordable Care Act,” there is nothing calling for negotiating prices or services.  Hospitals publish “retail” prices which are usually quite high. But they are wildly different from hospital to hospital even within the same community.  But these prices are essentially phony. [someone in audience: “They’re for the people who come from Canada for treatment.” – laughter]. In practice, the hospitals negotiate with insurance companies and bargain for much less than the published costs. Many hospital systems though are growing larger and are becoming conglomerates that compete against each other. They advertise who has the better equipment or the best cardiac care but not price. There’s a real fear that these conglomerates will have the power to set prices without much competition or push back from the government.

ANDRÉ PICARD: Canadians are ignorant about the real costs of healthcare. We overpay. We have a similar system to the U.S.

TRUDY LIEBERMAN: Steve Brill’s “Time Magazine” article about healthcare was really well done.

More transparency is needed.
Breakfast with the Chiefs concludes.

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