Who needs medicare?

The quick answer is that we all might, sooner or later. The longer answer is that most of us do not need it much in any 1 year, and that the present system should be replaced with one that meets the need while allowing for personal responsibility and choice.

The department of National Health and Welfare had a good idea in 1950 when it conducted the Canadian Sickness Survey, a grass-roots measurement of costs. A randomly selected sample of Canadian families across the country recorded the details of their expenditures on health services during 12 months. They kept a diary of their expenses and reported them at a monthly meeting with an interviewer in the research team. Their costs included all items—hospital, dentist, physician, medications (prescriptions or over-the-counter), herbal medicines, and alternative methods of care.

Reports on the 1950–1951 survey were published in a series of compilations over the next 5 years, prepared jointly by the Dominion Bureau of Statistics and the Department of National Health and Welfare. The results were collected into one publication, Illness and Health Care in Canada, published by the Queen’s Printer and Controller of Stationery (9005-515, July 1960).

The results of the 1950–1951 survey show that most of the population did not have expenses that could be considered too great to manage. In fact, the results suggest that if support is provided for those in the lowest income group, most of the population could pay their own medical bills most of the time and would need help to meet only the high cost of major illness. The wealthy few could pay all their bills. Unfortunately, those results have apparently been ignored by the many recent committees planning for medicare. Instead, multiple task forces and royal commissions have recommended adjusting an inadequate system that tries to provide complete coverage (unnecessary in most cases) of all conditions approved by the controlling medicare system. Numerous minor services are paid for, with the total cost of millions of small items becoming a major outlay. The items medicare does not pay for include some that are the most expensive—dental care, long-term medication, and long-term residential care.

Those given the task of recommending changes tend to ignore the most important question: What reasonable coverage is needed to support those whose medical expenses have a serious impact on their standard of living? The expert committees fail to recognize that the great majority of the population, as many as 90%, could manage their own relatively low medical expenses in any 1 year.

Health care expenditures

The 1950–1951 survey contains many details that should be considered in any plan for provision of medical care on a rational basis:

• Of approximately 10000 family units in the survey, 14% had no expenditures.

• Of the 86% reporting expenditures, the average expenditure per family was $95.

• The average expenditure for all 10000 families was $82.10 per family, $28.30 for individuals.

• The number of families with expenditures varied little between provinces, from a low of 81% in Newfoundland to a high of 92% in British Columbia.

• The average costs showed a wider variation, from $83 per family with expenditures in the Maritimes to $110 in British Columbia, except for the very low amount of $35 in Newfoundland (which had joined Canada only the year before the survey, in 1949).

• About 54% of the expenditures were for hospital, physician, nursing, eye care, and dental care. The remaining 46% were for prepayment plans (24%); medicines, appliances, and equipment (20%); and other health services (2%).

• Of all families with expenditures, 70% spent less than $100. Of the remaining 30%, about two-thirds spend under $200. Only a small proportion, 1.6%, spent $500 or more.

To compare current figures with those from 1951 might seem like comparing oranges with watermelons, but it is still worthwhile. One source of data is the annual report of the BC Medical Services Commission. In the report for the year ending 31 March 2001, the unaudited examples in the table are slightly higher than the Canadian average, but can still be considered as representative of Canada (see the Table).

In the past, some of these costs would have been incurred by traditional public health programs. The greatest improvement in the health of the population has been provided by measures that individuals alone could not have undertaken, such as mass vaccination, water treatment, and improved housing and nutrition, rather than by medical care provided to individuals. However, if the total expenditure for the Ministry of Health for 1 year (1999–2000) of $7 965 276 920 is divided among the population of BC of about 3 900 000, health costs work out to about $2042 per capita. Compare this with the ministry figures of $3025 per capita, which includes $830 in the private sector.

In the BC report, there was no breakdown into groups according to the amount spent per person, as there was in the 1951 survey. It is probable that the median cost was much lower, as those who had expensive investigations or surgery would raise the average considerably. If the median cost per person were $1000 or less, then the cost for an average family of three might be $3000 or less. Comparing this with 1951 figures is difficult, as we must take into account the effects of inflation and changes in policy, as well as the availability of higher-cost procedures, investigations, medications, and an increase in hospital costs.

Some of the present-day cost of services is met by compulsory premiums. Collection of overdue premiums was attempted by the Medical Services Plan until January 2001, when a collection agency was enlisted. In the fiscal year to 31 March 2001, overdue accounts over 90 days were $59 583 765. This suggests there could be a tendency for people to claim their rights when they need medical care but to ignore their responsibility to contribute to the maintenance of the system. Researchers might look closely at those with overdue accounts to see if they are really incapable of meeting their responsibility. (Researchers might also assess the amount those with overdue accounts spend on alcohol, tobacco, or sugary drinks.)

Volume of illness

From the stratified sample of 10 000 families studied in 1950–1951, a total of 34 000 illnesses were estimated for the survey year. Of those, 46% of illnesses were disabling. The definition of disability was “it kept a person away from the usual occupation for 1 day or longer.” Females reported 55% of the illnesses, males 45%.

As expected, respiratory diseases were the most frequent illnesses, 53.3% of the total. Of these, half were listed as the common cold.

Days of disability per year were greater in the low-income group (17.8 days) compared with 11.0 in the medium-income group, 9.6 in the lower-high group, and 11.4 in the higher-high group.

In the low-income group, males reported 21.1 days of disability, compared with 14.5 days for females.

Males in the low-income group required more hospital care than in the medium and high groups, apparently because of problems such as tuberculosis and accidents related to occupation.

Physicians’ care was received by 37.2% of the low-income group, 43.9% of the medium-income group, and 45.2% of the high-income group. However, hospital admission rates were similar in all groups, so it seemed that more serious conditions were taken care of for all.

These and other figures warrant the conclusion that the low-income group had a greater amount of disabling illness and received a smaller amount of care for minor conditions than the other income groups. The medium-income group had more disability and received less care than the higher-income group.

The health care that the low-income group received least often was dental care. Only 9.1% of the low-income group visited a dentist during the year, compared with 14% of the medium-income group, and 19.3% of the high-income group.

Today there is much publicity about some expensive procedures that have a significant effect on the quality of life. In 1951 there was little likelihood of major cardiac surgery or knee replacements. Hip replacement techniques were just developing. Cataract surgery was not so quick and low-risk as it is now. For these important items of surgery, the rates in 1999–2000 per 1000 population in BC were 0.72 for hip replacement, 0.73 for knee joint replacement, and 7.48 for cataract surgery. These are examples of the need to provide financial support for the small number who incur the expense of such operations in any 1 year.

The volume of sickness in 1951 is hard to compare with the present using selected figures in the BC report. The 1951 study recorded 3.4 illnesses per family. The BC figures for 2000 show 5697 services per 1000 population by general practitioners, 2750 by specialists, and 5474 diagnostic services. These data were only the fee-for-service items. There was no record of the number of illnesses or their diagnoses.

Significance of findings

In 1951 only about 10% of the families had health-related expenses of more than $200 in the year. Assuming that $200 in 1951 would be a hardship for some, a rational plan by the government would have offered support to those who needed it. For the other 90% without major expenses, most could have paid their own medical expenses, just as they paid the dentist and the pharmacist.

Today most of the pressure to reduce costs has been exerted on the providers of care—personnel and institutions—rather than on patients. Hospital and medication costs were included in the 1950–1951 survey. Since then, there have been many changes in the system, especially an escalation in the cost of hospitalization and an abundance of expensive new technological advances and drugs. Before hospital insurance, many hospital workers accepted low pay and felt that they were making a contribution to society. After the government decided to take over the hospitals, these new government servants expected, reasonably enough, a fair wage.

What will work better?

The main objective should be to relieve the total population of the burden of high costs for health care. Another important objective should be to remove the fear of incurring the expense of catastrophic illness. These objectives are achievable if there is a firm resolve to make some fairly drastic changes:

• Continue to provide acute hospital care but make it more rational. For many years the filling of acute care beds by chronic care patients has caused a strain on the system and on the morale of those working in it.

• Provide enough chronic care facilities to meet the current need, rather than by reacting to long waiting lists and pressure from the acute care hospitals.

• Let patients be responsible for their own expenses until they reach an amount that is too high. The level must be set with much thought to allow for the differences in income levels. The wealthy could meet all their own expenses.

• Eliminate premiums and support the major costs from public funds. For most families, the relief from premiums would allow them to pay most of their costs. This policy would preserve the government’s role as a provider and ensure the policy of universality, while reducing the bureaucracy needed to process millions of small claims.

• Avoid the rhetoric of poorly defined, pejorative, misunderstood, and misused terms, such as “two-tier,” “user-fees,” and “American-style medicine.”

• Provide support for patients with long-term problems, such as multiple sclerosis, arthritis, chronic lung disease, or hypertension, who need costly prescriptions.

• Be wary of advice from economists, who teach that everyone has a major objective to maximize income, not acknowledging the reality that most doctors are dedicated to doing useful work and often spend long hours responding to the needs of patients.

• Recognize that the increasing use of emergency wards and walk-in clinics is an unfortunate result of the public demand for quick service. The walk-in system replaces the building of a relationship with a family doctor through the years. It provides a relatively easy job with limited hours, no on-call duty, and no continuity in patient care. Family practices often have some flexibility in the schedule to accommodate their patients who need a same-day visit.

• Re-examine closely the five principles of medicare: availability, portability, comprehensiveness, universality, and government administration. These sacred cows are followed consistently only in rhetoric, not in fact, except for government administration.

• Recognize that the best value in medical care is the service of the family doctor, who will manage patient care and call on expert help when it is needed.

Conclusion

The survey summarized in Illness and Health Care in Canada shows that the great majority of families in Canada in the early 1950s did not have major health-related costs in any 1 year. There was no demonstrated need to provide first-dollar coverage for all expenses for all the population all the time.

Planners working on a system based on this understanding should relieve the worry many people have about the possibility of incurring overwhelming expenses. They should also help people realize that in any 1 year most of their expenses are likely to be manageable, and that they can choose what (and where) services are provided. Costs that can be catastrophic for some can be met without a problem by the relatively small group of individuals who are very wealthy. By contrast, costs that can be managed by the majority can be catastrophic for some. Some of these expenses might be relieved by income tax deductions. But should expenses become greater than patients can manage, then the medicare system can come to the rescue.

A rational system would provide support when it is needed, but retain an element of personal responsibility and choice.

Table. Ministry of Health expenditures by principal programs, 1999-2000

hidden

William A. Falk, MD

Dr Falk, a former associate professor of family medicine, University of Calgary, is now retired.