Dear Friends & Neighbors,

International Comparison of Healthcare Spending as % GDP. In 2008 data, U.S. was spending 15.5% of GDP on Healthcare. By 2012, U.S. was spending 17.6% of GDP on Healthcare.

Australian flag

Flag of Canada

 (Please click on red links & note magenta)

Note: as of 2008, Australia was spending less than 9% of GDP in health care, Canada was spending 10% in health care, whereas U.S. was spending 15.5% GDP (by 2012, U.S. was spending 17.6% of GDP in health care.). Both Australia and Canada had/has universal health coverage, but not U.S.

Health care in the United States:

Health care in the United States is provided by many distinct organizations. Health care facilities are largely owned and operated by private sector businesses. 58% of US community hospitals are non-profit, 21% are government owned, and 21% are for-profit. According to the World Health Organization (WHO), the United States spent more on health care per capita ($8,608), and more on health care as percentage of its GDP (17%), than any other nation in 2011.

64% of health spending was paid for by the government in 2013^, funded via programs such as Medicare, Medicaid, the Children’s Health Insurance Program, and the Veterans Health Administration. People aged under 67 acquire insurance via their or a family member’s employer, by purchasing health insurance on their own, or are uninsured. Health insurance for public sector employees is primarily provided by the government.

The United States life expectancy of 79.8 years at birth, up from 75.2 years in 1990, ranks it 42nd among 224 nations, and 22th out of the 35 industrialized OECD countries, down from 20th in 1990. Of 17 high-income countries studied by the National Institutes of Health in 2013, the United States had the highest or near-highest prevalence of obesity, car accidents, infant mortality, heart and lung disease, sexually transmitted infections, adolescent pregnancies, injuries, and homicides. On average, a U.S. male can be expected to live almost four fewer years than those in the top-ranked country, though notably Americans aged 75 live longer than those who reach that age in other developed nations. A 2014 survey of the healthcare systems of 11 developed countries found the US healthcare system to be the most expensive and worst-performing in terms of health access, efficiency, and equity.

Americans undergo cancer screenings at significantly higher rates than people in other developed countries, and access MRI and CT scans at the highest rate of any OECD nation. Diabetics are more likely to receive treatment and meet treatment targets in the U.S. than in Canada, England, or Scotland.

Gallup recorded that the uninsured rate among U.S. adults was 11.9% for the first quarter of 2015, continuing the decline of the uninsured rate outset by the Patient Protection and Affordable Care Act (PPACA). A 2012 study for the years 2002–2008 found that about 25% of all senior citizens declared bankruptcy due to medical expenses, and 43% were forced to mortgage or sell their primary residence.

In 2010 the Patient Protection and Affordable Care Act (PPACA) became law, providing for major changes in health insurance. Under the act, hospitals and primary physicians would change their practices financially, technologically, and clinically to drive better health outcomes, lower costs, and improve their methods of distribution and accessibility. The Supreme Court upheld the constitutionality of most of the law in June 2012 and affirmed insurance exchange subsidies in all states in June 2015.

At the moment, much of the future of American Healthcare is in limbo, for the House (May 4, 2017) has recently passed a bill to repeal and replace the ACA (Affordable Care Act, aka Obamacare), and this is the post on the analysis of the current state of this bill.

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Healthcare in Australia:

Health care in Australia is provided by both private and government institutions. The federal Minister for Health, currently Greg Hunt, administers national health policy, and state and territory governments administer elements of health care within their jurisdictions, such as the operation of hospitals.

Medicare, administered by the federal government, is the publicly funded universal health care system in Australia which was instituted in 1984. It coexists with a private health system. Medicare is funded partly by a 2% Medicare levy (with exceptions for low-income earners), with the balance being provided by government from general revenue. An additional levy of 1% is imposed on high-income earners without private health insurance. As well as Medicare, there is a separate Pharmaceutical Benefits Scheme also funded by the federal government which considerably subsidizes a range of prescription medications.

The funding model for health care in Australia has seen political polarisation, with governments being crucial in shaping national health care policy.

Australia has a universal health care structure, with the federal government paying a large part of the cost of health services, including those in public hospitals. The amount paid by the federal government includes:

1. patient health costs based on the Medicare benefits schedule. Typically, Medicare covers 75% of general practitioner, 85% of specialist and 100% of public in-hospital costs.
2. patients may be entitled to other concessions or benefits.
3. patients may be entitled to further benefits once they have crossed a so-called safety net threshold, based on total health expenditure for the year.

Government expenditure on healthcare is about 67% of the total, below the OECD average of 72%.

The remainder of health costs (called out of pocket costs or the copayment) are paid by the patient, unless the provider of the service chooses to use bulk billing, charging only the scheduled fee, leaving the patient with no out of pocket costs. Where a particular service is not covered, such as dentistry, optometry, and ambulance transport, patients must pay the full amount, unless they hold a Health Care card, which may entitle them to subsidized access.

Individuals can take out private health insurance to cover out-of-pocket costs, with either a plan that covers just selected services, to a full coverage plan. In practice, a person with private insurance may still be left with out-of-pocket payments, as services in private hospitals often cost more than the insurance payment.

The government encourages individuals with income above a set level to privately insure. This is done by charging these (higher income) individuals a surcharge of 1% to 1.5% of income if they do not take out private health insurance, and a means-tested rebate. This is to encourage individuals who are perceived as able to afford private insurance not to resort to the public health system, even though people with valid private health insurance may still elect to use the public system if they wish.

Insurance

Private health insurance, funds private health and is provided by a number of private health insurance organizations, called health funds. The largest health fund with a 30% market share is Medibank. Medibank was set up to provide competition to private “for-profit” health funds. Although government owned, the fund has operated as a government business enterprise since 2009, operating as a fully commercialized business paying tax and dividends under the same regulatory regime as do all other registered private health funds. Highly regulated regarding the premiums it can set, the fund was designed to put pressure on other health funds to keep premiums at a reasonable level. The Coalition Howard Government had announced that Medibank would be sold in a public float if it won the 2007 election , however they were defeated by the Australian Labor Party under Kevin Rudd which had already pledged that it would remain in government ownership. The Coalition under Tony Abbott made the same pledge to privatize Medibank if it won the 2010 election but was again defeated by Labor. Privatization was again a Coalition policy for the 2013 election, which the Coalition won. However, public perception that privatization would lead to reduced services and increased costs makes privatizing Medibank a “political hard sell.

Some private health insurers are “for profit” enterprises, and some are non-profit organizations such as HCF Health Insurance and CBHS Health Fund. Some have membership restricted to particular groups, some focus on specific regions – like HBF which centres on Western Australia, but the majority have open membership as set out in the PHIAC annual report. Membership to most of these funds is also accessible using a comparison websites or the decision assistance sites. These sites operate on a commission-basis by agreement with their participating health funds and allow consumers to compare policies before joining online.

Most aspects of private health insurance in Australia are regulated by the Private Health Insurance Act 2007. Complaints and reporting of the private health industry is carried out by an independent government agency, the Private Health Insurance Ombudsman. The ombudsman publishes an annual report that outlines the number and nature of complaints per health fund compared to their market share.

The private health system in Australia operates on a “community rating” basis, whereby premiums do not vary solely because of a person’s previous medical history, current state of health, or (generally speaking) their age (but see Lifetime Health Cover below). Balancing this are waiting periods, in particular for pre-existing conditions (usually referred to within the industry as PEA, which stands for “pre-existing ailment”). Funds are entitled to impose a waiting period of up to 12 months on benefits for any medical condition the signs and symptoms of which existed during the six months ending on the day the person first took out insurance. They are also entitled to impose a 12-month waiting period for benefits for treatment relating to an obstetric condition, and a 2-month waiting period for all other benefits when a person first takes out private insurance. Funds have the discretion to reduce or remove such waiting periods in individual cases. They are also free not to impose them to begin with, but this would place such a fund at risk of “adverse selection“, attracting a disproportionate number of members from other funds, or from the pool of intending members who might otherwise have joined other funds. It would also attract people with existing medical conditions, who might not otherwise have taken out insurance at all because of the denial of benefits for 12 months due to the PEA Rule. The benefits paid out for these conditions would create pressure on premiums for all the fund’s members, causing some to drop their membership, which would lead to further rises, and a vicious cycle would ensue.

There are a number of other matters about which funds are not permitted to discriminate between members in terms of premiums, benefits or membership – these include racial origin, religion, sex, sexual orientation, nature of employment, and leisure activities. Premiums for a fund’s product that is sold in more than one state can vary from state to state, but not within the same state.

The Australian government has introduced a number of incentives to encourage adults to take out private hospital insurance. These include:

• Lifetime Health Cover: If a person has not taken out private hospital cover by 1 July after their 31st birthday, then when (and if) they do so after this time, their premiums must include a loading of 2% per annum. Thus, a person taking out private cover for the first time at age 40 will pay a 20 per cent loading. The loading continues for 10 years. The loading applies only to premiums for hospital cover, not to ancillary (extras) cover.
• Medicare Levy Surcharge: People whose taxable income is greater than a specified amount (in the 2011/12 financial year $80,000 for singles and $168,000 for couples) and who do not have an adequate level of private hospital cover must pay a 1% surcharge on top of the standard 1.5% Medicare Levy. The rationale is that if the people in this income group are forced to pay more money one way or another, most would choose to purchase hospital insurance with it, with the possibility of a benefit in the event that they need private hospital treatment – rather than pay it in the form of extra tax as well as having to meet their own private hospital costs.
  • The Australian government announced in May 2008 that it proposes to increase the thresholds, to $100,000 for singles and $150,000 for families. These changes require legislative approval. A bill to change the law has been introduced but was not passed by the Senate. A changed version was passed on 16 October 2008. There have been criticisms that the changes will cause many people to drop their private health insurance, causing a further burden on the public hospital system, and a rise in premiums for those who stay with the private system. Other commentators believe the effect will be minimal.
• Private Health Insurance Rebate: The government subsidises the premiums for all private health insurance cover, including hospital and ancillary (extras), by 10%, 20% or 30%. In May 2009, The Labor Government under Kevin Rudd announced that as of June 2010, the Rebate would become means-tested and offered on a sliding scale.

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Healthcare in Canada:

Health care in Canada is delivered through a publicly funded health care system, informally called Medicare, which is mostly free at the point of use and has most services provided by private entities^. It is guided by the provisions of the Canada Health Act of 1984.

Canada has a publicly funded medicare system, with most services provided by the private sector. Each province may opt out, though none currently do. Canada’s system is known as a single payer system, where basic services are provided by private doctors (since 2002 they have been allowed to incorporate), with the entire fee paid for by the government at the same rate. Most government funding (94%) comes from the provincial level. Most family doctors receive a fee per visit. These rates are negotiated between the provincial governments and the province’s medical associations, usually on an annual basis. Pharmaceutical costs are set at a global median by government price controls.

Hospital care is delivered by publicly funded hospitals in Canada. Most of the public hospitals, each of which are independent institutions incorporated under provincial Corporations Acts, are required by law to operate within their budget. Amalgamation of hospitals in the 1990s has reduced competition between hospitals. As the cost of patient care has increased, hospitals have been forced to cut costs or reduce services. Applying perspective (pharmacoeconomic) to analyze cost reduction, it has been shown that savings made by individual hospitals result in actual cost increases to the Provinces.

In 2009, the government funded about 70% of Canadians’ healthcare costs. This is slightly below the OECD average of public health spending. This covered most hospital and physician cost while the dental and pharmaceutical costs were primarily paid for by individuals. Half of private health expenditure comes from private insurance and the remaining half is supplied by out-of-pocket payments. Under the terms of the Canada Health Act, public funding is required to pay for medically necessary care, but only if it is delivered in hospitals or by physicians. There is considerable variation across the provinces/territories as to the extent to which such costs as out of hospital prescription medications, physical therapy, long-term care, dental care and ambulance services are covered.

Healthcare spending in Canada (in 1997 dollars) has increased each year between 1975 and 2009, from $39.7 billion to $137.3 billion, or per capita spending from $1,715 to $4089. In 2013 the total reached $211 billion, averaging $5,988 per person. Figures in National Health Expenditure Trends, 1975 to 2012, show that the pace of growth is slowing. Modest economic growth and budgetary deficits are having a moderating effect. For the third straight year, growth in healthcare spending will be less than that in the overall economy. The proportion of Canada’s gross domestic product will reach 11.6% in 2012 down from 11.7% in 2011 and the all-time high of 11.9% in 2010. Total spending in 2007 was equivalent to 10.1% of the gross domestic product which was slightly above the average for OECD countries, and below the 16.0% of GDP spent in the United States.

In 2009, the greatest proportion of this money went to hospitals ($51B), followed by pharmaceuticals ($30B), and physicians ($26B). The proportion spent on hospitals and physicians has declined between 1975 and 2009 while the amount spent on pharmaceuticals has increased. Of the three biggest health care expenses, the amount spent on pharmaceuticals has increased the most. In 1997 the total price of drugs surpassed that of doctors. In 1975 the three biggest health costs were hospitals ($5.5B/44.7%), physicians ($1.8B/15.1%), and medications ($1.1B/8.8% ) while in 2007 the three biggest costs were hospitals ($45.4B/28.2% ), medications ($26.5B/16.5%), and physicians ($21.5B/13.4%).

Healthcare costs per capita vary across Canada with Quebec ($4,891) and British Columbia ($5,254) at the lowest level and Alberta ($6,072) and Newfoundland ($5,970) at the highest. It is also the greatest at the extremes of age at a cost of $17,469 per capita in those older than 80 and $8,239 for those less than 1 year old in comparison to $3,809 for those between 1 and 64 years old in 2007.

According to Lightman, “In-kind delivery in Canada is superior to the American market approach in its efficiency of delivery.” In the USA, 13.6 per cent of GNP is used on medical care. By contrast, in Canada, only 9.5 per cent of GNP is used on the medicare system, “in part because there is no profit incentive for private insurers.” Lightman also notes that the in-kind delivery system eliminates much of the advertising that is prominent in the USA, and the low overall administrative costs in the in-kind delivery system. Since there are no means tests and no bad-debt problems for doctors under the Canadian in-kind system, doctors billing and collection costs are reduced to almost zero.

Current status

The government attempts to ensure the quality of care through federal standards. The government does not participate in day-to-day care or collect any information about an individual’s health, which remains confidential between a person and their physician. Canada’s provincially based Medicare systems are cost-effective partly because of their administrative simplicity. In each province, each doctor handles the insurance claim against the provincial insurer. There is no need for the person who accesses healthcare to be involved in billing and reclaim. Private health expenditure accounts for 30% of health care financing. The Canada Health Act does not cover prescription drugs, home care or long-term care, prescription glasses or dental care, which means most Canadians pay out-of-pocket for these services or rely on private insurance. Provinces provide partial coverage for some of these items for vulnerable populations (children, those living in poverty and seniors). Limited coverage is provided for mental health care.

Competitive practices such as advertising are kept to a minimum, thus maximizing the percentage of revenues that go directly towards care. In general, costs are paid through funding from income taxes. In British Columbia, taxation-based funding is supplemented by a fixed monthly premium which is waived or reduced for those on low incomes. There are no deductibles on basic health care and co-pays are extremely low or non-existent (supplemental insurance such as Fair Pharmacare may have deductibles, depending on income). In general, user fees are not permitted by the Canada Health Act, though some physicians get around this by charging annual fees for services which include non-essential health options, or items which are not covered by the public plan, such as doctors notes, or prescription refills over the phone.

Benefits and features

A health card is issued by the Provincial Ministry of Health to each individual who enrolls for the program and everyone receives the same level of care. There is no need for a variety of plans because virtually all essential basic care is covered, including maternity but excluding mental health and home care. Infertility costs are not covered fully in any province other than Quebec, though they are now partially covered in some other provinces. In some provinces, private supplemental plans are available for those who desire private rooms if they are hospitalized. Cosmetic surgery and some forms of elective surgery are not considered essential care and are generally not covered. For example, Canadian health insurance plans do not cover non-therapeutic circumcision. These can be paid out-of-pocket or through private insurers. Health coverage is not affected by loss or change of jobs, health care cannot be denied due to unpaid premiums (in BC), and there are no lifetime limits or exclusions for pre-existing conditions. The Canada Health Act deems that essential physician and hospital care be covered by the publicly funded system, but each province has some license to determine what is considered essential, and where, how and who should provide the services. The result is that there is a wide variance in what is covered across the country by the public health system, particularly in more controversial areas, such as midwifery or autism treatments.

All of Canada (except the province of Quebec) is one of the few countries with a universal healthcare system that does not include coverage of prescription medication (other such countries are Russia and some of the former USSR republics even though Russia is considering a switch to full coverage of many prescription medications). Quebec citizens who are covered by the province’s public prescription drug plan pay an annual premium of $0 to $660 when they file their Quebec income tax return.  Pharmaceutical medications are covered by public funds in some provinces for the elderly or indigent, or through employment-based private insurance or paid for out-of-pocket. Most drug prices are negotiated with suppliers by each provincial government to control costs but more recently, the Council of the Federation announced an initiative for select provinces to work together to create a larger buying block for more leverage to control costs. More than 60 percent of prescription medications are paid for privately in Canada. Family physicians (often known as general practitioners or GPs in Canada) are chosen by individuals. If a patient wishes to see a specialist or is counseled to see a specialist, a referral can be made by a GP. Preventive care and early detection are considered important and yearly checkups are encouraged.

Statistics

2012 saw a record year for number of doctors with 75,142. The gross average salary was $328,000. Out of the gross amount, doctors pay for taxes, rent, staff salaries and equipment. Recent reports indicate that Canada may be heading toward an excess of doctors, though communities in rural, remote and northern regions, and some specialties, may still experience a shortage.

Public opinion

Canadians strongly support the health system’s public rather than for-profit private basis, and a 2009 poll by Nanos Research found 86.2% of Canadians surveyed supported or strongly supported “public solutions to make our public health care stronger.” A Strategic Counsel survey found 91% of Canadians prefer their healthcare system instead of a U.S. style system.

A 2009 Harris-Decima poll found 82% of Canadians preferred their healthcare system to the one in the United States.

A 2003 Gallup poll found 25% of Americans are either “very” or “somewhat” satisfied with “the availability of affordable healthcare in the nation”, versus 50% of those in the UK and 57% of Canadians. Those “very dissatisfied” made up 44% of Americans, 25% of respondents of Britons, and 17% of Canadians. Regarding quality, 48% of Americans, 52% of Canadians, and 42% of Britons say they are satisfied.

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I am not kidding: Over the years, I have already seen some Americans who sought after citizenship of other countries purely due to health care. As of 2009, 58 countries on planet earth have already adopted Universal Health Coverage. Allow me to explain:

Universal health coverage is a broad concept that has been implemented in several ways. The common denominator for all such programs is some form of government action aimed at extending access to health care as widely as possible and setting minimum standards. Most implement universal health care through legislation, regulation and taxation. Legislation and regulation direct what care must be provided, to whom, and on what basis. Usually some costs are borne by the patient at the time of consumption but the bulk of costs come from a combination of compulsory insurance and tax revenues. Some programs are paid for entirely out of tax revenues. In others tax revenues are used either to fund insurance for the very poor or for those needing long term chronic care. In some cases, government involvement also includes directly managing the health care system, but many countries use mixed public-private systems to deliver universal health care.

The UN has adopted a resolution on universal health care. It may be the next stage after the Millennium Development Goals

Please refer to the list of (click–>) Countries with universal health care

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Frequently raised issues, below:

1. Q:  Why should I pay for some one else’s problem?  A: When your neighbors are ill, you are more likely to come down with the illness also. When 58+ countries on earth already have universal health coverage and U.S. does not, what does that say about U.S.
2. Q:  It would cost too much to have Universal Health Coverage. A: U.S. is spending more than any other country on earth, without universal health coverage, and getting lower result. Something is not working right in U.S. health care system that needs to be modified or addressed. Ultimately, with more effective measures, after U.S. health care would be paying more attention to preventive medicine, gearing medical training toward treating the root cause of the problem rather than treating symptoms, and utilizing non-profit motivation rather than for-profit motivation behind the system of health care, will the U.S. health care system be able to measure up to the rest of the world. Perhaps then we will be able to implement Universal health coverage.

Perhaps our Senate would consider taking a look at the Australian and Canadian Healthcare Systems for ideas.

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Due to the topic/title of this post, I’ve received some reader (who may not have read our previous posts on health care issues), wondering if I know what the current bill that’s recently passed the House is all about. My response: yes, I am quite aware. Please refer to our earlier posts regarding this health care bill, below:

• Health Care Bill That Is Not For Health Care….Time To Contact Your Senators
• Rally at Rubio’s Office on Tuesday, May 9, 2017, at Noon, for Health Care
• Floridians’ Grass-Root Response To House Passing Health Care Bill

I am simply trying to make a point. As of 2017, between 1/4 to 1/3 of the nations on earth have universal health coverage. All developed nations (except USA) have universal health coverage. 11 African nations had universal health coverage in 2009. Once again, I’d like to invite you to review the list of countries that had universal health coverage by 2009 by clicking HERE.

Gathered, written, and posted by Windermere Sun-Susan Sun Nunamaker
More about the community at www.WindermereSun.com

Any comments, suggestions, concerns regarding this post will be welcomed at info.WindermereSun@gmail.com

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