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The Private Cost of Public Queues by Nadeem Esmail

This past October, The Fraser Institute released its seventeenth annual measurement of waiting times for medically necessary treatments in Canada (Esmail and Walker with Bank, 2007). This most recent measurement shows that the national median waiting time from appointment with a specialist to treatment rose slightly from 9.0 weeks in 2006 to 9.1 weeks in 2007. Put simply, the impact of waiting times from specialist to treatment on Canadians in 2007 was similar to that in 2006.

But the measurement of waiting times, or the examination of the absolute delay Canadians must endure in order to receive medically necessary care, is only one way of looking at the burden of waiting for health care. We can also calculate the privately borne cost of waiting: the value of time that is lost while waiting for treatment. While the absolute delay Canadians endured in 2007 was similar to that in 2006, it is entirely possible that the value Canadians place on time has changed over the past year in such a way that a marked change in the impact of wait times for treatment has taken place.

The privately borne cost of waiting for care

One way of estimating the privately borne cost of care in Canada was originally developed by Steven Globerman and Lorna Hoye (1990).They calculated the cost of waiting by estimating the amount of time that could not be used productively by a patient while he was waiting for treatment.

Globerman and Hoye's methodology is relatively simple. First, the number of patients who are waiting for treatment is multiplied by the wait times for those treatments in order to derive an estimate of the total number of weeks all patients will spend waiting for care.  This value is then multiplied by a measure of the proportion of time spent waiting for treatment that is rendered unproductive by the physical and emotional impact of an untreated medical condition. The monetary value of this lost productive time is then estimated.  In 2007, an estimated 827,429 Canadians were waiting for care after an appointment with a specialist (table 1).

These Canadians waited, on average, 9.1 weeks for treatment though those wait times varied               significantly when broken down by province and medical specialty (table 2). Multiplying the number of Canadians waiting in each of the 12 medical specialties in each of the 10 provinces by the weighted median wait time for that medical specialty in that province gives a rough estimate of the total amount of time that Canadians waited for treatment in 2007: about 9.99 million weeks this year. This estimate is slightly greater than the estimate of 9.86 million weeks for 2006 (Esmail, 2006).   

Globerman and Hoye's original estimate for the cost of waiting, which came from responses to a survey of physicians, used specialty-specific measures of the proportion of patients who were "experiencing significant difficulty in carrying on their work or daily duties as a result of their medical condition." The proportions they estimated ranged from 14% of patients in gynaecology to 88% in cardiovascular surgery, and averaged 41% overall (Globerman and Hoye, 1990; Esmail and Walker with Bank, 2007). However, the estimates of lost productivity measured by Globerman and Hoye cannot necessarily be applied today because of advances in the medical system's ability to deal with pain and discomfort through pharmaceuticals. These advances may allow many Canadians who are suffering significant difficulties to function at a higher level today than they would have in 1990, or even to maintain their normal activity levels. For this reason, this author's estimation of the cost of waiting in 2007 uses a Statistics Canada finding that 11.0% of people were adversely affected by their wait for non-emergency surgery in 2005 (Statistics Canada, 2006). This percentage is below even the lowest specialty specific measure estimated by Globerman and Hoye (1990).

An assumption that 11.0% of people waiting for treatment in 2007 experienced significant difficulties in their daily lives as a result of their medical condition, and thus lost productivity while waiting for treatment, results in an estimate that nearly 1.1 million weeks were "lost" while patients waited for treatment. However, because this estimate is based on the assumption that all individuals face the same wait time for treatment in each specialty/province combination, it is mathematically equivalent to assuming that 11.0% of the productivity of all Canadians waiting for care was lost to a combination of mental anguish and the pain and suffering that accompany any wait for treatment. Multiplying this lost time by an estimate of the average weekly wage of Canadians in 2007 (given in table 3), which provides an estimate of the value of lost time to each individual,6 gives an estimate of the cost of the productive time that was lost due to individuals waiting for medically necessary treatment in 2007 (table 4).

The estimated cost of waiting for care in Canada for patients who were in the queue in 2007, according to calculations based on the methodology produced by Globerman and Hoye (1990), was slightly more than $793 million. That cost works out to an average of about $959 for each of the estimated 827,429 Canadians waiting for treatment in 2007. Alternatively, that cost works out to roughly $8,716 for each individual among the 11.0% percent of patients in the queue who were suffering considerable hardships while waiting for care.

Of course, this figure is a conservative estimate of the private cost of waiting for care in Canada. This estimate assumes that only those hours during the average work week should be counted as lost. It places no intrinsic value on the time individuals spend waiting in a reduced capacity outside of the working week. Valuing all hours of the week, including evenings and weekends but excluding eight hours of sleep per night, at the average hourly wage (given in table 3) would increase the estimated cost of waiting to more than $2.42 billion, or about $2,919 per person. . .

To read the entire report, go to www.fraserinstitute.org/commerce.web/product_files/Dec07FFFull.pdf.

Canadian Medicare does not give timely access to healthcare, it only gives access to a waiting list.

--Canadian Supreme Court Decision 2005 SCC 35, [2005] 1 S.C.R. 791

http://scc.lexum.umontreal.ca/en/2005/2005scc35/2005scc35.html

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Health Care and Social Security in the Bosporus

A Tale of Three Cities: Istanbul, Athens and San Mateo, San Mateo County Medical Association Bulletin, September 2007, By James R. Missett, M.D., SMCMA President

From Gocek, a small seaport town of about 2,000 in southwestern Turkey on Republic Day, Monday, October 29, 2007: the 84th anniversary of the 1923 Proclamation of the Turkish Republic.

Istanbul is a city of 17 million that straddles both of the eastern and western shores of the Bosporus (or "cow crossing") that flows south from the Black Sea to empty eventually into the Aegean Sea.  Almost one in four of the 76 million citizens of Turkey live within greater Istanbul. All Turks are covered by one of three general health insurance plans for which everyone (theoretically) pays out of his or her income. Tax collection remains a national problem to which the current government is energetically addressing itself, but with mixed results.

In fact, it is the government's level of confidence in its health care contribution collections that determines the level of benefit that an individual in a given class of employees will receive. In other words, the more certain the government is that the individual class has paid its complete premiums, the higher and the broader the range of benefits are for recipients.

The best and widest range of services is made available to government employees. These include the employees and instructors in public schools, colleges, and universities.  Some might look askance at government workers getting the best deal and the broadest coverage with respect to their health insurance, but government workers are also a class of employees whose income is best and most accurately known to the tax collectors.

Better health care coverage means that a Turkish government employee is permitted to receive covered medical care in any private or public university medical facility without any co-payment. . .

Turkey is currently applying for membership in the European Economic Union (EU). The widespread belief is that the real reason for the postponement of their acceptance into full membership by the EU is based on the fact that Turkey is not a Christian country. In contrast, Greece is a member of the European Economic Union.

Like the Turks, the average Greek worker contributes approximately 40 percent of his or her total income to a combination of health care insurance and social security insurance. Approximately 15 percent of an individual's total income goes for health care coverage, while approximately 25 percent of an individual's total income goes for social security cuts.

However, unlike Turkey, Greece does not allocate benefits based on a government versus non-government basis. Nor does Greece give any of its 11 million population access to the better public university health care physicians, clinics, and hospitals.

Greece, however, does continue to struggle with EU demands for retirement eligibility age to be raised from its current levels of 30 years of work for a man and 25 years of work for a woman, to approximately 40 or 45 years of work for a man and 35 to 40 years of work for a woman.  The current retirement schedule allows for retirement as early as age 45 for some people.

The EU wants to increase the age of eligibility for retirement benefits to at least 55, but the Greeks are resisting. Of the 11 million Greeks, half live in Athens.  This means it is largely the Athenians that are resisting the demands of the EU for raising the retirement age. 

This is taking place at the same time that the Turks are beating plaintively and fruitlessly on the doors of the EU to subject their citizens to the same restrictions that the Greeks do not want. . .

To read San Mateo and the rest of the article, go to www.smcma.org/Bulletin/BulletinIssues/Oct07issue/BULLETIN-0710-President.pdf.

Can You Believe People Are Paying Medicare And Social Security Taxes Of 40 Percent?  


Past Issue:                                         (current issue)     (previous issue)

What is Single-Payer Government Medicine really like?

Lessons from Sweden's Universal Health System: Tales from the Health-care Crypt
by Sven R. Larson, Ph.D., JAPS, volume 13, No 1, 2008.

You cannot buy a new Lexus for $20,000. Small budgets cannot buy first-class medical care either. Yet one of the most persistent arguments for single-payer health insurance is that it will somehow give everyone gold-plated care at little or no cost. 

There are a lot of dry statistics to prove just how wrong this notion is. But there is a side of this issue that rarely is told, especially not by advocates of a government medical monopoly. It is the story of those who pay the price for the serious rationing in a single-payer system.

Universal Rationing: Real-Life Examples

Rationing of care is a reality under universal health insurance.  Yet, its advocates seem universally oblivious to it. In an effort to unmask the reality of "universal coverage," here are some actual case histories of real people with real experiences. They were reported by Swedish news media, in some instances numerous times. Sweden has longer experience with socialized medicine than almost any other country in the world.

In October 2003 Mrs. A., who lives in Malmo, Sweden, gave birth to a baby boy. She was signed out from the hospital after delivering the baby. There are not enough beds, so delivering a baby "without complications" is an outpatient procedure. Budget cuts have eliminated beds and medical staff.  The next day Mr. and Mrs. A. noticed that their baby was weak and did not want to eat. As is common in Sweden, they did not call a doctor. Instead they called the tax-paid "TeleMedicine" service.  Nobody advised them to go see a doctor right away. The following day their baby died of pneumonia. 

In May 2006 another couple lost their three-year-old son to the budget-starved medical system. When Mr. and Mrs. B.'s son suffered from diarrhea and had been vomiting for almost two days, they took him to the emergency room at the nearby university hospital. A doctor ordered a supply of intravenous fluids, and the boy was sent on to the pediatric clinic to have them administered. When he arrived, the nurses had no time for him. Mr. and Mrs. B. repeatedly called on the medical staff to ask why nobody was coming to give their son the intravenous fluids he so desperately needed.  Every time they got the same answer: nobody has time. They have too many patients and too little staff.  Six hours later the three-year-old boy died of heart failure.  You do not have to be a child to die from denial of care in Sweden.

In April 2005 Mr. C., 61 years old, became concerned about an unusual feeling of fatigue. He went to see a doctor at the local government-run clinic. The doctor sent him home with some encouraging words. Mr. C. came back a while later with worsened symptoms. Again he was sent home after a superficial examination and with more reassurance. Over the next year and a half Mr. C. visited this tax-paid local clinic a total of 14 times. He had no choice - all Swedes have to go through a government-run primary care physician at a tax-paid clinic in order to see a specialist. He developed blood in his urine. But the doctors refused even to take a blood test.  They told Mr. C. and his son that they were denying him the blood test because of budget restrictions imposed by government bureaucrats. When, finally, Mr. C.'s son convinced the doctors to do one blood test, they found out that Mr. C. had cancer. He was referred to a regional hospital. There they established that his cancer, originally curable, had spread throughout his body. There was nothing left to do. He died shortly after.

Even those who do not die from encountering denials of care suffer considerably under Sweden's universal coverage. Mr. D., a multiple sclerosis patient, lives in Gothenburg, a city of 500,000.  His doctor told him about a new medicine that is considered a breakthrough in MS treatment. But, when the doctor put in a request to have Mr. D. treated with it, the request was denied. Reason: it would cost 33 percent more than the old medicine, and that was more than the government was willing to pay.  For most Swedes there are no longer any subsidies for prescription drugs. People with exceptionally high pharmaceutical costs get some subsidies, but they have to pay the greater share themselves.  When the government denied Mr. D. the new medicine on the grounds that the subsidies would cost too much, he offered to pay the full cost of the medicine himself. He was denied the option to pay full cost out of his own pocket because, the bureaucrats said, it would set a bad precedent and lead to unequal access to medicine.  In Sweden, there is no way to obtain access to medication outside the government-run system.

There are other absurd examples. How many times have you gone to see your doctor only to find security guards posted in the waiting room?

This is reality in Malmo, Sweden's third largest city. To see a physician the 280,000 residents of Malmo have to go to one of two local clinics before they can see a specialist. Except during business hours, only one of the two clinics is open to serve all the city's residents.  As a result the clinic is severely overcrowded. The security guards serve two functions. They keep patients from becoming unruly as they sit and wait for hours to see a doctor, and they keep new patients from entering the center when the waiting room is considered full.

Opening the second clinic during off-business hours is considered too costly.

Government control over medicine also leads to government arrogance. In Gothenburg, a hospital was blessed with having a talented orthopedist on its staff. Dr. Leif Sward worked part time for the government-run hospital, part time for a local soccer club at its private orthopedic clinic, and part time for the British national soccer team.

You would expect a man with such credentials and experience to be considered a prized asset in a tax-supported hospital. But the government bureaucrats were unhappy with the fact that Dr. Sward was not working full time for them. They considered his work for the private health clinic "competing employment" - the soccer players should come to the tax-supported hospitals instead so as to increase their revenues. So they gave Dr. Sward an ultimatum: quit the private sector or leave us.

Dr. Sward chose the latter.

By giving Dr. Sward this ultimatum, the medical bureaucrats showed that their priority was to control and stifle competition and choice, an action contrary to the interests of patients. . .

Conclusion

If we implement a universal, single-payer model in America today, the negative effects will reliably occur about a generation from now. The question that we need to ask ourselves as we enter the election season is this: Are we willing to send that bill down the road for our children to pay?

To read more about Sweden's Health Care and the taxes required to pay for it, go to www.jpands.org/vol13no1/larson.pdf.

Sven R. Larson, Ph.D., is founder and president of The Hill City Skunkworks, a public policy research firm in Saratoga Springs, N.Y. www.hillcityskunkworks.com/
Contact: valfardresearch@yahoo.com.

Single-payer medicine does not give Access to Healthcare, it gives access to a Denial of Service.

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