Archive for the ‘Healthcare’ Category

A Real Global Problem

March 7, 2017

The Environment

There is a problem with the environment which does not depend on conflicting opinions based on computer driven models as is the case with global warming. It is air pollution, clean air or whatever you call the ghostly daytime scenes in cities like Beijing, Delhi and now London.

The World Health Organization estimates that seven million people died from air pollution in 2012 which was about one in eight of all deaths in the world that year. It confirms that air pollution is the world’s largest environmental health risk. Most of the deaths are due to heart disease, stroke, lung cancer and acute respiratory infections.

London’s air pollution today is similar to that of the 1950s which was due to coal burning power stations and coal used to heat homes. Today a main reason is the use of wood burning stoves for heating. The pollution is visible and a health hazard.

Environment Canada publishes an Air Quality Health Index and on most days there are no problems similar to those found in the cities of some other countries. As a global issue it is large and visible where it occurs.


An Older Adult?

April 14, 2015

In a neighbourhood park, the City of Ottawa has kindly placed a new bench. It is inscribed for the “Older Adult.” Not the old person, senior, pensioner, retiree or even old man (sorry person), shrively, wrinkly, old fart (or even something a little earthier).  I know I belong to the ranks of older adults. But is it not possible to use a phrase which describes clearly who I am? And how am I to know how old an older adult has to be to use this convenience?

Patient Care in Ontario

September 26, 2014

From the medical frontlines



A recent experience illustrates, at least to me, some of the issues which exist in the delivery of healthcare in Ontario. There is a good and a bad news story to tell. Following earlier postings (, I concluded that Ontario, and I assume other Canadian provinces, have well trained and qualified doctors, nurses and support staff. It has modern equipment and operating theatres, some perhaps requiring further expenditures, such as the recent shortage of MRI equipment which seems to have been solved, at least in the Ottawa area where MRI wait times have been reduced. The treatment of emergency and life threatening cases seems to work well, although hospitals can be dangerous places due to a persistent high level of infections which arise after admission. Don’t hang around longer than you have to.

The statistics which are worrying are the wait times to see specialists, and the wait times for patients to be operated on by specialists. The reasons are complex involving different aspects of the healthcare system which include, amongst others, the constitutional dimensions of the system, the authority and responsibility of the different players, actions taken by patients and the methods of funding healthcare. Royal Commissions have studied these issues, so that what follows is a barebones description of what happens, as seen mainly from a patient’s viewpoint.

Wait Times

A typical path for a patient is fairly straightforward. A visit to a GP is followed by referral to a specialist perhaps with some X-rays, ultrasound and blood and other tests. The tests are conducted quickly but delays frequently occur in getting an appointment with a specialist. There appears to be a shortage of specialists, especially in some areas like urology, endocrinology and gerontology. What is a reasonable wait time? Opinions differ, but I would suggest 12 to 24 weeks for many non life-threatening cases. A year seems too long and an indication that the system is malfunctioning. What are some of the problems? Geoffrey Simpson in Chronic Condition and others have pointed to a number of them.

Operating facilities

Operating theatres are not fully utilised and therefore have spare capacity, more than may be needed to handle any possible disasters. There are either not enough doctors, nurses and hospital beds to provide treatment and allow more patients to pass through the hospital system, or the administration of the system is faulty.

The single most important factor for lengthy operating wait-times appears to be the lack of hospitals beds and care for post-operative patients. Why the shortage? The main reason is that hospital wards are full of chronic care patients awaiting transfer to other facilities. The congestion is caused because of the lack of these facilities elsewhere in the system.

A diagnosis of the overall problem of wait times is complicated due to the system established by Canada to deliver healthcare. What follows touches on some of the main factors which seem to me to be important. In some ways Canada has a self-inflicted problem due to past decisions by different levels of government, with advice from interested parties and little input from patients except as tax payers. Other countries have better functioning systems, so it should be possible to see how delivery could be improved.

Who is responsible?

Healthcare is a provincial responsibility according to the Canadian constitution. At the same time provinces have agreed to treat patients from other provinces in certain cases. Thus elements of a nation-wide system are grafted onto one of provincial responsibility. In the case of emergencies, Canadians will receive treatment in any province regardless of their province of residence. In other cases, such as a patients deciding they would prefer to be treated in an out of province facility, that facility can refuse service, provide service and collect funding from the other province, or if this funding is less than that charged in the province of delivery ask the patient to pay the difference.

An example of what happens in practice is that Ottawa hospitals receive patients living across the provincial border in Quebec. Assuming non-emergency situations, the Ottawa hospital can accept patients and receive one or other form of payment or reject the patients, if it is just a case of preferring to be treated in the Ottawa facility. Both things can happen. But if the Quebec patient is treated in Ottawa and patients are treated in the order they arrive, then subsequent Ontario patients will have longer wait times. Service may be delayed to Ontario residents as a result of Quebec not providing certain services within a part of the province.

It could work the other way and at different provincial border locations throughout Canada. For example, a Cornwall, Ontario resident may find desirable healthcare providers in Montreal

This provincial healthcare scheme with certain universal or federal add-ons can have the following results. One province may decide that rather than expanding its own facilities it will depend on those of another province even though it has to pay that province. It may decide that it is cheaper to encourage its patients to travel across a provincial border than to invest in its own facilities. If so, the patients from the province providing the treatment will experience longer wait times. At one time, it was more lucrative for certain hospitals to treat out-of-province patients than Ontario patients. Apparently this is no longer the case but is illustrative of how a province based system with out-of-province features can affect delivery times.

Types of surgery

A more general issue is that there are certain types of surgeries which are routine and repetitive, especially with an ageing population. Hip, knee and other joint replacement, hernia operations, and certain types of eye surgery are fairly standard procedures and could be treated in facilities which cater to the specialties. This happens in the case of the Shouldice Clinic for hernia operations in Ontario. It is a private clinic but is paid for under the Ontario healthcare scheme. Other specialized clinics could be established in order to make better use of resources. At present, too wide a range of different medical procedures are conducted in the operating rooms of general hospitals. If these regular surgical procedures were confined to specialized locations, public or privately owned, then wait-times would be reduced.

Privately operated specialized clinics are seen as creating a two-tier healthcare system. If such clinics are operated efficiently and relieve the pressure on general hospital facilities, then delays of surgeries due to the lack of beds for post-operative care would be reduced.

A related issue is that emergency facilities are used by patients who don’t have emergencies and should be treated in clinics. In part this is because patients are not registered with a GP, although this seems to be changing with the opening of walk-in clinics. Doctors however find that patients who do not get a prescription from one doctor will visit other clinics until they feel satisfied. In 1984, I was part of a commission in Ontario that examined the dispensing fee allowed for prescribed drugs. At that time the government had a record of all drugs prescribed and paid for in Ontario, but would not use the information to reduce the costs of overprescribing within the province. I think this situation prevails today.

Administrative issues

An administrative wrinkle which complicates delivery in Ontario is the Ontario Hospital Act which gives certain responsibilities to the CEO of the hospital, but this does not include the services of doctors who are independent contractors reporting to the Chief of Staff not the CEO. In the case of fees charged, surgeon practices or malpractices, these are dealt with by the College of Physicians and Surgeons, a body of doctors regulating other doctors. This is not the case of the fox guarding the hen house, but the fox guarding the other foxes (or hens the hens). Obvious conflicts of interest may arise affecting both patient costs (either private or via taxation) and services provided.

Some forms of healthcare are either not funded by the government or are only funded in part and may be covered by privately purchased insurance, such as dental work, eye care, hearing aids and some prescription drugs. In Canada, it is estimated that about 70% of healthcare costs are covered by the government and 30% by a combination of private insurance and user pay. What the rationale is for public funding of some healthcare procedures and not others, such as eyes, ears and teeth, is a mystery to me. The original rationale for a public system was to address catastrophic illnesses. Over time it has been extended so that general public care is seen as an entitlement for almost all conditions. Once granted, politically it is close to impossible to withdraw.

A visit to a dentist, optometrist and hearing specialist is possible without a long wait. Their facilities are often spacious and well staffed in contrast to many general practitioners. This suggests that these skilled resources are organized, administered and paid for in a manner which allows for timely delivery of the services. In other segments of the system, as suggested, this is not currently the case. Thus my one year wait to see a specialist for a non-life threatening situation. But when age itself is a life threatening condition, then the wait is not appreciated.

Overall my view is that there are administrative shortcomings to the Ontario healthcare system which could be addressed to improve its performance and reduce costs or the rate of cost increase. Some might actually save money. The most important factor may be increasing the number of beds available for post-surgery patients which would require the assignment of other patients to facilities which specialize in their requirements.


I am grateful to David Rothwell who provided detailed remarks on an earlier draft of these comments. I alone am responsible for the above draft. I recognize that the administration of healthcare services is a highly complicated process. Many countries and jurisdictions do it, so that it should be possible to learn from best practices undertaken elsewhere, which may be adopted by Canadian provinces and the federal government. When healthcare and education account for 70% of provincial revenues in Ontario, and probably in other provinces, then we need all the help we can get to achieve cost efficiency, whatever that might mean. If my experience offers any lesson, it is that there must be room for improvement.

Medical Malpractice by Canadian Governments

July 28, 2014

The Canadian medical system is much admired outside of the country. Patients receiving its services have mixed views, some strongly critical. To me, the problems appear systemic. While there are excellent facilities and well trained doctors, nurses and administrators, the parts are not integrated in a way which delivers treatment satisfactorily. The problem rests with government financing and its interaction with those providing medical services.

Emergency problems are dealt with promptly and efficiently. Non-emergencies can result in unacceptable delays. Two examples: I thought the delay I experienced to see an orthopedic surgeon for an ankle injury was excessive – it was projected at nine to twelve months from referral by a GP. I am sitting by my phone at the eight month mark. A friend with a spinal disc problem requiring surgery was told the wait would be four years. Even if the first is marginally acceptable, the latter is not. It does not represent the satisfactory working of a medical system. Rather than fulminate further, I will try to outline what seems to be the problem. (Yes I am old and it may not matter, but young people experience similar delays.)

Operating rooms in hospitals are available. In many, they are used less than 24 hours a day (Jeffrey Simpson documented this in his book, Chronic Condition, reviewed at April 22, 2013). Surgeons are available. What seems to be missing is the support staff to allow the available surgeons to work in the available theatres. Why? Hospitals do not have the funds to pay the non-medical staff to allow a team to provide the services. I hope this is the reason. If not, it means crushing incompetence on the part of those administering hospitals.

The solution lies primarily in the hands of the government in making its budgeting decisions. Maybe there are other factors of which I am unaware, but to an economist when you have unused high cost facilities and unused high cost specialists, then there must be some further factors causing friction in the system, which prevents delivery of the services accounting for a major share of the provincial government’s budget. The parts are not working smoothly together and the engine is not producing full power. A racing car manufacturer would never allow the system to wreck the car’s performance.

What Ontario experiences may be different to that in other provincial jurisdictions. I have read that Vancouver operating theatres are more intensively used with surgeons operating on private patients during nighttime hours. This signals a combination of public and private medical services in BC. The same is true elsewhere in Canada where only certain medical services are covered by the government, and individuals either pay cash for non-covered services or buy private medical coverage, as one does when travelling abroad. It is estimated that in Canada the government pays for 70% of medical services and the remainder is privately financed.

The medical system, like the educational and defense systems which are publicly funded, take time to change, sometimes too long. Technology may expedite change. In other sectors information technology has caused seismic eruptions. Think of communications, music, films, television, radio, newspapers, books, and now education with online courses, and defense with missiles and drones. Similar changes are coming to medicine with real time monitoring devices, for example, which do not require as many visits of patients with doctors. The inefficiencies associated with travel time for patients and office time for doctors can be reduced. A doctor’s productivity may be increased by being able to monitor and treat more patients in a given time period. One example is provided by


In sum, the Canadian medical system has excellent elements but is seriously malfunctioning. Unless there is public criticism which makes politicians take notice and act, Ontarians are doomed to receiving poor health services for their tax dollar, or go elsewhere in Canada or abroad and pay for necessary treatment. Note that this already happens with education, whereby about five percent of the school age population is educated privately, while their parents get no relief from the taxes used to provide public education.


Canada’s Health Care Costs – are we paying too much?

April 1, 2013

Reasons for high and rising healthcare costs in the US is presented in lay language in a 53 page special Report in Time for March 4th, 2013, pp.18-55. Examples, and there are many, include a patient at the Seton Medical Center in Daly City, California who was charged $18 each for 88 diabetes-test strips that Amazon sells in boxes of 50 for $27.85, or 6 cents each. A 64 year old patient went to the emergency room at the Stamford Conn. hospital and received a blood test (Troponin 1) for a cost of $199.50. If she had been 65 she would have qualified for government insurance, Medicare, which would have paid Stamford $13.94 for the test.

While Time gave this topic mass market coverage, the writings of Professor Uwe E. Reinhardt as reported in the New York Times for March 29th, 2013 provide more detailed analysis going back to 2000.

Canadians are told by others, and some believe that we have one of the best healthcare systems in the world. Do we and should we worry that we too are paying too much? Following is a first small step to answer this question for which there should be numerical answers. In a qualitative sense, some argue that the Canadian system is barbaric when you describe how some patients are treated.

Are individuals being overcharged in Canada in a similar way to the US, even though Canada’s per capita healthcare costs are well below those in the US, as is the case for other OECD countries? The answer has to compare how healthcare costs are calculated and covered, and where costs may be too high. In Canada, as in other OECD countries, there are three sources of payment,

–          by governments

–          by individuals covered by private insurance

–          by individuals being self-insured and paying out of personal funds.

In the US, all three sources of funding exist with the charge for a given treatment depending on who is paying for it and the actual payment depending on how forceful the patient-consumer is.

In Canada, about 70% of overall healthcare costs are covered by a government plan and 30% by private insurance and cash (or self insurance). It is a mixed public-private system, although often described wrongly as a government system along the lines of the UK National Health Service. Canadians therefore pay taxes to fund the government system, premiums to pay for private health insurance and cash for self-insurance.

Follow the money

Using Ontario as an example, the provincial government through OHIP covers some but not all medical expenditures. Private insurance, if purchased by an employer or individual employee may cover some costs, while cash provides any balance owing. The Ontario provincial government pays for hospitalization and some other medical costs, but not for drugs consumed outside the hospital, and not for dental care, or for eye glasses. For hearing aids, OHIP pays $500 per ear with the balance paid by private insurance or cash. Why drugs, eyes, ears, and teeth are not considered part of general healthcare while noses, toenails and other appendages are is a mystery to me.

The price-cost reasonableness of healthcare funded by the Ontario government depends on the efficiency with which the covered hospital and non-hospital services are provided. It is not a competitive market but comparisons can be made with other provincial healthcare services. The payer is the government funded by the taxpayers, some of whom receive the health services. Taxpayers depend on the government negotiating a good deal on their behalf with healthcare providers such as doctors and hospitals.

For privately insured claims, the terms and conditions of the policy and the coverage provided are crucial and often not fully understood until a claim is made. The policy will have an annual premium cost which the individual and/or employer pays, but the amount paid out for a claim depends on the nature of the illness and the detailed wording of the policy. For example, the policy may have an upper limit for the amount to be paid out for a particular ailment, or an amount depending on whether it is a pre-existing illness, or a geographic limit depending on where the illness occurs. Insurance companies may arrange to fly patients back to Canada rather than be treated abroad so that they can be deposited into the provincial healthcare system.

When buying a private policy or accepting one from an employer as part of a benefits package, the individual does not know how much will be reimbursed until a particular situation arises, and has no idea whether the amount charged is reasonable or not. Thus the value of the private policy is largely unknown until a claim is made and the insurer responds to it. Some information may be gleaned by canvassing those, colleagues or others, who have a similar policy.

In the US case examined in Time magazine (March 6, 2013), the hospitals engage in price discrimination. They charge different prices for different patients for the same treatment depending on who is paying the bill. For a US patient covered by government funded Medicare and Medicaid, the hospital charges a much lower rate than for a patient covered by private insurance or a self-insured patient paying cash – see above example.

What the paying patients don’t realize is that the bill presented by the hospital is the asking price for the services provided and is subject to negotiation. In many countries, but not Canada and the US, it would be recognized that the price for any good or service is an asking price where the buyer is expected to bargain, so the seller starts high. Hospitals do that in the US, probably not in Canada.

The reason the supplier, namely the doctor and hospital, get away with this is because the services are often purchased under conditions of immediate need, where the patient is in distress, and is not in a position to bargain. The hospitals are large and permanent, and the consumers (patients) are small without the knowledge of what treatment is needed. The nature of the transaction is such that patients are often not in a position to discuss costs and shop around for alternative suppliers, as they might for hiring someone to cut their hair or complete a tax return. The conditions of the transaction give market power to the supplier.


How does this apply in Ontario? OHIP is a large buyer and assuming it works efficiently it has the potential market power to reimburse reasonable prices from hospitals, doctors and other suppliers of healthcare goods and services, similar to the way Medicare and Medicaid reimburses healthcare providers in the US. It is difficult to assess OHIP’s prowess as a negotiator. Some cross-provincial and cross country comparisons should be possible.

Conditions and payments made under private health insurance programs are more difficult to evaluate, because the policy holder does not know how the insurance company gets the information to decide how much to reimburse for each particular medical condition covered, which becomes the basis for the premium charged to the consumer. Also for a particular illness the insurance may put an upper limit on the amount which can be paid out. This provides a safety valve for the insurance company. If they also do not cover preexisting conditions, another safety valve exists, especially with an ageing population where more things become pre-existing with time.

There are all sorts of tales of people making claims on private health insurers and having difficulty in collecting, especially in the case of claims outside of the country. When travelers depart Canada, they have only a rough idea of whether a claim will be reimbursed by whom and for how much when a particular illness arises.


An actual example in Ontario

Consider the case of coverage for hearing aids in Ontario. The audiologist quotes $5000.00 for hearing aids in both ears. OHIP provides reimbursement of $500.00 per ear leaving a balance of $4000.00 to be paid. When submitted to the private insurer, the policy coverage is for 80% of “eligible expense”, where “The eligible expense is limited to customary charges. Customary charges are determined by any professional fee guides and average costs in your area.” The eligible expense in the relevant area in this case is $3000.00, not the $4000.00 remaining after the $1000.00 OHIP reimbursement. Reimbursement is 80% or $2400.00. In this case, the government pays $1000.00, private insurance $2400.00 and the individual via self insurance $1600.00. Note, the individual pays in three ways, as taxpayer, as purchaser of private health insurance, and with cash.

In order to be an informed consumer, it is necessary to get the necessary quote and then take it to different hearing aid suppliers to find one who offers the customary or near customary charge in the area. If they all charge $5000.00, then there may be price fixing, or you may believe it is a competitive market where all charge the same price. If all follow the professional fee guide, then the profession is aiding the provision of identical quotes and the government is assisting the suppression of competition.


(In a future posting, an attempt will be made to get quotes for the case cited above, which the author accepted showing that he was not an effective consumer. But consider how a person might behave if the condition was for a far more serious condition and there was no time to get quotes.)