Medicare Grows Up

Britain Royal BabyParents love growth charts. We could sell tickets to show moms where their princess lands on the pink curve. After 18 months of watching dots follow an arc, parents get distracted. The growth curves flatten, pudgy dimples disappear and kids get complicated.

Canadian Medicare has grown up too. The adorable baby born in the late 1960s looks different from the troubled teen of the 1980s and 90s. The current, adult version of Medicare looks almost as different again.

But people can’t see it. Only 4% of us ever need lifesaving medical wonders. 96% of us go on living in ignorance. All that matters is the myth: free universal care for all.

I. The Perfect Baby

Canada became the envy of the world in 1968-1971, with good reason. We built a program, with all party support, to fund hospital and physician costs. The insurance phase protected people from financial ruin. People could finally invest in a business or risk a career change without worrying about their health. It was the golden age of Medicare.

The insurance phase lasted barely 10 years. Dour economists warned, and were proved right, that demand for services always moves inversely to price. Drop the price; demand increases. Drop the price to zero, and demand increases infinitely.

On top of that, technology begged to satisfy the demand. Since anything that might benefit patients would more than likely get funded, industry responded eagerly to satisfy the insatiable demand for the new, latest and most advanced care possible. Doctors cared nothing about cost. They could wave their golden pens and prescribe every possible investigation and treatment without any clue – absolutely no inkling – of cost.

Government paid for healthcare and asked very few questions.

II. Adolescence – Health Services

Like a teenager spending her first pay-cheque at the mall, everything became a necessity. Medicare morphed from an insurance program into a payment program for routine services. Medicare stopped protecting against financial ruin. It became payment for the routine costs of simple concerns.

  • What do you suggest for this rash?
  • My mom has high cholesterol, do you think my 10 year old does too?
  • Can you suggest something for sleep?
  • My neck still hurts; what else can be done?
  • My tummy stopped hurting, so I just skipped the evening appointment you booked for me.

Spending soared. Politicians took notice and tried to control the bloodshed in the 1990s.

They faced a choice: cut services or cut payment for services. No one gets re-elected cutting services. But every politician wins votes by attacking the fat cats that voters envy.

Politicians cut extra billing first. Doctors used to make overhead payments by charging a little extra from those able to afford it.

Then governments cut billing codes. Actually, they clawed back total billings all through the 1990s and refused to increase fees above inflation.

Who could blame them? They had to control costs. They focused their fight on the price and quantity of services. They worked to shift costs onto doctors. Why should government pay for the bottomless pit of healthcare costs?

III. Medicare grows up – What is Healthcare?

But even at $33 per visit before subtracting overhead, doctors found ways to meet patient demands. They shortened visits to 1 problem and ordered all the tests and referrals patients loved. Clearly, government had to do more. If doctors couldn’t limit patient demand to bare necessity, then politicians would regulate it for them.

The last phase of healthcare finds bureaucrats consumed with redefining what constitutes a medical service. Payers take a special interest in identifying, codifying and prescribing ideal care. Debates irrupt about what determines ethical or appropriate healthcare. Providers face regulations and control. Experts redefine the practice of medicine. Big data will turn micromanagement into a fine art.

Governments make patients wait in an effort to ration care. Doctors get deployed away from treating disease and onto prevention. Disease costs money. We should focus on preventing costs in the first place.

Healthy people cost less; therefore we need to keep people healthy. But governments do not support prevention out of altruism. They promote it because it saves money. It keeps you out of hospital.

In phase III, government usurps control of patient care.

Who decides?

Healthcare costs a fortune. If cost control means choosing between care and money, who should make that decision? Doctors, government or patients? As Medicare enters its senescence, who do you think should make decisions about your health?


I leave you with a thoughtful note shared by a rural doc after 30 years.

“When MOH started the APP’s [alternate payment plans to replace fee for service], it was supposed to provide stability and simplicity to rural practice, as well as support excellence, continuous professional development, and attract quality physicians.

They did that for a few years, but then started into the engineering phase, providing complex formulas to reward desirable behaviours and extinguish undesirable ones. But the efforts possibly didn’t work well, as they kept changing them, making more complex methods to try to get doctors’ focus away from patient care and into something like going to the grocery store where you can only get a fair price by buying the right combination of goods on the right day.

It’s like a huge on-line multi player game, where various politicians and the bureaucrats they appoint log in for long enough to bump themselves up to the next level, and then bail out. Meanwhile there are the same docs and the same patients trying to work with it.

Schoolteachers give me the same story of trying to do what they were trained to do despite the ever changing array of government-ordained improvements. And every other businessperson who is trying to make an honest living and do something worthwhile at the same time.

Government is a parasite, which is re-affirmed every election by about 25% of voters who actually believe their ideology will be represented, and another 25% who feel obligated to vote for something, while the other 50% can’t be bothered.

But it won’t go away, because whenever something displeases the masses, another spark is struck for the government to do something. Those sparks are fanned by the media who like to be on board with whatever is popular, and then fanned again by the opposition parties who feel their role is not to govern but rather to appear to hold the feet of the party in power to the flames of popular dissatisfaction.”

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