Health costs are rising unabated, and health insurance premiums are weighing on many households. Anyone who blames the medical profession is acting carelessly – the list of those responsible is long.
The healthcare system causes abdominal pain for the Canadians. In the latest worry barometer, this area has increased by 20 percentage points and is now in second place, directly behind old-age provision. That is not by accident. The premium round for 2019 is comparatively mild. But the share of health costs in household budgets is increasing and increasing. In 2017, households already had to spend an average of 15 percent of the disposable income on basic insurance. Families with children who live in modest economic conditions are hardest hit. Because the discounts that some provinces save do not keep pace with the rising premiums. In view of these circumstances, the question arises: who is to blame for unchecked cost growth?
One group in particular believes that it must increasingly serve as a scapegoat – the doctors. They are angry because it was announced in a new study that medical income was a whopping 30 percent higher than expected. The costs rise not least because some doctors earned a golden nose. The indignation of doctors is understandable insofar as the statistics are artificially extrapolated to a full-time workload. A sober comparison of the effective median incomes of the medical profession in 2009 and 2014 shows that they rose by 10 percent.
In the same period, the entire health sector rose by around 18 percent, and health insurance premiums even increased by 19 percent. The medical income is therefore only of limited use in explaining the rapid growth in costs. This becomes obvious when you put them in relation. Assuming that politicians wanted to take 10 or 20 percent of their income from doctors, this would only have a modest impact on expenditure.
No More Bonuses
Nevertheless, the doctors should not pretend that they have nothing to do with the development of costs. After all, they are the central governance body of the healthcare system. You decide relatively freely whether a patient receives expensive treatment or not. It is clear that the medical profession should not be guided by economic considerations. The decisive factor is rather the diagnosis and, derived from it, the most efficient therapy. Only this maxim is not always followed in everyday life. False incentives that set hospital management are also problematic in this context: there has to be an end to bonuses for particularly busy operators or kickback payments for referring lucrative patients. Such actions often affect privately insured people. But the basic insured person also pays for every unnecessarily used hip prosthesis.
However, doctors also see increasing patient pressure. As in every insurance policy, there is also a paradox: the insured pay premiums in the hope that the insured event never occurs. If you are spared from illness for a long time, you have the feeling that you have thrown the money out of the window. All the more they insist on the all-inclusive package when a medical intervention becomes necessary. Many a doctor can tell stories about patients who are at risk: if you do not operate on me, I’ll just go to the nearest specialist. It is a doom-loop. The more premiums people pay, the more consideration they expect.
Such consumerist behavior makes possible, among other things, the free choice of doctor. This is a luxury – but the premium surcharge is far too low compared to sensible alternatives such as the family doctor model. Anyway, health policy issues are sometimes contradictory. As insured, Canadians complain about the premium burden. And, as citizens, they climb the barricades when the local hospital is supposed to close the doors. It is a legitimate position that the country can and should afford a high density of hospitals. But then you also have to bear the consequences on the cost side, in terms of taxes and premiums.
The Cash Register Pseudo Competition
Those responsible for the hospitals themselves have also done little to control costs in recent years. For example, they slept through the funding of the (hospital) outpatient area for a long time and thus insufficiently exhausted the potential of cheaper treatments without an inpatient stay. The health insurers, in turn, like to act as heroic defenders of the interests of the insured and track down doctors who bill too much. At the same time, the cash managers earn a lot. Some of them garnish more than half a million dollars a year.
But that is not even the main problem, especially since the administrative costs in basic insurance are not excessively high at around 5 percent. What is more serious is that the health insurances only have a pseudo competition. Obviously, they have coped well with the cost growth as long as they can keep the specter unified. Your basic insurance products hardly differ – some simply pay treatment bills a little earlier than others. A competition for customers with innovative products with the best possible care in the event of illness – there is not any.
Politicians are partly responsible for this sluggishness. And therefore, does not allow the health insurance companies to promote alternative insurance models with cheaper premiums or to refuse to cooperate with (over) expensive specialists.
The pharmaceutical industry is the last important player. The Canadian population spends around 7 billion dollars a year on medicines. The manufacturers, but also the pharmacies, like to skim off the purchasing power of consumers. From a financial point of view, the situation will worsen when increasingly individualized, extremely expensive therapies come onto the market.
Doctors, hospitals, patients, voters, health insurance companies, politicians, drug manufacturers: They all do their part to make the healthcare system ever more expensive. There are no simple recipes against the trend. If you turn a wheel in this highly complex system, you may trigger unwanted movements elsewhere. This does not mean that there are no options for cost-reducing corrections, such as the mentioned promotion of outpatient treatments. But miracles are not to be expected.
Medicine Has to Remain Affordable
A large part of the cost increases is anyway the result of social and economic megatrends that will continue in the foreseeable future. The population and the economy are growing, and wages are also increasing – this is particularly evident in the personnel-intensive healthcare system. The population is getting older and medicine is becoming more powerful. Individualization means that family ties become weaker and more people are dependent on professional care.