Democrats' health-care demagoguery

Canadian-Style Plan Would Only Worsen America's Medical System

Senate Republicans have resolved their leadership crisis. Now they can try to fix health care.

Al Gore endorsed a government-controlled medical system before taking himself out of the 2004 presidential race. The congressional hopper is sure to fill with bills attacking the pharmaceutical industry.

Some states aren't waiting for Washington to act. Oregon political activists pushed for a Canadian-style, single-payer system.

Voters overwhelmingly rejected it in November, but California State Sen. Sheila Kuehl (D.) has proposed that her state adopt the same sort of plan. Bruce Bodaken, head of Blue Shield of California, wants to mandate universal coverage through employers.

Maine and Vermont are trying to impose price controls on drugs. Florida is restricting Medicaid coverage of pharmaceuticals.

West Virginia Gov. Bob Wise (D.) has attacked pharmaceutical costs as "outrageous." People are "being taken advantage of since they pay more than Canadians.

Wise joined the curiously named Business for Affordable Medicine to lobby Congress to restrict drug patents, but acts as if whipping the latest political scapegoat makes him a profile in courage. Drugmakers will be "spreading lies" in response to his attacks, he warns.

It's an emotional litany worthy of the finest demagogue, not a state's top elected official. The pharmaceutical industry is what makes new, life-saving medicines available to people in West Virginia and the rest of America.

Canada is no model for the United States. Adjust for the two nations' differences-the United States has more war veterans and inner-city residents and spends far more on medical research, for instance-and medicine doesn't took so cheap up north.

Moreover, Canadians stand in ever-longer medical lines. The Vancouver-based Fraser Institute estimates that the average wait between general practitioner referral and specialty consultation is 16.5 weeks; the time between the latter and actual treatment is another 9.2 weeks.

Delays for cancer patients run a month or two. The wait is almost seven months for eye care and eight months for orthopedic surgery.

Canadians have only limited access to new technologies. Indeed, total health-care outlays are determined by a "global budget" rather than medical needs; the province of Ontario simply closed its hospitals around Christmas 1993 when it ran out of money.

Patients flee to America to jump local queues. Provinces contract out treatment, such as for cancer, to U.S. hospitals.

Canada restricts prices, free-riding on American research.

Economist Richard Manning estimates that one-third to one-half of the drug-price differential between the United States and Canada is due to the higher cost of American liability litigation.

Patricia Danzon of the Wharton School also points to different patent protection and availability of prescription drugs without prescriptions. After adjusting for such factors, she and Jeong Kim found, using 1992 data, "that the average U.S. consumer would have paid 3 percent more in Canada."

Pharmaceutical controls also have sharply reduced Canadians' access to needed drugs. Even when the national government approves a drug, provinces often do not cover its use.

For instance, Ottawa added only 24 of 400 medicines considered for reimbursement between 1994 and 1998. Provinces sometimes wait months or years before including pharmaceuticals in their formularies. Or use such techniques as "reference pricing," covering only the cheapest drug within a therapeutic category, irrespective of relative treatment effectiveness.

The consequences are predictable. In the province of British Columbia, reports Canadian physician William McArthur, more than a quarter of doctors have had to treat or even hospitalize patients because of government substitutions of medicine; six of 10 have seen their patients' conditions deteriorate.

American health care is a mess. But nationalizing the system will only exacerbate medical problems. And drugs, which often cut costs by eliminating the need for other treatments, are part of the solution.

If Gov. Wise and his allies nevertheless impose Canadian-style prices on drugs in the United States, Americans will suffer Canadian-style access to medicines.

There's much to do to fix the health care system. But those who want to re-engineer American medicine should learn the most important rule for physicians: First do no harm.

BY DOUG BANDOW

Mr Bandow is a senior fellow at the Cato Institute and an adjunct scholar at the Future of Freedom Foundation.

Copyright Human Events Publishing, Inc. Jan 6, 2003
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