Review Author(s): Eugene Vayda Review by: Eugene Vayda Source: Journal of Public Health Policy, Vol. 6, No. 4 (Dec., 1985), pp. 558-562 Published by: Palgrave Macmillan Journals Stable URL: http://www.jstor.org/stable/3342054 Accessed: 21-12-2015 00:37 UTC

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Book Reviews of CanadianHealthCare. Mercy:TheEconomics Robert G. Evans. Strainied Toronto: Butterworthand Co., 1984. xvi+39o pp. $29.95 Can. The CanadianHealth Care System, once describedas North America's best kept secret,has, in recentyears, shed its cloak of anonymity. It has been studiedanddescribedby an increasingarrayof analystsin Canadaand elsewherein a growing numberof journal articlesand books. Two conferences,at Sun Valley, Idahoin 1974, and at Banf, Albertain 1984, subjected it to extensivereview and comparisonwith the United States. Despite the increasinginterestthere is at presentno completely satisfactory textbook dealingwith the CanadianHealth Care System.Books by Soderstrom(1) and Migue & Belanger(2) were both publishedover a decadeago, while Meiicke and Storch (3) and Coburn,Darcy, New & Torrence(4) consistof collectionsof individualpapers.The book which Andreopoulosedited (5) reportedthe 1974 Sun Valley Conferenceand it is now ten yearsold. Taylor (6) haswrittena superbhistoricalanalysisand policy review, but not a comprehensive textbook. Monographs by Hatcher(7) andRoemerandRoemer (8) dealwith selectedaspectsof the systemandboth appearto havebeenwrittenprimarilyfor U.S. audiences. of CanadianHealthCare,RobertG. With StrainedMercy:TheEconomics Evans,who is probablyCanada'sforemosthealtheconomist,attemptsto remedythe existingstateof affairs.During the pasttwo decades,Evanshas been an essential,strident,often unpopular,but alwaysdominantvoice in any analysisof the CanadianHealth Care System. In this book the full force of his work and the reasonsfor his positionsare exposed. Although occasionallyvexing and dominatedby his distinctivestyle, it is, to date, the definitive work on health care in Canada:for Canadiansand nonCanadiansand for economistsand non-economists. Becausehe is an economist who seeks a broaderaudience,Evans has written the book on two levels. It is a textbook on Canadianhealtheconomics, but, by using footnotes (which the authorstatescan be ignored) and by carefully structuringindividual chapters,a circumscribedand recognizablepart of the book emergesas a healthcare textbook for non-

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SinceI am one of the latter,this review economisthealthprofessionals. will dealwith the healthcaresubtext. The book'sorganizationinto threepartsreflectsthe key actorsin the Canadianhealthcaresystem.The firstpart,whichis entitled"TheUtilizationof HealthCare,"dealswith theconsumerandhisor herbehaviour, andalsocontainsa historyandreviewof the systemwith extensivetimeThissectionis heavilylacedwith economic seriesdataon itsperformance. Part2, "TheProvisionof HealthCare,"focuseson the theoryandanalysis. chiefproviders,physiciansandhospitals,andalso examines"forprofit" Part 3, "The Governanceof U.S. comparisons. issueswith appropriate HealthCare,"completesthecircleby analyzingtheroleof provincialand Thissection,whichalsoexamineshealthmanpower, federalgovernments. evaluationof servicesand programs,and regulation,concludeswith priceof admisChapter14which,by itself,is worththenot inconsiderable sion (asmeasuredby dollarsor time). Overall,the book is coherentand followsits rationalorganizational plan.The datapresentedareas current as possible(through1982), given the timelag betweenwritingandpubof lishing,coupledwith the equallyseriouslag betweentheaccumulation dataandits generalavailability. Beforea moredetailedreviewof thebook, two generalcommentsare in order,only one of which is carping.The presence,style and wit of thetextand RobertG.Evansarein evidencethroughouttheintroduction, the numerousfootnotes.Forme thisaddedto the enjoymentof reading thebook,butI amanadmirer.Forothersthis"vintageEvans"mayprove to be disconcerting, butI hopethiswill not be thecase.Andnow my one repetitive.It carp.I foundcertainsectionsof thebook to be unnecessarily was as thougha point, once made,had to be madeagainand againfor emphasis.Whilerepetitionandemphasiscanbe importantteachingtools, heretheysometimesamountedto overkill.However,thesetwo pointsare minor.In the final analysisthe book shouldbe judged on contentand soundness,not on style.Hereit scoresvery high. in Whataboutthecontent?Muchof themeatof thebookisreaddressed the finalchapter,althoughthe earlierchaptersarenecessaryfor in-depth of Chapter14's shorthand andconclusions. Chapter14 also understanding it integrateseconomictheoryandpolicyanalysis.As such helpsto demysperspective. tify economicsandplaceit in a moreunderstandable Drawingon the work of Culyer (9), Evansexposesand rejectsthe "ratherarbitraryandcrudeassumptions aboutindividualandgroupbehaviourwhichareso basicto economicreview."He optsinstead,asCul-

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yer has, to apply analysisto objectiveswhich requirejustificationin terms of generalpolitical applicabilityor social acceptability.The worst criticism of this approach,as both Evans and Culyer point out, "is that it is looked down upon by economists."Both EvansandCulyeropt for reality ratherthan for the economists'usual "best of all possibleworlds." Although they may be rejectedand failedby traditionaleconomists,Evans and Culyer will undoubtedlyget full marksfrom the rest of us. Evansmakesa strong case for public ratherthan privateinsurancefor health care. Public insuranceis a means of income redistributionwhich transferswealth acrossrisk classes.While privateinsurancecould do this by premiumsubsidyand community rating,it is more likely to build in selectionmechanismsorchargedifferential premiumsaccordingto expected loss or risk status. Since the goal of the Canadiansystem was income redistribution(at both the individualand the provinciallevel), Canada opted for a public system.If countliesare to be judged by theirgoals and by theiractions,the differencesbetweenthe U.S. andCanadianhealthcare systemssay a great deal about the socialvaluesin the two countries. Evanspointsout thatone resultof publicfinancingof healthcareis that the governmenthasenteredthe medical(andhospital)income determination processin a significantway. Individualpractitionershavelong asserted their right to set their own fees and regulatetheir own practiceswhile hospitalshave done so to a lesserdegree.However, budgetand fee-setting negotiationshave shiftedcontrols to provincialgovernments.Although professionalsstill controlhow resourcesareused, provincialgovernments controlthe total resourcesavailableandincreasinglythey controlprovider incomes. By banningprivateinsurancefor medicaland hospitalservices, and by attemptingto eliminateextrachargesby physiciansand hospitals, the federalgovernmenthas demonstratedits desireto insure and control the total costs of hospitaland medicalservices.The new CanadaHealth Act (Bill C-3) reaffirmedthe principleof universalaccessibilityand imposed financialpenaltieson the provinceswhich allowed extrahealthcare charges.By so doing the federalgovernmentput pressuresquarelyon the provincesto eliminateuser charges.Such charges,while not great proportionally,have ideologicimportanceandalsotendto createa two-tiered system. Evans dismissesthe chargeof "underfunding"of the system made by physicians.While physiciansattempt to equate underfundingwith inadequatelevels of service,he correctlyexposesthe realissue:physicianincomes which are perceivedby the professionto be inadequate.Proposed

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physicianremedies,suchas usercharges,would resultin wealthtransfer frompatientsto providers,higherincomesforphysicians, andhigheroverall costs.The wealthtransferwould be unevensincewealthwould be drawnfrompatientsin particular regionsandwith particular problems. Further,sinceextrachargesinhibituseby thepoor,somepotentialpatients couldbe deniedaccessuntilit was too latefor effectivetreatment. "Costexplosion"chargesareviewedin thecontextof Canadian health careexpenditures whichremainedat about7% of GNP throughoutthe 1970s, and only reached8.4% in 1982 (when GNP fell). Since 1970 health care expendituresas a percentageof GNP have remained20% below the U.S., where chargesof "cost-explosion"have considerablejustification. To deal with a perceived "cost explosion", governmentscould reduce theirpoliticalrole as well as theirfiscalcontributions.Extrachargeswould increaseandprivateinsurancewould reenterthe arena;Canadawould then resemblethe dismantledAustralianMedibankSystem (lo) and the present U.S. hodge-podge. While the U.S. is not now inclinedto opt for equity, Australia,at least,appearsto be reassemblingits Medibank.In additionto relatingaccessto income, shifts to individualpayments and privatization merely increaseoverall costs, as the U.S. experiencehas clearly shown.

Evans says, ...

....

for profit firms in a health care environment make their profits

from sales,not cost containment.The incrediblyfuzzy United States thinkingwhich, presumablymuddledby ideologicalsymbols,equated private for profit enterprisewith cost control, has begun to undergo reality therapy. Evans dismissestraditionalprivate and categoricalU.S. solutions; he feels they have no real implicationsfor Canada.However, drawing from the U.S. HealthMaintenanceOrganizationexperiences,he supportsStoddart and Seldon's(l1) suggestionfor "publicsectorcompetition"as a possible way of dealingwith costsby shiftingincentives.He also suggeststhat studies of efficacyand appropriateassessmentand control of technology should also play a part in "value for money" and cost management.Here he envisionsmore interactionbetween professionalsand governmentwith both sidesat risk-more money for effectivemaneuversand eliminationof non-effective treatmentsdespitetheir potentialfor high providerprofit. I am pessimistic that either governments or physicianswill behave that rationallyor that responsibly. Overall,thisis probablythe most importantbook written to dateon the

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CanadianHealth Care System. It is incisive, analyticand usefulat many differentlevels and for many differentpeople. It is a rich sourceof utilization and expendituredata,both comparativeand current.It exposes the intellectand the wit of Bob Evans,forcesto be reckonedwith both politically and academically.I recommendit highly.

REFERENCES 1. Soderstrom,L. The CanadianHealthSystem.London: Croon Helm. 1975.

Migue, J. L. and Belanger, G. The Priceof Health.Toronto: MacMillanof Canada,1974. on CanadianHealthandSocial 3. Meilicke, C. A. and Storch,J. L. Perspectives ServicesPolicy:HistoryandEmergingTrends.Ann Arbor:HealthAdministration Press,1980. 4. Coburn,D., D'Arcy, C., New, P., and Torrance,G. M. HealthandCanadian Toronto: Fitzhenryand Whiteside, 1981. Perspectives. Society:Sociological S.Andreopoulous,S., editor. NationalHealthInsurance:Can We LearnFrom Canada?Toronto: John Wiley and Sons, 1975. andCanadianPublicPolicy.TheSevenDecisions 6. Taylor, M. G. HealthInsurance Montreal:McGill-Queen's thatCreatedtheCanadianHealthInsurance Systenm. University Press,1978. 7. Hatcher,G. H. UniversalFreeHealthCarein Canada,1947-77.Washington DC: US Departmentof Health and Human Services(NIH PublicationNo. 81-2052), 1981. PolicyUnderNationalHealth 8. Roemer,R. andRoemer, M. I. HealthManpower Insurance-TheCanadianExperience.Washington DC: US Department of Health Educationand Welfare (DHEW PublicationNo. 77-37), 1977. 9. Culyer, A. J. "The Quest for Efficiencyin the Public Sector: Economists versus Dr. Pangloss,"in H. Hanusch, ed. PublicFinanceand the Questfor Efficiency.Detroit: Wayne University Press, (forthcoming). 1o. Deeble, J. S. "Unscramblingthe Omelet: Public and Private Health Care Financingin Australia,"in G. McLachlanand A. Maynard,eds. ThePublic/ PrivateMixfor Health:TheRelevanceandEffectsof Change.London: Nuffield ProvincialHospitalTrust, 1982. 11. Stoddart,G. L. and Seldon,J. R. "PubliclyFinancedCompetition in CanadianHealthCareDelivery:A ProposedAlternativeto IncreasedRegulation," Second CanadianConference on Health Economics, Regina, September 9-11, 1983. 2.

EUGENE VAYDA

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