How did Canadian insurers, for example, handle the implementation of government health care? How about other countries? What kind of lead time did the companies have to prepare? Were any large insurers essentially blown up because of UHC?
The major insurers sailed right through it and are still around, in fact. There’s three important things to bear in mind here:
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Universal health insurance was not as huge a shock to the system in 1966 as it would be today, because health care just wasn’t as big an industry. The explosive growth of health care costs has mostly happened AFTER Canada adopted universal health insurance. (It’s universal health insurance, not health care, an important distinction; health care is not administered directly by the provincial governments. My doctor doesn’t work for the government, she’s a private businesswoman.)
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It did take quite a few years to unfold the process, which began at a provincial level and was built up through several acts of Parliament many years apart.
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There is still a very large market for private insurers in Canada - in fact, I’d guess that even adjusted for inflation, the private market for health insurance in Canada is as big or bigger than it was before universal health insurance. Quite a lot of health-related expenses in Canada are NOT covered by your health card. If I want my teeth fixed, that’s a private matter, and the bill goes to my insurance company. Prescription drugs? Private matter, I need insurance for that. Eyewear? Hearing aids? Call the insurance company, bro. Hurt your knee playing softball and need one of those fancy knee braces? Better have private insurance. Want a hospital room to yourself? Private insurance. Kids need braces? Hope you have insurance. Want to make sure you don’t get screwed if you get sick on vacation? Call the insurance company. Want long term disability insurance in case you’re hurt and can’t do your job? I pay every month for that. I could go on and on… if I go to the Caribbean and want a Hep B shot, I have to pay for that. My insurance company has lots and lots of stuff they can make money on.
For example- the average person does not have prescription coverage (unless drugs are administered as part of a hospital stay.) Ambulance rides are not covered. there are drug programs for poor and seniors, and the rising cost of medicines mean there are programs emerging to cover it. Health care is a provincial concern, so every province has slightly different rules. The Feds just set the minimum standards that must be adhered to to get the federal contribution to the plan.
But yes, since the medicare became universal in the 60’s when health care was a lot cheaper, this did not significantly impact the insurance industry.
Today, for example, big (and/or good) employers offer prescription plans, short term disability support, supplemental benefits (like Private Room or TV rent in room, ambulance rides, travel vacation coverage, etc.). For smaller employers, thess programs also are offered by industry associations or Chamber of Commerce groups. They are all provided by companies like Blue Cross who seem to be doing very well.
However, yes, there is no private insurance company buying its shareholders and executives BMW’s or Rolls and gobbling trillions in health care dollars - it’s all funded by taxpayer contributions. So the trauma to the insurance industry happened much earlier and was much less of an impact, since the scope of employer-provided benefits at the time was much smaller.
In fact, one can argue that the extra benefits like prescription and travel insurance are a direct result of the one-payer system. Employers wanting to offer extra benefits to attract employees started from a higher floor - everyone had basic coverage anyway.
By contrast, the single payer system lets the government set fees-for-service much lower than equivalent American services - our doctors are paid a lot less; but they benefit too from the more rational Canadian judicial system where malpractice is much rarer and awards are smaller, plus they have a much simplere and clearer set of rules - what’s covered, what the conditions are for allowing treatment, no chasing patients for money or 50 different insurance companies with different rules and forms for approvals or payments.
With regards to doctor’s salaries, it isn’t as much less as you might think. While precise numbers are not easily come by - many if not most Canadian doctors are self-employed or part of small businesses and so their gross isn’t necessary reflective of their net - I have seen estimates or actual net income ranging anywhere from $175,000 to $250,000, with GPs making (rather obviously) less than elite specialists. Obviously, doctors will insist it’s lower, while sober outside observers have guessed higher in that range.
The average American doctor is paid around $250,000 (again, it varies a lot depending on what kind of doctor you are) so the difference may not be THAT vast.
Yes, I have to agree with RickJay. First hospitalization insurance, then doctoring was covered a few years later. And I still have complementary insurance from my old employer. Until I was 65 it covered drugs too; now I use the provincial drug insurance which pays about 80% I think. They also negotiate cheaper rates with the drug companies. Things like glasses, hearing aids, dentistry are from the private insurance. Blood tests in hospitals are covered by the province; in doctor’s offices I have to pay and get reimbursed by private insurance.
With only one exception I am aware of, money never changes hands in a hospital. The province (I should mention that although this insurance was mandated by the federal government, each province was free to set up its own system, so long as it met federal norms) gives an annual block grant to each hospital, which sets its own budget. The only thing I ever got charged for in a hospital was the difference in cost between a hard lens and a soft lens for cataract surgery ($300 and then I got most of that back from my private insurance). Doctors, on the other hand, get fee for service just like the States. But the fees are non-negotiable. Doctors are free to “go private”, but they cannot collect 1¢ from the public system and almost none do that. (Exception: they will get paid if they render emergency care, say at an accident scene.)
So private health insurance was relatively small and continued with relatively little change. One thing to note is that all hospitals here were non-profits, AFAIK. Interestingly, when I was growing up in Philadelphia, I was unaware of for-profit hospitals. All the ones I knew were either associated with religious (I was born at Presbyterian Hospital), civic, or teaching institutions (I lost my appendix at Jefferson Medical College Hospital and my brother lost his at University of Pennsylvania Hospital).
To digress slightly, I will say that I am slightly nauseated by those full-page ads and often two-page spreads advertising hospitals that you see every week in the NY Times Sunday Magazine. Those hospitals are making gobs of money for their shareholders and advertising must pay. This must play at least a small part in the escalation of US health costs.
I agree with what RickJay said, and I’ll add that many insurers who provided major medical coverage at the time of the transition also provided other insurance lines: whole life policies and term life policies, for example. Between this business, and supplementary health and disability plans as described by Rick (i.e. dental, vision, etc.), and by offering (in some cases) financial planning and similar services, the insurers stayed afloat.
To the best of my recollection, there were very few “health only” insurers. Most were, as I stated, diversified in their product offerings. But even a company like Blue Cross still exists in Canada, which indicates to me that the supplementary health/disability/travel/etc. insurance business is still a lucrative one.
I don’t know. The GP’s I talked to a few years back have nice tidy incomes, but nowhere near the $175,000 (US) mark. That’s probably combining the GP apples with the specialist oranges. Based on the lifestyles I observe, they would have to be stashing more than half of that in the bank.
Very much so. American GPs aren’t at the American average either.
Back in the mid-70’s, when auto workers would be getting about $25,000 a year, the Ontario government published a list of doctors who made over $100,000. Mind you, that was gross, not net. they had to pay the receptionist, nurse, rent, supplies, etc. - and a lot did not even make the list.