Wednesday, August 31, 2011

An American in Oz

It feels like only yesterday that I met Christine, my pal Jennifer’s little sister, while gathering signatures in Los Angeles on petitions for health care reform. She was still an undergraduate then. So seeing her via Google chat in her office in Adelaide where she practices psychology felt a little unreal. And the fact that she now has three children hardly seems possible. Christine, who has been living in Australia since 2006, was kind enough to take time out of her workday to talk to me about her experiences with the Australian health care system, as a patient, as a mother, and as a health care provider.

“How is mental health coverage in Australia?” I asked as we got the interview underway. I was surprised to learn that Medicare does cover some sessions with a psychologist. I had thought this was a service that was only covered by private insurance. Christine explained that a patient wanting to see a psychologist first goes to a GP to get a referral for a mental health plan. This means that Medicare will cover 6 sessions and then the patient has to go back to the GP to get a referral for 6 more sessions up to 18 sessions per year. Of course many Australians have private insurance that covers psychologists so they don’t have to depend on Medicare.

When I began asking about Christine’s experiences as a patient, she first explained a bit about her private insurance for which she pays $350 per month to cover herself, her husband, and her 3 children. I asked whether some people get private insurance as an employee benefit and the answer was no. Their insurance covers them for private hospital care and they also have ancillary coverage for things like dentists, physical therapists, and psychologists. At the level of coverage her family chose, they pay a $200 “excess”, which is like a deductible, each time they go to the hospital.

Christine has had 2 children while living in Australia. Because of her private insurance, “I got to go to a private hospital and I also got to have an obstetrician,” she told me. For women using the public system, they can either see a GP during the beginning of their pregnancy and then switch to a midwife or they can choose to just see a midwife for the entire pregnancy.

For the obstetrician, Christine paid $2,000 but then was reimbursed much of that amount because her total medical bills for the year went over the “Medicare Safety Net” threshold. The Medicare Safety Net protects Australians from high out-of-pocket costs for non-hospital medical expenses. There is also a Pharmaceutical Benefits Scheme Safety Net, which protects people from high medication costs. With the Medicare Safety Net, patients are reimbursed at one level after they have spent about $400 out-of-pocket and at a higher level after they have spent $1150 out-of-pocket. Now remember, Medicare typically covers most of the cost a doctor bill to begin with but the patient does have a copayment. Sometimes the out-of-pocket expense runs higher because the doctor charges more than the amount allowed by the Medicare Benefits Schedule.

I was very curious about how the system works with these reimbursements. For some people, I would think coming up with the money to pay a doctor could be difficult. So how long do you have to wait to get reimbursed? Christine told me it can be almost instantaneous. “The place where I work, we swipe their [credit/debit] card; they pay; then if they’re hooked up electronically with Medicare, we swipe Medicare’s card. Then we put their [credit/debit] card back in the machine and it puts the balance back into their account.” Nifty, huh?

The Australian system does have some annoyances for Christine. Yes, the waiting lists.

Christine considers it very fortunate that her father-in-law is a physician. He can often pull strings to get family members in to see a doctor more quickly. But not always.

Her daughter needed to see a gastroenterologist and she had to wait 1 ½ to 2 months in order to be seen. As a worried mother, “I felt it was more urgent,” Christine laughed. Then her daughter needed an endoscopy. But since that can be done in a private hospital, she was able to use her private insurance. Remember, private insurance is only for care provided in a hospital not for regular doctor appointments. Using the private insurance, Christine’s daughter got in for the endoscopy in one week rather than 3-4 weeks with the public system.

On another occasion, a check-up prior to starting school showed that her daughter was having some vision difficulties. It was going to take her 4-5 months to see a pediatric ophthalmologist but fortunately she got in slightly earlier due to a cancellation. “It wasn’t urgent by any means but I wanted her to get in before school started.”

Apparently, most folks who live in Australia aren’t so bothered by the waits. “I think I get more annoyed by things like that because I’m not used to it,” Christine observed. “But on the other hand, I do see that they feel very entitled to free health care. They get annoyed with having to pay anything. For me, I’m thinking, ‘Woo, all these things for free!’”

I finally asked Christine whether she would prefer getting health care from the U.S. system or the Australian system. Although she isn’t too fond of the waits, she said it had never caused her family a health complication. Her conclusion was, “I think I would rather be getting it through Australian system if for no other reason than you cannot be excluded from getting health care for a pre-existing medical condition, or forced to pay more for that reason.”

Thanks, Christine. Who knew all those years ago when we were gathering signatures for single payer health care in California, you’d end up living in a country with a national health care system – and 17 years later, we still wouldn’t have it in the U.S.?

Tuesday, August 16, 2011

The Aussies

Once again in my favorite spot for interviews, I engaged a smart-looking, 30something Australian couple in conversation while we waited to board our plane. Ms. Aussie had spent 3 years living in Vancouver and was familiar with both the Canadian and Australian health care system. “I loved the Canadian system!” she exclaimed enthusiastically.

In Australia, she told me, private health insurance plays a much larger role in the health care system. There is an Australian publicly funded universal health care system called Medicare, which covers everyone for medically necessary doctor’s services and hospitalization. Medicare is funded partly by a 1.5% income tax levy and partly out of general revenue. But 45% of Australians also carry private insurance – hospital coverage, ancillary coverage, or a combination of the two. Hospital coverage enables policyholders to go to private hospitals, choose their doctor when hospitalized, schedule elective surgeries more promptly, stay in a private room, and make up some of the difference between the amount the government payment schedule will cover for doctors’ charges whilst an in-patient and what the doctors actually charge (called the "gap"). Private "ancillary" insurance covers some of the extended services, like physical therapy, optical, and dental, the way the private extended coverage does in Canada.

In contrast with Canada, 1/3 of hospital beds are in private hospitals. According to Ms. Aussie, public hospitals are not so desirable. Private hospitals are more attractive cosmetically, have better food, and one can usually stay in a private room. Many public hospitals, on the other hand, are better equipped. Emergency rooms are almost exclusively found at public hospitals.

Interestingly, some folks who have private hospital coverage still opt to use a public hospital. They can choose to go to a public hospital either as a private insurance patient or a public patient. For patients not using private insurance, Medicare will pay for all the expenses incurred in the hospital. A private patient, even in a public hospital, will be scheduled for elective procedures with a shorter wait, will be able to choose their physician, and may be able to get a private room. For a private patient, Medicare will cover 75% of in-patient medical procedures in accordance with the Medicare Benefit Schedule (MBS). The private insurance picks up the remaining 25% plus the hospital accommodation costs. If the doctor charges more than the MBS fee, the private insurance may pick up the “gap”, depending on the policy.

Ms. Aussie's sister had used private insurance and a private hospital when she needed back surgery. She would have had to wait a year for the surgery had she used the public system, according to Ms. Aussie. Ouch! But she ended up paying $7,000 out-of-pocket due to the "gap" despite her private insurance. Oooouch!

The Australian government provides incentives for individuals to purchase private insurance; they believe it is better to relieve the government of as much of the business of health care coverage as possible. First of all, they provide a 30% subsidy to everyone who purchases private insurance and a higher subsidy for the elderly. Secondly, there is a 1% tax on the income of anyone earning more than $77,000 per year ($154,000 for couples) who doesn’t purchase private insurance. A bit similar to the US's impending individual mandate. And finally, if Australians don’t purchase private insurance by their 31st birthday, they pay an additional 2% to purchase insurance for every year beyond that time. So if you don’t start purchasing insurance until you’re 40, you pay an extra 20%. This protects the private insurers, who are not allowed to charge more for preexisting conditions, from having everyone wait until they are older and sicker to start purchasing insurance. Furthermore, private insurance isn’t terribly expensive in Australia. For Ms. and Mr. Aussie, this is a no brainer. Their income is over $154,000 so they’d be paying the government 1% of their income anyway. The private insurance they purchase only costs $90 per month for the two of them.

Ms. Aussie had no complaints about the care she had received in either country but she seemed to prefer the Canadian system. I guess more people end up paying more out-of-pocket for the Australian system. By the way, she mentioned, as have several of the Canadians I’ve spoken to, how important it is for them to purchase travel health insurance before coming to the US. Wouldn’t dare leave home without it!

Monday, August 1, 2011

What Does It Cost -- A Tale Of Two Sisters & Two Systems

One of my great pleasures during the time I spent in Vancouver was reconnecting with my cousin. Brainy, fascinating Cousin Catherine, who left the US after high school to go to Oxford. She never returned to live in the US, spending roughly 20 years in Great Britain and then the past 20 years in Canada.

One drizzly evening she invited me to dinner at her house. "Am I finally going to get to interview you about your health care?" I asked as we sat down at the dining room table in her cozy craftsman style home. "Well, yes, I suppose so," Catherine answered. We had had many conversations about the Canadian health care system, but we’d never gotten into details of her personal experiences.

"Have you had any problems with the Canadian health care system? -- Any waiting list problems?" No, she hadn't. No problems for her husband or kids.

The only complaint she could come up with was that family doctors generally are only willing to discuss one problem per appointment. Since sometimes multiple problems are interrelated, it can get a bit silly at times. "And I've also been coughing --" "Oh, you'll need to schedule another appointment." Even though you're not paying more for the additional appointment, who wants to spend day after day at the doctor's office?

In fact, Catherine is a huge fan of the Canadian health care system. When she goes back to visit family in the US, she often ends up in the exasperating situation of having Americans tell her how bad the Canadian system is. "People who haven't spent one day in Canada and clearly have no idea what they're talking about!"

Catherine is acutely aware of the difference between her health care situation and her sister's. Cousin Jean lives in California and is a booking agent for performing artists. She is in business for herself and therefore has to buy insurance on the individual market.

I decided to give Cousin Jean a call to find out the specifics. "I have no idea what I get," was Jean's first reaction. "I think something's covered and then they change it." Then she began to have second thoughts about talking to me about her insurance. "I'm trying to get new insurance. I don't want to jeopardize my chances." I told her I'd change her name.

In my years of working on health care reform in the US, I have come across lots of people who have these kinds of concerns about being blackballed by health insurance companies. It just goes to show how people fear the life and death control these companies have over their lives, as well as their ruthlessness -- like some sort of organized crime operation.

Once Jean was able to line up a new policy, she told me her premiums were now under $500 per month with a deductible of $6,000.

That's the price Jean pays for going into business for herself. Something her sister Catherine didn't have to worry about in British Columbia when she left her job at the university teaching Middle Eastern History, and opened a small publishing business. "I didn't feel tied to my job at the university because I knew my doctors and hospitalization were covered by the Medical Services Plan (MSP) here."

Monthly premiums for the MSP are $60.50 per month for one person or $109 per month to cover both Catherine and her husband. If their sons were still living at home, the premium would be $114 per month to cover all of them. These are the rates for anyone making over $30,000 per year. There are no deductibles, no co-payments, no guessing at what's covered. For those who make less than $22,000 per year, the premiums are $0 and for those making between $22,000 and $30,000 per year there is a sliding scale on premiums.

But what about those legendary high Canadian taxes, eh?

After doing some research online, for several income levels I added up federal taxes, British Columbian provincial taxes, the Canadian equivalent of Social Security taxes, plus the Canadian version of Unemployment Insurance (which comes out of the taxpayer's paycheck). Then I added up US federal taxes, California (where Jean lives) state taxes, Social Security, Medicare, and California State Disability Insurance. Much to my surprise, the tax rate on income at home is higher than on income in British Columbia. That was true at each income level I tested.

There are higher sales taxes in Canada, although some sales tax is refunded to low-income Canadians. Funding for health care comes out of a combination of Provincial and Federal taxes. There is no specific health care tax in British Columbia but that varies from province to province.

Is providing universal health care enormously expensive in Canada?

Well, let's compare it to the US. In Canada, they spent $4,079 per person on health care in 2008, whereas, in the US, we spent $7,538. In Canada they spent 10.7% of GDP on health care compared with 17.6% of GDP in the US. And of course, everyone is covered in Canada while 17% of Americans are uninsured and almost 20% of Californians are uninsured.

Yes, many Canadians think the amount their government spends on health care is unaffordable. I'm guessing that is the story in every country that has a modern health care system – the tale, as it were, of many cities.