The health care systems of British Columbia and Washington state: learning from the neighbors.

• Author: Katz, Aaron

Comparative data on the administration, performance and quality of health care in a northwestern state and its neighbor in Canada show the underlying influence of national cultures, economies and governmental structures on the two systems.

Interest in the Canadian health care system among United States health policy makers and journalists is epidemic. Every major national radio and television network, most health care professional journals and newsletters, and newspapers across the land have devoted considerable space and time to comparisons of these two systems. Since early in 1989, the forays of U.S. health professionals, lawmakers and researchers to provincial capitals have been seemingly continuous. More recently, experts from Canada have been visiting their southern neighbors to explore practice innovations and management techniques employed by insurers and Health Maintenance Organizations (HMOs). This epidemic of interests raises a number of questions, the first of which asks, "Why all the attention? Why now?

A main factor underlying U.S. interest in Canada, and in other systems, is a growing perception that the U.S. health care system is not working well in the areas of costs and access. With the creation of Medicare and Medicaid in 1965, the United States took a significant step towards assuring financial access to health care for its citizens. The 1970s saw the development of regulatory structures and processes (e.g., certificate of need, organized health planning, hospital rate regulation) designed to both further these earlier access achievements and moderate rapidly inflating health spending.

The 1980s brought to the fore market-related (a.k.a. competitive) strategies to contain costs. The explosion in the number of managed care plans and enrollment in those plans in nearly every state, and the diverse experiments in payments and purchasing methods, both private and public, have dramatically increased understanding of the factors affecting health services access, use and costs.

Washington State Initiatives

Short of overhauling the entire system, Washington, like many other states, has taken steps to address cost and access problems. The Basic Health Plan, enacted in 1987, is a state-subsidized pilot insurance program for individuals who are otherwise uninsured. The plan provides managed care benefits for about 21,000 state residents. Medicaid eligibility and benefits expansion were initiated in 1989 and 1990 to improve access for low-income individuals, especially for maternity care and children. Rural health initiatives (1989 and 1990), Omnibus AIDS Act (1988) and Mental Health Reform Act (1989) were each designed to improve access in specific sectors of the health system. Washington state completed the nation's first comprehensive study of all state health care purchasing activities. The state's 1990 legislature created a 17-member Washington Health Care Commission to study access, cost and quality, and develop strategies to address these issues. The commission's final report is due in 1992.

The legislature also has made a number of changes in regulatory programs, in part with an eye towards controlling costs: State Hospital Commission statutes were revised in 1984 to promote price competition by authorizing negotiated rates between hospitals and payers. The commission itself was eliminated in 1989, as was certificate-of-need review of many hospital activities.

Despite, or perhaps because of these attempts, increases in health care expenditures in Washington are still far exceeding the Consumer Price Index (CPI). * The state government's health care

spending for 1987-89 (about $2 billion)

was nearly 100 percent higher than

1981-83, showing a 12.5 percent annual

inflation rate. * From 1982 through 1988, hospital

revenues in the state grew by an average

14.6 percent per year. * Total earned premiums for the state's

Blue Cross and Blue Shield plans and

health maintenance organizations grew

from approximately $1 billion in 1982

to just greater than $2 billion in 1988, a

14.3 percent annual increase.

These indicators of health care expenditures stand in contrast to an approximate annual CPI increase of 3 percent for 1982-88. In addition, the number of people without financial access to basic health care appears to be growing still; national figures indicate the number of people without insurance or financial resources to pay for care has increased 50 percent since 1980.

Recognizing these disturbing trends, more and more people are voicing their dissatisfaction with the U.S. health care system. A well-publicized 1988 Harris/ Harvard poll of adults in the United States, Canada and Great Britain found Americans to be the most dissatisfied with their health system; in fact, 61 percent of American respondents preferred a Canadian-type system.(1) Many corporate and labor leaders, nationally renowned researchers and mainstream medical journals have called for fundamental change. This strong and growing discontent has caused the search for solutions to move outside traditional or mainstream paths.

Does it make sense for the U.S. and Canada, or for Washington state and British Columbia, to look to each other for solutions? International comparisons are always difficult. Health and health care are largely influenced by and are products of a nation's economy, cultures, government structures and political philosophies. As a result, strategies to solve U.S. or Canadian health and health care problems must be relevant to each country's unique history and environment.

While different in many important respects, Canada and the U.S., Washington and...