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Flaws in Canadian system serve as red flag for Obamacare

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As the U.S. debates ways to replace or improve Obamacare, Canada may offer a blueprint for reform. Conservative Prime Minister Stephen Harper has moved to transfer control from the federal government to the provinces and is opening up the socialized system to private clinics and doctors.

“What we clearly need is experimentation with market reforms and private delivery options within the public system. ... that experimentation should occur at the provincial level,” Harper said a decade before winning a government majority in 2011. Now he's acting on his vision.

This is relevant to the debate over health policy in America because Canada's national health system consistently is used as an endpoint for Obamacare. When state health exchanges were launched in September, Sen. Bernie Sanders D-Vt., chairman of the subcommittee on primary health and aging, signaled that the long-term plan was a move toward a Canadian-style system.

“President Obama’s Affordable Care Act is a start,” the Vermonter wrote, but it doesn’t go far enough. “The only long-term solution to America’s healthcare crisis is a single-payer national healthcare program.”

Canada's health bureaucracy is so central to U.S. government designs that the Obama administration hired the Canadian CGI Group for $56 million to build the White House's website. The firm manages tech services for Canada's national health service and has received more than $1.4 billion in consulting fees from the U.S. during Obama's presidency. CGI, which is headquartered in Montreal, continues to receive tens of millions in new awards from the U.S. government even after the botched Obamacare web launch.

The fundamental pitfalls of the state-driven Canadian system are that it bleeds money and is hobbled by long waiting lines. Health costs jumped 53 percent over the last decade, and the country faces a funding shortfall of more than half a trillion dollars, according to the Fraser Institute, a Canadian think tank.

Furthermore, ever-growing budgets haven't improved access to care. “The 2013 median waiting time of 18.2 weeks is about three days longer than 2012, and substantially longer than 1993 when it was just 9.3 weeks,” reports Fraser.

Harper introduced a new funding model and creeping competition to address some of the problems. To cut waiting times, private providers are allowed to take overflow patients from overburdened public facilities and can accept customers willing to pay extra for private service. This is a small step, but it re-introduces the practice of private care to the nation.

To improve the balance sheet, Canada's conservative government is pegging spending to economic growth. For the past 10 years, Ottawa automatically increased the disbursements it sent to provincial governments by 6 percent every year. Strings-free block grants are used to encourage greater local experimentation and customization of care without muddling federal standardization.

Demographic trends provide the impetus for change. “There is a major shift in thinking around health care with the generations after baby boomers in Canada,” explains Alise Mills, a political strategist and commentator in Vancouver.

“Younger Canadians are asking how we can deliver better health care knowing the funding is unsustainable. It’s more than just moving pieces around the table; it’s a slow crawl to the inevitable.”

Nobody is saying Canada will scrap universal care any time soon, but Harper’s decentralization is seen as an important first step in bringing about more private health care options.

“Health care used to be the third rail in Canadian politics: Touch it, and you will die,” Michael Taube, a former speechwriter to the prime minister, tells the Washington Examiner. “Now, many Canadians desire more choice and freedom and would be content to have greater access to more doctors, hospitals, MRI clinics, diagnostics procedures and so forth.”

Brett M. Decker is consulting director at the White House Writers Group.

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