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From the archives

The Trust Spiral

Restoring faith in the media

Dear Prudence

A life of exuberance and eccentricity

Who’s Afraid of Alice Munro?

A long-awaited biography gives the facts, but not the mystery, behind this writer’s genius

What’s Race Got to Do with It?

A startling new analysis of the difference between Canadian and U.S. healthcare funding

Gregory P. Marchildon

National Health Insurance in the United States and Canada: Race, Territory and the Roots of Difference

Gerard W. Boychuk

Georgetown University Press

234 pages, softcover

ISBN: 9781589012066

The word “race” divides us—primarily according to skin colour and secondarily according to ethnicity. While the concept of race lacks a biological basis, categorization by race continues to shape relations within societies, particularly in those countries where slavery was a central institution for centuries or where settlement involved the displacement of large numbers of indigenous peoples. For example, because of the legacy of slavery, the racial division between African Americans and white Americans is the single most important theme in the national narrative of the United States. In his famous speech on race in March 2008 in Philadelphia, Barack Obama said it was time for America to confront the accumulated anger, resentments, stereotypes and distortions in order to get beyond the race divide. Only then, he said, would it be possible to fix the most broken parts of American public policy, including health care.

I suspect that this connection between race and healthcare policy must seem a little peculiar to most Canadians. In his new book, National Health Insurance in the United States and Canada: Race, Territory and the Roots of Difference, Gerard Boychuk, a political science professor at the University of Waterloo, explains why the politics of race prevented the introduction of universal health care in the United States. He also introduces a bold new hypothesis as to why Canada did the opposite. Boychuk’s surprising explanation for the introduction of universal health care in Canada, while not rooted in race, is nonetheless based on the politics of identity and the competition between the federal government and the provinces (particularly Quebec) for the hearts and minds of its citizens.

The different paths taken by the two countries have fascinated and perplexed commentators and social scientists on both sides of the 49th parallel for decades, particularly given the fact that the two countries once had congruent health systems. However, after universal hospitalization was implemented in Canada in the late 1950s and universal medical care insurance in the 1960s, two things changed. ((Although the word “medicare” in Canada was originally a contraction of “medical care insurance,” it soon became shorthand for both universal hospital and medical (physican) care coverage. It should not be confused with American “Medicare,” which is not universal.)) First, access to health care (or at least that portion deemed medically necessary) would now be based on need rather than ability to pay. Second, payment for such services would now be administered through provincial and territorial single-payer systems, thereby avoiding the overhead associated with private health insurance carriers and their need to assess risk, calculate premiums and administer claims.

As a consequence of this change, Canadians increasingly perceived health care as a collective right rather than an individual benefit, a social service rather than a commodity to be bought and sold on the marketplace. This policy divergence produced a different way of viewing the world, a difference reflected in everyday language—health care is generally described as an industry by Americans and as social policy by Canadians. However, the consequences of this policy divergence go beyond the philosophic. Before medicare, Canadians spent almost as much as Americans on health care. After medicare, Canadians began to spend less than Americans on both private and public health care thanks in part to the cost control exerted by single-payer administration in Canada and the escalating cost of public and private health care insured by private insurance carriers in the United States. Today, we spend less than one half of what Americans spend on private and public health care combined. Even when it comes to public health care alone, we spend less per capita, prompting some to ask why American taxpayers pay for European-style universality but get only partial coverage in return.

In the United States, opposition to universality went well beyond an ideological preference for the market and hostility to the state. As Boychuk shows, the more deep-rooted issue was the threat posed by health reform proposals to segregated health services. Southern congressional representatives, the majority of whom were Democrats, were viscerally opposed to reforms that might have required white people to be treated in hospitals, nursing homes and medical clinics alongside black patients. Segregationist sentiment was also a pronounced feature of organized labour, and the unions worked with conservative Democrats as well as the most vocal opponent of universal health care, organized medicine. The American Medical Association was itself a segregated organization and opposed universal public health care for racial as well as political and economic reasons in the 1940s and ’50s.

It was only after the Civil Rights Act of 1964 forced the desegregation of all public programs funded by the American government that the racial objections to universality receded and the political and economic objections to universality and government intervention took priority. One year later, a three-layer policy cake had been baked by Lyndon B. Johnson, assisted by Democrats and Republicans in Congress. The first layer, part A of Medicare, was designed to please Democrats. It involved extending federal social security (first introduced by Franklin D. Roosevelt in the 1940s) as health insurance for contributing seniors. Republicans endorsed the second layer, part B, which introduced government-subsidized private insurance for physician care. The final layer was Medicaid, covering the poor as well as seniors who had not made sufficient social security contributions to qualify for Medicare. It was understood by all that these three layers were to supplement, not replace, employment-based private health coverage, which Democrats and Republicans, industry and labour, still viewed as the core of American health care.

Of course, this bipartisan policy did not, and could not, deliver universality. Instead, it further entrenched a system of entitlements based on employment, age and income—an old-fashioned passenger ship with clearly demarcated classes, to introduce a different metaphor. In first class, you have Medicare and comprehensive private health insurance. In second class, you have Medicaid and private health insurance plans with less than comprehensive coverage. In steerage, you have the chronically underinsured, while those without any coverage—the working poor without private insurance and seniors without Medicare benefits—are always under threat of being thrown overboard. In eschewing universality, the U.S. displayed its exceptionalism, at least relative to the majority of wealthy nations in Europe, Australasia and Canada that have adopted some form of universal health care.

Aside from the lack of universality, the downside of the three-layer policy is the inability of federal and state governments to control the cost of Medicare and Medicaid, a constant thorn in the side of the American body politic. This generates a perpetual crisis. As private health insurance costs rise, companies cut or eliminate their employee health insurance benefits. As Americans lose benefits, they depend more heavily on the public safety net, but the more they rely on public benefits, the higher public costs grow. Not surprisingly, Americans regularly call upon their elected officials to address this recurring crisis in health care. In 1993, in response to public outcry, Bill Clinton told Congress that “this health care system of ours is badly broken, and it is time to fix it” only to see his administration’s efforts go down to spectacular defeat.

As Barack Obama begins his presidency, expectations are high that health care will finally be repaired if not reformed. This is so despite an economic crisis that is beginning to bear a striking resemblance to the Great Depression. If 50 percent of all personal bankruptcies in more prosperous times were a consequence of the inability to pay medical bills, just imagine the situation that faces the working poor, many of whom are African American, in the next two years. Obama is also aware that 95 percent of African Americans voted for him hoping for some improvement in their lives, including the constant worry whether the next hospital visit will push them into welfare and poverty.

In contrast, health care in Canada seems less of an issue in these hard economic times in large part because medicare has eradicated the spectre of medical bankruptcy. I would go even further than Boychuk in arguing that national medicare was an inspired act of nation building, and in this sense was much more than a reaction to province building—but I am almost sure that this is a view of history not shared by Stephen Harper and most members of his government today in Ottawa. Nation building is what Boychuk calls territorial integration, a term he borrows from Canadian social policy scholar Keith Banting, from whom he quotes:

Social programs controlled by the central government can become instruments of nation-building, helping to mediate regional tensions and strengthen the state against centrifugal forces rooted in territorial politics. Alternatively, social programs designed and controlled at the regional level can become instruments for strengthening regional cultures and enhancing the significance of local communities in the lives of citizens, thereby reinforcing differentiation and centrifugal tendencies at the centre.

In other words, in response to the secessionist forces within Quebec as well as the expansionist tendencies of nationalist Quebec governments, the federal government inserted itself into healthcare policy in order to “create a direct connection” with Quebec residents and “foster a sense of attachment between them and the national polity.” Boychuk argues that the federal government’s desire to exert a degree of territorial integrity is a better explanation for why Canada differs in its healthcare policy from the United States than the more commonly offered alternatives. One of these alternatives is the different ideology and values of the two countries, what Boychuk calls political culture. We can see this in terms of the social democratic ideology that led Tommy Douglas’s government in Saskatchewan to pioneer medicare, as well as the Red Tory influences in the old Progressive Conservative Party that allowed its members eventually to go along with medicare, however grudgingly. Another explanation is that Canada’s political institutions facilitated the adoption of universal health care while America’s diffused checks-and-balances structure prevented (and may continue to prevent) a similar reform. The fusion of the legislative and executive in Canada allows for majority governments to make major policy changes without compromise while a decentralized federation permits major experiments in areas of provincial jurisdiction, thus Saskatchewan’s innovations in hospitalization and medical care insurance could easily be adopted in other provinces with the encouragement of cost-share financing by the federal government.

A third common explanation is “path dependency” and its accompanying notion that timing is everything in public policy. Policy pathways are notoriously difficult to break from, in large part because of the financial, intellectual and ideological capital invested by individuals, organizations and institutions in the status quo. As difficult as it is, however, there are moments—critical junctures—when dissatisfaction with the status quo is powerful enough, or when the investments have not yet triggered a “lock-in” of the policy status quo, when change becomes possible. These windows of opportunity are rare. If not taken advantage of, policy change may be permanently blocked. Saskatchewan, for example, introduced universal hospital and medical care before private health insurance covered the majority of the population, although the same argument seems to fall flat for most urbanized provinces, such as Ontario, that had quite high rates of public coverage before medicare was introduced.

In the United States, the window of opportunity was 1965, but legislators chose incremental improvements over universality, making major change in the future even more difficult. As Jacob Hacker explained about American health care in the New England Journal of Medicine, the sad truth is that “most Americans—even the underinsured and soon-to-be-insured, the potentially uninsurable and the one-illness-from-bankrupt—can be frightened into believing that changing this entrenched and inadequate system means paying more for less.” While race may not seem relevant to this explanation, the fact is that a disproportionate number of the underinsured and uninsured are African Americans. They have the most to lose in this economic downturn and therefore are the most at risk from medical bankruptcy. They have the most to lose if President Obama and Congress do not finally fix the healthcare mess, but some, as Hacker identified in 2007, may object to any major change to the status quo for fear of losing what little they have under the current system.

Returning to Canada, I must admit that I still find aspects of the path dependency explanation more compelling than Boychuk’s argument concerning territorial integrity. In the second half of the 1950s, the Duplessis government in Quebec was opposed to government involvement in health care, so it hardly seems logical that the St. Laurent and Diefenbaker governments would have been attempting to steal a march by establishing a connection with Quebec residents through universal hospitalization. The argument holds a little more water in the 1960s during the Quiet Revolution in Quebec, but even here it seems to me that Boychuk has not made the case. In fact, it seems that successive nationalist governments in Quebec were only too willing to accept federal principles in return for tax room and cash for universal medical care.

It is possible to reject Boychuk’s argument yet accept his conclusion that the policy has become linked with national identity because health care has become one of the key differences between the two countries. This may be for a variety of reasons, including the very simple fact that in terms of ideology, Canada continues to be influenced by a set of social democratic values that are very much in the minority south of the border, although it remains to be seen whether Obama’s election marks a move toward more liberal communitarian values. Still, a more collectivist approach to health care in the U.S. seems to fly in the face of the more highly individualistic ethos that underpins both major political parties as well as civil society. On the other hand, the American emphasis on individual rights combined with the legacy of the civil rights movement may lead to health care being declared a fundamental right by the courts. This would strengthen the hand of those political leaders who feel that it is time, finally, for all Americans to have universal access to essential health care. Race once prevented this from occurring, and now, the intersection of race and rights may allow it to happen. As Roosevelt demonstrated during the Great Depression, a crisis can actually provide the opportunity for a new policy direction, if not a new social contract.

Greg Marchildon is Ontario Research Chair in Health Policy and System Design at the Dalla Lana School of Public Health and the Munk School of Global Affairs and Public Policy at the University of Toronto. He is also the Founding Director of the North American Observatory on Health Systems and Policies.