O CANADA - DO WE EXPECT TOO MUCH FROM ITS HEALTH SYSTEM

Canada's health program has been proposed as a solution to the most serious ills afflicting America's health care system-the limited access to care afforded people without insurance and its high cost. As proposed (by Rep. Marty Russo, DIL), Canada's model would replace the existing combination of private and public health insurance with a single public program that would protect all citizens from the financial consequences of illness. Advocates of Canada's single-payer model argue that it would be less expensive to operate here than the current U.S. system because of its simplified administration and planned growth in medical spending. Previous estimates of such savings ranged from $3 billion to $241 billion in 1991. However, a new analysis by John Sheils, Gray Young, and Robert Rubin also estimates the consequences of the greater demand that would result from a universal insurance scheme that financed comprehensive care, virtually free at the point of service. These costs, they project, would more than offset the estimated administrative savings. The authors, all of whom are affiliated with the Washington-based consulting firm Lewin/ICF, prepared this paper in response to arguments that the reduced administrative costs of such an approach would yield large savings without new costs of such an approach would yield large savings without new costs, and thus should increase its attractiveness as a solution. Sheils, who holds a master's degree in public policy from Carnegie-Mellon University, is widely respected for his analytic skills. He has been retained by interests representing different philosophic perspectives to provide cost estimates of a variety of health care reform proposals, including those put forward by the Heritage Foundation, the Pepper Commission, the Advisory Council on Social Security, and Sen. Bob Kerry (D-NE). Young holds a doctorate in business management and a law degree. Rubin, a physician, served as assistant health and human services secretary for planning and evaluation during the Reagan administration. He is president of Lewin/ICF.