Co-pay, Canadian style

One of the real nightmares of the US health care system is the paperwork involved in processing small transactions. A solo practitioner friend gave me an example of an office visit where he is paid $43 by a private insurance company. After collecting the $25 co-pay from the patient he’s left with trying to get the remaining $18 from the insurer. It’s not a simple matter to collect from the insurer, so he employs a biller. If the patient doesn’t pay the $25 at the time of service, there’s effort and expense involved in billing and collecting for that. All of this is not exactly a great use of time and resources. One of the advantages of a single payer system –like Canada’s– is that it greatly reduces these hassles and frictions.

I’m in Montreal today, where the Gazette leads off with a story (Feds mum on fee to visit MD) on how Quebec may begin to impose a $25 co-pay for each office visit or other service. Payment at the “point of contact” is forbidden by the Canada Health Act, which would seem to rule out co-pay’s. However, the plan is for the government itself to collect the fee as part of the personal income tax filing process. Twenty visits to the doctor? That will be an extra $500. It’s yet to be determined whether the federal government will allow this circumvention of the intent of the Health Act.

If enacted as described, this plan may have some major consequences. It’s highly regressive: it doesn’t take income into account and will fall most heavily on those who go to physicians frequently, i.e., sicker people.

The impact on the overall financial health of the health care system is a little less clear. On the plus side it will increase funding for the system (assuming it doesn’t simply replace other funds that would have been allocated). It is also likely to reduce spending by reducing utilization on office visits and other services. The extent of this reduction depends on how people react to paying the $25 –since the cost is deferred until tax time it may not be viewed the same as a point of service charge. It also depends on how patients perceive the co-pay in relation to other barriers to physician visits, such as waiting time for appointments, fear, and dislike of the experience. It’s also not clear the extent to which instituting the fee will suppress visits that are needed –ending up in more expensive emergency room visits or other pricey events further down the road.

My guess is that to get such a law enacted a bunch of adjustments will need to be made in the name of equity, e.g., waived payments for people with chronic conditions, pregnant women, preventive visits. If Quebec isn’t careful they’ll end up creating an administrative burden for tracking all this that will come to resemble what we have in the US. That would not be a good thing.

April 1, 2010

One thought on “Co-pay, Canadian style”

  1. I think if we ever have Single Payer it MUST have co-pays. Paid at the spot. And if people want given back to the poor when doing taxes. Not really for extra income, but to lower over utilization.

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