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How Montana's medicare could soon look a lot like Saskatchewan's

Montana and Saskatchewan are remarkably alike: The midwestern state and province have similar populations (about one million each), demographics (notably one in 10 residents who are aboriginal) and economies (farming, mining, oil).

But there is one area, aside from gun laws, where the Prairie neighbours are distinctly different: health care.

Montanans will spend almost $8-billion (U.S.) for health care this year, while Saskatchewanians will spend $4.5-billion. That is a whopping difference. But spending is just part of the story.

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In Montana, more than 280,000 people under the age of 65 had no health insurance last year, according to Families USA. Another 55,000 insured residents still faced "catastrophic" out-of-pocket health expenses – meaning more than $14,000. Private health insurance does not come cheap: The average premium for a family was $13,770 a year, double what it was five years earlier, according to the Kaiser Foundation.

In Saskatchewan, health care is universal and "free" – meaning everyone has health insurance regardless of income, and premiums are paid in the form of taxes. Even when you consider that Saskatchewanians pay relatively high taxes, when all is said and done, they still pay about half as much for health care as their southern neighbours.

The contrast has Montana Governor Brian Schweitzer coveting his neighbour's medicare.

The Democrat governor is a fierce critic of the Affordable Care Act (known more colloquially as ObamaCare). He told The Missoulian newspaper that the law – which will cap of out-of-pocket health spending – is a "pack of crap" that doesn't go nearly far enough and is unlikely to be implemented by the 2014 target date, if ever.

What Gov. Schweitzer wants instead is the ability to opt out of ObamaCare and introduce what he calls SaskCare (what Canadians call medicare).

The terminology can be confusing: In Canada, medicare is the informal name for universal, publicly funded insurance; in the U.S., Medicare is the name for the federal program that provides health benefits to those over the age of 65.

By SaskCare, what the governor means is a publicly administered insurance program available to everyone regardless of age or income – a universal, single-payer system.

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When the Canadian and American health systems are compared, it is often stated erroneously that Canada has a "public" system and the U.S. a "private" one. In fact, both countries have mixed models.

In Canada, 70 per cent of health expenses are paid with public funds and 30 per cent with private funds (meaning private insurance or out-of-pocket); in the U.S., public funding pays for 44 per cent of health expenses and private spending is 56 per cent. ObamaCare will boost the percentage of public spending to over half.

The big difference between the two countries – or in this case, between Montana and Saskatchewan – is administrative.

In Canada, all physicians and hospitals have a single insurer – the state – and citizens have a single insurance plan for medically necessary care. In the U.S. there are hundreds of insurers to choose from, and as many for health practitioners to deal with.

The practical impact of those different structures was well illustrated in a recent article in the journal Health Affairs. The study noted that per capita health spending in Canada is $3,895 and in the U.S. it is $7,290; more than $1,000 per capita of that spending is for paperwork.

(The balance is explained by the U.S. love for overtreatment. Consider for example, that there are six magnetic resonance imaging machines in the province of Saskatchewan, population one million; there are five MRIs in Helena, Mont., population 50,000.)

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The research, led by Dante Morra of the University of Toronto, showed that interactions with insurance providers – public and private – cost each physician at least $82,975 annually in the U.S., compared with $22,205 in Canada.

In the U.S., nursing staff spend an average of 20.6 hours a week per doctor dealing with billing/payments; in Canada it's 2.5 hours; similarly, clerical staff spend 53.1 hours weekly dealing with insurance providers, compared to 15.9 hours in Canada.

That is just one example, but when you multiply it by the 950,000 doctors in the U.S., the costs of a multiple-payer system add up quickly. (Canada, by the way, has 75,000 physicians.)

Yet, in the U.S., choice is a sacred principle, so it is enshrined in law.

What Gov. Schweitzer is asking for is a waiver from Health and Human Services (the U.S. equivalent of Canada's federal Health Department) so that he can offer a public health insurance plan to all working Montanans – those who depend on private insurance.

The governor also intends to ask for a similar waiver from Medicaid (low-income citizens), Medicare (seniors), Veterans Administration (armed forces personnel) and Indian Health Service (aboriginal people).

He would take the money from all those programs and put them into the pool, creating a single public insurance plan available to all citizens of the state.

In doing so, Gov. Schweitzer would go beyond SaskCare, creating a more universal and cohesive system than Saskatchewan. (And he would still allow citizens to opt out and buy private insurance.)

The governor, though, is a realist. He concedes that his plan has very little chance of getting a waiver from any, let alone all, of those federal agencies; just as he was unsuccessful, a decade ago, in getting the U.S. to regulate drug prices, instead loading Montana seniors onto buses and taking them to Saskatchewan to purchase their prescription drugs at a much lower cost.

But what Gov. Schweitzer has done is help spark a conversation about the best way to provide comprehensive health insurance to the most people for the lowest cost and reminded us that neither Montana, Saskatchewan, or anyone else for that matter, has got the formula quite right yet.

Editor's note: There are six magnetic resonance imaging machines in Saskatchewan. Incorrect information appeared in an earlier version of this story. This version has been updated.

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