the canadian health systemby lee soderstrom

The Canadian Health System by Lee SoderstromReview by: Robert G. EvansThe Canadian Journal of Economics / Revue canadienne d'Economique, Vol. 12, No. 1 (Feb.,1979), pp. 126-129Published by: Wiley on behalf of the Canadian Economics AssociationStable URL: http://www.jstor.org/stable/134587 .

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another post-mortem on the Roskill Commission's analysis of the Third London Airport, suggests that more attention should be paid to the question of how one should go about reaching a decision rather than focusing too strongly on the particular decision itself. This is followed by a discussion of a Channel Study (R. Rees) where the probabilistic nature of CBA iS stressed even to the extent of suggesting that projects be presented to the politicians as the gam- bles they so often are. M. Blaug then demonstrates that the more limited cost-effectiveness analysis can avoid evaluation controversies even in such treacherous terrain as the arts if the spending body has announced reasonably precise objectives. In marked contrast, the next paper, by J.W. Hurst, em- phasizes, perhaps to some extent inadvertently, the difficulty of applying CBA

in the Health and Social Services area when the informational requirements for a grand optimization are not met. A similar problem resurfaces in the more constrained application of CBA to crime prevention (R.W. Anderson) where a rather optimistic note would seem to be struck on the possibility of resolving the dichotomy between the warm-blooded costs and the more pecuniary aspects of crime. In a final paper, G.C. Corti presents a partial summation of the other contributions and proceeds to lay down some relatively common- sense strictures on the use of CBA for large projects, such as the preparation of rough initial forecasts so that all involved can see the nature of the work and the type of assumptions involved, the emphasizing of outcome ranges and prediction intervals for the variables involved, and finally the explicit consideration of questions of flexibility and adaptability in both the subject under consideration and the decision system itself.

In total, the book does offer some rather fruitful insights into the application of CBA, although it does not in any sense represent a how-to-do-it-manual. From a reader's viewpoint the main deficiency may be the lack of any substantial direct critical comment on the abuses that can be associated with the misapplication of CBA, and while the relatively subdued tone of most of the contributions undoubtedly reflects an appreciation of these considerations, perhaps the inclusion of the occasional piece of devil's advocacy, as might have arisen in the discussions, would have been welcome.

GEOFFREY PHILPOTTS, University of Calgary

The Canadian Health System by Lee Soderstrom. London: Croom Helm, 1978. Pp. 271. Index. $9.00 paper

Canadians spend as much time writing about health care, John Evans has said, as some other countries do in delivering it. A vast number of reports, studies, and investigations have been produced in the past two decades. Conspic- uously lacking, however, have been single volumes from which an outsider or a student could get a basic but fairly complete description of how the health



Reviews of books / Comptes rendus / 127

care industry in Canada is organized and functions. Several useful short articles exist, but no 'industry studies' have been written either for economists or for a wider market. The most useful sources to date are a collection of monographs prepared for a us conference studying the Canadian system (S. Andreopoulos, ed., National Health Insurance: Can We Learn From Canada?, 1975) and Migue and Belanger, The Price of Health (1974). In attempting such a description of the Canadian health system, Soderstrom's book is addressed to a real void in the literature and is likely to be widely used.

The author's principal objective throughout is descriptive, anatomical rather than physiological. There is some discussion of current issues in the functioning of the system, particularly the issues of 'access, costs, financial incentives, and the determination of benefits' which would most naturally interest the economist. Moreover the anatomic subsystems are clearly defined from an economic perspective. But the actual behavioural or policy analysis is limited; the book is obviously intended for and would be quite accessible to anyone with no economic background at all.

The health system is divided into five subsystem components: users, resources, supplying institutions, financing and regulating institutions, and outcomes. The first three receive a separate chapter each - institutions, health manpower, and demand. Three chapters deal with health services financing, and with federal and provincial government agencies and activities in health care. Finally, outcomes are divided between chapters on the health status of Canadians and systenm costs.

Soderstrom's book contains a remarkable collection of bits and pieces of information pulled together in one place. No other source tries to assemble such a range of components, from statistical descriptions of the Canadian health system in the early 1970s through organizational charts of the federal Department of National Health and Welfare to lists of federal legislation relating to health and glossaries of insurance terms. As an anatomical study, however, it falls short both in the systematic organization of the material covered and in the range and balance of items chosen for inclusion. Much of the information in the book appears ill-digested or swept together in heaps -- often interesting in its own right but not systematically linked to a more coherent whole.

There are problems of duplication and of incomplete or inconsistent cover- age at several points. Utilization, for example, is dealt with in one very short chapter on the demand for health services. This of course is not 'demand' in the economist's sense; Soderstrom makes clear that health care utilization is heavily dependent on supplier behaviour. No comprehensive picture of utilization ever emerges, however, because the data and discussion are scattered through the 'institutions,' 'manpower,' and 'costs' chapters. A chapter on the pattern and determinants of utilization might have pulled this together, creat- ing a base from which to draw in the discussion of how utilization and costs, or utilization and supplier organization, relate to each other.



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The separation between financing and governmental agencies is also awk- ward, because of course the major activity of government is finance. Thus there is considerable overlap between these different chapters. Chapter boundaries also break down between 'manpower' and 'supplying institutions,' as the former concentrates heavily on physicians. These occupy an ambiguous position, the physician being both labour supplier and entrepre- neur controlling the physician practice/firm, so the resource/institution dis- tinction becomes blurred.

Soderstrom's taxonomy is also weak on the definition of outcomes. Users and outcomes are separated, appropriately reflecting the departure of health care from consumer sovereignty. One cannot infer benefit from willingness- to-pay/use, despite the laetrile salesmen. Classifying 'costs' as a negative system outcome and 'job creation' as a positive one, however, seems to confuse accounting or monetary costs with opportunity or resource costs and counts the latter as a benefit. At the policy level, resources made available (especially quantities and types of manpower) seem to be the primary determinants of costs. The two issues cannot be separated; it is hard to control costs and create jobs at the same time! Nor are jobs necessarily useful, if health outcomes are only weakly related (if at all) to health care levels.

Within the chapters, the balance of materials is often somewhat peculiar. Nine pages go to a (selected) listing of health occupations - numbers, job descriptions, form of licensure, and national organizations. The whole issue of licensure/certification receives two pages, with one-quarter page for the very interesting new developments in professional control being administered in Quebec by the Office des Professions. Scattered and duplicative references to licensure crop up elsewhere in the chapter.

Twenty-nine pages go to the discussion of physicians (nurses and dentists are dismissed in three each), but of this a large proportion are lists of organizations physicians may belong to or steps whereby they become qualified. Scattered references are made to physician incomes, modes of practice organization, and reimbursement; and the broader issues of manpower sub- stitution, incentives, and organizational efficiency are touched on. But this treatment is light and is not linked in any systematic way to the discussion of system costs or financing.

A more extensive use of appendices might have been helpful. Lists of federal legislation, organizational charts, glossaries of terms, which are not referenced in the text could have been assembled there for the interested reader while the text provided more detail on why one might be interested in these matters.

The behavioural and analytic content of the volume is very light; in fairness the author's explicit intent was anatomy not physiology. There are several short sections, such as the discussion of deterrent fees (which Soderstrom rejects) and hospital incentive reimbursement, where a great deal of economics lies behind the scenes. The same is true of the manpower substitu-



Reviews of books / Comptes rendus / 129

tion and hospital/nursing home discussions. The analytics of these discussions, however, are implicit or only sketched in. I believe Soderstrom's conclusions are sound and his policy recommendations reliable. But the non-specialist economist (particularly if wedded to market mechanisms) may find the arguments less than convincing. A more organized and compact treatment of the descriptive material would have permitted more explicit analysis (and more empirical evidence, which 1 think would generally support Soderstrom's conclusions) and perhaps have made the book more interesting to an economist audience. As it is, the book provides some of the basic information from which one might go on to collect data and do economic analyses of the Canadian health system, as well as a number of references, but its own economic content is limited.

The book will be useful, as its author intended, to people seeking an introduction to the Canadian system. It will probably date rapidly, as most of the statistics are point-in-time and the structural information is highly specific. It will also be useful to workers in the field as a source of particular institu- tional facts which would be very hard to assemble from widely scattered sources. For a discussion of the policy issues in Canadian health care, and the analysis and empirical information, economic or otherwise, which underlies their debate, the newcomer, like the established worker, will have to go further.

ROBERT G. EVANS, University of British Columbia



the canadian health systemby lee soderstrom

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