Crawl Across the Ocean

Saturday, March 18, 2006

Health Care Summary

First off, a few links I forgot to include in my list of health care reading:

This series by Ezra Klein which looks at 5 different national health care systems (France, the U.K., Canada, Germany and Japan) is well worth reading.

This presentation has some good slides comparing how different national health systems work

And finally, this pair of posts from Jonathan at No More Shall I Roam looks at why the health care market fails, explaining why any country that can afford to has instituted some sort of government run / managed / regulated health care program.

Looking back at my series of posts on health care, I thought it might be worth clarifying my position on allowing private insurance in the Canadian health care system:

My first point is that there are a number of arguments people use in favour which I think are bogus, including:

  • It is inevitable - Not really an argument, so much as an attempt to avoid having to make an argument

  • The current system is unsustainable - This claim is normally supported by some misleading, irrelevant figures such as the percentage of provincial spending which goes towards health care, but is not supported if you look at our historical spending compared to our ability to pay (GDP).

  • The pragmatic-selfishness argument: We could have better health by spending more on health but people aren't willing to pay higher taxes - but they are willing to spend money directly on themselves. - Given the reductions in taxes over the last decade or so, especially for the wealthier members of society who are affected, I am unconvinced that we are incapable of paying higher taxes (i.e. the same taxes we paid a few years ago) if that is what it takes to make the health system work

  • It will be more efficient because the private sector is more efficient than the public sector. - Any study I've ever seen suggests the opposite, that private systems are less efficient (more paperwork, higher salaries, etc.)

That is not to say there aren't any valid reasons to do it, although so far, I can only see one (if you have more, let me know):

  • The personal freedom argument (as made by Andrew on an earlier post). The default position in our society (which I fully support) is that people are allowed to spend their money as they see fit - provided the negative consequences of this spending are not too severe. Where I take issue with this argument is when people leave off the second part, and try to claim that freedom to spend money as you wish trumps all other values in our society.

With that in mind, it is worth considering the potential drawbacks to allowing a parallel system of privately insured health care to flourish in Canada:
  • Shortage of medical personnel means that a parallel private system just increases wait times for those in the public system

  • Private insurers provide inferior coverage (per dollar spent) due to increased costs for administration, advertising, salaries or simply due to a focus on profits over patient health, leading to inefficient use of society's resources and poorer health outcomes than could have been achieved by spending the same amount of money overall, but not allowing private insurance.

  • With wealthy, influential people no longer dependent on the public system, political support for the system declines and health outcomes for those dependent on the public system decline

  • Inefficient use of insurance by people due to irrational decision making creates waste (hat tip to Laura for bringing this up)

  • Increased disconnect between the population and the politicians who govern us. A public health system being controlled by people who use private health care is not a great idea

  • Loss of equality in society, and a resulting drive by people to make enough money to be able to afford private health insurance, at the expense of less financially rewarding work such as volunteering.

  • Lack of common standards between provinces creates imbalances in the national system (such as doctors in certain fields all moving to one province).

Is people's personal freedom to spend money however they like important enough to trump all these potential drawbacks? Can these drawbacks be mitigated in some way, so that we are not faced with this tradeoff?

Personally, I'm not convinced.


  • I'll post a reply to your list of concerns when I get a chance. Thanks for laying them all out like that.

    By Blogger Andrew, at 6:20 AM  

  • I don't quite understand that last point of yours: "Lack of common standards between provinces creates imbalances in the national system (such as doctors in certain fields all moving to one province)."

    There is no "national system" - not in the true sense - since health is provincial and what you described - docs moving to one province already happens. The poorer provinces such as Newfoundland simply can't compete wage-wise with Alberta, Ontario, etc. Nationalising healthcare (making it a federal rather than provincial responsibility) might overcome this, but as a reason justifying why allowing private healthcare is bad, for me it doesn't work - it's already an issue without any (real) private healthcare.

    By Anonymous Anonymous, at 10:43 AM  

  • Jo - I should have been more clear, it's true that docs already move from one province to another, but as long as the vast majority of doctors are in the public system, the salary differences between provinces will be kept (relatively) small.

    But if one province develops a private system where doctors are making double or triple or quadruple what they can in the public system, then this will be a much bigger draw for doctors from across the country.

    Perversely, this could lead to reduced wait times in the privatized province and increased wait times in their neigbours who still have all public systems. People will then take that as evidence that privatizing works, when it's really evidence of the opposite.

    By Blogger Declan, at 11:37 AM  

  • I like how this is getting to be a hot topic again! You must have encountered the debate over at Malcolm Gladwell's site by now - lots of good stuff there, too.

    My only real addition is that a big reason why many doctors are going south (then mostly back again) is the expense of education. If you're starting your practice $100,000 in debt, you're going to want to get out of debt as quickly as possible, which is where a "highest bidder" system seems to work for doctors.

    On the other hand, the doctors protested in Saskatchewan only until they found out that they were getting paid EVERY TIME they sent a bill to the government, and there's no private clinic in the world that has that rate of collection.

    By Blogger Thursday, at 1:27 PM  

  • Hello Declan

    About unsustainability:

    One per cent of GDP more per decade may not sound so bad, but it adds up. And it's a large percentage of what heath care cost before. What if the rate of increase rises proportionately to total health care spending?

    And this is a rise that has taken place steadily amid a clamour about thousands and millions of people without family doctors, people dying on stretchers in corridors, waiting lists, nurse shortages and general constant "cutbacks" in health care.

    And the baby boomers are coming -how will a stressed out system cope with all those people hitting their hospital-prone years? Of course there's the counter-argument that people just use a lot of health care in the last two years before they die, whenever that is, and so longer old ages may actually stretch out the costs -and the aggravation argument that while the people who are old now just accept being in pain, lame, disabled & c if it's neccessary for the system to save costs, baby boomers, in their captious way, will insist on being cured or at least helped.

    Researchers into sleep disorders, clinical ecology and I imagine other areas report vast unmet needs and suffering calling out for relief.

    Remember also that several provinces have been, and Ontario and P.E.I. still are, running deficits in years of economic upswing. Among other things this will reduce the amount of health care they can in future provide from a given level of taxation.

    Anyway I don't think that there's much doubt from any of the projections that the growth of U.S. health care costs is unsustainable in the long run. And the United States is not only where the attention of many commentators is fixed, but tends to a be a forerunner of economic and other trends (as California goes today....).

    Furthermore, the provinces also have education on their hands, doing the same thing, aggravated by the mass influx of mature students, and teachers complaining that all the money goes to health care.

    About why private health would be expected to help:

    I imagine the hope is that health providers who stand to make a profit will learn to provide better and cheaper health care, as computers get faster and cheaper every year while government-funded trials get longer and more expensive each year without visible gain. (I would agree that the U.S. health care experience and other further analogies make this unlikely to actually happen, but the above are probably the sort of examples privatization advocates are thinking of.)

    I must admit that it is odd that Alberta, so flushed with oil revenues that they distributed cash last year, had an announcement that they were going to pay off their provincial debt and may actually have done it from the implications in the newspapers, and have actually started paying a little into the Alberta Heritage Fund again, should be a leading province in measures forced by economic incapacity. Of course as they're arguing to get out of paying equalization, it's a prosperity derived from nonrenewable resources and thus not sustainable or real in the long term.

    Best Wishes,

    By Anonymous Anonymous, at 2:43 PM  

  • Thanks for the comment Alan,

    It's true that if health care costs are growing in proportion to the costs themselves (as a % of GDP) then they could get higher faster, but I don't know why that would be the case.

    It's also true that 1% of GDP per decade adds up, but it still won't catch us up with the Americans for decades. So it's something to keep an eye on, I definitely agree that cost containment and how to ration health care spendng will continue to be an issue, I just don't think it demonstrably unsustainable at this time.

    The fact that Alberta is a leader in privatization sugests that it is ideologically driven, rather than cost-push driven, at least in my opinion.

    By Blogger Declan, at 1:07 AM  

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