LookGoodOptions: Misinformation fuels opposition to health-care reform in Canada

The reality is that for-profit provision of health-care services is commonplace among industrialized countries with universal health care

By Bacchus Barua
and Jason Clemens
The Fraser Institute

VANCOUVER, B.C. / Troy Media/ - For almost two decades, fear of a U.S.-style system has fuelled opposition to genuine reform of Canadian health care. Many of those same opposition voices are now protesting the constitutional challenge to Canada's health regulations by the former head of the Canadian Medical Association, Dr. Brian Day.

In reality, our health-care system is expensive, delivers poor-to-modest results, and fails to achieve many of its laudable aspirations. The solution to fixing and maintaining our universal health-care system is to recognize the successful approaches used in other universal-health care countries, such as the use of for-profit companies to deliver health-care services.

The Dr. Day case, which will likely end up in the Supreme Court of Canada, focuses on two aspects of British Columbia's health regulations: (1) prohibition against doctors working in both the public and private health-care systems, and (2) the disallowance of purchasing private insurance for core medical services.

Legal arguments aside, the context of the case is worth noting. Canada is one of the highest spenders, on both a per person basis and as a share of the economy, on health care among industrialized countries that provide universal health coverage. Yet Canadians endure some of the longest wait times for medically necessary procedures. For example, in 2015 Canadians waited 18.3 weeks between referral by a GP and actual treatment. Canadian patients also suffer from comparatively poor access to doctors and medical technologies such as MRIs.

But if the voices of opposition at the Dr. Day trial are to be believed, there's an incompatibility between medical care delivered by private, for-profit companies and universal health care.

The reality, however, doesn't match this rhetoric. A recent study looked at for-profit insurers and hospitals in six industrialized countries (Australia, France, Germany, the Netherlands, Sweden and Switzerland) that all maintain universal health care.

For-profit hospitals are found in all six countries. In Germany, France and Switzerland, for instance, universally accessible hospital care is delivered by both non-profit and for-profit hospitals. In Australia and Sweden, governments contract with for-profit hospitals for universally accessible services.

For-profit health insurers are also found in all six countries. Notably, for-profit companies compete to offer the primary health-care insurance in the Netherlands, offer a private substitute for public health-care insurance in Germany, and offer a private option alongside the public system for patients in Australia and Sweden.

Remember, all six of these countries maintain universal health care.

But Canadians need not look beyond our own borders to see the benefits of private, for-profit provision of health services. Saskatchewan's Surgical Initiative (SSI) was introduced in 2010 with the express goal of reducing what were the country's longest wait times for medical treatment.

Under the SSI, select day surgeries were contracted out to private, for-profit clinics. A recent study by the former NDP finance minister of Saskatchewan, Prof. Janice MacKinnon, provided evidence that on average, private clinics delivered procedures at 26 per cent lower costs than public-sector equivalents. For example, in 2012, Regina Surgical Centres Inc. provided cataract surgeries at $618 per procedure compared to $1,273 in public hospitals in the Regina Qu'Appelle regional health authority.

The results in Saskatchewan have been stunning. The province has gone from having some of the longest wait times, on average, for medical treatment to having the shortest. The government's own wait time data indicates a decline of 75 per cent in the number of patients waiting three months or longer for surgery.

The reality is that for-profit provision of health-care services is commonplace among industrialized countries with universal health care. Canada is actually the oddity in limiting - and in some cases, actually prohibiting - such activities. Hopefully the Dr. Day case, if nothing else, will bring these important reform lessons to light for Canadians.

Bacchus Barua and Jason Clemens are economists at the Fraser Institute.