Canadian health care—big bills, terrible system
Canadians are getting a raw deal when it comes to health care. Compared to other countries that share the noble goal of access to care regardless of ability to pay, we have significantly fewer physicians, acute care beds, and important medical technologies such as MRIs and CT scanners.
And of course, our long wait times—the defining feature of Canadian health care—represent the most spectacular failure of our system.
None of this is due to a lack of funding. In fact, the Canadian system is world class in one aspect—the amount of money Canadians spend on it.
And yet, our health-care system lacks many of the things that a high level of spending should provide. Why? Because of restrictive provincial policies, which contrast sharply with countries that do universal health care better than we do.
In a recent Fraser Institute study, we looked at Australia, France, Germany, the Netherlands, New Zealand, Sweden, Switzerland and the United Kingdom. All these countries maintain universal access health-care systems that cost about the same as—or less than—ours (per capita, or as a share of the economy). And all these countries generally outperform Canada in access to health care, health-care outcomes, or both.
Crucially, none of these countries—not one—follows the Canadian model for health care.
For starters, they all rely to a far greater extent on the private sector for the delivery of hospital and surgical care. For example, private for-profit hospitals comprise 39 per cent of hospitals in Australia and 43 per cent in Germany. In Canada they account for just one per cent—the private sector is essentially shut-out of delivering medically necessary services in this country.
Canada is also alone in forbidding private financing for medically necessary services. In all of these other countries, patients may seek care on their own terms with their own resources, or choose to receive care from the universal health-care system. This option is found in every developed country with universal health care, save one. Only in Canada is the government system the only option for patients.
Cost-sharing by patients, in the form of user fees or deductibles (with reasonable exemptions for those with lower incomes and the very ill), are also commonly found in higher-performing health-care systems. Only in Canada and the U.K. do patients not share directly in the costs of treatment. The concept is simple: people use their own money more wisely compared to when they use someone else’s, and cost-sharing encourages people to make more informed decisions about when and where to use the health-care system.
Finally, Canada almost exclusively relies on prospective global budgets (a big bag of cash, annually) to fund hospitals. This method encourages hospitals to view patients as a “cost” eating into their pre-determined budgets. Other countries are increasingly moving towards payment based on some measure of activity (by procedure or on a per-case basis), which encourages hospitals to treat more patients. According to research and experience, activity-based payment results in more efficient hospital care and a higher volume of services for the dollar.
Clearly, Canada’s unique approach to health care is not working for Canadians. It’s not a question of whether Canada should have universal health care, but rather how Canada can have the best universal system in the world. Other countries with universal health care have found ways to improve their systems for the benefit of patients and taxpayers. Canadian policymakers should learn from their progress.