More Money is not the Answer for Canada's Health Care Woes

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posted January 29, 2003

As the provinces and the Prime Minister continue to battle over the future of medicare, they all agree on one thing: a massive infusion of new money into health care in the next federal budget. This expansion, rumoured to be in the billions, is supposed to solve the woes of health care in Canada. Apparently, all that is wrong with the current health care system is a few billion dollars away from resolution.

What seems to be ignored is the fact that age adjusted health spending in Canada is already the highest among industrialized countries that promise universal access to health care. Yes, that’s right, Canada spends more on health care than France, or Germany, or Switzerland, or … well, you name it. Increasing the amount of money spent on health care in Canada would only result in Canada improving from its first place ranking to a first place ranking with a gold star for managing to outspend other countries by an even larger margin. Clearly, when compared to other OECD countries, the system is not cash starved.

What we do need is more of everything that our high level of spending should allow us to purchase. Despite Canada’s impressive spending performance, a recent Fraser Institute study, How Good is Canadian Health Care?, shows that Canadians get less access to high tech machines and doctors, wait longer, and end up with only middle-of-the pack performance in health outcomes. If we already spend more money than any other country that promises universal access to care and yet enjoy only middling health outcomes and limited access to machines and doctors, how can more money be the solution?

The real solution to the health care woes in Canada is to follow the lead of other countries with far more successful outcomes. Countries that spend less on health care while they outperform Canada on health outcomes and provide better access to technology and doctors have not achieved this through magic. Rather, these countries have achieved this impressive performance through employing a more effective set of health care policies.

The countries that consistently outperform Canada on measures of access and health outcomes, such as Sweden, France, and Japan, all have universal access health care systems that incorporate user fees and private health care provision. Further, none have abandoned caring for all regardless of ability to pay -- as opponents of private care and user fees in Canada often claim would be the result of such policies. None of these countries has resorted to forbidding choice and eliminating responsibility for patients (as is the practice in Canada) and the average citizen is far better off as a result.

Where patients pay a fee for the health services they receive, they are encouraged to make a more informed decision about how they use health services, because their care is not ‘free’. Private clinics and hospitals that are allowed to earn profits for treating patients are motivated to respond to patients’ needs. As a result, patients get better access to physicians and high-tech machinery, and the health systems end up being far more effective with their money.

The problem in Canada is not the amount of money spent on health care. The problems stem from the health care system itself: it is a massive, centrally controlled government bureaucracy. And in the true tradition of government bureaucracies, it sucks up increased funding with almost no change in the functioning of the system or the outcomes from that system. More money and a bigger bureaucracy won’t solve the problem.

The woes of Canadian health care will not be resolved with $5 billion, $15 billion, or even $25 billion. What Canadians need is a health care system that performs at a level that is reflective of the money already being spent. The solutions lie in lessons from other far more successful countries in Europe and Asia; solutions like user fees and private provision of public health care. The Canadian health care system has the potential to serve patients and meet the demand for health care, but realizing that potential requires change, not money.

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