A Step in the Right Direction

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Appeared in the Halifax Chronicle Herald
New Brunswick’s Health Minister should be applauded for his openness to a greater role for private competition in health care. Specifically, Health Minister Michael Murphy said in a speech this past Thursday that it was time to think about a greater role for the private sector in the delivery of publicly funded services and that he is open to considering private financing of medically necessary care. For far too long, Canada has remained out of step with the rest of the industrialized world in its steadfast opposition to tapping into the competitive market for solutions to our health care woes, to the detriment of both patients and taxpayers alike.

Consider for a moment what Canadians have got for this steadfast commitment to the status quo. Among the 28 developed nations that have universal health insurance programs, Canada ranks second in age-adjusted health care spending as a percentage of GDP. Despite that high level of expenditure, Canada ranks poorly in terms of access to technology and physicians, while Canadian patients wait longer than patients in most other countries and enjoy satisfactory, but not exemplary, outcomes from care.

Perhaps a closer look at why other countries are getting more for less is in order.

Take Sweden, often thought of as a Mecca of socialist thought. The health care program in that country has long been taking advantage of competitive markets. In the mid-1990s, the Swedes began to rely on private management and operation of health care facilities. In fact, one of the largest hospitals in Stockholm, St. Goran’s, is privately operated by a for-profit company and competes with public hospitals for public dollars. In addition, the Swedes encourage competition by paying hospitals on the basis of services actually provided. The effect is that hospitals actually have to worry about attracting patients and pay attention to what patients want and need. The end result is shorter wait times and more efficient service delivery.

The Spaniard’s are also catching on to the benefits of private competition. A core part of their very successful wait time reduction program (which reduced average waits by roughly 68 per cent in the late 1990s) was publicly funded contracts with private providers.

More broadly, among the world’s 28 most developed nations that have universal health insurance coverage (including Canada), the majority allow private providers to deliver publicly funded services. More importantly, all of the nations that outperform Canada across several measures of mortality related to health system performance (Australia, Sweden, and Japan) employ private competitive providers in the delivery of publicly funded health care. This is also true in every one of those developed nations that have no waiting lists for medically necessary care (Austria, Belgium, France, Germany, Japan, Luxembourg, and Switzerland).

But most importantly, every single one of the developed world’s top performing universal health insurance systems allow private competitive providers to deliver publicly funded health care services. The reasoning is simple: both economic research and international evidence have shown that the competitive private provision of services is more cost-efficient and produces a higher quality of care than the monopolistic public provision of services that exists in Canada.

With respect to private financing of health care services, it is interesting to note that all 27 of the other developed nations that maintain universal access health insurance programs (including the nine top performers) have a privately funded parallel health care sector that patients can access when the public program is either unwilling or unable to meet their needs. Again the reasoning behind introducing such a policy is simple: a public monopoly in health insurance means a more expensive and lower standard of care than would be available otherwise.

No single solution to all of Canada’s health care woes exists. However, in the interests of all Canadians, we ought to be looking at what others are doing and adopt those policies that work best. Allowing private hospitals to compete for the delivery of publicly funded care and allowing patients to seek care on their own terms with their own resources when they desire to do so are proven policies that would improve the state of Medicare for all Canadians.

Health Minister Murphy’s willingness to sit down and take an honest look at those policies that have worked so well elsewhere in the developed world bodes well for both patients and taxpayers in New Brunswick. Hopefully, his willingness to move beyond the politics and rhetoric that have plagued discussions of health care reform for years will serve as a beacon to other provinces as well.

While there are other reforms necessary to emulate the success of the developed world’s most effective and efficient universal access health insurance programs, a greater role for the private sector in Medicare is unquestionably a step forward for Canada.

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