The Wrong Answer to Capacity Problems

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posted May 9, 2008

In February, Calgary Health Region CEO Jack Davis requested $25-$30 million in provincial funding for a plan to address long wait times in Calgary’s emergency departments. This comes after a serious crunch on the Family Day long weekend had some patients waiting up to 24 hours before they were admitted to a hospital.

Additionally, a recent report points out how a flight that was forced to make an emergency landing in Calgary last month could have pushed the CHR into chaos if more than the 10 people had required hospital care, since the CHR just didn’t have the capacity to handle such an emergency. As it was, the injured were spread across three hospitals to avoid overwhelming any one facility.

While Mr. Davis’s request is surely well-intentioned and while greater capacity in Calgary’s health care system would be a good thing, the idea that more spending is required to achieve it is simply wrong.

Consider that Canada’s health care system, after accounting for the age profile of the population, is the developed world’s third most expensive universal access health care program. Among the provinces, Alberta’s publicly funded health care program is (on an age- and sex-adjusted basis) the most expensive in Canada.

While there is no lack of money in Alberta’s universal access health insurance system, there is a serious lack of access to health care.

Compared to other nations’ universal health insurance programs, Canada’s delivers relatively poor access to physicians, technology, and care generally. Access to care in Alberta is, generally, not markedly better than the Canadian average.

With respect to emergency care specifically, a recent survey published in the journal Health Affairs found waits in Canada can be a serious test of endurance for those in need of care. The survey found only 39% of Canadian respondents waited less than one hour to be seen in the ER compared to 47% of Australians, 50% of Britons, 55% of New Zealanders, and 66% of Germans. More troubling was the fact that 24% of Canadians reported ER waits of four hours or more compared to just 17% of Australians, 14% of Britons, 12% of New Zealanders, and 4% of Germans. Again, there is little reason to suspect that Alberta’s performance is markedly better than Canada’s generally.

In markets that allow competition in the provision of health care services and permit patients to pay to go elsewhere if they wish, wait times shrink considerably. Competition shortens queues; it improves access for everyone, even those unable to pay. It also allows the health care system to deliver a higher quality and quantity of care for the same, or less, money.

More specifically, competition among providers of publicly funded services would mean hospitals (both public and private) working to attract patients to their facilities through shorter queues and more comfortable environments. Their reward would be increased funding, as money would be following patients to the facility of their choosing. That’s the opposite of what happens in our monopolistic and uncompetitive health sector today, where hospitals have little incentive to offer shorter queues to patients partly because of the drain this would have on their annual budget.

Overall, total funding need not rise and might even fall as a result of the incentives to provide care more efficiently and effectively that exist in a competitive environment.

The experiences of other nations proves that competition in delivering publicly funded care and financing health care would improve the state of affairs for Calgarians and indeed, Canadians.

No one wants to wait inordinately long in pain and mental anguish for care. Delays impose significant hidden costs on patients, their families and loved ones. Even worse, the Health Minister gives us little choice in the wait times we endure because the province strives to abolish options that would allow us to pay for faster service elsewhere.

Equally troubling is the fact that Calgary’s health care system is ill equipped to deal with a surge of emergencies as a result of catastrophe.

The usual answer to these problems—the one proposed by Jack Davis—is to throw money at the system. This is often accompanied by proclamations that sensible approaches pursued in other developed nations—where private competition has resulted in significant improvements or prevented many of these problems—would only make things worse. Such statements ignore reality: Alberta’s health care system is already flush with money but delivers much less than what these other more competitive systems with private sector providers offer to their ill and injured.

Calgarians would be far better served by serious and sensible reform of the system than by another grab at their wallets from the Calgary Health Region.

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