User fees can improve efficiency of Canada’s health-care system
Waiting lists for health-care services remain a long-standing concern of Canadians. Indeed, waiting is likely the single most prevalent complaint Canadians have about their health-care system.
One initiative that would help reduce wait times in Canada is the imposition of some sort of usage-related charge, either in the form of a co-payment and/or a deductible. Currently, the absence of any charge for publicly insured health-care services at the point of consumption is mandated by the Canada Health Act along with a prohibition on extra-billing by health-care providers.
A major argument against the imposition of some sort of usage-based cost-sharing arrangement is that it will discourage the consumption of “necessary” medical services with the potential consequences of much larger future costs being imposed on the insurance system as those waiting for treatment become sicker or more debilitated. The available evidence from other countries with universal access to health care, but which impose cost-sharing on patients, unlike Canada, generally suggests that cost-sharing at the point of consumption does lead to a reduced use of health-care services at the margin. However, as noted in a recent Fraser Institute study, the evidence does not consistently establish that cost-sharing results in adverse long-term health outcomes.
Part of the explanation of the finding that cost-sharing does not have adverse health-care outcomes is that particularly “vulnerable” members of the population, including low-income families and individuals with chronic illnesses, are either exempt from cost-sharing or face very limited out-of-pocket charges.
Another part of the explanation is that cost-sharing improves the efficiency of the health-care system. Specifically, it reduces the demand for relatively minor medical complaints, thereby freeing up resources in the system that can be used to treat patients with more serious health-care issues, including those on waiting lists for consultations or procedures. Reducing waiting lists, in turn, has potentially large economic benefits. In particular, it enables more patients to continue to participate in the work force or to get back to work sooner.
Any debate in Canada about imposing user charges should be informed by the experiences of countries such as Australia, France, Germany, Italy, Japan, the Netherlands, Sweden and Switzerland, all of which have some type of direct cost-sharing scheme. These countries have universal access to health care. They are also countries that typically have shorter waiting lists than Canada.
Canadians who are concerned that cost-sharing is a step towards a “U.S.-style” health-care system can be reassured that cost-sharing is clearly consistent with universal access to health care. It’s also consistent with more timely medical care for Canadians.
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