October 11, 2005
Getting Hot in Canada …it ain't global warming.
Not long ago I was mentoring a pre-med student from a local university. He was preparing to go through the application process to medical school. Although it has been a long time since I did that, I suspect--given the obsession with tradition and stasis of the profession--not too much has changed. We had a wide-ranging conversation about medicine. He was particularly enamored with the Canadian healthcare system.
Curious about that, I pressed him, “Why do you admire the Canadian system?”
He replied simply, “Because it is better.”
“Oh, really, in what ways is it better?” I asked.
He sat silent, not even giving the usual pre-recorded reply about equal access to care and universality.
I asked him if he had been in queue before or understood the system of rationing by queue or that universality does not necessarily imply universally good.
He did not. I found it interesting. Where did this opinion come from? Why did he have this vague perception that somehow one whole system was superior to another, based on a feeling but no information?
A recent editorial in Barron's by Mark I. Schwartz focused on the Canadian healthcare system and particularly on the recent legal challenge. The title is "Canadians are not Immune… Their health-care system rejects the laws of economics, yet it must follow them." Imagine. Who knew?
As described in Barron's, underpinning the Canadian system is “the notion that health care should be a function of need, rather than of one's ability to pay. This is why Canada barred individuals from purchasing health insurance for all but a few medical services within the country. But this prohibition and some other mandates created perverse economic incentives, and led to the health-care crisis on which the Supreme Court was forced to rule.”
A recent Canadian Supreme Court decision, “in Chaoulli v. the Crown completely obliterated any pretense that the Canadian system is equitable or adequate, to say nothing of worthy of emulation. The court agreed with petitioners George Zeliotis, a patient who had waited a year for hip- replacement surgery, and Jacques Chaoulli, a Canadian physician seeking to open an independent private hospital, that the system of government-mandated care is an unconstitutional infringement of their right to life, personal security, inviolability and freedom. It also made the trenchant point that being placed on a waiting list, an everyday occurrence in the country, is not the same as providing health care, for a statutory guarantee doesn't amount to anything unless it can be converted to a right in practice.”
This gets at the difference between concentrating on something that is tangible and measurable--results, needs met--and something that is not even definable--“fairness.” The basis of equal access and universality is a notion of fairness and social justice. “Fairness,” like beauty and pornography, exists only in the eyes of the beholder.
Although the Canadian government tries to maintain the illusion of a tightly controlled, single-tiered system, people are way too creative for this. The editorial describes: “The increasingly popular means of informal access involve queue-jumping, such as by purchasing a spot from a patient closer to a treatment date, or using one's connections with a physician to be seen immediately. For this reason, befriending physicians has become something of a national sport. Also, increasingly, there are those who seek medical treatment in the U.S. Responding to this demand, insurance companies now offer plans expressly designed for those who want to travel to the States for treatment. According to a recent report by Canada 's GlobeInvestor, sales of such policies have grown exponentially in recent years.”
It turns out that by at least one reckoning the Canadian healthcare system is also very expensive, like the US system. “According to the Fraser Institute, a Canadian free-market think tank, Canada 's health-care system costs more per capita than that of any other OECD country save the U.S. and Iceland, despite the nation's comparatively young population. And according to Health Canada, the system accounts for more than 40% of government spending. Despite being flooded with all this health-care money, the system still forces individuals like George Zeliotis to wait a year or more for some medical services. Canada also ranks poorly in the prevention of perinatal mortality (12th among OECD nations) and the prevention of infant mortality (16th among OECD nations).”
There are a couple of principles that this story illustrates. First, governments should not be involved in both finance and delivery of healthcare. Governments could potentially have a constructive role in the finance of healthcare for poor people. But they generally have a much more questionable performance with delivery. There is an insoluble conflict of interest between the two jobs. The story in Canada illustrates this nicely.
Second, the healthcare system can never be rationalized until the financial transaction and the service transaction occur between the same two people.
So, while financial instruments can be supplied to individuals by various means, individuals making choices for themselves about their own healthcare is the only solution that will bring both results and fairness. Now that's hot! Who said that?
