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E-mail Print 'Greatest Canadian'? Think again
Health Care Op-Ed
By: Sally C. Pipes
12.9.2004

National Post (Canada), December 9, 2004

It's no surprise that Tommy Douglas has been dubbed the "Greatest Canadian" by the CBC and its viewers. The single-payer health-care system he helped pioneer has, in the words of a 2001 Senate report, "achieved iconic status." Indeed it is a testament to the power of the myths surrounding medicare that Douglas could be exalted in this way while no fewer than 815,000 Canadians are waiting for health services, many in considerable pain.

It's time to put both the Douglas myth and the rigid health-care system it protects to bed for good. The socialist ideal that society, rather than individuals, should be responsible for providing citizens with health care can no longer be sustained. As costs continue to escalate, provincial governments are increasingly capping reimbursements for doctors, clamping down on budgets and refusing to invest in new technology. The signs of breakdown can be found not only in growing waiting lists for specialized treatment, but in the fact that one in seven Canadians can't even secure a primary care doctor.

As American satirist P.J. O'Rourke once quipped, "If you think health care is expensive now, wait until you see what it costs when it's free." According to data released this week by the Canadian Institute for Health Information, our national health care tab this year is expected to hit $130-billion -- about $4,000 per person. Toronto-based expert Dr. David Gratzer calculates that a Canadian earning $35,000 a year pays out $7,350 in taxes to support the country's health system. Canada devotes 10% of its GDP to health, a level exceeded by only three other nations.

Despite this massive outlay, the service Canadians get in hospitals is often shoddy. In a market-based system such as that in the United States, patients produce revenues that sustain hospitals and clinics. And if service or amenities are subpar, patients can take their health care needs to a competing health network. Under Canada's public health monopoly, however, such choices are absent. From the hospital's point of view, patients simply produce costs that drain budgets.

And yet calls for reform are routinely dismissed as unCanadian. As the aforementioned 2001 Senate report concluded, medicare "is perceived to reflect Canadian values and these are seen to stand in sharp contrast to the values of our American neighbours."

As a Canadian who has lived and worked in the United States for more than a decade, I have had the chance to study both systems closely. I suggest that Canadians should spend less time criticizing the U.S. health care system and more time studying it. There's no reason they can't adopt its strengths while avoiding its shortcomings.

The U.S. system is far from perfect. It's expensive in monetary terms and far too many Americans lack third-party insurance. But most Americans receive excellent care, and waiting lists are almost unheard of. Thanks to the various safety nets that exist, even the uninsured are typically well-served. And whether insured or not, all Americans benefit from the fact that their basic health services are not controlled by the decisions of a single, global decision-maker. This means that Americans need never suffer a situation -- common in Canada -- whereby they cannot receive access to a treatment or diagnostic service because a provincial authority deemed it unworthy of funding.

In the United States, like Canada, governments are the largest players in health care, both as payers and regulators. Yet unlike Canada, which has witnessed an endless series of commissions and reports contemplating reform, individual players are free to experiment with different models of health insurance and delivery: There is no equivalent of the Canada Health Act, which prohibits any innovation that flies in the face of government dogma.

Indeed, some reform efforts in the United States have produced health-care structures that resemble our own. Most recently, a medicare-inspired program run by the state of Tennessee was hailed by U.S. liberals as the wave of the future. But the plan created many of the same problems on display north of the border, and soon became unstable. The state now faces the same choice faced by those who control Canada's health care purse strings: ration care or go bankrupt.

On the other end of the spectrum, U.S. employers are moving away from health care coverage that kicks in from the first dollar spent. Instead, they are embracing health savings accounts (HSAs), which allow Americans to put money, tax free, into savings accounts that can be used to pay for routine expenses. These are coupled with high-deductible, low-cost private insurance to pay for catastrophic bills.

Such innovative arrangements are driving down costs for those who adopt them: The Whole Foods chain of food stores, for instance, cut its insurance bill by 42% when it switched plans in 2002. Better still, its 30,000 employees retained access to US$14-million of unused HSA funds.

Even taken alone, such reforms would go a long way in reducing the costs borne by Canadians waiting for health care. As Dr. Gratzer and others have pointed out, they need not supplant the medicare system: HSAs would simply be an alternative for Canadians who wanted to devote more of their own resources to ensuring that they receive prompt care.

Of course, the introduction of HSAs would also require that the government allow Canadians the freedom to spend their own money on any health service, and providers the freedom to accept private payment. It would also require that Canadians be permitted to opt out of the public system if they chose. But these are reforms that are long overdue anyway.

These ideas may fly in the face of Douglas's dream of providing every Canadian all the "free" health care a government official decided that they require. But the price of maintaining Douglas's dream is paid by those languishing in line. It is time to put his myth to rest.


Sally C. Pipes is President of the Pacific Research Institute and author of Miracle Cure: How to Solve America’s Health Care Crisis and Why Canada Isn’t the Answer (2004). She can be contacted at spipes@pacificresearch.org.
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