Tales from The Antipodes: When The Government Runs The Hospitals

According to Dr. John R. Graham, MD, who has spent his career at Sydney Hospital, in Australia’s largest city, things started going down the tubes in 1984, when the federal government crowded out financing of hospitals by private payers. According to Dr. Graham, “…the record of the last 25 years demonstrates, governments have been pouring increasing sums of taxpayer money into public hospitals for poor returns, as measured by ever lengthening waiting lists and quite unbelievable levels of waste on useless bureaucracy” (p. 6).

Dr. Graham’s observation corresponds with a research paper written by the economist Martin Zelder, which addressed the true cost of government-run hospitals in Canada. I subsequently wrote a short article about government versus private financing of Canadian hospitals.

But wasted capital is not the only cost of government-run hospitals: There’s also the lack of transparency. Once hospitals become focused on government’s needs, instead of patients’, they “clam up”. The private, non-profit Fraser Institute has had great difficulty compiling report cards for Canadian hospitals, because disclosing the relevent information would harm the government’s interest.

Of coures, the U.S. is not about to adopt a government-monopoly, single-payer, health system in the short term. But the shenanigans around stuffing earmarks for parochial interests, especially hospitals, into the current legislation are a clear warning sign.

This blog post originally appeared on State House Call.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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