The Problem with Canadian Healthcare

March 13, 2009

Its not what you think, at least not from a libertarian perspective.

The biggest problem with Canadian style universal health care is that, for most people, most of the time, it works well enough. Yes, that’s right, it actually works.

But that never stops some well-meaning people from misrepresenting the Canadian system for their own ends.

For my American friends (and possibly for some Canadians as well) let me do a quick primer on what our system actually is.

The main reason that our system works as well as it does is that, despite cries of it being a “Soviet style socialized medicine”, the Canadian system is actually a hybrid system, with private, for profit delivery and public, monopoly insurance for core care. That is, doctors, diagnostics, clinics, some hospitals and insurance for things not covered by the provincial insurance plans, are all private business, usually operating for profit, based on the number of patients and obtaining fees by billing the patients insurance. The difference is, there is only one insurance company – the state.

The state, either at the provincial or municipal levels, runs hospitals and can keep some costs down because they can buy, for instance, aspirin or antibiotics or bandages or wooden crutches in bulk from private suppliers.

In short, there is just enough private and market forces at play within the system so that it works pretty well. As a Canadian who has been in the system for his entire life, let me assure American libertarians that, much to their chagrin, we get high quality care, for the most part.

Emergency rooms still see people based on priority and waits for this kind of service are not outrageous.

The quality of treatment is exceptional.

The problem is, there is also just enough state interference and manipulation of market forces to be causing the system to be unsustainable and to deteriorate.  We now hove long wait times for necessary but elective surgeries like hip and joint replacements. We have to wait months to see specialists or to get the latest in high-tech tests. People cannot even find a family doctor in Ontario anymore. And the conditions of our hospitals are worsening.

A large part of this is due to a government doctor cartel. Anyone over 30 will tell you that in the 70′s and 80′s, we did not have these problems. But around 1990, after the infamous Barer–Stoddart report, provincial governments and various provincial and national medical associations conspired to keep the numbers of doctors practicing low, so that each individual doctor (and by extension the Canadian Medical Association, the CMA, which is essentially a doctor’s union) can earn more money.

The report stated that there was a glut of doctors and that somehow this was going to cost the system millions. So provincial government, with the blessing of the medical associations, reduced the number of places in our medical schools and placed incredibly high barriers to entry for foreign trained doctors.  As a direct result of this blatant interference by the state into the market for doctors (and applauded by the medical profession itself at the time) we went from having low wait times for treatment, and the ability to change doctors at will in the 80′s and early 90′s to what we have now – long wait times, and no choice in who your doctor is. Meaning today you cannot leave an incompetent doctor because there are no doctors accepting patients.

Provincial health regulations also require a doctor for even the most basic medical requests – a refill of a prescription, to tell you the results of a test etc. Often these require a visit to the doctor’s office, resulting in a bill to the provincial insurance plan, even if the visit lasted 5 minutes. The reduced number of doctors becomes the bottleneck in the system.

Diagnostic clinics can open, but are not allowed to “extra bill” clients for services  and may only bill the province for service. Based on a fee structure negotiated with the province ever few years. Meaning that if a new piece of equipment comes on the market, they cannot charge what the market would bear, but what the state says. And in the end, they simply don’t buy the equipment, or find it economically viable only to run the equipment during certain hours.

In the end, thanks to this interference in the market, at the behest of doctors in order to maintain their privileged positions, we get wait times and poor client service (though the quality of treatment is still high when we finally get it).

So, although Canada’s system is not the much ballyhooed “soviet bread line medicine” it has been made out to be, its ever growing issues are still the result of interference and manipulation of the market by the state. Indeed, it is a microcosm of our entire Western, state-capitalist system – it works “just good enough” to keep most people happy and thinking that it works.  Most people miss how the very serious and growing issues are caused by the state and those they serve and favour.

That is the most nefarious part of it. It is difficult to convince people that freeing it totally from the state would make it better, when they seem to believe that more government will make it better. Trying to convince people of that is immensely harder when those who could and should be allies completely miss-charaterize how the system works. It displays an ignorance that turns people away from our message of freedom, rather than too it.

Its about being truthful and having integrity.

Two years ago I wrote a post discussing some of these issue and demonstrating how the goal of universal health care could be obtained without the state. It seems like a good time to bring it up again.

I am perfectly able to advocate for free market healthcare while recognizing both the strength and weaknesses of the Canadian system. I hope that others can now do the same.

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21 Responses to “The Problem with Canadian Healthcare”

  1. Rob Says:

    Found this post of yours via the WordPress related post algorithm.

    I am Canadian and I agree with much of what you have written.

    Alberta faces the same issues with physician numbers. The barriers to getting more physicians into practice are artificial at best and heinous at worst. The College will accept physician credentials from some foreign countries (and actively recruit there) and not from others.

    I have a friend who emigrated from Ukraine to Canada. He is a trained physician but was unable to crack the elite structure set up by the the College here and so today he manages senior citizen’s homes and is working on getting is EMT and paramedic credentials, because he was denied access to Canadian medical residency programs here.

    As you mention, the few doctors we do have fill up their patient rosters very quickly and stop accepting new patients. And if you live in a rural area you’re doubly screwed, because not many new physicians are willing to settle in rural areas. They all want to live in the big cities.

    My doctor is old. Past normal retirement age. I fear what is come when he finally does quit his practice because it appears that there are no options to find a new family physician.

    Another problem I see is that too many Canadians see the health services delivery system* as “free” (it’s not, taxation is significant to pay for this service) and use it frivolously. This adds to the burdens faced in the challenge to deliver quality health services.

    Despite the problems, I would not want to see a US style health services delivery model. I have lived in the US and found the health services delivery there of excellent quality. But I had very good medical insurance.

    For cases of no medical insurance or catastrophic illness, the potential to be bankrupted is too high, in my mind, to warrant ever adopting that system.

    Health and medical service delivery should be beyond greed and “money” grubbing.

    I don’t have the answer, but I know what I don’t want.

    * I do not like or use the term “health care”, because that is not what it is. It is up to individuals to take care of their own health. But illness or injury does require someone with specialized knowledge to provide health and medical services to the user.


  2. I’m an American living in Alberta. The only things I dislike is the lack of primary care doctors. I miss having a doctor who knew me.

  3. theconverted Says:

    Rob,

    I’m not advocating US style either…they clearly have issues of their own, again, thanks to odd regulations and interference.

    Follow the link to my post from 2007. I think I explain pretty well the system I envision.

    annie,

    True and it is again, primarily due to the cartel of government and doctors unions keeping number artificially low at the same time as doctors unnecessarily the centre of all medical processes.

    The interference in the two system is different and thus manifests differently.

    In 1998 I required 5 stitches in my chin while I was training in Boston. When I went to Mass General, I was seen in 10 minutes and there was almost no one in the waiting room. I was out 2 hours later. It cost me over $1000 USD.

    In 1999 I broke my leg playing hockey. It too over 4 hours to see a doctor at the only ER in Toronto that was accepting people, and then almost 24 hours for the specialist to come in to fix my leg. But I had a semi-private room, got 5 screws and a titanium pin and was home the next day for $37 dollars in charges for the ambulance and $20 for the wooden crutches.

    So in one system the state interference causes health to be expensive and unaffordable and the other makes it have long wait times.

    But it doesn’t change the fact that in both, it is the state interference that is the cause of the problem and the getting rid of state interference in the market for medical care is the solution.

  4. theconverted Says:

    As an fyi, I got a comment in my moderation queue form a ‘jacksmithworkingclass‘.

    Have a look. Its a blog with one post. And the entirety of that post was what was the comment. And its pretty obvious that ‘jack’ didn’t read my post or respond to any points – he merely blindly spammed me with bullshit talking points because I had the work ‘healthcare’ in the title.

    Well, jack, you comment stays in the queue. You are more than welcome to actually address what I have written, but you aren welcome to spam me. So come back if you have anything to say…otherwise, you are clearly not interested in debate, so fuck off.

  5. expertrns Says:

    Canada has an expensive healthcare system that sort of works because not everyone needs high cost care all the time. It’s like paying for insurance for the day you become sick, yet some people pay nothing, and tourists and visitors are treated and billed later. It does not work in the sense that hospitals are in the red every fiscal year, but are not allowed to carry debt. As a result they cut staff, and do other things to enrage most of the employees that work there. It also does not work because chronic, ventilated patients who cannot be transferred out of ICU for one reason or another, take up valuable trauma and Intensive Care beds that are needed by acutely ill patients for months and years in some cases. A stay in ICU is $2000/day or more…just do the math…and all working Canadians foot this massively staggering bill.

  6. theconverted Says:

    expertrns,

    All true, and yet Canada still spends less per capita and less as a percentage of GDP than the US does.

    My sister lives in Arkansas and pays $400+ USD per month for the insurance coverage for her family and does not get the same extended coverage as I do for about 1/2 that in health care premiums. She just doesn’t have to wait months for elective surgery.

    Again, it means that for Canadians state interference creates one set of problems and for people in the US, it creates another set. One isn’t better than the other because each is being affected by state interference.

  7. Robert Paul Says:

    It annoys me when anyone pretends the US has a “free market” health care system and Canada has the opposite. The US system is not free, and it’s not even clear that the US system is freer than Canada’s!

  8. Mike Says:

    Robert,

    I agree. The systems are different, each having advantages and disadvantages over the other in different areas.

    Both would be better if they were free.

  9. k Says:

    I don’t advocate a single payer system by any means, but considering the present “private” healthcare industry in the U.S. is about as private and free market as Boeing, I can’t say I’d lose any sleep over seeing it nationalized.

    If anything, a National Health system like they have in the UK would be easier to convert to genuine private ownership and free market rules than the American corporate system, because of the difficulties presented by the latter’s pretense to be “private.” I could take all the state-owned hospitals and clinics, with a stroke of the pen, and convert them into stakeholder cooperatives owned by patients and staff–i.e., genuine private property.

  10. Robert Paul Says:

    Mike,

    You’re correct. It’s too bad even some libertarians have such a knee-jerk reaction to any hint of “socialized medicine” being better than the US’s fascist system. Perhaps no one knows this better than…

    Kevin,

    Good call on the Boeing comparison. And nationalization wouldn’t bother me all that much either. I see it simply as a reorganization of the statist health care industry.

  11. Josh Says:

    The point about reductions in med school/residency spots was valid in the early 90s, but no longer. Take a look at the numbers. In 1997/98, total first-year med school enrolment was at a low of 1577, down from 1775 in 1990/91. Ten years later, that number was up to 2569, an increase of nearly 1000 per year. No one denies the mistake made in the early 90s, and it will take a while to improve things, but evidently that grand conspiracy of the CMA and government to limit the number of doctors is failing spectacularly. The CMA even goes so far as to publicly call for more doctors, evidently to diminish accusations of their “cartel” behaviour.

    Or maybe you’re just wrong.

  12. theconverted Says:

    So why do they continue to throw roadblocks up to foreign doctors? Oh how rural doctors can practice? Why do we still have a doctor’s shortage? Why is our per capita rate still the lowest in the industrialized world and still getting lower?

    You numbers are impressive on face value, but how about per capita? While the raw numbers of doctors have increased a few hundred over a decade, the population has increased an order of magnitude more. Meaning in reality its harder to find a doctor now than in 1990.

    Calling for more doctors and taking active measures to make it happen are two different things. Calling for more doctors while also pushing for more regulations on foreign trained doctors or rules when doctors can practice seems counter productive. Seems to me their efforts have been a dismal failure or is 19 years to improve things still not long enough?

    Or perhaps you are willing to concede that what I have been wrong about is the system itself – perhaps it is far less successful and full of systemic problems than even I an willing to admit.

  13. Josh Says:

    Well, leaving aside that that CBC article gets things wrong in the second paragraph (enrolments are way up despite the 1990s dip), per capita training positions are also up. In 1991, that number was at 6.5 per 100,000, and now it’s closer to 8.0 per 100,000, a 23% increase. It will take a while for the effects of that to manifest, but the continuing trend is to increase spaces further. Would you care to point to some actual, current examples of the national and provincial medical associations and colleges pushing for “more regulations”? I’m not clear on why international medical graduates should be exempt from our licensing or royal college exams – the issue is ensuring they can actually write them. It’s not a simple issue by any stretch.

    With respect to the Fraser Institute article mentioned by the CBC, the notion that “abandoning medical school admission and training restrictions” would imply that physician supply would be determined by “patients’ needs” is ridiculous.

    First, there are many good reasons why it’s not that easy to get in, not least because it’s a big waste of time and resources to let in anyone who is underqualified, under-capable, and not that likely to graduate. (That’s not to say that it shouldn’t be a bit easier – it should.) Second, training medical students is not only costly financially but in terms of time and space as well – here at Dal, for example, we are more or less at capacity in terms of access to preceptors as well as physically. That’s why a satellite program in Saint John will be opening in 2010 to accommodate increased enrolment. (I should add that increasing tuition even more is a complete non-starter. 100k in debt with zero assets is plenty, thanks.)

    I should add that such satellite programs have proliferated in the past few years – in Kitchener, St. Catherine’s, Windsor, Moncton, Victoria, Prince George, not to mention an entirely new school in Northern Ontario. The trend, if anything, has been hyperexpansionary, but it requires establishing new teaching hospitals, recruiting faculty, and building new facilities, all while not diluting the education of students in existing spaces.

    Finally, the Fraser Institute article rightly mentions moving to more team-based practice involving nurses, nurse practitioners, and other allied health professionals. They are, however, behind the times there, as this has been the trend for years. Here, anyway, most hospital outpatient clinics employ nurse specialists/practitioners extensively for routine visits and follow-up. They’ll do the initial history/exam, confer with the physician, who will then take further actions as necessary. Similar models of care are becoming more commonplace among family practices. Last, changes to billing and remuneration packages are ongoing to ensure greater flexibility.

  14. Eric H Says:

    I got into a very public argument with a doctor here in the US over a similar issue. A new “private” hospital opened up in town, and the doctor pulled out the old canard about the wastefulness of having two MRI machines and twice as many beds as we needed. He insisted that medicine is different than any other industry or market. No reason why, it just is. And just in case I missed his other credentials, he felt the need to inform me that he had won honors or a contest or something in math.

    The medical cartels always tell the same story: “competition just doesn’t work in medicine.” In my opinion, we haven’t had any in the US since roughly 1910.

  15. acai order Says:

    Great post. Insightful and entertaining as always! Keep up the good work

  16. Ashli Says:

    When I originally commented I appear to have clicked on the -Notify
    me when new comments are added- checkbox and now each
    time a comment is added I get four emails with the exact same comment.
    Is there a means you can remove me from that service?
    Many thanks!

  17. Sung Says:

    Hi there, I read your blogs like every week.
    Your writing style is witty, keep it up!


  18. [...] Canadian girl, will have to pay when I frequent. This is why some folks call our medical system a hybrid system. Dentists offices. Massage therapists. Orthodontists. I can go get my eyes checked for free every [...]


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