The Problem with Canadian Healthcare

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.