"The first lesson of economics is scarcity: There is never enough of anything to satisfy all of those that want it. The first lesson of politics is to disregard the first lesson of economics."- Thomas Sowell
Many see Canada's system of universal health insurance as an ideal solution to the challenges of the high cost of American health care. Legislative efforts are clearly moving the United States toward more government control of the health insurance and health care markets, but is this really such a good idea?
In my homeland of Canada, where I worked for 13 years as a physician before emigrating to the United States in 2001, all citizens have government health insurance. Each person carries a little plastic card documenting that they have public insurance – but that little plastic card is about all they can be assured of getting. Actual health care is another matter altogether.
The Fraser Institute states that the average wait time to see a specialist in Canada is 17.3 weeks. I knew several specialists with two-year waiting lists. The waiting time for a CT scan at my facility in Thunder Bay, ON, was seven months, and for an MRI scan, 13 months; double that in Newfoundland. Sixteen percent of the Canadian population has no access to a primary care physician, and specialists can only be seen with a primary care referral. Newcomers to my hometown of Sault Ste. Marie wait five years to see a family physician.
Canada's system of universal health insurance started out as a one-party payer system. The mandate was simply to pay for medical care. Ignoring the laws of supply and demand, which work so well in every other sector of the economy, this led to unrestrained demand for care. The natural consequence of this is that government relentlessly took over more and more of the health care market and created rate-limiting steps in its delivery to control costs. Access to medical care is curbed by government strategies, such as limiting the number of doctors trained, allocating fixed budgets for running hospitals, and limiting the number of MRI and CT scanners.
Because of a shortage of specialists in my field of radiology, we were overwhelmed with work. To facilitate reading large volumes of X-rays, I requested that the hospital procure a rollo scope, a labor-saving device that enhances productivity. There was no money available in the hospital budget for such a device, so I pled my case to bureaucrats 700 miles away at the Ministry of Health. The request was granted three years later. When it was finally obtained, it sat idle for another year because the hospital had no money for a clerk to regularly load the X-rays onto the rollo scope. Canadian hospitals do not benefit from more productive measures because they function from a fixed budget. This creates a disincentive to spend money for better patient service.
While working in the United States, my partner and I found ourselves increasingly busy. We requested a rollo scope and had it in one month. Why the difference? The hospital and my radiology group were working for a profit. Profit is enhanced through productivity. The rollo scope was a rational expense that added to profit by providing better service to patients. In Canada, such an expense was a burden to the system because it depleted a finite budget. Government health care is a zero-sum game. Keep in mind that this anecdote about the rollo scope is merely a representation of how the entire Canadian health care system works.
A few years ago, my brother was diagnosed with a potentially fatal illness and hospitalized in Canada. He desperately needed an MRI scan to make a diagnosis, but because it was Christmas, the MRI scanner was closed. Functioning from a budget rather than a profit, it made sense for the hospital to restrict its hours of operation. This contrasts with most American hospitals that are ready and willing to perform an MRI at any time because of the potential for profit by meeting patients' needs.
While my brother languished in the hospital, there was a busy coffee shop in its lobby making a profit serving people at all hours and on holidays. The absurdity that most Canadians completely overlook is that at such a time in a Canadian hospital, you are more likely to get a good cup of coffee than the health care that you need. Having a government health insurance card doesn't help much.
Furthermore, with government-provided insurance, the government sets prices on various medical services. As any credible economist will explain, wage and price controls will eventually lead to shortages. With reimbursements set artificially low by government, shortages arise for medical services. As an example, in one procedure I used X-ray guidance to inject pain-killing and anti-inflammatory medication into selected joints in a patient's spine. This skilled procedure reimbursed $14 (Canadian), and the government would only pay to have one side done. Fourteen dollars does not pay for a trip to McDonald's if I have my kids in tow. Despite only being paid this amount, I still assumed potentially millions of dollars of liability.
Is it any surprise that it is difficult to get necessary care in Canada?
When they're allowed to do so, markets work brilliantly to meet people's needs. Even America's poor have a standard of living that much of the world envies. Abundance is created through freedom and choice when markets are allowed to function. Unfortunately, the U.S. Congress is moving toward more government involvement in health care and the health insurance industry, adding greater restraint to the health care marketplace. This is a choice that America will eventually regret.
Lee Kurisko, MD is the author of "Health Reform – The End of the American Revolution?" He is a Canadian radiologist now working in Minneapolis, and serves the Board of Directors of Consulting Radiologists Ltd. He is also a cofounder of www.medibid.com, The Marketplace for Medicine. He can be reached at 763-502-0792.
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