Health Care

Myth information: A parallel private health system would not harm medicare

In Canada’s current health-care debate, the claim is made that parallel private financing and delivery of medical and hospital services would harm or destroy the services that are publicly insured by medicare. This claim is often put forward by public health service unions, hospital associations, and individual Canadian and American supporters of single-payer government health insurance monopolies.

While there is no convincing evidence for this claim, there is plenty of propaganda and political rhetoric. This is due to the lopsided financial and political power bases that have developed around Canada’s public health insurance monopolies.

The debate is highly politicized by its very nature, since 98.7% of total expenditures on physician services and 91.8% of total expenditures on hospital services are controlled and reimbursed by governments. Special interest groups lobby politicians, hoping to influence their health-care decisions. While these groups claim to be advocates of patients’ medical welfare, they should not presume that they represent their patients’ political and economic interests.

Opponents of parallel private health insurance and private health care raise the following myths:

MYTH: If Canadians were permitted to buy alternative private health insurance and health-care services in a parallel private system, those who did would no longer be interested in lobbying politicians to preserve the standards of quality, access and funding in the public system.

REALITY: The facts of the matter tell a different story. These standards of quality, access and funding have steadily declined in Canada under the present public health monopoly arrangement, without a private parallel alternative. Furthermore, in European countries where parallel private and public health systems have existed for more than a century, and where they have a level of public funding similar to Canada, they have maintained health services of high quality and ready access without waiting lists. In fact their public funding is often higher than in Canada and patients have freedom to choose public or private services or both. What is a public-versus-private issue for Canadians, is a non-issue for Europeans.

MYTH: We can’t treat medical services like other personal services in the market because patients do not have enough information on which to make market-based decisions.

REALITY: True, some health services like the treatment of acute life-threatening emergencies are different, but they make up a very tiny fraction of total health services. Most health services are quite similar to those in education, retirement insurance, income insurance, etc. Financing of the services is ideally prearranged through prepaid health insurance, and does not require payment at point of service, especially in emergency situations.

Patients in a future private sector would be encouraged to discuss the financial aspects of health services with their physician, clinic manager or with the proposed health purchasing agencies of the future. The latter would be owned by consumer purchasing groups of at least 10,000 members. The agencies would fully inform their members about insurance options, negotiate with insurers and arrange prepayment for the best possible hassle-free insurance coverage.

MYTH: If Canadians were permitted to buy alternative private medical services in addition to their universal publicly funded health insurance (medicare), a large but diminishing number would see this as a threat to “Canadian values” that embody medicare.

REALITY: These values include “equity,” meaning equal access to only one tier of public health services and prohibition of private alternatives; “social solidarity” by which all taxpayers must pay for public health insurance whether they use it or not; and “social justice” as in a Marxist doctrine of income distribution—from some according to their means, to others according to their needs or merit.

According to the Organization for Economic Cooperation and Development (OECD), as long as there is universal access to publicly funded basic health services, “equity” exists, regardless of the presence of private alternative health services.

Not content with this basic OECD standard of equity, supporters of the above argument also proclaim the Marxist notions of class struggle, distributive or social justice, and the envy-based prescription of egalitarianism. They call for progressively unequal rates of taxation and compulsory redistribution of individual earnings to finance government-run health insurance monopolies.

The result is a forced equalization of all Canadians in a single mass of health service mediocrity, rather than striving to use scarce public resources to optimize the level of care and outcomes for those individuals who need assistance.

In order to achieve this egalitarian ideal in Canada’s health-care sector, provincial and federal governments have been led to treat equal individuals unequally under the law, to infringe their personal freedom and property, and to move toward totalitarian governance in health care.

These are hardly the characteristics of a free and democratic society founded on the principle of the rule of law, where life, liberty and security of individuals are the highest Canadian values protected by our constitution. And yet these infringements have occurred within Canada’s medical, hospital and health insurance sectors because of certain provisions in federal and provincial health legislation. atters.

These provisions either discourage or prohibit the sale of alternative private medical and hospital insurance and private medical services in hospitals. Such coercive legislation is unknown in other OECD countries. It has secured for Canada’s health sector the dubious honour of being the last bastion of radical socialist doctrine in the free world.

MYTH: If we allow greater private sector involvement it would attract the best physicians and nurses to the more attractive private sector and leave the public sector short-handed and with inferior staff.

REALITY: As noted above, this claim is contrary to experience in most European countries where parallel public and private health systems have operated side by side for over a century. Instead of a physician shortage they have a surplus in both sectors. Waiting lists are virtually unknown and their health system performance is rated higher than Canada by the World Health Organization. In conclusion, the arguments that medicare would be harmed or destroyed by the introduction of a voluntary parallel system of alternative private health insurance and health care services, are speculative and not supported by evidence.

J. Edwin Coffey MD is associate researcher with the MEI and co-author of Universal Private Choice: Medicare Plus.

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