Private Health Care Could Benefit Canada

Health care is an issue that evokes strong emotions, which can sometimes lead certain commentators to console themselves with fine principles rather than adopt a pragmatic, results-based vision.

In an article published by the Globe and Mail on July 22, Colleen Flood, a University of Toronto law professor, sets out to warn Canadians against the risks involved in allowing the private sector to play a greater role in the field of health care. She writes, "The jewel of Canada's health care system is the commitment to restrict private finance for medically necessary hospital and physician care." But this "jewel" is more glass bauble than precious stone.

Using clever rhetoric, Professor Flood tries to convince her readers that the Canadian health care system's relatively mediocre performance is due to the substantial amount of private care available in this country. Her argument rests on a recent Commonwealth Fund (CWF) study of 11 industrialized countries in which the Canadian system is at the bottom of the pack when it comes to quality of care (9th), efficiency (10th), equity (9th), and overall health level of the population (8th), and ranks dead last in terms of timely access to care (11th).

Professor Flood gets one thing right: Public spending does indeed cover 70 per cent of overall health care expenditures in Canada. This statistic, however, is misleading. A very important distinction, of which Professor Flood is well aware, is that spending for care deemed medically necessary — which means practically all care provided in hospitals and medical offices — is entirely covered by the public system. As for expenditures that are financed privately, they essentially include dentistry, optometry, massage therapy, physiotherapy, psychology, and spending on drugs outside of a hospital setting.

This distinction is absolutely crucial, since it is precisely those services considered to be medically required that Canada's public system struggles to provide effectively to patients — and it is those services that were the subject of the CWF analysis. Of the 80 performance indicators used by the research organization, only a handful measured health services not covered by our public system.

It is true, as Professor Flood mentions, that most European countries provide public coverage for prescription drugs, unlike Canada. Interestingly, though, the CWF report shows that Canada actually outperforms most of the countries evaluated in terms of the poor's access to these products. Only 8 per cent of Canadians with below-average incomes said they had not taken a prescription drug because of cost considerations in 2013, which places Canada fourth in the CWF ranking on this measure. The corresponding figure for New Zealand, a country that has universal public coverage for prescription medications, is 18 per cent.

Canada should imitate the systems that work best

Professor Flood argues that "[i]nstead of moving to adopt the policies of better performing systems, Canada may be taking a step backwards." Her evidence for this claim is a court challenge being brought by a private clinic and a group of patients in British Columbia that, according to her, will move us one step closer to the American model.

Nothing could be further from the truth. The four sections of British Columbia's Medicare Protection Act that the plaintiffs are contesting deal with prohibiting the purchase of duplicate private insurance (section 45), prohibiting mixed medical practice (section 14) and preventing doctors from coming to mutual agreements with their patients when it comes to fees (sections 17 and 18).

The Canadian system is an anomaly among industrialized countries' health care policies. Canada is the only country to limit the role of private health insurance exclusively to the coverage of services not insured by the public system. Canada is also alone in prohibiting doctors from practicing in both the public and the private sectors.

Whereas 99 per cent of hospitals in Canada are public, in all other countries, private institutions have an important role to play in the provision of hospital services. Private, for-profit hospitals make up over one third of all hospitals in Germany (42 per cent), France (39 per cent) and Australia (36 per cent).

Therefore, contrary to Professor Flood's claims, if the plaintiffs were to win their case, the Canadian system would not become more like the American model, but would rather move closer to the most efficient universal systems in the world, those of Europe and Australia. Beyond any doubt, patients would be the first to benefit from such a pragmatic, evidence-based outcome.

Yanick Labrie is an Economist at the Montreal Economic Institute. The views reflected in this op-ed are his own.

Back to top