Magazine article Insight on the News

Canada Offers Faulty Model

Magazine article Insight on the News

Canada Offers Faulty Model

Article excerpt

Hardly a week goes by without a report from some institute or interest group on the benefits of a Canadian-style national health insurance plan, and many members of Congress support similar plans - frequently known as single-payer plans. One recent study, given prominent play in the Washington Post, claimed that 25 percent of U.S. hospital costs go to administration and that a single-payer plan could save $50 billion a year by eliminating much paperwork.

With all the clamor for a Canadian-style plan, it might be the time to take a close look at another recent study that hasn't received much attention in the U.S. press. The Fraser Institute in Vancouver, British Columbia, recently released its third survey of hospital waiting lists in Canada. It's true that health care costs have not been rising as fast in Canada as in the United States. The Fraser study tells us one reason for that: The Canadian system responds to excess demand by making people get in line for medical treatment.

The average waiting time to see a specialist after being referred by a general practitioner is about five weeks. Then there's frequently another long wait for surgery recommended by the specialist. The total waiting time from being referred by the general practitioner to treatment ranges from 11.5 weeks in Ontario to 21 weeks on Prince Edward Island.

Ontario has by far the best record - in most provinces the average total waiting time is around 16 weeks - which is particularly significant because it's the province that gets most attention from experts in the United States A widely cited study from the General Accounting Office, "Canadian Health Insurance: Lessons for the United States," for example, used data from Ontario alone in its discussion of the problem of waiting lists, thus dramatically underestimating the problem.

How would a good health care system respond to such evidence of excess demand and patients in need? In a competitive market economy, waiting lists are an indication that more resources should be devoted to an industry. Normally, consumers bid up prices, causing more people and resources to flow toward the demonstrated need.

However, the Canadian health care system is a government monopoly, so it doesn't operate like a competitive business. In fact, the number of operations performed in Canada actually decreased by 4 percent between 1986 and 1989 as waiting lists increased.

Now it's becoming clearer how the Canadian system holds down costs, as American experts are constantly reporting. …

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