Monday, October 8, 2007

Privatization of Health Care Part 1: The Background

According to the Canadian Institute for Health Information, total health care spending in Canada has nearly doubled in the past decade, falling just short of $150 billion in 2006. The rate at which health care expenditure is increasing is simply staggering and cannot possibly be maintained in any economically feasible future. To make matters worse, the problems that plagued health care in 1996 are the same problems that the system is facing 10 years later, despite all the extra funding. Many might argue that health care provider shortages, increasing wait times, and rural hospital closures are even more problematic now than a decade ago.

Considering the importance of the issue to all Canadians, there has been relatively little debate on the necessary course of action that will improve the provision of health care across the country while also curbing health care spending. Historically, the debate has had two main proponents: those in favour of revamping the system within the current framework set out by the Canada Health Act, and those in favour of revamping the Canada Health Act and establishing some type of privatized or for-profit health care system (commonly called two-tiered). More recently there have been proposals for a type of hybrid system that would combine aspects of private health care and aspects of public health care, and might look similar to systems that already exist in some European countries.

One of the factors that may be limiting this debate is the sentimentality that exists toward the universal system of health care that Canada was once so well known for. Universal health care has given Canadians a long-standing sense of moral superiority over our southern neighbors, who we consider barbaric for not affording all citizens an equal opportunity to health. In principle universal health care is a very noble concept, but if it is not accessible, timely and efficient, it is not beneficial to anyone, let alone everyone. An article in the National Post discussing the need to have an open debate about health care reform points out that “politicians will immediately cast any spokesperson for debate and discussion as pro-American, pro-private, two-tier health care.” The article’s author Kevin Libin also notes that “leaders are often reluctant to address growing problems for fear of being accused of trying to demolish universal health care.”

What many Canadians might not realize is that private health care is already a big part of Canada’s health care system. Private health care is loosely defined as anything beyond what the public system will cover. Of the nearly $150 billion spent in 2006, $43.2 billion was spent on private health care. Things like ambulance rides, private hospital rooms and many cosmetic procedures are not covered by the public system and either come out of extended medical insurance coverage, or the patient’s own pocket. It is also important to distinguish between publicly funded services and publicly delivered services. Most family doctors and specialists for example work out of the private sector, in practices that they themselves maintain and manage, and bill the public system for each patient that they see or treat. This service is therefore privately delivered but publicly funded. An increasing amount of long-term care facilities, and diagnostics labs are run privately and not-for-profit, again billing the public system for their work.

Private health care is not something that Canadians should fear, or be scared to talk about just because of our proud history of universal health care. In a democratic society, open debate is absolutely essential, especially when the issue is one that affects everyone, and one that so much of our taxes go towards. In part two of this blog I will delve further into the debate, and discuss the views and ideas of prominent health care policy researchers as well as the positions of politicians and the major political parties.

Sources:
CBC News In Depth: Health Care
Financial Post Article: Medicare Myths
National Post Article: People Should Speak Openly On Reform: NCC
Canadian Institue for Health Information

2 comments:

Trees for our children... said...

you make some good points... but reform is often the mask used by conservative-agenda pushers... remeber the reform party? Why not just make a good public healthcare system instead of trusting the market?

On a related note, US president Bush recently vetoed a bill passed in congress that guaranteed free healthcare to all children in the united states...

frank said...

I think you have presented a very forceful argument in favour of approaching this issue with an open mind. It is important to discuss values, but it is also important to discuss facts.
The main problem, though, is that the facts given in the paper are largely distorted, if not entirely misleading.
For example, it is very true that health care spending has doubled in the past decade. But so has every other expenditure in the country, which is the natural result of inflation. The statement is particularly misleading in that when we consider government spending in terms of total percentage of GDP, the federal government is at a 50 year low! (Dr. Paul Browne, Department of Politcal Science, U of Quebec)
We must also take into account that Canada only spends 9.9 percent of its GDP on health care. In perspective, this is lower than Germany, Switzerland, France, and certainly lower than the United States which spends 15.3 percent of its GDP on health care. (OECD, 2006)
In addition, expenditures over the past decade indicate that public sector spending only increased by 40 percent, whereas the private sector increased by 145 percent (McGill University Health Care). This is largely due to the fact that the system is funded by collective revenue, which means no rates, and thus less administrative costs.
Indeed, the area which has been increasing the most rapidly is pharmaceutical companies and private health care premiums. If anything, we should be addressing the private sector, as this is where the cost problems are. But this is getting more difficult with NAFTA, and especially TILMA- Harper's contract proposal with the provinces (some of which have already signed it) which states that corporations are allowed to sue provincial governments 5 million dollars for enacting public legislation that interferes with their profit margin!
In response to Finance Minister Carole Taylor's comment that over 70 percent of the provincial budget will be on health care in 2017, this is not measuring the proper indicator. The important indicator is total GDP for Canada, as this is where public health care dollars are being measured. No country measures their health care spending based on one province (especially when it is a federally funded program).
Also, when we weigh the pros and cons between private and public health care, we must consider that receiving late treatment is better than receiving none at all (46 million Americans are not insured). Therefore,it is important to work with what we have, and there are ways to do this.
For instance, the hospital employee's union has issued some feasible proposals that will drastically reduce weight times if we all wish to continue public health care. These include: managing lineups properly, bring in public surgery clinics, support home care, improve residential care, create 24-hour community clinics, keep vulnerable citizens healthy, control drug costs, value our existing work force, and train and certify those internationally educated health care professionals who are not working simply because their English isn't good enough. We must also get rid of private, public partnerships because they skyrocket infastructure expenditures.
These are the objectives we should be shooting for. I think the alternative looks grim.