Canada offers faulty model - national health insurance policy - Column

0 Comments | Insight on the News, Sept 13, 1993 | by David Boaz

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. It just doesn't offer more medical care as demand rises. It limits the total government spending on health care; doctors earn less money, and more and more of them are emigrating or leaving the medical profession. It cuts back on sophisticated equipment: There are more magnetic resonance imaging units in Washington state (population 4.6 million) than in all of Canada (26 million), and the United States has seven times as many radiation therapy units for cancer treatment as Canada, on a per capita basis.

Dr. Robert Macmillan, head of health insurance for the Ontario Ministry of Health, said recently, "All of Canada faces a lag in accessibility, particularly in highly sophisticated care."

In 1987, Dr. Walter Bobechko resigned as chairman of the orthopedic surgery department at Toronto's Hospital for Sick Children because he felt the government restricted patient care to the point of negligence. He now heads the Humana Advanced Surgical Institute in Dallas, a for-profit hospital.

Joanna Miyake and Michael Walker of the Fraser Institute have written, "There were more televised news stories on health care than on the economy in Canada last year. That this could happen during a recession is an indication that the funding and management of health care have become a major source of public anxiety." That's something to remember when we hear members of Congress singing the praises of the Canadian system.

How do Canadian doctors and patients deal with the inability to get prompt, high-quality medical care? They have a safety valve - the United States. Nearly a third of Canada's doctors have sent patients outside the country for treatment during the past five years. About 10 percent of all British Columbia residents requiring cancer therapy have been sent to the United States. A California heart surgery center advertises in Canadian newspapers. Remember, medical care is free - that is, it's paid for in taxes - in Canada, so people who go to the United States are choosing expensive care paid for out of their own pockets over free care sometime in the future.

When they need medical care promptly, Canadians come to the United States. If some members of Congress get their way and impose a single-payer plan on the United States, where will we go?

David Boaz is executive vice president of the Cato Institute.