Is Privatization the Remedy for Canada's Ailing Health Care?
By Ashish Sarkar
Health care is one of the most important issues facing Canada's leadership today. Over the past decade, Canadians have consistently ranked it as the topic of greatest significance, ahead of education, economics, international affairs, environment, and terrorist threats.
The Canadian public health care system is often cited as a successful model and is universally hailed for providing equal access to all. However, upon closer scrutiny, it fares poorly compared to others in the developed world (see Figure 1); and in 2000 a WHO Health Report ranked it at number 30, behind most European countries. Canadian health care also garners low satisfaction ratings from users - according to an IPSOS Reid survey, one third of Canadians rate health care quality as '"fair" or "poor".
The road ahead looks bumpy. The population is aging, increasing the number of patients waiting for medical services and reducing the availability of medical professionals. The human resource shortage is already a big issue - Canada ranked 17 out of 20 OECD countries in a comparison of doctors-to-population, based on 2002 OECD Health Data. Many believe a system-wide change is essential to fix the problem, and as stated by Dr. Brian Day, president of the Canadian Medical Association (CMA), "a greater role for private health care could be the right prescription for the looming health care crisis".
The debate on privatization
The encroachment of private sector delivery into the Canadian public health system has been highly controversial. Current regulations prohibit private sector delivery of publicly insured medical services. Opponents of privatization claim that a two-tiered system draws on the same set of resources, resulting in better medical coverage for the rich, at the expense of services available to the poor.
This discussion on privatization has recently been revived, and there are some signs of a shift in attitudes. In June 2005, the Supreme Court struck down a Quebec law that prohibited people from buying private health insurance to cover procedures offered by the public system, paving the way for private service delivery in the province. Soon after, the False Creek Urgent Care Centre opened in Vancouver, offering private emergency care on a user-fee basis. In addition, a recent survey (see Figure 2) finds that the majority of Canadians believe that private involvement in the health care system would lead to an improvement in the availability and quality of services offered.
Despite recognition of the potential benefits to privatization, the Canadian majority remains loyal to a public system that provides equal access to medical services. A 2007 IPSOS Reid survey found that when forced to choose between extremes, seven in ten Canadians preferred a not-for-profit publicly funded and delivered health care model, over a for-profit privately delivered model funded by governments and individuals. Further, to improve the existing system and ensure the best health outcomes, the majority of physicians (88%) and Canadians (77%) favoured wait time guarantees backed by adequate new resources rather than the status quo or the introduction of a parallel private system. This highlights physicians' dislike for a system that introduces the profit motive into health planning, and a possible aversion for competition. It also emphasizes the public's concern over reaching into their pockets to pay for medical services they have grown accustomed to getting for free.
Other Models
There are numerous examples of health care systems that have successfully incorporated both private and public elements. In fact, the only OECD nations that prohibit private comprehensive care are Canada and the Czech Republic. Generally, the introduction of a parallel system for medical services allows patients with the financial means to pay to avoid wait times for medical procedures, which in turn reduces the strain on the public system. The rationale is that this injects more money into the system, at a level reflecting individual choice in a market economy, which in turn increases the overall resources in health care.
Countries such as Germany and the Netherlands allow private health care insurance to those who want to opt out of the social insurance system. Norway has successfully reduced wait times by allowing private clinics to provide surgeries subject to long or detrimental waiting lists in the public system, while the UK provides the option for private care to anyone who is privately insured.
The British experiment indicates that private sector organizations are leaders in the application of relevant measures such as patient outcomes and provider performance - key lessons for the Canadian system. It also appears that opening the sector to competition creates more incentive for providers to increase service levels and reduce wait times.
The potential downsides of privatization are best exemplified by the US health care system, plagued with a focus on non-critical commercially inclined medical services, such as cosmetic surgery. American population health outcomes have been mediocre at best, while the country has seen spiraling costs - the US spends far more per capita on health than any other country (see Figure 1). This gap is so enormous that a recent University of California, San Francisco, study estimates that the United States would save over $161 billion per year in paperwork alone if it switched to a single payer system like the one in Canada.
Looking ahead
While privatization could potentially provide a much needed boost to Canada's health system, it is unlikely to be a silver bullet. Addressing deep structural issues in the health care system will require more than adding capacity through the private sector. Governments and public institutions will need to adopt new management practices to cope with the changing demographics, new diseases, and rapidly advancing medical technology and procedures, which all conspire to push health care spending upward for the foreseeable future.
Though it is widely recognized that the status quo is not sustainable, the full impact of privatization remains to be seen. And while profit minded firms are salivating over the prospects, the debate on the most suitable health care model flares up across the country.