Private compulsory

The London Free Press
Tuesday, March 7, 2005
By Rory Leishman

Ontario Premier Dalton McGuinty was up in arms last week over Alberta’s “Third Way” on health reform that would allow Albertans to seek better and faster medicare at their own expense through a private health insurance plan operating in tandem with the public system. That’s not the Ontario way, said McGuinty. He insisted that wait times should be reduced for everybody, “not just for those who can afford to jump to the front of the queue.”

Clearly, McGuinty does not get it. Under the Alberta proposal, people who take out private medical insurance would not jump to the head of medicare queue. They would get out of that queue altogether, by transferring at their own expense to a separate private system.

“But that’s two-tiered medicare,” wail the Liberals. So what? Britain, France, Germany, The Netherlands and Sweden – to name just a few countries – have operated two-tiered medicare systems for decades. Why should Canadians remain stuck with a grossly inefficient, virtually Soviet-style, medicare monopoly?

Granted, a two-tiered, public and private, medicare system is hardly better than a single-tiered system run by the government. While people who can afford private medical insurance in Europe can get good medicare, the majority who remain stuck in the public system encounter much the same problems as all of us in Canada – long and often painful waits for less than life-saving procedures such as hip-replacement and cataract surgery.

The ultimate remedy for public-sector medicare is to eliminate the inefficient system altogether. Yet the idea is anathema to liberals and socialists. They think it is beyond the capacity of statecraft to devise a system for the private delivery of medicare services that is superior to the model in the United States.

This is not to suggest that the United States’ system is especially bad. Despite all the supposed advantages of the Canadian medicare system, the Medicare and Medicaid programs in the United States provide the poorest of the poor with much quicker access to better medical services than is available even to the richest of the rich within Canada’s public-sector medicare monopoly.

A key flaw in the United States’ medical system is the lack of universal and comprehensive coverage. Many people cannot afford, or refuse to buy, comprehensive coverage for medical care. There is an obvious remedy for this defect: Acting together, the federal and state governments should subsidize the costs of basic medical insurance, and make this coverage compulsory.

Switzerland has adopted such an approach. Rather than provide medical services through a public plan, the Swiss Cantons require all residents to purchase at least basic medicare coverage from one of 87 competing, private-sector, albeit not-for-profit, insurance companies.

The companies are closely regulated. To hold down costs for the sick and elderly, they must provide insurance at the same rate as other clients within a designated region. In addition, the Swiss Cantons subsidize medicare premiums, so everyone, regardless of income, can afford comprehensive, basic coverage for sickness and accidents.

Thanks to this private-sector system, Swiss patients rarely have to endure long waits for basic medical treatments. But to be sure, the quality of Swiss medicare does not come cheap. According to the latest figures from the Organization for Economic Co-operation and Development on health care spending per person per year, the total for Switzerland was $3,781 in 2003, as compared to $3,001 in Canada.

If the governments of Canada were to lavish an extra $780 per capita on the existing Canadian medicare system at an extra annual cost of $25 billion, would Canadians enjoy the same quality of medicare as the Swiss? That’s most unlikely. Private-sector competition is the key to the success of the Swiss system: For Swiss physicians, hospitals and insurance providers to remain in business, they must provide quality service at an attractive price.

Alberta Premier Ralph Klein is eager to experiment with more private-sector competition for public medicare. Prime Minister Stephen Harper should allow him to do so within the limits of the Canada Health Act.

As for McGuinty, he should beware: By refusing to give private-sector providers any opportunity to reduce wait times for key medical services, he could incur the wrath of fed-up voters in the next Ontario election.