Canadian Health Care Is No Model for U.S.

Canadian Health Care Is No Model for U.S.
June 1, 2004

When one travels through Canada, as I regularly do, one cannot help but enter into frequent discussions on the pros and cons of health care in Canada versus the United States. The quiet, self-effacing Canadians cautiously vent their discontent with a system that, while apparently free for the individual citizen, comes with many drawbacks.

From a health standpoint, the Canadian system's greatest failing is the unconscionable delay citizens must accept to obtain serious medical procedures. From an economic perspective, the costs of the system are extravagantly higher than reported by the government's suspect accounting system.

Hidden Costs

Pierre Lemieux, an economist at The University of Quebec, wrote in the April 23, 2004 issue of the Wall Street Journal, "The Canadian system is built around a compulsory public insurance regime that provides most medical and hospital services free." Lemieux adds that the system is not, of course, free for the Canadian taxpayer. Twenty-two percent of all taxes raised in Canada are spent on its health care system.

Last August, the New England Journal of Medicine reported health care spending absorbs only 10 percent of the Canadian gross domestic product, compared to 14 percent of U.S. GDP. The Journal credited Canada with being more efficient in the application of administrative costs--but the real difference is explained by the fact that U.S. citizens are permitted to pay privately for health care services, while such spending does not take place in Canada. In Canada, it is illegal to seek or convey private medical assistance.

Canadian health insurance is compulsory, monopolistic, and administered by the various provincial governments under strict control of the federal government. It is illegal for a Canadian citizen to carry private insurance coverage for any health care services covered by the government. Physicians are told by the government how much they can charge for their services; drug prices are set by the government. The supply of medical services in Canada is completely rationed, with no significant private alternative.

The alleged "low cost" of Canadian health care is thus no less a fraud than it was in the Soviet Union. Canadians may not pay the price in dollar terms ... but they pay a steep price indeed in terms of care denied or delayed and the poor quality of service provided by unhappy medical practitioners whose incomes do not match their skill and training.

Take a Number and Wait

Long waiting lines are the worst flaw in the system. The Fraser Institute, a Canadian think tank, calculated in 2003 the average Canadian waited more than four months for treatment by a specialist once the referral was made by a general practitioner. According to the Fraser Institute's work, the shortest median wait was 6.1 weeks for oncology (cancer) treatment without radiation. In some provinces, neurosurgery patients waited more than a year. A simple MRI requires, on average, a three-month wait in Canada.

Long waits for critical care are an uncalculated cost of the Canadian health care system. A price tag could easily be calculated by determining how much patients would be willing to pay to reduce or eliminate these waiting times. We do this calculation on a regular basis in the United States in determining the charges for all services provided. In the U.S., we choose to pay higher prices in order to get more immediate care; in Canada, patients have no choice but to wait.

Three-Tier System

My own personal contacts with Canadians support a recent article in the Montreal Gazette, in which a Canadian woman described the frequent rudeness of unionized Canadian medical staff as compared to the "kindness, discretion, and professionalism" of staff members in U.S. hospitals. Few Canadians can afford to experience health care in the U.S. and thus make this comparison.

In his Wall Street Journal article, Lemieux quotes Professor Livio Di Matteo of Lakehead University in Ontario describing a three-tier system of health care in Canada. The very rich, DiMatteo pointed out, can go to the U.S. for rapid, personalized, high-tech treatment. A second tier, consisting of well-informed, aggressive Canadians, knows how to navigate the government system to gain every possible advantage, like getting to the head of the queue.

The third tier are the unconnected citizens, who make up the vast majority of patients in the Canadian health care system. They must suffer the slings and arrows of a system notoriously oblivious to anguish, discomfort, humiliation, and other affronts perpetrated by unfeeling bureaucrats on patients whose pain is most definitely not felt by those in charge.

A Quebec physician, Dr. Jacques Chanoulli, is suing the Canadian government for not allowing patients to pay for better care. The Supreme Court of Canada will hear the case in June. At the same time, 10,000 breast cancer patients who had to wait an average of eight weeks for post-operative radiation treatments over the past seven years have brought a class action suit against Quebec's hospitals.

Free-Market Alternatives

The demand for better health care has spurred innovation in Canada and overseas.

Two Indian nations, for example, are planning to build private hospitals on tribal lands, where the Canadian government's laws do not apply.

Private hospital companies in India are seeing tens of thousands of patients a year from outside that country's borders. The largest of these firms, Apollo Hospital Enterprises Ltd., has seen 60,000 foreign patients in the past three years. Terry Salo, a Canadian resident of Victoria, British Columbia, availed himself of hip replacement in Madras, India after waiting more than a year for the "free" service in his home province.

Similarly, Thailand, Malaysia, and Singapore have taken the lead in the field of "medical tourism," supplying low-cost, high-quality procedures to more than 600,000 patients in 2003. An article in the May 3 issue of the Chicago Tribune reported Poland's entry into the field, encouraging travelers to seek out lower-cost dental care while visiting Poland.

Kerry Would Clone it

What is happening in Canada and other countries with socialist health care systems is relevant to the current political debate in the U.S.

Michael Cannon, director of health policy studies for the Cato Institute, reported on the group's Web site that Democratic Presidential candidate John Kerry's health insurance proposals amount to sweeping socialization of the U.S. health care system.

That ought to alarm Americans, who should have no interest in seeing their health care deteriorate to the level of Canada's "free" system.


Dr. Jay H. Lehr is science director for The Heartland Institute. Lehr frequently travels to Canada and has spoken before more than 1,000 audiences on topics ranging from global warming to nuclear energy. He is editor of Rational Readings on Environmental Concerns, a 900-page textbook now in its third printing. His email address is e3@e3power.com.