Britain's NHS is a canary in the coal mine for Health Canada

Canada's one payor system works well unless you need care, then it falls apart.

The pandemic exposed the vulnerability of both the United Kingdom and Canada’s health care system. Canada’s is bad. The U.K. system is worse.

On measure of the effectiveness of any health care system is the time it takes to access care. In the United Kingdom, emergency or critical care is more of a concept than a reality since in those circumstances the timing of care is what is critical and delay is the emergency. But almost 700,000 people a month have to wait at least four hours for access to medical help during an emergency.

Part of the problem is its own success. People are living longer and older people need a lot more care than youth, and unfortunately are today exposed to a broader range of complex medical issues than heretofore. An older population compels greater demand for health care - not only emergency and critical care but also and more often long-term care. Death is inevitable but humans want to delay its occurrence as long as possible and at some point that delay requires extensive and costly intervention by doctors and hospitals, and for those whose lives are near to end, palliative care.

Among the most pervasive and costly requirements for care is cancer treatment. In the U.K. 40% of cancer patients wait over two months for first treatment.

The problems in the United Kingdom are exacerbated by the rising costs of care and the limited resources society has available to provide care. Health care costs in Western democracies now command between 9.7% and 17.8 % of Gross Domestic Product and that ratio has doubled in the past 40 years. United States spends about 50% more on health care than United Kingdom or Canada.

The United Kingdom situation is made worse by its economic chaos, a direct result of its own ill-conceived climate policies. Inflation is rampant, energy costs force households to choose between fuel and food, and interest rates are rising quickly. Prime Minister Sunak is a “climate nutter” devout in his belief that CO2 causes climate change (a nonsensical parody of science, since the laws of physics compel a different conclusion). Sunak will “double down” on wasteful spending to “combat climate change” at the expense of the government’s ability to provide health care for its citizens.

Why is that the Canary in the coal mine for Canada? The similarities are striking.

Like Sunak, Justin Trudeau is a climate nutter bent on a Quixotic mission to alter the course of nature and, like Don Quixote, doomed to failure. Like United Kingdom, the Canadian health system is single payor and costly to operate (both countries health care systems consume almost 12% of GDP as set out in the chart of OECD data above). Government spending in Canada (a proxy for taxes since ultimately all those bills must be paid for by taxpayers) is now running at 35% of GDP. Arithmetic points to health care costs comprising over one third of government spending.

In both the U.K. and Canadian systems, governments defray about 92% of all health care costs and individuals the balance. Of course, all government spending is ultimately borne by citizens so the split has meaning only in how spending is controlled and who controls it. Canada’s government record of prudent control over spending is a common theme for humour, since it is laughably bad. In the U.K. an estimated 380,000 people have been waiting for over 1 year for treatment. In Canada, the wait list amounts to 1 million people despite Canada having a much smaller population than the U.K.

The best evidence of how broken the Canadian health care system is a study by Fraser Institute that found that 72% of premature deaths of Canadians were from causes that were either preventable or treatable.

Health care in Canada today employs about 3 million people, about one in five of all people employed. As essential as health care workers are, they don’t produce any of the food, housing, transportation, fuel, etc. Canadians need. As the ratio of health care workers to employment grows, the ratio of people involved in producing and distributing the goods we need falls. At some point, it becomes untenable. We will appoach that point within the next few decades unless things change.

The change Canada (and the United Kingdom) need and in my opinion will eventually have to elect to choose, is to make individuals more responsible for their own care and allow markets to allocate resources. That means a private as well as a public system and some at least nominal fee for every visit to a health care provider. If health care remains a free good, there is no limit to demand. I often hear the argument that a fee of even $5.00 for a visit to doctors will deny some Canadians health care they need and lives will be lost. Lost? Everyone will die sooner or later. If the cost to take a step to extend your life is $5.00 you don’t value your life much. If you won’t spend the same amount as a coffee at Starbucks on your own care, you don’t care. And neither should society.

Many countries have universal health care with patient co-pays (Japan, Israel, China, France, Hong Kong, Morocco, Portugal, and Slovenia, for example). Co-pays reduce demand for health care in the same was as a nominal fee. Other countries like Sweden and Cyprus require patients to pay the first $200 (or some other limit) of their own health care expenses after which the state pays all costs. Again, this is similar to a patient fee in that there is an incentive to avoid unnecessary visits to health care providers.

Canadian doctors are paid about $30 for every patient visit. This payment systems encourages doctors to drum up business and encourage patients to visit frequently. It is the wrong approach. A fee paid by the patient for every visit (with appropriate waivers where warranted for indigent patients) is an approach that will discourage needless visits. The nominal fee is a “nudge” as that term was defined by Nobel laureate Richard Thaler, and is effective. The 5 cents per plastic bag model for grocery stores (before such bags were just banned) saw plastic bag use drop 70% notwithstanding the amount was trivial.

Waiting more than four hours for emergency care or waiting more than two months for your first cancer treatment will cause you more harm than a $5.00 fee. CDC data show that Americans visit health care providers 267 times per 100 people per year (about 3 times per year per person). I have no doubt that Canadians do the same. A $5.00 fee would cost every Canadian $15 a year on average. It would also dissuade many people from visiting a doctor or the Emergency Room every time they have a cough, sneeze, headache or upset stomach and would add $500 million to health care funding. Sure, it could lead to bad outcomes for some but the current system compels bad outcomes for many.

Private clinics are warranted. Wealthier Canadians suffer disease and injury just like everyone else, and are able and willing to pay for care if it can be accessed without the wait times our system suffers. Fewer people demanding publicly paid health care services will ease the demand on the public system. The complaint of “unfairness” ignores reality - life is unfair. Equality is a shibboleth. Today, wealthy Canadians with health issue simply go to Cleveland Clinic or Mayo Clinic or their ilk and access care without delay. The money leaves Canada. No one cares about the “unfairness”. Is it somehow less fair to have Canadians spend their money on Canadian private practitioners in Canadian private clinics?

Another argument is that physicians and nurses will leave the public system and prefer to work in the private clinics? Really? Give up secure jobs, and indexed pensions for the risks of private enterprise? Some will, most will not in my opinion.

Sooner or later Canadians will need to decide whether to maintain a broken system that is not working or shift to a market based system that allocates capital efficiently. That decision will be made for them by the economics of the current system: sometime before health care costs reach 100% of GDP and all Canadians are impoverished by health care costs, voters will have stark choices and in my opinion they will choose to remain economically viable. I think that will lead to private alternatives regardless of ideology.