Failures of Canada's Single-Payer Health Care Highlight the Flaws of 'Medicare for All'
· Reason
For evidence that "universal" government-run health care has become an almost theological article of faith among certain segments of our society, I need look no further than some emails received in response to my last column. In that piece, I wrote that government intrusion into health care is raising costs, devouring the federal budget, and increasing Americans' dissatisfaction with the quality of medicine. Yet my correspondents assure me that doubling down on government involvement with some variety of "Medicare for All" will solve the problem caused by that intrusion.
They're not alone: Progressive candidates for office, like Michigan's U.S. Senate hopeful Abdul El-Sayed, have made the policy part of their platforms.
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Well, if this country's experience with government trespassing into patients' relationships with their providers doesn't convince, maybe the Canadian experience will be more persuasive.
Earlier this month, the Vancouver, British Columbia-based Fraser Institute published a report on the failings of Canada's single-payer health care system.
A Healthcare System That Serves Government Bureaucrats
"An assessment of how money is spent throughout the health-care system concludes that the needs and preferences of patients play a small and indirect role in the allocation of health-care resources, having only limited input through the political process," conclude authors Nadeem Esmail and Steven Globerman. "The health-care system is oriented towards the needs and preferences of governmental decision-makers and bureaucrats, while health-care providers do not compete to serve patients but rather compete for government funding and their share of the health-care budget."
Coincidentally, Canada's single-payer, tax-supported health care system is commonly referred to as "Medicare." It's more or less what many lefties demand when they call for "Medicare for All" and excoriate relatively mainstream Democrats like House Minority Leader Hakeem Jeffries for not signing on to a full government takeover of medicine. Jeffries sponsored Medicare for All legislation for many years but cooled on the scheme as he gained seniority. Perhaps tenure in office granted him insights into the quality of services controlled by the state.
Long Waits and Canadians Moving to the U.S. for Health Care
"That Canada's health-care system is failing patients is obvious to most Canadians," note Esmail and Globerman. "Prominent examples of the system's shortcomings include remarkably long queues for procedures and treatments, millions of Canadians without a family physician, and problems with accessing timely emergency care."
Last month, Reason's Reem Ibrahim wrote that, in Canada, "the median waiting time between referral from a general practitioner and receiving treatment has hit 28.6 weeks, which is 208 percent longer than the wait Canadian patients would have expected in 1993….In 2020, 62 percent of Canadians who needed specialist care waited at least a month to get it, compared with just 31 percent of patients in the United States."
As a result, among Canadians moving to the United States, a July report from the University of Calgary's School of Public Policy noted "health care's overall prominence as an observed driver of relocation across all age groups—combined healthcare reasons (i.e., access and quality) account for 25.62 per cent of observed relocations, second only to job opportunity (27.74 per cent)."
But how can that be if our northern neighbor's health cares system is free—well, prepaid, courtesy of funding through taxes? It turns out that one feature of single-payer government healthcare is the problem with the quality and availability of medicine.
A Lack of Prices and Emphasis on Bureaucratic Planning
"In most activities other than health care, suppliers rely on prices to inform them of the preferences and priorities of consumers and to guide their efforts to improve the quality of their products and lower their costs through innovation," observe Esmail and Globerman. "Prices also assist consumers in their decision-making by informing them of the existing trade-offs between alternative consumption options."
"Because of legislation and government policies, the information and incentives supplied by prices that are used by participants in private markets to help them make economic decisions are not available to Canadian patients, health-care providers, or government decision-makers," they add. "As a consequence, governments, absent the knowledge conveyed by prices, allocate health-care resources through bureaucratic planning approaches."
In other words, the patients who need check-ups, tests, and treatment aren't the ones paying for their care, so they not only don't consider the cost of what they want, they are not even the customers. Government officials who issue payments are the customers, and their priorities are addressed by the system. This third-party payer problem isn't unique to government schemes; "insurance" that isn't really insurance for unexpected illness, but rather prepaid coverage, faces the same challenge.
"The healthcare market is hindered in many ways, but the core structural problem is simple: The person receiving care is almost never the person actually paying for it. Roughly 90 cents of every dollar is covered by a third party—an insurer or the government," economist Veronique de Rugy wrote in March for the Cato Institute. "When someone else pays, no one shops around, no one compares prices and no one asks whether a service is worth it."
We Need Markets To Improve Health Care
The problem is compounded in a single-payer system in which there is no competition, and the government can raise taxes to cover rising costs or compel rationing—at least for a while. Ultimately, the Fraser report adds, "bureaucrats lack any profit motive or other means to directly (that is, not politically) benefit from improving the health-care system's performance, including reducing patient wait times."
In fact, add Esmail and Globerman, the ever-lengthening wait times suffered by Canadians who need tests and treatments are an inevitable outcome of a system in which patients don't pay for care: "They represent the substitution of 'non-price' rationing of scarce resources for rationing by price."
The lesson for Americans is not that our system is perfect—far from it—but that many of the problems that make people so unhappy with healthcare are caused by existing government intrusion into relations between providers and patients. So-called Medicare for All would make those problems worse by further stripping patients of say over their own care. The answer lies in making people responsible for paying their own bills, using insurance to cover only unpredictable costs and events, and returning market prices and discipline to the provision of medicine.
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