Monday, August 08, 2005

NEWS FLASH>> Canada Inches Toward Private Medicine

The Canadian healthcare debate (and, increasingly, the American one) has for decades revolved around this central premise:
Universal public healthcare (i.e. Canadian) is a more humane model because everyone is covered regardless of their financial situation, and free market private healthcare (i.e. American) is inhumane because so many people, particularly the poor, are left without adequate medical care.
Allow me to point out some inherent problems with this half-baked assertion.

1) Apples to Oranges…

To say that the US system represents the free market private care model is incorrect, hence, to compare the systems as wholly public vs. wholly private is the wrong way to frame the debate. People need to understand that the American system is not an entirely free enterprise system by any means, thanks to the humongous Medicare and Medicaid bureaucracies. To ignore this fact is to ultimately compare apples to oranges. The politicians and the media in Canada need to stop using such a comparison as part of their propaganda and recognize the fundamental problems with their system, as evidenced by similar systems all over the planet, including the Medicare and Medicaid programs in the US.

2) Public Care = Humane Care…

In Canada, all you hear about is how bad things are on the other side of the border. Consequently, the horror stories of American healthcare are grossly overstated, and the failings of the Canadian system are vastly understated. There are many dirty little secrets about socialized medicine that belie the notion that such a system is the most “humane” way of treating people. Canada aside, it’s not just a handful of countries encountering problems with public care; virtually every nation with a large socialized medical system is grappling with the same issues associated with providing “free” services, primarily the degradation of care due to rationing and shortages. Check out this site and read about the deadly shortcomings of public healthcare. You’ll find a litany of articles that are almost never referenced in the Canadian media.

The perception that a publicly funded universal care monopoly somehow constitutes a more humane system is a grotesque fallacy. Even the architects of the most venerated European public healthcare systems acknowledged that fact to some extent, which is why they didn’t outlaw private health facilities or private insurance. Oddly, Canada is part of a very small club of countries that bans private care and insurance outright, sharing that honor with the likes of Cuba and North Korea.

Canadian healthcare advocates write about public monopolies providing the best form of care to the most vulnerable in society, but how does the mere existence of private care harm those most vulnerable? What about the poor man who was at the center of the recent Supreme Court decision that outlawed the Quebec health monopoly, the guy who needed hip replacement surgery but had to wait over a year? Does he not qualify as vulnerable? If he had the means to buy insurance that would have covered his surgery within a reasonable timeframe, what is so wrong with that? This man should suffer in pain for months on end to preserve the principle of universality? Let’s not kid ourselves into thinking that universality keeps “the rich” from “jumping the line” ahead of "the poor". People with the means to do so simply take a short ride across the US border if they do not want to wait in the Canadian line for care. What is so wrong with letting them get the care they wish to pay for in their own backyard instead?

All that being said, I am not an advocate of the American healthcare system in its current form. Contrary to the popular Canadian myth, the American system is not some giant capitalist marketplace that squeezes innocent, sick grannies of their hard-earned pennies. In reality, the system is a hodge-podge of both private and public care that’s been cobbled together over the years, and mangled by politicians and bureaucrats who’ve stifled the private market’s ability to deliver care at a reasonable cost. The answer to solving the problems of the US system is not more bureaucracy and public care. The correct answer is to let the market for healthcare operate more freely. If you allow the providers and insurers operate in a competitive environment, it will lead to more options and lower prices.

What we have to remember is that people are “consumers” of healthcare. When you give “consumers” a free service in a monopoly environment, as in free universal healthcare, they will tend to consume more of it than they otherwise would. In other words, what you have is a situation where the demands for the free service are never met by the limited means of the service provider, the government monopoly. This leads to chronic problems with shortages, rationing and higher costs for the delivery of the free service. This is Economics 101, folks. It applies whether we are talking about making widgets or performing bypass surgery. Why some people insist on perpetuating a system that is unsustainable is beyond my comprehension.

3) Private Care = Inhumane Care…

At my weekly office meeting a few weeks ago, there was a discussion about my co-worker's sister, who’s been battling lymphoma for some time. She used to work for a cutting edge healthcare technology company, and through her contacts was able to get some phenomenal stem cell treatment. In a nutshell, her doctors were able to harvest her stem cells and apply some revolutionary technique to essentially replace her immune system. So far, she’s doing great. Although it wasn’t stated explicitly, it was clear from the tone of the conversation that followed that it was 1) a shame that such a breakthrough treatment was so expensive (probably at least $1million), and 2) a greater shame that not everyone with lymphoma had free, unfettered access to such treatment.

Duh! If such treatment were free, who would spearhead the enormously costly research and development that would yield such treatments in the first place? Without a means to recoup investments in such things, how would companies stay in business, let alone exist in the first place? Medical technology is no different than any other technology in terms of its core business model. It goes something like this: A company invests in product development. It sells that product to a relatively small market for a hefty price to recoup the costs of development. The product matures, bugs are worked out, and efforts to expand the market are taken. Prices come down as competition enters the marketplace to meet demand for the product. The company invests its profits in improving the product and developing new ones. And the cycle continues unabated…

The product lifecycle is a relatively simple one which has been proven successful time and time again. Just because the lives of lymphoma patients would otherwise be saved if they had access to it in the early stages of the cycle does not change the basic equation. Providing it for free may benefit a few people today, but it harms countless numbers tomorrow because there would be no incentive to advance revolutionary technologies any further.

4) The Uncovered Millions…

Contrary to Canadian myth, the number of Americans living without medical coverage is grossly exaggerated. The oft-repeated line about 1/3 of Americans being without health insurance is utterly and patently false. Even the most ardent American universal care advocates say there are roughly 43 million uninsured Americans. That’s 14%, which is a far cry from 33%. Of course, using those figures is being quite generous to the universal care cause. Unbiased estimates of the uninsured come in between 25 and 30 million, taking the percentage down to 8% - 10%. Interestingly, there’s ample research showing that nearly half of that 8%-10% is made up of people who have the means of purchasing health insurance but choose not to do so. As the old sayings goes, “you can lead the horse to water, but you can’t make him drink.” To impose universal care on everyone would be to forcibly lead the horse to the water spigot and thread a hose down its throat. Making matters worse, there would only be a limited number of spigots, and no guarantee that the water would be running at all times. Plus, the horse’s owner would have to pay for the privilege of having access to the spigot and hose, yet have no input into their working condition. Maybe that’s taking an analogy a bit too far, but you get the idea.

Frankly, I understand where medical service providers like doctors and nurses are coming from when they make their pitch for universal care. On the frontlines, it’s tough to watch people seemingly get “screwed” by the system, citing the refrain “if only they had health insurance.” But good intentions do not always result in sound public policy. Countries all around the globe have experimented with public care in one form or another for the past 50 years. What’s becoming readily clear, particularly in this era of rapidly aging populations, is that these models simply do not provide the masses with the medical benefits that were intended. There’s no sense clinging to a bad idea in spite of good intentions. At some point in the near future, many countries, including Canada and the US, are going to have to face their tattered systems head-on, and make the requisite changes that will improve medical care for everyone. I only hope the powers that be will allow for a sensible injection of market forces into the bureaucratic nightmare the healthcare systems have become.


At 8/10/2005 7:47 AM, Blogger Eddie said...

Ace, your site rocks. I am glad I stumbled upon it. I couldn't have written a better article myself about the fallacies of universal healthcare. You are right, the Canadians love to quote the "worst case scenario" about the US health system which is fed to them by the liberal media in their country, especially the CBC.

Anyway, what a great paragraph about the number of uninsured in the US. If people have the means to afford it, and prefer to be self insured instead, why do we continue to say that they aren't getting health care? Also, a few more things about the numbers that the democrats love to quote. For beginners, that number is a fluid, moving average. Therefore, if you are unemployed without work and health insurance for one month, you are officially uninsured. However, you may have it in the next month or two. Another thing is Medicaid, or title 19. Just because someone hasn't yet applied for Medicaid doesn't mean they don't qualify. For example, if you are "uninsured" and poor, you are not going to apply for this program until you need it. Therefore, you may be healthy, and you show up in the uninsured numbers. In reality, you probably are covered, but haven't yet needed to apply for this coverage. Thanks for the article. Bravo.

At 8/10/2005 8:21 AM, Blogger Ace said...

Ugh, I could go on for a week about American myths circulated by the CBC propaganda machine. When I announced I was moving to the US, some of my friends were horrified. Based on their impression of life in America, it would only be a matter of time before I was:

a) shot by some anonymous assailant,
b) subsequently turned away at the hospital despite my injuries, and
c) assuming I survived, somehow sued civilly by my attacker.

Your point on the fluidity of the "uninsured" statistics is dead on. This common sense perspective on the whole universal care issue has to be told loudly and often to counter the unchecked lunacy I see floating in the media every day. People have to be dissuaded from the notion that "free" healthcare is some sort of birthright.

At 8/10/2005 3:01 PM, Blogger Eddie said...

Dear Ace,
I know you checked out my "stock" blog, but would appreciate it if you visited my political blog,

For some reason, I have had a bunch of pinkos commenting on my conservative thought today. I would appreciate it if you gave your opinion as well. Thanks, Eddie.

At 8/14/2005 11:05 AM, Blogger Dale said...

Brilliant commentary on the state of health care in Canada Ace. Thank you.

At 8/14/2005 12:51 PM, Blogger Ace said...

You're welcome, Dale.

At 11/28/2005 3:10 PM, Anonymous Blue Cross of California said...

Health care is an important aspect to many individuals and It would be great if we can do something to help the uninsured receive health coverage.


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