Private Health Care
I know and understand most of the arguments against private health care and P3's (private-public partnership) in Canada, and I agree with many of them.
In fact, I'm a huge supporter of keeping the universal public health care system, essentially at any cost.
Having said that, I have some thoughts on the potential benefit of some form of private health care existing.
It is often argued that with a private health sector competing with (or "filling a 'gap' left by") the public system, the best doctors will leave the public system and go to the higher-paying private clinics. While that would undoubtedly happen to some extent our biggest problem isn't a shortage of good doctors, it's a shortage of equipment and technicians to run the equipment, especially for diagnosis--mostly due to under-funding.
As long as those who choose to use private health care do not get any tax break for it, wouldn't the following benefit the system as a whole ?
1) The same tax would be collected and earmarked for health care, but fewer people would be using the public system.
2) More tax would be collected as those using the private care would generate profit for the private clinics which would then have to pay tax.
These points seem like they would lead to a better-funded public system, even if it is a notch or two (or three or four) below the private one. If A is greater than B, but B is greater than C, then isn't everyone better off with A and B rather than just C ?
Having said that, any significant (in size) private health care sector would require some important rules/legislation to keep it from blowing the public one away, especially some form of prescribed doctor salaries--perhaps allow the clinics to exist, but force the salaries of the doctors to be equal to, or at least very close to, those in the public system. The clinics could be allowed to make as much money as they wish by charging what they want for services, but must not be allowed to use that to pay doctors so much that the public system experiences a significant brain drain.
I'm not advocating an immediate opening up of health care services in Canada, but I just wanted to state some thoughts I've had while reading about the 100% private clinic opening in BC this fall.
8 Comments:
So Chris, there's some flawed logic in there...
First is that our biggest problem isn't a shortage of good doctors.
In most places, doctors shortages are a HUGE problem. Especially FAMILY doctor shortages. Windsor, London, most northern towns, are all nearly impossible to find a family doctor in. Doctors aren't going into be GP's anymore, they're doing other things.
Add to that the brain drain to the States, where they can get paid more (and will continue to be able to get paid more, even if there is a private system in place in Canada, it won't compete in earning potential)... and yes, Canada has a doctor shortage. And a nurse shortage. And a technician shortage. And an equipment shortage. And a space shortage.
It's a myriad of factors, all combined into one major problem (ie lack of health care).
With a private system, this will exacerbate it on almost all fronts. If you're a technician, go to the private clinic. They pay better. If you're a doctor, go to the private clinic, they pay better.
Capping the salaries is an interesting suggestion to try and control the brain drain... my question becomes though: Where would you suggest this money goes? I'd much rather see Dr.'s get rich than some business.
Either way, your logic would be good if the premise you've rested it all on (ie. we have enough Dr's to fill the public system, let alone a new private system) was sound, but there is definitely a Dr. crisis in Canada.
The way it could potentially go is Private system fills up with Dr's, Public System even more desperate for Dr's than now, Public System (although they can afford to PAY them and buy equipment) can't see patients... therefore people who don't make enough to go to private clinics are Doctorless.
In most places, doctors shortages are a HUGE problem. Especially FAMILY doctor shortages. Windsor, London, most northern towns, are all nearly impossible to find a family doctor in. Doctors aren't going into be GP's anymore, they're doing other things.
Perhaps the incentive of employement at private clinics would induce more students to become doctors--labour is a market after all--if demand and wages rise, an increase in the supply should follow. So, we might end up with MORE doctors, including some of the most intelligent people who might have chosen other professions now choosing to become doctors because of the prospects of higher wages. And those who are not at the top of the field, having spent a ba-zillion years in medical school, may open their own practices, leading to a rise in the # of GP's.
Add to that the brain drain to the States, where they can get paid more (and will continue to be able to get paid more, even if there is a private system in place in Canada, it won't compete in earning potential)... and yes, Canada has a doctor shortage. And a nurse shortage. And a technician shortage. And an equipment shortage. And a space shortage.
Well, there will be no change in whether there is a US brain drain, but private health care centres may choose to pay nurses more than the public system as well (I never suggested that nurses' salaries should be capped), which could lead to an increase in the number of nurses through the same labour market mechanism as that for doctors.
Capping the salaries is an interesting suggestion to try and control the brain drain... my question becomes though: Where would you suggest this money goes? I'd much rather see Dr.'s get rich than some business.
Capping salaries at a certain level is certainly one potential action. Maybe not the same as public sector, but such that the difference isn't so wide that doctors either work for the private sector or not at all.
As far as where the money goes, if there is a huge profit, more private clinics would open. Between the clients being split up and the price competition keeping rates in check, this would lead to the normal long-run equilibrium in a competitive industry, which is approaching zero profit--of course, since there are barriers to entry into the market (technical knowledge, start-up costs, etc), the profit would never get to zero, but the profit rate would be kept in check by competition. Essentially you would get a situation of increased employment, plus a greater amount of tax collected (since the increase in doctors and staff will pay income tax, and the profit will be taxed).
Either way, your logic would be good if the premise you've rested it all on (ie. we have enough Dr's to fill the public system, let alone a new private system) was sound, but there is definitely a Dr. crisis in Canada.
Well, causality is certainly at question here--is the system causing the shortage, or is the shortage causing the problems with the system. I don't know. I was offering a possibility.
The way it could potentially go is Private system fills up with Dr's, Public System even more desperate for Dr's than now, Public System (although they can afford to PAY them and buy equipment) can't see patients... therefore people who don't make enough to go to private clinics are Doctorless.
Yes...yes it could. Which is why I said "I know and understand most of the arguments against private health care and P3's (private-public partnership) in Canada, and I agree with many of them. In fact, I'm a huge supporter of keeping the universal public health care system, essentially at any cost."
If I believed that allowing private health clinics was going to crush the public one, I would be against it. I'm not saying that what I discussed was what I thought should happen--I was just playing devil's advocate to my own long-standing opinion that any private health sector would be the ruin of the public one.
From what I understand of Dr. shortage issues... the problem is there aren't enough spaces at Ontario Universities for qualified applicants. It's not like there aren't hundreds (thousands even) of qualified applicants who are being turned away each year.
As I'm sure you are aware, getting into Med School is highly competitive. Med school is MORE competitive than Law School, and I know that for every 1500 applicants there are approximately 150 positions. That means that less than 10% of qualified people can actually become Doctors.
This training issue is being caused arguably by underfunding of the education system. A totally public system could, not would but could, potentially see tuition going bezerk (as it has in Law, with U of T students paying 25k annually), which discourages average middle class, or really anyone but the very wealthy, from being able to attend these schools. At 4 years of education you're looking at 100k plus of debt. That's a mortgage, essentially, which is crappy despite earning potential.
The problem is that Supply and Demand as we typically know it doesn't seem to exist in the Dr. market. Right now there's HUGE demand... supply doesn't seem to be increasing in a corresponding manner. Not because there aren't enough willing future Doctors out there, but because our system isn't training them quickly enough, and likely due to the huge draw of the US.
I don't think anyone can KNOW that the installation of private healthcare would crush the public system. I think its a strong hypothesis, however, that a two tiered system would lead to sub standard and underfunded care for the poor. I think this hypothesis rests strongly on the fact that we aren't faced with an overwhelming number of qualified doctors, and if we were maybe things would be different.
The lack of doctors, however, goes back most likely to the underfunding of the education system and the inability to train more than they are now... which is a whole other can of worms.
Either way, it's a pretty unarguable proposition that when you create a two tier system, both tiers are not created equally. If you have public health care, and private health care, private health care will be better. End of story.
This could, and most likely would, create discrimination against the poor. ie. Can't afford private health care? No heart transplant for you. Which simply put isn't in the vein of equality. By no means should a baby get a lesser standard of care because his mom is a crack whore. By no means should a widow have less medical options available to her because she's living on a fixed income.
I think most Canadians, and I don't doubt you're included, want to see the health care system strong and universal, and bottom line is there is a huge possibility that a private system is going to create a whole host of realities that are beyond unpalatable.
Could it improve things? Maybe. Are there other ways to strengthen health care? Most certainly. Is private healthcare a risk we're willing to take?... that's the question.
Good points Sara and Chris.
There's a few reasons that for the shortage of doctors in Canada (however, brain drain is not a significant problem...it happens but much, much less than you'd think). The number of spaces in med school is certainly a factor, but the number is small not only because of funding issues. Opening up the number of places in med school drastically would make doctors that much more rare and make it harder for them to justify their salaries. There's no reason it has to be such an elite position, but the guild keeps the numbers of doctors down to ensure high salaries. This sounds great to me: more doctors for less $ per doctor. But not so great for the doctors who already went through school.
Hi Mike.
Your point about the # of doctors being kept down to raise the average salary correlates to one of my points above.
If there were a higher demand for doctors, which would certainly occur if a private health sector came into existence, then there could be an increase in the number of doctors in supply without changing the average salary--in fact, if the demand were greater, but the increase in doctors was relatively smaller, then there could actually be a situation of more doctors, but at a slightly higher salary (if the salary were to rise too much, then that could have a significant effect on the finances of the public system, something I would certainly oppose vehemently).
And Sara--your point about there being a rich vs poor, health care system--of course that is what would exist. But the question is would you rather have a system of A's and B's, or just give everyone a C ? I think in the case of health care, that it is most important to have the minimum level of care brought to the highest level possible. And since we live in a society where the rich give up a higher proportion of their income to support public institutions than do the poor, I think the economic benefit of having the rich spend a portion of their after-tax income on something that could, economically speaking, improve the public health care system by taking some of the pressure off of it, is worth looking at seriously.
Very interesting Mike... definitely a good thing to open up more spots, even if the salary goes down.
I don't really like the "two tier" idea because I really think something as fundamental as healthcare should be a right, not a priviledge. It turns into a slippery slope when we say "Well, they pay less, so they get less" or even "If someone can buy better health care, why not let them".
I think that rather than creating A and B, with A being great and B being crappy and the bare minimum that people don't die, I'd prefer to give everyone a C that was as good (or almost) as the A... and I really think that if we put the time and effort in that's a reality.
But really, that could be a false proposition... but opening up more spots for qualified Doctors would be a start... I think that the problem has more than just money at its root, and that's why it's harder to solve.
And Chris: Why do you think that if there were more doctors there'd be a higher demand.
I don't get that equation, and here's why it doesn't make sense...
Seems to me that the number of people in Canada is going to be 30 some million regardless of how many doctors we have. People only see doctors when they're sick. If, hypothetically the public system required 100 doctors to see everyone they are seeing now, I don't see how there'd be a drastic increase. Even if the private care was much better, therefore maybe requiring more doctors, the demand on the public system would be decreased in a corresponding amount (because their patients have all left).
I mean, maybe a slight increase because it takes Doctors who are doing a GREAT job in the private system longer than those doing an adequate job in the public system, but wouldn't it be negligible?
I never said that more doctors would equal a higher demand.
Shortage of doctors in the public health system coupled with the introduction of a private health sector increases the demand for doctors in this way:
We implied that some patients leaving the public system will not reduce the demand for doctors here--since we defined the system as short on doctors, the demand exceeds the supply, so if demand falls, there is still enough demand for the existing doctors.
So, when the private system requires more doctors to serve the patients who elect to leave the public system in favour of the private one, there is new demand for doctors--if salaries rise, the supply will increase to meet the new demand--of course, if no new licenses are granted, then this won't happen, but it would be crazy for a professional organization not to take advantage of a situation where employment can increase without adversely affecting salaries.
A second, but much more simple, effect, is that if we assume that private clinics exist because people are willing to pay to demand more of their doctor's attention, then the same number of doctors working for a private clinic cannot see as many patients as those in the public sector where they spend less time on each patient--basically there would be a higher doctor to patient ratio on the private system, so the same patients will demand more doctors overall.
One more point--the A, B, and C thing--the whole point is that if my economic arguments are correct (I'm not saying they are--depends whether or not you think this market will act the way a normal one should), the premise was that A is better than B is better than C, so A will be private and B public in a 2-tier system, whereas C would be the inferior but equal system. If you don't agree with my points about what may happen in a 2-tier system, then you are saying B is worse than C, in which case I would completely agree that we should have everyone at C--but my whole point was that unequal isn't necessarily worse, especially in the realm of healthcare where I believe that bringing the minimum level of care as high as possible should be the goal.
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