The Fraser Institute
May 2004
How Good is Canadian Health Care? 2004 Report
By Nadeem Esmail and Michael Walker with Sabrina Yeudall
Conclusion
This study has attempted to provide answers to a series of questions that are important to resolve if Canada is to make the correct choices as it amends its health care policies. The study is strictly comparative and examines a wide number of factors for the member countries of the OECD in arriving at the answers to the questions posed.
Taking this empirical approach to health care provides clear direction for health care reform in Canada.
* Canada and Iceland have the most expensive health care systems amongst the
industrialized nations that have comprehensive, universal access to health
care.
* Canada ranks first in only one of seven health care outcome categories and does not rank first in any of access to care, supply of technologies, or supply of physicians.
* No country in the industrialized world other than Canada outlaws a parallel private health care system for their citizens.
* All four countries that out-perform Canada on the cumulative rank for mortality amenable to health care, potential years of life lost, mortality from breast cancer, and mortality from colorectal cancer have private health care alternatives to the public system and some form of user fees at the point of access; none spends more than Canada after age adjustment.
The comparative evidence is that the Canadian health care model is inferior to others in place in the OECD. It produces inferior access to physicians and technology, produces longer waiting times, is less successful in preventing death from preventable causes, and costs more than any of the other systems that have comparable objectives. The models that produce superior results and cost less than Canada’s monopolistic, single-insurer, single-provider system have user fees; alternative, comprehensive, private insurance; and private hospitals. Canada should follow the example of these superior health care models.
http://www.fraserinstitute.ca/shared/readmore.asp?sNav=pb&id=658
Comment: This new report from The Fraser Institute is important because it will be distributed widely and used intensively by the opponents of both national health insurance in the United states and of the Canadian medicare system. It is important to understand the report and to be able to respond to it.
At the outset, the report attempts to set an erudite tone by providing a series of calculations, complete with Greek letter symbols, indicating that an adjustment of Canada’s health expenditures based on the age of their population results in the conclusion that Canada (tied with Iceland) has the most expensive health care system amongst the industrialized (OECD) nations that have universal access to health care. For purposes of this conclusion, the United States was conveniently excluded on the basis that it does not have a universal system.
A careful examination of the seemingly complex but very simple calculations
demonstrates that Canada’s costs were adjusted upwards because they would
have spent more if more Canadians were over age 65. This ignores the fact
that this increased spending is fictional and does not warrant their conclusion that Canada is the “highest spender.”
Another flaw is that they made the assumption that everyone over 65 suddenly requires a more intensive level of services. It is really only at the end of life when there is an abrupt increase in costs for a significant number of patients. And Canadians, being egalitarian, have accepted that each person is entitled to one but only one end to his or her life. It doesn’t matter at what age that occurs. There is no reason to falsify the level of spending based on such specious logic.
That should be adequate to completely destroy the credibility of this report. But then the report does include some well established economic theory that seems to lend some credibility to the report, even though the extrapolations by the authors are not warranted. But there are other major problems with this report.
The authors draw the conclusion that the “Canadian health care model is inferior to others in place in the OECD.” To reach this conclusion, citing numerous previously published reports, they compared Canada’s performance to other OECD nations with comprehensive, universal health systems. They used Canada’s ranking in these studies. Since these are all industrialized nations with comprehensive systems, an average rank should be evidence of success of the system. In most of the lists, Canada was in the upper half.
In fact, the cumulative rank was fifth, relatively high on the list of OECD nations. The conclusion that the Canadian model is inferior is refuted by the evidence included in their report.
The most outrageous conclusion of their report is that Canada should introduce user fees, private hospitals, and alternative, comprehensive, private insurance since these are features of superior systems. Not only is their data inadequate to establish the fact that other nations have superior systems, but they also failed to provide any cause and effect relationship between quality systems and privatization and cost sharing. The failure to provide any credible support to their conclusion unfortunately reduces their paper to the equivalent of gobbledygook.
