The Architect Of Canada’s Socialist Healthcare System Now Wants More Private Sector Involvement

Hey all

I’m dragging a different and related conversation over from the Obama race card thread to here. Somehow it morphed into healthcare between Buzz and Dave Noble, and it’s easier to keep it all in one place.

So here’s where we are picking up, and I’m responding to Dave Noble’s comment:

Finally, why do you think we are the only First World country that doesn’t have a nationalized healthcare system? I’m curious.

First off, there is a comparison of performance standards among five countries Australia, Canada, England, NZ and the US. All but the US have socialized health care.

This was based on some specifics, and certainly doesn’t take into account waiting times, hospital conditions, advanced surgeries, etc. But you will see that on the points they address, including various cancers, screening rates, suicide, kidney transplants, polio vaccines, etc, that the differences in performance are all close.

But let’s talk advanced medical technology and socialized medicine.

Dave, you specifically wanted to know why the US was the lone holdout in the socialized medicine experiment. The UK took that route in 1948. Canada and Australia were in 1983 and 84. Not sure when NZ went, but I think it’s more recent than the others.

Of these, the UK/Britain and Canada are both experiencing the downfalls of their socialized experiment. Curt’s the article above addresses Canada, but there have been previous articles for the other countries. I’d have to dig, but believe me… they are whining about quality and waiting lists.

An interesting comparison is to look at the medical advances and breakthrus for the last half of the 20th century. Keep in mind that the US is the only one that has private funds supporting most of these, with some federal funding in the mix. The others? Just as they have socialized medicine, all … sorry, make that most. I can’t give an absolute and forgive me for suggesting that initially…. their R&D also has to be govt funding.

So what are the notable medical break thrus? You’ll see on the link that in the last half of the 20th Century, most medical advances were dominated by Americans. And I think this is a direct effect from this country NOT having socialized medicine.

Added: BTW, these are just the advances in cardio/heart matters.

Valuable lessons here from William Anderson from the “Ludwig von Mises Institute”, an Alabama think tank. Posted in the Oct 2004 edition of their monthly rag, The Free Market, is Anderson’s personal story, and his views on facilities’ equipment in socialized medicine (specifically Canada) hospitals vs the US private institutions.

However, in the United States, the medical field still draws large amounts of private investment, which is not simply a mirror image of government “investment,” as we see in Canada. Krugman and others have declared that American medicine is high-cost because of the abundance of devices such as the MRI, or even the equipment used for my examination and angioplasty. As I pointed out in an earlier article, this is nonsense.

For those who hold that private investment in healthcare facilities somehow is morally and economically inferior to them being financed with tax dollars, I would urge them to visit a number of private and non-profit facilities in this country, and then visit the same number of Canadian facilities. The differences in some places would be subtle, while they would be quite stark elsewhere.

The reason is simple; in a system characterized by private property and some sort of private payment, capital facilities are assets. The owners can earn a rate of return on them, thus it makes no sense to permit such facilities to deteriorate. Capital in a system like Canada’s however, is a liability. No individual or organization earns income from these things, and payment for their purchase takes away from individual employees, many of whom are unionized.

Take the situation of a hospital administrator in Vancouver. He or she is given a government budget of “X” dollars. To spend some of that money on an MRI machine or something like that would be pointless, since it would not make the hospital – and its employees – better off, and in the short run would make them worse off. The purchase of such a medical device would likely mean no raises for the unionized workers, which would mean the possibility of a strike.

As in other industries, the free market provides competition and profit… which is then used for advances to remain at the top of the competition. Anderson is an economics specialist.

Lawdy I hate it when I type a response, and the system gives me an error… grrr. So let’s see if I can repeat this and do a safey Ctrl C before hitting the send button!

I must correct a badly worded section in my #11 post. I did not mean to imply that Taiwan and Hong Kong are not entirely socialized. It is Singapore only that has that structure.

INRE your:

I am willing to consider a healthcare system that has both government and private sector aspects. What I find unacceptable is our current system which, with the exception of the indigent and the aged, is run not by doctors, but by health insurance companies. My concerns are pragmatic, not ideological. I want the system that delivers the best overall healthcare for our citizens at the lowest price – i.e., that is based on a classic cost benefit analysis.

First, we already have a system that is a combo of private and govt run plans. VA, Medicare/Medicaid are federal programs, while many States have their own State run plans as alternatives to private care.

Our major failing is the costs. And in this, I agree with you a 100% on wanting a system that provides the “best overall healthcare” at the “lowest price”. Where Singapore succeeds and the US fails is the costs of administration.

The Singapore government spent only 1.3 percent of GDP on healthcare in 2002, whereas the combined public and private expenditure on healthcare amounted to a low 4.3 percent of GDP. By contrast, the United States spent 14.6 percent of its GDP on healthcare that year, up from 7 percent in 1970…

Our system is laden with waste. Those costs can be laid at the feet of Congress and legislation that favors trial lawyers. The HMO concept, while quite old, became far more complex and intrusive when Congress stuck it’s nose into the medical business and created the 1973 HMO Act. If ever you want to make something cost more, and be less efficient, involve Congress.

Back to Singapore – a system that, while we shouldn’t be parroting en toto, can offer us some lessons. Oddly enough, it is eerily similar to the proposals to privatize SS.

More details on how Singapore’s system works:

There are mandatory health savings accounts: “Individuals pre-save for medical expenses through mandatory deductions from their paychecks and employer contributions… Only approved categories of medical treatment can be paid for by deducting one’s Medisave account, for oneself, grandparents, parents, spouse or children: consultations with private practitioners for minor ailments must be paid from out-of-pocket cash…”

“The private healthcare system competes with the public healthcare, which helps contain prices in both directions. Private medical insurance is also available.”

Private healthcare providers are required to publish price lists to encourage comparison shopping.

The government pays for “basic healthcare services… subject to tight expenditure control.” Bottom line: The government pays 80% of “basic public healthcare services.”

Government plays a big role with contagious disease, and adds some paternalism on top: “Preventing diseases such as HIV/AIDS, malaria, and tobacco-related illnesses by ensuring good health conditions takes a high priority.”

The government provides optional low-cost catatrophic health insurance, plus a safety net “subject to stringent means-testing.”

The site I used for much of this info has an excellent final statement:

…. Singapore shows that the free lunch offered by greater government control [i.e. Canada] is meager compared to the free lunch offered by old-fashioned individual incentives [i.e. Singapore].

Now, all that being said about efficiency, there is also the not addressed and viable side bar… the superior equipment and capital assets by private hospitals over govt run hospitals. To examine simply the cost and health care results, without anticipating how that affects future research and advances, is only catching part of the picture.

I am not for 100% govt funded medical research. When private investors fund research, they analyze the costs, benefits and profits. If they feel it’s promising, they drop the cash. If it is a failure, it’s their cash lost, not ours.

Congress does not have the expertise to determine what is feasible and not in the medical field. They respond only to feel good, nanny proposals. I’m not into throwing cash at every medical cause Congress thinks is viable. I’d prefer the private sector absorb failures, not the US taxpayer. That way we are only paying for successful endeavors with the price point on a ready to market product.