Tuesday, November 29, 2011

Canada's bloated health care monopoly

"When countries with smaller workforces accomplish what those with larger ones struggle to achieve, we need to know the reasons," says Matthew Lister in a National Post article Health care needs to get lean. Mr. Lister was comparing the ratio of healthcare administration employees (federal and provincial) in Canada to that in Germany. It turns out that the Germans are remarkably more efficient. One healthcare administrative employee services about 1,415 Canadians. In Germany, with a similar system organized in states (provinces in Canada), it takes one healthcare administrative employee to service 15,545 Germans, more than ten times the Canadian ratio! Furthermore Mr. Lister compared Berlin's State healthcare employees to Alberta's, both have about the same population. Berlin's State has 104 employees compared to Alberta's Ministry of Health with 708 people. Yes, Alberta is huge in comparison to the German State, but it's the populations that are similar and that use the healthcare - not even close.
The chart above is from a comparison of healthcare outcomes for seven OECD countries. Canada is 6th, and Germany is 4th, but Canada is dead last in quality care, effective care and timeliness of care, while spending more money per capita.
Canadians most frequently compare our healthcare system to that of the US. According to the chart, they are similar, but only in outcomes. Canada is 6th, the US is 7th, but look at the difference in per capita cost. According to that chart, US costs are almost double Canada's per capita cost. Based on that, Canada should properly be compared to the other countries because the systems are more similar and so are the costs.
An article by Tom Blackwell in the PostLook past U.S. for health-care fixes: study, agrees that the US is not a good comparison for us. The other countries have similar systems to Canada's, but with much better outcomes and similar or lower costs. Why?

The answer seems to be related to competition and choice in these other countries, ideas that even last week were squelched by the McGuinty Liberals in Ontario. These countries haved shifted into "a 'consumer-driven' culture that gives patients more choice in medical services." Patients are allowed to pick and choose the services they get through private health insurance companies.
One of the doctors involved in the study said: "What I felt was quite striking across a number of these other countries is the role of consumer choice. As soon as consumers start to select and choose ... then you introduce into those systems some element of competition. Then the providers for those services suddenly need to respond to consumer demand, or lack thereof."
Of course this would be a start, a move in the right direction toward a truly competitive healthcare system. But can it really happen? An article in the Post by Lorne Gunter: We're all addicted to big government, suggests just how difficult this might be.
Mr. Gunter examines a StatsCan report that says:"Fully one-in-five Canadians (20.2%) now work for one level of government or another, for a Crown corporation or for a publicly funded institution such as a school or hospital. That’s more than 3.6 million out of a total of about 18 million working Canadians." Add to that families, and extended families, and people that depend on government largess (from taxpayers), and you start to see how many votes are cast in favour of big government. It's a bit depressing. "We’ve all got our ladles in the pot, which is why it is so difficult to find a constituency for broad cuts to government and significant tax reduction," says Mr. Gunter.


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