Oh, Canada: Should the US emulate Canada’s National Health Service?
While progressives in the U.S. continue to push for government-run health care, the Province of Alberta’s government this week cleared the way for a health omnibus bill that seeks to privatize its health care system.
The Canadian system is often touted as a model for the U.S. to follow; Sen. Bernie Sanders, for example, applauded the Canadian system during a presidential debate. But although the health care system in the U.S. needs much improvement, it’s very telling that the Canadian system is seeking to be more like ours.
The Health Statutes Amendment Act, Bill 30, “proposes to cut approval times for private surgical facilities, allow the ministry to contract directly with doctors — and allow private companies to take over the administrative functions of physician clinics.”
The bill addresses three longstanding problems in the Canadian system: Long wait times for surgeries, too-short visits with medical professionals, and the presence of too many middlemen. Yet these are just some of the systemic problems of the Canadian healthcare system. According to Health Minister Tyler Shandro, the move to privatization this year will allow doctors to “focus on providing care instead of focusing on administration,” which is really what health care should be about.
The lesson for Americans in Canada’s health care troubles is that monolithic, single-payer systems don’t work, and the reforms we seek should be more market-oriented.
The health care industry in the U.S. is far from a free market environment — which is evident in the fact that pricing is largely kept hidden from patients and employers. Price signals are critical for a free market to function. Without them, costs will continue to rise, and middlemen will have free rein to manipulate supply and demand.
Four U.S. senators recently unveiled a bill that would make health care pricing more transparent. Sen. Chuck Grassley (R-Iowa) and his colleagues say that “This legislation would codify the two health care price transparency rules that came out of President Donald Trump’s ‘Improving Price and Quality Transparency in American Healthcare’ Executive Order — which requires hospitals and insurers to reveal their low, discounted cash prices and negotiated rates to consumers before they receive medical care.”
These new price transparency regulations were important long before the COVID-19 pandemic, but in the aftermath of the economic disaster caused by the government shutdowns, “they’re a crucial first step toward engaging market forces to empower patients to access quality care at a lower cost.”
Another systemic failure of the U.S. health care industry is the misalignment of incentives. Usually in free market systems, the person receiving services is also the one that pays for those services. Health care doesn’t function this way. Ever since the wage freezes of 1942 enacted by President Franklin D. Roosevelt, health insurance in the private sector has been tied to employment.
Ironically, this progressive initiative is the root cause of what is known today as “pre-existing conditions.” Individuals, not corporations, should own their benefits and have them as portable to eliminate any risks associated with underlying medical conditions. Sen. Ted Cruz (R-Texas) and Rep. Chip Roy (R-Texas) are carrying companion bills in both chambers that seek to put patients back in control of their care by empowering them to use tax-advantaged dollars to purchase services that are shoppable and portable.
What the people of Alberta have come to learn through their government-run health system is that government agencies are not as efficient or effective as the private sector. Furthermore, individuals who are in control of their health care decisions keep those organizations in the private sector accountable when they are both the customer and the payer.
The U.S. needs to follow the example of Alberta and seek opportunities to make the delivery of health care more of a free-market environment.
David Balat is the Director of the Right on Healthcare initiative with Texas Public Policy Foundation. Follow him on Twitter @DavidBalatHC.
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