Re: CANADIAN DRUGS AREN'T THE CURE

From: Robert (RobertJ_at_hotmail.com)
Date: 08/23/04 

Date: Mon, 23 Aug 2004 14:45:01 -0700

"Robert" <RobertJ@hotmail.com> wrote in message

I forgot to mention CB that rich people do not get the same treatment in
Canada as they simply go to the US so let's not be disingenuous here. The
Canadian system is for those who can not afford to go to the US so a three
tier system happens up there. The poor in Canada are trapped in the system
with no way out.
Canada has many hidden costs that the government manipulates there for
public consumption.

This was written by your fellow Canadian.

http://www.independent.org/newsroom/article.asp?id=1292

Canada's "Free" Health Care Has Hidden Costs
April 23, 2004
Pierre Lemieux
The Wall Street Journal

John Kerry's health insurance proposals amount to a "sweeping socialization
of [the U.S.] health care system," writes Michael Cannon, director of health
policy studies at the Cato Institute in a recent Daily Commentary on the
Cato Web site. Although Mr. Kerry's proposals do not echo the frequent calls
for imitating the Canadian model, they would keep the U.S. heading down that
slippery slope. This ought to alarm Americans. The Canadian system is much
more costly than advertised because it is highly efficient in hiding costs.

Proponents of the Canadian model praise its universal coverage and its
apparent low cost. Total (private and public) health expenditures are only
10% of gross domestic product in Canada, compared to 14% in the U.S. A study
published last August in the New England Journal of Medicine claimed that a
third of this difference is explained by lower administrative costs in the
Canadian system. But, among its other faults, this accounting ignores the
hidden economic costs of Canadian health care.

The Canadian system is built around a compulsory public-insurance regime
that provides most medical and hospital services free. Of course, it is not
free for the taxpayer, who finances the system at a rate of 22% of all taxes
raised in Canada. The Canadian government pays about 71% of total Canadian
health care expenditures, compared to 44% paid by the government in the U.S.
This translates into public health expenditures of 7% of GDP in Canada and
6% in the U.S.-a rather small difference. The difference in total
expenditures is due to higher private expenditures in the U.S. Why are
private health expenditures so low in Canada? The main reason is that they
are illegal, which gets us to the heart of the system's hidden costs.

Canadian public health insurance is not only compulsory, it is also
monopolistic. The system is administered by provincial governments under
strict guidelines imposed by federal law and federal subsidies. Private
insurance covering publicly insured services is illegal. Physicians are
forbidden to accept private payments above the fees billed to the
government. Hospitals are public or non-profit, and tightly regulated.
Physicians' fees are determined-or "negotiated"-by provincial agencies.
Prices of drugs are controlled. In short, the public supply of medical
services is rationed, and there is little private alternative. Hence the
apparent low cost of the system.

The hidden costs include the poor quality of services, and the costs imposed
on customers (aptly called "patients" in this case) who have to wait in
queues.

Quality is subjective and can only be evaluated through consumer choices,
but the government won't let consumers make choices and vote with their feet
if they are not satisfied. Anecdotal evidence of questionable quality is
everywhere. In a recent piece in Montreal's Gazette, a Canadian related her
own experience, and contrasted the "kindness, discretion and
 professionalism" of staff in U.S. hospitals, with the frequent rudeness of
unionized personnel in the Canadian system.

Long waiting lines are a fixture of the system. The Fraser Institute, a
Vancouver think tank, has calculated that in 2003, the average waiting time
from referral by a general practitioner to actual treatment was more than
four months. Waiting times vary among specialties (and, less wildly, among
provinces), but remain high even for critical diseases: The shortest median
wait is 6.1 weeks for oncology treatment; excluding radiation, which is
longer. Extreme cases include more than a year's median wait for
neurosurgery in New Brunswick. The median wait for an MRI is three months.
Since 1993, waiting times have increased by 90%.

Waiting lines impose a real cost, which is approximated by what individuals
would be willing to pay to avoid them. Waiting costs include health risk,
lost time (especially for individuals whose time is most valuable), pain and
anguish. Socialist systems are notoriously oblivious to anguish, discomfort,
humiliation and other subjective factors which bureaucrats cannot measure or
don't value the same way as the patient does.

A Québec physician, Dr. Jacques Chaoulli, is suing the government for not
allowing patients to pay for better care. The Supreme Court of Canada will
hear his appeal of lower-court rebuttals in June. Last month, a class-action
case was launched against Québec hospitals on behalf of 10,000 breast cancer
patients who, since October 1997, have had to wait more than eight weeks
each for post-surgery radiation therapy.

Liberalization proposals are met by the "two-tier system" bogey man-that if
choice is allowed an unequal system will develop. But if directly paying a
doctor is illegal, there are legal ways to jump the queues. As pointed out
by Professor Livio Di Matteo of Lakehead University in Ontario, what now
exists is a three-tier system. The very rich (like Robert Bourassa, the late
Premier of Québec) go to the U.S. for rapid, personalized, high-tech
treatments. The second tier is made of "the well informed and aggressive,
who can push their way to the front of the treatment line." The poor and
those with no connections get stuck in the queue.

At least two Indian groups are now considering building private clinics or
hospitals on their land-just as other sorts of illegal-elsewhere trade
thrive on Indian reserves. Yet, Canadians who patronized such clinics would
still be prohibited from purchasing private insurance to cover the service,
leaving the opportunity only to the wealthiest.

As noted by Wharton professor Patricia Danzon, another hidden cost of the
Canadian system comes "from forcing everyone to have the same level and type
of insurance," whatever their individual preferences are.

One last cost should not be ignored: the loss of personal responsibility and
the habit of dependence on the state. Opinion polls show that Canadians are
generally proud of their public health insurance. Indeed, for most people,
any basis for comparison has been made illegal. Auberon Herbert, a
libertarian Member of Parliament in late 19th century England wrote, "If
government half a century ago had provided us all with dinners and
breakfasts, it would be the practice of our orators today to assume the
impossibility of our providing for ourselves."

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Pierre Lemieux is an economist and co-director of the Economics and Liberty
Research Group at the Université du Québec à Hull and research fellow at The
Independent Institute in Oakland, California.
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