Don’t expect Alberta to lead the way on health care reform

If the current crop of Progressive Conservative leadership candidates is anything to judge by (and one will end up as premier in mid-September), don’t expect them to look to Europe for ideas on health care reform. It appears most have never left the continent.

This past week, one candidate, former provincial cabinet minister Gary Mar, suggested opening up Alberta’s health care sector to some private options. Sensibly, Mar did so in the context of continued universality. The result? Fellow leadership contenders and the usual suspects launched a disinformation blitzkrieg.

The usual rent-a-quote clips

Alison Redford expressed “surprise” and argued the real issue is equality. She was concerned that the wealthy never be allowed to find treatment faster than the rest of us.

Another contender, Doug Horner, chimed in against more private options because “we’ve got lots to do in our publicly funded system.”

Then there were the usual rent-a-quote clips. The Alberta Union of Provincial Employees claimed “our public health care system works.” Bev Dick, the vice-president of the Alberta union that represents nurses, argued Mar was wrong to view health care as a “commodity.”

So much distracting flack and so little space to correct myths, but we’ll try.

Health care is a commodity and always will be. When the nurses’ union negotiates with government, they sell their services at a profit. No nurse will say – “Hey, cover just my past tuition expenses and we’re good.”

Also, the nurses’ union uses supply-and-demand reasoning in their bargaining. Union negotiators tell government the demand for nurses is high (as it is). They then assert that if wages and benefits are not competitive, the supply of nurses will go elsewhere.

Then there is the other myth, that Canada’s health care system ‘works’. Only in the sense that a 40-year old car works without air conditioning, cruise control and uses too much gas.

Internationally, according to the latest OECD figures, Canada’s health care system was the sixth most expensive health insurance system out of 33 countries. Moreover, we ranked between seventh and 21st in most indicators that measure the availability of medical resources and services. Also, in 2010, patients waited 18 weeks from the time they obtained a referral from a general physician to the time they received elective treatment from a specialist. That’s about double the wait time in 1993.

As for the ‘equality’ argument and the let’s-just-fix-the-public-system-first tack proposed by two Tory would-be Alberta premiers, fact is, the wealthy already get preferential treatment. Canada’s millionaires fly to the United States if they want to skip our queues. So that’s a non-issue under any reform.

The critical query is: How can the rest of us get improved access, more doctors in the system, preserve universality, and not go broke privately or via the tax-funded public system (i.e., by running deficits to finance health care).

Answer: Not by ‘concentrating’ more on the public system. That system has all the classic signs of a monopoly – because it mostly is: missing supply and demand price signals, politicization, and capture by special interests – think health care unions that claim they’re immune to ‘profit’.

The only real solution: Copy European countries that provide universal coverage but rarely ration access to medically necessary care. The result is patients do not wait unnecessarily long. In contrast, rationing and long waits are two signifying “achievements” of Canadian, government-run, government-insured health care.

A number of European countries share Canada’s social goal of universal access. But they also use cost-sharing mechanisms such as user-fees. They also mandate health insurance in a well-regulated competitive market to prevent (private or public) monopolies in service delivery from developing.

Consider Switzerland, Germany, and the Netherlands. All three countries have a health insurance mandate. There, by law, everyone must purchase a basic insurance package in a competitive private insurance market in addition to co-payments at the point of service. Those who cannot afford the insurance or user fees are given taxpayer-funded subsidies. That way, they can choose and purchase their own standard insurance package in an open market.

Consequently, insurers negotiate with providers on price and quality, and must compete for patients. At the same time, patients can shop around for the insurance plan that best meets their personal medical needs. Best of all, people in Switzerland, Germany and the Netherlands have universal coverage with virtually no wait times.

All of this is apparently unknown to Alberta’s PC leadership candidates, save Gary Mar. What a pity. Perhaps the other candidates, the ones too provincial in their outlook, should travel to Europe.

Mark Milke is the Fraser Institute’s Director of Alberta policy studies. Mark Rovere is the Associate Director of the Institute’s Health Care Policy Studies.