Published in the National Post on November 19, 2010
By Michael Bliss
In a way that Canadians do not like to recognize, modern history has already passed stark and sobering judgment on Canadian medicare.
Despite the system's popularity and iconic status; despite the belief by many Canadian health experts that the Canada Health Act system, a single-payer government monopoly, is the best way to deliver modern healthcare; and despite years of nationalist proclamation that Canadian health insurance ought to be a model to the world (and especially to the United States), no country has adopted the Canadian model.
In the eyes of the world, Cuba and North Korea perhaps excepted, Canadian medicare is not a model. The vast majority of global healthcare experts — led, of course, by those who designed healthcare reform in the United States — do not consider the Canadian system to be a practical ideal.
While Canada is widely perceived as a high-achieving global participant in many areas of biomedical research — a capacity that predated and has developed largely independently of the medicare system — it is not clear that there is parallel respect and demand for other areas of Canadian health-care expertise. Canada has not stood particularly high in various attempts to rate the quality of national healthcare systems, ranging from the World Health Organization's highly controversial standings, through recent comparisons that have us vying with the United States for bottom status.
Put more bluntly, since 1968 Canada does not seem to have generated much in the way of exportable health insurance excellence.
To a historian this suggests that the distinguishing feature of Canadian health care since 1984 — the attempt by government to maintain a single-payer monopoly — appears to be problematic. It raises important issues of individual liberty and freedom of choice, so far only partly resolved by the Chaoulli decision of the Supreme Court of Canada.
As an administered system, with personnel, pricing, and either the experience of other countries or the record of Canada's distinctive health-care history. While history seems to support the view that Canadian public opinion resists injections of market forces in health care, and in this regard will be hard to change, there does seem to be good reason to urge that attempts be made to encourage flexibility and experimentation. And it ought not to have to be said, but unfortunately does, that no health-care system, private, public, or mixed, will perform optimally without an adequate long-term funding plan.
On the other hand, the supply decisions abstracted from market signals, it may well be prone to serious inefficiencies and misallocation of resources that are difficult to correct, sometimes even to identify. Mainstream economists' critiques of protected monopolies in other areas generally have been considered substantially accurate, and came to underlie the movement towards retrenchment and privatization in the last third of the 20th century.
It is difficult to see why the Canadian approach to health insurance, once proudly labelled socialized medicine, should continue to be insulated from the forces of competition in the supply of care and/ or insurance — either competing private alternatives, or at least some fresh winds of internal competition.
The hubris of politicians, civil servants, economists, and managers who believe their expertise is generally superior to market forces in dictating the allocation of health-care resources does not seem to be supported by notion that large doses of competition, market prices, and other liberalizations of the Canadian system would mean major cost savings may be somewhat of a chimera.
While it is certainly good to use resources as efficiently as possible, the historical growth of health-care spending around the world seems to be a function of rising wealth, rising consumer expectations about health care, and technological and scientific innovation. No Western countries appear to have been able to contain the growth of health-care spending to rates less than the increase in their national wealth.
In the United States, the country where health-care and health insurance markets function with the least amount of government involvement, health-care spending as a share of national income has risen to its highest figure in history. This seems to be further evidence that, in any prosperous democracy, citizens' demand for high-quality health care will be hard to satisfy or contain.
The main social spending in wealthy countries will continue to be aimed at improving the quality and length of citizens' lives. This is not such a bleak prospect. In the long view of history it might even be cause for celebration.
Michael Bliss, a historian and professor emeritus at the University of Toronto, delivered the C.D. Howe Institute’s 2010 Benefactors Lecture. It can be found at /pdf/Benefactor_Lecture_2010.pdf
