October 13, 2016 Print

Health care, like all services, is subject to scarcity. When governments nominally promise to provide tax-funded health care to everybody, demand for care often exceeds supply — so taxpayer costs can soar, and people who are stuck on a long waiting list may go outside the system to seek more time-sensitive treatment. A new study from the Fraser Institute, an Atlas Network partner based in Canada, looks at the more than 45,000 Canadians who leave the country for non-emergency medical treatment in the course of a year. Titled “Leaving Canada for Medical Care, 2016,” the study notes that its methodology likely underestimates the number of Canadians who receive treatment elsewhere.

“Canadians who choose to seek treatment abroad do so for several reasons, many of which may relate to their inability to access quality health care in a timely fashion within Canada’s borders,” the study explains. “Some patients may be sent out of country by the public health care system due to a lack of available resources or because some procedures or equipment are not provided in their home jurisdiction. Others may choose to leave Canada because they are concerned about quality … and are seeking more advanced health care facilities, state-of-the-art medical technologies, or better outcomes. Others may leave in order to avoid some of the adverse medical consequences of waiting for care, such as worsening of their condition, poorer outcomes following treatment, disability, or death. … Some may leave simply to avoid delay and to make a quicker return to normal life.”

The Fraser Institute has estimated that, in 2015, “patients waited 9.8 weeks for medically necessary treatment after seeing a specialist — almost three weeks longer than what physicians consider clinically ‘reasonable ,’” with the highest proportion of patients leaving the country for urology procedures, ophthalmology treatments, general surgery, and internal medicine procedures.

“A large number of Canadians clearly feel they have to leave the country to obtain needed and timely medical care,” said Bacchus Barua, study co-author and senior economist for health care studies at the Fraser Institute. “Considering Canada’s long health-care wait times and their potential negative effects, it’s not surprising that so many Canadians are travelling abroad for medical treatment.”

Another recent Fraser Institute study, “The Price of Public Health Care Insurance, 2016 edition,” shows that despite Canada’s reputation as a haven for free health care, the tax-funded system comes with a hefty price tag for individual families.

 “The 10% of Canadian families with the lowest incomes will pay an average of about $443 for public health care insurance in 2016,” the study reports. “The 10% of Canadian families who earn an average income of $60,850 will pay an average of $5,516 for public health care insurance, and the families among the top 10% of income earners in Canada will pay $37,361.”

Canadians don’t incur direct expenses for the health care services that they use, so they have little incentive to conserve costs and are liable to demand more care, and for less urgent issues, than if there were a price tag associated with their care. This both raises costs for the system in general and leaves people waiting in lengthy queues.

“To begin with, Canada’s single-payer system (where the government is the sole-insurer for core-services) has led to a virtual monopoly on the funding and delivery of health care services,” Barua said. “In addition, physicians are generally discouraged from providing services in both the public and private sector (at the same time), and are effectively banned from accepting direct payments from individuals (although legal challenges have recently been, and are being, fought in various provinces). These policies, in addition to the general absence of competition, the wide use of global-budgets (instead of activity-based funding) for hospitals, and the lack of cost-sharing incentives for patients have led to a situation where medical services are rationed and patients are left with no recourse.”

Barua reported that, in 2014, Canada spent more on health care services per capita than the United States did. However, he noted, “although the United States spends a lot on health care in total, it gets more in return. For example, per capita, it has more acute-care beds, more MRI and CT scanners, and receives access to newer drugs than Canada does.”

Ultimately, innovation in health care offerings and cost savings in health care provision and insurance are both driven by the competitive dynamics of a free market.

“In general, our research has indicated that enhanced choice and competition in the insurance and hospital sectors, along with appropriate financial incentives for patients and providers actually help Canada better achieve its goal of universal health care,” Barua said. “Ultimately though, it’s up to Canadians to decide what system works best for them — however, it is important that they have as much accurate information as possible at hand during these important discussions.”