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Friday, November 09, 2007

Something to think about...while you wait

The good folks at the Fraser Institute, who also sponsor the Economic Freedom of the World Index, have released the 17th edition of "Waiting Your Turn: Hospital Waiting Lists in Canada"

From the press release:
A typical Canadian seeking surgical or other therapeutic treatment had to wait 18.3 weeks in 2007, an all-time high, according to new research published today by independent research organization The Fraser Institute.

The 2007 survey found the total median waiting time for patients between referral from a general practitioner and treatment, averaged across all 12 specialties and 10 provinces surveyed, increased to 18.3 weeks from 17.8 weeks observed in 2006. This is primarily due to an increase in the first wait, between seeing the general practitioner and attending a consultation with a specialist.

Total wait times increased in six provinces: Alberta, Manitoba, Ontario, Quebec, Nova Scotia, and Newfoundland. This masked the decreased wait times in British Columbia, Saskatchewan, New Brunswick and Prince Edward Island.

The point is that markets ration scarce goods and services regardless of anyone's intentions. Something to think about during this political season: is there any way to provide "free" health care and not have rationing? I am not aware of any other experiments with "free" goods, whether in this country or in others, in which rationing (i.e., shortages) did not occur.

Of course, it is possible to find examples of "free" items that did not suffer from rationing, but most of those examples would include products that are not as desirable as alternatives. When it comes to health care, there are scant few desirable alternatives and therefore we would expect shortages if enough people perceive their cost of health care to be "free."

Here's a companion report: How Good Is the Canadian Health Care System? [Update: link repaired]

I think public healthcare doesn’t hurt Canadians as much as it would hurt US citizens. Most large Canadian cities aren’t too terribly far from the US border. Should a Canadian be willing to pay the price for quick and high-quality healthcare, the option is still available (though much less convenient). Additionally, I would be surprised if US health insurance companies would deny a Canadian citizen the ability to purchase private health insurance.

So, for Canada, public healthcare means that the poor now get low-quality healthcare (as opposed to none perhaps) and the rich and middle class lose much of the Canadian private healthcare system but still have the option of purchasing healthcare in the US... oh, and they also have to pay for the public system through taxation.

If the US were to adopt a public healthcare system, US citizens would have little options for quick, high quality healthcare. They couldn’t get it in Canada and it’s not as if people will be flying to Mexico to find better doctors. Additionally, Canadians would be worse-off because they would no longer have many options in purchasing private healthcare in the US.

So, instead of creating a shortage through a price ceiling, we could lower healthcare prices through a rightward supply shock. Allow nurse practitioners to open their own clinics. The most common illnesses have standard diagnoses and standard treatments, which do not require a PhD to determine. Decreasing regulations on the healthcare industry (especially preventative medicine) would increase supply and therefore lower price. If one wanted to pay a higher price for a doctor, the option would still be available.
I think that your link to "How Good Is The Canadian Health Care System" is the same as the first link to the Frasier Institutes report.
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