Mixed signals from Ottawa on private health care

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Several years ago a contact from Winnipeg told me about how he once drove to Minnesota to get an MRI for his shoulder.

Manitoba’s government-run health care system had told Ken that he would have to wait a year or so for the procedure. He found that to be unacceptable. The guy was pretty active – liked to play sports, had kids who were still at home – he didn’t want to sit on the sidelines for a year.

At the same time, the Manitoba government had essentially outlawed private clinics from selling MRI scans to the public. That made Ken’s choice clear – wait for a year in discomfort or leave the province and pay out-of-pocket for faster care.

Ken drove to Minnesota paid around $800 for an MRI scan and if I remember correctly, he stayed a few extra days to do some shopping.

His experience, and others like it, has always struck me as strange. By limiting private health care options in the province, the Manitoba government pushed economic activity outside of its borders.

The $800 Ken spent in Minnesota supported jobs in Minnesota and the American company that provided the service – both of which would in turn pay taxes to the U.S. government (which could be used to fund the U.S. health care system).

But it wasn’t just the $800 cost for the procedure that would help the U.S. economy, Ken also spent money on fuel for his car, a hotel, food and shopping. All those dollars could have stayed in Manitoba had the province relaxed its regulations around what it allows private clinics to offer.

With stories like Ken’s in mind, I decided to do some digging into medical tourism. Here are a couple interesting tidbits that I came across:

1) In September 2018, I asked the government of Canada about cases like Ken’s – how many Canadians leave the country each year for health care? As the federal government provides provincial governments with billions of dollars each year in health care funding, I thought Ottawa might also track how many Canadians were dissatisfied with the service so much that they left the country.

Health Canada responded that it has no information on the situation. You can see their response if you click here.

2) While health care delivery is a provincial responsibility, the federal government’s Department of Health sometimes flexes its muscles in this area by financially penalizing (or threatening to penalize) provincial governments when they experiment with various forms of private health care. (See this story about Saskatchewan, this one about Ontario and this one about British Columbia.)

With those stories in mind, it was interesting to see the federal government’s Department of Innovation Science and Economic Development recognize the “success story” of a private health care entrepreneur.

On the federal government’s website you’ll find the story of Adele Kulyk, an entrepreneur from Saskatchewan who runs Global Healthcare Connections Inc., a medical tourism company that helps connect Canadians with health care services in other countries – hip operations, cancer procedures, bariatric surgery, etc.

No disrespect to Ms. Kulyk. If you look at her company’s website, you’ll see she has helped improve the health and well-being of many patients.

But when it comes to the idea of allowing Canadians more choice in health care, the contrast between Ottawa’s two departments is quite striking.

Colin Craig is the President of SecondStreet.org

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Prevention – reduce demand in the first place

If Canadians lived healthier lives, we could reduce demand for emergency services, orthopaedic surgeries, primary care and more. 

For instance, if you visit the Canadian Cancer Society’s website, you’ll read that “about four in ten” cancer cases are preventable. The Heart and Stroke Foundation notes that “almost 80 percent of premature heart disease and stroke can be prevented through healthy behaviours.” A similar number of Diabetes cases are also preventable. 

Many joint replacements and visits to ERs and walk-in clinics could also be avoided through healthy living. 

To be sure, not all health problems can be avoided through healthy living – everyday the system treats Canadians with genetic conditions, helps those injured in unavoidable accidents and more.  

But there is an opportunity to reduce pressure on the health care system through Canadians shifting to healthier lifestyles – better diets, more exercise, etc. 

To learn more, watch our Health Reform Now documentary (scroll up) or see this column. 

Partner with non-profits and for-profit clinics

European countries will partner with anyone who can help patients. 

It doesn’t matter if it’s a non-profit, a government entity or a private clinic. What matters is that patients receive quality treatment, in a timely manner and for a competitive price.  

In Canada, governments often delivery services using government-run hospitals instead of seeing if non-profit or private clinics could deliver the services more effectively. 

When governments have partnered with non-profit and private clinics, the results have often been quite good – Saskatchewan, Ontario and British Columbia are just a few examples of where partnerships have worked well. 

Canada should pursue more of these partnerships to reduce wait times and increase the volume of services provided to patients.  

To learn more, watch our Health Reform Now documentary (scroll up) or see the links above. 

Make cross border care more accessible

In Canada, citizens pay high taxes each year and we’re promised universal health care services in return. The problem is, wait times are often extremely long in our health system – sometimes patients have to wait years to see a specialist or receive surgery. 

If patients don’t want to wait long periods, they often have to reach into their own pocket and pay for treatment outside the province or country. 

Throughout the European Union, we also find universal health care systems. But a key difference is that EU patients have the right to go to other EU countries, pay for surgery and then be reimbursed by their home government. Reimbursements cover up to what the patient’s home government would have spent to provide the treatment locally. 

If Canada copied this approach, a patient waiting a year to get their hip operation could instead receive treatment next week in one of thousands of surgical clinics throughout the developed world. 

Governments benefit too as the patient is now back on their feet and avoiding complications that sometimes come with long wait times – meaning the government doesn’t have to treat those complications on top of the initial health problem. 

To learn more, watch our Health Reform Now documentary (scroll up) or this shorter video. 

Legalize access to non-government providers

Canada is the only country in the world that puts up barriers, or outright bans patients from paying for health services locally. 

For instance, a patient in Toronto cannot pay for a hip operation at a private clinic in Toronto. Their only option is to wait for the government to eventually provide treatment or leave the province and pay elsewhere. 

Countries with better-performing universal health care systems do not have such bans. They allow patients a choice – use the public system or pay privately for treatment. Sweden, France, Australia and more – they all allow choice. 

Why? One reason is that allowing choice means some patients will decide to pay privately. This takes pressure off the public system. For instance, in Sweden, 87% of patients use the public system, but 13% purchase private health insurance. 

Ultimately, more choice improves access for patients. 

To learn more, watch our Health Reform Now documentary (scroll up) or watch this short clip on this topic. 

Shift to funding services for patients, not bureaucracies

In Canada, most hospitals receive a cheque from the government each year and are then asked to do their best to help patients. This approach is known as “block funding”. 

Under this model, a patient walking in the door represents a drain on the hospital’s budget. Over the course of a year, hospital administrators have to make sure the budget stretches out so services are rationed. This is why you might have to wait until next year or the year after for a hip operation, knee operation, etc. 

In better-performing universal health systems, they take the opposite approach – hospitals receive money from the government each time they help a patient. If a hospital completes a knee operation, it might receive, say, $10,000. If it completes a knee operation on another patient, it receives another $10,000. 

This model incentivizes hospitals to help more patients – to help more patients with knee operations, cataract surgery, etc. This approach also incentivizes hospitals to spend money on expenses that help patients (e.g. more doctors, nurses, equipment, etc.) rather than using the money on expenses that don’t help patients (e.g. more admin staff). 

To learn more about this policy option, please watch our Health Reform Now documentary (scroll up) or see this post by MEI.