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JUNO NEWS COLUMN: Taking the politics out of the public vs private health care debate

Faced with unprecedented waiting lists, provincial governments are increasingly turning towards private clinics to deliver publicly-funded health care. While this is a proven strategy used by more successful universal health care systems around the world, it’s important to ensure that these clinics operate on a level playing field that is depoliticized, prioritizing patients over politics. A critical step toward achieving this is reforming how all hospitals – government and non-government – are funded.

Let’s be clear – Canada’s current approach to universal health care is little more than a lofty promise that is increasingly at odds with the reality on the ground.

Recent data from SecondStreet.org reveals that at least 3.7 million (likely much higher – as many as 5.8 million) Canadians are waiting for surgery, a diagnostic scan, or specialist appointments. Even emergency rooms, once a reliable fail-safe, are failing. The Montreal Economic Institute found nearly eight per cent of the patients left the ER without being treated – a 35 per cent increase since pre-pandemic levels in 2019.

Unsurprisingly, the majority of Canadians (64 per cent) believe the system needs major change. While the road to reform may be long and winding (cue Paul McCartney), an obvious first step is increased collaboration with third-party clinics to deliver publicly-funded care. This would mean an immediate boost in capacity without expensive capital investments.

Canadians understand this approach makes sense. A recent IPSOS poll found that most respondents support increased access via “independent entrepreneurs”, and almost two-thirds favour allowing private entrepreneurs to manage some public hospitals (so long as medically necessary care is fully reimbursed by the government).

This approach also aligns with our international peers. A new report examined eight universal health care countries that outperform Canada, with notably shorter wait times for elective surgery. All eight rely on a larger proportion of non-government hospitals than Canada (one per cent), as defined by the OECD. This ranges from seven per cent in Sweden, to over 75 per cent in Germany, Switzerland and the Netherlands. These facilities serve as both pressure-valves for the public system as well as partners within the universal health care framework.

Consider St. Göran’s Hospital in Sweden, owned by the government, but managed by Capio – a private, for-profit company. Consistently ranked as Stockholm’s top emergency hospital for quality, St Göran’s provides care to patients in the public system and reported the shortest wait time (31 minutes) to see a doctor among emergency hospitals in the region in 2019. Remarkably, this high level of quality is achieved at about 15-30 per cent lower cost to the public purse compared to publicly managed hospitals.

In Australia and France – both primarily tax-funded universal health care systems – about half of all hospitals are non-government. In the Netherlands, all major hospitals are non-government institutions that negotiate prices with insurers and compete within a regulated framework.

However, the study also found another key difference – the widespread adoption of patient-focused financing, specifically activity-based funding (ABF) to compensate both government and non-government providers. Under ABF, governments set a rate for specific services (e.g. $10,000 for child birth, $20,000 for knee surgery) regardless of where they are provided. Government hospitals, non-profit or for-profit clinics will then receive those amounts after delivering care to patients.

This contrasts sharply with Canada’s outdated global funding model. Most provincial governments tend to provide annual lump-sum transfers to public hospitals based on historical trends. Not only does this model ignore the true demand for services in real time, but it treats patients as costs – chipping away at a predefined budget with each visit.

Worse, many of the governments that do contract non-government clinics (Alberta, Saskatchewan, and Ontario for example) have become embroiled in allegations of sweetheart deals – lobbying, improperly awarded contracts, and inflated fees. Whether the allegations are true or not, these issues can arise because contracts for private clinics are individually negotiated and renewed, with the volumes and compensation determined by politicians.

A shift towards ABF offers a potential solution for both issues. By paying all providers – government and non-government – the same rate per procedure every time a patient walks through the door, ABF incentivizes care, encourages transparency, and eliminates politicized contract negotiations. Money follows the patient, not the politician.

It’s no coincidence that Switzerland, the Netherlands and Germany – the three countries with the shortest wait times for elective surgery and highest levels of collaboration with non-government health care providers – primarily use ABF to fund them. These systems suggest it’s the combination of reforms – collaboration and compensation – that delivers results.

Quebec has had some success with moving in this direction and it’s encouraging to see Alberta announce that it will embrace this approach in the future. As provincial governments across Canada increasingly partner with the non-government sector to deliver publicly funded care, they should embrace the opportunity to reform how healthcare is funded. A shift towards ABF would incentivize higher output and transparency, create a level playing field, and depoliticize health care decisions – a winning combination for patients and taxpayers.

Bacchus Barua is Research Director at SecondStreet.org.

This column was originally published in Juno News on December 10, 2025.

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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.