February 25, 2015 – A better mix of public and private funding in the healthcare system could reduce coverage gaps, as well as create incentives for politicians and bureaucrats to manage the public system more efficiently, according to a new report from the C.D. Howe Institute. In “Rethinking Canada’s Unbalanced Mix of Public and Private Healthcare: Insights from Abroad,” authors Åke Blomqvist and Colin Busby make the case for policies that allow private health insurance and services outside the provincial plans to play a somewhat larger role than they currently do, along lines similar to those healthcare systems found in Europe and elsewhere.
“Because of restrictions that provinces impose on the private financing of hospital and physician care, Canada has a uniquely unbalanced public-private mix in paying for health care” states Blomqvist. He adds that “our single-payer system may have led to more equal access to core healthcare services between rich and poor than would have prevailed otherwise, but it is quite costly compared to most other countries and has big gaps in coverage of items such as pharmaceuticals, dentistry, and long-term care.”
Many health systems, in Europe and elsewhere, do not have similar restrictions on private providers and devote a much larger share of public resources to drugs and long-term care while still operating equitable and high-performing healthcare systems. The authors consider the healthcare financing design of four countries – The UK, Australia, Switzerland and the Netherlands – that are generally considered to be among the world’s best-performing health systems. Despite allowing for private financing, all endorse: 1) universal public coverage and access for a defined core set of services; 2) the belief that costs of such services should be borne by society at large; and 3) high standards of care.
“These countries have shown that it is possible to open their healthcare systems to private medicine without violating the basic commitment to equity that they share with Canada,” says Busby. “They have also demonstrated that more competition can create an environment that encourages policymakers to take the hard decisions needed for efficient management.”
Accordingly, the report recommends that provincial governments should relax the restrictions they currently impose on private financing and production of health services outside the provincial plans, and allow a greater role for private medicine and insurance. “Expanded patient choice and competition from healthcare providers outside medicare would create incentives for politicians and bureaucrats to manage the public system more efficiently,” conclude the authors.
The C. D. Howe Institute is an independent not-for-profit research institute whose mission is to raise living standards by fostering economically sound public policies. It is Canada’s trusted source of essential policy intelligence, distinguished by research that is nonpartisan, evidence-based and subject to definitive expert review. It is considered by many to be Canada’s most influential think tank.
Click here for the full report.
For more information contact: Åke Blomqvist, Adjunct Research Professor at Carleton University and C.D. Howe Institute Health Policy Scholar; or Colin Busby, Senior Policy Analyst at the C.D. Howe Institute, at 416-865-1904; E-mail: amcbrien@cdhowe.org.