Flawed logic in two-tier medicine ruling
Europe the model for dual systems


THOMAS WALKOM

Opponents of medicare never go away. Neither evidence nor logic deters them. They are forever on the lookout for global examples to prove their point — that universal public health insurance is a bad idea and that Canada should move, instead, to an explicit two-tier system.

For a while, they looked to the United States as a model. But too many Canadians know too much about U.S. health care. So, that didn't work.

Then attention turned to Australia and New Zealand, both of which permit two-tier medicare. Critics said that if Canada followed suit, it could reduce surgical waiting times.

As an argument, this had some traction — until analysts began to look at what went on in these two countries. In fact, according to the Organization for Economic Co-operation and Development, New Zealand has longer waiting lists for medical procedures than Canada and Australia's are roughly the same.

So now Europe is the flavour of the month. Countries such as Germany and Holland allow two-tier medicine without any obvious problems, or so the argument goes. Why won't Canada?

Indeed, the Supreme Court of Canada used this logic when it ruled in June that Quebec's ban on private health insurance for so-called medically necessary services contravenes that province's human rights law.

Quebec's argument, echoed by Ontario, was that private insurance would allow a second tier of health services to develop and that this, in turn, would siphon physicians away from public medicare.

In other words, Quebec and Ontario told the court, permitting full-scale private insurance would increase, not reduce, waiting lists.

(In Canada, all provinces except Newfoundland either specifically ban private insurance for procedures covered by medicare or make it so unattractive that no companies bother to offer it. However, all provinces permit private companies to insure health procedures not covered by medicare.)

But the court rejected the arguments of Quebec and Ontario. It did so largely on the basis of its understanding that private health insurance and public medicare co-exist happily in countries like Germany and Holland.

But as German health economist Stefan Gress told a Toronto conference last week, the court's understanding was fundamentally flawed.

That's because the health-care systems in countries like Germany or Holland aren't two-tier in the Canadian sense.

To Canadians, a two-tier system is one where anyone at anytime has the right to pay for health care privately, either out of pocket or though insurance.

This notion of choice is attractive to many, particularly to those anxious to avoid waiting lists for elective surgeries.

But that's not the way the health system works in Germany and Holland. There, citizens can't flit back and forth between the public and private tiers. They can't choose to get their knees fixed privately in order to avoid waiting lists and then have longer-term and more potentially expensive problems such as kidney disease attended to publicly.

Rather, they have to stick with one system or the other.

The mechanisms vary. In the Netherlands, only high-income earners are allowed to opt out of public medicare and buy private insurance. In Germany, civil servants and the self-employed are also allowed to opt out.

But in both countries, it's a one-way street. Unless your employment or income status changes significantly, once you're out of the public system you can't get back in.

The other key feature of the European systems is that physicians' wages in the private sphere are tightly regulated. In Holland and Sweden, for example, specialists cannot be paid more privately that they would receive publicly. Thus there is little incentive for doctors to treat private cases ahead of public ones, and for patients little chance that "going private" will result in faster care.

In Canada, the Supreme Court ruling has renewed interest in two-tier medicine. Polls show that most Quebecers favour the introduction of private insurance. Last month, the Canadian Medical Association, the national physicians' lobby, demanded that private insurance for medically necessary procedures be legalized.

In both cases, the court's reasoning seemed to play a key role: If European social democracies can have private insurance, why can't Canada?

And, indeed, Canada could. But my guess is that most Canadians wouldn't like a German-style system that forced them to choose irrevocably between private and public care.

And I'd bet many of the physicians who voted for two-tier health care would be a lot less interested if, like Dutch doctors, they were barred from charging higher fees to privately insured patients.


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