Shocker: Health Care Costs Double In Canada’s Government-Run System
In free markets, prices are controlled by the laws of supply and demand. Those on the supply side try to sell their goods/services for as much as possible. Those on the demand side try to get as much as they can for as little as they can. As suppliers and demanders negotiate with one another, prices settle at an equilibrium that’s right around the least the supplier wants to accept and the most the buyer wants to spend.
But in government-run markets, there is no equilibrium. Price isn’t a function of billions of transactions taking place between those doing the supplying and those doing the demanding. Price is a function of government policy, and under such systems you always see bubbles.
In Canada, the problem is that those who consume health care aren’t directly tied to the cost of that care. Thus, they have little incentive to control their demand and doctors have a lot of incentive to provide more services than is needed. That’s adding up to exploding growth for the cost of government-run health care:
TORONTO — Health-care costs in Canada doubled over the past decade and will cross the $200 billion mark this year, a report released today reveals. …
Currently most doctors in Canada are paid by what’s called a fee-for-service model. They can charge the province and territory in which they practise a set amount for doing an annual check up, or administering a flu shot or ordering diagnostic tests.
If the fee-for-service payment model is retained, the system will be building in an incentive for doctors to over care for patients as a way to guarantee their incomes, Lewis says.
“In a fee for service system of course, they need to provide services in order to make a living. So that’s going to create even more pressure in the future for additional costs.”
Because health care in Canada is a sort of “all you can eat” buffet, some people over eat. And those getting paid to keep the buffet full are happy to cash in on the over consumption.
The scary part is that the next step is for the government to try and control costs through rationing, which Canada already does in many instances (look at the waiting lists for certain procedures).
Canadians (and Americans too, for that matter) would be better served by a system that made individuals responsible for obtaining their own health care.Tags: canada, Health Care