Healthcare reforms warnings from France and Canada

healthcare-combo– Brian Lee Crowley is the founding president of Atlantic Institute for Market Studies (AIMS), a public policy think tank in Canada (pictured left) and Valentin Petkantchin is director of research at the Paris-and Brussels-based Institut économique Molinari. The views expressed are their own. –

President Barack Obama’s package of heathcare reforms – mandatory health insurance, public health option and increased federal government financing – is being sold as preserving independent high quality care and choice for patients while keeping down costs. Taxpayers and patients in both Canada and France know better.

Unfortunately, our experience is that once the government gets its nose in the healthcare tent, not only is spending not contained, but health care professionals lose their freedom to practice. Left with few choices, patients face shortages and waiting lists.

Washington’s proposed new public health insurance option, while not imposing Canadian-style single-payer monopolistic public health insurance immediately, will almost certainly lead to that result in the end.

One of two things will happen. If doctors prove reluctant to accept patients covered by the public option and it is thus unable to compete successfully with private insurers, the politicians will not stand idly by.

Physicians’ freedom to practice outside the public option will become increasingly hedged with restrictions, perhaps ultimately ending up, as in Canada, with doctors in the public system being prohibited from taking private patients.

Or, more plausibly, in the short term at least, private insurers will gradually withdraw from the business, incapable of winning against a government-subsidized “competitor.”

In both cases, competition in the health insurance sector will progressively vanish and the U.S. will wake up with a monopolistic-style health insurance system, à la France or Canada.

Consider yourself warned.

Our respective health care systems have proven incapable of reining in rising costs. Health spending in France, while lower than the U.S., is among the highest in the world, whatever the indicator, despite decades of mandatory, subsidized health insurance. After 1988, the public health care system has regularly been in the red, with deficits numbered in the billions of euros. The forecast deficit for 2009 alone: 9.4 billion euros (over US$13 billion).

French officials are scrambling to take more control of the system to bring these costs down, but Canada, where government controls all “medically necessary care,” shows that this is no solution at all. A growing share of Canadian provincial budgets is also swallowed by the health care system, going in 20 years (1983-2003) from 32% to 41% and on the way to 50% in a few short years. As a portion of GDP, and adjusting for population age, Canadian health care spending even ranked ahead of France’s in 2005.

But the oxymoron of government cost containment is not the only problem. In the name of restraining costs – so fashionable currently in Washington – governments are adding further inefficiencies by piling on more bureaucracy.

Since 1996, there is a cap on national health care spending in France and growing pressure on health care professionals in the public system to cut costs. In 2004, patients’ choice of physician and specialist was also severely limited.

Independent private medicine – once one of the main pillars guaranteeing quality and timely care in the French system – is being slowly strangled. At the end of 2008, nurses lost their freedom to practice where they please, while a new law will do the same for physicians by imposing an annual financial penalty if they refuse to practice where the government tells them to. Specialists’ fees are increasingly regulated. The last pillars of competition among providers, and choice for French patients, are thus undermined.

Canada again is a good example of where the logic of such policies will lead the French and the Americans in the future.

North of the border, decades of total government control over health care have led to chronic doctor shortages and waiting lists. Roughly 1.7 million Canadians were unable to find a family doctor in 2007 and have to queue in impersonal clinics where they exist. Yet only a physician can order tests or get a patient in to see a specialist.

Despite continual infusions of fresh tax dollars, waiting times for hospital treatment went from an average of 7.3 weeks in 1993 to 17.3 weeks in 2008, although there was a minuscule decline last year as a result of massive political pressure. The problem is so severe that the Supreme Court of Canada acknowledged in a historical 2005 ruling that patients die as a result of waiting lists for public health care.

Finally, coverage of new drugs is delayed by a year or more for patients relying on the public system. Even with this delay, by October 2007 less than half of new drugs launched between 2004 and 2006 had been listed for payment.

Based on experience in both our countries, government health insurance and government financing inescapably lead to a crackdown on health care providers and bureaucratization of the entire health care system. Americans should look carefully at our experiences before going any further down the slippery slope of state-controlled health care.

58 comments

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Sounds to me like the systems in Canada and France do not work. Do the authors have a system that does work. If you know the systems please tell us what will work. We have plenty of people trying to take our money for giving us information on things that don’t work.

Posted by f belz | Report as abusive

The healthcare debate personifies the unforgiving landscape within America. US politicians are anxiously proposing a healthcare system that will alter the way of life before all the details have been inked. And, if the past serves as a guide, very few politicians will read the bill once all the details are inked. Meaning, most politicians will likely not know or understand the short, intermediate or long term outcome of their meddling. . . other than successfully having created one more bureacracy subject to intervention by politicians who commonly abrogate their oversight responsibilities.

If only the US government would focus on ‘governing’ and not portray itself as a diety over the basic laws of economics. And how rational it might be to govern based not only on the merits but to identify a specific problem and address only that specific problem within the context of the US Constitution.

Posted by rbblum | Report as abusive

Sounds to me like people from conservative think tanks emphasize the negatives to push their agenda. The only system they would advocate, the free market, is already a proven failure in assuring public health.

Posted by Chevalier Mal Fet | Report as abusive

be carefull

Posted by Sergie | Report as abusive

This is an editorial, not a “warning.” Are there no examples from the U.K., from Germany, from Norway, Sweden, Denmark? And even given the problems described for France and Canada, are their respective situations any worse than the vicious financial triage system we have here in the U.S.?

What point are the authors trying to make other than that there are problems in the French and Canadians systems?

Posted by Rupescissa | Report as abusive

It is very simple if you want healthcare in this country,join a union.

Posted by Tony | Report as abusive

another scary fairytale from from the proponents of the status quo. our family of four has been in the apparently murderous canadian system since its inception in the early 70`s and tell you what, we would not trade places with an american family of similar financial means for any reason. by the way your system costs double what ours does in terms of percentage of gdp expended on health care.

Posted by paul robert | Report as abusive

There lies the problem that reason Obama is pushing for passing the legislation this year as next congress he may not have the necessary votes after next election cycle.
According to Hillary Clinton and Raum Emanuel they have to seize the occasion. They have nationalized the banks in a way, own car companies and are in the pocket of Unions. As I understand from Canada and France experience this is a power grab by Obama and democrats. Only place this will work is not in this world but may be in different galaxy or universe. It may work even in science fiction but not in real life.

Posted by VJ | Report as abusive

This article is absolutely crap, crap, crap! The measure of any h health care system is NOT how much the physicians can make by offering “choice” but how well the populous lives. By such measures, the US “choice if you’ve got the money” fails miserably when compared with Canada, France, Japan, practically any other developed nation.
One would think that after the revealing article on medicine in McAllen Texas, practically a physician choice utopia, that as stupid an article as this one would be rejected out of hand. The McAllen article showed that “choice” led to more procedures, more medication, more office visits, more costly medicine on every front but with the result of poorer health care for citizens. And the poor citizens couldn’t even sue since Texas severely limits malpractice awards.
Why can’t the print and electronic media tell the real story: that for all the US citizens are forced to pay, the US medical system produces patient outcomes worse than the majority of developed nations, outcomes standing no better than 25th in the world. Oh, I know why: our costly health system makes plenty of billionaires, individuals with financial clout to insure that articles like this one instead of the real facts get published.

Posted by James Reed | Report as abusive

Well put and thank you. America is making some very bad mistakes with the ballooning of the feds. Very frightening to know that federal health control is even being considered. Mr. Belz asks what will work. In my opinion, get rid of the bloated federal government’s reach into healthcare regulation and employer healthcare coverage tax credits. Allow insurance companies freedom to dictate their own terms and for their customers to do the same. We need to get rid of federal mandates that override states’ healthcare budgets and helps drive local budgets into oblivion while losing states sovereignty to more federal control in the name of federal funding. The more we give up our right to free market decision making the worse EVERYTHING will get for all of us. Freedom in the marketplace is the best solution in my opinion.

Posted by jason | Report as abusive

So 1.7 million Canadians wait at a clinic for healthcare? That’s 5% of their population. In the US 13% are waiting in the emergency room. If we achieve Canadian success rates we will have provided healthcare for 25 million Americans who don’t currently have it. Sorry, but I don’t see the downside.

Posted by AT | Report as abusive

One reason we have doctor shortages in Canada is that the doctors we graduate can immediately move to the US state of their choice, at twice the salary, and have all their schooling reimbursed. One year Dalhousie graduated 18 doctors, two stayed in Canada.

Posted by RC in Canada | Report as abusive

Keep in mind that Pfizer and Merck are both supporters of this conservative “free market” think tank. If they have to keep their costs down, then their profits will go down, too, and to prevent that, they’ll say whatever it takes to defeat national health care. Corporate interests should not be allowed to take precedence over public health.

Posted by Karen | Report as abusive

Interesting how France and Canada is plucked off the tree of PLENTY, out of all the developing nations. Regardless of the TYPE of healthcare these countries have, the QUALITY is plentiful, and sure, thats arguable, but being a recipient of healthcare outside our country, its my opinion and i’m sticking to it. The US healthcare system is sickly and does not provide the TYPES nor the QUALITY but the costs are PLENTY. Its like buying that delicious looking bag of potato chips, the bag is large. You shake it, you hear the chips. You open, and the bag is half full, and mostly air. Our healthcare has a deceptive illusion of choice, quality and plenty, but its only full of air. These countries and others overall still have better healthcare that the US.

Posted by Dahc | Report as abusive

Obama’s error about the health plan is that HE DOES NOT WANT TO LIMIT THE LAW SUITS. One of the major reasons for increased cost is that the doctors order EVERY test and scan even when the patient’s condition does not warrant them to protect themselves from law suits. The same applies to end-of-life care because if they do not do EVERYTHING possible to prolong the lives of those who are hopless, they get sued! Statistics also show that the highest percentage of law suits comes from patients on government programs.

Posted by Albert | Report as abusive

So, are the citizens of Canada or France demanding that they abolish their health care systems, and adopt America’s system? Uh, no.

Posted by DLN | Report as abusive

Funny thing is that no system works perfectly. People always push their own agenda. The bottom line should be what benefits the population at large the most. If US spends the most amount per person versus the rest of the world and it only has a sub par system, things can only get better. Smile and be happy people. Don’t be taken in by the words of people who see themselves on the losing side by these changes. Question agendas.

Posted by Sam | Report as abusive

Any solution proposed by extremists of either stripe will never work. So forget “complete freedom in the marketplace” and “complete government control”. It would be nice if we could receive a sensible and economically viable proposal.

Posted by Steve Numero Uno | Report as abusive

Problem with health care costs? Big government unions. Problem with poor schools? Big unions. Big bureaucracy. Problem with auto industry? Big unions. Notice any point of commonality?

As for James Reed comment – if American would only get its fat backside out of the potato chips, colas, candy, grease soaked bacon and buttered pancakes, maybe there wouldn’t be a problem. Lets spend some money on NUTRITIONAL EDUCATION.

Posted by Hur Tinn | Report as abusive

Everyone is up in arms about the QUALITY of health care, and somewhere in that the COST becomes a moot point. I don’t care how much that shiny new bicycle will help you in life, if you can’t afford it, you don’t get it (unless you are in Congress). Again and again, it becomes an ideologue’s debate, and the wonks only consulted at the very end. Also, a rebuttal:

“It is very simple if you want healthcare in this country,join a union.”
posted by Tony
–Yes, Tony, but I would also like to have a JOB as well. But maybe I’m overreacting. Look how great the auto industry is doing (Thanks UAW!?!). “Big 3″ retirees just saw their dental and vision coverage evaporate, and none of them had prepared for it. Imagine a whole nation this naive…

We will sell our children for a CAT-scan. When did it stop being about tomorrow, and start being about “ME, ME, ME!”?

Posted by Patrick | Report as abusive