Canadian Health Care
By Arnold Kling
Pierre Lemieux discusses the distortions in measured costs under a socialized system. Criticizing an article in the New England Journal of Medicine that reports on lower administrative costs in Canada than in the United States, he writes,
Canada’s long waiting lines saves the health system money but at a cost to patients…
The second category of hidden costs relates to the partial conscription of medical personnel in the Canadian system…
The system costs Canadian taxpayers more than $75-billion — more than 20% of all taxes levied in Canada. The administrative cost of collecting these taxes can be roughly estimated at $1-billion. But…(what economists call the “deadweight loss” of taxes), is much higher — perhaps of the order of $20-billion.
When my wife and I stayed at a Bed and Breakfast on Prince Edward Island, the owner said that seven years ago when they first moved to PEI, he was put on a three year waiting list to be assigned a personal physician. He has a heart murmur, and he was unhappy about this. One day, by chance he ran into the head of the provincial health service and talked her into moving him to the head of the queue. He told this as a reassuring story, but it made me wonder about the people he bumped back.
For Discussion. On the surface, the multiplicity of providers makes competition inefficient. Reducing the number of providers should save on administrative overhead. Which examples of private competition and government monopoly illustrate the fallacy of such thinking?
UPDATE: One classic example of the doubtful efficiency of monopoly is the post office, which is the subject of a recent opinion piece by Rick Geddes.