Price Controls and Black Markets in Canadian Health Care
By David Henderson
One high-ranking physician who works with doctors at several Montreal hospitals told The Gazette that obstetricians often accept cash offered by expectant parents to ensure their doctor attends the delivery, rather than having to depend on whichever doctor is on call.
“I’ve learned that it’s current practice. … Everyone within these hospitals knows about it,” he said of the hush-hush payments. “It’s systemic, and it has been so for a long time now.”
This is from “Want fast care? Slip an MD some cash” in the Montreal Gazette.
When I teach a segment on Canada’s extreme price controls on health care–set typically at zero for the patient–I ask my students what they think would result. What I’m expecting them to say, and they often do say, is that there will be queues for health care. But the common answer they often give is that there will be a black market with side payments to doctors. My usual response is that I have not seen evidence of this. Well, now there is evidence. Read the whole article.
The strange thing is that one doctor attributes this to privatization:
The black market for care is encouraged by the privatization of services, he said. Doctors feel underpaid and the demand for medical services in the public system outstrips supply, he said.
But these facts–doctors feeling underpaid and demand outstripping supply–apply to all of Canada’s Medicare system. When I went up to my home town of Carman, Manitoba in 1988 to visit my father when he had a medical emergency, his doctor, when he found out I was from “the States” and that I had done some health economics, vented to me about how little he is paid for this or that procedure. And the queues for health care are so widespread that the Fraser Institute in Vancouver puts out an annual report estimating their length.
It’s true that Canada’s Supreme Court, in the 2005 Chaoulli v. Quebec (Attorney General) decision, found that it was a violation of the Quebec constitution for the government to prevent people from using private insurance to get health care when there are long queues. The solution was more private insurance and loosening the restrictions that prevented people from paying legally for health care. Maybe the doctor’s argument is that doctors can choose between getting paid more by private payers or taking lower pay from the government and so they even things up somewhat by taking government payments and private side payments at the same time. Here’s a test: is this happening in the nine other provinces to which the Supreme Court ruling doesn’t apply? Here’s another test: the first doctor quoted said that this practice has been around “a long time now.” Longer than 5 years?
HT to Karen Selick.