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The Solution to Canada’s Failed Universal Health Care System: Consumer and Physician Freedom

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05/10/2018

[This is Part Three in a three-part series on Canadian Health Care. See Part One and Part Two.]

Many Canadians are satisfied with the health care they receive, but there are also many who do not survive lengthy government-imposed wait times for necessary treatment. Thus, Canada’s universal health care system must be described as failing to fulfill the government’s promise “to make sure that people could get care when it was needed without regard to other considerations” (see Part 2).

The government’s health care monopoly suppresses the capitalistic impulses which would produce far superior results. If Canadians are unable to grasp this basic economic reality, the deadly consequences of universal health care will continue to grow.

Economic Cause and Effect

Health care is no different than any other product or service in terms of the societal conditions which must prevail in order to achieve the highest possible level of consumer satisfaction. Health care is funded with tax dollars, but many people die as they are forced to wait for the care they have supposedly purchased. However, notice how we are able to quickly purchase, and immediately receive, such necessities as food and clothing. The difference is that these products are supplied by entrepreneurs on the free market, whereas health care is supplied by a bureaucratic government.

Purchases of food and clothing are an outcome of the voluntary interactions between only two parties, the consumer and the producer (or retailer), where goods are simultaneously exchanged for money. In the marketplace, there are many producers who are highly incentivized to compete for the attention of consumers who will not part with their money unless they are happy with the product offered. Companies incur losses and eventually go out of business if consumers are not satisfied with the price and quality of the goods and services they produce. Therefore, it is the preferences of consumers, as expressed through their decisions to buy (or not to buy) which ultimately determines what gets produced.

In contrast, the Canadian government monopolizes the provision of health care by forbidding market participants from offering consumers alternative choices, though the law is not rigidly enforced, and has been subjected to a constitutional challenge in the courts. Bureaucrats arbitrarily decide how much people must pay (in taxes) for government health care, whether they have access to it or not. They also decide how much of this money they will keep for themselves, and how much will be paid to the actual producers of health care. As William Gairdner (p 307) rightfully observes:

Thus does the State itself consume resources that might otherwise have gone to patients, forcing them to wait for care, many of them in pain, some of whom will die.

The government has interposed itself as a third party between consumers of health care (patients) and producers of health care (e.g. doctors, nurses). This prevents consumers from effectively expressing their preferences and negates the incentives of producers to satisfy those preferences. It is the arbitrary commands of bureaucrats, not the voluntary interactions between consumers and producers, that determines the quantity and quality of health care to be produced. And because health care is ‘free’ at the point of service, millions of ‘consumers’ rush to the doctor with every little ache and sniffle. At zero cost, consumers are no longer incentivized to be judicious, demand explodes, health care is rationed by unaccountable bureaucrats, and thousands die as a result of the government’s inefficiency.

The government’s response to inefficiency is always a political grab for more tax dollars, accompanied by speeches from politicians and bureaucrats promising better service. That is to say, speeches from politicians incentivized to win your vote, and speeches from bureaucrats incentivized to increase their own power through larger budgets and bureaucracies which they control. And, as we have seen in Part 2, the actual provision of health care declines as the government’s health care budget rises. Such are the perverse incentives embedded within the coercive institution of government.

No One Has a "Right" to Health Care

Economist/historian Murray Rothbard wrote,

… the concept of "rights" only makes sense as property rights. 

Everyone naturally owns their own body, which means they have a right to keep the fruits of their own labour (wages i.e. property), and the right to voluntarily exchange their property for the property of another person on terms mutually agreeable to the two parties.

It follows then that I do not have a right to food, clothing, health care, or any other material good because such a ‘right’ forces someone else to provide these things for me, which is a clear violation of the property rights of another person. However — and this is the important distinction — I do have a right to acquire any of these things through my own efforts, including mutually agreeable voluntary exchanges with others, so long as I do no harm to other persons or their property. In this way, I am not interfering with the efforts of others to acquire the things they desire.

There is no other definition of rights consistent with morality. However, we are constantly reminded of a so-called "right" to health care by smooth-talking politicians and bureaucrats who have a vested interest in monopolizing its provision. The duplicity of these charlatans is painfully clear. For decades, their bureaucracies have feasted on billions of tax dollars while thousands of dead Canadians are still waiting to exercise their ‘right’ to health care. They are dead because the government denied them the right to use their own money to save their own lives by purchasing private health care in the Canadian marketplace.

Consumer/Physician Freedom

The only way to ensure the prompt availability of high quality health care to the greatest possible extent is to defend the right of any consumer and any physician to enter into a voluntary exchange without any interference from a third party! It therefore follows that a physician may offer his services to any consumer, regardless the opinion of any third party as to the qualifications of the physician (i.e. licensing).

Licensure is a government granted favour to the medical establishment intended to limit the number of practicing physicians (see Part 1). As Ronald Hamowy (p 125) wrote:

The profession’s attempt to suppress these doctors was not motivated out of a selfless interest in improving the quality of medical care offered the public, but out of a desire to lessen competition, which would in turn increase their incomes.

Without coercive licensing laws, consumers would consult market-based sources to determine the qualifications of physicians. Hamowy (pp 328, 77) wrote about "certification":

By certification I mean the endorsement, either through examination or by some other method, of medical practitioners by some semi-public or private body that is not legally empowered to restrict entry into the profession nor to prevent the practice of uncertified physicians.

… there is no hard evidence that licensing, as opposed to certification, improves the quality of physician care available to the public; indeed, there is a good deal of evidence that suggests the contrary is true. And doubtless these effects account for why medical licensing laws have originally been enacted at the urging of the profession itself, and have seldom been promoted by the consumers of medical care, their supposed beneficiaries.

Annual government health care spending in Canada is about $4,000 per capita. In the U.S., the figure is even higher in a heavily regulated system with its attendant costs and red tape. Eager to eliminate the ‘third-party-government,’ thousands of physicians have opted out of U.S. Medicare, preferring to deal with consumers who are willing to pay them directly for service, thus re-establishing the traditional two-party doctor-patient relationship (two examples – here and here, both of which offer 24/7 access; there are many others). Prices for routine doctor visits appear reasonable and would likely decline with an influx of new doctors if licensure laws were repealed.

Furthermore, as noted in Part 1, prior to medicare legislation, private, affordable health insurance for more serious conditions was widely available. This would once again be the case with the repeal of suffocating government regulation of the insurance industry.

Medicare, licensure, and insurance regulations should be repealed. The supply of physicians would rise, the quality of health care would improve, and consumers would regain control of the market, just as they had in the 19th century (see Part 1). The freedom to compete would sharpen the focus of physicians, who would either satisfy the preferences of consumers or seek another line of work. Government health-care-bureaucracies would be abolished, which means citizens would be enriched because their tax-savings would exceed their health care costs, which would fall considerably in an unhampered market.

Following a 23-year career in the Canadian financial industry, Lee Friday has spent many years studying economics, politics, and social issues. He operates a news site at www.LondonNews1.com

Note: The views expressed on Mises.org are not necessarily those of the Mises Institute.
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