What if Better Healthcare Just Isn't Possible?
Should the Canadian healthcare debate focus on management rather than perfection?
Canadians never tire of talking about healthcare, and I’m as guilty as anyone: the Audit is only 25 posts old and this is already the fourth post whose primary subject involves public health spending. Anytime we’re stuck waiting for a medical appointment or lab result, it’s always “We never used to have delays like this!” Invariably, that’ll be followed by thoughts on how the system could be improved if only [[insert your plan here]].
But what if it can’t be improved? What if we’ve already maxed-out available funding and run out of useful ideas for attracting the thousands of doctors and nurses we’re missing? What if there’s no solution to the problem of modern healthcare?
Before addressing those questions, let’s add some context.
Is the System Broken?
Not even close. As of 2019 at least, life expectancy in Canada was near the global leaders, at 82.4 years. The Our World in Data coverage of essential health services index placed us near the top at 80.15 in 1990 and 86.7 in 2021. Overall - as of 2019 - we’re spending $5,520 on healthcare per Canadian each year. When divided into our per capita GDP ($49,172), that means healthcare spending consumes more than 11% of our total economy.
That’s not to say it’s all rainbows and unicorns at the walk-in clinic. Those good numbers might be less the result of an effective healthcare system and more due to our relative wealth. Wealthier people, in other words, have the luxury of making healthier choices. The bleak truth is that millions of Canadians lack access to a primary caregiver, wait times for important procedures are far too long, and “avoidable death” numbers are actually moving in the wrong direction.
Avoidable deaths (also known as “amenable mortality”) are “untimely deaths that should not occur in the presence of timely and effective health care, including prevention.” This is an excellent proxy for assessing the overall effectiveness of a healthcare system.
Unfortunately, as you can see from the graph visualizing Statistics Canada data, steady improvements in the metric between 1979 and around 2012 have since been reversing. The significant jumps in preventable deaths during the COVID years (2020-2021) in particular might represent public health officials’ shameful choice to neglect non-COVID illness during that period. But the overall negative trend began long before COVID.
But that being said, as a nation we’re not doing too badly.
Can It Get Any Better?
I don’t think I’ll generate any controversy by observing that the primary causes for healthcare delivery failures in Canada are:
Funding shortfalls (there isn’t enough money in the system)
Labor shortages (there aren’t enough doctors and nurses in the system)
The problem is that those aren’t easy problems to solve. Even if there was still some life left in the “soak-the-rich” playbook, who’s to say that new-found funds should be spent on healthcare? NATO called and they’d like a slice of that pie if it’s not too much bother.
Now don’t get me wrong: I’m all for cutting budgets mercilessly. In fact, I’d wager that each of the 21 non-healthcare posts in The Audit provides very specific and very practical suggestions. But I’m not holding my breath waiting for any axes to drop in those areas. Creating new entitlements is easy. Cancelling them is…unlikely.
I’m sure we’ll still regularly hear federal and provincial politicians promising billions of new “investments” in healthcare. But I’m equally certain that none of those announcements will ever be sufficient or smart enough to make significant progress on the core problems. It’s simply unrealistic to expect many thousands more bright young people to commit themselves to the costs, pressures, risks, and lifestyle upheaval necessary to survive medical training. And, according to recent heavily-followed discussions in the US, the real pain only begins after graduation. If anything, it’s astonishing that we have as many doctors and nurses as we do.
Perhaps, instead of dreaming of grand (and impossible) solutions, we’d be better off spending our time and energy on policies for managing the system. This might involve energetically searching for efficiencies and savings and playing around with the edges of the model - including finally considering the private delivery of some services. Rather than facing repeated rounds of bitter budget wars, we might achieve the odd incremental success.
Could a Free Market Save Us?
Until the 1960s, medical care was delivered through private businesses. Doctors and hospitals had to set their rates according to what their customers/patients were able to pay. Medical schools charged what medical students could afford. Drugs were sold at affordable rates. Sure, there were certainly individuals who died for lack of funds. But my understanding is that such tragedies weren’t so common.
Why can’t we recreate that world? I’m sure you already know the answer.
Medicine is more complex so training is going to be longer, more intense, and more expensive.
Medical diagnostic equipment is expensive to purchase and maintain - often far more expensive than any one doctor or small hospital could afford without government help.
Many modern drugs that wouldn’t exist without billions of dollars in research investments won’t be sold cheaply.
We could certainly return to a 1950s-style medical economy, but it would require accepting 1950s-style medical services. I asked the Claude 3 Sonnet AI (finally available in Canada) how it saw a modern medical free market playing out. Here’s what I was told:
Healthcare worker shortages would theoretically drive up wages and incentives until labor supply met demand at market equilibrium pricing.
Education costs could seek their own pricing equilibrium based on positioning programs to attract students to meet projected labor demands. This could potentially relieve bottlenecks by ensuring sufficient financial incentives for people to enter healthcare fields.
Healthcare would likely become increasingly unaffordable for many without public subsidies or insurance requirements.
For-profit education might prioritize lucrative fields over social needs if unregulated.
Free market failures like information asymmetries could persist and distort pricing signals.
Issues like uneven geographic distribution of providers may not self-correct optimally.
So in theory, free markets could solve healthcare staffing through fluid labor mobility and pricing mechanisms, but without the patient affordability and broad access of the current public model.
Speaking as a retired family physician and retired senior health care administrator…..
There are many other first world countries that deliver better health outcomes at lower aggregate costs, so I’m not convinced that we can argue that our system is underfunded.
We’ve been living for a very long time with government rationing of health care supply. They ration the supply of providers, through limits on class sizes and training opportunities. They limit the number of hospitals and beds. They limit the number of diagnostic machines. They limit the number of surgeries. They limit what drugs are covered through pharmacare. Everything is limited. The response to limited supply in the face of rising demand is increased costs.
I was a practicing physician. Doctors aren’t starving. Doctors from all over the world want to come here to work, but their opportunities are limited. Canadians who trained overseas, at their own expense, have to fight for an opportunity to train and practice in their own country. Some folks will incur huge additional costs to train as doctors overseas when they can’t get into a Canadian medical school. There’s no shortage of people who want to work here as doctors, but the opportunities are limited by government. Meanwhile, you earn exactly the same whether you are a bad doctor or a good doctor, so why try too hard?
I suspect the same is true for other providers. My wife was a nurse, trained in the days when it was a three year hospital-based training program. Nowadays, nurses are university-educated in a four year program, it graduate without the skills needed to look after patients from day 1, so they need an “apprenticeship” before they can do the work. We’ve limited the number of training spots, raised the costs, and graduate less capable people with higher expectations. At the same time, we’ve centralized health care, and unionized everything, so a nurse is a nurse is a nurse and they all earn the same, based on seniority not merit. We are so desperate to staff the hospitals that every nurse gets a job.
At the same time, because we’ve made it so hard to get into medical school and nursing school, we don’t fail anybody, even the ones who shouldn’t be there!
Want to make it work better? Restore the free market. Throw open the doors to training to anybody who is motivated and willing to pay for the chance. Graduate only those who prove their merit. Let them work where they can find opportunity, and charge what they deserve. Let private agencies open hospitals where there’s a need and run those hospitals efficiently. A bit of competition would reward the efficient and those who do their job well, while driving down overall costs.
At the same, drop the idea that the public purse will pay for everything. The original idea was to avoid people being bankrupted by catastrophic health care costs. We’ve completely lost the plot on that, and now we cover everything from soup to nuts, no matter what the value proposition might tell us.
I'm not so sure there isn't enough money in the system. But I am sure that a lot of that money is wasted. I read somewhere that our ratio of managers to patients is ten times higher than Germanys, and their system is rated much higher than ours by the OECD. You also have people protecting their turf. My father-in-law was working in a hospital senior position when a new method of treating kidney stones was presented. It was less invasive. However the surgeons kicked up a fuss because they would lose out on the billing because the new procedure was done by radiologists. Turf wars. The OECD recognizes 28 or 30 health care systems that all rate better than Canada. And we rate just one step ahead of the US. So let's look at those other 28 systems and see what we can learn from them. And if we can improve the system, we might be able to attract more people to work in it.