Private health care plays important role in other countries

As other countries demonstrate, universal health care can successfully include for-profit providers

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By Nadeem Esmail
and Bacchus Barua
The Fraser Institute

Defenders of Canada’s health system have long argued that there are only two valid policy options: we can have a universal health-care system dominated by government or a system where private, for-profit insurers and hospitals are present but universality is unattainable.

The truth, however, is that universal health care can successfully include for-profit providers. A number of other countries offer clear examples.

Nadeem Esmail
Nadeem Esmail

The noble goal of universal-access to health care is not unique to Canada. It’s shared with nearly every other developed country, all of which pursue it through a combination of government, private non-profit and for-profit institutions. Consider the examples of Australia, France, Germany, the Netherlands, Sweden and Switzerland, each of which delivers higher quality universal health care for costs similar or lower than Canada. Unlike Canada, these countries do not appear to be frozen by a fear of profit-making – they seem to have embraced it as part of their higher-performing approach to universality.

In all of these countries, private for-profit insurers compete in the voluntary insurance sector, variously offering services such as expanded choice of physicians and hospitals, private rooms, coverage for vision and dental, and expedited access for elective treatment and day surgeries.

For-profit companies also compete to offer primary universal health-care insurance in the Netherlands, and offer a substitute for public health insurance in Germany. In these countries, doctors are able to practise in both the public and private systems, and accept payments from either insurer.

The presence of for-profit hospitals is even more commonplace. In 2012, some 42 per cent of hospitals in Germany were for-profit institutions, as were more than half of hospitals in Switzerland, and about 40 per cent of hospitals in France. Nearly all of these for-profit hospitals provide care for the universal systems of each country. In Australia, 35 per cent of hospitals are for-profit facilities with some contracted to provide universally accessible care. Even in Sweden, three of the country’s 83 hospitals are for-profit, including a large acute-care facility that delivers care to patients within the universal system.

Bacchus Barua
Bacchus Barua

This level of co-operation between public funders and for-profit institutions is ostensibly absent in Canada. Private for-profit parallel insurance is disallowed, dual practice by physicians is prohibited in most provinces, and only a small number of for-profit clinics and hospitals can be found. The climate simply does not encourage their formation.

Some pundits say such involvement by the private sector (for-profit institutions in particular) is antithetical to the goal of universal-access health care. Others in Canada argue more strongly that any involvement of the private sector, especially the for-profits, will sacrifice the universal nature of our health-care system. None apparently have bothered to look at what other countries, particularly those with high-performing universal access health-care systems, are doing.

While Canada struggles with long wait times, physician and medical-technology shortages and health-care expenditures that are eating away at provincial budgets, pundits and policy-makers are taking valuable policy options off the table for philosophical reasons.

The experience of other countries demonstrates how the private sector can play an important role in delivering on the promise of universal-access health care. We owe it to patients to consider all options that provide universal, high-quality health care.

Nadeem Esmail and Bacchus Barua are authors of the recent Fraser Institute study For-Profit Hospitals and Insurers in Universal Health Care Countries.

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Nadeem Esmail

Nadeem Esmail is a Senior Fellow of the Fraser Institute. He first joined the Fraser Institute in 2001, served as Director of Health System Performance Studies from 2006 to 2009, and has been a Senior Fellow since 2010.

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