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Sunday, November 09, 2008

Canada's Health System: a problem of supply

Yesterday I attended the Fraser Institute Student Seminar in Toronto. It was an interesting event, as it always is. There was a wide range of topics discussed and view points expressed. Perhaps the most critical of the topics was Canada's health care system.

The first presentation was about price control. Mark Schug of the University of Wisconsin Milwaukee described how price ceilings can disrupt the supply of a good. Basically an artificially low price takes away a producer's incentive to create more of their products. This set the tone for the discussion about Canada's health care system.

Canada suffers from a problem of supply. Of course it is not enough to merely say that. You need statistics to demonstrate that Canada has a smaller supply of medical goods and services than the United States. As the Fraser Institute would say, "If it matters, measure it." And that is what Fraser Institute researcher Brett Skinner did for us. You can read the full details in the publication, "The Hidden Costs of Single Payer Health Insurance." I will give you a sample of his findings.

In Canada, there are 6.2 MRI machines for every million people. In the United States there are 26.5 MRI machines for every million people.

In Canada, the average age of a hospital is 40 years (dating back to before universal health care). The average is nine years in the United States.

In Canada we have 4.3 staff members per bed. There are 5.3 staff members per bed in the United States.

Finally, and the most telling, there are 510 American doctors working in Canada. There are 8990 Canadian doctors working in the United States (as of 2005).

Doctors in the U.S. are also paid more than twice what they are paid in Canada. It is hard to be a doctor. It is hard also to become a doctor. It only makes sense that fewer people will be willing to make the sacrifices needed for a much smaller award.

Just like rent control, the good intentions of our politicians has made it hard to find medical treatment in many parts of our country.

Posted by Hugh MacIntyre on November 9, 2008 in Economic freedom | Permalink


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Is there a study showing the huge amount of tax dollars sucked up (wasted) by the top heavy administration of our socialised health care? I think that would prove very enlightening.

Posted by: Alain | 2008-11-09 6:13:54 PM

Check out the Fraser Institute's website. They have several studies about Canada's health care system

Posted by: Hugh MacIntyre | 2008-11-09 6:26:19 PM

Thanks Huge and will do. I am referring to the administration at both the federal and provincial level.

Posted by: Alain | 2008-11-09 6:44:43 PM

our health care system is much like Indian affairs, gun registry,economic development and a few other bottomless pits.A crapload of drones and too few people that actually work. If you want some real villains check out the pharmaceudicals.

Posted by: peterj | 2008-11-09 7:02:11 PM

peterj, the real villains are governemnts. Not corporations. The unholy alliance of business and government hurst us all. But to focus only on the corporation is to ignore the root cause. Corporations will use every advantage they can under the law. If that legislation results in more taxes for you and me, or fewer freedoms for you and me, they normally don't care.

Freedom results in better services at lower costs. But even if it didn't, I would still choose freedom.

Posted by: TM | 2008-11-09 11:19:08 PM

Once again, people realize that which has been said before - a long time ago.

Ludvig von Mises expressed (in 1922) the problem of prices in his "Economic Calculation" argument which basically shows Socialism for the pipe dream it is.

Friedrich Hayek explained this very clearly again in "The Road to Serfdom"... No one should be surprised.

Posted by: Technical Bard | 2008-11-11 7:24:39 PM

Personally, I find the Fraser Institute so far to the right that if they were a highway they would continually be driving on the shoulder. Although our health system needs changes, I would never trade with the American system. All U.S.HMO's are on the stock exchange. Stock exchanges are there for one reason and one reason only. To make money for investors. HMO's are the middleman between the patient and the doctor. I believe we can easily afford basic service and generic drugs when required. I believe if a person wants a sex change operation, abortion ,tummy tuck, cosmetic surgery, lyposuction or other non essential system perks, they can pay for that themselves. That would shorten the waiting list. I have friends in Oregon that lost the house they had lived in for 22 years. He got sick. They had a medical plan that cost them $380. a month. It was not good enough. This is not a system I want to live under. There are some things I do not mind paying taxes for. Just pisses me off when so much of that Tax money is wasted.

Posted by: peterj | 2008-11-11 9:48:06 PM

Fraser Institute doesn't advocate an American system Peter. They generally advocate the sort of systems that you find in Europe. Is Europe too far to the right for you?

Posted by: Hugh MacIntyre | 2008-11-11 10:19:54 PM

Hugh MacIntyre
No Hugh, Europe is also too far to the left for me.

Posted by: peterj | 2008-11-11 10:28:35 PM

You missed my point, which is that the Fraser Institute is not very radical on this issue.

Posted by: Hugh MacIntyre | 2008-11-11 10:42:38 PM

Ok Hugh, I am on dial up and read as far as I could without trying to download the rest of it, which probably would have taken up the rest of the night. I have followed the Fraser institute for many years and from what you are saying, I jumped to conclusions. Will shut up until I read the whole thing. Ps..on dial up only because we can't get high speed out here. Also, I'm not sure I consider F. I. radical. Agree with many of their points. Just predictable very right wing.

Posted by: peterj | 2008-11-11 11:30:47 PM

Well predictable I suppose, but I get the impression that they try not to prejudge.

If you are interested in the Fraser Institute's research on health care this study is perhaps a better one to look at, http://www.fraserinstitute.org/researchandpublications/publications/5035.aspx

It compares Canada to other 'universal' systems, primarily in Europe.

I feel your pain with the dial up

Posted by: Hugh MacIntyre | 2008-11-12 12:24:37 AM

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