Canadian Healthcare: Thoughts about party platforms on major issues

I'm currently finishing up the health economics class that Queen's university offers, which is designed to help students better understand how healthcare systems function and how they can be improved from an economics (read: least biased) perspective. Since my exam is in 2 days and I'm pretty well studied up for it, and also since it's the Canadian general election, I'm going to give my new-found knowledge a try and analyze some of the platforms that the three major Canadian political parties have regarding major issues in the Canadian healthcare system.

Issue 1: Regarding the status of the 1984 Canada Health Act:

• As expected, all the parties supported the universal, public-funding of healthcare Canada. Canadians are very proud of our iconic, egalitarian system and it would be political suicide to “scrap” or even to “amend” it. What the platforms didn’t clearly mention is that one pillar of the Health Act, “public administration”, is ambiguous. Administration could mean “insurance/funding of care” AND/OR “provision/delivery of care”. The two are very different. Right now, Canada has a publically-funded system with pseudo-privately delivered care. Delivery is “pseudo-private” because all the hospitals/clinics in Canada are heavily government-regulated, and there is no competition, which from an economics point of view, is inefficient and doesn’t generate high-quality care. Many changes to the Canada Health Act can be made to make our system better while preserving our national values of equality, universality, comprehensiveness, and yes, even public administration (insurance). Senator Kirby detailed has one such proposal: the introduction of so-called “internal markets” in healthcare delivery to create competition amongst publically-funded private providers, as well as a national wait-times guarantee. His ideas, and many others, deserves debate, or at least consideration, especially in a system that obviously can be improved.

Issue 2: Regarding the rising cost of pharmaceuticals:

• The Conservative platform of throwing money at provinces (for them to figure things out) is not the answer to the problem. According to health economics (and common sense) concepts, throwing money at many healthcare problems, including pharmacare, will actually only awaken “latent demand”: those patients that are teetering at-the-margin between whether or not to buy those drugs. Such “marginal patients”, seeing a drop in drug prices because of the injection of funds, can of course buy more drugs, but this is only a short-term solution and does little to solve the root issues of the problem (with are likely related to both supply and demand for drugs).
• In contrast to the Conservative plan, the NDP plan is actually evidence-based. They plan to create “a universal prescription-medications insurance plan” may actually work to decrease drug costs in the long-term. It makes economic sense. Pooling together all the individual drug insurance plans into one national plan will create a demand-pool that exerts considerable influence on the willingness-to-pay (the price) of drugs – you can think of it as a reverse-monopoly (what economics call a monopsony). Because of this huge bulk-purchase, drug prices can be bid down.

Issue 3: How to reduce wait times without hiring more MDs/Nurses:

• At the risk of sounding like another Conservative-basher, we actually learned in our health econ class that “continuing to increase funding for health care to record levels”, the Conservative platform, is not the solution. (In fact, that’s actually the problem! The system now needs record-high funds to be maintained!) Again, I refer to the principle of latent demand: increased funding to increase health system capacity will only reduce waits in the short-run. When “marginal patients” (those deterred by long wait times but can afford to wait a little) see wait times temporarily decreasing, they will join the new shorter wait lists, which will lengthen the wait list again, leaving wait times relatively unchanged in the long-run.
• In terms of the other two parties’ goals: both of them promote improved and increased home-care, which can potentially reduce costs because we know that hospitals are the single-biggest money-hogs in the health system (page 31 of this 2010 CIHI report).
• The Liberals mention that the increasing the rural health work force is critical, but they fail to mention specifics of how they will actually implement this other than increasing broadband expansion. In fact, a wide range of methods can be implemented, from training young doctors in rural regions to providing employment opportunities in rural regions for spouses and educational opportunities for kids, all of which have been shown to raise the number of doctors willing to work in rural areas (although doing so would take more time and effort).
• None of the parties even dare to mention the fundamental reason behind wait times, according to health economics principles.
• The fundamental reason is collective choice in a publically-funded system. That’s why you see excessive wait times in all countries with publically-funded health systems. Essentially, collective choice means that, with regards to a public pool of goods, people are less willing to contribute to it, but more willing to take from it for individual benefit. In terms of the healthcare system in Canada, people are less willing to contribute to total health system capacity (supply), since not many people really want to pay higher taxes (taxes fund our health system). However, since healthcare services are free at the point of service, Canadians are keen to claim more health services individually (greater demand). At the population level, then, the total demand for healthcare would be much greater than total supply, resulting in excess demand that causes waits.
• Unless the parties are willing to look at ways of reducing public healthcare demand (for instance, via a parallel private supplementary health insurance system, or better yet, via prevention) while maintaining or increasing public healthcare capacity/supply (by inducing competition between providers with “internal markets”, etc), the thorn of long waits will always stick in our sides.

Issue 4: Clearly defining what is “medically necessary” to determine what should be covered by public insurance, and what could be covered by private insurance:

• At this point I don’t have the expertise to comment on this issue, but I would like to point out that both the Liberals and the NDP say that this definition must be made with “scientific evidence” and “objective clinical evaluation”, whereas the Conservative response was to “work with the provinces and territories to renew the Health Accord and to continue reducing wait times”…a blatant, albeit clever, dodge of the question.

Okay, enough for now - I'm going to go study for my other exams. What are your thoughts?