Increased national health system spending can increase waiting times

In an effort to reduce waiting times for such things as surgery and treatment by a specialist, the Canadian government has increased spending on its national health care system. However, analysts say that increased spending can actually cause longer waiting times for surgery – not shorter ones – unless the money is spent on doctors and medicines.

Studying annual public expenditures on health care in Canada from 1993 to 2001, Nadeem Esmail found:

An extra $100 of per capita expenditure not spent on drugs or physicians results in a one week increase in waiting time.

Spending that $100 on drugs or doctors results in a two-week reduction in waiting time.

The reduction in waiting times that results from increased spending on physicians is fairly easy to understand, Esmail says:

Under the current system, doctors can only perform the number of procedures allotted by the provincial governments, but patients are not limited in the number of procedures they can demand.

Thus, waiting times increase as demand exceeds supply.

But because pharmaceuticals can substitute for surgery or delay the need for it, increased spending on prescription drugs will shorten waiting lists and eventually lower total health expenditures.

Meeting patient demand also requires competition and patient responsibility, says Esmail. Allowing more private health care providers to compete for those patients who can afford them would relieve the burden on public hospitals. Cost-sharing of this type will encourage patients to seek health care only when necessary, thus reducing excess demand and waiting lines.

Source: Nadeem Esmail, Spend and Wait, Fraser Forum, March 2003, Fraser Institute.

For text http://www.fraserinstitute.ca/admin/books/chapterfiles/Spend%20and%20Wait-pp25-26.pdf#
For more on Health Issues(Canada) http://www.ncpa.org/iss/hea

FMF Policy Bulletin/ 8 July 2003