Is a Single-Payer Health Care System a Good Idea for South Africa?

Let’s learn from an author who has made a thorough study of a working example of such a system. Canada has had a single-payer system for many years and has a GDP per capita that is four time that of South Africa’s. If anyone should have solved the problems related to such a system it should be Canada.

The Fraser Institute has just released the book: Canadian Health Policy Failures: What’s wrong? Who gets hurt? Why nothing changes by Brett J Skinner, their Director Bio-Pharma & Health Policy and
Director Insurance Policy. The book is available for free download at: http://www.fraserinstitute.org/commerce.web/product_files/CanadianHealthPolicyFailures.pdf.

The purpose of this book according to the Fraser Institute is to focus on the “exceptionalism” of the Canadian health care system as a textbook case of government failure in medical insurance and medical services policy.

The book begins by identifying and demonstrating six key areas where Canadian health policy is failing to produce optimal outcomes:

Chapter 1 Unsustainable costs
Chapter 2 Shortage of medical professionals
Chapter 3 Shortage of medical technology
Chapter 4 Long waits for medical treatment
Chapter 5 Inflated generic drug prices and wasted spending
Chapter 6 Lack of access to new drugs

Chapter 7 offers some qualitative support for the quantitative analyses presented in earlier sections. The chapter provides a small sample of published media stories and journalistic reports that illustrate the ways in which real people are often harmed by Canadian health policy.

Chapter 8 identifies and discusses the key health and prescription drug policies in Canada that are most problematic. Chapter 9 provides a discussion about various potential alternative policies that could provide better outcomes. In both chapters, opposing opinions are discussed and critically analysed and compared to research that supports the arguments presented in this book.

Chapters 10, 11, and 12 identify the key political factors that act as barriers to the adoption of more economically rational health care policies in Canada. One of these barriers is that the ideological political values of many in the academic research community tend to be opposed to the economic liberalisation of health policy, and this could partially contribute to an information deficit for policy makers. Another is that some special interest groups actually benefit economically from the state’s involvement in health care and therefore could face strong incentives to favour interventionist public policies and oppose liberalization.

The electoral dynamics produced by the distribution of the tax burden and of illness are also not favourable to the introduction of economically liberal health policy reforms. The majority of the tax burden is paid for by a minority of the population. This means most people are disproportionately insulated from the price of public health insurance programmes. Therefore, the majority of voters have significantly reduced financial incentives to make cost-benefit calculations about the performance of the health system. It also means that policy makers face fewer political risks from raising taxes to fund health care than from introducing price mechanisms that are paid by everyone. And ill people—those most directly harmed by a lack of access to medical care—make up an extremely small percentage of the population, and therefore represent too few votes to have a decisive influence on policy makers about declining access and coverage under Medicare. The costs of public policy failure are also not borne equally by policy makers and the public, and this might also produce policy preferences that do not optimise the public interest.

The book concludes in chapter 13 on an optimistic note, with a discussion about the political feasibility of achieving economically liberal health policy reform in Canada. While the Canada Health Act (CHA) is a partial barrier to economically liberal policy reforms, there is still a surprising degree of freedom under the act, and ultimately the provinces still have policy autonomy if they choose to exercise it. The nature of health policy liberalisation as a wedge issue in a multi-party system is also discussed to demonstrate that a reform platform could work as a winning electoral strategy. This is accompanied by a review of the results from various public opinion polls which indicate that when the right questions are asked, the responses suggest that most Canadians might actually tend to prefer economically liberal and socially minimalist approaches to health policy.

The timing of the book release could not be better. The health reform debate in the United States is dominating the media and has spilled over international borders. The Canadian health care debate is being dangerously influenced by several myths about government involvement in health care markets in general, and about the comparative structure and performance of US and Canadian health care in particular. This book directly challenges these myths and provides objective, evidence based answers to the most important perennial questions about health care policy.

Importantly, the book offers a persuasive new political narrative explaining resistance to economically liberal approaches to health policy.

HPU Feature Article /29 September 2009