NCPA - National Center for Policy Analysis


October 9, 2009

Government-dictated health care budgets can undoubtedly hold down costs in the short run by squeezing doctors, hospitals, and drug companies, who have no choice but to sell to their one and only customer.  But in the long run, rationing takes its toll, as doctors retire or refuse to take on new patients, waiting lists lengthen for scarce hospital beds, and medical innovation stagnates as investment capital for new drugs shifts to other, more lucrative sectors.  In short, single-payer systems can starve health care providers of funding for only so long before facing the inevitable consequences, says Paul Howard, a senior fellow at the Manhattan Institute.

What are those consequences?  Consider some recent news from Canada and Europe:

  • In 2005, in response to a challenge by a physician operating a private (and therefore technically illegal) clinic, the Canadian supreme court ruled that, under the Quebec Charter, access to a waiting list was not the same as access to health care.
  • Emboldened by the Quebec example, more than 70 private clinics now operate in British Columbia, offering MRIs and surgeries in days or weeks; by contrast, it can take public hospitals months to provide these same procedures.
  • Brian Day, former director of the Canadian Medical Association, recently told the Los Angeles Times: "What we have in Canada is access to a government, state-mandated wait list. . . . You cannot force a citizen in a free and democratic society to simply wait for health care, and simply outlaw their ability to extricate themselves from a wait list."
  • The supreme court of British Columbia may soon rule on whether these services are legal, which could further splinter the government's monopoly on health care spending.

Despite massive increases in government spending on the National Health Service (NHS) over the last several years (the NHS budget has tripled since 1997), the United Kingdom still lags behind Europe and the United States when it comes to the treatment of chronic disease:

  • In 2007, The Lancet Oncology reported that England's cancer-survival rates were among the worst in Europe.
  • They were equal to Poland's, despite the fact that England spends at least three times as much on health care as Poland does.
  • For women, England was sixth worst out of 22 countries surveyed; the United States led in overall cancer-survival rates for both men and women.
  • In June, NHS officials released a report warning of a "huge budget shortfall" starting in just two years.

Source: Paul Howard, "Real Health Care Reform," National Review Online, October 8, 2009.


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