NCPA - National Center for Policy Analysis

Increased Health Spending Does Not Decrease Waiting Times

August 25, 2000

Patients in Canadian provinces which spend more per capita on government health care do not have shorter waiting times for surgeries and nonsurgical treatments, and, in fact, fewer major surgeries and total procedures are performed in those provinces. Those are two conclusions of a new Fraser Institute study by Martin Zelder, director of health policy research, that analyzed health care spending throughout Canada.

Zelder suggests that increases in health spending are either consumed by wage and price increases or are being devoted to nonsurgical uses.

  • Among the various types of health spending, only increased spending on drugs was found to reduce waiting times.
  • Thus a $13.33 or 12 percent increase in per capita government drug spending would reduce waiting time by a week.
  • For three types of specialized medical services -- radiation oncology, medical oncology, and cardiovascular surgery -- the study found additional per capita spending actually increased waiting times.

Quebec is the only province in which higher spending appears to be significantly associated with reduced waiting for important areas of treatment; a 10 percent increase in spending there -- approximately $170 per capita -- would reduce waiting time by 2.1 weeks.

The study finds that productive areas of spending are largely neglected by the government: the provinces that increased spending did not devote the new resources to drug spending -- about 6 percent of total government health spending is on drugs while only about 1 percent of additional spending goes to drugs.

The evidence clearly refutes the claim that increased funding will solve the problems of Canada's health care system, says Zelder. He recommends moving towards permitting for-profit hospitals to provide care, allowing doctors and nurses to earn salaries commensurate with their abilities, and encouraging sensible use by consumers via modest user fees or medical savings accounts.

Source: Martin Zelder, "Spend More, Wait Less? The Myth of Underfunded Medicare in Canada," Fraser Forum, August 2000, Fraser Institute, 4th Floor, 1770 Burrard Street, Vancouver, BC, Canada, V6J 3G7, (604) 688-0221.


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