Matthew Lau: Fixing health care requires markets, prices and profits
Deputy Prime Minister and Finance Minister Chrystia Freeland spent much of last week insisting that enormous sums of federal spending will ensure a strong public health care system for years to come. Speaking in Ottawa on Tuesday, she said that this year “provinces and territories are receiving $52.1 billion from the federal government through the Canada Health Transfer. This is the largest amount ever.” It will rise to nearly $55 billion next year and $57.4 billion the following year. Then in Toronto on Wednesday, Freeland gave a speech trumpeting the government’s “historic $200 billion, 10-year health care plan.”
Also last week, the federal government issued a news release that again cited the $52.1-billion and $200-billion figures, and added mention of $500 million for a youth mental health fund, $3.2 million to “strengthen supply management capacity for drugs and medical devices,” and student loan forgiveness of up to $60,000 for doctors and $30,000 for nurses who work in rural and remote communities. In addition, it mentioned, without giving dollar amounts, the government’s spending initiatives on national dental care, national pharmacare and taxpayer-funded contraceptives.
All of this increased spending, we are told, will “reduce backlogs, improve primary care, and cut wait times.” The spending of many more billions of dollars will “mean shorter wait times for surgeries and in the emergency room. It’s going to make it easier to see a doctor or a nurse practitioner so all Canadians can get the care they need.” Why Canadians today are suffering from massive health care backlogs that need reducing, insufficient primary care that needs improving, lengthy wait times for surgery and in the emergency room that need shortening, and difficulties accessing doctors and nurse practitioners — all this after the Liberals have been in government for nearly nine years — Chrystia Freeland did not explain.
Should Canadians believe higher spending will really deliver the promised results? Politicians of all stripes and at all levels of government boast at every opportunity about how much public money they are spending on health care, yet access to health care is declining. In the Fraser Institute’s annual survey in 2023, physicians reported a median wait time of 27.7 weeks between referral from a general practitioner and receipt of treatment — up from 18.3 weeks in 2015. More spending, but worse access. Someone once told me never to donate money to a hospital: the hospital staff certainly work hard to provide the best care they can for patients, but the money will be blown away by a bureaucrat or politician with the stroke of a pen or keyboard.
In her famous “the lady’s not for turning” speech in 1980, less than two years after the United Kingdom’s “winter of discontent,” Margaret Thatcher observed, “If spending money like water was the answer to our country’s problems, we would have no problems now. If ever a nation has spent, spent, spent and spent again, ours has. Today that dream is over. All of that money has got us nowhere, but it still has to come from somewhere.”
Canadian health care well illustrates this point. Enormous government expenditures and expanded government involvement have not improved access to medical care; they have made taxpayers poorer and access worse — except, that is, to physician-assisted suicide, which is now so accessible and offered so readily that Canada has become infamous for it.
Shawn Whatley, former Ontario Medical Association president, describes overbearing government control of health care in Canada: “The state dictates who can enter a clinic; whom doctors must see; who must be referred; what kinds of care must be offered; what notes must be taken; what notes must never be taken; data to report; and how to report the data.” Canada’s socialized health care, he continues, “forces doctors to be socialized with respect to bills, fees, services, reporting, and much more.” No wonder higher spending fails to deliver better care. In a Post column earlier this year, Whatley argued that “In family practice, computers and paperwork have replaced patient care. Family doctors spend 19 hours on paperwork each week.” The latest funding agreement between the federal and Ontario governments, he said, “represents more central planning designed to fix problems created by central planning.”
Centrally planned health care does not work, and pouring more money into it will not make it work. Whether in health care or in other sectors, what drives the efficient provision of high-quality goods and services are prices, markets and profits. Without them Canadian health care is doomed to continue failing.