Wednesday, July 01, 2009

Suppose you wanted to spend more? 

Canada spends about $3600 per person on health care. That's about half what the US spends, and some think we need to spend less and be more Canadian. Well, some Canadians want to be more American, too.
"Any wait time was an enormous frustration for me and also pain. I just couldn't live my life the way I wanted to," says Canadian patient Christine Crossman, who was told she could wait up to a year for an MRI after injuring her hip during an exercise class. Warned she would have to wait for the scan, and then wait even longer for surgery, Crossman opted for a private clinic.

As the Obama administration prepares to launch its legislative effort to create a national health care system, many experts on both sides of the debate site Canada as a successful model.

But the Canadian system is not without its problems. Critics lament the shortage of doctors as patients flood the system, resulting in long waits for some treatment.

"No question, it was worth the money," said Crossman, who paid several hundred dollars and waited just a few days.
So without denial of any service to anyone else, Ms. Crossman spends $700 to get her treatment. She upgraded her health care, of her own volition, with her own resources. I would not have thought anyone could object. But,
"Private clinics don't produce one new doctor, nurse, or specialist. All they do it take the existing ones out of the public system, make wait times longer for everybody else while people who can pay more and more and more money jump the queue for health care services," said Natalie Mehra, member of the Ontario Health Coalition.

..."One can understand that this is evolving and a mix of private and public seems to be favorable in some context. On the other hand, we need to be really careful that we're not treating health care the way we treat a value meal at McDonalds," Dr. Michael Orsini from the University of Ottawa told FOX News.
Ms. Mehra is economically illiterate. An increase in demand for doctors -- by paying them more -- will increase their income and induce young, smart people into medicine who now go elsewhere. (That is, if the medical profession allows medical schools to admit however many they want.) The fixed-pie thinking of Mehra -- if you get one more doctor in your private clinic I get one less doctor in my public medical factory line -- is a static thinking that fails to understand incentives. If you would just allow them to work, you could have as many doctors as you'd like.

But Dr. Orsini thinks there's something entirely different about health care. That appears to be the dominant thinking in Canadian public policy. They should talk to more Ms. Crossmans. Health care is a scarce good: People economize by seeking value for their dollar. The only reason someone would not want a patient to seek value is that that person -- the doctor, the government, the bureaucracy -- doesn't want to cede the power of being able to make that choice for them.

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