Creeping Corporate Medicine Is Undermining Canadian Health Care

Canada’s health system is both more efficient and more equitable than its US counterpart. But its achievements have been undermined by years of government underinvestment, leading to the growth of outsourcing to private clinics.

In Canada, the outsourcing of care to private clinics often owes itself largely to myopic policymaking. (Maskot / Getty Images)

Though vastly superior in both design and outcome to its American equivalent, Canada’s health care system has some obvious weaknesses. Originally established decades ago, it continues to have major gaps in coverage. Thanks to nationalized health insurance, a visit to a hospital or doctor’s office may cost nothing, but a prescription afterward must often be paid out of pocket. Dental, like pharmaceutical care, similarly remains a largely private market covered by a patchwork of means-tested and nonuniversal public programs that vary from province to province.

The real Achilles’ heel of Canada’s health care system, however, can arguably be traced to the cracks in existing public coverage. In advocating Medicare for All, critics of America’s current health care model have rightly argued that the mere existence of any private market would virtually guarantee a two-tiered system of care even if a public option were to be put in place. The same problem, albeit on a much smaller scale, exists in Canada, where private, for-profit clinics for some services have been allowed to proliferate by government policies.

As Andrew Longhurst observes in a recent study published by the Canadian Centre for Policy Alternatives, the outsourcing of care to private clinics often owes itself largely to myopic policymaking. “Severe pressure on our hospitals and a lack of physical space and shortages of health-care personnel,” Longhurst writes, “mean that outsourcing to private clinics is often viewed by governments of all political stripes as a politically expedient policy fix.” The implication, as his report demonstrates, is not only the continued undermining of efficient and effective public provision but also the growth of billing practices that are illegal under the Canada Health Act.

Focusing on the for-profit surgical and medical imaging industries in the province of British Columbia (BC), Longhurst’s analysis finds that the market for private clinics has exploded thanks to outsourcing and inadequate funding of the public system. While technically operating within that system, hundreds of millions of dollars in government subsidies have allowed a nascent parallel market to flourish — with a growing culture of illegal activity besides. “The growth of private surgical clinics in BC,” he writes, “has benefited from extra-billing.” Extra-billing, as Longhurst explains, is a practice whereby wealthier patients can pay extra to receive faster service. Illegal under both the Canada Health Act and the provincial BC Medicare Protection Act, it has blossomed thanks to the growth in private clinics.

The more significant issue, however, is the problem posed by the existence of a parallel for-profit market, even if its stated purpose is to reduce wait times and supplement public provision. For one thing, it generally costs governments more in the long run because of the higher costs associated with private care — thanks, among other things, to having a profit margin and higher labor costs (the latter being, as Longhurst explains, because private facilities have to pay more to lure qualified staff from the public sector).

As is so often the case with market-based arguments for the provision of public services, the logic of private outsourcing — which is generally that it will save money and increase efficiency — doesn’t even hold water on its own terms. If the point of a health care system is to provide for a universal need at the lowest overall cost and in the most efficient way, a public model will prevail every time. Taken as a whole, the Canadian system costs much less on a per capita basis than its US equivalent and doesn’t leave more than thirty million people uninsured.

But as the British Columbia examples in Longhurst’s analysis makes clear, greater long-term investment in public health care is badly needed — and, as in the United States, the ongoing existence of for-profit medicine or treatment represents a very real threat to one of Canada’s most widely cherished national institutions.