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Health Law Blog

This Little Patient Went to Market - The Case for Market-Based Health Care Policy

July 3, 2014

Is it possible that the “dismal science” might be the answer to the dismal state of health care delivery in Canada?

In 2012, Canadians waited, on average, 8.5 weeks from the time they received a GP referral until they met with a specialist; they then waited an additional 9.3 weeks (on average) from that meeting until treatment could begin. Apart from the personal consequences of lengthy waiting times, there are economic consequences as well ranging from potentially increased cost of care should an individual’s condition worsen due to a lengthy wait to overall reduced labour force participation. According to a study published by the Fraser Institute, in 2012, wait times in Canada cost Canadians as much as $3 billion in lost time and productivity.

One possible solution comes in the form of market-based health care policy and the tried-and-true concept of supply and demand. In terms of the Canadian health care system, this would mean giving Canadians the option of paying for health care with their own money, allowing doctors and hospitals to price their services without being restricted by government price controls, allowing for the purchase of private insurance for medically necessary health care, and allowing doctors and hospitals who are paid by the government to also provide medical care to private pay customers.

The benefits of such a policy and the increased competition that accompanies it are significant. Under a market-based approach, for example, an increase in demand means that more resources are drawn into the system rather than having to be rationed as they are now. In this case, everyone benefits. Wait times will also be reduced as those who can afford to pay for private care are removed from the public queue.

Market-based policy isn’t just good in theory. Several developed nations including Belgium, France, Germany, Japan, Korea, Luxembourg, Switzerland and the Netherlands have successfully managed to employ some form of choice that combines universal access to health care with a competitive market model. Citizens in these countries enjoy timely access to health care without the lengthy wait times we have here at home. A market-oriented model is well worth considering if Canadians hope to continuing benefitting from increasingly scarce health care resources.

Testimonials

Several years ago I was fortunate enough to have been selected as a Tremayne-Lloyd Fellow here at Western Law. I used the funds to finish a book and to begin work on a new one. It dawned on me far too late that I had never thanked you for that splendid gift. The new book is to be published by Harvard Press in 2010. The TTL Fellowships provided ritual seed capital for this project, which required me to spend a good deal of time and money at The National Archive in Washington. Again, with many thanks.

R. W. Kostal Professor of Law and History

Tracey Tremayne-Lloyd Health Law