The Fraser Institute

The Fraser Institute

December 01, 2008 06:00 ET

The Fraser Institute: Canada Needs to Follow European Example and Increase Private-Sector Involvement in Health Care

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 1, 2008) - Canada's refusal to consider increased private sector involvement and competition in health care has left the country struggling with a health care system burdened with lengthy wait lists and aging medical technology despite being one of the most expensive systems among industrialized nations, concludes a new study released today by independent research organization the Fraser Institute.

"Canada needs to reorganize its health care system to ensure we can actually deliver on the country's promise of a compassionate approach to health care," said Nadeem Esmail, Fraser Institute director of health system performance studies and co-author of the How Good is Canadian Health Care? 2008 Report.

"Additional private sector involvement does not mean an American-style health care system; it means a system more like the more successful ones in place in many European countries."

The peer-reviewed study, How Good is Canadian Health Care? compares Canada to other OECD (Organization for Economic Co-operation and Development) countries that guarantee access to health care insurance regardless of ability to pay. Twelve indicators of access to health care and outcomes from the health care process are examined including access to physicians, access to high-tech medical equipment, and key health outcomes. The United States and Mexico are not included in the study because they do not have universal-access systems. The complete study is available at

Esmail points out that Canada spends more on health care on an age-adjusted basis than any other industrialized nation with a universal access system except Iceland and Switzerland, yet Canada ranks near the bottom in terms of access to physicians and new medical technology.

"Canada is the only OECD country that outlaws privately-funded purchases of core health care services. In addition, nearly 85 per cent of the other OECD countries also charge user fees for access to health care services such as doctor visits and hospital care," Esmail said.

"Every top performing OECD nation has some form of user pay, private provision health care. The evidence clearly shows these systems are delivering better results for their citizens. So why are Canadians so reluctant to consider these models?"

User Fees and Private Providers

Esmail's study found that health care costs can be significantly reduced if consumers of care have to participate in paying for the care they demand through some form of user fees. More than three quarters of the universal-access countries in the OECD (including Canada) charge user fees for access to hospitals, general practitioners, or specialists-in many cases, to all three. Low income citizens are often exempted from these fees.

And while many OECD countries rely principally on public hospitals to provide publicly insured services, more than half of the countries also permit private providers to deliver publicly funded care.

Comparing Health Outcomes

The study found that Canada, while spending more on health care on an age-adjusted basis than any other industrialized country in the OECD except Iceland and Switzerland, ranks 17th in the percentage of total life expectancy that individuals can expect to live in full health, 24th in infant mortality, 17th in perinatal mortality, sixth in mortality amenable to health care, 10th in potential years of life lost to disease, 10th in the incidence of breast cancer mortality, and second in the incidence of mortality from colorectal cancer.

Most notable about this international comparison of outcomes is that all of the countries that have fewer years of life lost to disease and that have lower mortality amenable to health care than Canada also have private alternatives to the public health care system and all but one have user fees at the point of access to care. Furthermore, only two of these countries (Iceland and Switzerland) did not spend less on health care than Canada after age adjustment.

The Number of Doctors

On an age-adjusted, comparative basis, Canada, relative to comparable countries of the OECD, has a small number of physicians: it ties with Korea, Poland, and the UK at 23rd out of 28 countries with 2.3 doctors per 1,000 people, for a total of 69,108 doctors in Canada. To rank as highly as the first-ranked Iceland, for example, Canada would have needed 65,817 more doctors than we actually had in 2005. Notably, Canada had the second-highest doctor to population ratio among 20 OECD countries for which data were available in 1970.

Access to Technology

With regard to age-adjusted access to high-tech machinery, Canada performs dismally by comparison with other OECD countries. While ranking number two as a health care spender, Canada ranks 14th of 25 in access to MRIs, 19th of 26 in access to CT scanners, eighth of 21 in access to mammographs, and ties with New Zealand at 19th of 21 in access to lithotriptors. Lack of access to machines has also meant longer waiting times for diagnostic assessment, and mirrors the longer waiting times for access to specialists and to treatment found in the comparative studies examined for this study.

"Groups opposing reform here in Canada often resort to fear-mongering and suggestions that Canada will end up with an American-style health care system. But those groups are behind the times. They don't seem to realize that throughout Europe, Asia, and elsewhere in the developed world, nations have built efficient, high-functioning health care systems by blending public and private health care," Esmail said.

"It's time for Canada to do the same."

The Fraser Institute is an independent research and educational organization with locations across North America and partnerships in more than 70 countries. Its mission is to measure, study, and communicate the impact of competitive markets and government intervention on the welfare of individuals. To protect the Institute's independence, it does not accept grants from governments or contracts for research. Visit

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