Australia’s public-private ‘Medicare-plus’ model can work for Canada
NationalPost.com – Full Comment
31/10/13. Terry Barnes
As reported in the National Post on Tuesday, the authors of a new Fraser Institute study on medical wait times suggest that Canadians look overseas for models that combine universal health care with private options.
Esmail chose a good example in Australia. The current Australian universal health system, also known as Medicare, came into being under a Labor government in 1984. This happened roughly in parallel with the passage of the Canada Health Act, setting out the principles under which the Canadian government invests in healthcare services (which are provided mostly by the provinces).
Indeed, both Australian and Canada uphold the right of their citizens to access safe, high-quality medical and hospital care, regardless of their financial means. Australia has its equivalent of the Canadian Health Act, in which such principles are enshrined.
Similarly, Canadians and Australians place high value on healthcare universality. Australians see Medicare as reflecting the national ethos of a “fair go” for all. Consequently, Medicare instantly became popular in that country, so much so that the conservative coalition led by John Howard had to drop its long-standing hostility to “socialised medicine” to regain office from Labor.
Where Australia and Canada differ, however, is in attitudes to private healthcare.
In Canada, the private-clinic sector is small, heavily (if varyingly) constrained by federal and provincial regulation, and treated with hostility by many Canadians, as if it were “un-Canadian.” Interest groups, such as the Council of Canadians, decry “privatization” and demonize all forms of for-profit healthcare.In Australia, by contrast, the private health sector, particularly private hospitals, complements public provision. Access to private care mostly comes by way of private insurance that, since 1996, has attracted members thanks to a combination of (a) generous premium subsidies, and (b) financial penalties applied to those who are able to afford their own private health coverage but choose not to (this penalty effectively doubles the Medicare levy that Australians pay on their taxable income).
Since 1996, Australians consistently have shown their support for “Medicare-plus”: a universal system with an elective private option. So entrenched did these pro-private measures become that it was necessary for Labor to retain them to secure its own return to office in 2007.
This public-private mix has not undermined universality in Australia. If anything, it actually has bolstered the viability of the public healthcare system — in several ways:
Waiting times for public patients are shorter than they otherwise would be
First, the basic principle of universal access remains. Australians needing to see a doctor or go to hospital rightly will never accept being treated as second-class citizens because they can’t afford the cost of treatment.
Second, waiting times for public patients are shorter than they otherwise would be. As in Canada, elective patient treatment in Australian public hospitals, run by state and territory governments, involves waits. Just as the Fraser Institute study shows wait times varying from province to province, in Australia they vary from state to state. But were the private option not available to relieve pressure on these waiting lists, Australian waiting times would be far longer.
Third, the private option better rewards surgeons and physicians while benefiting public patients. Australian proceduralists have extensive private lists, covered by private insurance, which are much more lucrative than Medicare-funded work. They can treat these private patients in public hospitals, alongside their public patients. This makes the doctors happy, and it means they are willing and able to work in the public system, both maintaining universality and keeping wait times down.
Lastly, Australia’s public-private mix better uses scarce public funds and promotes greater efficiency. A definitive 2003 study concluded that each dollar spent by the Australian government on its private health-insurance subsidy saved two dollars of other public health spending. Given that real growth in federal and state government health spending remains strong , this has meant more — not less — money being invested in Australia’s public system on equipment, staff, capital infrastructure and, above all, patient care. Everyone wins.
A “Medicare-plus” approach works in Australia, and could work for Canada too. Measures similar to Australia’s could be applied at the provincial level, or can be built into whatever agreement replaces the current federal-provincial Health Care Accord in 2014.
Australia’s health system is not necessarily better than Canada’s. But expressed in terms of a significantly lower GDP share spent on health, and waiting times for similar services, it arguably is more efficient. The Fraser Institute authors are right: Canadians can have universality and all it stands for, but with a complementary private option, too.
— Terry Barnes is an Australian health policy consultant. He has advised former Australian health minister Tony Abbott, who is now the country’s prime minister.
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