A tricky operation: Finding a place for private health insurance in a public system: André Picard
2019-12-03 from theglobeandmail.com
Canadians are effectively prohibited from buying private medical insurance or paying out-of-pocket for surgical and hospital services that are deemed “medically necessary.” As a result, there are no private, for-profit hospitals and only a few private surgical facilities in the country.
In Australia, on the other hand, almost half the population has private hospital insurance and there are programs in place to encourage them to do so. Private hospitals have been commonplace for decades, and patients with private coverage can even get more extensive and faster care in public facilities.
Vancouver’s Cambie Surgeries Corp., hoping to open the door to this sort of private option, is challenging the restrictions that exist in Canada in a closely watched constitutional case.
Meanwhile in Australia, the private system is in a “death spiral,” and struggling to stay relevant, according to a new report by the Grattan Institute. Young people, in particular, are snubbing private insurance, feeling it doesn’t provide value for money.
So what can Canada and Australia – both of which have universal health programs called medicare – learn from each other about the public-private schism? First and foremost, that neither banning nor embracing private health insurance is a panacea.
Every health insurance program in the developed world, public and private, is struggling with a daunting triple challenge: An aging population, the soaring cost of new technologies and rising consumer expectations.
Health insurance programs rely on the healthy subsidizing the unhealthy, a tough sell in a me-first world. There are no fully public systems, because the state cannot afford to provide all care to all people all the time. Similarly, there are no countries with uniquely private insurance options, because a good chunk of the population would never be able to afford coverage.
Practically that means every health system has a mix of private and public coverage. Canada covers 72 per cent of health expenditures publicly, and Australia 67 per cent. (Even the United States covers 50 per cent of health care publicly.)
So, to ensure fair, equitable and affordable coverage there needs to be a combination of good regulation, thoughtful public policies and a recognition that there can be unintended consequences from either.
When Australia embraced a parallel system of private hospitals and private hospital insurance, it did so with the belief it would create more competition, greater efficiency and drive down costs.
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