September 4, 1998
Relieving The Pressure
In September 1997, a new health clinic opened in Grafton, North Dakota. It offers highly technical services such as CT scans, magnetic resonance imaging, and ultrasounds.
Grafton, a sleepy farm town, population 5,000, has little need for the well-equipped clinic, called DMS Imaging. But the hamlet lies just 100 miles from the Manitoba border. Early last summer, the clinic's founders conducted market research in our province to gauge the demand for services. According to one of the principals, "We felt there was a need but we weren't really sure what to expect."
Since "non-urgent" waiting lists for such marvels in our country are long and arguably dangerous -- four to five months for a MRI, six months for a CT scan, and eight months to a year for an ultrasound -- it is no surprise that the clinic was constructed quickly. On some days its customers are all from Manitoba. These people know that early detection of cancerous tumours means a much higher survival rate. Their choice is bleak, to wait for a "free" service and take a huge risk, or to head for the border.
What would happen if the clinic were built closer to its target patients, i.e. right in Canada? Six eye clinics and the Pan Am Sports Medicine Centre in Winnipeg now offer service for fees. But such arrangements break the law, specifically the Canada Health Act. The federal government dings the province of Manitoba $49,000 a month in fines for allowing the infractions to continue, about $1.2 million over the last two years. The Grafton clinic would never be built in Canada because it contravenes a silly statute.
Half a million dollars a year in our province's healthcare budget therefore buys nothing except relief from bean counters in Ottawa. And that's the least of it. Thirty years of central planning in medicine has created enormous distortions in the allocation of resources.
If you live in Winnipeg and your kidneys have failed, you may find yourself in a taxi heading to Morden, where a dialysis machine is running six days a week. The ride costs $350 return, and each patient has to make the trip three times a week. But Manitoba Health picks up the tab, because it falls within the complex and arcane list of rules devised by enforcers of the law.
If the Canada Health Act allowed citizens to choose and pay for homegrown alternatives, the construction of the Grafton clinic, the purchase of its equipment, and the tax revenues generated from its income would have stayed here. At no cost to the public purse.
Think of the system as an enormous pressure cooker. We've set up an unsustainable combination in our officious healthcare kitchen - zero prices, which encourage unlimited demand, and constant centralization in decision-making, which means response to the demand is further and further removed from the public need. The Grafton clinic creates the tiny vent at the top, which prevents the whole stew from blowing up.
We created this pressure cooker out of good intentions because we wanted equity in our healthcare system. We wanted nobody to be denied medical service because they lacked the means to pay for it. But a sour dose of unintended consequences has been the outcome. Now everybody waits for service, and only those with healthy bank balances get quick access. Those who can afford to travel and pay the fees to foreign clinics.
It's a public policy disaster that makes last year's flood of the century look cheap in comparison. It will never work.
We all lose because Canada's recipe for healthcare was long on good intentions but ultimately impractical. It's time to add a few more ingredients.
The Frontier Centre for Public Policy
is an independent public policy think tank whose mission is "to broaden the debate on our future through public policy research and education and to explore positive changes within our public institutions that support economic growth and opportunity."