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Don’t be scared into supporting privatized health care

Posted: September 13, 2022

(September 12, 2022)

By: Gordon Guyatt in the Toronto Star

That one should never let a good crisis go to waste has become a political cliché. Canadian, and particularly Ontario health care, is facing a crisis resulting from three main factors.

First is the pent-up demand for health care resources and innovations. This follows from many years of care deferrals and two years of correctly prioritizing the enormous demands of a pandemic.

Second is the demoralization and exhaustion of large numbers of health workers, particularly nurses, many of whom have left the health care workforce.

Third is the overzealous restraint on health care spending and insufficient regulation that preceded the COVID-19 pandemic. Ontario, as an example, has the fewest hospital beds per capita in Canada and one the lowest among high income nations. Many Ontario nursing homes were disastrously ill-equipped in their management of COVID- 19, leading to unnecessary deaths and uncovering glaring deficiencies in care.

Enthusiasts for what health economist Bob Evans called the zombie of health care policy are rushing to take full advantage of the crisis. Evans referred to the notion of Canadian health care privatization as a zombie: intellectually dead but destined to keep rising again and again to haunt health policy debates.

There are two streams to privatization. One is allowing people to pay for quicker care, and the other is allowing corporations to make a profit on health care delivery.

The equity problems that arise when people with the resources can pay for quicker care

— and thus, ability to pay trumps need as a determinant of care — are obvious. The potential negative effects on health outcomes when care is delayed for those most in need are less obvious, but no less important.

When the magnitude of private pay becomes sufficiently great, people rightfully demand the opportunity to buy health insurance. This creates enormous administrative waste as manifested both by American health care and the Canadian approach to pharmaceuticals. This is why economists note that a well-constructed national pharmacare program will save us billions.

Contrasting the overwhelmingly public pay hospital and physician care to the majority private pay pharmaceutical sector illustrates the consequences of the two approaches. Canadian hospital and physician care is largely equitable with impressive cost control.


In contrast, approximately 15 per cent of Canadians cannot afford needed drugs, and the last two decades have seen an explosion in pharmaceutical costs.

Twenty years ago, the Romanow Commission reported on its conclusions based on three commissioned research projects and 40 discussion papers from leading health economists. Romanow concluded that private payment compromises both equity and efficiency, with wasteful administrative costs. Today, the evidence has not changed and Evans’ characterization of the zombie of private payment remains accurate.

The second privatization stream has to do with whether for-profit or not-for-profit providers deliver care. In Canada, hospital care is exclusively not-for-profit. Not so for nursing home or home care, the majority of which is delivered by for-profit providers.

Researchers have extensively studied the outcomes of for-profit versus not-for-profit delivery. Overall, the for-profit option has not fared well.

The clearest findings come from American dialysis facilities in which death rates are higher in for-profit provision, and from nursing homes in which quality of care is superior in not-for-profit providers.

In the hospital sector, results suggest a possible increase in mortality, and a cost disadvantage, with for-profit provision.

In no area is there a clear advantage in quality, cost, or outcomes from for-profit health care delivery.

Those calling for privatization note that current health care delivery isn’t working, and that we have to do something. Indeed, it isn’t, and we must take action. Our action should, however, be based on the best evidence of the consequences of our policy innovations.

The privatization options will not begin to address the problems of a demoralized and depleted health care workforce and the overzealous constraints on public health care spending and will have negative consequences for both equity and efficiency.

Debating private care options is a wasteful distraction. We should put the zombie to rest and develop the public health care innovations necessary to address our current health care crisis.

Dr. Gordon Guyatt is a distinguished professor, McMaster University, and Officer of the Order of Canada.

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