The excerpted article was written by DIANA DUONG | The Province

Is paying out-of-pocket for medical care the answer to long wait times?

In Canada, private medical insurance does not exist. Our health care system does not allow paying with private health insurance for any hospital services that are “medically necessary.” It’s illegal for patients to pay out of pocket to skip a long waitlist for a surgery and physicians cannot accept payment from patients who want to see them sooner.

To be clear, we’re not talking about the private insurance that covers dental care, vision, or prescription drugs. Private medical insurance in Canada would aim to provide an alternative option to waitlists and providing faster and better options for currently covered elective procedures. In England, 10.5 percent of the population have private medical insurance while 44 percent of the population in Australia have purchased complementary coverage on top of their public system.

Canada’s model is designed to protect affordability. Healthcare is provided on the basis of need, rather than the ability to pay, states the Canada Health Care System website. A major concern is that if private insurance were introduced, high-income people will receive faster and better care than lower-income people. But with a growing aging population, not enough facilities to manage the elderly, and painfully lengthy waitlists, many wonder if it’s time to consider how private medical insurance could fit into our system.

Healthcare is provided on the basis of need, rather than the ability to pay

Conservative policy think tank Fraser Institute released a new study this week criticizing these objections. It compares the healthcare systems in several developed nations with universal health care coverage. But when Healthing spoke with study author Steven Globerman, he says this study doesn’t offer a prescription or proposal of how exactly Canada could introduce private insurance to our current model.

“It’s hard to say ‘here’s a specific model,’ because it varies from country to country,” he says. “Each country has its own differences and its own idiosyncrasies. If Canada is going to move along the path towards allowing private insurance, Canada needs to go slowly and carefully and adopt the changes and see which seem to work and which don’t. What works in Switzerland might not work in Canada.”

Indeed, if done wrong, it may have unintended consequences. A report from the Grattan Institute states that private hospitals in Australia are “less efficient than public hospitals.” The report found that “a handful of greedy doctors charging more than twice the Medicare Benefit Schedule fee account for the vast majority of out-of-pocket costs private patients pay.”

It also found that private hospital patients stay 9 per cent longer than public hospital patients with similar conditions, which it estimates costs about $1 billion each year.

When asked if services provided by private institutions should be subjected to the same rules and regulations as public institutions — and importantly, the same price or cheaper in order to protect affordability, Globerman said, “it doesn’t necessarily have to be the case.”

“You can have private insurance cost more than the tax dollar value of public insurance if people are willing to pay for it. That’s going to be determined by the marketplace,” he says. “If the government thinks that’s a monopoly price and it’s too high, then they can invoke some kind of regulation that might lower price.”

Globerman suggests adding private insurance can help get faster service, but it may result in a two-tier system.

“In a narrow sense, there would probably be a two-tier system,” he says. “Some people might get faster care or a wider selection of providers but everyone will have shorter wait times, including people who are strictly on the public insurance system and they’ll better off.”

But without a clear model ahead or a health system similar to Canada’s, it’s hard to definitively say that all parts of the population will be better off.

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