From the Frontier Centre for Public Policy

By Joseph Quesnel

“Our healthcare system is a monopoly installed at every level with the culture inherent to monopolies, whether public or private. The culture is based on regulation and budgetary controls, closed to the outside world, impermeable to real change, adaptation and innovation. It is a culture that favours inefficiency.”

Why is the Globe and Mail afraid of healthcare reform that works?

The Globe and Mail editorial board seems to find healthcare innovation “scary.”

On Sept. 3, it published an editorial called “Danielle Smith has a scary fix for healthcare,” criticizing the Alberta Premier’s idea to introduce competition in the province’s health system. Premier Smith’s plan involves third-party leasing of underperforming hospitals while the government retains ownership and continues funding.

Let’s be clear: the real problem isn’t Smith’s proposal – it’s the current state of healthcare across Alberta and Canada. Sticking with the status quo of underperformance is what should truly alarm us. Rather than attacking those trying to fix a broken system, we should focus on much-needed reforms.

So, what exactly is Smith proposing? Contrary to what you may have heard, she isn’t dismantling Alberta’s universal healthcare or introducing an American style system. Yet the public sector unions – and certain media outlets – seem to jump into hysterics any time innovation is proposed, particularly when it involves private-sector competition.

Predictably, groups like Friends of Medicare, with their union ties, are quick to raise the alarm. Yet media coverage often fails to disclose this affiliation, leaving readers with the impression that their views are impartial. Take Global News’ recent coverage, for example:

In late August, Global News reporter Jasmine King presented a story on potential changes to Alberta’s healthcare system. She featured a spokesperson from Friends of Medicare, who predicted that the changes would be detrimental to the province. However, the report failed to mention that Friends of Medicare is affiliated with public sector unions and has a history of opposing any private sector involvement in healthcare. The news segment also included a statement from the dean of a medical faculty, who was critical of the proposed changes. Missing from the report were any voices in favour of healthcare innovation.

Here’s the real issue: Canada is an outlier in its resistance to competition in healthcare. Many European countries, which also have universal healthcare systems, allow private and non-profit organizations to operate hospitals. These systems function effectively without the kind of fear-mongering that dominates the Canadian debate.

Instead of fear-based comparisons to the U.S., let’s acknowledge the success stories of countries that have embraced a mixed system of healthcare delivery. But lazy, fear-driven reporting means we keep hearing the same tired arguments against change, with little context or consideration of alternatives that are working elsewhere.

It’s ironic that The Globe and Mail editorial aims to generate fear about a health care policy proposal that could, contrary to the alarmist reaction, potentially improve efficiency and care in Alberta. The only thing we truly have to fear in healthcare is the stagnation and inefficiency of the current system.

Claude Castonguay, the architect of Quebec’s Medicare system, released a report in 2008 on that province’s health system, calling for increased competition and choice in healthcare.

“In almost every other public and private areas, monopolies are simply not accepted,” he wrote. “Our healthcare system is a monopoly installed at every level with the culture inherent to monopolies, whether public or private. The culture is based on regulation and budgetary controls, closed to the outside world, impermeable to real change, adaptation and innovation. It is a culture that favours inefficiency.”

The fear of competition is misguided, and Canadians are increasingly open to the idea of paying for private treatment when the public system falls short.

Let’s stop demonizing those who propose solutions and start addressing the real issue: a system that is no longer delivering the care Canadians need. The future of healthcare depends on embracing innovation, not clinging to outdated models and misplaced fears.

Joseph Quesnel is a Senior Research Fellow with the Frontier Centre for Public Policy.

News release from the Montreal Economic Institute

If properly executed, the Smith government’s plans to have management of some hospitals transferred to independent operators could help improve access to health care, according to a researcher at the Montreal Economic Institute.

“The wait times that have become characteristic of Alberta’s and Canada’s health systems are amongst the longest in the developed world,” explains Krystle Wittevrongel, director of research at the MEI. “When we look at European countries that perform better on access to care than we do, the existence of competition between care providers is the norm.”

Alberta Premier Danielle Smith has announced plans to introduce competition to the province’s health care system by transferring authority over hospital management to non-governmental health operators.

The move is intended to drive better performance from Alberta Health Services.

A recent MEI publication found that autonomous not-for-profit hospitals tend to perform better than their government-run peers, as seen in Germany, France and the Netherlands.

However, according to the researcher two key ingredients are necessary for the model to function effectively.

The first is managerial autonomy, which has been shown to help bring decision-making closer to front-line health professionals and lead to faster and more efficient adaptation to changing health needs in a region.

The second ingredient is the reliance on an activity-based funding model in which a hospital receives a set amount of money for each treatment carried out within its walls. Under this system, Wittevrongel says, each additional patient treated represents an immediate source of revenue for the facility.

Under the current funding model, hospitals receive a fixed budgetary envelope every year, which they then spend on patient treatment over the course of the following twelve months. Since every new patient is a source of cost, this often leads to rationing of services, explains the researcher.

“With the right incentives and competition, our province’s hospitals could treat more patients than they do now,” notes Ms. Wittevrongel. “By introducing such competition, the Smith government is taking a step in the right direction.

“It just needs to make sure it enacts the right incentives for this reform to reach its full potential and increase access to care in the way Albertans want and deserve.”

* * *

The MEI is an independent public policy think tank with offices in Montreal and Calgary. Through its publications, media appearances, and advisory services to policymakers, the MEI stimulates public policy debate and reforms based on sound economics and entrepreneurship.