Fraser Institute
Australia’s universal health-care system outperforms Canada on key measures including wait times, costs less and includes large role for private hospitals
The Role of Private Hospitals in Australia’s Universal Health Care System
From the Fraser Institute
by Mackenzie Moir and Bacchus Barua
In the wake of the COVID-19 pandemic, provincial governments across Canada relied on private
clinics in order to deliver a limited number of publicly funded surgeries in a bid to clear unprecedented
surgical backlogs. Subsequently, surveys indicated that 78% of Canadians support allowing more
surgeries and tests performed in private clinics while 40% only support this policy to clear the
surgical backlog. While a majority of Canadians are either supportive (or at the very least curious)
about these arrangements, the use of private clinics continues to be controversial and raise questions
around their compatibility with the provision of universal care.
The reality is that private hospitals play a key role in delivering care to patients in other countries with universal health care. Canada is only one of 30 high-income countries with universal care and many of these countries involve the private-sector in their health-care systems to a wide extent while performing better than Canada.
Australia is one of these countries and routinely outperforms Canada on key indicators of health-care performance while spending at a similar or lower level. Like Canada, Australia ranked
in the top ten for health-care spending (as a percentage of GDP and per capita) in 2020. However, after adjusting for the age of the population, it outperforms Canada on 33 (of 36) measures of performance.
Importantly, Australia outperformed Canada on a number of key measures such as the availability of physicians, nurses, hospital beds, CT scanners, and MRI machines. Australia also outperformed
Canada on every indicator of timely access to care, including ease of access to after-hours care, same-day primary care appointments, and, crucially, timely access to elective surgical care and specialist appointments.
Australia’s universal system is also characterized by a deep integration between the public and private sectors in the financing and delivery of care. Universal health-insurance coverage is provided through its public system known as Medicare. However, Australia also has a large private health-care sector that also finances and delivers medical services. Around half of the Australian population (55.2% in 2021/22) benefit from private health-insurance coverage provided by 33 registered not-for-profit and for-profit private insurance companies.
Private hospitals (for profit and not for profit) made up nearly half (48.5%) of all Australian hospitals in 2016 and contain a third of all care beds. These hospitals are a major partner in the delivery of care in Australia. For example, in 2021/22 41% of all recorded episodes of hospital care occurred in private hospitals. While delivering a small minority of emergency care (8.2%), private hospitals delivered the majority of recorded elective care (58.6%) and 70.3% of elective admissions involving surgery.
Private hospitals primarily deliver care to fully funded public patients in two ways. The first is contracted
care, either through ad hoc inter-hospital contracts or formal programs. Fully publicly funded episodes of care occurring in private hospitals made up 6.4% of all care in private hospitals, while representing 2.6% of all recorded care. The second way is privately delivered care paid for through the Department of Veterans’ Affairs. A full 73.5% of care paid for by the Department of Veterans’ Affairs occurred in private hospitals.
It would be easy, however, to underestimate the significance of this public-private partnership by examining only the delivery of care that is fully publicly funded. Privately insured care is also partially subsidized by the government, at a rate of 75% of the public fee. Therefore, in order to understand the full extent of publicly funded or subsidized care in private hospitals, it is helpful to examine private hospital expenditures by the source of funds. In 2019/20, 32.8% of private hospital expenditures came from government sources, 18.2% of which came from private health-insurance rebates. This means that a full
third of private hospital expenditure comes from a range of public sources, including the federal government.
Overall, private hospitals are important partners in the delivery of care within the Australian universal healthcare system. The Australian system outranks Canada’s on a range of performance indicators, while spending less as a percentage of GDP. Further, the integration of private hospitals into the delivery of care, including public care, occurs while maintaining universal access for residents.
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From the Fraser Institute
Canadian federal politicians are floundering in their responses to Donald Trump’s tariff and annexation threats. Unfortunately, they’re stuck in a 2016 mindset, still thinking Trump is a temporary aberration who should be disdained and ignored by the global community. But a lot has changed. Anyone wanting to understand Trump’s current priorities should spend less time looking at trade statistics and more time understanding the details of the lawfare campaigns against him. Canadian officials who had to look up who Kash Patel is, or who don’t know why Nathan Wade’s girlfriend finds herself in legal jeopardy, will find the next four years bewildering.
Three years ago, Trump was on the ropes. His first term had been derailed by phony accusations of Russian collusion and a Ukrainian quid pro quo. After 2020, the Biden Justice Department and numerous Democrat prosecutors devised implausible legal theories to launch multiple criminal cases against him and people who worked in his administration. In summer 2022, the FBI raided Mar-a-Lago and leaked to the press rumours of stolen nuclear codes and theft of government secrets. After Trump announced his candidacy in 2022, he was hit by wave after wave of indictments and civil suits strategically filed in deep blue districts. His legal bills soared while his lawyers past and present battled well-funded disbarment campaigns aimed at making it impossible for him to obtain counsel. He was assessed hundreds of millions of dollars in civil penalties and faced life in prison if convicted.
This would have broken many men. But when he was mug-shotted in Georgia on Aug. 24, 2023, his scowl signalled he was not giving in. In the 11 months from that day to his fist pump in Butler, Pennsylvania, Trump managed to defeat and discredit the lawfare attacks, assemble and lead a highly effective campaign team, knock Joe Biden off the Democratic ticket, run a series of near daily (and sometimes twice daily) rallies, win over top business leaders in Silicon Valley, open up a commanding lead in the polls and not only survive an assassination attempt but turn it into an image of triumph. On election day, he won the popular vote and carried the White House and both Houses of Congress.
It’s Trump’s world now, and Canadians should understand two things about it. First, he feels no loyalty to domestic and multilateral institutions that have governed the world for the past half century. Most of them opposed him last time and many were actively weaponized against him. In his mind, and in the thinking of his supporters, he didn’t just defeat the Democrats, he defeated the Republican establishment, most of Washington including the intelligence agencies, the entire corporate media, the courts, woke corporations, the United Nations and its derivatives, universities and academic authorities, and any foreign governments in league with the World Economic Forum. And it isn’t paranoia; they all had some role in trying to bring him down. Gaining credibility with the new Trump team will require showing how you have also fought against at least some of these groups.
Second, Trump has earned the right to govern in his own style, including saying whatever he wants. He’s a negotiator who likes trash-talking, so get used to it and learn to decode his messages.
When Trump first threatened tariffs, he linked it to two demands: stop the fentanyl going into the United States from Canada and meet our NATO spending targets. We should have done both long ago. In response, Trudeau should have launched an immediate national action plan on military readiness, border security and crackdowns on fentanyl labs. His failure to do so invited escalation. Which, luckily, only consisted of taunts about annexation. Rather than getting whiny and defensive, the best response (in addition to dealing with the border and defence issues) would have been to troll back by saying that Canada would fight any attempt to bring our people under the jurisdiction of the corrupt U.S. Department of Justice, and we will never form a union with a country that refuses to require every state to mandate photo I.D. to vote and has so many election problems as a result.
As to Trump’s complaints about the U.S. trade deficit with Canada, this is a made-in-Washington problem. The U.S. currently imports $4 trillion in goods and services from the rest of the world but only sells $3 trillion back in exports. Trump looks at that and says we’re ripping them off. But that trillion-dollar difference shows up in the U.S. National Income and Product Accounts as the capital account balance. The rest of the world buys that much in U.S. financial instruments each year, including treasury bills that keep Washington functioning. The U.S. savings rate is not high enough to cover the federal government deficit and all the other domestic borrowing needs. So the Americans look to other countries to cover the difference. Canada’s persistent trade surplus with the U.S. ($108 billion in 2023) partly funds that need. Money that goes to buying financial instruments can’t be spent on goods and services.
So the other response to the annexation taunts should be to remind Trump that all the tariffs in the world won’t shrink the trade deficit as long as Congress needs to borrow so much money each year. Eliminate the budget deficit and the trade deficit will disappear, too. And then there will be less money in D.C. to fund lawfare and corruption. Win-win.
From the Fraser Institute
To state the obvious, president-elect Donald Trump’s threat to impose an across-the-board 25 per cent tariff on Canadian exports to the United States has gotten the attention of Canadian policymakers who are considering ways to retaliate.
Reportedly, if Trump makes good on his tariff threat, the federal government may levy retaliatory tariffs on a wide range of American-made goods including orange juice, ceramic products such as sinks and toilets, and some steel products. And NDP Leader Jagmeet Singh said he wants Canada to block exports of critical minerals such as aluminum, lithium and potash to the United States, saying that if Trump “wants to pick a fight with Canada, we have to make sure it’s clear that it’s going to hurt Americans as well.”
Indeed, the ostensible goal of tariff retaliation is to inflict economic damage on producers and workers in key U.S. jurisdictions while minimizing harm to Canadian consumers of products imported from the U.S. The hope is that there will be sufficient political blowback from Canada’s retaliation that Republican members of Congress will eventually view Trump’s tariffs as an unacceptable risk to their re-election and pressure him to roll them back.
But while Canadians might feel good about tit-for-tat retaliation against Trump’s trade bullying and taunting, it might well make things worse for the Canadian economy. For example, even selective tariffs will increase the cost of living for Canadians as importers of tariffed U.S. goods pass the tax along to domestic consumers. Retaliatory tariffs might also harm productivity growth in Canada by encouraging increased domestic production of goods that are produced relatively inefficiently here at home compared to in the U.S. Make no mistake—once trade protections are put in place, the beneficiaries have a strong vested interest in having the protections maintained indefinitely. While Trump will be gone in four years, tariffs imposed by Ottawa to retaliate against his actions will likely remain in place for longer.
The U.S. president has substantial leeway under existing legislation to implement trade measures such as tariffs. While Trump has several legislative options to impose new tariffs against Canada and Mexico, he’ll likely use the International Emergency Powers Act (IEEPA), which grants the president power to regulate imports and impose duties in response to an emergency involving any unusual and extraordinary threat to national security, foreign policy or the economy. According to Trump’s rhetoric, the emergency is illegal immigration and drug traffic originating in Canada and Mexico.
However risible Trump’s emergency claim might be when applied to Canada, overturning any action under the IEEPA, or some other enabling legislation, would require a legal challenge. And in fact, because no president has yet used the IEEPA to impose tariffs, the legality of Trump’s actions remains in doubt. In this context, a group of governors sympathetic to Canada’s position (and their own political fortunes) might spearhead a legal challenge to Trump’s tariffs with encouragement and support from the Canadian government.
To be sure, any legal challenge would take time to work its way through the U.S. court system. But it will likely also take time for domestic opposition to Trump’s tariffs to gain sufficient political momentum to effect any change. Indeed, given the current composition of Congress, it’s far from clear that a Team Canada effort to rally broad anti-tariff support among U.S. politicians and business leaders would bear fruit while Trump is in office.
While direct retaliation might be emotionally satisfying to Canadians, it would likely do more economic harm than good. And while a legal challenge will not obviate the immediate economic harm Canada will suffer from Trump’s tariffs, it might help limit the ability of Trump (and any future president) to use trade policy for political leverage in our bilateral relationship. After all, there’s no guarantee that the next president will not be a Trump acolyte.
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