Transfusion of Incentives and Competition Needed to Resuscitate Canada's Health Care System: International lessons show Canada's current reforms only Band-Aid solution

Release Date: 15 August 1996

Vancouver, B.C.>>> Canada's health care policy makers should begin reforming the incentive structure of the health care system, and not simply its management or administrative structures, according to a book released today by The Fraser Institute.

Healthy Incentives: Canadian Health Reform in an International Context makes recommendations for health reform in Canada which reflect an awareness of the emerging problems as well as the solutions which have been proposed, and in some cases implemented, in Europe and Australasia. (See attached Executive Summary.)

"Myths have come to define the Canadian 'health care crisis'," said William McArthur, MD, Visiting Fellow at the Institute, "and Canadian policy makers have bought into these myths. Reducing expenditures on health care, closing hospitals, cutting the number of hospital beds, restricting doctors' billing numbers, and prohibiting private clinics are unproven shoot-from-the-hip attempts at reform."

Official OECD data put to rest other well-worn but unfounded contentions, including that health expenditures are directly related to a population's health status; that there are too many physicians in Canada; that Canadians abuse their health care system by visiting their doctors too often; that hospital stays are excessive on average; and that privatization of certain aspects of health care will lead to a deterioration of the health system.

"Canadians need to take a hard look at their health care system," said Cynthia Ramsay, health economist at the Institute and co-editor of the book. "Too often we look at the weaknesses of the U.S. health care system, perceiving it as the only alternative to our own. There are many countries, including the U.S., which offer vibrant, practical, and affordable alternatives to much of what Canada does now."

Healthy Incentives documents some of the international efforts at effective health care reform, and the authors conclude that a Canadian health system should:

•separate the purchasers, providers and regulators of health care;

•allow both the public and private sectors to play a role in the provision and financing of health care;

•introduce incentives for both patients and providers to act in a fiscally responsible manner;

•emphasize the importance of individual patient choice and decision making;

•respect the advocacy role of health providers;

•encourage the health care sector to become an engine of economic growth; and

•ensure that no Canadians are deprived of appropriate care because of age or financial hardship.

To order a copy of Healthy Incentives, please contact David Hanley at (604) 688-0221, ext. 582, or visit our Web site at http://www.fraserinstitute.ca.

CONTACTS: Cynthia Ramsay, Health Economist, The Fraser Institute, (604) 688-0221, ext. 314; William McArthur, MD, (604) 688-0221, ext. 331.