Laurels

Last month I praised Premier Mike Harcourt for his expressed willingness to clear the way for an NBA franchise by taking basketball off the provincial betting system. He has duly done so, and my praise for him in that article is hereby repeated.

In that same article I reproached Ontario Premier Bob Rae for his apparent unwillingness to do the same, but urged him to seize the brief time remaining to salvage the franchise. And he did! While I cannot realistically claim the credit for the change of mind, Premier Rae has indeed done the right thing, and deserves all the credit in the world. My article ended with Harcourt being carried off the court by cheering fans. For this they should come back in and carry Rae out too.

John Robson

Robot dreams

Filip Palda

THE BELIEF THAT SMALL businesses need government money to succeed seems immune to facts. Last month's federal budget showed strong signs of this immunity. A document from the budget called "Growing Small Businesses" explains a plan for stimulating economic growth. The plan looks like an intellectual soccer ball stitched together from business guru musings, special interest pleadings, and the insistence by politicians that markets are failing and need government guidance. The way to score with this ball is to kick it from the field.

The government plan centres on giving money away on "pathways to innovation." Three of these pathways stand out.

The Canadian Technology Network will be a sort of government information booth to let firms know, free of charge, the latest news on hot technologies. The belief behind this program is that it is too expensive for businesses to gather information for intelligent investments. So the federal government, which is responsible for Canada's greatest investment blunders (the CANDU reactor, Telidon, Hibernia) will set itself up as an investment information broker for business. The government plan does not mention that gathering information is one of the most important things businesses do and that private investors spend small fortunes researching which high-technology investments are "hot." A government information program at best will supply businesses with information they would have gathered on their own. At worst the program will provide no relevant information--at tax-payers' expense.

The Engineers and Scientists Program gives small businesses money to hire engineers. The government's intellectual position is that businesses need more engineers but do not know it. The practical explanation is that there are many unemployed engineers around who could use a good make-work program.

The Canada Investment Fund "will help ensure an adequate supply of patient capital for the financing of innovation by leading-edge companies." Put differently, the government will place taxpayer dollars into the hands of high-risk investors for spending on projects that may not show a return for many years. The Canada Investment Fund is the latest in a similar crop of funds provincial government have been setting up. The idea behind the funds is that the private capital market is too timid and short-sighted for long-term, high-risk investments. Only government has the nerve to put money up for these projects. The myth that the private market puts too little money into venture capital ignores that venture companies were the big source of stock market excitement through the 1980s. Investors put out and lost billions on biotechnology, computer software, and electronics. They learned that there are fewer sound investments than they had thought. The "shortage" of money for high-risk ventures reflects the experience and knowledge investors have gathered about this part of the economy. Politicians have not yet learned this lesson.

Perhaps the only sound proposal in the plan is to continue the previous government's policy of getting rid of business regulations. Our leaders should stick to this idea and forget their dreams of high-technology economic miracle plans.

Requiem for a nobody

John Robson

IT WAS MY GRIM MISFORTUNE to spend a great deal of this Christmas in the waiting room of the cardiac intensive care unit of a major Canadian hospital. I'd like to tell you the story of one of the people I met there, or at least the end of it.

She was a charming, elderly lady, with no children and very few relatives, from out of town, and she was keeping a lonely and terrible vigil over her husband. He didn't have heart disease when he entered the hospital. He had an artificial hip the wrong size, and had come down from his home town to this major city to get it replaced. But he had waited and waited and waited and finally the stress got to him and he had a massive coronary. And now his wife slept all alone on the couch in the waiting room, and she ate all alone, except when we shared our tea and cookies with her, and she sat by herself except when we talked to her. And she waited for her husband to get well enough that they could think about operating on his heart, never mind his hip.

When he was awake he was pretty feisty, and he was considerate: he told her to call his doctor and cancel his appointment for a test he'd been waiting a year for, because he couldn't make it and he realized someone else was waiting too. His wife read all these signs as hopefully as she could.

And then he died.

And for all practical purposes she died with him, for, as she said at the time, "He's all I have." I know we all have to die sometime. But she deserved better, and so did he.

Unfortunately neither she nor her husband were rich, famous or powerful. They couldn't afford to go to the U.S. for treatment, nor did they know somebody who knew somebody. They just sat and waited, like citizens of the U.S.S.R., and now he is dead and no one will care except his wife. When she dies who will cry for her? Certainly not the Minister of Health. This couple were, to our political medical system, nobodies.

And when our Premiers and our Health Ministers agree that we need to cut back on the number of doctors in order to reduce health care billings, and when they cap total spending, and when they refuse to fund paramedics in smaller towns, and when they deny The Fraser Institute's waiting list surveys' validity, no one will remember this gentleman or his wife. When they count up the expenditure (not the cost) of our health care system, he shows up as a saving. After all, operations are expensive, and they never did have to do his hip, and he was old anyway. We have made the point in our Waiting Your Turn publications that the stress and physical pain associated with waiting are a real cost of socialized medicine, a cost made worse not better by being invisible to the system.

So is people dying while waiting.

And so is waiting and waiting and knowing you'll never reach the head of the queue because you are too old. Is that dignity for the elderly?

More and more people are going to suffer and die like this, and you're going to hear more and more such stories from the people that you know. Of course in our two-tiered system the influential, the well-connected and the well-heeled won't have these problems or tell these stories because they can jump the queue, either within Canada or by going to the U.S. There is even a special clinic for elective surgery for senior Ottawa bureaucrats so they don't have to wait. It was discovered through the Freedom of Information Act, and publicized, by the National Citizens Coalition. This will never happen to them.-Note. This will never happen to them.

But it will happen to us, to the little guys, to the people the government says it cares about more than markets do... to the nobodies.

So as he disappears from the government's books, please spare a thought for this man, and for his wife. They were human beings too, and their pain and their suffering, and their deaths, matter just as much as anybody's. And there is something terribly wrong with a system that doesn't act as if that were true, and kills this man, and leaves his wife a broken, lonely widow surrounded, consoled and ultimately mourned only by strangers.

Is Canadian health care a good model for others to follow?--part I

Michael Walker

AS USUAL, I CONTINUE TO have the most interesting job in the world. On February 9, it took me to Washington D.C. where I had been invited by the Ways and Means Committee of the U.S. House of Representatives. The committee is in the process of considering which one of the health care reform proposals it will back or how it will combine them to come up with its own proposal. It is a foregone conclusion that they will come up with a variant of reform which involves sweeping changes to the U.S. health care system. But it is far from clear what their real motivation is.

One thing that is crystal clear is that those who propose it as an alternative have an entirely idealized vision of the Canadian health care system. They imagine that in our system access is equal, free and unlimited. They are certain that merely adopting it will solve the problems of high infant mortality and shortened life expectancy amongst low income members of their communities. And they think they will be able to accomplish all of this while saving money because the Canadian system is cheaper. No evidence presented to the committee seemed in any way to deter them in their enthusiasm. But the evidence they heard should at least have made them think twice.

First let me say that I think that the Canadian health care system has been one of the best in the world. We have been able to provide a very good quality of health care to the vast majority of Canadians. However, it is just as important to note that the quality of the system is changing, and that there are definite signs of deterioration. These signs of deterioration are traceable to structural characteristics of the Canadian system, characteristics that also are imbedded in the proposals for reform in the United States.

The silver bullet in the plan proposed by President Clinton is premium capping--that is, the provision that the premium for the standard required health care package will be allowed to increase only by the rate of inflation and the rate of population growth. In other words, the plan freezes the quantity of health care resource at the present per capita level in real terms. There will be no increase in the real cost per person from 1995.

And this is the same silver bullet that controls the costs of the (ten) Canadian health care system(s): the provincial governments have acted gradually to cap the budget allocations for health care. The methods differ by province, but essentially the attempt has been made to cap the budgets of hospitals for operating expenses, for special surgical procedures such as by-pass surgeries and hip replacements, and for the acquisition of technology. Meanwhile province after province has adopted a form of capping for the incomes of physicians, thus controlling the overall cost of health care. These controls have not prevented health care expenditures from escalating from 5.5 percent of GDP in 1960 to about 9.5 percent at the moment. In fact Canadian costs look good only by comparison with the U.S. which is now spending 13.5 per cent of GDP--up from the same 5.5 percent as Canada in 1960.

In economics we say that there is no such thing as a free lunch. The question is how has Canada been able to save the 4 percentage points of GDP? What have we done without? The Democrats on the House Ways and Means Committee believe, along with many Canadians, that we have sacrificed nothing, simply controlled the excesses of private enterprise medicine.

It is interesting to restate what this belief implies: the replacement of the dollar-focused, profit-driven judgement of the competitive market by the socially focused, well-meaning judgement of government bureaucrats has been successful in producing a better quality health service, for more people at a lower cost. The first clue that something may be awry is provided by substituting the word "automobile," or "postal service," or "airline," or "gasoline," or anything else for "health service," in the sentence. In fact, based on a tremendous amount of evidence and direct experience, it is now possible to say the sentence would not be true for any other product or service. And there is evidence, which I and others provided to the U.S. Congress, that Canadian Health care has not succeeded where all these other attempts at government coordination have failed. But that is the subject for another column.

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Last Modified: Wednesday, October 20, 1999.