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The Fraser Institute: Think Tank Warns California to Avoid Canadian-Style Health Insurance System

The Fraser Institute: Think Tank Warns California to Avoid Canadian-Style Health Insurance System

TORONTO, ONTARIO -- (MARKET WIRE) -- 05/29/07 -- Proposals before the California legislature calling for Canadian-style, single-payer public monopoly health insurance could saddle the state with a less efficient, less effective health care system and unsustainable costs, warns a new study from The Fraser Institute, Canada's leading independent think tank.

"Many people think that Canadian patients get the same quality of care and health technology as American patients but for less money. Nothing could be further from the truth," said Brett Skinner, the Institute's Director of Health, Pharmaceutical and Insurance Policy Research and author of the study, California Dreaming: Canadian-style Health Insurance in the United States.

"Canada's public health insurance monopoly is failing. Rising annual costs mean it is financially unsustainable and millions of Canadian patients wait so long for treatment that they are no better off than uninsured Americans."

Skinner's study points out that health care only appears to cost less in Canada than the U.S. because Canadian public health insurance does not cover many advanced medical treatments and technologies commonly available in the U.S. Canadian patients do not get the same quality or quantity of care as American patients. On a comparable basis, Canadians have fewer doctors, less high-tech equipment, older hospitals, and receive fewer advanced medicines than Americans.

"If Canadians had access to the same quality and quantity of health-care resources that American patients enjoy, the Canadian health-insurance monopoly would cost a lot more than it currently does," Skinner said.

The study comes as the California legislature is again presented with the Universal Health Insurance bill (SB-840). The bill was vetoed by Governor Arnold Schwarzenegger in 2006 but it has since been reintroduced. The bill calls for a statewide universal health insurance system similar to the one in Canada. Private health insurance would effectively be banned and replaced with a health-insurance monopoly owned and run by government.

"Canada is currently witnessing the failure of its own single-payer health insurance system. Faced with this example, why would Americans want to adopt such a system for themselves? The fact is that the Canadian model is an example of what not to do in health care," Skinner said.

Chief among the problems with Canada's health system are the lengthy waiting times for treatment. Canadians currently wait an average of almost 18 weeks between the time they see their family physician and the time they receive treatment from a specialist. Statistics show that of patients who received health-care services in 2005, 11 per cent waited longer than three months to see a specialist; 17 per cent waited longer than three months to get necessary non-emergency surgery; and 12 per cent waited longer than three months to get necessary diagnostic tests.

"Canadian doctors say patients wait almost twice as long for treatment than is clinically reasonable," Skinner said.

And while Canadians are forced to wait for treatment, the system legally prevents them from seeking treatment elsewhere and paying for it out of their own pocket unless they choose to leave the country.

"The absurdity of this policy is that the economic benefit of spending on personal health care is lost for Canada. Canadian patients end up spending money in other countries - often the United States - because they are not allowed to buy health care at home," Skinner noted.

But perhaps most significantly for California, the report shows that the Canadian system is not financially sustainable in the long run. There is a growing consensus among government and private-sector researchers in Canada that because public spending on health care is growing so much faster than public revenue, every one of Canada's 10 provinces is on a path to fiscal distress.

Skinner said that American worries about the growing costs of health care insurance and the large number of Americans without insurance are legitimate concerns, and ones that need to be resolved. But if California truly wants to replicate a health care system from elsewhere and implement universal coverage, he suggests there are better alternatives than Canada, such as Switzerland.

"The Swiss health insurance system provides important real-world lessons for achieving universal health-insurance coverage on a sustainable basis," he said.

"The Swiss system should be studied; otherwise Californians run the risk of having a Canadian-style health policy disaster foisted upon them by a group of people who are not disclosing the facts about health care in Canada."

The Fraser Institute is an independent research and educational organization based in Canada. Its mission is to measure, study, and communicate the impact of competitive markets and government intervention on the welfare of individuals. To protect the Institute's independence, it does not accept grants from governments or contracts for research. Visit

The Fraser Institute
Brett Skinner
Director, Health, Pharmaceutical and Insurance Policy Resear
(416) 363-6575, ext. 224
Email: [email protected]

The Fraser Institute
Dean Pelkey
Associate Director of Communications
(604) 714-4582
Email [email protected]

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