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The Progressive Economics Forum

Former Blair minister on why two-tier HC is a bad idea

Just came across this interesting article relating comments by Frank Dobson, former UK health minister under Blair, on the plan by BC liberals to bring in the private sector in health care. Essentially, he thinks it was a fairly bad idea for Britain and advises BC not to go ahead. The following well represents his conclusion:

[T]he changes made to the UK’s National Health Service under Tory Margaret Thatcher and New Labour’s Tony Blair had consistently run up costs and diminished service satisfaction for patients in Britain.

Worse still, he even argues that the measure was not popular in the UK. According to him, this reform is one of the important reasons why the Labour party has sunk in the polls. Shortly put, it is hard to see any logical reason to go ahead with the plan. After meeting with Dobson for more than an hour, the current BC health minister came out and said that he thanked his interlocutor for the warning, but that the BC government would go ahead nonetheless. After all, why let oneself be bothered by past experience?

Enjoy and share:

Comments

Comment from ken
Time: December 9, 2007, 9:58 am

Deterioriating public health care systems can be use d as an excuse to bring in the private sector.Bringing in the private sector is not designed to improve health care but to open up the area even more to private investment and thus profits. The fact that this involves a deterioriation of the system is thus not an argument against the “reform”, in fact it is an argument for the reform since it may very well increase demands to further “reform” the system through even greater privatisation, even though this may make the situation even worse for health care clients while improving the situation for private capital.

Comment from Chris Wrobel
Time: December 9, 2007, 11:49 pm

I don’t believe that privatization is the answer to the requirement for HC reform. It is a part of the solution to our problems but it alone cannot guarantee socially responsible HC.
Private public HC is an oxymoron because the public and private are bound by different laws even if they share a common objective which in this instance is the provision of health care.

Lets not be afraid of the bad word “PROFIT”. Profits are good because they justify investment in research that could cure someone in the future. For that reason I like to think that profits generated by the medical system are just. I just have a problem with unstructured privatization.
Any changes to HC will never be politically correct and the fact that changes can be forgone to a political agenda worries me. Given the chance again would the government of Frank Dobson make the same reforms? Is privatization really to blame? Or was it a case of poor design and execution of the legislation???

The other day I went to a supermarket, one of the chains, and I wanted to pickup some fresh veggies, I walked around, walked around and all I could find were carrots grown in US.
For God’s sake, can’t we grow our own carrots in Canada??
Than I realized that the problem was not with who made the carrot but with who controls the food supply and its distribution.
I’d like to think of the HC much the same, we must keep control of its supply and distribution but really is there anything wrong with private firms supporting that control and distribution. The end is the same, the means to it might differ…..

Comment from Mathieu Dufour
Time: December 12, 2007, 12:02 pm

The profit motive as an adjudicator of social resources… I think there are a few problems with this in the health care sector. While I understand that Mr. Woebel advocates a mild version of privatization, let me go a little broader.

(1) For all the intervention that could require a long-term relationship (physiotherapy, physiotherapy, chiropractics, etc.), what is the incentive to cure the patient rather than provide temporary relief if the patient is likely to come back? In a public sector with scarce resources, the answer is evident (though actual practitioners may not feel the pressure directly), while in the private sector, it is rather unclear. It looks more like a balancing act between providing “enough” relief for the patient to come back, but not “too much”, to remove the need. This is notwithstanding any personal ethics, of course, but when is the last time ethics and profit-seeking were ever related?

2. Research. Mr. Woebel’s post suggest that profits generated in the sector could spur research. There are a few problems with that argument:

– I fail to see the link between profits generated providing a service and research. To take an extreme example, if we outsource hospital cafeterias, how is that going to percolate to drug research? More to the point, most drug research in Canada is already private and they are making a handful with the patent system directly. It seems hard to see how having the private sector in service providing would change any of the practices in research.

– Quite apart from that, I think the profit motive for medical research is very problematic. In short, it skews research towards ailments that affect rich people, not to mention preoccupations of rich people that are not ailments (plastic surgery, etc.). The idea is that to make money, drug companies need to sell to people who can pay. The more they can pay, the more research is profitable. For years, illnesses in tropical countries have been under-researched. I would like to believe that the recent interest in a few of them, such as malaria, is not related to the fact that first worlders are increasingly affected, but at its base, if you are going after money, you will go where the money is.

– I don’t know of any researcher who does it for the money. Companies do,but researchers are usually driven by personal motives (the famed academic ego?). Why can’t the state hire them, so that we can all decide together what the priorities are, rather than let corporations do the priority setting (the government does try to influence the latter, but it seems lkike a very roundabout way to sun-contract the way they do).

3. Private insurance. Society has a direct stake in people being healthy. There is no incentive to cut services, except if other objectives trump this. Private insurance companies, on the other hand, have every incentive not to pay. I have thankfully never been sick in the US, but most of my friends and colleagues there have had to spend inordinate amounts of time arguing over small prints, fill forms, be threatened with non-payments, etc. etc. And I am not even getting in the legal cases involved. This is mayhem. Socially speaking, there is no saving, quite the contrary. Of course, if you have money, you can jump the line with that system and hire a lawyer to take care of the rest.

4. Private clinics as a way to expand service. The problem is the supply of doctors and nurses, not the number of clinics. I don’t believe any purported brain drain has anything to do with it – there is no brain drain on the net if we consider the world, and the numbers are small anyway. But even if that’s the problem, then what would that personnel want? Higher wages? does not have to do with the private/public nature of the service. Less and more flexible hours? Well, that may be fair, but how’s that going to increase service?

More to the point, we should start educating more healthcare workers and be less constipated with diplomas from abroad. The hoops people have to go through to transfer diplomas are ridiculous. We are talking about years and years, often for very meaningful reasons such as the fact that exams that have to be taken one after the other are given once or twice a year, on the same date.

Oh, and speaking of the profit motive: There is a limited number of spaces for interns, but in many cases, it pays more for the universities (or the system, I have not broken down the benefits) to get people from abroad who are not going to stay, people who pay the full cost. I don’t want to single out any groups or place, but it is my understanding that more than half of the interns in a prominent university like McGill are in that situation.

5. The profit motive in provision… To be stark, my willingness to pay for treatment of a potentially terminal illness (or any important one, anyway) is close to infinity. If on top of it I can’t choose where I go (spatial monopoly, lack of information, inability to get the information due to a lack of education, etc.), what is to keep the provider from pumping the maximum out of me? Similarly, what would there be to pump from pennyless beggars? Oh, yes, I forget, once half of the system is private, the public system will be just as good as before.

The heatlthcare sector needs reform, sure. It is ossified, yes. But I have yet to see a single good argument as to why this reform should have any private component.

Comment from Phillip Huggan
Time: December 12, 2007, 2:35 pm

I haven’t studied the issue in details but Matheiu’s #4 above looks to be the main argument against regressing public health care. The supply of (trained by publicly subsidized educational institutions) nurses and doctors isn’t too flexible. Are private clinics willing to open and operate their own universities? Could they attract students at private tuition rates?
No and no. So, the % of nurses syphoned by private clinics should be used as the base to impose some sort of royalty tax returned to the public health sector.

In the case of BC, a post in the “Taxing the rich” thread suggests provinces have the ability to unilaterally impose an estate tax. People love coming to Victoria and Vancouver to die, so there is an alternate public nurse procurement revenue source. Globally, more nurses need to be trained but the highest paying, least stressful work environments always syphon supply.

Comment from Phillip Huggan
Time: December 12, 2007, 6:54 pm

To be specific, the market failure is that there is no incentive for anyone to train nurses save for clinics in Tokyo or the Hamptons assuming a purely globalized workforce. The market will underprovide the needed level of nurses for a society’s desired longevity, and populations will become healthier at a slower rate (lowering productivity) than with public controls. If the Philippines were to be compensated by Canada for the bare training costs, the system would be workable. Same for private clinics in PoCo pouching nurses from East Vancouver.

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