Mises Wire

Health Care: American Mania vs. Canadian Sclerosis

I follow several physicians from Canada on Twitter. Since I do not have first-hand experience of that health care system, I find their accounts instructive. Shawn Whatley, a Canadian physician I follow, wrote in a 2015 blog post entitled “Medicine resists change” that:

Canadians took a bold, progressive move in the 1960s and created Medicare. And we’ve blocked change ever since.

Sure, we dribble in new technology. Embarrassment demands we buy at least a few PET scanners and robotic surgical assists. But our core system is unchanged.

Government and Organized Medicine insist that basic clinical services work the same as in the 1960s. Patients see their family doctor. Doctors send patients for “high-tech” X-Rays, ultrasounds or blood tests. Patients drive to licensed and controlled lab facilities. Then they trudge back for results days later.

That sounds grim. But the apparent Canadian medico-sclerosis Whatley describes would have been even worse if it weren’t for the American medico-mania which has disgorged an unbelievable number of innovations and technologies over the last half century. Most of these innovations, such as the PET scanner, have been exported all over the world, including Canada.

It occurred to me that the extent to which other countries have benefited from this American cornucopia seems to be under-recognized in the perennial debates that compare different health care systems. What would single-payer systems like those of Canada and Europe (let alone those of the developing world) look like today without the impetus exerted by the American dynamo?

“Life expectancy is just as good in the NHS!” we are told.  But hasn’t the NHS benefited from the development of modern intensive care units, pacemakers, heart-lung machines, bypass surgery, coronary angioplasty, neonatology, CT scanners, MRIs, and myriad inventions which have seen the light of day primarily by virtue of the existence of the American system?

Now, in pointing out the technological and scientific dependence of the world’s health care systems on the US, I am neither trying to boast about American inventiveness (clearly, a large number of inventors have been foreign born, and a good number of inventions originated abroad — even in Canada!) nor establish the American health care system as superior.

In fact, to the extent that our system’s medico-mania is fed by a bulimia of debt, that it defers onto future generations a painful day of reckoning, that it creates boondoggles and encourages cronyism, and that it causes those with health care benefits to inevitably drive prices out of the reach of those without those same privileges, then I am perfectly willing to accept that the American model offers as much to be embarrassed about as the Canadian one.

The point worth making is how difficult it is — impossible, in fact — to make any economic comparison of one system against the other on the basis of empirical observations alone. One can’t say “Look, here, single-payer system, it works!” anymore than one can say “Look, there, crony capitalism, it works!”

Yet that’s precisely the approach that a colleague has taken to rebut my previous criticism of single-payer economics. Adam Gaffney, a Boston physician and active member of Physicians for a National Health Program wrote that

Now … it’s a bit quixotic to invoke the political philosophy of a neoliberal economist to argue against what is essentially [an] empirical point, i.e. that the United States spends more on health care administration than nations that have a single-payer system (emphasis mine).

But Gaffney missed the point I had made at the end of my post where I said:

Although a single payer could conceivably reduce administrative burden and cut costs, its doing so will never be on the basis of “knowledge of the particular circumstances of time and place” that is at the heart of genuine medical care.

The realm of human affairs is an inextricable mishmash of causes and effects. It can be clarified only if we begin with first principles and proceed by way of reasoned deductions. An appeal to empiricism just won’t do.

So as to which of Canadian medico-sclerosis or American medico-mania is the best disorder to have, I’d say they both need radical surgery and would simply leave it at that.

Note: The views expressed on Mises.org are not necessarily those of the Mises Institute.
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