Cato Institute
Policy Analysis
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obtain faster treatment than they can get at a
to cover services to which they presumably
government facility. There is also a budding
are entitled for free under the NHS, and pri-
private market in sophisticated scanning ser-
vate-sector spending makes up 15 percent of
the country's total health care spending.38
vices. Private clinics that apparently skirt the
law--on the theory that services are not "nec-
In Canada, the share of privately funded
essary" medical care--are booming and now
health care spending rose from 24 percent in
1983 to an estimated 30.3 percent in 1998.39 In
constitute 10 percent of the MRI market. St.
Paul's Hospital in Vancouver offers after-
Australia, private health insurance coverage
hours full-body scans for less than C$1,000.
has risen from around 31 percent of the pop-
A Montreal clinic offers a private CT scan for
ulation in 1998 to almost 45 percent by March
2002.40 In New Zealand, 35 percent of the pop-
C$250. Patients wait one or two weeks for
these procedures, compared to six-month
ulation has private health insurance (again, to
waits in the public sector. A private company
cover services theoretically provided for free by
in Vancouver that offers PET scans for
the state), and private sector spending is about
10 percent of total health care spending.41
C$2,500 is attracting patients from as far
away as Newfoundland.44
The almost seven million people in Britain
covered by private health insurance account
To reduce waiting lists for cancer treat-
Despite British
for two-thirds of all patients in private hospi-
ment, 7 of the 10 Canadian provinces are
claims that
tals. Britain's 300 private hospitals account for
sending some of their breast and prostate
an increasingly large share of total health care
cancer patients to the United States for radi-
health care is a
ation therapy.45 Canadians spend an estimat-
services, including 20 percent of all nonemer-
right and is not
gency heart surgery and 30 percent of all hip
ed $1 billion on care in the United States
each year.46 Sometimes the patient's home
conditioned on
replacements. In 2002 an estimated 100,000
patients elected to pay for private surgery
province pays the bill. In other cases, patients
the ability to pay,
rather than wait for "free" care.42
spend their own money.
large numbers of
Despite British claims that health care is a
right and is not conditioned on the ability to
patients waited
Myth No. 4: Although the
pay, large numbers of patients waited for care
for care while
United States Spends More
while 10,000 private-pay patients--about half
10,000 private-
of whom were foreigners--received preferen-
per Capita on Health Care
tial treatment in top NHS hospitals in 2001.43
pay patients
Than Countries with National
Advertisements for one hospital boast that
received preferen-
Health Insurance, Americans
patients come from all over the world, and the
Do Not Get Better Health Care
tial treatment in
rooms are well-furnished, with televisions that
have Arabic-language channels. An investiga-
top NHS
tion by the Observer found that the NHS earns
This myth is often supported by reference
hospitals in 2001.
approximately $500 million per year in fees
to two facts: (1) that life expectancy is not
from treating private patients.
much different among the developed coun-
Since Canada does not allow private
tries and (2) that the U.S. infant mortality
health insurance for services covered by its
rate is one of the highest among developed
Medicare system, Canadians who see the
countries. If the United States spends more
country's few private physicians or get treat-
than other countries, why don't we rate high-
ment at a private hospital must pay most of
er than the others by these indices of health
the cost out of pocket. For example,
outcomes? The answer is that neither statis-
Canadians sometimes choose to undergo
tic is a good indicator of the quality of a
cataract surgery on an outpatient basis in pri-
country's health care system. Other indica-
vate clinics. Although the government will
tors are much more telling.
pay the surgeon's fee, private patients often
Average life expectancy tells us almost
pay $1,000 to $1,200 in "facilities fees" to
nothing about the efficacy of health care sys-
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