Canada cannot afford its rationed health care system

Reuters:

Pressured by an aging population and the need to rein in budget deficits, Canada's provinces are taking tough measures to curb healthcare costs, a trend that could erode the principles of the popular state-funded system.

Ontario, Canada's most populous province, kicked off a fierce battle with drug companies and pharmacies when it said earlier this year it would halve generic drug prices and eliminate "incentive fees" to generic drug manufacturers.

British Columbia is replacing block grants to hospitals with fee-for-procedure payments and Quebec has a new flat health tax and a proposal for payments on each medical visit -- an idea that critics say is an illegal user fee.

And a few provinces are also experimenting with private funding for procedures such as hip, knee and cataract surgery.

It's likely just a start as the provinces, responsible for delivering healthcare, cope with the demands of a retiring baby-boom generation. Official figures show that senior citizens will make up 25 percent of the population by 2036.

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Competition and the free market do a better job of driving down cost than government dictates. One of the prime examples in the US is Lasik eye surgery where there is no insurance available for most people and the costs have come down dramatically. I think there is also competition on the cost of cataract surgery.

What seems clear from the Canada experience is the single payer model does not work for the same reason that socialism does not work. It is the same reason that no one person can determine how many eggs and slices of bacon are needed in New York everyday. But the market figures that out everyday by itself.

Investor's Business Daily also looks at the problems with Canada's rationed health care system.