Coming Soon to America: A Two-Tiered, Canadian-Style Health Care System

NCPA May 24, 2013

We are moving toward two different health systems, says John C. Goodman, president and CEO of the National Center for Policy Analysis.

• In one, patients will be able to see doctors promptly and they will talk to physicians by phone and email.
• In the other system, waiting times will grow for almost everything -- to get appointments with physicians, to get tests, to obtain elective surgery, etc.
• In terms of waiting times and bureaucratic hassles, health care for these patients in the "other" system may come to resemble the Canadian system -- or worse.

The evolution toward a two-tiered system was already under way before Barack Obama became president. But ironically, the Affordable Care Act (ObamaCare) is accelerating the pace of change. It is doing so in four ways.

• First, ObamaCare is supposed to insure 32 million additional people by this time next year. If the economic studies are correct, these newly insured will try to consume twice as much medical care as they have been.
• Second, most of the rest of us will be forced to have more generous coverage than we previously had, boosting the demand for care.
• Third, there is really no provision under ObamaCare to create more doctors to meet this boost in demand.
• Fourth, the supply of doctor services is likely to decrease because of two more features of health reform: Doctors will step up their retirement dates as they contemplate the prospects of even more bureaucracy. Also, hospitals are acquiring doctors as employees at a rapid rate. When doctors quit their private practices and start working for hospitals, they reduce the number of hours they work and are less productive because they have a guaranteed income.

These four changes add up to one big problem: We are about to see a huge increase in the demand for care and a major decrease in the supply. In any other market, that would cause prices to soar. But government plans to control costs (even more so than in the past) by vigorously suppressing provider fees and the private insurers are likely to resist fee increases as well. That means we are going to have a rationing problem. Just as in Canada or Britain, we are going to experience rationing by waiting.

Because the two tiers of health care will compete with each other for resources, the growth of the first tier will make rationing by waiting even more pronounced in the second tier. As a result, waiting times in the second tier could easily exceed those in Canada.

Source: John C. Goodman, "Coming Soon to America: A Two-Tiered, Canadian-Style Health Care System," Forbes, May 23, 2013.