Cats and categories: public and private in Canadian healthcare

Abstract

Arguments about where private sector healthcare delivery fits within a publicly funded system should distinguish among types of private delivery. In Canada, most healthcare delivery is already private, albeit not-for-profit (e.g., hospitals) or small business (e.g., physicians, dentists). The expectation that corporations provide a return on investment to shareholders is more problematic if the dual loyalties that professionals have as agents of their patients conflict with the profit imperative. Consideration of where such firms can generate their profits, and the "production characteristics" of healthcare, suggests that certain sectors lack the contestability, measurability and complexity needed to make competitive markets function effectively. Neither is it likely that competition can co-exist with requirements for a single payer. In that connection, it must be recognized that the incentives inherent in a corporate structure, all other things being equal, appear inimical to many desired outcomes of a healthcare system. These tendencies can be controlled, but only through fairly elaborate measurement and monitoring of performance, which carry their own costs, and which smaller providers may be unable to meet. Chodos, MacLeod, Romanow and Kirby have done a great service of reminding us where we want to go--and where we do not.