 This evening, it is my distinct pleasure to introduce Ronald Hamoui. Dr. Hamoui is a professor emeritus of intellectual history at the University of Alberta and previously was the assistant director of the History of Western Civilization program at Stanford University. He is currently a fellow in social thought at the Cato Institute and is the author of books on the Scottish Enlightenment, Health Care, and Drug Prohibition. He is the editor of the Encyclopedia of Libertarianism and of Cato's Letters. He's also a close friend or was a close friend of Murray Rothbard and was a student of Mises in his seminar. So without further ado, it's my pleasure to introduce Ronald Hamoui. Thank you all for coming here. Is this, am I loud enough? The topic that I wish to discuss this evening is the Canadian health care system about which much has been rooted about. Unfortunately, most of the comments are ignorant of the actual conditions of those that persist in Canada. So I thought I would give you an outline of actually how it functions and what it does. Now we're all familiar with the problems. We're all familiar with the problems that are endemic to the current health care system in the United States and its intolerably high costs, which if allowed to continue will within the foreseeable future, bankrupt the nation. To give you some perspective, in 1960, aggregate spending on health care in the United States was approximately $27 billion or $143 per capita. By 19, by 2003, this amount had increased to $1,679 billion or $5,560 per capita. And even in constant $2,003 per capita spending has increased over those years from $891 to $5,560. By 19, by 2009, I'm old enough to keep making this mistake of saying 1900. By 2009, total expenditures on medical care in the United States had reached $2.5 trillion or 17.6% of GDP. And these are projected to reach $4.6 trillion in 2019. And of this total, more than 51% are government expenditure. Obviously, this rate of growth cannot continue, but politicians seem unwilling to either abandon or cut back the programs that lie at the root of this prodigious increase. In place of the system now that exists in the United States, increasingly large numbers of Americans have suggested that the US adopt the same health care system as currently prevails in Canada. They point to the fact that all Canadians living in a country that in most respects is similar to the United States are insured for all aspects of their medical care, except drugs, and that Canada appears to manage this siege while expending slightly less than 10% of their GDP. They've managed this through a national health care insurance scheme administered by each of the provinces and based on a fee-for-service payment to physicians and annual block grants to hospitals and medical centers. The result is that the Canadian system provides medical services similar to those that exist in the US at about half the cost. As attractive as this alternative sounds, however, it's based on ignorance of the actual conditions that prevail in Canada, and it is worthwhile to take a look at what really goes on there. Let me just make a couple of mentions of the historical background to the current Canadian health care system. Canada, of course, is just one of a large number of countries that have instituted a state-run health insurance scheme. The first of these was instituted in Germany. In 1883, enacted by Chancellor Otto von Bismarck, the newly elected chancellor of United Germany, who gained passage of a whole series of socialist measures, the main aim of which was to pull voters away from the then liberal opposition. And in this, he proved completely successful. Intellectuals and social democrats throughout Europe looked on Bismarck's attempts to forge a powerful centralized state through the enactment of social legislation with great favor and were soon successful in introducing similar measures throughout the continent. Compulsory health insurance, particularly, was hailed as a model of regressive legislation and was emulated by a number of countries, including, of course, Great Britain, who in 1911 instituted the National Health Care Act. Now, in Canada, the introduction of a government health insurance system can be credited to Tommy Douglas, a Baptist minister and socialist politician who led his party, the Saskatchewan Cooperative Commonwealth Federation, to victory in the provincial elections of 1944. As premier of Saskatchewan, he'd immediately institute a whole series of socialist measures, the most important of which was a proposal to nationalize the medical system in the provinces. It called for all physicians to become salaried employees of the province and all hospitals to be situated in designated sites and run as government bureaus. Needless to say, doctors were strongly opposed to this and, in fact, went on strike, but they were forced to settle for, Douglas was forced to settle for a compromise set of acts that allowed for free hospital care to most Saskatchewan residents. The Saskatchewan plan was soon emulated by other provinces and its popularity adopted by the federal government. In 1957, the Ottawa government, under Prime Minister John Diefenbecker, a conservative, enacted legislation that provided that the federal government would underwrite 50% of the costs of hospital programs throughout the country. Finally, in 1966, under pressure from the New Democratic Party, which was the successor name of Tommy Douglas's cooperative Commonwealth, passed the Medical Care Act, which extended the existing program to cover physicians' charges. So both hospitalization and physicians' charges were then covered by a government program. Now, I personally have always found Tommy Douglas, a particularly repellent figure. He was ignorant, stubborn, sanctimonious in due part to partly to the fact that, of course, he himself was a minister. This reaction to Douglas was intensified by the fact that he is particularly beloved by almost all Canadians. Canadian historians have a penchant for turning their major figures into saints, and he's regularly hailed as the most outstanding figure in Canadian history. Indeed, in a CBC poll conducted in 2004, he was voted the greatest Canadian ever, which is possible he might have moved. However, a lesson, however, a less enthusiastic examination of Douglas's background shows someone less. His MA thesis, written in 1933, dealt with the need for a national eugenic policy that would weed out the unfit and ensure that only those meeting approved standards were allowed to procreate. Among the suggestions Douglas put forward was that couples wishing to marry would first have to be certified as morally and psychologically fit by the state. Should it be determined that either prospective parent was intellectually deficient or incurably ill, they were to be summarily sterilized. Those who were regarded as only morally deficient would be sent to concentration camps, which Douglas called state farms. It is not unlikely that Douglas's proposal led to Saskatchewan enacting a sterilization statute in 1933, the same year that Hitler came to power in Germany. Douglas was an inveterate proponent of war government. He enacted a number of laws extending provincial control over the economy during his premiership of Saskatchewan from 1944 to 1960. And during that period he nationalized electric power and telephone systems in the province, instituted a system of government automobile insurance, nationalized the bus service within the province and so on. For those of you who go to Saskatchewan, you will appreciate his reforms. The introduction of Medicare in the province was not without difficulty. When Saskatchewan instituted a universal medical Medicare program in 1962, doctors were so upset that they called a strike, which lasted in closing their offices for 23 days. Now it is in fact the case that the mortality rate dropped during this 23 day period, but they were finally persuaded to return to medical practice because the provincial government very cleverly raised the fees that they were prepared to pay doctors so that doctors now saw an opportunity to make windfall profits by taking advantage of the government. The Saskatchewan model was made national by Lester Pearson in 1966 and was exceedingly well received by the Canadian public. Let me give you the main provisions of the act are that all hospital and doctor fees will be administered by a government entity, that all medical services and hospital services are to be included under the act. The same level of service must be provided to all those who are insured, that the coverage that a person receives in his province is extended if he travels outside that province. With respect to coverage outside of Canada, the coverage often borders on black humor. Several years ago, for example, Alberta, which is the province in which I lived, allowed 50 Canadian dollars a day for hospital coverage outside of Canada. And this was at a time when Canadian dollars worth 62 cents. I remember being hospitalized and receiving my $36 a day to cover the costs. In addition and most important, the various provincial plans are prohibited from extra billing for any insured service and for levying any user charges. There are no deductibles, no co-payments for any service covered under the act. Canadian Medicare remains one of the nation's most popular programs. And in fact, in a poll in 2009, those surveyed showed overwhelming support for the Canadian system over that in the United States. And in fact, on the surface, there appears to be every reason to share its popularity. After all, the Canadian system seems to offer medical and hospital services, somewhat comparable to those in the United States where all the residents of Canada aren't sure, as opposed to just 85% in the West. And where the costs of running the program are about one third less than they are here. This, however, is a very superficial reading of what really goes on there. Most obvious difference between Canada and the United States in terms of medical service offered is that it is true that all Canadians are insured for the full amount of medical services, but they have to wait in line to get these services. Since it is illegal to charge patients to reduce demand, that is the cost of medical service or hospital services effectively zero, the only available method of rationing use is by queuing with all of the inefficiencies associated with non-price rationing of scarce resources. The result is often long waits, both to see specialists and to undergo treatment, to give you some idea of how onerous these wait times can be. The median wait time between original referral by a GP to treatment of a condition in 2010 was 18.2 weeks. This wait time varied by specialty and by province, but were always consistently substantial. The longest wait time, for instance, was for orthopedic surgery at 36.7 weeks. Medium wait time for all specialties from referral by a GP to a specialist in New Brunswick, one of the provinces where New Brunswick was the worst offender was 24.6 weeks. I won't bother you with some of these figures, they're really quite disgusting for instance. In New Brunswick, there was a wait time of 58.7 weeks between diagnosis of a urological problem and treatment. Despite these data, a number of commentators who favor the introduction of a Canada-like system have argued that wait times in Canada are really not out of line with those in the United States. And indeed, in a lot of cases are less burdensome. There is an organization called Physicians for a National Healthcare Programme and another called the Californian Nurses Association. Both organizations actively lobby for the introduction of a single payer Canadian-type system in the United States. And both have repeated the claim that the on average, the wait time to see a physician in the United States is 70 days. I don't know where they came up with that. Wait times of course are in fact substantially longer in Canada than they are in the United States. And even the Supreme Court of Canada has claimed that 95% of patients wait well over a year and many two years for knee replacements. Let me read you from a case that came before the Federal Supreme Court in 2009. There is no dispute that there is a waiting list for cardiovascular surgery for life-threatening problems. Dr. Daniel Doyle, a cardiovascular surgeon who teaches and practices in Quebec City, testified that a person with coronary disease is quote sitting on a bomb and can die at any moment. He confirmed without challenge that patients die while on waiting lists. Invariably where patients have life-threatening conditions, some will die because of undue delay in waiting surgery. So these wait times must be added. The waiting time spent in medical offices waiting to see a physician, one of my particular paves. It is an invariable practice in Canada to double or triple book when you make an appointment with a physician. So even though the appointment might be three weeks out, you will have the same appointment time as one or two other people, which means invariably you will have to wait in the doctor's waiting room for some time. Two hour waits are not uncommon. And physicians seem oblivious to the fact that time has some value to those other than themselves. Under the Canada Health Care Act, there is no incentive for a physician to be prompt. And in fact, the more patients he can squeeze into his schedule, the higher his income. Nor need he be concerned that he will lose patients since the demand for physician services at zero cost is close to infinite. Not only must Canadians wait to see a specialist or to undergo treatment, but the wait to employ advanced technology for certain diagnostic tests is equally long. It is worth pointing out the PET scans, positron emission tomography scans, are totally unavailable in Canada on the Republic Health Care System. The medium wait time in Canada to access an ultrasound is 31 days. To access a CT scan, 30 days. To access an MRI, 69 days. And there is a range that can go much higher depending on what the tentative diagnosis is and what province you live in. Wait times for MRI are 16 weeks in Ontario and 112 days in the Vancouver area. 112 days. Contrast this with the wait time in Canada at veterinary hospitals. You can get your dog a CT scan or an MRI within a few hours. Canada's record of investment in these technologies is the worst among industrialized nations. The number of MRI units per million is 6.7, which is half the rate of the OECD and about one quarter the rate of the US. It has half as many units, MRI units as does Greece and Korea. One third the number of units as does Italy. Now, I tried to check the particular datum and I wasn't able to find where I had originally read it. So I repeated the number of units so I repeated to you with the caveat that I'm not sure where it comes from or whether it's completely reliable. But I did read somewhere that the number of MRIs in the Arabian desert during Desert Storm was greater than all of the MRIs in Canada. In 2008 Forbes magazine noted that there were more MRIs in Pittsburgh than all of Canada. Even in less developed equipment, Canadian healthcare system is often reluctant to make these available to patients because of cost. I won't go into that, that's unnecessary. In the face of these horrendous weights, which occasionally result in the death of patients, there was substantial opposition to the introduction of privately run MRI clinics. A group of doctors in the province of Alberta and also in British Columbia decided to get together and set up a private clinic where they would not provide hospital or physician service but simply these diagnostic tests. However, there was a huge you and cry tremendous opposition to this on the part of large number of Canadians because it was felt some Canadians would be able to, quote, jump the queue. And that would in turn allow for a two-tier system of healthcare. The first private MRI clinic was opened in Calgary in 1993, but at the time of the 2000 federal election, the Prime Minister Jean Chrétien vowed to withhold funding if any province allowed such clinics to continue existing. So mean-spirited were a large number of Canadian voters that they were outraged that anyone could buy quicker service. This despite the fact that one result of these private clinics was to reduce the waiting time on public facilities. The group in the lead in opposition to these private clinics was, of course, Tommy Douglas and CCF and also the Canadian Union of Public Employees that argued that the National Canada Health Act, to which all the provinces had subscribed, implicitly disallows payment for any medically necessary hospital and medical services. That's diagnostic tests, physicians, now hospitals. The number of acute care hospital beds in Canada has been steadily dropping for 25 years. In 2007, it was 2.7 per 1,000 population down from 3.9 in 1995. Now although the number of hospital beds available in Canada and the United States currently is about the same, there is a quirk in the Canadian system. Much of the difference is because hospitals are financed in Canada by block grants that are given at the beginning of the year. You get X number of dollars to operate until the end of the year when we reassess and give you another grant for the succeeding year. Now that being the case, patients who are more seriously ill are less likely to find a bed in a Canadian hospital than someone who is less seriously ill because it's cheaper to deal with a less seriously ill patient. So the result is that hospital stays tend to be longer in Canada. In the US, they get you out right away and somebody as critically ill as you were when you entered can take up the hospital bed. That is less true in Canada. The average length of stay in Canadian acute care hospitals was 7.6 days in 2009 compared with 4.8 days in the United States and this is true over a whole range of illnesses and the shortage of available beds in hospital ward and intensive care units necessarily leads to much longer wait for admission and too long waits in emergency rooms where patients are often warehoused while awaiting admission. In April 2011, I discovered this the other day, the health minister of the province of Alberta boasted that the province's attempts to reduce emergency room wait times was meeting with success and that medium wait times for patients in hospitals in Edmonton had been reduced from 16 hours to 11.6 hours. Finally, physicians. There is a serious shortage of physicians in Canada for obvious reasons. One way you can reduce the expenditure on healthcare is simply by reducing the number of physicians that are available to patients who stand in line to see them and this has been done. So the shortages of deliberate consequence of policies pursued by the Canadian federal government to reduce admissions to medical schools and the number of training positions available and contributing to this shortage are restrictions on licensing of immigrants who are physicians to Canada. Now, despite the evidence deficiencies of the Canadian medical system in almost every particular, it remains enormously popular among Canadians who are regularly bombarded by propaganda, much of the generated by the government and by those organizations with a vested interest in perpetuating the nation's current arrangements. In a joint Canadian U.S. survey of health conducted in 2003, no less than 87% of Canadians indicated that they were very satisfied or somewhat satisfied with the healthcare services available to them. The number of those satisfied almost exactly equals the number satisfied in the U.S. The average Canadian has led to believe that in the United States, someone seeking healthcare, sorry, someone seeking healthcare either finds himself uninsured and health and hence without access to medical care or else faced with bankruptcy because of the prohibitively high costs for medical services. Most Canadians appear to believe that before a critically ill patient will be picked up by an ambulance or admitted to a hospital in the United States, they must either first present proof of medical insurance or at least a credit card with huge limits. In fact, the overwhelming proportion of Americans, of course, are in fact covered by some form of health insurance. In a study undertaken in 2009, the Census Bureau estimated that approximately 51 million people or 16.7% of the population had no medical insurance. However, in reality, the number of people who are effectively uninsured that is those who seek medical insurance but do not have access to it is almost certainly considerable and small for a variety of reasons. First of all, the larger figure is in part the fault of the Census Bureau's survey, which consistently underestimates the number of Americans who are entitled to Medicaid. Where these differences taken into account, it would reduce the involuntarily uninsured by about 20%. Second, if we analyze the incomes of those who are uninsured, at least 25% of them could, without great difficulty, afford medical insurance if they chose to purchase it. The U.S. Census Bureau reports that almost 20% of uninsured Americans live in households with an income of at least $75,000. Even if this half, even if only half of this number are uninsured because they themselves are unable to afford it and they live with other richer people, the remainder, about 25%, are uninsured by choice. Third, the fact that medical insurance in the United States is regarded by the IRS as a non-taxable benefit is almost certainly associated, which requires that it be associated with one's employment. This could be reduced substantially if either medical insurance provided by one's employer were taxed, as it would be if you were to buy it being self-employed, or if it were exempted from tax if you were self-employed. Given these facts, there are also problems with illegal immigrants and so on, but I won't go into that. Given these facts, it has been estimated that the actual number of people lacking insurance for non-emergency services is actually about 5%, or about one-third of the official figure of 15%. Of this, 27% are illegal immigrants who come from nations where private health insurance is unnecessary. Additionally, only legal immigrants who have been residents in this country for at least five years qualify for public insurance. Finally, more than half of those uninsured are fairly young and of these a substantial number are likely to regard medical insurance as unnecessary. It's worth emphasizing that American hospitals are required by law to provide treatment to stabilize the sick or injured, regardless of the patient's ability to pay. This requirement does not absolve those who receive treatment for paying for their hospitalization if they can afford to. It is only in instances where they cannot meet the costs that patientism is absolved from paying. It is not the indigent, however, that concerns the average Canadian who so staunchly opposes the healthcare system as it operates in the United States. His concern centers on the middle class who would be faced, almost certainly faced, with a staggering debt without insurance and consequently has compelled to spend tens of thousands of dollars a year to avoid this contingency. In the minds of most Canadians, the alternative to the burden of private insurance is a government-run system which they regard as free. Since their healthcare is financed through taxes, there's no real sense that they're actually paying for medical and hospital services and they certainly don't count their waiting time at some cost on them. This seems to be the only reason why Canadians are so wedded to their system and so opposed to the American alternatives. Yet in almost every particular, the Canadian healthcare system falls short when contrasted with that in the United States. Given its limitations, shortages, long queues for diagnosis and treatment, widespread inefficiencies, it's hard to believe that Americans would tolerate a Canadian-style healthcare system. Those who support its introduction are either unfamiliar with its characteristics or are motivated by private interests that lead them to distort the truth. There are serious problems inherent in the current American system but the Canadian example hardly offers a solution to this. Thank you.