In all provinces, doctors are free to withdraw from the public plan and offer their services for a fee to anyone who is willing to pay. They cannot, however, practice in the public sector (billing public insurance) and, at the same time, practice privately (billing out-of-pocket). Doctors have to choose one or the other and there are valid public policy reasons for this limitation.

Because public insurance plans are part of provincial budgets, provincial governments have a strong incentive to limit costs. It’s called fiscal responsibility. The negotiation of fee schedules with medical associations is a crucial part of this cost control mechanism, and is necessary for sound management of the public plans. As the largest purchaser of medical services in their borders, governments use their size to bring the prices of health services down lower than they would be if doctors were left to bill their own prices.

Doctors are thus restricted to choose between: (1) participating in the public system, freely accepting the fee schedule negotiated on their behalf. This is a lower-paying, lower-risk alternative as payments are basically guaranteed by a single-payer and well-endowed insurer; or (2) withdrawing from the public plan and practicing privately by receiving cash payments. This is obviously a higher-paying, but also higher-risk endeavour.

The consequences of dual practice

Doctors who are proponents of dual practice (the elimination of this restriction) are basically looking at having their cake and eat it too: they would be able to charge more than the public plan fee schedule, but at the same time, they would enjoy the security of the same public plan if the flow of private patients proved insufficient.

But there are significant problems with this approach, which puts in place all the wrong incentives.

First, there would be a strong incentive for these doctors to use their public practice time to refer patients to their higher-paying private practice.

Second,there would be a strong incentive to cut down their public practice time once their private clientele is established, will lead in the short-to-long term, to a significant decrease in capacity for the public system, which in turn, will make private alternatives more palatable.

Third, there would be a strong incentive to delay surgeries and procedures in the public system, to ensure a steady flow of customers ready to pay for them in their private practice.

All these incentives are real and they have been observed in Australia, New Zealand and the United Kingdom where dual practice was allowed. In fact, some of these situations are already seen in parts of Canada. In Quebec, for example, physicians working in hospital-affiliated clinics, strongly suggest their patients to pay privately for x-rays at the private radiology clinic they own, rather than to the hospital’s radiology department where these services are still publicly insured.

The hidden objective: Duplicative private health insurance

More to the point is the question: Can Canadians afford to purchase health services on their own? By and large, no. This is why there is insurance. Canadians might be able to pay out-of-pocket for consultations, or simple, cheaper procedures. But for most Canadians, cancer treatments, heart bypass surgeries, hip or knee replacements or even a few nights stay at a hospital cost more than they can afford without imperilling their financial situation. Using after-tax dollars doesn’t solve access problems in most cases.

This means that proponents of the use of “hard-earned after-tax dollars” on publicly-insured health services are really seeking lifting the ban on duplicative private health insurance.

In a system of publicly-delivered, non-profit health services, duplicative private health insurance makes no sense because privately insured individuals will still be in the same delivery system as publicly-insured citizens. The only way for it to make sense is if it allows individuals with private insurance access to services unavailable to those without such private insurance. And that is through private, for-profit medical institutions and service providers.

To summarize, the call for the right to spend after-tax dollars on health services publicly insured is really a call for duplicative private insurance. The call for duplicative private health insurance is really a call for the development of a private, for-profit health care system.

The development of private, for-profit health care is a threat to public medicare for a variety of reasons, such as NAFTA provisions on national treatment, queue-jumping, and cream-skimming, which would require another essay to develop. But it’s enough to put us on guard against the far-reaching consequences of allowing the seemingly innocuous “right” to spend after-tax dollars wherever Canadians want.

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