A Tale of Two Systems

When an American boy named Randy suffered a mild convulsion, he was immediately signed up for Magnetic Resonance Imaging—or MRI—to make a diagnosis. But in Canada, people who need an MRI add their name to a waiting list that can delay diagnosis for months. Last summer a hospital in Calgary, Alberta, had 1,000 patients waiting for an MRI. Why do Canadians have to wait for months, while Americans get MRIs as routinely as blood tests? The answer lies in a tale of two systems. The U.S. health system operates basically as a free market. MRIs were first introduced here in the late 1980s. Because they lead to more accurate diagnoses, doctors began ordering MRIs for their patients. Insurance companies agreed to pay for them. Spurred by the demand, hospitals went out and bought more of the machines. Spurred by that demand, the U.S. medical technology industry produced more and better machines. And as supply increased, costs went down—making MRIs widely available for average Americans. But Canada's state-run system is quite another tale. There the government pays health-care bills, not individuals or insurance companies. In order to keep expenditures as low as possible, the provincial governments establish global budgets limiting how money can be paid out for health care. In that situation the natural tendency is to resist spending money on new, high-cost technology—like MRIs. But ironically, by not paying for MRIs, the government keeps demand low, which keeps supply low, which keeps costs high. The cost never comes down to the point where most hospitals can buy the equipment for their patients. The result? Shortages and waiting lists. In fact, Canadian patients often cross the border to take advantage of the U.S. system. British Columbia sends workmen's compensation claimants down to Washington state for MRIs. Ontario recently contracted with hospitals in Buffalo and Detroit to do MRIs for their citizens. The moral of this tale is that government-run health care—whether Canadian-style or Clinton-style—doesn't work very well. Government-run systems are sold to the public under the slogan of economic justice: They promise to guarantee access to health care for everyone, including the poor. But the historical fact is that government systems do just the opposite: By putting the lid on spending, they decrease demand and slow down supply—which keeps medical technology rare and expensive. Treatment becomes harder to get for everyone—including the poor. As Christians we are called to work for economic justice. As British economist Brian Griffith writes, "Christianity starts with faith in Christ and it finishes with service in the world." Part of our service in the world is establishing a more just economic order. Free-market systems work best for making resources like health care available to a wide range of people. Yes, our current system needs reform—for example, we need to make insurance portable. But the best strategy is not to invite the government to take over; it's to work within America's free-market system. For the sake of our own health . . . and, we might add, for the health of our Canadian neighbors.

05/23/94