Canada’s government considers its doctors to be a cost source

This article from 2015 shows how the Canadian government sees its healthcare providers, not as a resource but as a drain on resources. I’d come up with a newer article, maybe something in 2017 or 2018, but the 2015 article has the best quote, which I’ve bolded below.

First, some context: “Queen’s Park stopped talking with Ontario’s doctors back in January and is cutting services to save money… In early February, the provincial government decreed that medical services be cut by an average of 5 per cent. This includes a cut to all doctors’ fees by 3 per cent as well as cuts to primary care and specialist services originally designed to assist complex patients. ”

Now the most important quote in the article: “If doctors see more patients than the arbitrary limit the government has set — government will force physicians to pay back any amount over their imposed limit.”

Parse that sentence a moment. If doctors do too much doctoring, they have to pay for it. On its face, this seems ridiculous. Doctors offer a valuable service, and they’re penalized for performing it? What crazy land have we entered?

Let us for a moment consider the land of the sane. In the land of the sane, health care is a business, and a business generally has two categories of workers: line and staff. Line workers generate revenue by directly participating in the company’s line of business. Staff workers consume revenue in their roles supporting the line positions. A smart business seeks to balance the two kinds, maximizing the number of line positions while minimizing the number of staff positions.

In the business of health care, doctors and nurses generate revenue, lots and lots of revenue. We value our lives, and pay commensurately. Unfortunately, we don’t have enough doctors and nurses, so their value rises. (There are, of course, other reasons for the high prices in the U.S., but this is the crux of the problem, and the only part I’m addressing in this post.)

However, health care isn’t a business anymore in Canada; it’s a government service. Government: that is our crazy land, where taxes generate revenue and any service performed is a cost. Any service. Doctors, police, even tax collectors are staff functions. They consume revenue, and use of their services must be constrained. Who holds the equivalent of line positions in this crazy land? Politicians.

The logic of this crazy land requires service cuts in areas of the highest demand, but logic in the world of the sane tells college students to avoid such industries. Sane logic says increased competition reduces costs; crazy logic pretends that you can put a cap on demand and slow cost increases (even crazy logic no longer pretends it will reduce costs).

Remember this when you hear someone say, “If only we treated health care the way Canada does.”


  1. Russell Gold

    This is specifically about Ontario. Each province in Canada has its own way of budgeting for medical care. From that 2015 article: “We’re asking the Ontario government to do what other provincial governments have done: fully fund a public health care system that we pay for through our taxes.”

    Of course, this is a not all that unexpected consequence of third-party pay. There is no natural limit on demand due to costs, and no natural increase in payments as a result of consumer choice.

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  3. John Wilkes

    “Who holds the equivalent of line positions in this crazy land? Politicians.”

    Politicians are just the sales team. Line staff are the bureaucrats.

    1. Dawn Smit

      That’s simultaneously hilarious and terrifying.

      I’ve always thought of bureaucrats as the remoras to the politicians’ sharks, but that’s another metaphor entirely.

  4. Jeff Mallette

    The proponents of socialism despise profit, at least the profit they deem to be “too much” profit. When asked who determines what is too much profit and who is allowed to make how much, they seldom provide a coherent response. They do not have the moral courage to openly declare their preference for socialism over free market capitalism. Nor do they have the courage to state that in their worldview the government is the arbiter of profit and is meerly leveling the playing field and looking out for the little man.

  5. frank

    Very good, except that nurses, although line workers, are considered a cost center… at a hospital, anyway. It’s the MDs that generate revenue, along with some therapists and other clinicians e.g. APRNs.

    1. Dawn Smit

      Yeah, nurses at hospitals would be considered a cost center, wouldn’t they? Of course, I’ve never seen a hospital in a free market (there hasn’t been one in my lifetime), where they might be more valued. I was thinking about nurse practitioners (a form of APRN, correct?), who can be revenue generators because they increase the number of patients seen in a day. Some higher level nurses like RNs should be for the same reason, but from everything I’ve seen, they’re treated like walking pieces of equipment, only with less maintenance. Sigh.

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  7. Dan Hamilton

    Where you are missing the point is that the demand for services doctor’s care is unlimited.
    The Government cannot control the DEMAND, they can only control the Supply the Doctor’s Services. Each minute of Health Care Workers services costs the Government.

    There fore the Services MUST be rationed to control costs. Delay of Service is the primary way to ration costs.

    The problem for the Politicians is they SOLD the System on providing care. Care they are unable to provide because of cost. Yet they don’t want to be honest with the People.

    This is why single payer doesn’t work. The care must ALWAYS be rationed but the People getting the care have no say in how it is rationed.

    1. Dawn Smit

      The demand for just about everything would be unlimited, Dan, under those same circumstances. So I didn’t miss the point; I just find it to be secondary to the point at hand, which is that governments have the amazing ability to turn revenue generators into giant cost sucks.

      But I agree that Services performed by the government must be rationed to control costs. As you said, government cannot control the demand, only the supply. Delay of Service is the primary way for the government to ration costs. And I would add that the rationing can only get worse and never better because not enough suppliers are willing to enter that government-controlled industry to alleviate the shortage. Government rationing is its own worst enemy. The free market has the pricing mechanism, which uses high prices as a signal for more suppliers to enter the market, which lowers prices over time.*

      Which means I agree with your main point: single payer doesn’t work.

      And I agree emphatically that the politicians lied. After all, they opened their mouths.

      *Now if you’re saying that the pricing mechanism is merely another form of rationing and so our only choice is between methods of rationing, I would disagree with you over definitions, but I’d settle for saying that I will generally choose the form of rationing that reduces the need for rationing.

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