Health care as a commodity

One of the arguments that is often advanced in defence of the public health care system in Canada appeals to the idea that medical care should not be treated as a “commodity.” The recent Romanow Report on the Future of Health Care in Canada, for instance, says that, “Canadians view medicare as a moral enterprise, not a business venture.”1 Public provision is then urged on the grounds that this is the only mode of delivery compatible with this constraint. This argument has received surprisingly little scrutiny, despite the important role that it plays in structuring the recommendations of the report, not to mention the broader public debate. This is unfortunate, since not only is it, in my view, a bad argument, but it is one that actually obscures the rationale for the current public system. It encourages the widely shared misperception that health care is a pure public good in our society (financed through taxation, then provided “for free” to all citizens). Provincial governments in Canada do not, for the most part, deliver health care services directly to the population. What they provide instead is health insurance. They rely primarily upon the private sector to deliver care. Thus the Canadian health care system more closely resembles what is often described as a quasi-market, or a “public market.” The justification for the role of the public sector in health care can be traced back to market failure in the insurance sector, and not in the market for health care services.