Health care cost

2 years ago, I felt on my chin and got stitches. I paid $265 for a 20 minutes visit, and a 10 minutes visit to remove the stitches a week later. Lately I had to do a medical check to become a permanent resident of Canada. I paid $120 for a bit of paperwork filling by a clerk, and for a —less than 3 minutes long— medical examination. I guess that most of the money was for the physician.

Last December I twisted my ankle and had 4 sessions of physiotherapy. Each session was between 30 and 50 minutes long. During those sessions, 15 to 30 minutes were with the physiotherapist. Each session costed $55. Totaling $220 for 2 hours and 30 minutes of therapy, including 1 hour and 15 minutes with the physiotherapist.

Physiotherapists aren’t necessarily as qualified as doctors. They’re nonetheless skilled professionals. According to Wikipedia:

In Canada, entry-level physiotherapy education is offered at 13 universities. Some of these university programs are at the Master's level, meaning that applicants must have already completed an undergraduate degree prior to applying; all of them are slated to be at the Master's level by 2010.

Both professions require many years of training. So why was the physician so much more expensive on an hourly basis than the physiotherapist?

$265 × 30 minutes = $530 / hour
$55 × 20 minutes = $165 / hour

The Canadian and French health care systems are similar: they are publicly funded, and the service is mostly provided by the private sector. A simple visit to a physician in Paris costs 40 euro —less than $60. In Vancouver it’s twice as much: $120. Why such difference? One reason is the lack of physicians. Canada has one of the lowest rate of physician per capita of the OCED. It wasn’t always like that. In the early 90’s there were too many physicians in Canada. Provincial governments set limits on the number of new physicians to save money. In 1993 the number of physicians peaked. As population grew and health care demand increased, the surplus of physicians turned into a shortage.

This situation shows the main limit of publicly health care. Fixed policies aren’t able to adapt to the changing reality. Without proper competition, and price signal it’s hard to get everything right. It looks that France managed its supply of physicians better, but it could very well experiences similar problems. A bad political decision regarding health care can have decades long consequences.

Health care costs for 2009 were between 8% and 11% in most developer countries —with the notable exception of the US at 16%. No country can afford to have one tenth of its economy running inefficiently. It’s important to have the right set of rules. Rules that give us a good health care at the right price.

I recommend 2 articles from the New Yorker, and one from the Economist on the subject: