Catalonia’s Dynamic Public Health Care Model

Commentary, Healthcare & Welfare, Frontier Centre

A public monopoly for the delivery of health-care services is chapter and verse for federal Liberals, to wit Jean Chrétien’s long feud with Alberta over private clinics. But Jean Charest’s election victory in Québec, with its key plank of “fully integrating the participation of private medical clinics into the public system,” indicates that such orthodoxy has lost its appeal even in the Liberal heartland.

It’s about time. Although such refreshing talk is heresy for our stagnant political elites, Canada is the only country with universal health insurance that forbids such facilities. European governments not only allow private providers a role, but the ones who have expanded it the most have the most dynamic health-care systems.

Over the last decade, authorities in Stockholm have shredded waiting lists by purchasing more from efficient private facilities. The Social Democrats, elected last September, vowed to stop the trend, have now bowed to the more sophisticated consumer reality by promising to sell off more public hospitals. The people like faster, better service.

Another country at the south end of the continent is attracting attention for similar advances. Spain’s 1986 Health Care Act embedded an important principle. It allowed provincial authorities a significant amount of autonomy in delivering health services. The national government provides an umbrella of public financing and sets standards that ensure universal access. Then it gets out of the way.

The province of Catalonia has been so successful in developing a strong health-care system within this decentralized model that current literature refers to it as “the Catalan model.” Like its Swedish counterpart, it separates the funding of services from their provision. Private facilities are paid with public funds. The Catalan Health Service (see related backgrounder)
regulates, plans, evaluates and inspects everything related to health services, but hospitals and the primary care system operate by means of contracts with providers. Of any kind.

The Catalonian health care network differs from the rest of Spain In the country as a whole, 70 percent of severe-case hospital beds are the property of the Ministry and 30 percent are owned by others. In Catalonia, that ratio is reversed, with 70 percent of beds belonging to autonomous hospitals, including for-profit facilities. It therefore offers a natural case study for comparing the network of beds run by the public health authority and those owned by contractors. The model existing in many countries can be measured against a wider reliance on the private sector, since both co-exist in Spain.

Catalonia’s pragmatic approach has proven both practical and workable. Although it requires co-payments for a variety of health services, citizens pay less out-of-pocket than Canadians now do. By various measures, Catalonia’s six million people are reaping the benefits of an effective and efficient healthcare system.

Part of the Catalan success is its focus on promoting good health and disease prevention. Its decision-makers use a package of preventive interventions applied gradually to asymptomatic adults targeted according to age and sex. Consequently Spaniards spend less of their lives suffering from disabilities than Canadians. On average, females live with disability for approximately 7 years of their lives and males for 5.8 years, reports the OECD; their Canadian counterparts average 7.2 and 6.5 years respectively. This small statistical difference has a major impact on health spending.

In a recent analysis of European health reforms, the World Health Organization found that an increasing number of European countries are using contracting as an instrument to implement health policy objectives outside the traditional public system. Why this works is important for Canadian Medicare.

Because contracting mechanisms bind providers to explicit commitments, the WHO reports, they generate the economic motivation to fulfill these promises. They promote a healthy process of negotiation on prices and quality, as well as ensure compliance by providers. Proponents of contracting cite four major reasons for introducing contractual relationships into tax-based, command-and-control health systems: to encourage decentralization of management, to improve provider performance, to improve planning of health-care development and to improve management of care.

Canada’s policy makers narrowly confuse public administration with public delivery and pour money into a monopoly with few incentives to perform well. Providers are paid whether or not outcomes are positive. Catalonia and Stockholm have learned that administration and funding can remain public in a disciplined mix of competing public and private suppliers.

Manitoba has the most expensive system in Canada, yet we scrape along with deteriorating services and lengthening queues, a fraying hand-me-down of ideologically entrenched central planning. The whopping 7.8% increase ($218 million) in the recent provincial health budget simply postpones the day of reckoning. The Spaniards are achieving better results with less money, 8.3 percent of GDP in 2000, almost two points below Canada’s spending, despite similar demographics.

Intelligent socialists crafted the Catalan model. Olé to them, and to Jean Charest.

view related backgrounder