Health care is chronically ill from central planning

Man, somebody better prescribe some sedatives here. No sooner did the Ontario government offer an extra $50 million in physician service payments if doctors cut the cost of the Ontario Drug Benefit Program by $200 million than it was denounced as "despicable" and "immoral." But how can people swear undying allegiance to the notion that governments should set incentives in health care, then hit the hospital roof when governments set incentives in health care? NDP health critic Shelley Martel fumed about "a bribe" and Tory health critic John Baird about a "kickback." Health Minister George Smitherman defensively insisted that "There is no bribe here," that he was just taking "an opportunity to influence policy" by providing incentives for "appropriate behaviour." I'm no fan of the McGuinty Liberals. But please, before we go any further with the hair-pulling, would someone clarify for me the difference in a central-planning system between incentives for appropriate behaviour and bribes?

One can hardly deny that there's an over-prescription problem. Canadians, and Ontarians, down an average of nearly 10 a year each, and since I don't someone out there must have 20. I expect some of you should just have a beer instead. I'm very sure some people who would benefit from any single one of their dozens of mysterious coloured pills are worse off for gobbling them all, often in combinations their doctor doesn't know about. (Just as you might lower your stress by having a couple of beers, two glasses of wine or two mixed drinks in an evening, but not all of the above.)

There's too much prescription going on. And since government runs the health system, government has to do something about it. True, prescription drugs aren't covered by the Canada Health Act because they aren't considered medically necessary (which makes me wonder why we're eating them like Smarties). But half of drug purchases are publicly funded -- for seniors and the poor. Besides, while Ontario doctors are not paid to write prescriptions, they are paid to see patients, which encourages quick turnaround. Of course doctors' conduct in the office depends on a wide range of factors, from technical knowledge to individual philosophy to their mood that day. But all else being equal, if you reward them for getting patients in and out of the office fast, they will speed things up a bit. And since too many people think they've been well cared for once they get a prescription and not before, doctors too often write one.

A number of critics claim the government is motivated at least partly by a desire to save money. What, suddenly you're in favour of government waste? Of course the authorities should try to save money, and of course they should try to do it by reducing unnecessary or less necessary procedures.

A more pertinent objection is that this measure does not precisely target the least useful prescriptions. But how could it, when the existing system doesn't know which they are? Surely it's better to pressure doctors to reduce prescriptions overall and let them choose which than to substitute the judgment of bureaucrats for that of MDs as to which Rx to dispense with instead of dispensing. And it will not do to blame schemes to reform central planning for pre-existing problems inherent in central planning.

John Baird said, "I have no objection with going after the legitimate problem with over-prescription of drugs, but why would you focus just on the disabled? Why focus just on seniors?" OK, what's his alternative? Radically restructure OHIP's fee schedule so doctors see fewer patients for more time, when too many people already can't find a doctor? Besides, as the largest consumers of pills, seniors and the disabled are most likely to suffer ill-effects from mixing drugs. If doctors think twice about writing them one more prescription and ask a bit more carefully what they're already taking, it could well save lives as well as money.

I think the reform won't work because planning doesn't work (and file Ontario's new regional health authorities under "Kosygin Reforms"). But the details make as much sense as the setting permits, which makes the shrillness of the outcry a bit weird.

At bottom, I don't think it's about the details. I think it's about using incentives to influence behaviour. Which is absurd: why else would OHIP have a fee schedule? But it's also the logical reductio ad absurdum of central planning, which both accepts and rejects the fundamental truth that people respond to incentives and thus finds itself at war with human nature in general and thrashing about wasting resources in crises.

It's an ugly spectacle. And it's bad medicine.

[First published in the Ottawa Citizen]