User Fees for Health Care: Why a Bad Idea Keeps Coming Back (Or, What's Health Got to Do With It?)

Abstract

ABSTRACTCalls for user fees in Canadian health care go back as far as the debate leading up to the establishment of Canada's national hospital insurance program in the late 1950s. Although the rationales have shifted around somewhat, some of the more consistent claims have been that user fees are necessary as a source of additional revenue for a badly underfunded system, that they are necessary to control runaway health care costs, and that they will deter unnecessary use (read abuse) of the system. But the real reasons that user fees have been such hardy survivors of the health policy wars, bear little relation to the claims commonly made for them. Their introduction in the financing of hospital or medical care in Canada would be to the benefit of a number of groups, and not just those one usually thinks of. We show that those who are healthy, and wealthy, would join health care providers (and possibly insurers) as net beneficiaries of a reintroduction of user fees for hospital and medical care in Canada. The flip side of this is that those who are indigent and ill will bear the brunt of the redistribution (for that is really what user fees are all about), and seniors feature prominently in those latter groups. Claims of other positive effects of user fees, such as reducing total health care costs, or improving appropriateness or accessibility, simply do not stand up in the face of the available evidence. In the final analysis, therefore, whether one is for or against user fees reduces to whether one is for or against the resulting income redistribution.