Rethinking the Welfare State: The prospects for ... - e-Library

Health care 99
1975–39 percent of total provincial program spending in 2002 compared with 29 percent
in 1977.
Apart from the efficient allocation of resources between the health care sector and
other sectors (allocative efficiency), dynamic efficiency within the health care sector is
another important goal. Health care is, by its very nature, a dynamic enterprise: a vast
number of new therapies—pharmaceuticals, surgical techniques, alternative health
maintenance measures—are constantly emerging. No system is able to take advantage of
these innovations, even where cost effective, quickly enough. As well, health care
provision is often highly bureaucratic: it has a tendency to resist change—technological
or organisational.
Preservation of public health
Perhaps the most basic rationale for government intervention in the domain of health care
is the preservation of the state of health of the population as a whole. Although there is a
vast range of factors that affect the status of every individual’s personal health, many of
those factors are related to interactions with others. In particular, infectious diseases—
from the common cold to flu to chicken pox to HIV—spread across populations with
little regard for age, ethnicity, or economic status. Unfortunately, because of the costs of
health care services, or due to general myopia as to the long-term benefits of investment
in health care, or due to collective action or free rider problems, many members of
society fail to take sufficient precautions to safeguard their own health and hence the
health of others. Thus, it is in the interests of those with the requisite resources to ensure
that suitable health care services are available to all and to promote the benefits of those
services, for doing so reduces every individual’s risk of infection. 14
Redressing insurance market failure
Health care services are an unusual commodity in that, for most part, it is difficult to
predict when they will be required. Unlike the need for food, education, or housing, the
need for health care services is contingent upon the onset of an illness, the contraction of
a disease, or the suffering of an injury—all events that could occur at any time. Coupled
with the high cost of health care services, the uncertainty of whether or when to expect
these occurrences makes health care insurance the only means of preparing for future
need.
Insurance market failure stems from the fact that insurance providers are particularly
wary of high costs and uncertain need. Because these providers are private entities
seeking to maximize profits, it is vital to their success that they minimize both of these
variables. They do so by risk-rating individuals according to age, disability, and lifestyle
and avoiding those individuals whom they consider to be high-risk and therefore costly
patients. For many, the result of this proflt-seeking behaviour is an unaffordable
insurance premium or no coverage at all. Ironically, the result is a health care system that
discriminates against those who are most in need of care. This problem has the potential
to become even more acute as genetic screening technology develops that will allow
insurers more carefully to pinpoint high-risk individuals. Government intervention in the
health care domain is likely the only means of addressing this concern. Untied cash