Canada Creep Strikes Mitt Romney, Atlantic Coast

April 19 (Bloomberg) — Mitt Romney is one bold Republican.

The fact that his party colleagues aren't ready yet to nationalize health care in the rest of the country doesn't faze the Massachusetts governor. No, he is simply going to go ahead and nationalize it right there in Massachusetts.

Well OK, not nationalize it. But mandate insurance in a way that makes clear that further government subsidies will be necessary down the road. And talk about the same plan for the rest of the country, a plan whose results will only be visible later, when the governor has already, presumably, made it to the White House.

In fact, Romney is less courageous than he seems, because there is a reason he is able to push through "health care for all" in Massachusetts. It is what we'll call Canada Creep.

Citizens of northern states have always looked longingly at the country next door. What they envy is its roster of entitlements, including, of course, Canada's universal health care. Informally, Canadians even call their nationalized system medicare — the word is written in lower case letters. It's a subtle, but important difference from Medicare, the upper-case U.S. system, which is mostly for senior citizens and coexists with private insurance.

Why be satisfied with Medicare when you can have medicare?

But the trouble is that Americans enjoy envying Canada so much that they choose to overlook the reality of what goes on there.

Crawford Time

Take prescription drugs. Drug prices are lower in Canada than in the U.S., but only because the Canadian government forced drug companies into charging less. U.S. citizens, focusing on the first part of that news and ignoring the second, demanded the right to similarly priced drugs.

Perhaps because he spent too much time in Kennebunkport and not enough in Crawford, President George W. Bush caught his own case of Canada Creep and gave American seniors a Canadian-style program. It didn't matter that the new entitlement created a budget problem that makes Social Security's look minor.

The lure of the Canadian model is also proving strong when it comes to health-care services. Canada's government-will-pay system sounded good when it was created decades ago. But the experiment didn't work out as planned. Costs rose. As many Canadians know all too well, the provinces and federal government ended up doing what all governments do in such situations: they curtailed supply and shut out competition by making it illegal for private insurance to thrive in most provinces.

Get In Line

Every year the Fraser Institute, a free-market think tank in Vancouver, British Columbia, produces "Waiting Your Turn," a survey of the wait times for various medical procedures. Romney might find it worth perusing. The average is 17 weeks, almost double what it was a decade ago. In Saskatchewan, the wait is 25 weeks.

After all, as Edwin Coffey, former president of the Quebec Medical Association, told me, "access to a waiting list is not the same as access to health care."

In the past decade, hospitals south of the border have seen their own version of Canada Creep: Canadian patients crept south to Seattle, New York, or Maine for hip replacements or chemotherapy that weren't available in a timely fashion in Canada. Twice in the past five years the province of New Brunswick contracted with the Eastern Maine Medical Center in Bangor, Maine, so that Canadian patients could receive cancer treatment, a hospital spokesman told me.

Lust, Disgust

Even as lust for Canada's health-care system builds in the U.S., disgust with it has been building in Canada. A few years ago a man from Quebec named George Zeliotis faced a year-long wait for a hip replacement. The pain made him cranky enough that he went to court alleging that Canada was depriving him of his right to pay his own way, perhaps through insurance, and bypass the queues.

The suit got more publicity than many people imagined — the freer U.S. model was also influencing Canada.

In one of its most important rulings in years, Canada's Supreme Court sided with Zeliotis. Justice Marie Deschamps wrote that the finding reflected the influence of a number of other countries.

"The United Kingdom does not restrict access to private insurance," she said. Sweden too, she noted, "does not prohibit private insurance." Under Canadian law, the Quebec government must revise its health legislation by June to conform to the Supreme Court's judgment.

Private-health insurance is on its way at long last in Canada. Brian Lee Crowley of the Atlantic Institute for Market Studies in Halifax, Nova Scotia, actually has a speech called "We Can't Go on Like This." He developed it for the Canada-Sweden Business Association, which tells you a lot right there. Perhaps now the Republicans should invite him on down.

American Creep

That America Creep is happening in Canada is important, especially given the state of play of health-care politics in the U.S. Ever since the Bush administration agreed to the drug entitlement for seniors, there has been the sense that it may only be a matter of time before Washington and the states consolidate control of health care.

Romney's move is politically exciting for party strategists who believe that, in health care, they are stealing an election winner from the Democrats. But that shouldn't conceal from the rest of us the fact that the move is based on an illusion.

(Amity Shlaes is a Bloomberg News columnist. The opinions expressed are her own.)

© Copyright 2006 Bloomberg

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