Miracle Cure: How to Solve America's Health Care Crisis and Why Canada Isn't the Answer

K.V. Nagarajan is a professor in the Department of Economics at
Laurentian University.

Sally Pipes is a Canadian who worked at the Fraser Institute in
Vancouver before moving on to the Pacific Research Institute in San
Francisco. The arguments she advances in this book are in keeping with
the free market bias of both institutions.

Although the United States and Canada have very different health-care
systems, Pipes finds that they both suffer from the “symptoms of the
same disease: the disease of central control.” In her analysis, the
trouble in the United States arises from third-party payments,
government control, and regulation—all of which result in
overutilization, perverse incentives, and cost escalation. In Canada,
she traces the problems to the single-payer public insurance system,
which attempts to control costs by means of bureaucratic control and
global budgeting; the results are lengthening waiting lists, crumbling
infrastructure and equipment, and lack of innovations.

What the author would like to see is a decentralization of both systems
whereby the power of governments and insurance companies is replaced by
a consumer-driven system that is backed by Health Savings Accounts for
routine care and catastrophic insurance for unexpected high health-care
costs. The trouble with this line of reasoning is that obtaining health
care is not like purchasing a bar of soap or getting a haircut. People
can buy health care, but not health—outcome is unpredictable. It is
unreasonable, therefore, to relabel patients as consumers and expect
them, during times of distress or unconsciousness, to make informed
decisions. The rationale for insurance is uncertainty of the occurrence
of illness. The rationale for government licensing and control is to
reduce monopoly exploitation by the more powerful in the health-care
equation. Furthermore, history shows that life before medicare was not a
bed of roses. By ignoring these considerations, Pipes gives a one-sided
view of the health-care crisis.

Miracle Cure establishes a case for reform in both countries. Whether
the solutions it offers are the right ones is an open question.