Fraser Institute
Canadians are ready for health-care reform—Australia shows the way
From the Fraser Institute
By Bacchus Barua and Mackenzie Moir
Australia offers real-world examples of how public/private partnerships can be successfully integrated in a universal health-care framework. Not only does Australia prove it can be done without sacrificing universal coverage for all, Australia spends less money (as a share of its economy) than Canada and enjoys more timely medical care.
Canada’s health-care system is crumbling. Long wait times, hallway health care and burned-out staff are now the norm. Unsurprisingly, a new poll finds that the majority of Canadians (73 per cent) say the system needs major reform.
As noted in a recent editorial in the Globe and Mail, we can learn key lessons from Australia.
There are significant similarities between the two countries with respect to culture, the economy and even geographic characteristics. Both countries also share the goal of ensuring universal health coverage. However, Australia outperforms Canada on several key health-care performance metrics.
After controlling for differences in age (where appropriate) between the two countries, our recent study found that Australia’s health-care system outperformed Canada’s on 33 (of 36) performance measures. For example, Australia had more physicians, hospital beds, CT scanners and MRI machines per person compared to Canada. And among the 30 universal health-care countries studied, Canada ranked in the bottom quartile for the availability of these critical health-care resources.
Australia also outperforms Canada on key measures of wait times. In 2023 (the latest year of available data), 39.5 per cent of patients in Australia were able to make a same or next day appointment when they were sick compared to only 22.3 per cent in Canada. And 9.6 per cent of Canadians reported waiting more than one year to see a specialist compared to only 4.5 per cent of Australians. Similarly, almost one-in-five (19.9 per cent) Canadians reported waiting more than one year for non-emergency surgery compared to only 11.8 per cent of Australians.
So, what does Australia do differently to outperform Canada on these key measures?
Although the Globe and Mail editorial touches on the availability of private insurance in Australia, less attention is given to the private sector’s prominent role in the delivery of health care.
In 2016 (the latest year of available data) almost half of all hospitals in Australia (48.5 per cent) were private. And in 2021/22 (again, the latest year of available data), 41 per cent of all hospital care took place in a private facility. That percentage goes up to 70.3 per cent when only considering hospital admissions for non-emergency surgery.
But it’s not only higher-income patients who can afford private insurance (or those paying out of pocket) who get these surgeries. The Australian government encourages the uptake of private insurance and partially subsidizes private care (at a rate of 75 per cent of the public fee), and governments in Australia also regularly contract out publicly-funded care to private facilities.
In 2021/22, more than 300,000 episodes of publicly-funded care occurred in private facilities in Australia. Private hospitals also delivered 73.5 per cent of care funded by Australia’s Department of Veterans’ Affairs. And in 2019/20, government sources (including the federal government) paid for almost one-third (32.8 per cent) of private hospital expenditures.
Which takes us back to the new opinion poll (by Navigator), which found that 69 per cent of Canadians agree that health-care services should include private-sector involvement. While defenders of the status quo continue to criticize this approach, Australia offers real-world examples of how public/private partnerships can be successfully integrated in a universal health-care framework. Not only does Australia prove it can be done without sacrificing universal coverage for all, Australia spends less money (as a share of its economy) than Canada and enjoys more timely medical care.
While provincial governments remain stubbornly committed to a failed model, Canadians are clearly expressing their desire for health-care reforms that include a prominent role for private partners in the delivery of universal care.
Australia is just one example. Public/private partnerships are the norm in several more successful universal health-care systems (such as Germany and Switzerland). Instead of continuing to remain an outlier, Canada should follow the examples of Australia and other countries and engage with the private sector to fulfill the promise of universal health care.
Authors:
From the Fraser Institute
Canadians continue to endure long wait times for health care. And while waiting for care can obviously be detrimental to your health and wellbeing, it can also hurt your pocketbook.
In 2024, the latest year of available data, the median wait—from referral by a family doctor to treatment by a specialist—was 30 weeks (including 15 weeks waiting for treatment after seeing a specialist). And last year, an estimated 1.5 million Canadians were waiting for care.
It’s no wonder Canadians are frustrated with the current state of health care.
Again, long waits for care adversely impact patients in many different ways including physical pain, psychological distress and worsened treatment outcomes as lengthy waits can make the treatment of some problems more difficult. There’s also a less-talked about consequence—the impact of health-care waits on the ability of patients to participate in day-to-day life, work and earn a living.
According to a recent study published by the Fraser Institute, wait times for non-emergency surgery cost Canadian patients $5.2 billion in lost wages in 2024. That’s about $3,300 for each of the 1.5 million patients waiting for care. Crucially, this estimate only considers time at work. After also accounting for free time outside of work, the cost increases to $15.9 billion or more than $10,200 per person.
Of course, some advocates of the health-care status quo argue that long waits for care remain a necessary trade-off to ensure all Canadians receive universal health-care coverage. But the experience of many high-income countries with universal health care shows the opposite.
Despite Canada ranking among the highest spenders (4th of 31 countries) on health care (as a percentage of its economy) among other developed countries with universal health care, we consistently rank among the bottom for the number of doctors, hospital beds, MRIs and CT scanners. Canada also has one of the worst records on access to timely health care.
So what do these other countries do differently than Canada? In short, they embrace the private sector as a partner in providing universal care.
Australia, for instance, spends less on health care (again, as a percentage of its economy) than Canada, yet the percentage of patients in Australia (33.1 per cent) who report waiting more than two months for non-emergency surgery was much higher in Canada (58.3 per cent). Unlike in Canada, Australian patients can choose to receive non-emergency surgery in either a private or public hospital. In 2021/22, 58.6 per cent of non-emergency surgeries in Australia were performed in private hospitals.
But we don’t need to look abroad for evidence that the private sector can help reduce wait times by delivering publicly-funded care. From 2010 to 2014, the Saskatchewan government, among other policies, contracted out publicly-funded surgeries to private clinics and lowered the province’s median wait time from one of the longest in the country (26.5 weeks in 2010) to one of the shortest (14.2 weeks in 2014). The initiative also reduced the average cost of procedures by 26 per cent.
Canadians are waiting longer than ever for health care, and the economic costs of these waits have never been higher. Until policymakers have the courage to enact genuine reform, based in part on more successful universal health-care systems, this status quo will continue to cost Canadian patients.
Mackenzie Moir
Senior Policy Analyst, Fraser Institute
Business
84% of Swiss hospitals and 60% of hospitalizations are in private facilities, and they face much lower wait times
From the Fraser Institute
If Canada reformed to emulate Switzerland’s approach to universal health care, including its much greater use of private sector involvement, the country would deliver far better results to patients and reduce wait times, finds a new study published today by the Fraser Institute, an independent, non-partisan Canadian policy think-tank.
“The bane of Canadian health care is lack of access to timely care, so it’s critical to look to countries like Switzerland with more successful universal health care,” said Yanick Labrie, senior fellow at the Fraser Institute and author of Integrating Private Health Care Into Canada’s Public System: What We Can Learn from Switzerland. The study highlights how Switzerland successfully integrates the private sector into their universal health-care system, which consistently outperforms Canada on most health-care metrics, including wait times.
For example, in 2022, the percentage of patients who waited less than two months for a specialist appointment was 85.3 per cent in Switzerland compared to just 48.3 per cent in Canada.
In Switzerland, 84.2 per cent of all hospitals are private (either for-profit or not-for profit) institutions, and the country’s private hospitals provide 60.2 per cent of all hospitalizations, 60.9 per cent of all births, and 67.1 per cent of all operating rooms.
Crucially, Swiss patients can obtain treatment at the hospital of their choice, whether located inside or outside their geographic location, and hospitals cannot discriminate against patients, based on the care required.
“Switzerland shows that a universal health-care system can reconcile efficiency and equity–all while being more accessible and responsive to patients’ needs and preferences,” Labrie said.
“Based on the success of the Swiss model, provinces can make these reforms now and help improve Canadian health care.”
Integrating Private Health Care into Canada’s Public System: What We Can Learn from Switzerland
- Access to timely care remains the Achilles’ heel of Canada’s health systems. To reduce wait times, some provinces have partnered with private clinics for publicly funded surgeries—a strategy that has proven effective, but continues to spark debate in Canada.
- This study explores how Switzerland successfully integrates private health care into a universal public system and considers what Canada can learn from this model.
- In Switzerland, universal coverage is delivered through a system of managed competition among 44 non-profit private insurers, while decentralized governance allows each of the 26 cantons to coordinate and oversee hospital services in ways that reflect local needs and priorities.
- Nearly two-thirds of Swiss hospitals are for-profit institutions; they provide roughly half of all hospitalizations, births, and hospital beds across the country.
- All hospitals are treated equally—regardless of legal status—and funded through the same activity-based model, implemented nationwide in 2012.
- The reform led to a significant increase in the number of cases treated without a corresponding rise in expenditures per case, suggesting improved efficiency, better use of resources, and expanded access to hospital care.
- The average length of hospital stay steadily decreased over time and now stands at 4.87 days in for-profit hospitals versus 5.53 days in public ones, indicating faster patient turnover and more streamlined care pathways.
- Hospital-acquired infection rates are significantly lower in private hospitals (2.7%) than in public hospitals (6.2%), a key indicator of care quality.
- Case-mix severity is as high or higher in private hospitals, countering the notion that they only take on simpler or less risky cases.
- Patient satisfaction is slightly higher in private hospitals (4.28/5) than in public ones (4.17/5), reflecting strong user experience across multiple dimensions.
- Canada could benefit from regulated competition between public and private providers and activity-based funding, without breaching the Canada Health Act.
Yanick Labrie
Senior Fellow, Fraser Institute
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