‘Abusive’ medical fees are possible because of government’s health-care monopoly

Although the idea of an “abusive” price that is voluntarily paid is a little odd, some patients are clearly less than pleased about the extra fees they are sometimes faced with when they visit the doctor. Indeed, as reported in the Montreal Gazette last week, a Montreal community clinic has just set up a registry to record complaints about such fees (“Registry keeps tabs on abusive fees charged by some doctors, clinics” Montreal Gazette, Feb. 17.). In the first 24 hours, it had accumulated more than 250 grievances.

Assuming for the sake of argument that these fees are indeed “abusive” or excessive: What gives doctors the power to charge them? And how come we’re not reading about, say, grocery stores that charge abusive prices, and registries that keep tabs on the most abusive grocers?

In a word: competition. If your neighbourhood Kwik-E-Mart tries to charge you an arm and a leg for your bag of produce and canned goods, you can take your business elsewhere. If your family doctor decides to squeeze you for a little something extra to look at your arm and your leg, on the other hand, even regulations designed to keep him or her from doing so won’t protect you, it seems.

Why? Because it may take you months, if not years, to find another family doctor. Better to pay a little more than to go without entirely. And the shortage of family doctors in turn has everything to do with the lack of a proper market and the bureaucratic mismanagement of the government’s monopoly control of much of the health-care system.

If the grocery store comparison seems like a bit of a stretch, consider laser eye surgery instead, an area of health care that is relatively unhindered by monopolistic controls and regulations. Far from gouging its patients, laser eye surgery clinics have been innovating to provide ever-better services at ever-lower prices. When I looked into it a few years ago, prices had fallen from around $5,000 for both eyes at the turn of the century to between $1,000 and $2,000 in 2011.

In contrast, the private Ville Marie Breast Centre in Montreal equipped itself with two full-field digital mammography machines in 2003. This technology was more expensive than prior machines, but also more effective at detecting breast cancer. Unfortunately, the Régie de l’assurance maladie du Québec, the province’s public health insurer, only reimbursed the cost of treatment with the old technology, and it was illegal to recoup the difference by requiring a financial contribution from patients.

What’s a specialized clinic to do? Charge extra fees and be accused of “abusing” its clientele? Unsurprisingly, this kind of constraint has the effect of strongly discouraging any initiative aimed at innovating or acquiring new equipment, even though this would likely lead to better health results and lower prices in the long run, as it has in the laser eye surgery market.

Even if regulations were tightened and the government stepped up enforcement, the root problem of access to family doctors (not to mention access to diagnostic tests, emergency room care, and operating blocks) would remain. Instead of always adding a new layer of regulation to deal with the negative consequences of previous layers, why not peel back some of that inefficient, bureaucratic, centralized control?

In less heavily regulated parts of the economy, the kinds of problems facing the health care system would be perceived as opportunities by entrepreneurs. Why not loosen the regulatory constraints that predictably lead to shortages, and give health-care entrepreneurs the freedom to figure out how best to supply demand? We can count on market competition to keep prices from becoming “abusive,” as it has everywhere and every time it has been tried.

Yanick Labrie est économiste à l’Institut économique de Montréal. Il signe ce texte à titre personnel.