Economics and the mid-life crisis have much in common: Both dwell on foregone opportunities

C'est la vie; c'est la guerre; c'est la pomme de terre . . . . . . . . . . . . . email: jpalmer at uwo dot ca

. . . . . . . . . . .Richard Posner should be awarded the next Nobel Prize in Economics . . . . . . . . . . . .

Friday, June 10, 2005

Friggin' Activist Judges:
Canada's Supremes Can't Stop Meddling in Policy

Canadian Health Care. We got the right outcome, but I am far from convinced this was the right way to get it. To see the recent Canadian Supreme Court decision on health care in Quebec, click here.

Until Thursday, Canada had a single, all-encompassing health care system. It was stupid and inefficient. It specifically denied the people the opportunity to purchase a little bit more or a little bit less or lot more than that provided by the gubmnt. There was a view that this system would mean everyone would be equal and the rich wouldn't be able to buy more than the poor.

I am strongly opposed to this view for several reasons:
  1. It provides a good incentive for people to work harder and save more and plan for their futures if doing so means they will be able to afford better health care. Alternatively, not being allowed to purchase better health care dampens incentives. [Example: my wife says we should save more in case we need money for health care as we age; my reaction is there's no reason to do so if we won't be allowed to get more than the gubmnt offers anyway.]
  2. Time and again in other industries, we see that different pricing for different levels of service attracts more resources to the field. Allowing some people to pay more to buy more or better health care would not necessarily mean there would be less health care available for poor people. Rather, it would induce more doctors and nurses and other health professionals to stay in Canada and practice here.
  3. The result has been a shrinkage of resources available and an increase in the quantity demanded, relative to a partially private system --- and, at zero price, the only way to ration the shortage is via doctors' playing God and deciding who is where on what waiting list. For more on these arguments, see A Canadian Econoview, which is sure to have more on this topic soon, since he is specialist in health economics. [Update: Brian and I must have posted our articles at about the same time. He does, indeed, have a very thorough analysis of the economics involved, along with many valuable links. If you're interested in health economics, his piece is a must read.][Another Update: Alan Adamsom at Silly Little Country has written a nice piece on the decision (along with some intriguing questions about the CBC); so has Mike at London Fog.]

My concern is that this decision reflects a policy choice, and that is the type of decision that should be made in Parliament, by elected officials, not by judges. The rationale for their decision was

that the Quebec ban on private insurance for medically necessary services violates Quebec's charter of rights because care in the public system is so slow it endangers life and personal security.

So? There are many things that endanger life and personal security, such as crime. Does that mean the Supreme Court of Canada gets to decide how many scarce resources must be devoted to law enforcement in Canada? or to child safety? or to every single activity that involves even a scintilla of risk?

Of course not. And the Justices of the Supreme Court are uniquely unqualified to make the requisite cost-benefit decisions that must be made in deciding how many [and whose] scarce resources to devote to the various ways of reducing dangers to life and personal security. As strongly as I have disagreed with Canadian health care policy, I disagree even more with majority decision in this case. This is a matter for Parliament to decide, not the Supreme Court. It is a matter of policy, not a matter of legal interpretation. If Parliament gets it wrong, it is up to voters to elect people who will get it right.

Sadly, none of the major reporting on the decision recognizes this problem. There were ten articles about the decision in today's National Post. Not one mentions it. Nor do articles in the Globe & Mail or CBC. The Globe comes close, though:

However, in a blistering dissent, Mr. Justice Ian Binnie, Mr. Justice Louis LeBel and Mr. Justice Morris Fish derided the notion that a court can decide a time limit after which waiting lists for an MRI or a hip replacement are too long.

"It is to be hoped that we will know it when we see it," they said. "It will be very difficult for those designing and implementing a health plan to predict when judges will think its provisions cross the line from what is 'reasonable' into the forbidden territory of what is 'unreasonable.'

They said it is foolhardy for judges to attempt to resolve an issue that has been the subject of protracted debate in Quebec and across Canada through several provincial and federal elections.

Someone, somewhere, has to blow the whistle on this court. Their role is NOT to make policy.

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