Public Private Debate and CMAJ

A recent CMAJ editorial (13/09/05)[i] states, “We need to remember that there is virtually no disagreement that private health care is more expensive and less efficient than publicly funded care.”

Unfortunately, this statement is ideology, not fact, and is not supported by any serious survey of the economics literature. It puts us in mind of Artemis Ward’s dictum “It’s not the things that people don’t know that get them into trouble, it’s the things they know that aren’t actually so.” To quote Professor Brian Ferguson, a health economist at the University of Guelph.

The claim that for-profit hospitals are no more efficient or cost-effective than not-for-profits is used to argue against allowing private hospitals to operate in Canada. However, the literature shows that private hospitals, whether they are run on a for-profit or not-for-profit basis, are more efficient than government-run hospitals. And private not-for-profit or for-profit hospitals are about equally efficient.

The sub-text in the debate about profit making in the health care sector is that it’s wrong to earn profits from sick people. But the empirical evidence shows that not-for-profit hospitals behave in similar ways to for-profit hospitals under similar incentive structures. Not-for-profit hospitals are just as motivated to maximize gains as their profit-making counterparts.[ii]

Ferguson cites substantial peer reviewed literature to support his contention and suggests we examine when private delivery is superior and when public systems are best able to deliver health services.

The editors of CMAJ have, in common with many people in the health care debate in Canada, preferred to get their health care economics from medical journals. They should be wary of this, as should anyone being treated by a doctor who claims to have learned his or her medicine in economics journals.


Edwin Coffey, MD, Former President, Quebec Medical Association

Brian Lee Crowley, Ph.D., President, Atlantic Institute for Market Studies (

Peter Holle, MBA, President, Frontier Centre for Public Policy ( )

Michel Kelly-Gagnon, President, Institut économique de Montréal ( )

David Zitner, MD, Director of Medical Informatics, Dalhousie University Faculty of Medicine


[i] “Private Health Insurance: In One Door and Out the Other”, CMAJ • September 13, 2005; 173 (6).

[ii] Profits and the Hospital Sector: What Does the Literature Really Say?, Brian Ferguson, AIMS Health Reform Background Paper 1, November 2002. /site/media/aims/profits.pdf