Three Cheers for the Fraser Institute!

At times, the Fraser Institute produces such helpful material.

I hope they make their well-heeled funders, such as the multi billionaire Koch brothers, proud. However, I’m sure the Kochs are more concerned missteps by their progeny Mitt and Ryan are derailing their chance to buy the US presidency.

So back to the Fraser Institute and to three of their recent reports.

1. As Canada (and other countries) have increased their level of “market freedom” as measured by the Fraser Institute’s flagship Economic Freedom of the World report (and other measures of market freedom and deregulation), our productivity growth has declined — as Andrew Sharpe and Don Drummond recently highlighted.

Of course the relationship between these and other economic factors is complex (it makes little sense to directly compare Switzerland and Ethiopia) but I couldn’t help but notice that a number of countries that in recent years climbed to the top ranks of their “economic freedom index”, such as Iceland, Ireland, UK, and the US, subsequently suffered most from the economic crisis (and then have dropped in their rankings as their economies have tanked).

2. As Andrew Jackson recently pointed out on this blog, Canadian provinces ranked at the bottom in their indices of labour market (de)regulation, but top in their index of labour market performance. Many states in their top rank of labour market deregulation (public sector employment as share of total, minimum wages, unionization) performed worst in terms of labour market performance and growth.

3. And just last week the Fraser Institute released its 2012 annual report on “The Price of Public Health Insurance“. According to the media reports and summary BS on the Fraser Institute website, this study supposedly demonstrates that Canada’s public health care system costs the average Canadian family over $11,000 a year through the taxes they pay. Some columnists have even suggested that the average Canadian family pays more for public health care than US families pay for their health care.

Of course, this is all completely false, as anyone who actually takes the time to read the seven page report and do some very basic on-line research can easily find.

The Fraser report actually says that Canada’s public health care system will implicitly cost an “average Canadian family” $7,670 a year in taxes this year.

This wasn’t enough for the Fraser Institute’s misinformation meisters, so they used a larger than average sized family with a higher than average income level (over $100,000) as their “average family” in their releases, no doubt confident that journalists wouldn’t read all the way to page 3 of their report to get this information.

In fact, as data from the OECD and Canadian Institute for Health Information show, not only does Canada spend far less on total public and private health care per person than the United States (in 2010, US$4,445 per person in Canada vs $8,233 in the US), but Canada also spends less per person than the U.S. on our public health care system, (US$3,158 per person in Canada vs $3,967 per person in the US) while providing coverage for everybody with better quality and outcomes, while the US system leaves 50 million people uninsured.

According to the Kaiser Family Foundation’s authoritative annual report on health benefit costs, just released in September, the average annual costs of employer health care premiums in the US is $15,745 for family coverage this year and $5,615 for single coverage.

The cost of family health care premiums has almost doubled in the US over the past decade, rising by 97% since 2002, while the Fraser Institute’s calculations of the implicit cost of public health care for the average Canadian family has increased by 59.8%.

While employees in the US directly pay for about a third of these private health care premiums, they pay far more when they get sick through annual deductibles, co-payments and “co-insurance” which a large majority of all US plans have.

For instance, the average family deductible is at least $1,000; co-payments for emergency room visits over $100 a visit, and average “coinsurance” rates close to 20%.

The cheapest medical insurance my cousin, who is a doctor at a family clinic in New Hampshire, could get for his three person family was ~$10,000 a year with an $8,000 deductible — and they are all in excellent health and physical shape. In effect it’s catastrophic health insurance. He’s fortunate and can deal directly with his family’s medical problems: most of course can’t.

No wonder the reason most people go bankrupt in the United States is because of medical problems, even among those with health insurance.

Much lower costs for employee health insurance premiums provides a major competitive advantage for Canadian firms compared to the US, which they should pay back through higher taxes– but which they don’t.

Despite the media reports, the Fraser report actually confirms that public health care is an excellent deal for most Canadian families, particularly for middle and low income families, as the CCPA’s report on Canada’s Quiet Bargain also demonstrated a few years ago.

Yes, it’s true that that higher income individuals and families may pay an implicitly higher amount for these public services through progressive taxes (when they pay them) but overall costs are much lower, so we all or at least 90% of us are much better off.

We could reduce the overall implicit costs of health care for families in Canada if we changed the tax system so businesses paid a higher share of tax revenues — but organizations such as the Fraser Institute continue to push hard in the opposite direction lobbying heavily for cuts to business taxes and shifting taxes onto households. Good work over there!

Yet another enlightening report from the Fraser Institute. (With adversaries like these….)

Sam Boshra at the Economic Justice blog also has some good comments on this report.

2 comments

  1. Why do we call health care health care? Isn’t is sick care? Why did we believe that health would improve and costs would go down when people quit smoking. Cancer rates have risen. Why do we believe that health care involves taking medications once the diagnosis is made. Medications that frequently must be taken until the end of one’s existence. Why do we believe that the fix for everything is spending more tax dollars. Why is it that the “best and brightest” can never find solutions. What if the system is designed to actually “not” work but to “painfully” hobble along. Unquestionably, “health care” is certainly an interesting industry. I doubt that it will be “cured” until we begin to dig a lot deeper into the reasons for ever increasing illness. Just my opinion, however, it seems that the more dollars spent, the more illness and ill health abound. Perhaps my observations are simplistic, but then again, scientific and financial data haven`t resolved the issues. How useful is scientific research when, at the end of day, most people are unable to afford the price of it`s promise. When I observe politicians woefully wringing their hands and seeming, ever so saddened by the costs, that end of the day is edging ever closer.

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