The Costs of ‘Free’ Healthcare

The Costs of ‘Free’ Healthcare

By Dr. Julie Ponesse

Canada’s healthcare system is deeply broken. Excess capacity in emergency rooms has become the rule rather than the exception, wait times for surgeries and specialist appointments are ever-increasing, medical staff are burnt out, and more than 20% of Canadians don’t even have a family doctor. Perhaps most significantly, the patient-physician relationship is crumbling in the face of government mandates and conflicts of interest. The quality of medicine in Canada has declined so much over the last few years that it hardly seems apt to use the word “care” to describe what is currently happening in hospitals and doctors' offices across the country.

If the health care crisis is to be meaningfully addressed, we need to first have an honest and transparent discussion about the funding model on which it rests. As we approach the 40th anniversary of Medicare’s universal adoption under the Canada Health Act of 1984, alternative funding models are emerging, including various forms of privatized medicine. Earlier this year, for example, the Ontario provincial government passed a bill allowing for-profit clinics to offer certain surgeries and imaging procedures in an attempt to unburden the clogged public system.

This bill was met with predictable opposition because it clashed with what for many Canadians is a deeply engrained ideological belief: that free, universal health care is a basic human right, and that being required to pay for access to healthcare is morally wrong. Many worry that privatization of any form represents a slippery slope towards denying medically necessary care to those unable to pay and privileging the elites of our country at the expense of the average person.

Healthcare funding models have long been the subject of intense debate in Canada. According to a recent survey, 39 per cent of Canadians are "public health purists," who are against any privatization, 28 per cent believe increased privatization is necessary, and 33 per cent are "curious, but hesitant" about the benefits of increased privatization.

It’s precisely the polarizing nature of this issue that makes it all the more important to ask the questions: Should health care always be free? If so, why?

No Solutions, Only Trade-offs

For most people, health is foundational to what makes life worth living. When we are ill, injured, or in pain, rewarding activities such as family life, work, and play can be transformed into occasions for emotional distress and social detachment. 

In this context, requiring people to pay for all of their health-related financial costs can be debilitating. In the United States, for example, medical fees for the uninsured are the leading cause of bankruptcy. This reality causes many Canadians to instinctively oppose the idea that there should be any compromises to “free” health care.

This instinctive reaction, however, falsely frames the issue as binary. Are we really forced to choose between the current, broken Canadian model and the American model that can have such extreme negative outcomes? Are we forever beholden to a Canadian system that was created in the 1950s and 1960s, and that is not well suited to the 21st century? Are we just now experiencing the unraveling of a system that was doomed to fail from the start? Might there be a third way that would address Canada’s current crisis without leading to the worst of the US system? 

It’s time for Canadians to face some difficult questions with regard to healthcare funding. Just because something is valuable, should it be free? Should we necessarily have unimpeded access to what is good? Does a free system give us more control over our healthcare, or less? What are the hidden costs inherent in ‘free’ care which are easy to overlook?

The Economist Thomas Sowell once said that “There are no solutions, only trade-offs; and you try to get the best trade-off you can get, that's all you can hope for.” As we stand at the precipice of what feels like a health care revolution, we need to take an honest look at the key facets of healthcare – such as quality, access, and cost – acknowledge the trade-offs we’re making in our present system, and determine which compromises we, as individuals and as a nation, are willing to accept.

Haven’t the Courts Already Ruled on Universal Health Care?

Some readers might have heard of a recent decision of the British Columbia Court of Appeal, which rejected a constitutional challenge to the ban on private funding, brought by Dr. Brian Day. Dr. Day, an orthopedic surgeon, argued that the health risks caused by delays resulting from the prohibition on private health care were so serious as to breach the rights of patients under “life, liberty and security of the person” provisions of the Canadian Charter of Rights and Freedoms. In July 2022, the Court ruled that the existing funding model does not contravene the Charter. In April 2023, the Supreme Court of Canada refused to hear an appeal from the Court’s decision.

Some people interpreted the Court’s judgment to mean that Canada cannot have a private pay system. But what the Court effectively ruled is that it is for our governments, not the courts, to design a properly functioning health care system. This was made clear in several of the statements of judges. For example, the Chief Justice of the Court wrote the following:

[14]   We are not examining what objectively would be the best, most efficient, or socially just means of delivering healthcare to British Columbians. That is beyond our mandate and our expertise and jurisdiction. What we say in this judgment does not address those questions. At most, we examine the findings of the judge and test those findings against the Charter. It is quite possible that public policy may be constitutionally compliant, yet also be flawed when analysed from other perspectives.

A separate concurring judgment said this:

[420]  For a court accustomed to protecting Charter rights of the parties who come before it, the conclusion we are compelled to reach is far from a satisfactory one. The record establishes that thousands of patients every year are waiting beyond medically acceptable wait times for care. Those thousands include many, perhaps even a majority, who could afford private insurance and private care if the impugned provisions did not effectively prevent a private system from emerging. Even without private insurance, many could and would choose to pay for basic surgeries for cataracts, hips, knee replacements, and for diagnostic tests. It is this broad range of British Columbians of relatively ordinary means who are being denied a remedy by the application of s. 1—the truly wealthy will simply cross the border to avail themselves of the private care available in the United States.

[421]  We reach the decision we do in this case, constrained by the record, and recognizing that the impugned provisions are upheld at the cost of real hardship and suffering to many for whom the public system is failing to provide timely necessary care.

In short, the courts are telling us that fixing our health care system is a fundamental societal question, not a legal question. Instead of leaving it to lawyers and judges to solve the problem, we need to roll up our sleeves and face some difficult questions in the democratic process. Yesterday’s “good answers” have to be re-examined in light of the conditions today. 

Is ‘Free’ Healthcare Really Free?

To begin an honest discussion, it’s important to clarify a few basic facts. 

First, the term "free health care" is a bit of a misnomer. Health care in Canada is not in fact free. It is funded through taxes, which are managed at the provincial and territorial level. There is always a question of how much tax a society can afford before the tax burden undermines the economy itself, especially when governments are spending tax dollars on other priorities. Elections are often won or lost over how high the tax burden will be and how much of the budget a government intends to spend on health care versus other priorities such as roads, schools, international aid, the military or the environment. There is always a limit on healthcare spending, and that limit is always less than what is needed.

Second, despite the rhetoric you might hear in some quarters, not all healthcare in Canada is “free” or tax-funded, even today. While most services (~70%) are publicly funded, there are a great many services for which patients already pay out of pocket (~30% of all health care costs). In Ontario, for example, OHIP covers services such as doctor visits, hospital stays, and diagnostic tests, but it does not cover healthcare essentials such as prescription drugs, dental services, doctor letters and many other incidentals. In short, even the federally and provincially funded “free” health care system has always limited the health care that is publicly funded.

Third, there are deep philosophical questions at play when a third party such as government is involved in the health care relationship between physician and patient. As the old saying goes, “he who pays the piper calls the tune.” As much as we might wish it otherwise, the state’s interests do not always align with our own. Government funding (or non-funding), coupled with a prohibition on any private option, can result in government policies that steer physicians in directions that they might not otherwise choose for optimum patient care, whether that be access to GP services, length of visits, waiting times, specialist services or choice of medication that a physician can prescribe for a patient’s condition.

A Cautionary Tale: Purdue Pharma and the Opioid Crisis

Among the most striking examples of how conflicts of interest can tarnish healthcare surrounds the opioid crisis, which, conservatively, has caused the deaths of half a million Americans since 1999. Purdue Pharma, the company that patented the prescription painkiller OxyContin, aggressively promoted the drug’s use for decades despite clear evidence of its potential for addiction and overdose. Court documents from a recent lawsuit revealed that Purdue spent over $200 million USD on advertising and sponsored 20,000 pain “education programs” in an effort to sway physicians to prescribe more opioids. Five years after its release, OxyContin had generated an annual revenue of more than $1 billion.

Shockingly, the head of the FDA, Curtis Wright, who was principally responsible for approving OxyContin (along with a label stating the drug was addictive in “less than 1% of cases” – a number that seems to have been generated out of thin air by Purdue’s marketing department) went on to work for Purdue a year after leaving the FDA. You’d be forgiven for assuming that this is a singularly egregious example of regulatory capture. But as of 2021, nine of the prior ten FDA commissioners had gone on to work for pharmaceutical companies. The revolving door between government regulatory bodies and the pharmaceutical industry is a grim reminder of the devastating consequences which can arise from conflicts of interest in the healthcare domain.

Conflicts of Interest in the COVID-19 era

The global response to the COVID-19 pandemic provides another clear example of the potential harms inherent in the congestion of healthcare systems with a bloated number of stakeholders. Specifically, medical professionals have found themselves caught between their fiduciary duties to their patients and mandates imposed upon them by their regulatory bodies.

In our current context, physicians are under clear directives to make patients conform to the COVID-19 response (including recommending, and refusing to give exemptions for, COVID-19 vaccines) by order of their colleges and Health Canada, and on pain of professional discipline or even the loss of their licenses. Multiple entities – the government, the regulatory colleges, and even pharmaceutical companies (who pocketed 100 billion dollars from government-mandated vaccines in 2022 alone) – stand between doctor and patient.

The fact that a physician could ever be forced to act more as an agent of the state than as a trusted consultant for a patient is emblematic of just how broken is our healthcare system.

The Erosion of Autonomy

Among the most precious things we lose in a ‘free,’ public healthcare system is autonomy. In a public health care system, a patient’s options regarding who to see for care and which treatments to pursue are very limited, more often dictated by policies and procedures than by individual patient needs or preferences.

It is often said that you get what you pay for. But it may be more accurate to say that you get what you pay for. Any one-size-fits-all approach to care will inevitably fail on principle because humans are by nature diverse and complicated beings, with different needs, values, beliefs, and life goals. It’s important not only that we receive the best health care according to some public-health algorithm but that we receive health care consistent with who we are, who we trust, and what we most deeply believe and value. 

Studies have shown that autonomy deeply affects quality of life: it increases engagement, productivity, and satisfaction in the workplace; it reduces emotional exhaustion and stress; and it increases our resistance to illness (e.g., heart disease, stroke, and various cancers) and prolongs life, generally. More than an ethical ‘nice-to-have,’ autonomy is intimately connected to our humanity and to our ability to control what matters most to what we are.

If a ‘free’ health care system means stripping patients of autonomy, and if this makes it harder to be happy, healthy, and free to flourish, wouldn’t that system be rather self-defeating in its aim of enhancing health?

Paradoxes of Consumer Behaviour

It is a strange quirk of psychology that many of the same Canadians who are repulsed by the very idea of privatized medicine are simultaneously willing to pay out of pocket for things that are not especially valuable (both in an objective sense and by their own measure). Many folks are quite willing to spend their hard-earned money on vacations, designer clothes, fancy coffees and, for some, daily Amazon deliveries. We expect 5-star service at our Air BnB’s, we demand that the barista prepares our coffee ‘just right’, and we are willing to pay a premium for it. Yet when it comes to our health, many are offended at the thought of paying a dollar out of pocket. Why is that?

Part of the reason we’re so willing to demand perfection in our frivolous purchases but prepared to accept mediocrity in our medical care is that the price of a service is not determined solely by its value. To some extent, the price of an item actually informs its value. This is why people given a placebo are twice as likely to have their pain disappear when they are told the pill was expensive. It’s also why the same mediocre wines are rated as tastier when brandished with a fancy label.

This is among the many paradoxes inherent in ‘free’ healthcare: the fact that it’s free increases the likelihood that the care will be perceived as poor, because patients have less ‘skin in the game.’

For this reason, some Healthcare Professionals such as Physiotherapists, Chiropractors, and Naturopaths (whose services aren’t covered by taxpayer dollars) only accept cash and opt not to direct bill private insurance companies. They do this to simplify the relationship between practitioner and patient, ensure that patients actively commit to their treatment plan, and maintain an incentive to provide excellent care.

The Bottom Line

While the idea of universal healthcare is noble in theory, it does not, by any measure, appear to be flourishing in practice. One of the first steps towards fixing our broken system is to acknowledge what is lost when health care is ‘free’ and, on that basis, advocate for change. It’s worth exploring innovative models of care that uphold our desire to maintain a social safety net for medically necessary services, while enhancing quality and elevating patient choice.

In the end, the cost of health care is about more than just dollars and cents – it's also about autonomy, perceived value, and the quality of care we receive. While it may be true that there are no perfect solutions in healthcare, we as individuals and as a nation must decide which trade-offs we’re willing to make, and which values we are most committed to defending.

Ultimately, the success of our healthcare system should not be measured merely in financial terms, but by its capacity to protect our autonomy, align with our values, and empower us in the decision-making process concerning our own health.

“Beware of Greeks bearing gifts” warns Virgil’s Aeneid. Unless doctors and other health care professional are willing to work for free, someone will always pay for health care. It’s just a question of who, how, and at what cost.



Himmelstein, D. U., Thorne, D., Warren, E., & Woolhandler, S. (2009). Medical bankruptcy in the United States, 2007: results of a national study. The American journal of medicine122(8), 741-746.

Canadian Institute for Health Information Prescribed drug spending in Canada, 2016: a focus on public drug program. 2016.

Duke University. (2008, March 5). You Get What You Pay For? Costly Placebo Works Better Than Cheap One. ScienceDaily. Retrieved July 3, 2023 from



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