The politics behind hospital expansions

Decisions about investments of the scale of an expanded PRH are not made on the basis of demand and return on investment

There is no doubt of public support for a hospital expansion in Penticton. Doctors and health care professionals have taken to the streets to demonstrate their belief that an expanded hospital is vital. There is little doubt a hospital expansion will result in increased economic activity, at least during the construction phase, and probably into the future.

Politicians have voiced their support for the project. Interior Health, initially enthusiastic about the investment, has gone quiet on the topic of late.

Supporters of the expansion are growing restless and are demanding answers; clearly of the view an expanded hospital is both required and critical.

In our taxpayer-funded health care system, decisions about investments of the scale of an expanded Penticton Regional Hospital are not made on the basis of demand and return on investment. Rather, in a system that mistakenly relies on rationing of resources to control costs, there is no rational economic signal bureaucrats can identify to make investment decisions.

In the private sector, the level of public support for the hospital expansion would encourage investors. Calculating the long-term return on the investment required to build or expand a facility is a fairly straightforward process. Private investment could be secured as individuals and financial institutions determined the risk of investment is worth the reward, and the facility would be completed in a timely manner, on budget. Penticton has seen examples such as the Superstore expansion.

The Canada Health Act and the army of unions, media and social engineers who believe health care is a “right”, and profit is evil, prevent rational investment decisions in any facet of health care. Whether capital investments like hospitals or MRI machines, or operating expenses like wages and benefits, no investment in Canadian health care is made on the basis of return on investment, quality of care or outcome or future requirements. Instead, each investment decision is made through the prism of political advantage and bureaucratic self-justification.

Hence, while there is probably a good business case for an expanded hospital in Penticton, it is as likely there is neither the political nor bureaucratic will to build it.

Canada’s health care system has become unworkable and uneconomic. Politicians of all stripes use the promise of “free” health care to buy votes. The majority of Canadians will complain about wait times, the lack of available doctors and shortages of drugs, treatments and hospitals. At the same time, many of these people use socialized health care as a way to define their “Canadianism”.

The hard facts are that the government cannot give anyone anything, without first confiscating it from someone else. In the case of health care, B.C. doctors, for instance, are not allowed to set their own prices for services rendered — the government has, in effect, confiscated from doctors the opportunity to make a better living. As a result, doctors are unlikely to set up shop in small towns, where the market for their services is so small there is not enough volume to justify a business. Doctor shortages are not the result of the economy, or even mean-spirited bureaucrats. The lack of doctors is entirely a consequence of a system that attempts to control costs by reducing services.

Our health-care system relies on limiting the supply of resources as a means of controlling costs. It takes a fair amount of willful ignorance to accept that reducing the supply of anything, in the face of rising demand, results in lower cost — but when it comes to health care, millions of Canadians do.

Ignorance of basic economics aside, when viewed through the lens of a bureaucratic, politically driven health-care system such as ours, a decision to postpone or abandon a hospital expansion makes as much sense as a decision to go ahead with the plan. Reason and logic has little to do with it.

Ironically, many of those demonstrating in favour of the hospital, including some of the doctors and health professionals, also support the very system of socialized health care that may prevent the expansion from taking place.

 

 

 

Mark Walker is the publisher of the Penticton Western News.

 

 

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