Canadians should recalibrate their resistance to private health care

We must ensure that health-related markets are free of unnecessary barriers that inflate costs

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Rightly or wrongly, the designers of Medicare decided that teeth, eyes, ears, and drugs did not fall within the definition of medical care. Some would expand the public system to cover more – or even all – of these things. But perhaps Canadians should recalibrate their resistance to the growing privatization of the entire medical system and instead focus on ensuring that health-related markets are free of unnecessary barriers that inflate costs. . We need more rational markets in the broader health space.

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In the recent past, new entrants have reshaped markets for the benefit of consumers. Warby Parker Inc., a direct seller of eyewear, has transformed the eyewear market since its inception in 2010. Previously, the eyewear industry was essentially a monopoly of European conglomerate EssilorLuxottica SA. Warby Parker started with a selection of five plastic frames for $95. Contact lenses also went direct to consumers a few years later, often with a subscription. Suddenly people had more options for their eyeballs and they haven’t looked back.

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It appears regulators have inadvertently locked down health-related markets with unnecessary complexity, suppressing the creation of more Warby Parkers. As a general rule, health regulations are to our advantage. But too often it creates and perpetuates barriers to entry. Of course, we want clear and strong regulation of drugs and devices. After that, ideally, we want light regulation that benefits consumers by allowing businesses to legitimately compete on price.

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The most recent example of this market blockage in Canada is that of hearing aids. The United States no longer requires a prescription or medical exam to purchase most devices, a simple policy change that advocates such as hearing aid pioneer Mead Killion began requiring 20 years ago. Yet Canadian authorities still support the barrier. Why?

Another industry in need of a shake-up is pharmaceuticals, especially as Canada contemplates a national pharmacare program. Pharmacare is ultimately about competition, because it asks us to intervene on prices. Yet the federal Liberals have three times opposed big pharma when it comes to lowering drug prices. In the United States, Mark Cuban Cost Plus Drugs Co. – an online start-up founded by billionaire Mark Cuban – has delivered huge savings to Americans. Are we over-regulating our market in favor of Big Pharma?

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In contrast, long-term care in Canada is largely unregulated, and we impose no requirements on facilities that want to call themselves long-term care facilities, which proves that better competition is not is not always synonymous with overregulation.

There is plenty of anecdotal evidence that tech companies have the potential to make healthcare markets more efficient with little or no risk to consumers beyond what already exists.

Invisalign from Align Technology Inc. and SmileDirectClub Inc. make cosmetic dental care more accessible. Maybe more braces should be 3D printed, like Lightforce Orthodontics Inc. is trying to do, and eye exams will be done by AI-powered telemedicine, like EyeCare Live Inc. is working on it. Perhaps we could further stimulate competition for general, genetic and naturopathic diagnostic tests conducted by LifeLabs Inc. We would certainly benefit from a better sharing economy for casts, crutches and wheelchairs, thus reducing the cost of health.

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Consider the experience, until recently, of Canadians who needed sleep tests for common conditions like apnea. A visit to a sleep lab, often located only in major cities and only making appointments after months of waiting, shut out many patients in rural areas. Worse still, the disruptive effect of sleeping wrapped in wires, in a strange bed, further disrupted these patients’ sleep and often made test results unreliable. Wearable technology has already made much of sleep measurement as good at home as it is in the lab, and the added diagnostic benefit of data from multiple nights is a real improvement. Regulation and reimbursement pathways have and still hinder the adoption of home testing technology in sleep medicine, blocking access to better health for millions of Canadians.

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These changes would not target billing rates for dentists, optometrists or ophthalmologists, but rather seek to significantly reduce the cost of physical products and associated overhead. Moreover, these interventions would not result from amendments to the Competition Act. Rather, they could be strategically targeted to facilitate healthier markets by tackling regulatory moats and managing regulatory risk for a range of medical needs that are typically paid for out of pocket. Things like medical testing and device rules and standards are regularly used by traditional businesses as barriers to competition and innovation. This actively harms consumers.

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Canada lacked a czar with a keen sense of market modernization. However, with a whole-of-government approach exemplified by President Biden’s executive order on competition, Canada could unlock health-related markets. We should focus on how regulatory capture in medical and health technologies, as well as in its administration and distribution, inhibits consumer benefits. The question is whether the nation is ready to take competition seriously.

Unfortunately, what we call “public policy” does not always reflect the public interest, because the development process is so often co-opted by corporate interests. Patents and various intellectual property protections create exclusivity, but also increase innovation. Direct-to-consumer technology companies in health and wellness aspire to resolve these tensions by cutting out the middleman and going directly to you and me with radically transparent pricing models. Perhaps it is time to rethink the regulatory environments that govern various health-related markets, to oust regulators and dethrone incumbents who have been propped up by political environments that allow them to arbitrarily raise prices and protect against vigorous competition.

There is room for private tech companies to cut costs – we just have to.



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