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Canadians are effectively prohibited from buying private medical insurance or paying out-of-pocket for surgical and hospital services that are deemed “medically necessary.” As a result, there are no private, for-profit hospitals and only a few private surgical facilities in the country.

In Australia, on the other hand, almost half the population has private hospital insurance and there are programs in place to encourage them to do so. Private hospitals have been commonplace for decades, and patients with private coverage can even get more extensive and faster care in public facilities.

Vancouver’s Cambie Surgeries Corp., hoping to open the door to this sort of private option, is challenging the restrictions that exist in Canada in a closely watched constitutional case.

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Meanwhile in Australia, the private system is in a “death spiral,” and struggling to stay relevant, according to a new report by the Grattan Institute. Young people, in particular, are snubbing private insurance, feeling it doesn’t provide value for money.

So what can Canada and Australia – both of which have universal health programs called medicare – learn from each other about the public-private schism? First and foremost, that neither banning nor embracing private health insurance is a panacea.

Every health insurance program in the developed world, public and private, is struggling with a daunting triple challenge: An aging population, the soaring cost of new technologies and rising consumer expectations.

Health insurance programs rely on the healthy subsidizing the unhealthy, a tough sell in a me-first world. There are no fully public systems, because the state cannot afford to provide all care to all people all the time. Similarly, there are no countries with uniquely private insurance options, because a good chunk of the population would never be able to afford coverage.

Practically that means every health system has a mix of private and public coverage. Canada covers 72 per cent of health expenditures publicly, and Australia 67 per cent. (Even the United States covers 50 per cent of health care publicly.)

So, to ensure fair, equitable and affordable coverage there needs to be a combination of good regulation, thoughtful public policies and a recognition that there can be unintended consequences from either.

When Australia embraced a parallel system of private hospitals and private hospital insurance, it did so with the belief it would create more competition, greater efficiency and drive down costs.

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The Grattan Institute report, penned by Stephen Duckett (who headed Alberta Health Services almost a decade ago and was sacked after a bizarre incident dubbed cookiegate) says that private sector efficiency is a myth. Private hospitals keep patients longer, order more tests, prescribe more drugs and provide a lot of low-value or no-value care. They overtreat and overcharge to the tune of about 2-billion Australian dollars’ worth annually.

The private hospitals don’t have tougher cases. On the contrary, private hospitals generally do elective surgery while public hospitals provide emergency and more complex care. Physicians in private hospitals can charge on top of what is covered by medicare and a “greedy few" charge double the set rates.

Currently, 44 per cent of Australians have private insurance. The government provides subsidies for premiums of 6-billion Australian dollars a year. In addition to paying a medicare tax, people above an income threshold pay an additional levy if they don’t have private insurance. And if citizens don’t purchase insurance by the age of 31, they will pay higher premiums for life, a way to encourage young, healthy people to sign-on.

Yet, young Australians are eschewing private insurance in droves, frustrated at how little it covers, the user fees and the lack of clarity in billing.

One recommendation of the Grattan Institute report is that there be a single bill instead of the “present avalanche of separate and often surprising bills.”

Canada’s health insurance and health delivery systems are far from perfect. Our wait times are shamefully long, the care journey is painfully disjointed for many patients and cost transparency is non-existent.

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Our approach to public health insurance – covering 100 per cent of hospital and physician care – and varying and much smaller percentages of coverage for prescription drugs, home care, long-term care and dental care is also irrational.

Similar to Australia, we have cranked out more than our fair share of reports calling for change, chock-full of thoughtful recommendations that are not acted upon.

The message we should retain from Down Under is that private hospitals are not going to solve the woes of Canadian medicare, not any more than jettisoning private insurance will solve the problems of Australian medicare.

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