PUBLIC FINANCING WITH NO PARALLEL PRIVATE FINANCE
The vast majority of countries with universal publicly financed systems of health care insurance allow a parallel private insurance sector in which individuals can purchase private insurance for publicly insured services. The benefits of such insurance to its beneficiaries may include a wider range of treatment choices, the ability to jump a public queue, and so forth. Advocates also argue that such private insurance helps improve access to the public sector by lessening the demands placed on it. Is there an ethical rationale, however, for going beyond the provision of universal public finance by prohibiting such parallel private insurance, as is done in Canada for medically necessary physician and hospital services?
Restricting private insurance this way might follow directly from certain ethical approaches that demand equal access to health care or equal maximum possible consumption of health care by all members of society (for example, perhaps some solidarity-based approaches). It would not, however, follow directly from any of the three ethical frameworks considered in this paper or many other approaches framed within the four propositions identified above. But within a wide range of consequentialist approaches, such a restriction might derive indirectly from the operation of parallel systems of finance. That is, it is an empirical question whether a system of financing that prohibits private insurance for publicly insured services better advances the access and utilisation patterns ethically demanded. Evidence suggests that this is at least plausible.
Parallel systems of private finance can drain resources from the public system, erode public support for the public system, lead to longer waiting times in the public sector, and make it harder to provide all members with timely access to high quality services.36 Parallel private insurance is in general associated with an expansion of resources devoted to health care, though these additional resources are often used for services that generate smaller health gains (otherwise, they would have been given greater priority within the public system).
These dynamics imply that a parallel private insurance sector is not, as is commonly suggested, simply an add-on to a publicly financed system. Rather, complex interaction occurs that affects the viability of the publicly financed system, which leads to cross-subsidies (most often from public to private), and which may draw scarce resources into the health sector that are allocated in ways not consistent with the ethically justified patterns of access and utilisation.
Once again, this potential empirical justification is perhaps most tentative within a utilitarian framework, as the benefits of such a restriction on parallel private insurance must be weighed against its cost in the form of frustrated preferences among those who would prefer to purchase such insurance. The rationale is perhaps strongest within the extra-welfarist approach that calls for an equal distribution of health and which strongly de-emphasises utility effects in the valuation process. Given that on average it is those who are of low income and poor health status who are hurt most by the dynamics of parallel systems of finance, such a restriction may well also be supported within a Rawlsian framework.
