COLUMN

Turning a profit from health and education

The government could make money by allowing the private sector to sell Canada’s hospital, school and university services to foreigners

DIANE FRANCIS August 7 1995
COLUMN

Turning a profit from health and education

The government could make money by allowing the private sector to sell Canada’s hospital, school and university services to foreigners

DIANE FRANCIS August 7 1995

Turning a profit from health and education

COLUMN

DIANE FRANCIS

The government could make money by allowing the private sector to sell Canada’s hospital, school and university services to foreigners

Canada’s health and education systems need improvements but, even so, they still represent an enormous competitive advantage over those in the United States. On average, Canada does a better job, at considerably lower prices, for its citizens than America does in those two vital areas. That represents an enormous advantage because healthy and educated workers are more productive workers. But it also presents an incredible opportunity to our governments at a time when they are hardpressed to meet health and education costs. The fact is that Canadian governments could subsidize, and even improve, the social-safety net by turning a large portion of it into a service “export” industry.

That could be accomplished if every surplus hospital, hospital bed, university, university place, high school or college were sold to foreigners. Governments could do it themselves but, better yet, they should license the excess capacity to the private sector and allow entrepreneurs to generate more valuable foreign currency by selling health and education services abroad.

Canadians are already selling some services, but only on a small scale. Many foreign students, mostly Chinese and other Asians, attend private Canadian secondary schools. Thousands more attend universities and pay higher tuition than Canadians students do, thus helping to defray the enormous subsidies granted to the Canadians.

But so far, selling such social services is virtually unexploited by governments. Educators have failed to tap the full potential and, in the area of health care, Ottawa and most provinces have just been impediments. Governments have preferred to simply cut services and close hospitals and schools, laying off teachers and nurses. And if nothing changes in the political mind-set, that will continue, given Canada’s debt and deficit mess. But there is no reason to lay off nurses or teachers if governments realize that

they can do what free enterprisers would do. A company that has outgrown a market or finds it unprofitable seeks new customers to keep its factory and workers busy. Similarly, Canada’s surplus health and education assets should be peddled to foreigners. That would keep the teachers and nurses working and turn financial drains into profit centres.

Current efforts to “sell” education to foreigners should be turned over to the private sector to get the best price. That is because university administrators are not expected to analyze costs in order to figure out prices. All they do is spend other peoples’ money. Nor are they actively marketing their services abroad or south of the border. For instance, the University of Toronto charges Canadian students around $3,000 in annual tuition, while foreign students pay roughly $10,000. Even that is seriously underpriced—equivalent universities in the United States charge twice as much.

So U of T or McGill or the University of British Columbia should hire intermediaries to sell their services. Those professionals could dramatically hike fees to foreigners, since the market could clearly bear higher tuition fees for our educational services. A

big appeal for Americans, for instance, is that Toronto, Montreal and Vancouver, among other Canadian centres, have a bigcity atmosphere and opportunities, without the crime and grime. Canada is also a foreign country to Americans, offering different culture, ideas and customs to broaden a student’s educational experience. Middleclass American parents would lap it up—if anyone told them about it. Instead, the few American foreign students who do attend schools in Canada probably do so only because of word of mouth or some family or academic ties here.

A far bigger cash opportunity lies in health care, but only if governments allow the private sector to develop a parallel medical system to sell services to Americans, whose medical costs are exorbitant. Canada already permits foreigners to come here for medical treatment, but only if they are hardship cases, know someone important here or need unique expertise in certain fields that we offer. U.S. Vice-President Al Gore, for instance, had his six-year-old son, Albert, treated at the renowned pediatric neurological unit of Toronto’s Hospital for Sick Children.

Parts of hospitals or entire facilities that are surplus to the needs of Canadians should be leased for rents or profit-sharing by governments to private-sector players such as Canadian health providers or even U.S. insurance companies or hospital chains. Americans could have their babies delivered or their cataracts removed in Canada at bargain prices. Famous American specialists like those at the Mayo Clinic could open up Canadian branches, making it unnecessary for Canadians to traipse down to the United States for unique or experimental treatments.

Any such system would have to meet Canadian standards, but the costs of regulation and inspection would be borne by the private-sector medical system, not by Canada’s taxpayers. Obviously, this would benefit taxpayers because such fees and rentals or profit-sharing partnerships would give governments more money to improve care for Canadians. I have little doubt that this system could turn into one of Canada’s biggest industries in no time, as American insurance companies, searching for ways out from under excessive medical costs, would ship thousands of policyholders north for cheaper treatment. That would benefit business outside the health sector, too, as many patients would be accompanied by relatives or friends who would stay in hotels, buy meals and perhaps even do some shopping during the patient’s recuperation.

I can see it all now: hospitals and clinics and entire universities, employing thousands of Canadian doctors, nurses, educators and others in order to provide Americans with health care and education at—by American standards—bargain-basement prices. It would be cross-border shopping in reverse for social services, and a lot more intelligent as a strategy than closing hospitals and schools, then building casinos in the hope of earning foreign currency.