Canadian Health Care: The End of Innovation?

June 26, 2009— -- President Obama said that the government is going to "fix what is broken about health care in America." It sounds like a great idea, but often what sounds good has unintended consequences.

When the government takes over, many critics say that you may not get the care and breakthroughs you need to save your life.

Watch "20/20" TONIGHT at 10 pm E.T for more.

"The only way they can get costs down under a government-run system is to control the amount of money that is spent on health care," says Sally Pipes of the Pacific Research Institute, who was born in Canada, and is wary about government taking the reins of health care in the U.S.

"We are going to have denied care, lack of access to the latest technology, and long waiting lists, just like people do in Canada and Great Britain," she warns.

In those countries, the government pays for all health care, and bureaucrats put limits on spending in order to control costs. They determine how much doctors can be reimbursed and put caps on the amount of money that can be spent on treatments.

The result of all this cost-cutting? People wait for care.

In England, shortages of dentists have caused hundreds of people to wait in line just for an appointment. The queues can be so long that some people have resorted to pulling out their own rotting teeth, using vodka and pliers as tools. One British hospital even tried to save money by not changing bed sheets. Instead of washing them, a British newspaper reported that the staff was encouraged to simply turn the sheets over. At any given time in Great Britain, there are over half a million people waiting to get into a hospital for treatments.

But Obama has said he doesn't want a government takeover of health care.

"When you hear the naysayers claim that I'm trying to bring about government-run health care," he told the American Medical Association last week, "know this -- they're not telling the truth."

CLICK HERE to check out John Stossel's latest blog.

Public vs. Private Plans: Cost, Care, Competition

Canada and Great Britain have what's called a "single-payer" health care system: the government pays for everyone's health care using tax revenue. It's true that Obama says he doesn't want a health care system exactly like that.

Instead, he says he wants to set up a public insurance program run by the government that will compete alongside private insurance plans. However, critics warn that a plan like this won't allow private insurers to compete on a level playing field. They say the government will keep costs down for their public plan by setting payment rates for doctors below the market level, the same way that Medicare does now.

"What will happen in the long run is that private insurers will not be able to compete with the government on price," Pipes predicts, "so they will leave the market."

Critics like Pipes say that when the size and power of a government plan grow large enough, public insurers will crowd private insurers out of the health care market and American health care will become a de facto government-run system, like Canada or Great Britain.

"People line up for care. Some of them die. That's what happens," Dr. David Gratzer says of Canada's health care system.

Gratzer, a Canadian doctor, thought Canada's government health care system was great -- until he started treating patients.

"The more time I spent in the Canadian system, the more I came across people waiting for radiation therapy. Waiting for the knee replacement so they could finally walk up to the second floor of their house," he explained.

"You want to see your neurologist because of your stress headache? No problem! You just have to wait six months," he continued. "You want an MRI? No problem! Free as the air. You've just got to wait six months."

Many ER doctors in Canada agree that the system is broken. They say hospitals face a consistent shortage of bed space, and patients often have to wait.

While people in America also wait in emergency rooms, the wait is different in Canada. When patients go to the ER for treatment and are found to be sick enough to enter the hospital, they have to wait in the emergency room for an average of 19 hours before they can be given a hospital bed.

"We can't send these patients to other hospitals that have capacity because there is no other hospital in the area that has capacity," said Dr. Eric Letovsky, an ER doctor from Ontario. "Every other emergency department in the country is just as packed as we are."

Serious Drawbacks to Canadian Model

A national shortage of general practitioners in Canada means that 1.7 million Canadians don't have access to a regular doctor to go to for routine care.

The town of Norwood, Ontario, has only one family doctor available to serve the entire community. To ration the patient list, the town clerk holds a lottery once a month, drawing a few names out of a box that contains all of the people hoping to get on the doctor's patient list. She calls the lucky winners, but everyone else must continue to wait.

It's true that America's partly-private, profit-driven system is expensive and sometimes wasteful, but that pursuit of profit has allowed our health care system to offer rapid delivery, great doctors, and incredible lifesaving discoveries.

"This is the country of medical innovation. This is where people come when they need treatment," said Gratzer.

Thousands come from countries with government-run health care to take advantage of the advanced care in the United States. The famous Spanish tenor Jose Carreras didn't get treated for cancer in Spain -- he went to Seattle. King Hussein of Jordan came to America for treatment. So did Italian Prime Minister Silvio Berlusconi and South African Archbishop Desmond Tutu.

"Literally, we're surrounded by medical miracles. Death by cardiovascular disease has dropped by two-thirds in the last 50 years," said Gratzer. "You've got to pay a price for that type of advancement,"

The reality is that there are always trade-offs in life. Although government "universal coverage" promises great things like equal care and that no one need worry that an illness will bankrupt them, government control also means waiting in lines and sometimes going without care.

Innovations like birth control pills, cholesterol medication, robotic limbs, and many other things, would not have happened without the possibility of big profit, said Grace Marie Turner of the Galen Institute.

"I want companies to come up with cures for Parkinson's, cures for cancer, cures for Alzheimer's. Unless there is a reward for them to do that, we're not going to have those new medicines," she said.

Canada: Pets Fare Better Than Humans

Some of the best, most innovative treatments and most rapidly-delivered care happens through this pursuit of profit. Even in Canada, you'll find one area where they offer easy access to cutting edge technology.

CT scans and MRIs, hip and knee replacements: available 24 hours a day and without a wait.

"If I see a patient that's torn a cruciate ligament in that patient's knee, we can generally have the patient scheduled for within probably a week," said Canadian Dr. Terri Schiller.

But you have to bark or meow to get that kind of treatment. Schiller is a veterinarian and her practice makes a profit treating cats and dogs.

Want a CT scan in Canada? Private veterinary clinics said they can get a dog in the next day. For people, the waiting list is a month.

"Many clients will come here with their pets and as they're leaving, it's, 'Next time, I get sick, I want to come here. I don't want to go to the regular hospitals,'" said Schiller.