When Governments Offer Empty Health Care Promises, Black Markets Deliver the Goods

From the Third World to the First World, officials can’t exempt medicine from the laws of economics.

By J.D. Tuccille of Reason. Excerpts:

"When it comes to the triumph of state-provided everything, what could beat the example set by North Korea? What is officially the hardest of hard-core communist regimes remaining on the planet boasts that "All natural resources, main factories and enterprises, harbours, banks, transportation means and communication organizations are only owned by the state." When it comes to the provision of healthcare to the inhabitants of this socialist workers' paradise, "the state bears totally the expenses of medical checkups and treatment, bed and board in hospitals, medicines, and even travel costs to and from sanatoria."

When governments make economically improbable promises, the private sector is usually left to deliver what politicians can't. But the Democratic People's Republic of Korea officially has no independent entrepreneurs—they're forbidden by law. Despite that awkward hurdle, by 2008 "the average North Korean family drew some 80 percent of its income from the private economy," according to Andrei Lankov, author of The Real North Korea: Life and Politics in the Failed Stalinist Utopia.

The health care sector has been no exception. In a country where "the state bears totally the expenses" of diagnosis and treatment, the result has been as lousy as everything else North Korea's government provides. So the black market has stepped into to meet the demand for actual care. "Many doctors working in the black markets are retired from state hospitals, unable to make a living on measly wages. Some are without medical licenses and are usually self-taught Korean medicine doctors," reports Daily NK, an internationally well-regarded news source based in South Korea.

Diagnoses start at around the equivalent of $10, with the price of treatment varying as you'd expect. With the total collapse of the state system, even high party officials reportedly turn to black market providers.

Informal medical providers, like other black marketeers, may provide North Koreans with something more substantial than the state's empty promises, but they still face risks."

"For years, private medicine operated in something of a gray area in Canada, with provincial laws in place that made it difficult for providers and patients to negotiate payments for care outside of the state system. Even so, Dr. Brian Day opened the country's first private surgery clinic in 1995—and rose to become head of the Canadian Medical Association a bit over a decade later.

The legal barriers put in place to discourage private medicine were nothing compared to the shitty quality of care driving Canadians to hurdle those barriers. As the Supreme Court of Canada noted in the 2005 case, Chaoulli v. Quebec, "Access to a waiting list is not access to health care. As we noted above, there is unchallenged evidence that in some serious cases, patients die as a result of waiting lists for public health care."

That decision set aside only Quebec's ban on private health insurance, leaving other provincial barriers in place. But the same pressures that blew apart one province's restrictions drove an explosion in private health care elsewhere. "In British Columbia, private clinics and surgical centers are capitalizing on patients who might otherwise pay for faster treatment in the U.S.," the Los Angeles Times reported in 2009. "Private clinics continue explosive growth," the Canadian Medical Association Journal added two years later, noting that many "private clinics were openly violating" restrictions on billing private parties while contracted with government Medicare.

This year Quebec officials moved to legalize many of the fees that private providers were already charging. That makes sense, since those providers were delivering actual care when the state system could only offer "access to a waiting list.""