Can the Introduction of Private Dual Practice in Alberta Deliver Efficiency While Maintaining Universality?
Background
On November 24, 2025, Bill 11: Health Statutes Amendment Act (2025, No. 2) was introduced to the Legislative Assembly of Alberta. In line with the objectives in the mandate letter to the Ministry of Hospital and Surgical Health Services (Government of Alberta, 2025), the Act came into force on December 18, 2025. The Act aimed to serve as part of several service improvement initiatives to shorten surgical wait times, increase the number of patients treated, and deliver care to Albertans more efficiently. While efficiency and innovation are at the core of the Act, the approach raises critical concerns regarding universality and accessibility, which are core principles embedded in the Canada Health Act (1985). Universality requires that all residents have equal entitlement to medically necessary care, while accessibility mandates that care be provided without barriers, including financial ones (Canada Health Act, 1985, s. 7).
A recent Fraser Institute report (Esmail & Hill, 2025) argues Alberta’s high per‑capita spending but persistent long waits show that additional public spending cannot solve inefficiency, thus supporting selective privatization as a core tenet of economics in which the private sector works to maximize profits. Under certain conditions, via Adam Smith's Invisible Hand (Smith, 1776), this profit motive can allocate resources efficiently – maximizing what society gets out of a given set of inputs. However, apparent inefficiencies within the public sector may not actually be “inefficiencies” in the absence of a profit motive, but rather outcomes concerned with a different set of objectives, such as equitable access, which may better reflect societal values. This shift in focus brings social preferences to the forefront of the efficiency debate. In a publicly funded system, efficiency may not be assessed solely by increases in activity. Instead, efficiency must be evaluated in terms of whether it expands total capacity without weakening public access.
What “Efficiency” Means
Efficiency in health care evaluates whether limited resources are being deployed in a way that delivers the greatest possible benefit for their cost (Palmer & Torgerson, 1999). Therefore, efficiency in health care is perhaps best defined by the relationship between resource inputs, such as “labour, capital, and equipment”, and the health outcomes those inputs generate (Palmer & Torgerson, 1999, p. 1136). These outputs may be measured as intermediate indicators, such as the number of patients treated, wait times, or final health outcomes, including “lives saved, life years gained, or quality-adjusted life years (QALYs).” However, Palmer and Torgerson (1999) also warned that reliance on intermediate measures alone can lead to suboptimal policy recommendations if they fail to capture true improvement in health. This is a core issue with applying the same efficiency standards in public and private systems.
When evaluating Bill 11, the concern is whether the Bill creates new capacity or simply reallocates existing resources. If the number of physicians stay constant and physicians do not become more productive, then the private delivery only shifts physician time from the public system to the private space. Therefore, shorter wait times for privately paying patients would not reflect system efficiency, but rather redistribution of scarce resources. Nevertheless, Bill 11 could increase overall service volume if private delivery enables physicians to treat more patients or complete more procedures within the same amount of time. This leads to a question of whether the reform will involve both a redistribution of physician labour and some growth in total services provided. If productivity gains are large enough, the province’s efficiency argument becomes more plausible.
Since the Alberta government caps MD (Doctor of Medicine) program enrollment through the Ministry of Advanced Education, the domestic physician supply cannot expand without a deliberate policy change (Henry & Saini, 2025). Without increased enrollment, the private sector can only grow by attracting out-of-province doctors. To do so, it must offer higher pay than the public sector. This means paying more for the same services, which contradicts the efficiency argument. Physician supply is therefore central to the efficiency question. The private sector can only expand the system if it brings additional physicians, increases the productivity of existing physicians, and trains more future physicians. Drawing from the same pool of physicians currently serving the public system does not create or expand capacity; it simply shifts labour.
System Capacity
In short-run economics, a variable remains fixed, which constrains the ability of the system to further expand outputs in response to the new incentive of dual practice. In Alberta's health care system, the fixed inputs represent the workforce capacity, with specialized labour experiencing ongoing shortages – anesthesiologists being one example (Rusnell, 2025).
The Alberta government has acknowledged some of the potential infrastructural and incentive-based issues and proposed measures to manage them, such as regulating facilities and physician participation across the public and private sectors (Government of Alberta, 2026). Yet, these safeguards still draw from the same finite pool of workers. From a long‑term perspective, potential gains depend on whether Alberta can expand its total system capacity through new investments and workforce growth. As George Stigler argued, efficiency is not inherently tied to private ownership (Stigler, 1976) as was intended with Bill 11; it depends on the incentives and context that shape organizational behaviour.
In April 2025, the Alberta government announced its considerations in changing the funding model for acute care services from global budgets to activity-based funding (ABF) (Government of Alberta, n.d.). Organizations are paid for the services actually provided based on a pre-set fixed amount, transforming patients from being a cost, such as in lump-sum global budgets, to a source of revenue in ABF (Canadian Institute for Health Information, n.d.; Palmer et al., 2013). As indicated by the Canadian Institute for Health Information (n.d.), ABF enhances resource efficiency and increases transparency in health care spending. These theoretical benefits must be balanced against current workforce shortages and risks of care fragmentation through pilot programs to test implementation in the Albertan context.
Conclusion
With Albertans’ long-term health outcomes in mind, the government has prioritized efficiency in the context of financial feasibility by introducing dual systems to shorten wait time. However, it is also critical for the Alberta government to ensure that the competition it introduces to incentivise service providers does not become competitions between patients based on their ability to pay for medically necessary care that was meant to be guaranteed under the Canada Health Act.
Author: Alia Arafat, Jen Chao, and Vivian Su are current Master of Public Policy candidates at the University of Calgary’s School of Public Policy. Dr. G. Kent Fellows is an Associate Professor in the Department of Economics and the School of Public Policy at the University of Calgary.
References
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