Local inequality and departures from publicly provided health care in Canada

This paper examines the relationship between changes in income inequality and the provision of resources in a health care system (the public-private mix). Specifically, we investigate whether increases in income inequality, as separate from overall income levels and growth, have changed the availability of both private clinics and privately financed physicians in a context where the dominant market player is the public system. Our findings provide reasonable evidence that increases in income inequality have led to substantial increases in both. We find that moving from median level of inequality across neighborhoods to the top 1% level of inequality increases the probably of a private clinic by 40% and the probability of having physicians who have opted out of the public system by 170%.