Comparison of the healthcare systems in Canada and the United States

Canada and the US had similar healthcare systems in the early 1960s,[1] but now have a different mix of funding mechanisms. Canada's universal single-payer healthcare system covers about 70% of expenditures, and the Canada Health Act requires that all insured persons be fully insured, without co-payments or user fees, for all medically necessary hospital and physician care. About 91% of hospital expenditures and 99% of total physician services are financed by the public sector.[13] In the United States, with its mixed public-private system, 16% or 45 million American residents are uninsured at any one time.[14] The U.S. is one of two OECD countries not to have some form of universal health coverage, the other being Turkey. Mexico established a universal healthcare program by November 2008.[15]

The governments of both nations are closely involved in healthcare. The central structural difference between the two is in health insurance. In Canada, the federal government is committed to providing funding support to its provincial governments for healthcare expenditures as long as the province in question abides by accessibility guarantees as set out in the Canada Health Act, which explicitly prohibits billing end users for procedures that are covered by Medicare. While some label Canada's system as "socialized medicine", health economists do not use that term. Unlike systems with public delivery, such as the UK, the Canadian system provides public coverage for a combination of public and private delivery. Princeton University health economist Uwe E. Reinhardt says that single-payer systems are not "socialized medicine" but "social insurance" systems, since providers (such as doctors) are largely in the private sector.[16] Similarly, Canadian hospitals are controlled by private boards or regional health authorities, rather than being part of government. [17]

In the US, direct government funding of health care is limited to Medicare, Medicaid, and the State Children's Health Insurance Program (SCHIP), which cover eligible senior citizens, the very poor, disabled persons, and children. The federal government also runs the Veterans Administration, which provides care directly to retired or disabled veterans, their families, and survivors through medical centers and clinics.[18]

The U.S. government also runs the Military Health System. In fiscal year 2007, the MHS had a total budget of $39.4 billion and served approximately 9.1 million beneficiaries, including active-duty personnel and their families, and retirees and their families. The MHS includes 133,000 personnel, 86,000 military and 47,000 civilian, working at more than 1,000 locations worldwide, including 70 inpatient facilities and 1,085 medical, dental, and veterans' clinics.[19]

One study estimates that about 25 percent of the uninsured in the U.S. are eligible for these programs but remain unenrolled; however, extending coverage to all who are eligible remains a fiscal and political challenge.[20]

For everyone else, health insurance must be paid for privately. Some 59% of U.S. residents have access to health care insurance through employers, although this figure is decreasing, and coverages as well as workers' expected contributions vary widely.[21] Those whose employers do not offer health insurance, as well as those who are self-employed or unemployed, must purchase it on their own. Nearly 27 million of the 45 million uninsured U.S. residents worked at least part-time in 2007, and more than a third were in households that earned $50,000 or more per year.[21]

Despite the greater role of private business in the US, federal and state agencies are increasingly involved, paying about 45% of the $2.2 trillion the nation spent on medical care in 2004.[22] The U.S. government spends more on healthcare than on Social Security and national defense combined, according to the Brookings Institution.[23]

Beyond its direct spending, the US government is also highly involved in healthcare through regulation and legislation. For example, the Health Maintenance Organization Act of 1973 provided grants and loans to subsidize Health Maintenance Organizations and contained provisions to stimulate their popularity. HMOs had been declining before the law; by 2002 there were 500 such plans enrolling 76 million people.[24]

The Canadian system has been 69–75% publicly funded,[25] though most services are delivered by private providers, including physicians (although they may derive their revenue primarily from government billings). Although some doctors work on a purely fee-for-service basis (usually family physicians), some family physicians and most specialists are paid through a combination of fee-for-service and fixed contracts with hospitals or health service management organizations.

Canada's universal health plans do not cover certain services. Non-cosmetic dental care is covered for children up to age 14 in some provinces. Outpatient prescription drugs are not required to be covered, but some provinces have drug cost programs that cover most drug costs for certain populations. In every province, seniors receiving the Guaranteed Income Supplement have significant additional coverage; some provinces expand forms of drug coverage to all seniors,[26] low-income families,[27] those on social assistance,[28] or those with certain medical conditions.[29] Some provinces cover all drug prescriptions over a certain portion of a family's income.[30] Drug prices are also regulated, so brand-name prescription drugs are often significantly cheaper than in the U.S.[31] Optometry is covered in some provinces and is sometimes covered only for children under a certain age.[32] Visits to non-physician specialists may require an additional fee. Also, some procedures are only covered under certain circumstances. For example, circumcision is not covered, and a fee is usually charged when a parent requests the procedure; however, if an infection or medical necessity arises, the procedure would be covered.

According to Dr. Albert Schumacher, former president of the Canadian Medical Association, an estimated 75 percent of Canadian healthcare services are delivered privately, but funded publicly.

Frontline practitioners whether they're GPs or specialists by and large are not salaried. They're small hardware stores. Same thing with labs and radiology clinics ... The situation we are seeing now are more services around not being funded publicly but people having to pay for them, or their insurance companies. We have sort of a passive privatization.[33]

Some of the extra money spent in the United States goes to physicians, nurses, and other medical professionals. According to health data collected by the OECD, average income for physicians in the United States in 1996 was nearly twice that for physicians in Canada.[89] In 2012, the gross average salary for doctors in Canada was CDN$328,000. Out of the gross amount, doctors pay for taxes, rent, staff salaries and equipment.[90] In Canada, less than half of doctors are specialists whereas more than 70% of doctors are specialists in the U.S.[91]

Canada has fewer doctors per capita than the United States. In the U.S, there were 2.4 doctors per 1,000 people in 2005; in Canada, there were 2.2.[92] Some doctors leave Canada to pursue career goals or higher pay in the U.S., though significant numbers of physicians from countries such as China, India, Pakistan and South Africa immigrate to practice in Canada. Many Canadian physicians and new medical graduates also go to the U.S. for post-graduate training in medical residencies. As it is a much larger market, new and cutting-edge sub-specialties are more widely available in the U.S. as opposed to Canada. However, statistics published in 2005 by the Canadian Institute for Health Information (CIHI), show that, for the first time since 1969 (the period for which data are available), more physicians returned to Canada than moved abroad.[93]

Both Canada and the United States have limited programs to provide prescription drugs to the needy. In the U.S., the introduction of Medicare Part D has extended partial coverage for pharmaceuticals to Medicare beneficiaries. In Canada all drugs given in hospitals fall under Medicare, but other prescriptions do not. The provinces all have some programs to help the poor and seniors have access to drugs, but while there have been calls to create one, no national program exists.[94] About two thirds of Canadians have private prescription drug coverage, mostly through their employers.[95] In both countries, there is a significant population not fully covered by these programs. A 2005 study found that 20% of Canada's and 40% of America's sicker adults did not fill a prescription because of cost.[96]

Furthermore, the 2010 Commonwealth Fund International Health Policy Survey indicates that 4% of Canadians indicated that they did not visit a doctor because of cost compared with 22% of Americans. Additionally, 21% of Americans have said that they did not fill a prescription for medicine or have skipped doses due to cost. That is compared with 10% of Canadians.

One of the most important differences between the two countries is the much higher cost of drugs in the United States. In the U.S., $728 per capita is spent each year on drugs, while in Canada it is $509.[95] At the same time, consumption is higher in Canada, with about 12 prescriptions being filled per person each year in Canada and 10.6 in the United States.[97] The main difference is that patented drug prices in Canada average between 35% and 45% lower than in the United States, though generic prices are higher.[98] The price differential for brand-name drugs between the two countries has led Americans to purchase upward of $1 billion US in drugs per year from Canadian pharmacies.[99]

There are several reasons for the disparity. The Canadian system takes advantage of centralized buying by the provincial governments that have more market heft and buy in bulk, lowering prices. By contrast, the U.S. has explicit laws that prohibit Medicare or Medicaid from negotiating drug prices. In addition, price negotiations by Canadian health insurers are based on evaluations of the clinical effectiveness of prescription drugs,[100] allowing the relative prices of therapeutically similar drugs to be considered in context. The Canadian Patented Medicine Prices Review Board also has the authority to set a fair and reasonable price on patented products, either comparing it to similar drugs already on the market, or by taking the average price in seven developed nations.[101][102] Prices are also lowered through more limited patent protection in Canada. In the U.S., a drug patent may be extended five years to make up for time lost in development.[103] Some generic drugs are thus available on Canadian shelves sooner.[104]

The pharmaceutical industry is important in both countries, though both are net importers of drugs. Both countries spend about the same amount of their GDP on pharmaceutical research, about 0.1% annually[105]

The United States spends more on technology than Canada. In a 2004 study on medical imaging in Canada,[106] it was found that Canada had 4.6 MRI scanners per million population while the U.S. had 19.5 per million. Canada's 10.3 CT scanners per million also ranked behind the U.S., which had 29.5 per million.[107] The study did not attempt to assess whether the difference in the number of MRI and CT scanners had any effect on the medical outcomes or were a result of overcapacity but did observe that MRI scanners are used more intensively in Canada than either the U.S. or Great Britain.[108] This disparity in the availability of technology, some believe, results in longer wait times. In 1984 wait times of up to 22 months for an MRI were alleged in Saskatchewan.[109] However, according to more recent official statistics (2007), all emergency patients receive MRIs within 24 hours, those classified as urgent receive them in under 3 weeks and the maximum elective wait time is 19 weeks in Regina and 26 weeks in Saskatoon, the province's two largest metropolitan areas.[110]

According to the Health Council of Canada's 2010 report "Decisions, Decisions: Family doctors as gatekeepers to prescription drugs and diagnostic imaging in Canada", the Canadian federal government invested $3 billion over 5 years (2000–2005) in relation to diagnostic imaging and agreed to invest a further $2 billion to reduce wait times. These investments led to an increase in the number of scanners across Canada as well as the number of exams being performed. The number of CT scanners increased from 198 to 465 and MRI scanners increased from 19 to 266 (more than tenfold) between 1990 and 2009. Similarly, the number of CT exams increased by 58% and MRI exams increased by 100% between 2003 and 2009. In comparison to other OECD countries, including the US, Canada's rates of MRI and CT exams falls somewhere in the middle. Nevertheless, the Canadian Association of Radiologists claims that as many as 30% of diagnostic imaging scans are inappropriate and contribute no useful information.[111]

The extra cost of malpractice lawsuits is a proportion of health spending in both the U.S. (1.7% in 2002)[112] and Canada (0.27% in 2001 or $237 million). In Canada the total cost of settlements, legal fees, and insurance comes to $4 per person each year,[113] but in the United States it is over $16. Average payouts to American plaintiffs were $265,103, while payouts to Canadian plaintiffs were somewhat higher, averaging $309,417.[114] However, malpractice suits are far more common in the U.S., with 350% more suits filed each year per person.[113] While malpractice costs are significantly higher in the U.S., they constitute a small proportion of total medical spending. The total cost of defending and settling malpractice lawsuits in the U.S. in 2004 was over $28 billion.[115] Critics say that defensive medicine consumes up to 9% of American healthcare expenses.,[116][117] but CBO studies suggest that it is much smaller.[113]

There are a number of ancillary costs that are higher in the U.S. Administrative costs are significantly higher in the U.S.; government mandates on record keeping and the diversity of insurers, plans and administrative layers involved in every transaction result in greater administrative effort. One recent study comparing administrative costs in the two countries found that these costs in the U.S. are roughly double what they are in Canada.[118] Another ancillary cost is marketing, both by insurance companies and health care providers. These costs are higher in the U.S., contributing to higher overall costs in that nation.

Numerous studies have attempted to compare the rates of cancer incidence and mortality in Canada and the U.S., with varying results. Doctors who study cancer epidemiology warn that the diagnosis of cancer is subjective, and the reported incidence of a cancer will rise if screening is more aggressive, even if the real cancer incidence is the same. Statistics from different sources may not be compatible if they were collected in different ways. The proper interpretation of cancer statistics has been an important issue for many years.[134] Dr. Barry Kramer of the National Institutes of Health points to the fact that cancer incidence rose sharply over the past few decades as screening became more common. He attributes the rise to increased detection of benign early stage cancers that pose little risk of metastasizing.[135] Furthermore, though patients who were treated for these benign cancers were at little risk, they often have trouble finding health insurance after the fact.

Cancer survival time increases with later years of diagnosis, because cancer treatment improves, so cancer survival statistics can only be compared for cohorts in the same diagnosis year. For example, as doctors in British Columbia adopted new treatments, survival time for patients with metastatic breast cancer increased from 438 days for those diagnosed in 1991–1992, to 667 days for those diagnosed in 1999–2001.[136]

An assessment by Health Canada found that cancer mortality rates are almost identical in the two countries.[137] Another international comparison by the National Cancer Institute of Canada indicated that incidence rates for most, but not all, cancers were higher in the U.S. than in Canada during the period studied (1993–1997). Incidence rates for certain types, such as colorectal and stomach cancer, were actually higher in Canada than in the U.S.[138] In 2004, researchers published a study comparing health outcomes in the Anglo countries. Their analysis indicates that Canada has greater survival rates for both colorectal cancer and childhood leukemia, while the United States has greater survival rates for Non-Hodgkin's lymphoma as well as breast and cervical cancer.[123]

A study based on data from 1978 through 1986 found very similar survival rates in both the United States and in Canada.[139] However, a study based on data from 1993 through 1997 found lower cancer survival rates among Canadians than among Americans.[140]

A few comparative studies have found that cancer survival rates vary more widely among different populations in the U.S. than they do in Canada. Mackillop and colleagues compared cancer survival rates in Ontario and the U.S. They found that cancer survival was more strongly correlated with socio-economic class in the U.S. than in Ontario. Furthermore, they found that the American survival advantage in the four highest quintiles was statistically significant. They strongly suspected that the difference due to prostate cancer was a result of greater detection of asymptomatic cases in the U.S. Their data indicates that neglecting the prostate cancer data reduces the American advantage in the four highest quintiles and gives Canada a statistically significant advantage in the lowest quintile. Similarly, they believe differences in screening mammography may explain part of the American advantage in breast cancer. Exclusion of breast and prostate cancer data results in very similar survival rates for both countries.[141]

Hsing et al. found that prostate cancer mortality incidence rate ratios were lower among U.S. whites than among any of the nationalities included in their study, including Canadians. U.S. African Americans in the study had lower rates than any group except for Canadians and U.S. whites.[142] Echoing the concerns of Dr. Kramer and Professor Mackillop, Hsing later wrote that reported prostate cancer incidence depends on screening. Among whites in the U.S., the death rate for prostate cancer remained constant, even though the incidence increased, so the additional reported prostate cancers did not represent an increase in real prostate cancers, said Hsing. Similarly, the death rates from prostate cancer in the U.S. increased during the 1980s and peaked in early 1990. This is at least partially due to "attribution bias" on death certificates, where doctors are more likely to ascribe a death to prostate cancer than to other diseases that affected the patient, because of greater awareness of prostate cancer or other reasons.[143]

Because health status is "considerably affected" by socioeconomic and demographic characteristics, such as level of education and income, "the value of comparisons in isolating the impact of the healthcare system on outcomes is limited," according to health care analysts.[144] Experts say that the incidence and mortality rates of cancer cannot be combined to calculate survival from cancer.[145] Nevertheless, researchers have used the ratio of mortality to incidence rates as one measure of the effectiveness of healthcare.[10] Data for both studies was collected from registries that are members of the North American Association of Central Cancer Registries, an organization dedicated to developing and promoting uniform data standards for cancer registration in North America.[146]

The U.S. and Canada differ substantially in their demographics, and these differences may contribute to differences in health outcomes between the two nations.[147] Although both countries have white majorities, Canada has a proportionately larger immigrant minority population.[148] Furthermore, the relative size of different ethnic and racial groups vary widely in each country. Hispanics and peoples of African descent constitute a much larger proportion of the U.S. population. Non-Hispanic North American aboriginal peoples constitute a much larger proportion of the Canadian population. Canada also has a proportionally larger South Asian and East Asian population. Also, the proportion of each population that is immigrant is higher in Canada.

A study comparing aboriginal mortality rates in Canada, the U.S. and New Zealand found that aboriginals in all three countries had greater mortality rates and shorter life expectancies than the white majorities.[149] That study also found that aboriginals in Canada had both shorter life expectancies and greater infant mortality rates than aboriginals in the United States and New Zealand. The health outcome differences between aboriginals and whites in Canada was also larger than in the United States.

Though few studies have been published concerning the health of Black Canadians, health disparities between whites and African Americans in the U.S. have received intense scrutiny.[150] African Americans in the U.S. have significantly greater rates of cancer incidence and mortality. Drs. Singh and Yu found that neonatal and postnatal mortality rates for American African Americans are more than double the non-Hispanic white rate.[147] This difference persisted even after controlling for household income and was greatest in the highest income quintile. A Canadian study also found differences in neonatal mortality between different racial and ethnic groups.[151] Although Canadians of African descent had a greater mortality rate than whites in that study, the rate was somewhat less than double the white rate.

The racially heterogeneous Hispanic population in the U.S. has also been the subject of several studies. Although members of this group are significantly more likely to live in poverty than are non-Hispanic whites, they often have disease rates that are comparable to or better than the non-Hispanic white majority. Hispanics have lower cancer incidence and mortality, lower infant mortality, and lower rates of neural tube defects.[147][152][153] Singh and Yu found that infant mortality among Hispanic sub-groups varied with the racial composition of that group. The mostly white Cuban population had a neonatal mortality rate (NMR) nearly identical to that found in non-Hispanic whites and a postnatal mortality rate (PMR) that was somewhat lower. The largely Mestizo, Mexican, Central, and South American Hispanic populations had somewhat lower NMR and PMR. The Puerto Ricans who have a mix of white and African ancestry had higher NMR and PMR rates.

More imaginative solutions in both countries have come from the sub-national level.

In Canada, the right-wing and now defunct Reform Party and its successor, the Conservative Party of Canada considered increasing the role of the private sector in the Canadian system. Public backlash caused these plans to be abandoned, and the Conservative government that followed re-affirmed its commitment to universal public medicine.

In Canada, it was Alberta under the Conservative government that had experimented most with increasing the role of the private sector in healthcare. Measures included the introduction of private clinics allowed to bill patients for some of the cost of a procedure, as well as 'boutique' clinics offering tailored personal care for a fixed preliminary annual fee.

In the U.S., President Bill Clinton attempted a significant restructuring of health care, but the effort collapsed under political pressure against it despite tremendous public support.[158] The 2000 U.S. election saw prescription drugs become a central issue, although the system did not fundamentally change. In the 2004 U.S. election healthcare proved to be an important issue to some voters, though not a primary one. [159]

In 2006, Massachusetts adopted a plan that vastly reduced the number of uninsured making it the state with the lowest percentage of non-insured residents in the union. It requires everyone to buy insurance and subsidizes insurance costs for lower income people on a sliding scale. Some have claimed that the state's program is unaffordable, which the state itself says is "a commonly repeated myth".[160] In 2009, in a minor amendment, the plan did eliminate dental, hospice and skilled nursing care for certain categories of noncitizens covering 30,000 people (victims of human trafficking and domestic violence, applicants for asylum and refugees) who do pay taxes.[161][162]

In July 2009, Connecticut passed into law a plan called SustiNet, with the goal of achieving health care coverage of 98% of its residents by 2014.[163]

US President Donald Trump has declared his intent to repeal the Affordable Care Act, but has failed to do so, thus far.[164][165]

The Canada Health Act of 1984 "does not directly bar private delivery or private insurance for publicly insured services," but provides financial disincentives for doing so. "Although there are laws prohibiting or curtailing private health care in some provinces, they can be changed," according to a report in the New England Journal of Medicine.[166] Governments attempt to control health care costs by being the sole purchasers and thus they do not allow private patients to bid up prices. Those with non-emergency illnesses such as cancer cannot pay out of pocket for time-sensitive surgeries and must wait their turn on waiting lists. According to the Canadian Supreme Court in its 2005 ruling in Chaoulli v. Quebec, waiting list delays "increase the patient's risk of mortality or the risk that his or her injuries will become irreparable."[167] The ruling found that a Quebec provincial ban on private health insurance was unlawful, because it was contrary to Quebec's own legislative act, the 1975 Charter of Human Rights and Freedoms.[168][169]

In the United States, Congress has enacted laws to promote consumer-driven healthcare with health savings accounts (HSAs), which were created by the Medicare bill signed by President George W. Bush on December 8, 2003. HSAs are designed to provide tax incentives for individuals to save for future qualified medical and retiree health expenses. Money placed in such accounts is tax-free. To qualify for HSAs, individuals must carry a high-deductible health plan (HDHP). The higher deductible shifts some of the financial responsibility for health care from insurance providers to the consumer. This shift towards a market-based system with greater individual responsibility increased the differences between the US and Canadian systems.

Some economists who have studied proposals for universal healthcare worry that the consumer driven healthcare movement will reduce the social redistributive effects of insurance that pools high-risk and low-risk people together. This concern was one of the driving factors behind a provision of the Patient Protection and Affordable Care Act, informally known as Obamacare, which limited the types of purchases which could be made with HSA funds. For example, as of January 1, 2011, these funds can no longer be used to buy over-the-counter drugs without a medical prescription.[170]