Comparisons of Health Care Systems in the United States, Germany and Canada
Goran Ridic,1Suzanne Gleason,2 and Ognjen Ridic3
1Fall, Ilinois, USA
2ECON, Ilinois, USA
3Sarajevo International University, Sarajevo
Corresponding author: Goran Ridic, PhD. Fall, Ilinois, USA. E-mail: email@example.com
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Received 2012 Feb 12; Accepted 2012 Apr 15.
Copyright © 2012 AVICENA
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The purpose of this research paper is to compare health care systems in three highly advanced industrialized countries: The United States of America, Canada and Germany. The first part of the research paper will focus on the description of health care systems in the above-mentioned countries while the second part will analyze, evaluate and compare the three systems regarding equity and efficiency. Finally, an overview of recent changes and proposed future reforms in these countries will be provided as well. We start by providing a general description and comparison of the structure of health care systems in Canada, Germany and the United States.
Key words: health care systems, Canada, Germany, USA.
1. CANADA’S NHI – OVERVIEW, ORIGINS AND HISTORY
Canada has a national health insurance program NHI (a government run health insurance system covering the entire population for a well defined medical benefits package). Health insurance coverage is universal. General taxes finance NHI through a single payer system (only one third-party payer is responsible for paying health care providers for medical services). Consumer co-payments are negligible and physician choice is unlimited. Production of health care services is private; physicians receive payments on a negotiated fee for service and hospitals receive global budget payments (Method used by third party payers to control medical care costs by establishing total expenditure limits for medical services over a specified period of time).
Canada’s health care system is known as Medicare (the term should not be confused with the Medicare program for the elderly in the U.S.) Canada’s population is about 31 million people and the country is divided into 10 provinces and two territories. Most of the population lives within 100 miles of the United States border. From the American point of view, Canada provides a good comparison and contrast in terms of the structure of its health care systems. U.S. and Canada share a similar heritage in terms of language and culture; the two countries also share a long border and have similar economic institutions (Folland et al 542).
The origins of the current Canadian health care system can be traced back to the 1940’s when some provinces introduced compulsory health insurance. The Canadian health care system began to take on its current form when the province of Saskatchewan set up a hospitalization plan immediately after WWII. The rural, low–income province was plagued by shortages of both hospital beds and medical practitioners. The main feature of this plan was the creation of the regional system of hospitals: local hospitals for primary care, district hospitals for more complex cases, and base hospitals for the most difficult cases. In 1956, the federal parliament enacted the Hospital and Diagnostic Services Act laying the groundwork for a nationwide system of hospital insurance. By 1961 all ten provinces and the two territories had hospital insurance plans of their own with the federal government paying one half of the costs. By 1971 Canada had a national health insurance plan, providing coverage for both hospitalization and physician’ services. As recently as 1971, both the United States and Canada spent approximately 7,5 % of their GDP’s on health care. Since 1971 the health care system has moved in different directions. While Canada has had publicly funded national health insurance, the United States has relied largely on private financing and delivery. During this period, spending in the United States has grown much more rapidly despite large groups that either uninsured or minimally insured.
The provisions of the 1984 Canada Health Act define the health care delivery system as it currently operates. Under the Act, each provincial health plan is administered at the provincial level and provides comprehensive first dollar coverage of all medically necessary services. With minor exceptions, health coverage is available to all residents with no out of pocket charges. Most physicians are paid on a fee for service basis and enjoy a great deal of practice autonomy. Private health insurance for covered services is illegal. Most Canadians have supplemental private insurance for uncovered services, such as prescription drugs and dental services. As a result, virtually all physicians are forced to participate and each health plan effectively serves all residents in the province (Henderson 487).
Patients do not participate in the reimbursement process, and reimbursement exclusively takes place between the public insurer (the government) and the health care provider. The monetary exchange is practically non-existent between patient and health care provider. The ministry of health in each province is responsible for controlling medical costs. Cost control is attempted primarily through fixed global budgets and predetermined fees for physicians. Specifically, the operating budgets of hospitals are approved and funded entirely by the ministry in each province and an annual global budget is negotiated between the ministry and each individual hospital. Capital expenditures must also be approved by the ministry, which funds the bulk of the spending.
Physician fees are determined by periodic negotiations between the ministry and provincial medical associations (the Canadian version of the American Medical Association). With the passage of the Canada Health Act of 1984, the right to extra billing was removed in all provinces. Extra billing or balance billing refers to a situation in which the physician bills the patient some dollar amount above the predominated fee set by third party payer. For the profession as a whole, negotiated fee increases are implemented in steps, conditional on the rate of increase in the volume of services. If volume per physician arises faster than a predetermined percentage, subsequent fee increases are scaled down or eliminated to cap gross billings – the product of the fee and the volume of each service – at some predetermined target. The possible scaling down of fee increases is supposed to create an incentive for a more judicious use of resources. Physicians enjoy nearly complete autonomy in treating patients (e.g., there is no mandatory second opinion for surgery) because policy makers believe there is no need for intrusive types of controls given that the hospital global budgets and physician expenditure targets tend to curb unnecessary services (Santerre–Neun 38).
Many feel that it is inaccurate to characterize the Canadian system as “single – payer” because the provincial plans vary considerably. In spite of the differences it is fair to say that each provincial plan is a public – sector monopsony, serving as a single buyer of medical services within the province and holding down medical care prices below market rates. By U.S. standards, physicians’ incomes are on average low. In 1992 the average income of self employed physicians was $104,000 adjusted for purchasing power parity, about five times the average Canadian worker, but less than two thirds that of the typical U.S. physician.
The key element in the Canadian strategy to control overall spending is the regionalization of high – tech services. Government regulators make resource allocation decisions. This control extends to capital investment in hospitals, specialty mix of medical practitioners, location of recent medical graduates, and the diffusion of high tech diagnostic and surgical equipment. In 1997 Canada’s 53 MRIs meant one for every 572,000 citizens (contrast that figure to 2046 MRIs in the U.S., one for every 130,800 Americans). Access to open heart surgery and organ transplantation is also restricted.
That same year the 245 CT scanners in Canada meant one for every 123,500 citizens. The United States had 3667 CT scanners, one for every 73,000 Americans (Henderson 487).
Recent studies found Canadian deficits in several areas including angioplasty, cardiac catheterization and intensive care. Waiting lists for certain surgical and diagnostic procedures are common in Canada. Nationwide, the average wait for treatment is 13.3 weeks. The average waiting time in more than 80% of the procedures is one third longer than Canadian physicians consider clinically reasonable. If care required diagnostic imaging, waiting times are even longer. Canadians are sacrificing access to modern medical technology for first dollar coverage for primary care. Treatment delays are causing problems for certain vulnerable segments of the Canadian population, particularly the elderly who cannot get reasonable access to the medical care they demand, including hip replacement, cataract surgery and cardiovascular surgery.
Several lessons can be learned from the Canadian experience. When government provides a product “free” to consumers, inevitably demand escalates and spending increases. Products provided at zero price are treated as if they have zero resource cost. Resource allocation decisions become more inefficient over time and government is forced either to raise more revenue or curb services. A number of the provincial health plans are moving to reduce spending by dropping services from the approved list of the “medically necessary”. A second lesson from the Canadian experience is that everything has a cost. When care requires major diagnostic or surgical procedures, the “free” system must find some other mechanism to allocate scarce resources. The Canadian system delegates this authority to the government. Resource allocation is practiced, not through the price mechanism, but by setting limits on the investment in medical technology. Proponents will argue that using waiting lists as a rationing measure is reasonable and fair. Opponents find the lists unacceptable and an unwelcome encroachment on individual decision-making in the medical sector. Proponents of the single payer alternative must deal with the fact that Canadians face waiting lists for some medical services especially for high – tech specialty care. To avoid delays in treatment, many Canadians travel south to the United States for more advanced treatment.
Critics of the Canadian system must deal with the fact that most Canadians support their version of Medicare. The single most important defense of medical care delivery in Canada is that it works relatively well. Regardless of the problems faced by the system, critics must face the reality that the medical care system provides its residents with access to all “medically necessary hospital and physician services” at a fraction of the per capita cost of the U.S system (1).
2. GERMANY – SOCIALIZED MEDICINE–OVERVIEW, ORIGINS AND HISTORY
Germany’s health care system has its origins in the “mutual aid societies” created in the early 19th century. The German system of social benefits is based on the concept of social insurance as embodied in the principle of social solidarity. This principle is a firmly held belief that government is obliged to provide a wide range of social benefits to all citizens, including medical care, old age pensions, unemployment insurance, disability payments, maternity benefits and other forms of social welfare. When Otto von Bismarck became Germany’s first chancellor in 1871, hundreds of sickness insurance funds were already in operation. Bismarck saw the working class movement of that time as a threat. This concern led him to advocate the expansion of the existing sickness benefit societies to cover workers in all low wage occupations. In 1883, the Sickness Insurance Act was passed, representing the first social insurance program organized on a national level.
After WWII Germany was divided into two separate entities by the Allies. The German Democratic Republic (East Germany) was under the influence of the former Soviet Union and adapted the socialist form of government. The Federal Republic of Germany (West Germany) maintained its connections with the West and continued to utilize the pre–war economic system including the health care delivery system. East and West Germany were reunited in 1990 and since that time the former East Germany has been subjected to most West German laws including legislation relating to the medical insurance system. With the combined population of 82 million people, Germany is divided into 16 provinces (Laender), each with a great deal of independence in determining matters related to health care. Over the past 130 years the system has grown to the point where virtually all of the population is provided access to medical care. All individuals are required by law to have health insurance. Those earning less than $35,000 (1995) must join one of the sickness funds for their health care coverage (Henderson 495). Sickness funds are private, not – for – profit insurance companies that collect premiums from employees and employers. Those earning more than this limit may choose private health insurance instead. Approximately 74% of the population is compelled to join a sickness fund. Another 14% are members who join voluntarily even though their income exceeds the statutory cutoff. Of the remaining portion, 10% is covered by private insurance and 2% by police officers insurance, student insurance and public assistance. One of every 10 Germans covered by sickness fund insurance also purchases private supplementary insurance to cover co-payments and other amenities.
Individual health insurance premiums for workers are calculated on the basis of income and not age or the number of dependents. Premiums are collected through a payroll tax deduction; the average contribution was 13.4% of workers gross salary in 1993. The social insurance component is organized around some 500 localized sickness funds. The sickness funds are independent and self – regulating. They pay providers directly for services provided to their members at rates that they negotiate with individual hospitals. Regional groups of funds negotiate with regional doctors’ and dentist’ associations for payment for ambulatory and dental care. Payment from these funds represents about 70% of health care spending (Folland et al. 537).
The sickness funds are required by law to provide a comprehensive set of benefits. These include physician ambulatory care provided by physicians in private practice, hospital care, home nursing care, a wide range of preventive services and even visits to health spas. Patient cost sharing is minimal. The funds, like disability insurance also provide additional cash payments to those who are unemployed as a result of illness. The system is weak in several areas. In particular, public health services and psychiatric services are minimal. As for reimbursement, ambulatory providers are paid on a fee for service basis, hospitals on a prospective basis. Both public and private (including for profit) hospitals exist, though the public hospitals account for about half the beds. Hospitals tend to use salaried physicians, and unlike the United States physicians in private practice generally do not have admitting privileges. Thus, many doctors have invested in elaborately equipped clinics to compete with hospitals by being able to perform a wide range of procedures.
The German experience is especially relevant to the United States. Coverage is provided through a large number of relatively small and independent plans. In this sense, the delivery of health care is similar to that found in the United States where, for the most part, large numbers of employee groups, independent insurers, and providers reach agreements without direct government intervention. Many Americans propose mandated coverage for the working uninsured. Germany relies on a mandated approach where coverage for certain conditions is required by law. Germany also introduced cost controls similar in principle to prospective payment under the U.S. DRG mechanism.
2.1. Government Role and Involvement
In the German health care system, each level of government has specific responsibilities. The central government passes legislation on policy and jurisdiction. State governments are responsible for hospital planning, managing state hospitals, and supervising the sickness funds and physician associations. Local governments manage local hospitals and public health programs. Decentralization is extensive. The sickness funds and physician associations have considerable administrative autonomy. Despite this autonomy, government intervention is extensive and has been increasing steadily. Expenditures of the sickness funds grew rapidly in the 1960’s and early 1970’s. As a result, the Cost Containment Act of 1977 introduced a fixed budget for payments by the sickness funds to the physician associations. In essence, this program is similar to prospective payment schemes developed in the United States. The Health Care Reform Act of 1989 introduced more major changes. These were directed at attempts to further reduce the growth of health expenditures through means familiar to those in the United States. The changes included greater cost sharing, a strategy increasingly favored in Germany’s many reform efforts. The act also attempted to control hospital costs through reductions in hospital capacity, hospitals inpatient admissions, and hospital expenditures on capital equipment (2).
As costs continued to rise for the sickness funds at a rate faster than the rise in incomes, the call for reform continued. In 1993 the Health Care Reform Act was passed which introduced supply- side competition. These reforms gave members the freedom to choose among a range of sickness funds whose revenues would be determined by the risks of their members. The reforms further changed the hospital payment system from a per diem payment to a DRG – styled prospective payment basis.
Germany’s success in controlling costs can be attributed to the institutional framework of the system itself. By linking medical expenditures to the income of sickness fund members, the success of the strategy depends upon the continued growth in wages and salaries and the success of the negotiations between the sickness funds and medical practitioners. The cost containment measures have resulted in a dramatic decrease in the relative salaries of primary care physicians, which have fallen from 5.1 times the average for wage and salary workers in 1975 to 2.7 times that average in 1990. By U.S. standards, physician’s salaries are relatively low. In 1993, the average German physician earned $75,700 with general practitioners receiving $64,300 on average and orthopedic surgeons receiving $107,600. More than 100,000 students attend one of the 29 medical schools run by the state. After completing the six-year curriculum, physicians must first practice in a hospital setting for five years before they are allowed to enter private ambulatory practice. Hospitals also have less high technology diagnostic, therapeutic, and surgical equipment than is available in the typical urban hospital in the United States. Germany has 22.6 percent fewer MRI units per million compared to the United States. The one area where Germany has more technology is CT scanners, where they have 17.1 per million population compared to 13.7 per million in the United States (Henderson 497) (3).
The German system suffers from several problems that bring into question its ability to contain costs over the long term. Possibly the biggest problem with the system is its reliance on third party payment providing virtually no role for the cost – conscious consumer. Patients have no incentive to limit their demand and medical providers have no incentive to limit their supply. Nothing would lead competitive forces to reduce costs. The only competition is among medical practitioners to attract more patient volume. The ability of the system to control costs depends solely on the relative bargaining power between sickness funds and medical providers. Another problem with the system is its tendency to use resources inefficiently. Incentives promote the provision of invasive acute care procedures and discourage the provision of personal services. Based on the latest available OECD figures, Germans see their doctors more often, are provided more prescription drugs, have a higher hospital admission rate, and stay in the hospital longer than citizens of the major developed countries in the OECD. The average lengths of stay in the hospital are much longer in Germany than in the United States (12.0 days compared to 7.1 days). Significant excess capacity in the number of hospital beds relative to the population means 9.3 per 1000 population in Germany compared 3.7 per 1000 in the United States.
After examining the performance of the German system, we may question whether it is the United States or Germany that has the better system. Surveys of public opinion indicate that Germans by and large are satisfied with their health care system (as opposed to the U.S. where a large portion of the population thinks that system needs substantial changes). The inability to contain costs in the 1990’s is partly an artifact of Germany’s reunification. The former East Germany added considerably to Germany’s health care spending without adding much GDP. The German health care system also faces additional cost pressures from having a much older population than the United States does. Germany has achieved a favorable rating along other criteria. It has a publicly funded system with virtually universal coverage but has avoided queues and extensive government intrusion. Both patient and provider have considerable autonomy. Germany has managed to achieve cost control by establishing an explicit trade off between volume and price. When utilization is higher than anticipated, fees are lowered proportionally. In addition, spending caps instituted in the mid 1980s as a temporary cost containment measure have become permanent. New laws adopted in 1993 and 1997 designed to increase competition among sickness funds, lowered pharmaceutical prices and physicians’ fees, increased required co-payments, and placed more regulations on hospital billing practices, all to reach desired spending targets. Even with all these new changes, support for the system remains high, in part because wealthy Germans have a private insurance safety valve and the ability to buy more physician time and better services.
On the other hand, the German health system faces a new challenge. The German population is aging rapidly, causing a demographic change that will place severe pressure on its social security and health care programs (4).
3. UNITED STATES – PRIVATE MARKETS & PLURALISM
The United States has no single nationwide system of health insurance. Health insurance is purchased in the private marketplace or provided by the government to certain groups. Private health insurance can be purchased from various for – profit commercial insurance companies or from non – profit insurers. About 84% of the population is covered by either public (26%) or private (70%) health insurance. Approximately 61% of health insurance coverage is employment related, largely due to the cost savings associated with group plans that can be purchased through an employer (Santerre and Neun 46). Employers voluntarily sponsor the health insurance plans. Rather than purchasing an insurance policy from an external party (commercial insurance company) employer and employee premiums sometimes fund an internal health insurance plan. The fully self-insured firm assumes all the risk for its employees’ health care costs. A partially self insured firm limits the risk it assumes by purchasing “stop loss” insurance coverage, which protects it from incurring costs over a specified maximum amount. In either case, the firm usually contracts with a third party to administer the health insurance program.
A conventional health insurance plan, which allows unrestricted choice of health care provider and reimburses on a fee for service basis, presently covers less than 30% of all employees. Even these plans provide some type of utilization management program (e.g. preadmission certification, concurrent review of length of stay, and mandatory second opinions for surgery). Traditional plans differ depending on the medical services that are covered and the co-payment and deductible amounts. Rather than enroll employees in a traditional insurance plan, most employers have turned to managed care health insurance plans. Managed care organizations are defined as “systems that integrate the financing and delivery of appropriate health care services to covered individuals by means of: arrangements with selected providers to furnish a comprehensive set of health care services to members; explicit criteria for the selection of health care providers; formal programs for on going quality assurance and utilization review; and significant financial incentives for members to use providers and procedures associated with the plan”(SBHID 167).
There are basically two types of MCOs: Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs). About 70 percent of employees are currently enrolled in MCOs. HMO is a health care delivery system that combines the insurer and producer functions. HMOs are pre – paid and in return provide comprehensive services to enrollees. PPOs are a third party payer that offers financial incentives such as low out – of – pocket prices, to enrollees who acquire medical care from a preset list of physicians and hospitals. A PPO is also a prepaid type of MCO that combines the insurer and producer functions.
In addition to private health insurance nearly 26% of the U.S. population is covered by public health insurance. The two major types of public health insurance, both of which began in 1966 are Medicare and Medicaid. Medicare is a uniform national public health insurance program for aged and disabled individuals. Administered by the federal government, Medicare is the largest health insurer in the country, covering about 13 % of the population. The Medicare plan consists of two parts. Part A is compulsory and provides health insurance coverage for inpatient hospital care, very limited nursing home services and some home health services. Part B the voluntary or supplemental plan provides benefits for physician services, outpatient hospital services, outpatient laboratory and radiology services and home health services. Part A of Medicare is funded by a Medicare tax that is similar to the Social Security tax, and Part B is financed by monthly premiums (25%) and general taxes (75%). The Medicare patient is also responsible for paying a deductible and a co-payment for most part B services and for long-term hospital services under part A. Many Medicare recipients also choose to purchase Medigap insurance, a private health insurance plan offered by commercial insurance companies that pays for medical bills not fully reimbursed by Medicare (Hoffman et al. 180).
The second type of public health insurance program, Medicaid, provides coverage for certain economically disadvantaged groups. Medicaid is jointly financed by the federal and state governments and is administered by each state. The federal government provides state governments with a certain percentage of matching finds ranging from 50 to 77%, depending on the per capita income in the state. Coverage under Medicaid varies because states have established different requirements for eligibility. Individuals who are elderly, blind, disabled or members of families with dependent children must be covered by Medicaid for states to receive federal funds. Additionally, although the federal government stimulates a certain basic package of health care benefits (e.g. hospital, physician and nursing home services), some states are more generous than others. Following that, individuals in certain states receive a more generous benefit package under Medicaid than those in others. Medicaid is the only public program that finances long – term nursing home stay. Medicaid covers approximately 12% of the population.
However, another category of individuals exists: those who are uninsured. Approximately, 16 % of the population is estimated to lack health insurance coverage at any point in time. This does not mean these individuals are without access to health care services. Many uninsured people receive health care services through public clinics and hospitals, state and local health programs, or private providers that finance the care through charity and by shifting costs to other payers. Nevertheless, the lack of health insurance can cause uninsured households to face considerable financial hardship and insecurity. The uninsured often find themselves in the emergency room of a hospital after it is too late for proper medical treatment.
The U.S. health care system is much diversified in terms of production methods. Government, not – for – profit, and for – profit institutions all play a role in health care markets. Primary care physicians in the United States function in the private for – profit sector and operate in group practices, although some physicians work for not – for – profit clinics or in public organizations. In the hospital industry, the not – for – profit is the dominant form of ownership. Not – for – profit hospitals control about 70 percent of all hospital beds. A different picture can be seen in the nursing home industry, where 70 percent of all nursing homes are organized on a for – profit basis (Santerre and Neun 52) (5).
Up to the early 1980s most insured individuals had full choice of health care providers in the United States. Consumers could choose to visit a primary care giver or the outpatient clinic of a hospital, or see a specialist if they chose to. The introduction of various Managed Care Organizations and such new government policies as selective contracting (a situation when a third party contracts exclusively with a preselected set of medical providers) have limited the degree to which consumers can choose their own health care provider. For example, those individuals belonging to a staff HMO must receive their care exclusively from that organization; otherwise they are fully responsible for the ensuing financial burden. The primary care giver acts as a gatekeeper and must refer the patient for additional care. The lower premiums of a staff HMO compensate consumers at least to some degree for the restriction of choice. Even those individuals belonging to the less restrictive PPO face a financial penalty when choosing health care providers outside the network.
3.1. Reimbursement process
Unlike in Canada and Europe, where a single payer – system is the norm, the United States possess a multiplayer system in which a variety of third – party payers, including the federal and state governments and commercial health insurance companies are responsible for reimbursing health care providers. Reimbursement takes on various forms depending on the nature of the third party payer. The most common form of reimbursement is fee – for – service, although prospective payment (a method of payment used by third – party payers in which payments are made on a case by case basis) and prepaid health plans are becoming more popular. Most traditional health insurance plans reimburse health care providers on a fee for service basis. Health care providers contacting with most MCOs are paid on a fee – for – service basis.
Physician services under Medicare (and for the most part Medicaid as well) are also reimbursed on a fee for service basis, but the fee is fixed by the government. Traditionally, the fees were based on the “usual, customary and reasonable fee”. This means the fee was limited to the lowest of the three charges: the actual charge of the physician, the customary charge of the physician, or the prevailing charge in the local area. Since 1992 physician services to Medicare patients are reimbursed according to a point system called the “Resource Based Relative Value Scale” RVS system. Various physician services are assigned points based on resource costs, such as the time and intensity of the physician’s work, practice expenses and malpractice insurance expenses. The RVS is transformed into a schedule of fees when it is multiplied by a dollar conversion factor and a geographic adjustment factor that allows fees to vary in different locations (Santerre and Neun 49).
Under both Medicare and Medicaid, the physician can choose to accept assignments of patients. If the physician accepts the assignment, he or she agrees to accept the government determined fee in full and cannot charge the patient an additional amount beyond the normal 20 percent co-payment. The physician must also agree to treat all Medicare patients for all services. A physician who does not accept assignment can charge patients a price higher than the Medicare fee and accept patients on a case-by-case basis. Without assignment, a patient pays the actual physician charge and receives reimbursement for 80 % of the Medicare fee.
In contrast to the fee – for – service method, some health care providers are paid on a fixed – fee or prospective basis. For example, the consumer prepays the staff HMO, and physicians are paid on a salary basis. The consumer also prepays the individual practice association HMO, however, health care providers are usually paid on a fee – for service or capitation basis.
Since 1983, the federal government has reimbursed hospitals on a prospective basis for services provided to Medicare patients. This Medicare reimbursement scheme, called the “diagnosis related group” (DRG) system, contains around 500 different payment categories based on the characteristics of the patient (age and sex), primary and secondary diagnosis, and treatment. A prospective payment is established for each DRG. The prospective payment is claimed to provide hospitals with an incentive to contain costs. Beginning in the early 1980s, many states instituted selective contacting, in which various health care providers competitively bid for the right to treat Medicaid patients. Under selective contracting, recipients of Medicaid are limited in the choice of health care provider. Moreover, to better contain health care costs and coordinate care, the federal government and various state governments have attempted to shift Medicare/Medicaid beneficiaries into MCOs. As of 1997, about 48% of all Medicaid recipients and roughly 15% percent of all Medicare beneficiaries are enrolled in MCOs (Santerre and Neun 50).
3.2. Equity and efficiency – Analysis and Evaluation
The advanced state of technology is the greatest strength of the U.S. health care system. Premature babies for example, face relatively good chance of surviving if they are born in the United States because of the state of technology. A relatively high life expectancy after age 80 is another reflection of the advanced state of health care technology in the United States. People 80 years and older in the U.S. tend to live longer than their counterparts in most other countries because of the abundance of advanced medical technology. Also the United States continues to be the world leader in pharmaceutical innovation. These products save, extend and improve the quality of lives.
Unfortunately, the U.S. health care system is not without weaknesses. Its most glaring weakness is exemplified by the fact that more than 42 million people are without health insurance. The lack of health insurance creates medical access problems and subjects a family’s income to the vagaries of health status. The inability to successfully control costs is another major weakness of the U.S. health care system. The growth of health care costs continues unabated, although the pace has slowed in recent years mostly due to the influence of managed – care organizations. Whether managed care can continue to slow the growth of health care costs remains questionable. Eliminating the weaknesses while maintaining the strengths is a challenge faced by any plan for changing the U.S. health care system (Table 1) (6).
Empirical Evidence and International Comparisons. Source: OECD Health Data 2000, OECD, Paris, 2000
From the table we can see that the United States has the largest GDP per capita and the largest health care spending per capita. The number of physicians per 1000, number of hospital beds per 1000 and average length of stay (days) are largest in Germany. The United States is ranked at the bottom of the list in terms of hospital beds per 1000 at 3.7 beds and average length of hospital stay at 7.1 days.
Medical care spending in the U.S. is the highest in the world, both in per capita terms and as a percentage of gross domestic product (Table 2) (7).
Life Expectancy at Birth and Life Expectancy at Age 65. Source: OECD Health Data 2000, Paris: Organization for Economic Cooperation and Development, 2000
Comparative Health Care System statistics (1998) for these three countries show that the United States has the highest infant mortality (7.2) per 1000 and Germany has the lowest rate (4.7). The mortality rate in Canada is (5.5) per 1000. The percent of population greater than 65 years according to 1996 data is 12.1 % in Canada, 12.2 % in the U.S., and 15.3 % in Germany.
4. CONSUMER SATISFACTION WITH HEALTH CARE SYSTEMS IN 3 COUNTRIES
One interesting question is whether people in various nations are satisfied with their current health care system. From the data several conclusions are worth mentioning. The first is that Canadians are most satisfied with their health care system. The Canadian health care system offers national health insurance financed by taxes, private production of health care services, and regulated budgets and fees for health care providers. Approximately 56% of the respondents in Canada believed the health care system requires only minor changes, and only 5% thought the system needs complete rebuilding.
The second conclusion to be drawn is that people in the United States are the least satisfied with their current health care system. Only 10 % of the respondents believed that the present health care system could be improved with minor changes, and an overwhelming 60% thought the system needs fundamental changes. In addition, 3 out of every 10 respondents in the United States believed the health care system requires a complete restructuring. The surveyors speculated that the dissatisfaction with the present U.S. health care system is due to the financial insecurity caused by inadequate insurance protection and high out – of – pocket costs. The third conclusion is that the presence of a national health care (or socialized medicine) plan does not guarantee high levels of consumer satisfaction. In Germany for instance 48 % of those surveyed indicated that the system either needed fundamental changes or needed to be rebuild completely (Table 3) (8).
Changes needed to improve health care systems in Canada, Germany and USA. Source: Robert J. Blendon, Robert Leitman, Ian Morrison, and Karen Donelan, “Satisfaction with Health Systems in 10 Nations,” Health Affairs 9 (summer 1990) Exhibit...
The data suggests that the Canadian and German systems appear to be more effective than the U.S. system in several respects. Costs are lower, more services are provided, financial barriers do not exist, and health status as measured by mortality rates is superior. Canadians and Germans have longer life expectancies and lower infant mortality rates than do U.S. residents. However, the comparisons do not tell the whole story, nor do they necessarily imply that the United States should adopt the Canadian or German approach. Some have argued that a system that is manageable for a population of 30 or 80 million people cannot easily be adapted to a more pluralistic, heterogeneous country with a population of nearly 280 million.
5. RECENT DEVELOPMENTS – CANADA
Many Canadians are no longer confident that the provinces will be able to afford their current systems. As a result of unprecedented federal deficits the Canadian government has reduced substantially its cash transfers to the provinces. Growing complaints about long lines for diagnosis and surgery, as well as widespread “line – jumping” by the affluent and connected, are eroding public confidence in Canada’s national health care system.
A recent government study indicated that 4.3 million Canadian adults – or 18 % of those who saw a doctor in 2001 – reported they had difficulty seeing a doctor or getting a test or surgery done in a timely fashion. 3 million Canadians are unable to find a family physician, according to several private studies, producing a situation all the more serious since it is the family doctor who refers patients to specialists and medical testing.
Overworked technology is one reason for the long lines; others include a shortage of nurses and inefficient management of hospital and other health care facilities, according to several studies (Krauss 3).
Waiting times have also increased because an aging population has put more demands on the system, while the current generation of doctors is working fewer hours than the last. Waiting can occur at every step of treatment. A study by the conservative Fraser Institute concluded that patients across Canada experienced average waiting times of 16.5 weeks between receiving a referral from a General Practitioner and undergoing treatment in 2001 – 2002, a rate 77 percent longer than in 1993. The recent Senate report noted that waiting times for MRI, CT and ultrasound scans grew by 40 % since 1994.
In an effort to reduce waiting lists, some Canadian provinces (Alberta, Nova Scotia and Ontario) have established about 30 private MRI and CT clinics, some of which offer non emergency services to be paid for by private insurance.
6. RECENT DEVELOPMENTS – GERMANY
Like other countries, Germany’s health care system faces growing demands from an aging population and advances in medical technologies. But in the context of slower economic growth, stagnant incomes, and a consensus that labor costs cannot rise much more without disastrous effects on competitiveness and employment, payroll based financing is not a sufficient revenue based (Giaimo 145). Even if payroll taxes were permitted to rise, the resultant unemployment and inactivity could, in the end, lead to a financing crisis of the social insurance system.
A number of proposals aimed at putting health care financing on a sounder and more equitable footing were presented in the late 1990s. These included raising the income ceiling for contributions, bringing civil servants and the self employed into statutory health insurance, and bringing non–wage income and assets under the contribution levy. Other proposals would have simply shifted costs from employers to employees. One such proposal would have fixed employers’ share of the contribution and let employees side float, with the latter financing the difference. A more radical option suggested the abolition of contribution-based insurance and its replacement with compulsory individual insurance, while compensating employees with a “wage subsidy”. However, there was no real political support for this proposal and the immediate outcome was political paralysis.
Future German governments face difficult choices in continuing to ensure that all individuals have access to high quality care at an affordable cost. Thus far, however, the political and sectoral configurations underlying German health politics have impeded radical changes in governance or financing. Most stakeholders still want to maintain the status quo. However, the situation is dynamic, not set in stone. The power of preferences of politicians could change in the future in ways that would tolerate a bolder departure from the present governance system or radical changes in financing. Such changes could either expand or undermine solidarity – or they might prompt a search to redefine it. Given the presence of powerful countervailing forces in the health sector and in the political arena, successful adjustment will likely hinge on forging a consensus with these stakeholders over a new conception of solidarity that continues to ensure broad provision, spreads the burden of adjustment fairly, and shelters the most vulnerable from harm (Giaimo 147).
United States – Recent Developments
From the discussions that were presented above we can see that the prices and expenditures on various medical services continue to rise in the US, although at a slower rate than in the past. The transition to managed care health care system has helped to promote some cost savings in various medical care markets but has also resulted in some rationing of care. Choice of physician, physician autonomy and income, hospital inpatient admissions, and selection among pharmaceutical products have all been greatly limited by the movement to a managed care health care system in the United States. These limitations pertain not only to private managed care insurance plans but also to managed care plans under the auspices of the Medicare and Medicaid programs. Moreover, it seems that competition in the health care sector may have sown the seeds of its own destruction. For instance, benefit denial and cherry picking behavior take place in the private health insurance industry because of competition. Induced demand in the physician services industry and the medical arms race in the hospital industry are argued to occur because of competition (Santerre and Neun 560) (9).
In the discussion, it is important to compare the US health care system with health care systems in other advanced industrialized countries. Canada and Germany involve a single payer system rather than a multiple payer system like that of the US. Their health care systems provide nearly universal access to medical care services and involve a greater financing and regulatory role for the federal government and less reliance on competition in health care matters. The available data suggests that the US spends more on medical care as a fraction of GDP than to the other two countries. In fact, as a fraction of GDP, the US spends slightly over 35% more than Germany, the next biggest spender. Comparatively high health care expenditures coupled with low medical utilization rates have led some to believe that medical prices must be significantly higher in the US than in the other two countries. The quality of medical services may be higher in the US and account for the alleged higher medical prices. Evidence suggests that waiting times are shorter for most medical services in the United States. In addition, the government in the US is responsible for financing about 44% of all health care spending. The comparable figure for other countries is well over 90% (Anderson, 1997).
Many analysts have concluded that health care costs and infant mortality are lower in other countries because a government plays a more dominant role in the health care sector and because there is universal access to health insurance. Many health care policy analysts believe that a similar approach can produce better results in the US.
Many people in the US are dissatisfied with the performance of the health care system. The cost of health care in the United States is alleged to be rising faster than in any other country. Many worry that the health care monster will continue to devour an increasingly large slice of the economic pie. Moreover, at any one point in time, critics note that one out of every six non–elderly citizens lacks insurance coverage for acute care. Many others in the US are seriously underinsured or lack proper long-term care insurance coverage. A number of health care analysts and policy makers are searching for ways to improve the American health care system.
Various groups have advanced a large number of health care reform plans. The plans differ in a number of respects, especially concerning the role the individual, employer and government play in the financing of medical insurance and the functions the government and marketplace serve in the allocation of health care resources.
Several distinctive new approaches and plans have been proposed to improve and reform the US health care system. Four different approaches have surfaced in recent times; those include medical savings accounts, individual mandates, managed competition and national health insurance (Santerre and Neun 565). Medical savings accounts programs are not designed to achieve universal coverage. However, health insurance premiums should become more affordable when they become tax deductible and apply mainly to catastrophic plans. Tax credits and subsidies are used to make health insurance more affordable for poor individuals. The plan is financed primarily out of individual contributions to medical savings accounts. The government expenditures on Medicare and Medicaid would end and the deficit should diminish accordingly. Because consumers pay for most health care expenditures out of their own “Medisave” accounts, they have the incentive to minimize waste and shop around for competitive prices. A reduction in administrative expenses also translates into cost savings (10).
The individual mandates plan is implemented through mandated insurance coverage and a guarantee by the government that basic medical coverage is available across the country. Tax credits and subsidies are available to make coverage affordable to all. Under this plan near universal coverage would be attainable. The plan is financed largely by premium payments by consumers either directly or through employers. A tax increase is necessary which negatively affects the budget deficit. Under this plan, both Medicare and Medicaid would be eliminated. Costs are contained through the maintenance of a highly competitive medical insurance market. Private insurance vendors are disciplined by the market place to provide competitive prices to consumers.
Under managed competition plan employers are required to provide medical coverage to all full time workers. Subsidies are provided to make it possible for low-income families to purchase medical insurance. Medicaid and Medicare are maintained and almost universal coverage should be possible. Medical coverage is financed primarily through employer mandates so employees most likely pay through foregone wages. Government expenditures are paid through a payroll tax. The impact on the deficit should not be too significant. Cost containments results from the maintenance of a highly competitive private insurance market. A uniform benefit package is offered, and employers are required to pay for 80% of the representative plan. The remaining 20 % provides an incentive for consumers to shop wisely. This plan would likely have a significant effect on employment because employer mandates may create substantial distortions in labor markets, especially among low – wage workers.
Finally, a national health insurance system would provide universal coverage for all citizens. Medical coverage is financed out of an income tax. In addition, funds for Medicare and Medicaid are diverted to partially offset the cost of the plan. An employer tax equal to the cost of employer – financed medical insurance is levied. Costs are contained through the utilization of a single payer system that decreases the administration and billing costs that are the byproduct of a multipayer system. Moreover, global budgeting is used to establish a constant relation between gross domestic product and health care expenditures. Employment effects will be concentrated in the private insurance market and health care administration (Santerre and Neun 572).
In addition, the states in the US have taken a very active role in health care reform. Almost every state has initiated, or is contemplating, health care reform. Despite the fact that the policies vary immensely across states, the goal is always the same: simultaneously contain the growth of health care costs while improving access to quality care.
In this research paper we have examined different health care systems in Canada, Germany and the United States. Variations exist in terms of financing, provider payment mechanisms, and the role of government, including the degree of centralization. The United States stands out as the country with the highest expenditures on health care. It would appear that systems that ration their care by government provision or government insurance incur lower per – capita costs. On the other hand, in the largely private system in the United States, waiting times tend to be shorter than in rationed systems, a conclusion that follows simply from theory as well as from observation. Americans have been more dissatisfied with their health system than Canadians or Germans have been with theirs. Many characterize the main gap in the American system as the problem of the uninsured – more than 40 million people. While this does not mean that they go entirely without care, the uninsured consume only half as much health care on average as the insured.
Among three countries, the United States is by far the biggest spender in absolute per capita terms. It is also the biggest spender as a share of GDP. Germany manages to provide a health system that delivers universal health insurance while avoiding queues that often trouble government systems. However, costs per capita have been increasing faster than the incomes per capita, a problem leading to strenuous reforms in the 1990s.
Many Americans feel that Canada has successfully developed a comprehensive and universal national health insurance program that is both cost effective and popular.
Compared to the US system, the Canadian system has lower costs, more services, universal access to health care without financial barriers, and superior health status. Canadians and Germans have longer life expectancies and lower infant mortality rates than do US residents.
Part of the gap between US and Canadian health care costs may be explained by a failure to account for Canadian hospital’ capital costs, larger proportion of elderly in the United States and higher level of spending on research and development in the US.
One should mention that data from different countries may not be directly comparable for several reasons and therefore, should be accepted with some skepticism.
For instance, no standard taxonomy exists across countries. Also in practice it is often very difficult to draw a line separating medical services such as acute and long-term care services. In addition, monetary values for health care expenditures and gross domestic product must be converted to a common denominator such as US dollars, before meaningful comparison can be made. Any conversion factor, such as purchasing power parities or currency exchange rates is not without measurement error (Santerre and Neun 561).
Finally, most Canadians and Germans think that their health care systems need minor to moderate changes, while in the United States a substantial portion of the population thinks that large and fundamental changes are needed. Each health care system analyzed above is experiencing a continuous process of changes and improvements and all three systems fight the never-ending battle of cost containment, provision of quality services and maintaining and expanding access to health care. This goal is one that they can only hope to attain or come close to. Large portions of the economic pie are consumed by the health care systems in these three countries and the importance of health care is likely to have an even greater significance in the years to come. Consequently, it will be fascinating to observe the future developments and improvements in the health care systems of Canada, Germany and the United States.
CONFLICT OF INTEREST
1. Clifford K. Section A; Page 3; Column 1; Foreign Desk. The New York Times; 2003. Feb 13, Long Lines Mar Canada’s Low – Cost Health Care.
2. Sherman F, Goodman AC, Stano M. The Economics of Health and Health Care. Prentice Hall; 2000.
3. Henderson WJ. Health Economics and Policy. South – Western Publishing; 2002.
4. Susan G. Markets and Medicine: The Politics of Health Care Reform in Britain, Germany, and the United States. Ann Arbor: The Univ. of Michigan Press; 2002.
5. The Source Book of Health Insurance Data. 1994.
6. OECD Health Data 2000. Empirical Evidence and International Comparisons. Paris. 2000.
7. OECD Health Data 2000. Life Expectancy at Birth and Life Expectancy at Age 65
8. Blendon RJ, Leitman R, Morrison I, Donelan K. Satisfaction with Health Systems in Ten Nations. Health Affairs, Summer 1990, Exhibit 2. p. 188. [PubMed]
9. Rexford SE, Neun SP. Health Economics: Theories, Insights and Industry Studies. Orlando, FL: Dryden. Harcourt Brace College Publishers; 2000.
10. Earl HD, Klees BS, Curtis CA. Overview of the Medicare and Medicaid Programs. Health Care Financing Review. 2000;22(1):175–193.
Articles from Materia Socio-Medica are provided here courtesy of The Academy of Medical Sciences of Bosnia and Herzegovina
Comparison of the healthcare systems in Canada and the United States is often made by government, public health and public policy analysts. The two countries had similar healthcare systems before Canada changed its system in the 1960s and 1970s. The United States spends much more money on healthcare than Canada, on both a per-capita basis and as a percentage of GDP. In 2006, per-capita spending for health care in Canada was US$3,678; in the U.S., US$6,714. The U.S. spent 15.3% of GDP on healthcare in that year; Canada spent 10.0%. In 2006, 70% of healthcare spending in Canada was financed by government, versus 46% in the United States. Total government spending per capita in the U.S. on healthcare was 23% higher than Canadian government spending, and U.S. government expenditure on healthcare was just under 83% of total Canadian spending (public and private) though these statistics don't take into account population differences.
Studies have come to different conclusions about the result of this disparity in spending. A 2007 review of all studies comparing health outcomes in Canada and the US in a Canadian peer-reviewed medical journal found that "health outcomes may be superior in patients cared for in Canada versus the United States, but differences are not consistent." Some of the noted differences were a higher life expectancy in Canada, as well as a lower infant mortality rate than the United States.
One commonly cited comparison, the 2000 World Health Organization's ratings of "overall health service performance", which used a "composite measure of achievement in the level of health, the distribution of health, the level of responsiveness and fairness of financial contribution", ranked Canada 30th and the US 37th among 191 member nations. This study rated the US "responsiveness", or quality of service for individuals receiving treatment, as 1st, compared with 7th for Canada. However, the average life expectancy for Canadians was 80.34 years compared with 78.6 years for residents of the US.
The WHO's study methods were criticized by some analyses. While life-expectancy and infant mortality are commonly used in comparing nationwide health care, they are in fact affected by many factors other than the quality of a nation's health care system, including individual behavior and population makeup. A 2007 report by the Congressional Research Service carefully summarizes some recent data and noted the "difficult research issues" facing international comparisons.
In 2004, government funding of healthcare in Canada was equivalent to $1,893 per person. In the US, government spending per person was $2,728.
The Canadian healthcare system is composed of at least 10 mostly autonomous provincial healthcare systems that report to their provincial governments, and a federal system which covers the military and First Nations. This causes a significant degree of variation in funding and coverage within the country.
Canada and the US had similar healthcare systems in the early 1960s, 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. In the United States, with its mixed public-private system, 16% or 45 million American residents are uninsured at any one time. 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.
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," but health economists don't 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, because doctors are in the private sector. Similarly, Canadian hospitals are controlled by private boards and/or regional health authorities, rather than being part of government.
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 to retired or disabled veterans, their families, and survivors through medical centers and clinics.
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.
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.
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. 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.
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. The U.S. government spends more on healthcare than on Social Security and national defense combined, according to the Brookings Institution.
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.
The Canadian system has been 69–75% publicly funded, 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 plan does 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, low-income families, those on social assistance, or those with certain medical conditions. Some provinces cover all drug prescriptions over a certain portion of a family's income. Drug prices are also regulated, so brand-name prescription drugs are often significantly cheaper than in the U.S.Optometry is only covered in some provinces and is sometimes only covered for children under a certain age. 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."
Coverage and access
In both Canada and the United States, access can be a problem. Studies suggest that 40% of U.S. citizens do not have adequate health insurance, if any at all. In Canada, 5% of Canadian citizens have not been able to find a regular doctor, with a further 9% having never looked for one. Yet, even if some cannot find a family doctor, every Canadian citizen is covered by the national health care system. The U.S. data is evidenced in a 2007 Consumer Reports study on the U.S. health care system which showed that the underinsured account for 24% of the U.S. population and live with skeletal health insurance that barely covers their medical needs and leaves them unprepared to pay for major medical expenses. When added to the population of uninsured (approximately 16% of the U.S. population), a total of 40% of Americans ages 18–64 have inadequate access to healthcare, according to the Consumer Reports study. The Canadian data comes from the 2003 Canadian Community Health Survey,
In the U.S., the federal government does not guarantee universal healthcare to all its citizens, but publicly funded healthcare programs help to provide for the elderly, disabled, the poor, and children. The Emergency Medical Treatment and Active Labor Act or EMTALA also ensures public access to emergency services. The EMTALA law forces emergency healthcare providers to stabilize an emergency health crisis and cannot withhold treatment for lack of evidence of insurance coverage or other evidence of the ability to pay. EMTALA does not absolve the person receiving emergency care of the obligation to meet the cost of emergency healthcare not paid for at the time and it is still within the right of the hospital to pursue any debtor for the cost of emergency care provided. In Canada, emergency room treatment for legal Canadian residents is not charged to the patient at time of service but is met by the government.
According to the United States Census Bureau, 59.3% of U.S. citizens have health insurance related to employment, 27.8% have government-provided health-insurance; nearly 9% purchase health insurance directly (there is some overlap in these figures), and 15.3% (45.7 million) were uninsured in 2007. An estimated 25 percent of the uninsured are eligible for government programs but unenrolled. About a third of the uninsured are in households earning more than $50,000 annually. A 2003 report by the Congressional Budget Office found that many people lack health insurance only temporarily, such as after leaving one employer and before a new job. The number of chronically uninsured (uninsured all year) was estimated at between 21 and 31 million in 1998. Another study, by the Kaiser Commission on Medicaid and the Uninsured, estimated that 59 percent of uninsured adults have been uninsured for at least two years. One indicator of the consequences of Americans' inconsistent health care coverage is a study in Health Affairs that concluded that half of personal bankruptcies involved medical bills. Although other sources dispute this, it is possible that medical debt is the principal cause of bankruptcy in the United States.
A number of clinics provide free or low-cost non-emergency care to poor, uninsured patients. The National Association of Free Clinics claims that its member clinics provide $3 billion in services to some 3.5 million patients annually.
A peer-reviewed comparison study of healthcare access in the two countries published in 2006 concluded that U.S. residents are one third less likely to have a regular medical doctor, one fourth more likely to have unmet healthcare needs, and are more than twice as likely to forgo needed medicines. The study noted that access problems "were particularly dire for the US uninsured." Those who lack insurance in the U.S. were much less satisfied, less likely to have seen a doctor, and more likely to have been unable to receive desired care than both Canadians and insured Americans.
Another cross-country study compared access to care based on immigrant status in Canada and the U.S. Findings showed that in both countries, immigrants had worse access to care than non-immigrants. Specifically, immigrants living in Canada were less likely to have timely Pap tests compared with native-born Canadians; in addition, immigrants in the U.S. were less likely to have a regular medical doctor and an annual consultation with a health care provider compared with native-born Americans. In general, immigrants in Canada had better access to care than those in the U.S., but most of the differences were explained by differences in socioeconomic status (income, education) and insurance coverage across the two countries. However, immigrants in the U.S. were more likely to have timely Pap tests than immigrants in Canada.
Cato Institute has expressed concerns that the U.S. government has restricted the freedom of Medicare patients to spend their own money on healthcare, and has contrasted these developments with the situation in Canada, where in 2005 the Supreme Court of Canada ruled that the province of Quebec could not prohibit its citizens from purchasing covered services through private health insurance. The institute has urged the Congress to restore the right of American seniors to spend their own money on medical care.
Coverage for Mental Health
The Canada Health Act covers the services of psychiatrists, who are medical doctors with additional training in psychiatry but does not cover treatment by a psychologist or psychotherapist unless the practitioner is also a medical doctor. Goods and Services Tax or Harmonized Sales Tax (depending on the province) applies to the services of psychotherapists. Some provincial or territorial programs and some private insurance plans may cover the services of psychologists and psychotherapists, but there is no federal mandate for such services in Canada. In the U.S., the Affordable Care Act includes prevention, early intervention, and treatment of mental and/or substance use disorders as an “essential health benefit” (EHB) that must be covered by health plans that are offered through the Health Insurance Marketplace. Under the Affordable Care Act, most health plans must also cover certain preventive services without a copayment, co-insurance, or deductible. In addition, the U.S. Mental Health Parity and Addiction Equity Act (MHPAEA) of 2008 mandates “parity” between mental health and/or substance use disorder (MH/SUD) benefits and medical/surgical benefits covered by a health plan. Under that law, if a health care plan offers mental health and/or substance use disorder benefits, it must offer the benefits on par with the other medical/surgical benefits it covers.
One complaint about both the U.S. and Canadian systems is waiting times, whether for a specialist, major elective surgery, such as hip replacement, or specialized treatments, such as radiation for breast cancer; wait times in each country are affected by various factors. In the United States, access is primarily determined by whether a person has access to funding to pay for treatment and by the availability of services in the area and by the willingness of the provider to deliver service at the price set by the insurer. In Canada, the wait time is set according to the availability of services in the area and by the relative need of the person needing treatment.
As reported by the Health Council of Canada, a 2010 Commonwealth survey found that 39% of Canadians waited 2 hours or more in the emergency room, versus 31% in the U.S.; 43% waited 4 weeks or more to see a specialist, versus 10% in the U.S. The same survey states that 37% of Canadians say it is difficult to access care after hours (evenings, weekends or holidays) without going to the emergency department over 34% of Americans. Furthermore, 47% of Canadians and 50% of Americans who visited emergency departments over the past two years feel that they could have been treated at their normal place of care if they were able to get an appointment.
A report published by Health Canada in 2008 included statistics on self-reported wait times for diagnostic services. The median wait time for diagnostic services such as MRI and CAT scans is two weeks with 89.5% waiting less than 3 months. The median wait time to see a special physician is a little over four weeks with 86.4% waiting less than 3 months. The median wait time for surgery is a little over four weeks with 82.2% waiting less than 3 months. In the U.S., patients on Medicaid, the low-income government programs, can wait three months or more to see specialists. Because Medicaid payments are low, some have claimed that some doctors do not want to see Medicaid patients. For example, in Benton Harbor, Michigan, specialists agreed to spend one afternoon every week or two at a Medicaid clinic, which meant that Medicaid patients had to make appointments not at the doctor's office, but at the clinic, where appointments had to be booked months in advance. A 2009 study found that on average the wait in the United States to see a medical specialist is 20.5 days.
In a 2009 survey of physician appointment wait times in the United States, the average wait time for an appointment with an orthopedic surgeon in the country as a whole was 17 days. In Dallas, Texas the wait was 45 days (the longest wait being 365 days). Nationwide across the U.S. the average wait time to see a family doctor was 20 days. The average wait time to see a family practitioner in Los Angeles, California was 59 days and in Boston, Massachusetts it was 63 days.
Studies by the Commonwealth Fund found that 42% of Canadians waited 2 hours or more in the emergency room, vs. 29% in the U.S.; 57% waited 4 weeks or more to see a specialist, vs. 23% in the U.S., but Canadians had more chances of getting medical attention at nights, or on weekends and holidays than their American neighbors without the need to visit an ER (54% compared to 61%). Statistics from the Canadian free market think tank Fraser Institute in 2008 indicate that the average wait time between the time when a general practitioner refers a patient for care and the receipt of treatment was almost four and a half months in 2008, roughly double what it had been 15 years before.
A 2003 survey of hospital administrators conducted in Canada, the U.S., and three other countries found dissatisfaction with both the U.S. and Canadian systems. For example, 21% of Canadian hospital administrators, but less than 1% of American administrators, said that it would take over three weeks to do a biopsy for possible breast cancer on a 50-year-old woman; 50% of Canadian administrators versus none of their American counterparts said that it would take over six months for a 65-year-old to undergo a routine hip replacement surgery. However, U.S. administrators were the most negative about their country's system. Hospital executives in all five countries expressed concerns about staffing shortages and emergency department waiting times and quality.
In a letter to the Wall Street Journal, Robert Bell, the President and CEO of University Health Network, Toronto, said that Michael Moore's film Sicko "exaggerated the performance of the Canadian health system — there is no doubt that too many patients still stay in our emergency departments waiting for admission to scarce hospital beds." However, "Canadians spend about 55% of what Americans spend on health care and have longer life expectancy and lower infant mortality rates. Many Americans have access to quality healthcare. All Canadians have access to similar care at a considerably lower cost." There is "no question" that the lower cost has come at the cost of "restriction of supply with sub-optimal access to services," said Bell. A new approach is targeting waiting times, which are reported on public websites.
In 2007 Shona Holmes, a Waterdown, Ontario woman who had a Rathke's cleft cyst removed at the Mayo Clinic in Arizona, sued the Ontario government for failing to reimburse her $95,000 in medical expenses. Holmes had characterized her condition as an emergency, said she was losing her sight and portrayed her condition as a life-threatening brain cancer. In July 2009 Holmes agreed to appear in television ads broadcast in the United States warning Americans of the dangers of adopting a Canadian-style health care system. The ads she appeared in triggered debates on both sides of the border. After her ad appeared critics pointed out discrepancies in her story, including that Rathke's cleft cyst, the condition she was treated for, was not a form of cancer, and was not life-threatening.
Price of health care and administration overheads
Healthcare is one of the most expensive items of both nations’ budgets. In the United States, the various levels of government spend more per capita than levels of government do in Canada. In 2004, Canada government-spending was $2,120 (in US dollars) per person, while the United States government-spending $2,724.
A 1999 report found that after exclusions, administration accounted for 31.0% of healthcare expenditures in the United States, as compared with 16.7% in Canada. In looking at the insurance element, in Canada, the provincial single-payer insurance system operated with overheads of 1.3%, comparing favourably with private insurance overheads (13.2%), U.S. private insurance overheads (11.7%) and U.S. Medicare and Medicaid program overheads (3.6% and 6.8% respectively). The report concluded by observing that gap between U.S. and Canadian spending on administration had grown to $752 per capita and that a large sum might be saved in the United States if the U.S. implemented a Canadian-style system.
However, U.S. government spending covers less than half of all healthcare costs. Private spending is also far greater in the U.S. than in Canada. In Canada, an average of $917 was spent annually by individuals or private insurance companies for health care, including dental, eye care, and drugs. In the U.S., this sum is $3,372. In 2006, healthcare consumed 15.3% of U.S. annual GDP. In Canada, only 10% of GDP was spent on healthcare. This difference is a relatively recent development. In 1971 the nations were much closer, with Canada spending 7.1% of GDP while the U.S. spent 7.6%.
Some who advocate against greater government involvement in healthcare have asserted that the difference in costs between the two nations is partially explained by the differences in their demographics. Illegal immigrants, more prevalent in the U.S. than in Canada, also add a burden to the system, as many of them do not carry health insurance and rely on emergency rooms — which are legally required to treat them under EMTALA — as a principal source of care. In Colorado, for example, an estimated 80% of undocumented immigrants do not have health insurance.
The mixed system in the United States has become more similar to the Canadian system. In recent decades, managed care has become prevalent in the United States, with some 90% of privately insured Americans belonging to plans with some form of managed care. In managed care, insurance companies control patients' health care to reduce costs, for instance by demanding a second opinion prior to some expensive treatments or by denying coverage for treatments not considered worth their cost.
Administrative costs are also higher in the United States than in Canada.
Through all entities in its public–private system, the US spends more per capita than any other nation in the world, but is the only wealthy industrialized country in the world that lacks some form of universal healthcare. In March 2010, the US Congress passed regulatory reform of the American health insurance system. However, since this legislation is not fundamental healthcare reform, it is unclear what its effect will be and as the new legislation is implemented in stages, with the last provision in effect in 2018, it will be some years before any empirical evaluation of the full effects on the comparison could be determined.
Healthcare costs in both countries are rising faster than inflation. As both countries consider changes to their systems, there is debate over whether resources should be added to the public or private sector. Although Canadians and Americans have each looked to the other for ways to improve their respective health care systems, there exists a substantial amount of conflicting information regarding the relative merits of the two systems. In the U.S., Canada's mostly monopsonistic health system is seen by different sides of the ideological spectrum as either a model to be followed or avoided.
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. 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. When comparing average incomes of doctors in Canada and U.S., it should be kept in mind that malpractice insurance premiums may differ significantly between Canada and the U.S., and the proportion of doctors who are specialists differs. In Canada, less than half of doctors are specialists whereas more than 70% of doctors are specialists in the U.S.
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. 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.
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. About two thirds of Canadians have private prescription drug coverage, mostly through their employers. 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.
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. 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. 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. 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.
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, 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. 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. Some generic drugs are thus available on Canadian shelves sooner.
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
The United States spends more on technology than Canada. In a 2004 study on medical imaging in Canada, 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. 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. 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. 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.
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.
The extra cost of malpractice lawsuits is a proportion of health spending in both the U.S. (1.7% in 2002) 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, 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. However, malpractice suits are far more common in the U.S., with 350% more suits filed each year per person. While malpractice costs are significantly higher in the U.S., they make up only 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. Critics say that defensive medicine consumes up to 9% of American healthcare expenses., but CBO studies suggest that it is much smaller.
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. 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.
In the World Health Organization's rankings of healthcare system performance among 191 member nations published in 2000, Canada ranked 30th and the U.S. 37th, while the overall health of Canadians was ranked 35th and Americans 72nd. However, the WHO's methodologies, which attempted to measure how efficiently health systems translate expenditure into health, generated broad debate and criticism.
Researchers caution against inferring healthcare quality from some health statistics. June O'Neill and Dave O'Neill point out that "...life expectancy and infant mortality are both poor measures of the efficacy of a health care system because they are influenced by many factors that are unrelated to the quality and accessibility of medical care".
In 2007, Gordon H. Guyatt et al. conducted a meta-analysis, or systematic review, of all studies that compared health outcomes for similar conditions in Canada and the U.S., in Open Medicine, an open-access peer-reviewed Canadian medical journal. They concluded, "Available studies suggest that health outcomes may be superior in patients cared for in Canada versus the United States, but differences are not consistent." Guyatt identified 38 studies addressing conditions including cancer, coronary artery disease, chronic medical illnesses and surgical procedures. Of 10 studies with the strongest statistical validity, 5 favoured Canada, 2 favoured the United States, and 3 were equivalent or mixed. Of 28 weaker studies, 9 favoured Canada, 3 favoured the United States, and 16 were equivalent or mixed. Overall, results for mortality favoured Canada with a 5% advantage, but the results were weak and varied. The only consistent pattern was that Canadian patients fared better in kidney failure.
In terms of population health, life expectancy in 2006 was about two and a half years longer in Canada, with Canadians living to an average of 79.9 years and Americans 77.5 years. Infant and child mortality rates are also higher in the U.S. Some comparisons suggest that the American system underperforms Canada's system as well as those of other industrialized nations with universal coverage. For example, a ranking by the World Health Organization of health care system performance among 191 member nations, published in 2000, ranked Canada 30th and the U.S. 37th, and the overall health of Canada 35th to the American 72nd. The WHO did not merely consider health care outcomes, but also placed heavy emphasis on the health disparities between rich and poor, funding for the health care needs of the poor, and the extent to which a country was reaching the potential health care outcomes they believed were possible for that nation. In an international comparison of 21 more specific quality indicators conducted by the Commonwealth Fund International Working Group on Quality Indicators, the results were more divided. One of the indicators was a tie, and in 3 others, data was unavailable from one country or the other. Canada performed better on 11 indicators; such as survival rates for colorectal cancer, childhood leukemia, and kidney and liver transplants. The U.S. performed better on 6 indicators, including survival rates for breast and cervical cancer, and avoidance of childhood diseases such as pertussis and measles. It should be noted that the 21 indicators were distilled from a starting list of 1000. The authors state that, "It is an opportunistic list, rather than a comprehensive list."
Some of the difference in outcomes may also be related to lifestyle choices. The OECD found that Americans have slightly higher rates of smoking and alcohol consumption than do Canadians as well as significantly higher rates of obesity. A joint US-Canadian study found slightly higher smoking rates among Canadians. Another study found that Americans have higher rates not only of obesity, but also of other health risk factors and chronic conditions, including physical inactivity, diabetes, hypertension, arthritis, and chronic obstructive pulmonary disease.
While a Canadian systematic review stated that the differences in the systems of Canada and the United States could not alone explain differences in healthcare outcomes, the study didn't consider that over 44,000 Americans die every year due to not having a single payer system for healthcare in the United States and it didn't consider the millions more that live without proper medical care due to a lack of insurance.
The United States and Canada have different racial makeups, different obesity rates and different alcoholism rates, which would likely cause the US to have a shorter average life expectancy and higher infant mortality even with equal healthcare provided. The US population is 12.2% African Americans and 16.3% Hispanic Americans (2010 Census), whereas Canada has only 2.5% African Canadians and 0.97% Hispanic Canadians (2006 Census). African Americans have higher mortality rates than any other racial or ethnic group for eight of the top ten causes of death. The cancer incidence rate among African Americans is 10% higher than among European Americans. U.S. Latinos have higher rates of death from diabetes, liver disease, and infectious diseases than do non-Latinos. Adult African Americans and Latinos have approximately twice the risk as European Americans of developing diabetes. The infant mortality rates for African Americans is twice that of whites. Unfortunately, directly comparing infant mortality rates between countries is difficult, as countries have different definitions of what qualifies as an infant death.
Another issue with comparing the two systems is the baseline health of the patient's for which the systems must treat. Canada has only half the obesity rate that the US system must deal with (14.3% vs 30.6%). On average, obesity reduces life expectancy by 6–7 years.
A 2004 study found that Canada had a slightly higher mortality rate for acute myocardial infarction (heart attack) because of the more conservative Canadian approach to revascularizing (opening) coronary arteries.
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. 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. 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.
An assessment by Health Canada found that cancer mortality rates are almost identical in the two countries. 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. 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.
A study based on data from 1978 through 1986 found very similar survival rates in both the United States and in Canada. However, a study based on data from 1993 through 1997 found lower cancer survival rates among Canadians than among Americans.
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.
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. 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.
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. Experts say that the incidence and mortality rates of cancer cannot be combined to calculate survival from cancer. Nevertheless, researchers have used the ratio of mortality to incidence rates as one measure of the effectiveness of healthcare. 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.
Racial and ethnic differences
The U.S. and Canada differ substantially in their demographics, and these differences may contribute to differences in health outcomes between the two nations. Although both countries have white majorities, Canada has a proportionately larger immigrant minority population. 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. 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. 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. 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. 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. 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.
Impact on economy
In 2002, automotive companies claimed that the universal system in Canada saved labour costs. In 2004, healthcare cost General Motors $5.8 billion, and increased to $7 billion. The UAW also claimed that the resulting escalating healthcare premiums reduced workers' bargaining powers.
In Canada, increasing demands for healthcare, due to the aging population, must be met by either increasing taxes or reducing other government programs. In the United States, under the current system, more of the burden will be taken up by the private sector and individuals.
Since 1998, Canada's successive multibillion-dollar budget surpluses have allowed a significant injection of new funding to the healthcare system, with the stated goal of reducing waiting times for treatment. However, this may be hampered by the return to deficit spending as of the 2009 Canadian federal budget.
One historical problem with the U.S. system was known as job lock, in which people become tied to their jobs for fear of losing their health insurance. This reduces the flexibility of the labor market. Federal legislation passed since the mid-1980s, particularly COBRA and HIPAA, has been aimed at reducing job lock. However, providers of group health insurance in many states are permitted to use experience rating and it remains legal in the United States for prospective employers to investigate a job candidate's health and past health claims as part of a hiring decision. Someone who has recently been diagnosed with cancer, for example, may face job lock not out of fear of losing their health insurance, but based on prospective employers not wanting to add the cost of treating that illness to their own health insurance pool, for fear of future insurance rate increases. Thus, being diagnosed with an illness can cause someone to be forced to stay in their current job.
Politics of health
Politics of each country
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. The 2000 U.S. election saw prescription drugs