Benefits and Costs of the US vs. Canadian Healthcare Systems Taylor Mann, Susan Oladeji, Stephen DePaul, Pavan Thaker, Elizabeth Rutan and Supriya Venigalla University of Georgia
The healthcare mechanisms of the United States (US) and Canada are often compared due to the countries’ cultural and geographic similarities; however, healthcare delivery in the two countries varies greatly. The US is a multi-payer and predominantly privately funded system, while the Canadian system is primarily publically funded (The National Bureau of Economic Research [NBER]). Based on the percentage of GDP spent on healthcare, both of the countries spend more than the OECD average.
Canada’s current healthcare design, called Medicare, evolved from the Saskatchewan province’s decision in 1944 to provide universal hospital insurance. With Saskatchewan continuing to lead the way, eventually all of Canada’s provinces proceeded to provide universal medical coverage by 1965. In order to restrict doctors from “[opting] out of the system and [billing] patients themselves… the Canadian Healthcare Act of 1984…denies federal support to provinces that allow extra-billing within their insurance schemes and effectively forbids private or opted-out practitioners from billing beyond provincially mandated fee schedules.” The act officially defined the principles of Medicare: comprehensiveness, universality, accessibility, and portability, and public administration (Irvine, Ferguson, & Cackett, 2005).
The healthcare system of the US developed in response to problems distinct from those that drove the creation of the Canadian healthcare system. With American unemployment growing rapidly during the 1930s, there came an increased awareness of the need for medical reform (Kaiser Family Foundation [KFF], 2009, pg. 2). In an attempt to address this problem, President Roosevelt supported and passed the Social Security Act of 1935 to provide assistance for the elderly, unemployed, and needy children (Gerber & McGuire, 1995, pg. 266). After WWII, it became increasingly popular for large companies to withhold a portion of workers’ wages in order to provide insurance, thus leading to a wider usage of private healthcare insurance (KFF, 2009, pg. 3). Meanwhile, many in government promoted the idea of universal health insurance (KFF, 2009, pg. 4); however, others were resistant for of fear of the spread of communist ideals. Finally some progress was made, in 1965, when “both Medicare and Medicaid were incorporated into the Social Security Act as it was signed by President Johnson” (KFF, 2009, pg. 5). After the passage of Medicare and Medicaid, health care costs as a percentage of GDP began to rise significantly. With the large population of uninsured Americans and a drastic rise in health care costs many returned to the idea of universal healthcare. Many cost control ideas and new medical insurance reforms were proposed, but most never made it to fruition (KFF, 2009, pg. 6). In 1997, the Children’s Health Insurance Program (CHIP) was enacted to help provide for children of low-income families as a part of Medicaid (KFF, 2009, pg. 8).
The US healthcare system and the Canadian healthcare system vary greatly in overall health outcomes. In the US, the incidence of chronic diseases is higher, but as found by Sam and June O’Neil, the US also has better access to healthcare (2007, pg. 17). In Canada long wait times are the most common source of “unmet needs” – while in the US, the cost of care causes the highest rates of “unmet needs”. The US has a surplus of “early detection devices”, which is one source of high medical costs, but there is no evidence that access to state-of-the-art early detection devices has resulted in lower disease-specific mortality rates (O’Neil & O’Neil, 2007, pg. 13). The US spends the highest percentage of GDP on healthcare of any OECD country at 17.4%, while Canada spends 11.4% (NBER). Although...
References: Anderson, G. F., & Frogner, B. K. (2008). Health spending in OECD countries: obtaining value per dollar. Health Affairs (Project Hope), 27(6), 1718-1727. doi: 10.1377/hlthaff.27.6.1718
Barr, D. A. (2011). Introduction to U.S. Health Policy: The Organization, Financing, and Delivery of Health Care in America. The Johns Hopkins University Press
Chari, R., Hogan, J., Murphy, G
Eisenberg, M. J., Filion, K. B., Azoulay, A., Brox, A. C., Haider, S., & Pilote, L. (2005). Outcomes and Cost of Coronary Artery Bypass Graft Surgery in the United States and Canada. Archives of Internal Medicine, 165(13), 1506-1513
Hill, S. C., Abdus, S., Hudson, J. L., & Selden, T. M. (2014). Adults In The Income Range For The Affordable Care Act’s Medicaid Expansion Are Healthier Than Pre-ACA Enrollees. Health Affairs, 33(4), 691-699. doi:10.1377/hlthaff.2013.0743
Hussey PS, Anderson GF, Osborn R, et al. (2004). "How does the quality of care compare in five countries?". Health affairs (Project Hope) 23 (3): 89–99.doi:10.1377/hlthaff.23.3.89. PMID 15160806
June E. O 'Neill & Dave M. O 'Neill, 2008. "Health Status, Health Care and Inequality: Canada vs. the U.S," Forum for Health Economics & Policy, Berkeley Electronic Press, vol. 10(1)
Kaul P, Armstrong PW, Chang WC, et al
Legreid, A. M. (2013). Canada Health Act of 1984. Salem Press Encyclopedia
Pandey, S. K., Cantor, J. C., & Lloyd, K. (2014). Immigrant Health Care Access and the Affordable Care Act. Public Administration Review, 74(6), 749-759. doi:10.1111/puar.12280
Patient Protection and Affordable Care Act, 25 U.S.C
Reinhardt, U. E., Hussey, P. S., & Anderson, G. F. (2004). U.S. Health Care Spending In An International Context. Health Affairs, 23(3), 10-25
Starr, P. (2011). Remedy and Reaction. Yale University Press
Trovato F (January, 2001)
White, C. (2007). Health care spending growth: how different is the United States from the rest of the OECD? Health Affairs (Project Hope), 26(1), 154-161
(2004). Pew Research Global Attitudes Project, Americans and Canadians. Pew Reesearch Center
Please join StudyMode to read the full document