September 14, 2009

Health Care in Other Countries: Canada

New York Times "Prescriptions":

Theodore R. Marmor is professor emeritus of public policy and political science at Yale University and a former fellow of the Canadian Institute for Advanced Research. He is the author of “The Politics of Medicare” (Aldine Transaction, 2000). He spoke to freelance writer Sarah Arnquist.


  • Life expectancy: 81 years (USA: 78)
  • Infant mortality: 5 per 1,000 live births (7)
  • Health spending as a percentage of GDP: 10 (15)
  • Percentage of health spending that is private: 30 (54)
  • Doctors per 10,000 people: 19 (26)
Source: World Health Organization.

Q. How does the Canadian system provide health care at lower cost than the American system?

A. Canada’s national health insurance, called Medicare, provides hospital and physician insurance to all Canadian citizens. It does not provide health care directly from government hospitals or through publicly employed physicians. Imagine 10 provincial nonprofit health insurance plans without deductibles, co-insurance or co-payments for medically prescribed treatment.

Canada pays for more hospital days and doctor visits per capita than the United States but spends about 40 percent less. Canadians pay their doctors, nurses and other medical personnel less, and provide fewer very expensive equipment and services. Open heart surgery, for example, would cost about 30 percent less in Toronto than in Chicago. The lower supply of expensive equipment means Canadians wait somewhat longer for those services, but in recent years improved management has reduced waiting lists for services like M.R.I. scans. Canada has more general practice doctors per capita than the United States does, so basic office visits are considerably less costly. Private spending, which is about 30 percent of all Canadian health spending, has increased more rapidly than public expenditures over the past 40 years.

The final reason Canada has lower costs is that the provincial governments are responsible for financing health care and directly face the pressure of rising health costs. They must act to control the costs because other government services compete for public funding.

Q. What does the Canadian health system do particularly well?

A. Two features stand out. One is that the financing of medical care is extraordinarily simple for patients, physicians and hospitals. Patients face no bills for acute services and no co-payments. Doctors are paid electronically each month according to a set payment rate, and the hospitals must follow a set budget. Bankruptcy from medical bills, insurance disputes and billing confusion do not exist as problems.

The second strength is clarity about the purposes public health insurance serves and for many Canadians a sense of pride that access to medical care is not treated as a market transaction. Medical care is allocated more by ability to benefit than by ability to pay, however, disparities in medical use still exist between people of different classes and educational backgrounds.

Q. What is your biggest criticism of it?

A. The continued nastiness of federal-provincial negotiations about the shared financing of Medicare is one unappealing feature of the Canadian system. This dual responsibility leads to endless blaming between the national and provincial governments for the pressures of medical expenditures on the budgets of other public programs and tax levels. This, in turn, has partly prevented Canada from handling drug costs in the uncomplicated Medicare program.

Q. What is the most important lesson Americans should learn from the Canadian system?

A. Until the 1960s, Canada was very similar to the United States in its medical, hospital, economic and social context. Canada’s experience since then demonstrates that it is possible to have public health insurance that largely fulfills the explicit purposes set out in the Canada Health Act of 1984: universal insurance, comprehensive hospital and physician benefits (without hidden insurance policy constraints), portable coverage across the nation, clear accountability through the political process and no significant financial barriers to care.

By Sarah Arnquist
August 14, 2009