In the midst of our national debate about healthcare reform, people on both sides of the debate seem to pick and choose among the facts and myths about the nationalized healthcare available in a number of other countries. The fact is that every nationalized health care system in the world is battling issues of rapidly rising costs and decreasing access to care. But, these systems also have some very attractive benefits. So, let’s take a look at the pro’s and con’s of the Canadian system.
Michael Tanner, the director of health and welfare studies at the Cato Institute, is the coauthor of Healthy Competition: What’s Holding Back Health Care and How to Free It and the author of this series:
Canada has a single payer system but the provinces have the bulk of the responsibility of running the health care system for their own residents. In order to qualify for federal funding, each province must meet the following criteria.
Universality. Available to all provincial residents on uniform terms and conditions;
Comprehensiveness. Covering all medically necessary hospital and physician services;
Portability. Allowing residents to remain covered when moving from province to province;
Accessibility. Having no financial barriers to access such as deductibles or copayments; and Public administration. Administered by a nonprofit authority accountable to the provincial government.
Nevertheless, the 2005 Canadian Supreme Court ruling striking down Quebec’s prohibition on private insurance contracting may foreshadow significant changes in Canada’s health care system.
Percent Insured. ~100%
Funding. Funding is provided jointly by the federal and state governments. The federal government uses funds from general revenue to provide a block grant to each of the provinces. The block grant finances only about 16% of each province’s health care expenditures. The remainder is funded by provincial taxes: mostly personal and corporate income tax. Health care spending makes up between one-third to one-half of provincial social welfare spending. For the nation as a whole, health care costs only 9% of GDP.
Private Insurance. “At one time, all provinces prohibited private insurance from covering any service or procedure provided under the government program. But in 2005, a Canadian Supreme Court ruling struck down Quebec’s prohibition on private insurance contracting.” Private clinics are barred from offering medical services which are covered by the Canada Health Act, but many begun to offer services in the black market.
Physician Compensation. Physicians work in private practice and are paid on a fee-for-service basis. Since these fees are set by a centralized agency, wages are fairly low which has lead to a physician shortage. There are only 2.1 physicians per 1,000 people. This is far less than the OECD average of 3.0 physicians per 1,000. Hospitals are funded on a global budget basis. Capital expenditures are reviewed and approved on a case-by-case basis.
Physician Choice. Referrals are required for all specialist services except the ED.
Copayment/Deductibles. There are generally no copayments or deductibles for services. However, British Columbia, Alberta and Ontario charge insurance premiums (although health services cannot be denied because of inability to pay).
Technology. The U.S. has five times as many MRI machines per capita as Canada and three times as many CT scanners. However, because of Canada’s proximity to the U.S., many Canadians do have the option of coming to the U.S. for treatment.
Waiting Times. In a 2005 decision striking down part of Quebec’s universal care law, Canadian Supreme Court Chief Justice Beverly McLachlin wrote that it was undisputed that many Canadians waiting for treatment suffer chronic pain and that “patients die while on the waiting list.”
For instance, the Fraser Institute finds that 800,000 Canadians are waiting for treatment at any given time. “According to [the Fraser] survey, treatment time from initial referral by a GP through consultation with a specialist, to final treatment, across all specialties and all procedures (emergency, nonurgent, and elective), averaged 17.7 weeks in 2005.”
A recent survey by the Fraser Institute, a public policy organization with offices in the United States and Canada, found that people in Canada wait an average of 4.8 weeks for simple CT scans, a procedure patients in the United States often receive within days or even moments of a physician’s order.
Canadians wait an average of 18.3 weeks to be seen by specialists such as neurosurgeons, radiologists, and ear, nose and throat doctors. However, that 18.3-week waiting period begins after the patient has waited to see a general practitioner for a referral. In Saskatchewan the wait for a specialist averages 27.2 weeks, and in New Brunswick it’s 25.2 weeks.
In Newfoundland and Labrador, a Canadian waits 20 weeks just to receive an MRI. An American, by contrast, can receive an MRI the same day as the referral. Even most uninsured, destitute Americans can receive MRIs in less than 20 weeks.
In addition, there has been much discussion about cancer treatment, at least as compared to the US. Here’s some information about that topic from the National Center for Policy Analysis:
Results for Canada. Canada’s system of national health insurance is often cited as a model for the United States. But an analysis of 2001 to 2003 data by June O’Neill, former director of the Congressional Budget Office, and economist David O’Neill, found that overall cancer survival rates are higher in the United States than in Canada:
- For women, the average survival rate for all cancers is 61 percent in the United States, compared to 58 percent in Canada.
- For men, the average survival rate for all cancers is 57 percent in the United States, compared to 53 percent in Canada.
If you are interested on more information about the Canadian health care system, see Tanner’s October 2, 2007 post in The Healthcare Economist.
Here are links to the entire series: The Grass Is Not Always Greener: A Look at National Health Care Systems Around the World