Canadian and American health care systems compared

From Academic Kids

The comparison of the health care systems of Canada and the United States is of great importance to both nations. The very different methods of delivering health care allows citizens and politicians to look to the other side of the border for alternatives. In Canada the United States is used as a model and as a warning against increasing private sector involvement in health care. In the United States, meanwhile, Canada's monopsonistic health system is seen by different sides of the ideological spectrum as either a model to be followed or avoided.


Government involvement

The two neighbours are a dramatic contrast. Canada has one of the world's most fully socialized health care systems (with the exception of services noted below) while the United States is the only OECD country not to have some form of guaranteed health insurance.

The governments of both nations are closely involved in the delivery of health care. The central structural difference between the two is in health insurance. In Canada all citizens are guaranteed access to health care by the Canada Health Act, which explicitly prohibits billing end users for procedures that are covered by Medicare. In the United States health insurance must be paid for privately if one is not disabled or over 65, in most cases by a person’s employer. However, there are about forty million Americans who do not have health insurance.

Canada's health plan only covers certain areas. Dental care and prescription drugs are not covered, and optometry is only covered in some provinces. Visits to many specialists may require an additional user 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. When compared, the privately managed sectors of the health system have similar rates of participation and treatment in both countries.

Cost of health care

Health care is of the most expensive items of both nations’ budgets. In 2001, in Canada, about 16.2% of government money was spent on health care, while in the United States this number was 17.6%. When exchange rates are included it can be seen that government in the United States spends more per capita on health care than it does in Canada. In 2001, the government of Canada spent $1533 (in US dollars) per person on health care, while in the United States it gave $2168.

Despite the American government paying more per capita, private sources also pay far more for health care in the United States. In Canada an average of $630 dollars is spent annually by individuals or private insurance companies for health care, including dental, eye care, and drugs. In the United States this number is $2719.

In 2001 the United States spent in total 13.6% of its annual GDP on health care. In Canada only 9.5% of the GDP was spent on health care.

Medical professionals

Some of the extra money spent in the United States goes to doctors, nurses, and other medical professionals, all of whom are paid higher salaries south of the border. In Canada billing rates for each procedure are set through negotiations between the provincial governments and the physicians' organizations. In the United States the free market determines the rates, but with some significant influence from the large insurance companies. This leads to much higher salaries in the United States. Some economists have argued that in highly technical matters like health care the free market fails as one group, the doctors, have far more knowledge than the patients. In Canada the government professionals are also experts in the field and thus, the argument goes, fairer rates are set.

One effect of this is a brain drain whereby skilled doctors and nurses, who have trained in Canada partially at the taxpayer's expense, emigrate to the United States to pursue higher salaries. In part due to this problem, Canada has fewer doctors per capita than the United States. In the United States there were 2.8 doctors per 1000 people in 1998 while in Canada only 2.1.


Another much higher cost in the United States is that of prescription drugs and medicines. Canada has laws that impose medical patents less rigorously. Generic drugs are thus available on Canadian shelves sooner. The Canadian system also takes advantage of centralized buying by the provincial governments that have more market heft and buy in bulk, lowering prices. This typically delays the introduction of new medications into the Canadian market. However, despite this Canada continues to be a world leader in the research and development of pharmaceuticals.


A third important difference is the prevalence of expensive malpractice lawsuits in the United States. These frequently award patients millions of dollars for errors made by doctors, though some states have placed limits on maximum awards (e.g., California has a $250,000 maximum payout). In Canada such lawsuits are very rare. Canadian law gives virtually nothing for pain and suffering, which in the United States is worth millions. Rather Canadian settlements cover future medical care, lost income, and other such expenses. Moreover, in Canada it is illegal for lawyers to work on commission - they must be paid their hourly rate or work pro bono. This greatly reduces the number of lawsuits, and makes it very difficult for the poor to sue.

Quality of care

While Canada’s health system is cheaper, it compares well on a statistical level with the American one. Life expectancy in 2002 was about two and a half years lower in the United States than in Canada, with Canadians living to an average of 79.8 years and Americans 77.3. Infant and child mortality rates are also markedly higher in the United States.

When comparisons of public satisfaction are made between the two nations' health care systems, the numbers for Canadians and insured Americans are almost identical. This holds true in average annual doctor's visits. While a good number of Canadians complained that they were unable to receive treatment due to long wait lists, overall Canadians had no greater number of people who were unable to receive treatment than insured Americans.

A much greater difference was seen, however, between uninsured Americans and Canadians. Overall the uninsured group was 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. This leads to numbers somewhat lower for Americans.


1997 death rates for various types of cancer can be used as a comparative example of differences between the systems. Below are the numbers of deaths per 100,000 people each year from various forms of cancer. These numbers show roughly comparable rates, with Canada being slightly better. It is also important to note that more than fifty percent more money is spent on each cancer patient in the United States than in Canada.


Cancer Canadian rate American rate
Breast 32.6 30.2
Intestinal 19.4 21.2
Leukaemia 5.8 6.6
Lung 37.7 45.7
Non-Hodgkin lymphoma 6.9 8.1
All cancers 179.2 187.7


Cancer Canadian rate American rate
Intestinal 22.1 21.8
Leukaemia 7.4 8.6
Lung 65.4 69.7
Non-Hodgkin lymphoma 8.2 9.4
Prostate 24.4 25.1
All cancers 212.3 214.6

Source: WHO Cancer database (

Some of the differences shown above are related to lifestyle choices, and this is true of all health comparisons between the two countries. For instance, Canada has a slightly higher smoking rate than the United States while the Americans have a marginally higher rate of obesity.

Effect of poverty

If the poorest twenty percent of Americans were excluded from health statistics, Canadian and American life expectancy and infant mortality rates would be almost identical.

There is some disagreement as to whether the poor are less healthy merely because they have reduced access to medical treatment in the United States. The fact that the poor are also generally poorer in the United States is believed by many to contribute greatly to reduced health. If this is the case, then not only adopting Canada's health care system but other social welfare programs may also be necessary to bring American health levels up to Canadian ones.

However, the wealthy are more likely to be more healthy in the United States than Canada. The better health of this smaller group cannot statistically offset the poorer health at the much larger bottom levels of the socio-economic system.

Economic effects

Conversely, the problem could be not poverty hurting health, but poor health causing poverty. Over a quarter of the American poor report chronic health difficulties, a level much higher than in Canada. This can make it far harder to find and hold a job and improve one's financial well being. Better overall health of the poor encourages social mobility and may play a role in it recently being easier to climb the social ladder in Canada than in the United States.

The economic effects of the differences in the two health system are hard to judge. Canada's higher taxes to pay for health care certainly have some negative impact on its economy. There are, however, some benefits as well. Major corporations often find it cheaper to pay those taxes than provide expensive employee health plans as in the United States. This is especially true of the auto industry.


One crucial advantage of the larger role of the private sector in American health care is flexibility. In Canada, increasing demands for health care, due to the ageing population, must be met by either increasing taxes or reducing other government programs. Both of these are being done in Canada to great acrimony and debate, and since governments are very reluctant to raise taxes, there is a tendency to delay until a problem is critical before acting. In the United States, if the government does not act, more of the burden for health care will simply be taken up by the private sector and individuals. On the other hand, this might also mean that an increasing number of Americans will find themselves without health insurance.

The two greatest problems with the current Canadian system, waiting lists and a shortage of MRI machines, are a direct product of this lack of flexibility. The problem is compounded by Canada's overall faster population and economic growth over the last several decades.

Politics of health

In both countries health care is a major political issue, with many polls showing it among the top concerns of voters. Health care tends to be of greater interest to Canadians in polls, in part because Canadians do not care much about issues that are important to Americans, like terrorism, the War in Iraq, or the economy. Health care is also linked very closely to Canadian pride and patriotism making it an important issue.

Currently, the major parties in both countries support the status quo. The Democratic President Bill Clinton attempted a large reform of health care, but the effort collapsed in his first term. The 2000 U.S. election saw prescription drugs become a central issue, but although the program created by George W. Bush increased the relative cost of American health care, it did not fundamentally change the system. In the 2004 U.S. election health care proved to be an important issue to some voters, but not important enough to justify the election of Bush's opponent.

In Canada, the right-wing and now defunct Reform Party and its successor, the Canadian Alliance toyed with increasing the role of the private sector in the Canadian health care system. Sharp public backlash caused these plans to be quickly shelved. Public concern over the private sector playing a greater role in Canadian health care continues to haunt the right wing. In the 2004 Canadian election many pundits argue it was the specter of an alleged secret plan to change Medicare that lead to the collapse of the Conservative popularity in the last days of the campaign.

More radical solutions in both countries have come from the sub-national level. In 2002 Massachusetts held a referendum on whether to adopt universal health insurance, the measure losing, but having considerable support. Oil wealth allows Alaska to support the USA's only full health insurance system, but ironically, in Canada, it is oil rich Alberta under the conservative government of Ralph Klein that is seen to experiment most with increasing the role of the private sector in health care. These include the introduction of private clinics that are allowed to bill patients for some of the cost of a procedure. Quebec has also recently experimented with private health care under the Parti Quebecois and Liberal governments. Not only does Quebec now have the highest number of private clinics which deliver publicly funded care, but Quebec also has whole hospitals and emergency wards that have opted out of the public system.

A recent Canadian court decision has ruled that the Canadian health care system, which outlaws private health insurance, contravened the Quebec Charter of Rights guaranteeing the right to security of the person. On Thursday, June 9, 2005, the Supreme Court of Canada overturned a Quebec law preventing people from buying private health insurance to pay for medical services available through the publicly funded system. While the ruling applies only to the province of Quebec, it is believed by some that it could fundamentally change the way health care is delivered across the country.

The ruling may be read here:[1] (

See also:

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