Insights February 2014

U.S., Canadian healthcare systems share some challenges: Both systems more interested in constraining costs than providing care

Trudy Lieberman

WASHINGTON, DC/ Troy Media/ - Both Canada and the United States are historically and practically steeped in fee-for-service medicine, and much of the power to control prices rests in the hands of the medical establishment. While provincial governments have periodic negotiations with medical and hospital groups, and there are global budgets for hospitals that try to constrain costs, the system is relatively expensive.

In 2011, the U.S. won the dubious honor of having the most expensive system in the world, spending about $8,500 per capita. Canada spent about $4,500, making it the third most expensive country among a group of OECD-developed nations.

Still, that number needs perspective. In 1970, a few years before Canada implemented its national health insurance system, both countries were spending about 7 per cent of the GDP on healthcare. Thirty-nine years later, the U.S. was spending 50 per cent more of its national income on healthcare, leaving its patients with the highest out-of-pocket expenses in the world.

When I explained the high out-of-pocket expenses to Canadians on my speaking tour across the country there, that notion simply did not compute. There is some talk about imposing copays for some services as a way to help both the federal and provincial governments save money. But the idea of making people pay 50 per cent of a bill or a family paying $13,000 out of pocket before insurance benefits kick in is wildly unpopular.

As in the U.S., there's much soul searching about whether the country is getting as much bang for the bucks it spends. Does the quality of care match the country's outlay? A number of studies, including the latest international comparison from The Commonwealth Fund, show that Canada and the U.S. both fall down on several dimensions of care. Both Canadians and Americans were more likely to report long waits for primary care and high use of emergency rooms compared to other countries such as Germany, France and the United Kingdom.

I asked Jeffrey Turnbull, M.D., F.R.C.P.C., chief of staff at Ottawa General Hospital, about criticisms of the quality of Canadian healthcare. He said that, when it comes to treating heart attacks, stroke, heart failure and pneumonia "we do relatively well." But when you look at the broader indices that measure the inequities, the picture is very different. "Our vulnerable populations have rates like the developing world." We can say the same for groups in the U.S.

Our two countries also share the increasing burden of providing care for their aging populations. Indeed, lack of community support is one reason why waiting lists develop at Canadian hospitals. Seniors who are admitted to acute care hospitals sometimes stay much longer than what's medically necessary because they have no place to go.

The public, though, seems to be paying attention. Last summer the Canadian Medical Association polled residents to measure their priorities for long-term care. Ninety-three per cent said the government should develop a comprehensive seniors' strategy. The outgoing president of the CMA said the poll results sent a strong message the public wants action. In a system that's accountable to the taxpayers who fund it, it's easier for the federal and provincial governments to listen. Contrast that with the U.S. where long-term care is barely discussed, and the CLASS Act provision in the Affordable Care Act, a fledgling program to pay for long-term care was repealed.

Healthcare systems are not static, as Nicholas Timmins, the former health policy editor of The Financial Times, told a group of healthcare journalists at an Athens meeting a year ago. But neither do they change the fundamentals much. "Countries rarely change the way they do things," Timmins told the group. Canadians may fix their system; we may fix ours, but neither country is rushing to embrace the other's. Timmins added, "What systems do face is the desire to find a way to constrain costs."

At Breakfast with the Chiefs on Friday, October 18, 2013, Trudy Lieberman, Health Journalist for the Columbia Journalism Review and blogger at, and André Picard, Health Reporter and Columnist at The Globe and Mail, made the following presentation: The Future of Healthcare in North America: Is U.S.-Canada convergence in the cards? 

About the Author(s)

Trudy Lieberman, a former president of AHCJ, is a contributing editor to the Columbia Journalism Review. She is a fellow at the Center for Advancing Health where she blogs about paying for healthcare.


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