Health Insurance Gov Comparison Essay

Comparison of the healthcare systems in Canada and the United States is often made by government, public health and public policy analysts.[1][2][3][4][5] The two countries had similar healthcare systems before Canada changed its system in the 1960s and 1970s. The United States spends much more money on healthcare than Canada, on both a per-capita basis and as a percentage of GDP.[6] In 2006, per-capita spending for health care in Canada was US$3,678; in the U.S., US$6,714. The U.S. spent 15.3% of GDP on healthcare in that year; Canada spent 10.0%.[6] In 2006, 70% of healthcare spending in Canada was financed by government, versus 46% in the United States. Total government spending per capita in the U.S. on healthcare was 23% higher than Canadian government spending, and U.S. government expenditure on healthcare was just under 83% of total Canadian spending (public and private) though these statistics don't take into account population differences.[7]

Studies have come to different conclusions about the result of this disparity in spending. A 2007 review of all studies comparing health outcomes in Canada and the US in a Canadian peer-reviewed medical journal found that "health outcomes may be superior in patients cared for in Canada versus the United States, but differences are not consistent."[8] Some of the noted differences were a higher life expectancy in Canada, as well as a lower infant mortality rate than the United States.

One commonly cited comparison, the 2000 World Health Organization's ratings of "overall health service performance", which used a "composite measure of achievement in the level of health, the distribution of health, the level of responsiveness and fairness of financial contribution", ranked Canada 30th and the US 37th among 191 member nations. This study rated the US "responsiveness", or quality of service for individuals receiving treatment, as 1st, compared with 7th for Canada. However, the average life expectancy for Canadians was 80.34 years compared with 78.6 years for residents of the US.[9]

The WHO's study methods were criticized by some analyses. While life-expectancy and infant mortality are commonly used in comparing nationwide health care, they are in fact affected by many factors other than the quality of a nation's health care system, including individual behavior and population makeup.[10] A 2007 report by the Congressional Research Service carefully summarizes some recent data and noted the "difficult research issues" facing international comparisons.[11]

Government involvement[edit]

In 2004, government funding of healthcare in Canada was equivalent to $1,893 per person. In the US, government spending per person was $2,728.[12]

The Canadian healthcare system is composed of at least 10 mostly autonomous provincial healthcare systems that report to their provincial governments, and a federal system which covers the military and First Nations. This causes a significant degree of variation in funding and coverage within the country.


Canada and the US had similar healthcare systems in the early 1960s,[1] but now have a different mix of funding mechanisms. Canada's universal single-payer healthcare system covers about 70% of expenditures, and the Canada Health Act requires that all insured persons be fully insured, without co-payments or user fees, for all medically necessary hospital and physician care.[citation needed] About 91% of hospital expenditures and 99% of total physician services are financed by the public sector.[13] In the United States, with its mixed public-private system, 16% or 45 million American residents are uninsured at any one time.[14] The U.S. is one of two OECD countries not to have some form of universal health coverage, the other being Turkey. Mexico established a universal healthcare program by November 2008.[15]

Health insurance[edit]

The governments of both nations are closely involved in healthcare. The central structural difference between the two is in health insurance. In Canada, the federal government is committed to providing funding support to its provincial governments for healthcare expenditures as long as the province in question abides by accessibility guarantees as set out in the Canada Health Act, which explicitly prohibits billing end users for procedures that are covered by Medicare.[citation needed] While some label Canada's system as "socialized medicine," but health economists don't use that term. Unlike systems with public delivery, such as the UK, the Canadian system provides public coverage for a combination of public and private delivery. Princeton University health economist Uwe E. Reinhardt says that single-payer systems are not "socialized medicine" but "social insurance" systems, because doctors are in the private sector.[16] Similarly, Canadian hospitals are controlled by private boards and/or regional health authorities, rather than being part of government.

In the US, direct government funding of health care is limited to Medicare, Medicaid, and the State Children's Health Insurance Program (SCHIP), which cover eligible senior citizens, the very poor, disabled persons, and children. The federal government also runs the Veterans Administration, which provides care to retired or disabled veterans, their families, and survivors through medical centers and clinics.

The U.S. government also runs the Military Health System. In fiscal year 2007, the MHS had a total budget of $39.4 billion and served approximately 9.1 million beneficiaries, including active-duty personnel and their families, and retirees and their families. The MHS includes 133,000 personnel, 86,000 military and 47,000 civilian, working at more than 1,000 locations worldwide, including 70 inpatient facilities and 1,085 medical, dental, and veterans' clinics.

One study estimates that about 25 percent of the uninsured in the U.S. are eligible for these programs but remain unenrolled; however, extending coverage to all who are eligible remains a fiscal and political challenge.[17]

For everyone else, health insurance must be paid for privately. Some 59% of U.S. residents have access to health care insurance through employers, although this figure is decreasing, and coverages as well as workers' expected contributions vary widely.[18] Those whose employers do not offer health insurance, as well as those who are self-employed or unemployed, must purchase it on their own. Nearly 27 million of the 45 million uninsured U.S. residents worked at least part-time in 2007, and more than a third were in households that earned $50,000 or more per year.[18]


Despite the greater role of private business in the US, federal and state agencies are increasingly involved, paying about 45% of the $2.2 trillion the nation spent on medical care in 2004.[19] The U.S. government spends more on healthcare than on Social Security and national defense combined, according to the Brookings Institution.[20]

Beyond its direct spending, the US government is also highly involved in healthcare through regulation and legislation. For example, the Health Maintenance Organization Act of 1973 provided grants and loans to subsidize Health Maintenance Organizations and contained provisions to stimulate their popularity. HMOs had been declining before the law; by 2002 there were 500 such plans enrolling 76 million people.[21]

The Canadian system has been 69–75% publicly funded,[22] though most services are delivered by private providers, including physicians (although they may derive their revenue primarily from government billings). Although some doctors work on a purely fee-for-service basis (usually family physicians), some family physicians and most specialists are paid through a combination of fee-for-service and fixed contracts with hospitals or health service management organizations.

Canada's universal health plan does not cover certain services. Non-cosmetic dental care is covered for children up to age 14 in some provinces. Outpatient prescription drugs are not required to be covered, but some provinces have drug cost programs that cover most drug costs for certain populations. In every province, seniors receiving the Guaranteed Income Supplement have significant additional coverage; some provinces expand forms of drug coverage to all seniors,[23] low-income families,[24] those on social assistance,[25] or those with certain medical conditions.[26] Some provinces cover all drug prescriptions over a certain portion of a family's income.[27] Drug prices are also regulated, so brand-name prescription drugs are often significantly cheaper than in the U.S.[28]Optometry is only covered in some provinces and is sometimes only covered for children under a certain age.[29] Visits to non-physician specialists may require an additional 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.

According to Dr. Albert Schumacher, former president of the Canadian Medical Association, an estimated 75 percent of Canadian healthcare services are delivered privately, but funded publicly.

"Frontline practitioners whether they're GPs or specialists by and large are not salaried. They're small hardware stores. Same thing with labs and radiology clinics …The situation we are seeing now are more services around not being funded publicly but people having to pay for them, or their insurance companies. We have sort of a passive privatization."[30]

Coverage and access[edit]

In both Canada and the United States, access can be a problem. Studies suggest that 40% of U.S. citizens do not have adequate health insurance, if any at all. In Canada, 5% of Canadian citizens have not been able to find a regular doctor, with a further 9% having never looked for one. Yet, even if some cannot find a family doctor, every Canadian citizen is covered by the national health care system. The U.S. data is evidenced in a 2007 Consumer Reports study on the U.S. health care system which showed that the underinsured account for 24% of the U.S. population and live with skeletal health insurance that barely covers their medical needs and leaves them unprepared to pay for major medical expenses. When added to the population of uninsured (approximately 16% of the U.S. population), a total of 40% of Americans ages 18–64 have inadequate access to healthcare, according to the Consumer Reports study.[31] The Canadian data comes from the 2003 Canadian Community Health Survey,[32]

In the U.S., the federal government does not guarantee universal healthcare to all its citizens, but publicly funded healthcare programs help to provide for the elderly, disabled, the poor, and children.[33] The Emergency Medical Treatment and Active Labor Act or EMTALA also ensures public access to emergency services. The EMTALA law forces emergency healthcare providers to stabilize an emergency health crisis and cannot withhold treatment for lack of evidence of insurance coverage or other evidence of the ability to pay.[34] EMTALA does not absolve the person receiving emergency care of the obligation to meet the cost of emergency healthcare not paid for at the time and it is still within the right of the hospital to pursue any debtor for the cost of emergency care provided. In Canada, emergency room treatment for legal Canadian residents is not charged to the patient at time of service but is met by the government.

According to the United States Census Bureau, 59.3% of U.S. citizens have health insurance related to employment, 27.8% have government-provided health-insurance; nearly 9% purchase health insurance directly (there is some overlap in these figures), and 15.3% (45.7 million) were uninsured in 2007.[18] An estimated 25 percent of the uninsured are eligible for government programs but unenrolled.[17] About a third of the uninsured are in households earning more than $50,000 annually.[18][35] A 2003 report by the Congressional Budget Office found that many people lack health insurance only temporarily, such as after leaving one employer and before a new job. The number of chronically uninsured (uninsured all year) was estimated at between 21 and 31 million in 1998.[36] Another study, by the Kaiser Commission on Medicaid and the Uninsured, estimated that 59 percent of uninsured adults have been uninsured for at least two years.[37] One indicator of the consequences of Americans' inconsistent health care coverage is a study in Health Affairs that concluded that half of personal bankruptcies involved medical bills.[38] Although other sources dispute this,[39] it is possible that medical debt is the principal cause of bankruptcy in the United States.[40]

A number of clinics provide free or low-cost non-emergency care to poor, uninsured patients. The National Association of Free Clinics claims that its member clinics provide $3 billion in services to some 3.5 million patients annually.[41]

A peer-reviewed comparison study of healthcare access in the two countries published in 2006 concluded that U.S. residents are one third less likely to have a regular medical doctor, one fourth more likely to have unmet healthcare needs, and are more than twice as likely to forgo needed medicines.[42] The study noted that access problems "were particularly dire for the US uninsured." Those who lack insurance in the U.S. were 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.[42]

Another cross-country study compared access to care based on immigrant status in Canada and the U.S.[43] Findings showed that in both countries, immigrants had worse access to care than non-immigrants. Specifically, immigrants living in Canada were less likely to have timely Pap tests compared with native-born Canadians; in addition, immigrants in the U.S. were less likely to have a regular medical doctor and an annual consultation with a health care provider compared with native-born Americans. In general, immigrants in Canada had better access to care than those in the U.S., but most of the differences were explained by differences in socioeconomic status (income, education) and insurance coverage across the two countries. However, immigrants in the U.S. were more likely to have timely Pap tests than immigrants in Canada.

Cato Institute has expressed concerns that the U.S. government has restricted the freedom of Medicare patients to spend their own money on healthcare, and has contrasted these developments with the situation in Canada, where in 2005 the Supreme Court of Canada ruled that the province of Quebec could not prohibit its citizens from purchasing covered services through private health insurance. The institute has urged the Congress to restore the right of American seniors to spend their own money on medical care.[44]

Coverage for Mental Health[edit]

The Canada Health Act covers the services of psychiatrists, who are medical doctors with additional training in psychiatry but does not cover treatment by a psychologist[45][46][47] or psychotherapist unless the practitioner is also a medical doctor. Goods and Services Tax or Harmonized Sales Tax (depending on the province) applies to the services of psychotherapists.[48] Some provincial or territorial programs and some private insurance plans may cover the services of psychologists and psychotherapists, but there is no federal mandate for such services in Canada. In the U.S., the Affordable Care Act includes prevention, early intervention, and treatment of mental and/or substance use disorders as an “essential health benefit” (EHB) that must be covered by health plans that are offered through the Health Insurance Marketplace. Under the Affordable Care Act, most health plans must also cover certain preventive services without a copayment, co-insurance, or deductible.[49] In addition, the U.S. Mental Health Parity and Addiction Equity Act (MHPAEA) of 2008 mandates “parity” between mental health and/or substance use disorder (MH/SUD) benefits and medical/surgical benefits covered by a health plan. Under that law, if a health care plan offers mental health and/or substance use disorder benefits, it must offer the benefits on par with the other medical/surgical benefits it covers.[50]

Wait times[edit]

One complaint about both the U.S. and Canadian systems is waiting times, whether for a specialist, major elective surgery, such as hip replacement, or specialized treatments, such as radiation for breast cancer; wait times in each country are affected by various factors. In the United States, access is primarily determined by whether a person has access to funding to pay for treatment and by the availability of services in the area and by the willingness of the provider to deliver service at the price set by the insurer. In Canada, the wait time is set according to the availability of services in the area and by the relative need of the person needing treatment.[citation needed]

As reported by the Health Council of Canada, a 2010 Commonwealth survey found that 39% of Canadians waited 2 hours or more in the emergency room, versus 31% in the U.S.; 43% waited 4 weeks or more to see a specialist, versus 10% in the U.S. The same survey states that 37% of Canadians say it is difficult to access care after hours (evenings, weekends or holidays) without going to the emergency department over 34% of Americans. Furthermore, 47% of Canadians and 50% of Americans who visited emergency departments over the past two years feel that they could have been treated at their normal place of care if they were able to get an appointment.[51]

A report published by Health Canada in 2008 included statistics on self-reported wait times for diagnostic services.[52] The median wait time for diagnostic services such as MRI and CAT scans is two weeks with 89.5% waiting less than 3 months.[52][53] The median wait time to see a special physician is a little over four weeks with 86.4% waiting less than 3 months.[52][54] The median wait time for surgery is a little over four weeks with 82.2% waiting less than 3 months.[52][55] In the U.S., patients on Medicaid, the low-income government programs, can wait three months or more to see specialists. Because Medicaid payments are low, some have claimed that some doctors do not want to see Medicaid patients. For example, in Benton Harbor, Michigan, specialists agreed to spend one afternoon every week or two at a Medicaid clinic, which meant that Medicaid patients had to make appointments not at the doctor's office, but at the clinic, where appointments had to be booked months in advance.[56] A 2009 study found that on average the wait in the United States to see a medical specialist is 20.5 days.[57]

In a 2009 survey of physician appointment wait times in the United States, the average wait time for an appointment with an orthopedic surgeon in the country as a whole was 17 days. In Dallas, Texas the wait was 45 days (the longest wait being 365 days). Nationwide across the U.S. the average wait time to see a family doctor was 20 days. The average wait time to see a family practitioner in Los Angeles, California was 59 days and in Boston, Massachusetts it was 63 days.[58]

Studies by the Commonwealth Fund found that 42% of Canadians waited 2 hours or more in the emergency room, vs. 29% in the U.S.; 57% waited 4 weeks or more to see a specialist, vs. 23% in the U.S., but Canadians had more chances of getting medical attention at nights, or on weekends and holidays than their American neighbors without the need to visit an ER (54% compared to 61%).[59] Statistics from the Canadian free market think tank Fraser Institute in 2008 indicate that the average wait time between the time when a general practitioner refers a patient for care and the receipt of treatment was almost four and a half months in 2008, roughly double what it had been 15 years before.[60]

A 2003 survey of hospital administrators conducted in Canada, the U.S., and three other countries found dissatisfaction with both the U.S. and Canadian systems. For example, 21% of Canadian hospital administrators, but less than 1% of American administrators, said that it would take over three weeks to do a biopsy for possible breast cancer on a 50-year-old woman; 50% of Canadian administrators versus none of their American counterparts said that it would take over six months for a 65-year-old to undergo a routine hip replacement surgery. However, U.S. administrators were the most negative about their country's system. Hospital executives in all five countries expressed concerns about staffing shortages and emergency department waiting times and quality.[61][62]

In a letter to the Wall Street Journal, Robert Bell, the President and CEO of University Health Network, Toronto, said that Michael Moore's film Sicko "exaggerated the performance of the Canadian health system — there is no doubt that too many patients still stay in our emergency departments waiting for admission to scarce hospital beds." However, "Canadians spend about 55% of what Americans spend on health care and have longer life expectancy and lower infant mortality rates. Many Americans have access to quality healthcare. All Canadians have access to similar care at a considerably lower cost." There is "no question" that the lower cost has come at the cost of "restriction of supply with sub-optimal access to services," said Bell. A new approach is targeting waiting times, which are reported on public websites.[63][64][65]

In 2007 Shona Holmes, a Waterdown, Ontario woman who had a Rathke's cleft cyst removed at the Mayo Clinic in Arizona, sued the Ontario government for failing to reimburse her $95,000 in medical expenses.[66][67][68][69][70][71][72] Holmes had characterized her condition as an emergency, said she was losing her sight and portrayed her condition as a life-threatening brain cancer. In July 2009 Holmes agreed to appear in television ads broadcast in the United States warning Americans of the dangers of adopting a Canadian-style health care system. The ads she appeared in triggered debates on both sides of the border. After her ad appeared critics pointed out discrepancies in her story, including that Rathke's cleft cyst, the condition she was treated for, was not a form of cancer, and was not life-threatening.[73][74]

Price of health care and administration overheads[edit]

Healthcare is one of the most expensive items of both nations’ budgets. In the United States, the various levels of government spend more per capita than levels of government do in Canada. In 2004, Canada government-spending was $2,120 (in US dollars) per person, while the United States government-spending $2,724.[75]

A 1999 report found that after exclusions, administration accounted for 31.0% of healthcare expenditures in the United States, as compared with 16.7% in Canada. In looking at the insurance element, in Canada, the provincial single-payer insurance system operated with overheads of 1.3%, comparing favourably with private insurance overheads (13.2%), U.S. private insurance overheads (11.7%) and U.S. Medicare and Medicaid program overheads (3.6% and 6.8% respectively). The report concluded by observing that gap between U.S. and Canadian spending on administration had grown to $752 per capita and that a large sum might be saved in the United States if the U.S. implemented a Canadian-style system.[76]

However, U.S. government spending covers less than half of all healthcare costs. Private spending is also far greater in the U.S. than in Canada. In Canada, an average of $917 was spent annually by individuals or private insurance companies for health care, including dental, eye care, and drugs. In the U.S., this sum is $3,372.[75] In 2006, healthcare consumed 15.3% of U.S. annual GDP. In Canada, only 10% of GDP was spent on healthcare.[6] This difference is a relatively recent development. In 1971 the nations were much closer, with Canada spending 7.1% of GDP while the U.S. spent 7.6%.[citation needed]

Some who advocate against greater government involvement in healthcare have asserted that the difference in costs between the two nations is partially explained by the differences in their demographics.[77] Illegal immigrants, more prevalent in the U.S. than in Canada,[citation needed] also add a burden to the system, as many of them do not carry health insurance and rely on emergency rooms — which are legally required to treat them under EMTALA — as a principal source of care.[78] In Colorado, for example, an estimated 80% of undocumented immigrants do not have health insurance.[78]

The mixed system in the United States has become more similar to the Canadian system. In recent decades, managed care has become prevalent in the United States, with some 90% of privately insured Americans belonging to plans with some form of managed care.[79] In managed care, insurance companies control patients' health care to reduce costs, for instance by demanding a second opinion prior to some expensive treatments or by denying coverage for treatments not considered worth their cost.

Administrative costs are also higher in the United States than in Canada.[80]

Through all entities in its public–private system, the US spends more per capita than any other nation in the world,[75] but is the only wealthy industrialized country in the world that lacks some form of universal healthcare.[81] In March 2010, the US Congress passed regulatory reform of the American health insurance system. However, since this legislation is not fundamental healthcare reform, it is unclear what its effect will be and as the new legislation is implemented in stages, with the last provision in effect in 2018, it will be some years before any empirical evaluation of the full effects on the comparison could be determined.[82]

Healthcare costs in both countries are rising faster than inflation.[83][84] As both countries consider changes to their systems, there is debate over whether resources should be added to the public or private sector. Although Canadians and Americans have each looked to the other for ways to improve their respective health care systems, there exists a substantial amount of conflicting information regarding the relative merits of the two systems.[85] In the U.S., Canada's mostly monopsonistic health system is seen by different sides of the ideological spectrum as either a model to be followed or avoided.[42][86]

Medical professionals[edit]

Some of the extra money spent in the United States goes to physicians, nurses, and other medical professionals. According to health data collected by the OECD, average income for physicians in the United States in 1996 was nearly twice that for physicians in Canada.[87] In 2012, the gross average salary for doctors in Canada was CDN$328,000. Out of the gross amount, doctors pay for taxes, rent, staff salaries and equipment.[88] When comparing average incomes of doctors in Canada and U.S., it should be kept in mind that malpractice insurance premiums may differ significantly between Canada and the U.S., and the proportion of doctors who are specialists differs. In Canada, less than half of doctors are specialists whereas more than 70% of doctors are specialists in the U.S.[89]

Canada has fewer doctors per capita than the United States. In the U.S, there were 2.4 doctors per 1,000 people in 2005; in Canada, there were 2.2.[90] Some doctors leave Canada to pursue career goals or higher pay in the U.S., though significant numbers of physicians from countries such as China, India, Pakistan and South Africa immigrate to practice in Canada.[citation needed] Many Canadian physicians and new medical graduates also go to the U.S. for post-graduate training in medical residencies. As it is a much larger market, new and cutting-edge sub-specialties are more widely available in the U.S. as opposed to Canada. However, statistics published in 2005 by the Canadian Institute for Health Information (CIHI), show that, for the first time since 1969 (the period for which data are available), more physicians returned to Canada than moved abroad.[91]


Both Canada and the United States have limited programs to provide prescription drugs to the needy. In the U.S., the introduction of Medicare Part D has extended partial coverage for pharmaceuticals to Medicare beneficiaries. In Canada all drugs given in hospitals fall under Medicare, but other prescriptions do not. The provinces all have some programs to help the poor and seniors have access to drugs, but while there have been calls to create one, no national program exists.[92] About two thirds of Canadians have private prescription drug coverage, mostly through their employers.[93] In both countries, there is a significant population not fully covered by these programs. A 2005 study found that 20% of Canada's and 40% of America's sicker adults did not fill a prescription because of cost.[94]

Furthermore, the 2010 Commonwealth Fund International Health Policy Survey indicates that 4% of Canadians indicated that they did not visit a doctor because of cost compared with 22% of Americans. Additionally, 21% of Americans have said that they did not fill a prescription for medicine or have skipped doses due to cost. That is compared with 10% of Canadians.[citation needed]

One of the most important differences between the two countries is the much higher cost of drugs in the United States. In the U.S., $728 per capita is spent each year on drugs, while in Canada it is $509.[93] At the same time, consumption is higher in Canada, with about 12 prescriptions being filled per person each year in Canada and 10.6 in the United States.[95] The main difference is that patented drug prices in Canada average between 35% and 45% lower than in the United States, though generic prices are higher.[96] The price differential for brand-name drugs between the two countries has led Americans to purchase upward of $1 billion US in drugs per year from Canadian pharmacies.[97]

There are several reasons for the disparity. The Canadian system takes advantage of centralized buying by the provincial governments that have more market heft and buy in bulk, lowering prices. By contrast, the U.S. has explicit laws that prohibit Medicare or Medicaid from negotiating drug prices. In addition, price negotiations by Canadian health insurers are based on evaluations of the clinical effectiveness of prescription drugs,[98] allowing the relative prices of therapeutically similar drugs to be considered in context. The Canadian Patented Medicine Prices Review Board also has the authority to set a fair and reasonable price on patented products, either comparing it to similar drugs already on the market, or by taking the average price in seven developed nations.[99][100] Prices are also lowered through more limited patent protection in Canada. In the U.S., a drug patent may be extended five years to make up for time lost in development.[101] Some generic drugs are thus available on Canadian shelves sooner.[102]

The pharmaceutical industry is important in both countries, though both are net importers of drugs. Both countries spend about the same amount of their GDP on pharmaceutical research, about 0.1% annually[103]


The United States spends more on technology than Canada. In a 2004 study on medical imaging in Canada,[104] it was found that Canada had 4.6 MRI scanners per million population while the U.S. had 19.5 per million. Canada's 10.3 CT scanners per million also ranked behind the U.S., which had 29.5 per million.[105] The study did not attempt to assess whether the difference in the number of MRI and CT scanners had any effect on the medical outcomes or were a result of overcapacity but did observe that MRI scanners are used more intensively in Canada than either the U.S. or Great Britain.[106] This disparity in the availability of technology, some believe, results in longer wait times. In 1984 wait times of up to 22 months for an MRI were alleged in Saskatchewan.[107] However, according to more recent official statistics (2007), all emergency patients receive MRIs within 24 hours, those classified as urgent receive them in under 3 weeks and the maximum elective wait time is 19 weeks in Regina and 26 weeks in Saskatoon, the province's two largest metropolitan areas.[108]

According to the Health Council of Canada’s 2010 report "Decisions, Decisions: Family doctors as gatekeepers to prescription drugs and diagnostic imaging in Canada", the Canadian federal government invested $3 billion over 5 years (2000–2005) in relation to diagnostic imaging and agreed to invest a further $2 billion to reduce wait times. These investments led to an increase in the number of scanners across Canada as well as the number of exams being performed. The number of CT scanners increased from 198 to 465 and MRI scanners increased from 19 to 266 (more than tenfold) between 1990 and 2009. Similarly, the number of CT exams increased by 58% and MRI exams increased by 100% between 2003 and 2009. In comparison to other OECD countries, including the US, Canada’s rates of MRI and CT exams falls somewhere in the middle. Nevertheless, the Canadian Association of Radiologists claims that as many as 30% of diagnostic imaging scans are inappropriate and contribute no useful information.[109]

Malpractice litigation[edit]

The extra cost of malpractice lawsuits is a proportion of health spending in both the U.S. (1.7% in 2002)[110] and Canada (0.27% in 2001 or $237 million). In Canada the total cost of settlements, legal fees, and insurance comes to $4 per person each year,[111] but in the United States it is over $16. Average payouts to American plaintiffs were $265,103, while payouts to Canadian plaintiffs were somewhat higher, averaging $309,417.[112] However, malpractice suits are far more common in the U.S., with 350% more suits filed each year per person.[111] While malpractice costs are significantly higher in the U.S., they make up only a small proportion of total medical spending. The total cost of defending and settling malpractice lawsuits in the U.S. in 2004 was over $28 billion.[113] Critics say that defensive medicine consumes up to 9% of American healthcare expenses.,[114][115] but CBO studies suggest that it is much smaller.[111]

Ancillary expenses[edit]

There are a number of ancillary costs that are higher in the U.S. Administrative costs are significantly higher in the U.S.; government mandates on record keeping and the diversity of insurers, plans and administrative layers involved in every transaction result in greater administrative effort. One recent study comparing administrative costs in the two countries found that these costs in the U.S. are roughly double what they are in Canada.[116] Another ancillary cost is marketing, both by insurance companies and health care providers. These costs are higher in the U.S., contributing to higher overall costs in that nation.[citation needed]

Healthcare outcomes[edit]

In the World Health Organization's rankings of healthcare system performance among 191 member nations published in 2000, Canada ranked 30th and the U.S. 37th, while the overall health of Canadians was ranked 35th and Americans 72nd.[9][117] However, the WHO's methodologies, which attempted to measure how efficiently health systems translate expenditure into health, generated broad debate and criticism.[118]

Researchers caution against inferring healthcare quality from some health statistics. June O'Neill and Dave O'Neill point out that " expectancy and infant mortality are both poor measures of the efficacy of a health care system because they are influenced by many factors that are unrelated to the quality and accessibility of medical care".[10]

In 2007, Gordon H. Guyatt et al. conducted a meta-analysis, or systematic review, of all studies that compared health outcomes for similar conditions in Canada and the U.S., in Open Medicine, an open-access peer-reviewed Canadian medical journal. They concluded, "Available studies suggest that health outcomes may be superior in patients cared for in Canada versus the United States, but differences are not consistent." Guyatt identified 38 studies addressing conditions including cancer, coronary artery disease, chronic medical illnesses and surgical procedures. Of 10 studies with the strongest statistical validity, 5 favoured Canada, 2 favoured the United States, and 3 were equivalent or mixed. Of 28 weaker studies, 9 favoured Canada, 3 favoured the United States, and 16 were equivalent or mixed. Overall, results for mortality favoured Canada with a 5% advantage, but the results were weak and varied. The only consistent pattern was that Canadian patients fared better in kidney failure.[8]

In terms of population health, life expectancy in 2006 was about two and a half years longer in Canada, with Canadians living to an average of 79.9 years and Americans 77.5 years.[119] Infant and child mortality rates are also higher in the U.S.[119] Some comparisons suggest that the American system underperforms Canada's system as well as those of other industrialized nations with universal coverage.[120] For example, a ranking by the World Health Organization of health care system performance among 191 member nations, published in 2000, ranked Canada 30th and the U.S. 37th, and the overall health of Canada 35th to the American 72nd.[9] The WHO did not merely consider health care outcomes, but also placed heavy emphasis on the health disparities between rich and poor, funding for the health care needs of the poor, and the extent to which a country was reaching the potential health care outcomes they believed were possible for that nation. In an international comparison of 21 more specific quality indicators conducted by the Commonwealth Fund International Working Group on Quality Indicators, the results were more divided. One of the indicators was a tie, and in 3 others, data was unavailable from one country or the other. Canada performed better on 11 indicators; such as survival rates for colorectal cancer, childhood leukemia, and kidney and liver transplants. The U.S. performed better on 6 indicators, including survival rates for breast and cervical cancer, and avoidance of childhood diseases such as pertussis and measles. It should be noted that the 21 indicators were distilled from a starting list of 1000. The authors state that, "It is an opportunistic list, rather than a comprehensive list."[121]

Some of the difference in outcomes may also be related to lifestyle choices. The OECD found that Americans have slightly higher rates of smoking and alcohol consumption than do Canadians[119] as well as significantly higher rates of obesity.[122] A joint US-Canadian study found slightly higher smoking rates among Canadians.[123] Another study found that Americans have higher rates not only of obesity, but also of other health risk factors and chronic conditions, including physical inactivity, diabetes, hypertension, arthritis, and chronic obstructive pulmonary disease.[42]

While a Canadian systematic review stated that the differences in the systems of Canada and the United States could not alone explain differences in healthcare outcomes,[1] the study didn't consider that over 44,000 Americans die every year due to not having a single payer system for healthcare in the United States and it didn't consider the millions more that live without proper medical care due to a lack of insurance.[124]

The United States and Canada have different racial makeups, different obesity rates and different alcoholism rates, which would likely cause the US to have a shorter average life expectancy and higher infant mortality even with equal healthcare provided. The US population is 12.2% African Americans and 16.3% Hispanic Americans (2010 Census), whereas Canada has only 2.5% African Canadians and 0.97% Hispanic Canadians (2006 Census). African Americans have higher mortality rates than any other racial or ethnic group for eight of the top ten causes of death.[125] The cancer incidence rate among African Americans is 10% higher than among European Americans.[126] U.S. Latinos have higher rates of death from diabetes, liver disease, and infectious diseases than do non-Latinos.[127] Adult African Americans and Latinos have approximately twice the risk as European Americans of developing diabetes.[126] The infant mortality rates for African Americans is twice that of whites.[128] Unfortunately, directly comparing infant mortality rates between countries is difficult, as countries have different definitions of what qualifies as an infant death.

Another issue with comparing the two systems is the baseline health of the patient's for which the systems must treat. Canada has only half the obesity rate that the US system must deal with (14.3% vs 30.6%).[129] On average, obesity reduces life expectancy by 6–7 years.[130]

A 2004 study found that Canada had a slightly higher mortality rate for acute myocardial infarction (heart attack) because of the more conservative Canadian approach to revascularizing (opening) coronary arteries.[131]


Numerous studies have attempted to compare the rates of cancer incidence and mortality in Canada and the U.S., with varying results. Doctors who study cancer epidemiology warn that the diagnosis of cancer is subjective, and the reported incidence of a cancer will rise if screening is more aggressive, even if the real cancer incidence is the same. Statistics from different sources may not be compatible if they were collected in different ways. The proper interpretation of cancer statistics has been an important issue for many years.[132] Dr. Barry Kramer of the National Institutes of Health points to the fact that cancer incidence rose sharply over the past few decades as screening became more common. He attributes the rise to increased detection of benign early stage cancers that pose little risk of metastasizing.[133] Furthermore, though patients who were treated for these benign cancers were at little risk, they often have trouble finding health insurance after the fact.[citation needed]

Cancer survival time increases with later years of diagnosis, because cancer treatment improves, so cancer survival statistics can only be compared for cohorts in the same diagnosis year. For example, as doctors in British Columbia adopted new treatments, survival time for patients with metastatic breast cancer increased from 438 days for those diagnosed in 1991–1992, to 667 days for those diagnosed in 1999–2001.[134]

An assessment by Health Canada found that cancer mortality rates are almost identical in the two countries.[135] Another international comparison by the National Cancer Institute of Canada indicated that incidence rates for most, but not all, cancers were higher in the U.S. than in Canada during the period studied (1993–1997). Incidence rates for certain types, such as colorectal and stomach cancer, were actually higher in Canada than in the U.S.[136] In 2004, researchers published a study comparing health outcomes in the Anglo countries. Their analysis indicates that Canada has greater survival rates for both colorectal cancer and childhood leukemia, while the United States has greater survival rates for Non-Hodgkin's lymphoma as well as breast and cervical cancer.[121]

A study based on data from 1978 through 1986 found very similar survival rates in both the United States and in Canada.[137] However, a study based on data from 1993 through 1997 found lower cancer survival rates among Canadians than among Americans.[138]

A few comparative studies have found that cancer survival rates vary more widely among different populations in the U.S. than they do in Canada. Mackillop and colleagues compared cancer survival rates in Ontario and the U.S. They found that cancer survival was more strongly correlated with socio-economic class in the U.S. than in Ontario. Furthermore, they found that the American survival advantage in the four highest quintiles was statistically significant. They strongly suspected that the difference due to prostate cancer was a result of greater detection of asymptomatic cases in the U.S. Their data indicates that neglecting the prostate cancer data reduces the American advantage in the four highest quintiles and gives Canada a statistically significant advantage in the lowest quintile. Similarly, they believe differences in screening mammography may explain part of the American advantage in breast cancer. Exclusion of breast and prostate cancer data results in very similar survival rates for both countries.[139]

Hsing et al. found that prostate cancer mortality incidence rate ratios were lower among U.S. whites than among any of the nationalities included in their study, including Canadians. U.S. African Americans in the study had lower rates than any group except for Canadians and U.S. whites.[140] Echoing the concerns of Dr. Kramer and Professor Mackillop, Hsing later wrote that reported prostate cancer incidence depends on screening. Among whites in the U.S., the death rate for prostate cancer remained constant, even though the incidence increased, so the additional reported prostate cancers did not represent an increase in real prostate cancers, said Hsing. Similarly, the death rates from prostate cancer in the U.S. increased during the 1980s and peaked in early 1990. This is at least partially due to "attribution bias" on death certificates, where doctors are more likely to ascribe a death to prostate cancer than to other diseases that affected the patient, because of greater awareness of prostate cancer or other reasons.[141]

Because health status is "considerably affected" by socioeconomic and demographic characteristics, such as level of education and income, "the value of comparisons in isolating the impact of the healthcare system on outcomes is limited," according to health care analysts.[142] Experts say that the incidence and mortality rates of cancer cannot be combined to calculate survival from cancer.[143] Nevertheless, researchers have used the ratio of mortality to incidence rates as one measure of the effectiveness of healthcare.[10] Data for both studies was collected from registries that are members of the North American Association of Central Cancer Registries, an organization dedicated to developing and promoting uniform data standards for cancer registration in North America.[144]

Racial and ethnic differences[edit]

The U.S. and Canada differ substantially in their demographics, and these differences may contribute to differences in health outcomes between the two nations.[145] Although both countries have white majorities, Canada has a proportionately larger immigrant minority population.[146] Furthermore, the relative size of different ethnic and racial groups vary widely in each country. Hispanics and peoples of African descent constitute a much larger proportion of the U.S. population. Non-Hispanic North American aboriginal peoples constitute a much larger proportion of the Canadian population.[citation needed] Canada also has a proportionally larger South Asian and East Asian population. Also, the proportion of each population that is immigrant is higher in Canada.[citation needed]

A study comparing aboriginal mortality rates in Canada, the U.S. and New Zealand found that aboriginals in all three countries had greater mortality rates and shorter life expectancies than the white majorities.[147] That study also found that aboriginals in Canada had both shorter life expectancies and greater infant mortality rates than aboriginals in the United States and New Zealand. The health outcome differences between aboriginals and whites in Canada was also larger than in the United States.[citation needed]

Though few studies have been published concerning the health of Black Canadians, health disparities between whites and African Americans in the U.S. have received intense scrutiny.[148] African Americans in the U.S. have significantly greater rates of cancer incidence and mortality. Drs. Singh and Yu found that neonatal and postnatal mortality rates for American African Americans are more than double the non-Hispanic white rate.[145] This difference persisted even after controlling for household income and was greatest in the highest income quintile. A Canadian study also found differences in neonatal mortality between different racial and ethnic groups.[149] Although Canadians of African descent had a greater mortality rate than whites in that study, the rate was somewhat less than double the white rate.[citation needed]

The racially heterogeneous Hispanic population in the U.S. has also been the subject of several studies. Although members of this group are significantly more likely to live in poverty than are non-Hispanic whites, they often have disease rates that are comparable to or better than the non-Hispanic white majority. Hispanics have lower cancer incidence and mortality, lower infant mortality, and lower rates of neural tube defects.[145][150][151] Singh and Yu found that infant mortality among Hispanic sub-groups varied with the racial composition of that group. The mostly white Cuban population had a neonatal mortality rate (NMR) nearly identical to that found in non-Hispanic whites and a postnatal mortality rate (PMR) that was somewhat lower. The largely Mestizo, Mexican, Central, and South American Hispanic populations had somewhat lower NMR and PMR. The Puerto Ricans who have a mix of white and African ancestry had higher NMR and PMR rates.[citation needed]

Impact on economy[edit]

In 2002, automotive companies claimed that the universal system in Canada saved labour costs.[152] In 2004, healthcare cost General Motors $5.8 billion, and increased to $7 billion.[153] The UAW also claimed that the resulting escalating healthcare premiums reduced workers' bargaining powers.[154]


In Canada, increasing demands for healthcare, due to the aging population, must be met by either increasing taxes or reducing other government programs.[citation needed] In the United States, under the current system, more of the burden will be taken up by the private sector and individuals.[citation needed]

Since 1998, Canada's successive multibillion-dollar budget surpluses have allowed a significant injection of new funding to the healthcare system, with the stated goal of reducing waiting times for treatment.[citation needed] However, this may be hampered by the return to deficit spending as of the 2009 Canadian federal budget.[citation needed]

One historical problem with the U.S. system was known as job lock, in which people become tied to their jobs for fear of losing their health insurance. This reduces the flexibility of the labor market.[155] Federal legislation passed since the mid-1980s, particularly COBRA and HIPAA, has been aimed at reducing job lock. However, providers of group health insurance in many states are permitted to use experience rating and it remains legal in the United States for prospective employers to investigate a job candidate's health and past health claims as part of a hiring decision.[citation needed] Someone who has recently been diagnosed with cancer, for example, may face job lock not out of fear of losing their health insurance, but based on prospective employers not wanting to add the cost of treating that illness to their own health insurance pool, for fear of future insurance rate increases. Thus, being diagnosed with an illness can cause someone to be forced to stay in their current job.[citation needed]

Politics of health[edit]

Politics of each country[edit]

More imaginative solutions in both countries have come from the sub-national level.


In Canada, the right-wing and now defunct Reform Party and its successor, the Conservative Party of Canada considered increasing the role of the private sector in the Canadian system. Public backlash caused these plans to be abandoned, and the Conservative government that followed re-affirmed its commitment to universal public medicine.

In Canada, it was Alberta under the Conservative government that had experimented most with increasing the role of the private sector in healthcare. Measures included the introduction of private clinics allowed to bill patients for some of the cost of a procedure, as well as 'boutique' clinics offering tailored personal care for a fixed preliminary annual fee.[citation needed]

United States[edit]

In the U.S., President Bill Clinton attempted a significant restructuring of health care, but the effort collapsed under political pressure against it despite tremendous public support.[156] The 2000 U.S. election saw prescription drugs

Health spending per capita, in $US PPP-adjusted , with the US and Canada compared amongst other first world nations.
This graph depicts gross U.S. health care spending from 1960 to 2008.

Fact Sheet 2016

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Download this fact sheet as a PDF.

The U.S. health care system is unique among advanced industrialized countries. The U.S. does not have a uniform health system, has no universal health care coverage, and only recently enacted legislation mandating healthcare coverage for almost everyone. Rather than operating a national health service, a single-payer national health insurance system, or a multi-payer universal health insurance fund, the U.S. health care system can best be described as a hybrid system. In 2014, 48 percent of U.S. health care spending came from private funds, with 28 percent coming from households and 20 percent coming from private businesses. The federal government accounted for 28 percent of spending while state and local governments accounted for 17 percent.[1] Most health care, even if publicly financed, is delivered privately.

In 2014, 283.2 million people in the U.S., 89.6 percent of the U.S. population had some type of health insurance, with 66 percent of workers covered by a private health insurance plan. Among the insured, 115.4 million people, 36.5 percent of the population, received coverage through the U.S. government in 2014 through Medicare (50.5 million), Medicaid (61.65 million), and/or Veterans Administration or other military care (14.14 million) (people may be covered by more than one government plan). In 2014, nearly 32.9 million people in the U.S. had no health insurance.[2]

This fact sheet will compare the U.S. health care system to other advanced industrialized nations, with a focus on the problems of high health care costs and disparities in insurance coverage in the U.S. It will then outline some common methods used in other countries to lower health care costs, examine the German health care system as a model for non-centralized universal care, and put the quality of U.S. health care in an international context.

In Comparison to Other OECD Countries

The Organization for Economic Co-operation and Development (OECD) is an international forum committed to global development that brings together 34 member countries to compare and discuss government policy in order to “promote policies that will improve the economic and social well-being of people around the world.”[3] The OECD countries are generally advanced or emerging economies.  Of the member states, the U.S. and Mexican governments play the smallest role in overall financing of health care.[4] However, public (i.e. government) spending on health care per capita in the U.S. is greater than all other OECD countries, except Norway and the Netherlands.[5]

This seeming anomaly is attributable, in part, to the high cost of health care in the U.S. Indeed, the U.S. spends considerably more on health care than any other OECD country.

  • The OECD found that in 2013, the U.S. spent $8,713 per person or 16.4 percent of its GDP on health care—far higher than the OECD average of 8.9 percent per person.[6] Following the U.S. were the Netherlands, which allocated 11.1 percent of its GDP, then Switzerland also at 11.1 percent, and Sweden, which allocated 11 percent of its GDP to health care in 2013. In North America, Canada and Mexico spent respectively 10.2 percent and 6.2 percent of their GDP on health care.

On a per capita basis, the U.S. spends more than double the $3,453 average of all OECD countries (see chart[7] below).[8]

Health Expenditure per capita, 2013 (or nearest year)

Drivers of Health Care Spending in the U.S.

Prohibitively high cost is the primary reason Americans give for problems accessing health care. Americans with below-average incomes are much more likely than their counterparts in other countries to report not: visiting a physician when sick; getting a recommended test, treatment, or follow-up care; filling a prescription; and seeing a dentist.[9] Fifty-nine percent of physicians in the U.S. acknowledge their patients have difficulty paying for care.[10] In 2013, 31 percent of uninsured adults reported not getting or delaying medical care because of cost, compared to five percent of privately insured adults and 27 percent of those on public insurance, including Medicaid/CHIP and Medicare.[11]

While there is no agreement as to the single cause of rising U.S. health care costs, experts have identified three contributing factors. The first is the cost of new technologies and prescription drugs. Some analysts have argued “that the availability of more expensive, state-of-the-art medical technologies and drugs fuels health care spending for development costs and because they generate demand for more intense, costly services even if they are not necessarily cost-effective.”[12] In 2013, the U.S. spent $1,026 per capita on pharmaceuticals and other non-durable medical care, more than double the OECD average of $515.[13]

Another explanation for increased costs is the rise of chronic diseases, including obesity.  Nationally, health care costs for chronic diseases contribute huge proportions to health care costs, particularly during end of life care. “Patients with chronic illness in their last two years of life account for about 32% of total Medicare spending, much of it going toward physician and hospital fees associated with repeated hospitalizations.”[14] The National Academy of Sciences found that among other high-income nations the U.S. has a higher rate of chronic illness and a lower overall life expectancy. Their findings suggest that this holds true even when controlling for socio-economic disparity.[15] Experts are focusing more on preventative care in an effort to improve health and reduce the financial burdens associated with chronic disease.[16] One provision of the Patient Protection and Affordable Care Act, commonly referred to as simply the Affordable Care Act (ACA), implemented in 2013, provides additional Medicaid funding for states providing low cost access to preventative care.[17]

Finally, high administrative costs are a contributing factor to the inflated costs of U.S. health care. The U.S. leads all other industrialized countries in the share of national health care expenditures devoted to insurance administration. It is difficult to determine the exact differences between public and private administrative costs, in part because the definition of “administrative” varies widely. Further, the government outsources some of its administrative needs to private firms.[18] What is clear is that larger firms spend a smaller percentage of their total expenditures on administration, and nationwide estimates suggest that as much as half of the $361 billion spent annually on administrative costs is wasteful.[19] In January 2013, a national pilot program implemented under the ACA began. The aim is to improve administrative efficiency by allowing doctors and hospitals to bundle billing for an episode of care rather than the current ad hoc method.[20]


Health Insurance in the U.S.: Uneven Coverage

While the majority of U.S. citizens have health insurance, premiums are rising and the quality of the insurance policies is falling. Average annual premiums for family coverage increased 11 percent between 1999 and 2005, but have since leveled off to increase five percent per year between 2005 and 2015.[21] Deductibles are rising even faster. Between 2010 and 2015, single coverage deductibles have risen 67 percent.[22] These figures outpace both inflation and workers’ earnings.

The lack of health insurance coverage has a profound impact on the U.S. economy. The Center for American Progress estimated in 2009 that the lack of health insurance in the U.S. cost society between $124 billion and $248 billion per year. While the low end of the estimate represents just the cost of the shorter lifespans of those without insurance, the high end represents both the cost of shortened lifespans and the loss of productivity due to the reduced health of the uninsured.[23]

Health insurance coverage is uneven and often minorities and the poor are underserved. Forty million workers, nearly two out of every five, do not have access to paid sick leave. Experts suggest that the economic pressure to go to work even when sick can prolong pandemics, reduce productivity, and drive up health care costs.[24]

  • There were 32 million uninsured Americans in 2014, nine million fewer than the year prior. Experts attribute this sharp decline in the uninsured to the full implementation of the ACA in 2014.[25] Of American adults who had health insurance in 2014, 73 percent had one or more full-time workers in the family and 12 percent had one or more part-time workers in the family.[26] Just 49 percent of American adults reported getting health insurance from an employer in 2014.[27]
  • Coverage by employer-provided insurance varies considerably by wage level. Firms with higher proportions of low-wage workers are less likely to provide access to health insurance than those with low-proportions of low-wage workers.[28]
  • In 2014, 11.2 percent of full-time workers were without health insurance. However, the percentage of part-time workers without insurance was 17.7 percent, a significant decrease from 24 percent in 2013, thanks in part to the Affordable Care Act. The uninsured rate among those who had not worked at least one week also decreased from 22.2 percent in 2013 to 17.3 percent in 2014.[29]
  • Smaller firms are significantly less likely to provide health benefits to full or part-time workers. Among all small firms (3-199 workers) in 2015, only 56 percent offered health coverage, compared to 98 percent of large firms.[30]
  • After the Affordable Care Act allowed for many young adults (19-25) to remain on their parents’ health plans, there was a statistically significant increase in the percentage of insured young people from 68.3 percent in 2009[31] to 82.9 percent in 2014.[32] Over the same period, the percentage of young people aged 26-34 with insurance increased from 70.9 percent to 81.8 percent.[33]
  • Minorities and children are disproportionately uninsured. In 2014, 7.6 percent of non-Hispanic Whites were uninsured, 11.8 percent of Blacks were uninsured, 9.3 percent of Asians, and 19.9 percent of people of Hispanic origin were uninsured.[34] The Kaiser Family Foundation has found that about 80 percent of the uninsured are U.S. citizens.[35] Among children, six percent were uninsured in 2014.[36] These children are 10 times more likely than insured children to have unmet medical needs and are five times as likely as an insured child to go more than two years without seeing a doctor.[37]
  • Women in the individual market often faced higher premiums than men for the same coverage. Beginning in 2014, the Affordable Care Act banned this practice, as well as denying coverage for pre-existing conditions.[38]
  • In 2014, 19.3 percent of the population living below 100 percent of the poverty line ($23,550 a year for a family of four) was uninsured.[39] According to the Kaiser Family Foundation, 90 percent of the uninsured have family incomes within 400 percent of the federal poverty level. This makes them eligible for either subsidized coverage through tax credits or expanded Medicaid eligibility under the Affordable Care Act’s state health exchanges. [40]


Rising Healthcare Premiums

Health insurance premiums in the U.S. are rising fast. From 2005 to 2015, average annual health insurance premiums for family coverage increased 61 percent, while worker contributions to those plans increased 83 percent in the same period. This rate of increase outpaces both inflation and increases in workers’ wages.[41]

  • In 2005, the average annual premiums for employer-sponsored health insurance were $2,713 for single coverage and $8,167 for family coverage. In 2015, premiums more than doubled to $6,251 for employer-sponsored single coverage and $17,545 for employer-sponsored family coverage.[42]
  • A growing number of workers face a deductible of $1,000 or more for individual plans. In 2015, 46 percent (compared to 38 percent in 2013 and 22 percent in 2009) of workers were enrolled in a plan with an annual deductible of $1,000 or more. Employees at small firms are more likely than those at large firms to have a deductible greater than $1,000.[43]
The Union Difference: Union workers are more likely than their nonunion counterparts to be covered by health insurance and paid sick leave. In March 2015, 95 percent of union members in the civilian workforce had access to medical care benefits, compared with only 68 percent of nonunion members. In 2015, 85 percent of union members in the civilian workforce had access to paid sick leave compared to 62 percent of nonunion workers.[44] At the median, private-sector unionized workers pay 38 percent less for family coverage than private-sector nonunionized workers, according to a 2009 study.[45]

Across states, there are significant disparities in both the availability and the cost of health care coverage.

  • In 2012, Medicare reimbursements per enrollee varied from $6,724 in Anchorage, Alaska to $13,596 in Miami, Florida.[46] Annual premiums are similarly disparate. In 2015, the average family premium in the South was $16,785 while the same coverage averaged $18,096 in the Northeast.[47]
  • Firms in the South were less likely to provide coverage for an employee’s domestic partner than other regions. In the South, 41 percent of firms reported providing benefits for same-sex partners (compared to 51 percent in the Northeast) and 20 percent reported offering benefits to opposite-sex domestic partners (compared to 46 percent in the Northeast).[48]


High Costs Drive Americans into Bankruptcy

Universal coverage, in countries like the United Kingdom, Switzerland, Japan, and Germany makes the number of bankruptcies related to medical expenses negligible.[49] Conversely, a 2014 survey of bankruptcies filed between 2005 and 2013 found that medical bills are the single largest cause of consumer bankruptcy, with between 18 percent and 25 percent of cases directly prompted by medical debt.[50] Another survey found that in 2013, 56 million Americans under the age of 65 had trouble paying medical bills.[51] Another 10 million will face medical bills they are unable to pay despite having year-round insurance.[52]

It has been suggested, based on the experience of Massachusetts, where medical-related bankruptcies declined sharply after the state enacted its health reform law in 2006, that the ACA may help reduce such bankruptcies in the future.[53]


The Affordable Care Act: Successes and Remaining Challenges

In March, 2010, President Obama signed the ACA into law that made hundreds of significant changes to the U.S. healthcare system between 2011 and 2014. Provisions included in the ACA are intended to expand access to healthcare coverage, increase consumer protections, emphasizes prevention and wellness, and promote evidence- based treatment and administrative efficiency in an attempt to curb rising healthcare costs.

  • Beginning in January 2014, almost all Americans are required to have some form of health insurance from either their employer, an individual plan, or through a public program such as Medicaid or Medicare. Since the so-called “individual mandate” took effect, the total number of nonelderly uninsured adults dropped from 41 million in 2013 to 32.3 million in 2014.[54] The largest coverage gains were concentrated among low-income people, people of color, and young adults, all of whom had high uninsured rates prior to 2014.[55]
  • A major provision of the ACA was the creation of health insurance marketplace exchanges where individuals not already covered by an employer-provided plan or a program such as Medicaid or Medicare can shop for health insurance. Individuals with incomes between 100 percent and 400 percent of the federal poverty line would be eligible for advanceable premium tax credits to subsidize the cost of insurance. States have the option to create and administer their own exchanges or allow the federal government to do so. Currently, only 14 states operate their own exchanges.[56]
  • Designed to promote competition among providers and deliver choice transparency to consumers, the state-based exchanges appear to be doing just that. A recent analysis by the Commonwealth Fund found that the number of insurers offering health insurance coverage through the marketplaces increased from 2014 to 2015.[57] Additionally, there was generally no reported increase in average premiums for marketplace plans over that period. The analysis found only a modest increase in average premiums for the lowest cost plans from 2015 to 2016.[58]
  • The ACA also included a major expansion of the Medicaid program, although the Supreme Court ruled in 2012 that this expansion is a state option. As of November 2015, 30 states have chosen to expand Medicaid. As of 2014, adults with incomes at or below 138 percent of the federal poverty line are now eligible for Medicaid in the states that have adopted the expansion.[59]
  • Despite improvements to the U.S healthcare system under the ACA, a number of challenges remain. In 2014, 10.4 percent of Americans were still uninsured[60], and those with insurance still face high deductibles and premium costs. Furthermore, in the 20 states that had not expanded Medicaid, an estimated three million poor adults fall into the “coverage gap” where their incomes are above current Medicaid eligibility limits but below the lower limit of premium credits on the healthcare exchanges. The bulk of people in the coverage gap are concentrated in the South, with Texas (766,000 people), Florida (567,000), Georgia (305,000) and North Carolina (244,000) having among the highest number of uninsured.[61]
  • The ACA included a number of other provisions to improve healthcare access and affordability. The law banned lifetime monetary caps on insurance coverage for all new plans and prohibited plans from excluding children and most adults with preexisting conditions.[62] Insurance plans are also prohibited from cancelling coverage except in the case of fraud, and are required to rebate customers if they spend less than 85 percent (80 percent for individual and small group plans) of premiums on medical services. Additionally, the ACA established the Prevention and Public Health Fund to allocate $7 billion towards preventative care such as disease screenings, immunizations, and pre-natal care for pregnant women and between 2010 and 2015. Furthermore, $11 billion in funding for community health centers and $1.5 billion in additional funding for the National Health Service Corps was included in the law.[63]
  • A number of cost control provisions were included in the ACA in an attempt to curb rising medical costs. Among them is the Independent Payment Advisory Board, which will provide recommendations to Congress and the President for controlling Medicare costs if the costs exceed a target growth rate. The administrative process for billing, transferring funds, and determining eligibility is being simplified by allowing doctors to bundle billing for an episode of care rather than the current ad hoc method. Additionally, changes were made to the Medicare Advantage program that would provide bonuses to high rated plans, incentivizing these privately-operated plans to improve quality and efficiency. Furthermore, hospitals with high readmission rates will see a reduction in Medicare payments while a new Innovation Center within the Centers for Medicare and Medicaid Services was created to test new program expenditure reduction methods.[64]


Common Methods to Lower Health Care Costs

By taking an international perspective and looking to other advanced industrialized countries with nearly full coverage, much can be learned. While methods range widely, other OECD countries generally have more effective and equitable health care systems that control health care costs and protect vulnerable segments of the population from falling through the cracks. Among the OECD countries and other advanced industrialized countries, there are three main types of health insurance programs:

  • A national health service, where medical services are delivered via government-salaried physicians, in hospitals and clinics that are publicly owned and operated—financed by the government through tax payments. There are some private doctors but they have specific regulations on their medical practice and collect their fees from the government. The U.K., Spain, and New Zealand employ such a system. [65]
  • A national health insurance system, or single-payer system, in which a single government entity acts as the administrator to collect all health care fees, and pay out all health care costs. Medical services are publicly financed but not publicly provided. Canada, Denmark, Taiwan, and Sweden have single-payer systems.
  • A multi-payer health insurance system, or all-payer system, which provides universal health insurance via “sickness funds,” used to pay physicians and hospitals at uniform rates, thus eliminating the administrative costs for billing. This method is used in Germany, Japan, and France.[66]

A universal mandate for health care coverage defines these systems. Such a mandate eliminates the issue of paying the higher costs of the uninsured, especially for emergency services due to lack of preventative care.[67] Other methods for reducing costs may include:

  • Funding health care costs in relation to income rather than risk or people’s medical history.[68]
  • Negotiating the price of prescription drugs and bulk purchasing of prescription medications and durable medical equipment is a method used in other countries for lowering costs. This has been effectively used by the U.S. Department of Veterans Affairs, Medicaid, and Health Management Organizations in the U.S. Yet, it has been prohibited by law from traditional Medicare. Savings of up to five percent of total health care expenditures could result from the full adoption of these practices.[69]


An International Case Study: How Germany Pays for Health Care

Germany has one of the most successful health care systems in the world in terms of quality and cost. Some 240 insurance providers collectively make up its public option. Together, these non-profit “sickness funds” cover 90 percent of Germans, with the majority of the remaining 10 percent, generally higher income Germans, opting to pay for private health insurance. The average per-capita health care costs for this system are less than half of the cost in the U.S. The details of the system are instructive, as Germany does not rely on a centralized, Medicare-like health insurance plan, but rather relies on private, non-profit, or for-profit insurers that are tightly regulated to work toward socially desired ends—an option that might have more traction in the U.S. political environment.[70]

  • The average insurance contributions to German sickness funds are based on an employee’s gross income, around 15.5 percent with an income cap at $62,781, and employers and employees each pay about half of the premium. Generally, an individual employee’s contribution is 8.2 percent and the employer pays the remaining 7.3 percent.[71][72]
  • Premiums are not based on risk and are not affected by a person’s marital status, family size, or health. Germans have no deductibles and low co-pays.[73]
  • Doctors are private entrepreneurs and get a fee from insurers for every visit and procedure they perform. However, they are tightly regulated. Groups of office-based physicians in every region negotiate with insurers to arrive at collective annual budgets. Doctors must remain in these budgets, as they do not receive additional funding if they go over. This helps keep health care costs in check and discourages unnecessarily expensive procedures. The average German doctor also makes about one-third less per year than in the U.S., around $123,000.[74]
  • Government general revenues cover premiums for children, on the premise that the next generation should be the entire nation’s fiscal responsibility, instead of just the responsibility of the parents.[75]
  • Germany reformed its coverage for prescription drugs in 2010 after costs for prescription drugs continued to rise. Prior to reforms, drug companies set the price for new drugs and were not required to show that the new drug was an improvement over previously available prescription drugs. Pursuant to the reforms effective in 2011, manufacturers could set the price for the first 12 months a new drug is on the market. “As soon as the drug enters the market, a new process of benefit assessment begins.” Manufacturers must establish, through comparative effective research that the new drug has an “added benefit to the patient, compared to the previously existing standard treatment.” Drugs without added benefit will be reimbursed according to a government pricing list. New drugs without added benefits are available to patients, but the patient has to pay the price difference. For drugs with added benefit, a price will be negotiated between health insurers and the manufacturer.[76]


Quality of U.S. Health Care in an International Context

U.S. health care specialists are among the best in the world. However, treatment in the U.S. is inequitable, overspecialized, and neglects primary and preventative care.[77]  The end result of the U.S. approach to health care is poorer health in comparison to other advanced industrialized nations.  According to the Commonwealth Fund Commission, in a 2014 comparison with Australia, Canada, France, Germany, the Netherlands, New Zealand, Norway, Sweden, Switzerland, the U.K., the U.S. ranked last overall.  In terms of quality of care, the U.S. ranked fifth, but came in last place in efficiency, equity, and healthiness of citizens’ lives.[78] Comparing other health care indicators in an international context underscores the dysfunction of the U.S. health care system.

  • Despite the relatively high level of health expenditure, in the U.S. there are fewer physicians per capita than in most other OECD countries. In 2013, the U.S. had 2.6 practicing physicians per 1,000 people—below the OECD average of 3.3.[79]
  • In the U.S., there are only about 1.2 primary care physicians per 1,000 people. Projections indicate that the U.S. will need 52,000 more primary care physicians by 2025 to meet demand.[80] While population growth and aging make up a substantial proportion of this increased need, expanded access to insurance under the Affordable Care Act means more people will seek out treatment. Therefore, there are provisions in the legislation to increase the number of primary care physicians in the U.S.
  • There is a significant spatial mismatch within the United States for physicians as well. While the U.S. averaged 225.6 doctors active in patient care per 100,000 people in 2014, there is a wide variance across states; Massachusetts ranks highest with 349.5 active doctors per 100,000 people, while Mississippi has only 170.3.[81]
  • In 2013, the U.S. infant mortality rate was 5.96 per 1,000 live births[82], while the OECD median was 3.8.[83]
  • The obesity rate among adults in the U.S. was 35.3 percent in 2013, down slightly from 36.5 in 2011. This is the highest rate among OECD countries. The average for the OECD countries was 19.0 percent in 2013.[84]


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[1] “National Health Expenditures 2014 Highlights” Center for Medicare and Medicaid Services. Available at:
[2] Jessica C. Smith and Carla Medalia, U.S. Census Bureau. Current Population Reports, pg 5 Health Insurance Coverage in the United States: 2014, U.S. Government Printing Office, Washington, DC, 2015.
[3] OECD (2015), Health at a Glance 2015: OECD Indicators, OECD Publishing. Available at:
[4] OECD (2015), Health at a Glance 2015: OECD Indicators, OECD Publishing. Available at:
[7] Chart source: OECD (2015), Health at a Glance 2015: OECD Indicators, OECD Publishing. Available at:
[9] Karen Davis, Kristof Stremikis, David Squires, and Cathy Schoen “Mirror, Mirror on the Wall: How the Performance of the U.S. Health Care System Compares Internationally, 2014 Update,” The Commonwealth Fund Commission on a High Performance Health System, June, 2014, 11. Available at:
[11] U.S. Department of Health & Human Services, Health System Measurement Project, “Percentage of People Who Did Not Receive or Delayed Needed Care Due to Cost in the Past 12 Months.” Available at:
[12] Adara Beamesderfer and Usha Ranji. “U.S. Health Care Costs.” Background Brief. Kaiser Family Foundation. February 2012.
[13] OECD (2015), Health at a Glance 2015: OECD Indicators, OECD Publishing. Pg 31. Available at:
[14] The Dartmouth Atlas of Health Care. “End of Life Care”. 2013. Available at:
[15] National Research Council. U.S. Health in International Perspective: Shorter Lives, Poorer Health. Washington, DC: The National Academies Press, 2013.
[16] Adara Beamesderfer and Usha Ranji. “U.S. Health Care Costs.” Background Brief. Kaiser Family Foundation. February 2012.
[17] “Key Features of the Affordable Care Act, By Year.” U.S. Department of Health and Human Services. Washington, D.C. Available at:
[18] Ezra Kelin. “Administrative Costs in Healthcare: A Primer”. The Washington Post. July 7, 2009. Available at:
[19]Ibid.; Elizabeth Winkler, Peter Basch, and David Cutler. “Paper Cuts: Reducing Health Care Administrative Costs”. Center for American Progress. June 2012. Available at:
[20] “Key Features of the Affordable Care Act, By Year.” U.S. Department of Health and Human Services. Washington, D.C. Available at:
[21] Michelle Long, Matthew Rae, Gary Claxton; Anne Jankiewicz; David Rousseau, “Recent Trends in Employer-Sponsored Health Insurance Premiums” Journal of the American Medical Association. January 5, 2016. Available at:
[23] Peter Harbage, Ben Furnas, “The Cost of Doing Nothing on Health Care,” Center for American Progress, 2009. Available at:
[24] “Everyone Gets Sick. Not everyone has time to get better: A briefing book on establishing a paid sick leave standard.” National Partnership for Women and Families, July 2011. Available at:
[25] Melissa Majerol, Vann Kewkirk, and Rachel Garfield, “The Uninsured: A Primer – Key Facts About Health Insurance and The Uninsured in the Era of Health Reform”, Kaiser Family Foundation, November 2015. Available at:
[26] Kaiser Family Foundation, “Key Facts About the Uninsured Population,” 2015.
[27] Kaiser Family Foundation, “Health Insurance Coverage of the Total Population.”2014. Available at:
[28] Employer Health Benefits 2015 Annual Survey,Kaiser Family Foundation, 2015. Available at:
[29] By Jessica C. Smith and Carla Medalia, U.S. Census Bureau. Current Population Reports, Health Insurance Coverage in the United States: 2014, pg 10 U.S. Government Printing Office, Washington, DC, 2015.
[30] Employer Health Benefits 2015 Annual Survey,Kaiser Family Foundation, 2015. Available at:
[31] Carmen DeNavas, Bernadette D. Proctor, Jessica C. Smith. U.S. Census Bureau. Current Population Reports
Income, Poverty, and Health Insurance Coverage in the United States: 2009 pg 25 U.S. Government Printing Office, Washington, DC, 2010. Available at:
[32] By Jessica C. Smith and Carla Medalia, U.S. Census Bureau. Current Population Reports, Health Insurance Coverage in the United States: 2014, pg 7 U.S. Government Printing Office, Washington, DC, 2015.
[34] By Jessica C. Smith and Carla Medalia, U.S. Census Bureau. Current Population Reports, Health Insurance Coverage in the United States: 2014, pg 15 U.S. Government Printing Office, Washington, DC, 2015.
[35] “The Uninsured and the Difference Health Insurance Makes,” Kaiser Family Foundation, September 2010, 1. Available at:
[36] Kaiser Family Foundation, “Health Insurance Coverage of Children 0-18” State Health Facts. 2014. Available at:
[37] “Policy Priorities: Uninsured Children,” Children’s Defense Fund, 2009. Available at:
[38] “Women and Health Care in the United States.” National Women’s Law Center, May, 2013. Washington, D.C. Available at:
[39] By Jessica C. Smith and Carla Medalia, U.S. Census Bureau. Current Population Reports, Health Insurance Coverage in the United States: 2014, pg 13. U.S. Government Printing Office, Washington, DC, 2015.
[40] “The Uninsured and The Difference Health Insurance Makes,” Kaiser Family Foundation, September 2012, 1. Available at:
[41] Employer Health Benefits 2015 Annual Survey,Kaiser Family Foundation, 2015. Available at:
[44] U.S. Department of Labor, Bureau of Labor Statistics. Employee Benefits in the United States, Table 2 and Table 6; March 2015. Available at:
[45] Jenifer MacGillvary, “Family-Friendly Workplaces: Do Unions Make a Difference?” UC Berkley Labor Center, July 2009. Available at:
[46] “Total Medicare Reimbursements per Enrollee”. The Dartmouth Atlas of Health Care. Lebanon, NH. 2013. Available at:
[47] Employer Health Benefits 2015 Annual Survey,Kaiser Family Foundation, 2015, 26. Available at:
[49] Battista M.D., John R. “An International Perspective on Health Care Reform,” Grand Rounds, Department of Medicine, Stamford Hospital, Stamford, CT, October 8, 2008. Available at:; Sarah Arnquist, “Health Care Abroad: Japan,” New York Times, August 25, 2009. Available at:
[50] Austin, Daniel A. “Medical Debt as a Cause of Consumer Bankruptcy”, Maine Law Review, Vol 67, No. 1 pp 1-23 (2014). Retrieved from:
[51] Christina Lamontage, “Nerdwallet Health finds Medical Bankruptcy Accounts for Majority of Personal Bankruptcies” Nerdwallet. June 19, 2013.
[53] Stech, Katy “The Future of Personal Bankrupcty in a Post-Obamacare World” The Wall Street Journal. July 1, 2015. Retrived from:
[54] Melissa Majerol, Vann Kewkirk, and Rachel Garfield, “The Uninsured: A Primer – Key Facts About Health Insurance and The Uninsured in the Era of Health Reform”, Kaiser Family Foundation, November 2015. Available at:
[56] “State Health Insurance Exchange: State Run Exchanges”, Available at:
[57] Davis Cusano and Kevin Lucia, “Implementing the Affordable Care Act: Promoting Competition in the Individual Marketplaces” The Common Wealth Fund, February 4, 2016. Available at:
[59] Melissa Majerol, Vann Kewkirk, and Rachel Garfield, “The Uninsured: A Primer – Key Facts About Health Insurance and The Uninsured in the Era of Health Reform”, Kaiser Family Foundation, November 2015. Available at:
[62] “The Affordable Care Act: A Brief Summary”, National Conference of State Legislatures, March 2011. Available at:
[63] “Summary of the Affordable Care Act”, The Kaiser Family Foundation. April 25, 2013. Available at:
[65] “Health Care Systems—Four Basic Models,”Physicians for a National Health Program, December 2008. Available at:
[67] Battista, “An International Perspective on Health Care Reform.”
[70] Richard Knox, “Most Patients Happy With German Health Care,” NPR, August 5, 2009. Available at:; Uwe Rienhart, “Health Reform Without a Public Plan: The German Model,” New York Times, April 17, 2009.
[71] Frequently Asked Questions About Health Care Coverage In Germany,” American Voices Abroad Berlin, 2009. Available at:
[72] Elias Mossialos, Martin Wenzl, Robin Osborn and Chloe Anderson “ International Profiles of Healthcare Systems, 2014” The Commonwealth Fund. January 2015. Available at:
[74] Richard Knox, “Most Patients Happy With German Health Care.” Richard Knox, “Keeping German Doctors On A Budget Lowers Costs,” NPR, July 2, 2008. Available at:
[75] Uwe Rienhart, “Health Reform Without a Public Plan: The German Model.”
[76] Daniel Bahr and Thomas Huelskoetter, “Comparing the Effectiveness of Prescription Drugs: The German Experience,” Center for American Progress, May 21, 2014.
[77] James S. Cox, “The Future of Health Care,” MD News, August 29, 2011.Available at:
[78] Davis,et. al. “Mirror, Mirror on the Wall: How the Performance of the U.S. Health Care System Compares Internationally, V.
[79] OECD (2015), Health at a Glance 2015: OECD Indicators, OECD Publishing. Available at:
[80] Petterson S et al. “Projecting US Primary Care Physician Workforce Needs: 2010-2025.”
Annals of Family Medicine, Vol. 10, No. 6, 503-509; 2012.
[81] “2015 State Physician Workforce Data Book” Association of American Medical Colleges, Washington, D.C. 2015. Available at:
[82] “Deaths: Final Data for 2013”, The Centers for Disease Control and Prevention, National Vital Statistics Reports. Vol 64, No. 2. February 16, 2016. Available at:
[83] OECD (2015), Health at a Glance 2015: OECD Indicators, OECD Publishing. Available at:

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