Universal health insurance is on the American policy agenda for the fifth time since World War II. In the 1960s, the U.S. chose public coverage for only the elderly and the very poor, while Canada opted for a universal program for hospitals and physicians’ services. As a policy analyst, I know there are lessons to be learned from studying the effect of different approaches in similar jurisdictions. But, as a Canadian with lots of American friends and relatives, I am saddened that Americans seem incapable of learning them.
Our countries are joined at the hip. We peacefully share a continent, a British heritage of representative government and now ownership of GM. And, until 50 years ago, we had similar health systems, healthcare costs and vital statistics.
On coverage, all Canadians have insurance for hospital and physician services. There are no deductibles or co-pays. Most provinces also provide coverage for programs for home care, long-term care, pharmaceuticals and durable medical equipment, although there are co-pays.
On the U.S. side, 46 million people have no insurance, millions are underinsured and healthcare bills bankrupt more than 1 million Americans every year.
Lesson No. 1: A single-payer system would eliminate most U.S. coverage problems.
On costs, Canada spends 10% of its economy on healthcare; the U.S. spends 16%. The extra 6% of GDP amounts to more than $800 billion per year. The spending gap between the two nations is almost entirely because of higher overhead. Canadians don’t need thousands of actuaries to set premiums or thousands of lawyers to deny care. Even the U.S. Medicare program has 80% to 90% lower administrative costs than private Medicare Advantage policies. And providers and suppliers can’t charge as much when they have to deal with a single payer.
Lessons No. 2 and 3: Single-payer systems reduce duplicative administrative costs and can negotiate lower prices.
Because most of the difference in spending is for non-patient care, Canadians actually get more of most services. We see the doctor more often and take more drugs. We even have more lung transplant surgery. We do get less heart surgery, but not so much less that we are any more likely to die of heart attacks. And we now live nearly three years longer, and our infant mortality is 20% lower.
Lesson No. 4: Single-payer plans can deliver the goods because their funding goes to services, not overhead.
The Canadian system does have its problems, and these also provide important lessons. Notwithstanding a few well-publicized and misleading cases, Canadians needing urgent care get immediate treatment. But we do wait too long for much elective care, including appointments with family doctors and specialists and selected surgical procedures. We also do a poor job managing chronic disease.
However, according to the New York-based Commonwealth Fund, both the American and the Canadian systems fare badly in these areas. In fact, an April U.S. Government Accountability Office report noted that U.S. emergency room wait times have increased, and patients who should be seen immediately are now waiting an average of 28 minutes. The GAO has also raised concerns about two- to four-month waiting times for mammograms.