The Advantages and Disadvantages of American and Canadian Healthcare

There is a clear and lucid difference between the health care systems in the United States and in Canada. Both structures have clear advantages and disadvantages. There are key variables that distinct each system from one another which may help a person decide which system is more beneficial to all parties involved. Health care, no matter what type of system or country, is a very important and crucial part of a person’s life.

This subject has been a very heated debate, especially in the United States, as rates rise and fewer companies are offering health care to their workers. Both Republicans and Democrats acknowledge this “crisis” and have come up with an agenda that will supposedly counter the high costs and fewer services. In the recent election President Bush and Senator John Kerry offered their party’s plan for the country. Now that the election is over, the President is now expected to push his plan for the country and hopefully enact changes in the current system that is in place today.

Canada has a completely different system of providing health care to its citizens. This does not stop the Liberal and Conservative party from arguing over a better way to deliver the service. Health care quality is a big issue to Canadians. In 2001, the Prime Minister established the Commission on the Future of Health Care in Canada. On November 28, 2002 the commission released it’s report and called for many new changes in the current system.

The obvious reason why political parties debate and new commissions are created is that some or all of the components of the current system are not working or are not very favorable to the public. Both sides think their plan is better but it seems as if neither proposal is ever put into law to allow these much needed changes to take place. Once, if ever, these new plans are enacted time will quickly tell whether the new ideas are serving their purpose and also making the public happy. These ideas may also be the reason why a candidate is re-elected or a new candidate with a different plan is put into office.

The socialized system of medicine in Canada means that the government controls and pays for basically all the health care in the country. Consequently, a health care czar has a very important say over who gets what and when. The Canadian system was introduced as a 50/50 federal government, provincial government funding. This has gradually deteriorated ranging from 42% to a one time low of 10.5% federal spending for health care. One debate that many Canadians are fighting is over whether the public system of health care should be gotten rid of in favor for an all privatized system (Puscas).

Canadian households spend an average of 3.1% of their annual income on health care. With Canada’s tax code the highest income earners in the country paid three times as much for health care than did the lower income earners. On average, Canada spends $3,300 per person, $102.5 billion dollars a year, for health care. This does not include the money that the provinces pay. That figure amounts to 9.4% of the total GDP in Canada, making it the number four country in the Organization for Economic Co-Operation and Development (CIHI).

Waiting for services in Canada is an understood pay off for its citizens. According to the Fraser Institute, a Vancouver, B.C.-based think tank, in their annual Waiting List Survey, the average waiting time between a referral from a general practitioner to treatment went up 90% from 9.3 weeks in 1993 to 17.7 weeks in 2003 (Pipes) . This ranged from an average of 30 weeks in Saskatchewan to 14 weeks in Ontario. These long waits also exist for diagnostic procedures such as ultrasounds, computer tomography and magnetic resonance imaging. The average time waited for these practices were between two and 24 weeks (Williams). The usual time one can expect to wait for a medical oncology if they have cancer increased from 2.5 weeks to 6.1 and for a radiation oncology from 5.3 to 8.1 weeks over the 10 year period (Pipes). Waits like this have led to deaths, says Kerri Houston of the Frontiers of Freedom Institute in her article “Access Denied: Canada’s Health Care System Turns Patients Into Victims.”

Houston says that hip-replacement patients often end up non-ambulatory while waiting an average of 20 weeks for the procedure, and that’s after having waited 13 weeks just to see the specialist. The wait to get diagnostic scans followed by the wait for the radiologist to read them just might explain why Cleveland, Ohio, has become Canada’s hip-replacement center. (Williams)

The reason for the waiting list is explained by the Pacific Research Institute. “To the government, health care costs are the checks it must write” and the government planners control the monetary cost by shifting the non-monetary cost to the patients (Pipes). The non-monetary costs are the waiting times people face.

According to a story in Canada News, 10,000 doctors left Canada in the 90s. This is even a bigger problem because there are not as many medical school graduates. Ontario has had to take the step of creating more positions for nurses that would take the place of a doctor (Williams). Being an employee of the government and not working for-profit, doctors may not want to be practicing in Canada. This problem may also tie in with the increased amount of time on waiting lists.

The American system, unlike Canada, is run mostly by private businesses. Drug companies, hospitals and insurance agencies all compete for your money. Forty-two percent of Americans are offered health insurance at their jobs, with their employer paying some of the bill. Another 22% have individual health insurance (Heritage1). Even though the United States does not have universal healthcare it spends a total of $558.7 billion dollars to provide it’s citizens with other entitlement programs. Four point nine percent of the total GDP is dedicated to healthcare in the 2004 fiscal year budget (WH).

The United States does have government sponsored health care for certain people. The Medicaid program is a federal and state sponsored program that gives Americans who are poor a chance to receive some health care for free. This program faces many structural and financial problems as states are increasingly forced to take the burden of their many dependent citizens. This problem forces them to lower the quality of services because they can not afford to spend much more money on health care. Astronomical costs of health coverage are compelling states to lower reimbursement funds to providers and limit the amount of drug coverage. These costs continue to rise and increase the amount of taxes the states will have to levy on their citizens. Medicaid is not only just a problem for the states, the national government spends over $259 million dollars on this entitlement program, making it the largest government program. Even after spending unbelievable sums of money, the service is still not up to par. Sixty-five percent of adults between 19 and 64 surveyed have said they would prefer to have private health coverage over Medicaid (Heritage1).

The United States takes care of it’s elderly population by provided them with a limited plan of health care. The initiative, called Medicare, provides some doctor care and hospital stay. Congress also recently passed a prescription discount card that gives seniors a savings between 10 and 25 percent on their drug purchases and a $600 subsidy for low-income seniors. This card will be substituted in 2006 with a universal prescription drug entitlement.

Currently, 41 million Americans are enrolled in the Medicare plan with the baby-boomer generation on the heels of retirement. The current plan and new laws created recently do not have a known cost. Without a fiscally sound plan, the costs will continue to rise to unknown levels, putting the extra burden on the taxpayers and jeopardizing the Bush tax cuts. According to the Congressional Budget Office, this new Medicare law could cost the American taxpayers $1 to $2 trillion dollars over the next 10 years. Medicare is on a roll to become 1/5th of the annual budget by 2026. The CBO has also said that the new law could cause 1/3rd of the 78% of Medicare beneficiaries with prescription drug coverage to lose that coverage (Medicare2).

Both Canada and the United States have different political parties that want different changes in the current health care systems. In America it is the Republican and Democratic parties, in Canada the main parties are the Liberal and Conservative parties.

The Liberal Party of Canada, according to their party platform, says they are dedicated to making sure the Canadian system stays accessible to all citizens. They are beginning to implement a National Waiting Times Reduction Strategy with cooperation with the provinces, doctors and patient groups. The party also expresses interest in making sure that the primary health care system can provide the proper care at any time of the day without requiring an emergency room visit or long waits at the doctor’s office (Liberal).

The Conservative party has the same idea in mind. They supported the Canadian Health Accord that has the backing of the Registered Nurses Association which will strengthen and expand the current health system. The Conservatives, too, will work with the provinces ensure funding, shorter waiting lists and more doctors (Conservative).

While the Canadian parties give a more vague approach to their health care plans, American candidates and parties give a detailed platform to reform the current system.

John Kerry and John Edwards introduced the Democratic Party Platform at their national convention this year. In their platform, they mention many problems of the current system announce their goal: “quality health coverage for all Americans to keep our families healthy, our business competitive, and our country strong.” Their plan to do this would be to provide expectant mothers prenatal care, children with regular check-ups and, seniors with safe, affordable drugs.

These plans will be done by increasing Medicaid for children and expand the Clinton children’s health program and tax credits for businesses and individuals to make coverage more affordable. Also, expand coverage for low-income families and provide families with the same coverage that Congress receives. Democrats plan to cut health care costs by “picking up the tab” for high medical costs. The party also promised to do away with many of the administrative tasks and provide an electric medical record database. Also on their agenda was to create a patients Bill of Rights and increase the amount of money spent on Medicare and allow seniors to receive prescription drugs more easily. They believe that competitive bidding and increasing the penalties for frauds will cut the cost of Medicare by getting rid of the waste in the system (DNC).

The Republican Party and President Bush have endorsed a plan of consumer-driven health care. The President has created Health Savings Accounts for those who have purchased high-deductible health insurance. This account would be used to help pay some of the high costs and the remainder of the money saved would be allowed to grow, tax free. The President has also proposed making individually paid premiums for HSA accounts tax deductible to create a more level field between individual and group insurance. Republicans have favored giving tax breaks of up to $3,000 to individuals in low-income tax brackets, whether they pay little income tax or not. This money could also be used in HSA accounts because families could put up to $2,000 to premiums for the HSA and $1,000 to help fund the account. This reform would potentially give low-income families the same access to health care as most middle class families (NCPA).

Association Health Plans is one other big part of the Bush Agenda. AHP’s would allow small businesses to join together through trade groups and negotiate with large insurance companies on behalf of all the employees of the companies involved (RNC). Small companies have a tendency to pay more for insurance than big businesses and low-income workers are more likely to be working for these small businesses. Costs can become so high that some companies do not offer insurance to their employees. The Republicans support a dollar for dollar tax credit rebate to small businesses who contribute to the HSA’s of families.

The President in addition has supported a national market for health insurance. This marketplace would allow individuals to shop around the country for the best coverage with the cheapest price. This is meant to help small businesses and those in states with high regulation. In order for a company to be in this market they would have to meet a list of standards nationally instead of each state (NCPA).

Reform is important in both countries to help ease the growing concerns that face the citizens and governments. In Canada the universal system has created many problems and something must be done to keep the promise the government has made to it’s people. A Gallup Poll in 2002 showed that 60% of Canadians do not mind paying for health care out of their pocket (Bucur). It may be more beneficial to the citizens in Canada to allow this in some form. On the contrary, government has become more strict in allowing it’s people to go outside the system for quality care. Bill 82, enacted by the British Columbian government has disallowed citizens from paying clinical fees for a private surgery. This bill also grants the government to levy a fine of up to $20,000 on any physician who accepts any money. Basically it is against the law to opt-out of the Canadian system (Williams).

The socialist promise of “free” health care is arguably not so free after all. Having the government decide what and when you can see your doctor or have a procedure preformed is probably the biggest problem Canada faces and can sometimes cost you more than money. This free promise comes at the cost of medical czars and long waiting lists that could put a life at risk.

The political parties in Canada both give a vague set of reforms or laws they would be in favor of to help the current system in their country. It is inevitable that the current universal system will stay in place but it is also unavoidable to leave it as it currently is. With the waiting lists growing and the doctors leaving it is only a matter of time before this system is destroyed and Canada is left in a disaster. The Liberals and Conservatives both agree talking to the provinces, doctors, and patient groups is a must but they do not specify what they would do to change the current problems in their system.

In America reform is needed just as bad, even worse. Rising costs for health care and decreased service has left many without any insurance for their families. Government sponsored Medicare and Medicaid are becoming increasingly difficult to fund and predict the cost in the coming years. Without a clear plan Americans will be faced with a very complicated task when the system collapses or the taxpayers are paying unheard of amounts of income tax to fund these programs.

Medicare will either become a bigger and bigger tax burden to the public or reform could be enacted to keep prices down and coverage up. The Federal Employees Health Benefit Program is a perfect model the law-makers could use. This program will allow seniors to chose their own health plans and benefits with little government intervention and regulation. The government contribution would reflect market prices and capped at a certain level. If a person wanted a more premium service they would have to pay the difference. This would create much more competition and keep prices down. This program, along with a Health Savings Program would be beneficial to the government and to the persons’ on the program.
Unlike Canada, the political parties in the United States have now both offered a plan to reform the system. Democrats have backed away from the socialist system that they tried to implement in the last decade in favor of more government spending but allowing competition. Republicans, on the other hand, have offered a different plan that gives the patient the freedom to choose the services they believe to be right for them. Both parties, and most Americans, agree that our current system needs to be changed. With the 2004 Republican victory in the election it is likely that Americans will see many new reforms passed in Congress.

For America to keep the best health care in the world it is necessary to allow freedom in the market place to encourage drug companies to invent new drugs and hospitals to have the most recent equipment. Without competition there is no reward for doctors or companies who supply speedy, reliable service to patients. The more government intervention and decisions made by bureaucrats can only make the current system in the United States worse. Medicare and Medicaid are both already big parts of the government in Washington, D.C. and in each state and they are both in severe need of reform.

In the United States and furthermore in Canada, a more consumer-directed approach would be beneficial to all. Allowing individuals to search for themselves for the best healthcare will force the insurance companies to be competitive and create a much better doctor-patient relationship. Being forced to go to a specific doctor and company can result in more distrust for the treatment. With a trusted doctor-patient relationship “physicians will be free to act as the agents of their patients (NCPA)” with health care providers.

The systems of the two countries are very clear and the benefits of each are obvious to anyone. When analyzing both systems one must look at the program that helps the most and whether the advantages outweigh the disadvantages. After decades of debate and concern over the problems of each system there comes a time when actual reform needs to be enacted. Both countries have a chance to do this and should start passing initiatives before it is too late. With a Republican majority in Washington and a Liberal government in Ottawa, the time is now for both governments to launch new programs and leave it up to time to see if they work.

Bucur, Diodora. “Private-Public Partnership, A Healthcare Solution.” Montreal Economic Institute. 17 April 2002. < http://www.iedm.org/library/art126_en.html> Conservative Party of Canada. “Access to Health Care.” < http://www.conservative.ca/english/issues.asp> Democratic National Committee. “Democratic National Platform: Reforming Health Care” < http://a9.g.akamai.net/7/9/8082/v002/www.democrats.org/pdfs/2004platform.pdf> Goodman, John C. “Bush Health Plan: Consumer-Driven Health Care” National Center For Policy Analysis. 20 September 2004. < http://www.ncpa.org/pub/ba/ba486/> “Health Care Spending in Canada.” Canadian Institute for Health Information. 29 May 2002. < http://www.cihi.com/cihiweb/dispPage.jsp?cw_page=media_29may2002_b6_e> Liberal Party of Canada. “Health.” < http://www.liberal.ca/issues_e.aspx?id=4> Pipes, Sally C. “Health Care, Canadian Style.” Pacific Research Institute. 20 September 2004 < http://www.pacificresearch.org/press/opd/2004/opd_04-09-20b-sp.html> Puscas, Darren. “Waiting in the Wings!.” Canadian Dimension. < http://www.canadiandimension.mb.ca/extra/d0930dp.htm> The Heritage Foundation. “Medicaid.” Heritage Foundation Policy & Research Analysis. 2004 < http://www.heritage.org/research/features/issues2004/medicaid.cfm> The Heritage Foundation. “Medicare.” Heritage Foundation Policy & Research Analysis. 2004 < http://www.heritage.org/research/features/issues2004/medicare.cfm> Republican National Committee. “President Bush’s Agenda for Improving Health Care” < http://www.gop.com/GOPAgenda/AgendaPage.aspx?id=4> Williams, Walter E. “Free Health Care.” A Minority View/World Net Daily. 21 July 2004 < http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=39559> White House Office of Management and Budget. “Budget of the United States Government.” 2004 < http://www.whitehouse.gov/omb/budget/fy2004/pdf/hist.pdf>