Comparative Health Care: United States vs. Canada

Comparative Health Care: United States vs. Canada

In 2018, A video went viral of a woman getting her foot trapped by a subway train in Boston (Williams, 2018). In the video, she begged people to not call an ambulance because she didn’t think she could afford it. In the United States, health care is seen as a commodity, not a necessity, which is why, even in freak accidents, Americans may be concerned about affording medical bills over their health.

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While in the past, the United States took pride in their healthcare system, within the last few decades, this system has gone downhill. According to Bodenheimer & Grumbach (2009) recent polls revealed that 79% of voters requested a “complete overhaul “of the United States healthcare system. According to Reid (2009) surveys found that Americans who see a doctor are usually less satisfied with the treatment they receive compared to Britons, Italians, Germany, Canada, or Japan, even though Americans pay the doctor much more than other countries do. 

  If you search “comparative healthcare” on Google, several websites will pop up with rankings on the world’s best healthcare systems. At the top of these rankings are the countries Canada, Japan, Switzerland, Germany, France, and Sweden (Reid, 2009). However, what criteria are these rankings based from? According to The Infographics Show (2018), these rankings consider the following: how much a country spends on health care, the quality of that health care, the availability of it, how effective the health care is in keeping the population healthy, and the upfront cost of healthcare. Based on these criteria, this paper outlines how the United States differs from other industrialized countries based off these criteria. It’s no wonder that the United States falls short in the rankings, especially when you consider that medical bills are the leading cause of bankruptcy in the United States (Mangan, 2013). Therefore people, like that girl who got her leg trapped on the subway, are wary about receiving medical services.  The United States is unique because they are the only industrialized nation in the world without universal healthcare (Department for Professional Employees, 2016). However, this doesn’t mean that the United States doesn’t spend money on health care. Ironically, America spends more money on health care than any other developed nation.

You would think that America, who spends more money on healthcare, 3.3 trillion dollars in fact, than any other developed nation would be higher in these rankings (American Medical Association, 2017). The purpose of this paper is to compare the health care systems of the United States and other industrialized countries. This paper will focus on comparing the U.S. to Canada, who is known for their world class healthcare system. Additionally, this paper will discuss how America can potentially implement the National Health Insurance Model (NHI) into their own health care plan, providing more coverage and care to all citizens, while lowering expenditure.

When it comes to comparative healthcare, there are four different models of healthcare used in developed, industrialized nations: The Bismarck Model, the Beveridge Model, the Out-of-Pocket Model, and the National Health Insurance Model (Reid, 2009). In order to fully understand how the United Sates health care system works, it is important to understand these models, because the nation uses a combination of the four. In the Bismarck Model, healthcare services and payers are private entities.  An individual’s health care is covered by private health insurance and jointly paid by employees and employers through payroll deduction. Countries like Germany, Japan, and France all use this Bismarck model. This system is like employer provided private insurance, which is what majority of Americans have (Kaiser Family Foundation, 2017).

While most Americans have employer provided private health insurance, many still struggles paying medical costs. A study done by the Kaiser Family Foundation (Hamel, Norton, Levitt, Claxton, & Brodie, 2016) found no significant difference on the impact medical bills had between insured and uninsured. In fact, in the U.S., those insured are 3% more likely to declare bankruptcy than the uninsured. Which suggests that employer provided private insurance may not be the most effective. Sometimes people are unprepared to pay an unexpected deductible or coinsurance costs if they are under the impression that their insurance would cover them. The study also found that almost one third of people who participated weren’t aware that hospitals or services weren’t included in their insurance plan. They also found that one in four people were denied claims from their insurance. These statistics suggest that come American employer provided insurance plans are unreliable and complicated.

The second model is the Beveridge Model (Reid, 2009). In this model, health care is provided and paid for by the government through taxes. There are no medical bills because health care is treated like a public service, like firefighters. Great Britain is known for using this system. In America, this classic European model of health care is usually referred to as “socialized medicine.” Many Americans believe this style of health care gives the federal government too much power (InterExchange, 2019). They fear this model is bureaucratic and takes the choice out of patients’ hands, making health care more regulated and less individualized. Americans also worry that with a large health care system, this would cost too much money and significantly raise taxes. However, a prime example of the Beveridge Model is the U.S. Department of Veteran Affairs (Reid, 2009).

The third model is the Out-of-Pocket Model, which is what most under developed countries have, like India (Reid, 2009). In this system, health care services are privately owned, and individuals must pay out-of-pocket for medical care. In the system, the wealthy receive medical care, and the poor are left sick and dying. In rural regions of Africa, India, China, and South America, hundreds of millions of people go their whole lives with no access to real medical care.  For the 27 million Americans who remain uninsured, unexpected out-of-pocket medical expenses can be detrimental to people if they can’t afford it.

The fourth model is the National Health Insurance Model (NHI), which combines principles from the Bismarck and the Beveridge model (Reid, 2009). In this model, all healthcare services are owned privately, but health insurance is paid by the government. This is Canada’s health care system, which, if implemented into the United States’ system, could potentially improve their current and complex healthcare system.

The NHI is also sometimes called the “single payer” system (Martin, 2017). Even though it’s called the “single payer “system, it does not function as one single entity. All provinces and territories in Canada are primarily responsible for providing, organizing, and supervising health care services for its residence (International Commonwealth Fund, 2019). The coverage is publicly funded, so the government pays for it through federal and provincial taxes. However, this does not mean that Canadians are taxed an arm and a leg for these services. The Canada Health Act, Canada’s federal legislature for medical care, States that the primary goal is “to protect, promote, and restore the physical and mental well-being of residents of Canada and to facilitate reasonable access to health services without financial or other barriers” (Government of Canada, 2014).

However, this does not mean that Canadian medical services are owned by the government. In an interview with The National Public Radio (NPR), a Canadian physician, Daniel Martin, explains:

“[As] The family doctor, I am not an employee of the government. I deliver my services in a very similar looking model to American physicians. But instead of billing a private insurance company or billing my patients directly, I simply bill the government plan” (Martin, 2017).

This means that all Canadian citizens receive medical services without cost. However, this does not mean that healthcare in Canada is “free.”  Even with universal health care, Canadians still spend $6,604 annually on medical services (Canadian Institute for Health Information, 2017). This is still less than the average American who spends $10,739 annually on healthcare (American Medical Association, 2017). Canadians pay for these medical services through taxes, but many people also spend more for additional private insurance.

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In Canada, citizens can apply for private additional health insurance through their employer or a third-party insurer (Allin & Rudoler, 2019). Approximately two-thirds of Canadians have supplemental private insurance. These insurance plans are used to cover medical services excluded by Canadian Medicare, like vision and dental care, prescription drugs, home care, and rehabilitation programs. Approximately 94% of insurance premiums are covered by employers, unions, or other group contracts. Comparatively, in the United States, 82% of single coverage health insurance is paid by employers, and this average drops to 71% for family coverage (Merhar, 2018). Because Canada Medicare doesn’t cover everything, the nation is able to control spending costs, which is why health care spending represents only 11.3% of Canada’s GPD, compared to the US at 17.7% GPD (American Medical Association, 2017).

After discussing the four different models of health care, The Bismarck Model, the Beveridge Model, the Out-of-Pocket Model, and National Health Insurance Model (NHI), they might look familiar to some Americans, as they should, because the US health care system is a combination of the four (Reid, 2009). For instance, Americans over the age of 65 years old receive U.S. Medicare, which is like Canada’s Medicare or NHL. For those under 65 years old, the U.S. health care is like Germany, who uses the Bismarck Model, where employers jointly pay for health care premiums and employee’s pay the insurance co-payment. For military personnel, Native Americans, and veterans, the U.S. is like Britain who uses the Beveridge Model. The VA provides government employees and facilities to veterans, ensuring that they will never pay a medical bill. Lastly, for those uninsured, the U.S. health care system is, like India or China, who uses the Out-of-Pocket Model and provides medical care for individuals only if they pay for it out-of-pocket. And yet, at the same time, the U.S. is unique from any other developed, industrialized country because it maintains different systems for different classes of people. The U.S. also has the Affordable Care Act (ACA) or Obamacare for those in Americans in poverty who don’t have access to employer coverage (The Infographics Show, 2018). However, this fragmented and complex health care system is extremely costly, regardless if someone is insured. It leaves huge gaps in insurance rates among the U.S. population. In Canada, each province or territory is primarily responsible for providing Medicare for its residence. Although they use a “single-payer” universal health care system, all medical services are private. If the United States could find a way to integrated the NHL Model into their current health care system, they could give each state power of over its residents’ coverage. They would be able to keep medical services private, as well as change full coverage private insurance plans to supplemental plans, allowing Americans the freedom to opt in for a better plan, while keeping a universal plan available for those who couldn’t afford it otherwise. One of United States’ core values is to keep the power in the hands of the state. This is what most Americans are concerned about with universal healthcare is that it will give too much power to the federal government. However, by integrating the NHL into the current United States health care system, this will allow states to keep power but give everyone the right to health care.

References

•  Allin, S., & Rudoler, D. (2019). The Canadian Health Care System. (The Commonwealth Fund) Retrieved from International Health Care System Profiles: https://international.commonwealthfund.org/countries/canada/
• American Medical Association. (2017). Trends in health care spending. Retrieved from American Medical Association: https://www.ama-assn.org/about/research/trends-health-care-spending
• Bodenheimer, T., & Grumbach, K. (2009). Understanding health policy. San Francisco: The McGraw-Hill Companies.
• Canadian Institute for Health Information. (2017). How much does Canada spend on health care? Retrieved from CIHI: https://www.cihi.ca/en/how-much-does-canada-spend-on-health-care-2017
• Cooper, J. (2019, April 25). Healthcare expenditure, UK Health Accounts: 2017. Retrieved from Office For National Statistics: https://www.ons.gov.uk/peoplepopulationandcommunity/healthandsocialcare/healthcaresystem/bulletins/ukhealthaccounts/2017
• Department for Professional Employees. (2016). The U.S. Health Care System: An International Perspective. Retrieved from https://dpeaflcio.org/programs-publications/issue-fact-sheets/the-u-s-health-care-system-an-international-perspective/
• Government of Canada. (2014). Canada Health Act Report 2012-2013. Government of Canada. Retrieved from https://www.canada.ca/en/health-canada/services/health-care-system/reports-publications/canada-health-act-annual-reports/report-2012-2013.html
• Hamel, L., Norton, M., Levitt, L., Claxton, G., & Brodie, M. (2016). The burden of mdeical debt: results from the kaiser family foundaton/new york times medical bills survey. The Henry J. Kaiser Family Foundation. Retrieved from https://www.kff.org/report-section/the-burden-of-medical-debt-section-3-consequences-of-medical-bill-problems/
• InterExchange. (2019). Understanding the U.S. Health Care System. Retrieved from InterExchange: https://www.interexchange.org/articles/visit-the-usa/understanding-us-healthcare-system/
• International Commonwealth Fund. (2019). The Canadian Health Care System. Retrieved from International Health Care System Profiles: https://international.commonwealthfund.org/countries/canada/
• Kaiser Family Foundation. (2017). Health Insurance Coverage of the Total Population. Retrieved from The Kaiser Family Foundation: https://www.kff.org/other/state-indicator/total-population/?dataView=1¤tTimeframe=0&selectedRows=%7B%22wrapups%22:%7B%22united-states%22:%7B%7D%7D%7D&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D
• Mangan, D. (2013, July 24). Medical Bills Are the Biggest Cause of US Bankruptcies: Study. Retrieved from CNBC: https://www.cnbc.com/id/100840148
• Martin, D. (2017, September 24). A Canadian Doctor Explains How Her Country's Single-Payer Health Care System Works. (M. Martin, & D. Guerra, Interviewers) NPR. Retrieved from National Public Radio: https://www.npr.org/2017/09/24/553336111/a-canadian-doctor-explains-how-her-countrys-single-payer-health-care-system-work
• Merhar, C. (2018, November 8). What Percent of Health Insurance is Paid by Employers? Retrieved from People Keep Inc.: https://www.peoplekeep.com/blog/what-percent-of-health-insurance-is-paid-by-employers
• Reid, T. (2009). The healing of america: a global quest for better, cheaper, and fairer health care. New York: The Penguin Press.
• The Infographics Show. (2018, September 9). Us healthcare system explained. Retrieved from https://www.youtube.com/watch?v=DublqkOSBBA&t=186s
• Williams, D. (2018, July). Woman feared she couldn't afford ambulance after her leg was trapped by a subway train. Retrieved from CNN: https://www.cnn.com/2018/07/03/health/subway-accident-insurance-fear-trnd/index.html