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Comparing the Health Care System in the United States to that of Canada Essay Example


Comparing the Health Care System in the United States to that of Canada Essay Example


Canada established a National Health Insurance program (NHI) since its health system supports universal health care. The single-payer system permit physician’s autonomy and the consumer co-payments are negligible. Canadian hospitals receive global budget payments as medical practitioners receive payments on a negotiated fee for service. When some provinces implemented compulsory health insurance in the 1940s, the Canadian government decided to restructure the health system. The Hospital and Diagnostic Services Act of 1956 outlined the framework for a nationwide hospital insurance system, and by 1971 Canada had implemented a national health insurance plan in all ten provinces and two provinces. The insurance covers the patient’s hospitalization and physician’s services. In Canada, private enterprises are prohibited from covering the benefits outlined by the Canada Health Act of 1984. 

Canadians can only obtain supplemental private insurance for uncovered services such as dental and prescription services. Each province in Canada is solely responsible for controlling health care costs. Contrariwise, the United States is a multi-payer system as it lacks a single national health insurance system. Both the U.S. government and the private marketplace fund health insurance. Most of the American population is covered by private insurance, as the ones covered by government insurance are mainly from the eligible groups outlined by the government. Individuals have a right to free healthcare provider choice as the conventional health insurance plan reimburses physicians fee-for-service. The U.S. health system encounters numerous co-payments and deductible amounts compared to Canada. Uninsured households in the U.S. undergo financial hardship and insecurity as they lack appropriate medical care. As Canadian national health insurance is publicly funded, health insurance in the United States heavily depends on private financing and delivery. In the U.S., the health care expenditure is twice that of Canada because the health system is complex. Compared to the U.S., Canada’s health system demonstrates better health outcomes and distributes health resources more equitably. The paper compares the U.S. healthcare system to Canada’s in terms of costs, quality, and access and highlights what the U.S. can learn from the Canadian healthcare system. 

Comparison of Costs

According to the 1984 Canada Health Act provisions, each provincial health plan in Canada is administered at the provincial level and offers comprehensive first-dollar coverage for all health care services (Ridic et al., 2012). All residents with no out-of-pocket charges are entitled to health coverage, although minor exceptions exist. In Canada, most practitioners are paid fee-for-service and practice autonomy. The government prohibits private health insurance for covered services (Ridic et al., 2021). At the same time, most Canadians obtain supplemental private health insurance for uncovered services such as dental services or drugs.   

In Canada, the reimbursement process transpires between the public insurer (government) and the health care provider, as patients are not involved. In each Canadian province, the ministry of health controls medical costs. Predetermined costs for physicians and fixed global budgets help in cost control. The ministry in each province approves and funds the hospital’s operating budgets and negotiates the annual global budget with each hospital. The ministry also supports capital expenditures financing most operations (Ridic et al., 2012). The ministry and provincial medical associations engage in periodic negotiations to determine physician fees. All Canadian provinces do not support extra billing above the predominated price set by a third-party payer. 

In the United States, there is no single nationwide health insurance system. Both the government and the private marketplace provide health insurance. Private insurance covers about 70 percent of insured individuals, while public insurance covers around 26 percent, and only 84 percent of the population is covered. Unlike in Canada, the U.S. health care system does not provide free health care services to the uninsured. The government offers cost savings to group plans when employers purchase the insurance premiums. As a result, an estimated 61 percent of health insurance is employment-related. American citizens fund their insurance unless they are in disadvantaged groups outlined by the government. 

Regarding medical spending, there is a significant difference in medical expenditures between the U.S. and Canada. According to Abrams (2020), healthcare administrative costs in the U.S. make up about 34 percent of the entire healthcare expenditures, twice the percentage spent in Canada. Principally, the growth of private insurers overheard in the last two decades has increased costs. Compared to nations with a single-payer system, the U.S. has higher administrative costs and uses an incongruent system of private providers and insurers (Abrams, 2020). The U.S. spends five times more per individual on health care administrative costs than Canada, estimated at $2497 per person vs. $551 per person in 2017. 

There are various reasons for additional spending on healthcare in the U.S. A study by Pozen & Cutler (2010) illustrates that U.S. administrative costs are about 50% higher than Canada’s. The higher medical spending emanates from higher prices, higher pharmaceutical costs for branded drugs, and higher physician compensation. Also, patients in the U.S. receive a higher volume and intensity of health care services. Compared to Canada, the U.S. carries out increased medical procedures for patients with diseases such as hip replacement surgery, myocardial infection, and coronary artery bypass graft surgery (Pozen & Cutler, 2010). The reimbursement from private health insurance is less regulated, which could signify higher medical spending in the U.S. 

As demonstrated, health care insurance coverage is different in both countries. The primary way to pay for healthcare is through insurance, although the insurance is funded differently. In the U.S., citizens fund their medical coverage. There are exceptions for individuals eligible for government-provided insurance programs such as Veterans Health Administration, Medicare, or Medicaid. On the other hand, the federal government in Canada funds insurance coverage as long as the provincial governments adhere to the Canada Health Act (Pozen & Cutler, 2010). Canada’s National Health Care System provides all citizens with health insurance. 

Private enterprises are present in the U.S. and Canadian health systems but operate differently. In the U.S., private enterprises are primary providers for health care services and healthcare insurance. Health care practitioners in the U.S. compete for customers through medical specialty, cost, or quality. They also yearn to sell health policies to employers or individual consumers. In the U.S., individual consumers’ choices are constrained by the insurance types employer negotiate, the type of services offered by insurance providers, and the available doctors within the insurance provider’s physician network. Within the Canadian healthcare system, private providers provide most healthcare services. Physicians work autonomously in private practice but generate revenue by billing government health insurance. 

Comparison of Quality

Compared to the U.S., Canada’s health system demonstrates better health outcomes and distributes health resources more equitably. Although life expectancy and infant mortality rate are influenced by numerous factors apart from the health care system, low birth weight is more common in the U.S. due to increased drug and substance abuse. The U.S. population experiences a higher mortality rate for young adults due to homicides and accidents. Also, the older population’s life expectancy gap is higher due to the increased rate of chronic diseases such as heart disease and cancer. The obesity rate in the U.S. accounts for 33 percent, while Canada’s stands at 19 percent. Moreover, Canada is known for better treatment of heart diseases. 

Chronic disease incidence can help compare the quality of care in countries. However, the measures are less subjective since they could be influenced by other behavioral factors outside the health system. Even though the measures of these conditions, including heart disease, high blood pressure, and asthma, are somewhat higher in the U.S., they are more likely to be treated. Canadians embrace a better and healthy lifestyle, thus reducing the likelihood of contracting these diseases. The Canadian health care system is also preventative as it creates awareness among the citizens by encouraging them to exercise regularly and eat a balanced diet. 

The availability of health care resources is higher in the U.S. than in Canada. This enables the U.S. to provide frequent cancer screenings, including PAP smears and mammograms, colonoscopies, and PSA screenings. Seventy-three percent of Canadian women aged 40 to 69 experience a mammogram, and in 86 percent in the U.S. In the U.S… There is an increased likelihood of early detection and treatment of various cancer types. The U.S. health care system is increasingly successful in detecting and treating cancer. Also, Canadian experience higher waiting times compared to American citizens. According to the National Bureau of Economic Research (2007), Canada, compared to the U.S., has a more equitable distribution of health outcomes.

The U.S. spent 16.9 percent of the GDP on healthcare in 2018, nearly double the average in OECD countries. The U.S.’s higher costs result from the advancement of medical technologies, rising health sector prices, and the increased demand for services. Compared to Canada, the U.S. experiences higher per-capital spending from private sources, such as employer-sponsored health insurance coverage. Averagely, U.S. citizens pay about $1122 out-of-pocket for healthcare due to co-payments for prescription drugs, doctor’s visits, and health insurance deductibles. The higher costs of health care spending in the U.S. do not reflect enhanced health outcomes. The U.S. records a shorter life expectancy compared to Canada and the highest suicide rate in the world. 

Comparison of Access

Studies have revealed a significant difference in coverage for medical care in the United States and Canada. The Canadian government provides its citizens with health care insurance coverage, while in the U.S., only those eligible for health care programs access free health care. Health care access is a problem in both countries. 5 percent of Canadians cannot find a regular doctor, while 9 percent are yet to look for a doctor. In the U.S., 4 percent of the underinsured persons face difficulty accessing care. Universal healthcare is not present in the U.S., although publicly funded healthcare programs help the disabled, poor, elderly, and children access care. In the U.S., an individual during an emergency is not obligated to meet the cost of care, but the hospital has a right to contact any debtor for the emergency costs. On the other hand, the government meets emergency room treatment for legal Canadian residents. 

Coverage for mental health services is different in the United States and Canada. For instance, The Canada Health Act covers psychiatrist services but does not cover the treatment cost offered by a psychologist. Goods and Services Tax applies to psychotherapist’s services. The federal government in Canada does not have a responsibility to cover psychiatric services, but private insurance helps the affected persons in some provinces. On the other hand, the Affordable Care Act encompasses the prevention, early intervention, and treatment of mental and/or drug and substance use disorders, thus demanding health plans to cover the treatment and services. The U.S. health care system establishes plans to cover psychiatrist services and treatment. 

According to Laser et al. (2006), fewer U.S. residents than Canadians had a regular medical doctor. U.S. residents were more likely to have forgone the required medicines in the past year. Compared to Canada, women in the U.S. had higher Pap test rates at 3 and 5-year intervals. Also, they experience an increased rate of mammography screening. U.S. citizens reported a higher satisfaction rate regarding hospital and community-based care than Canadians. Laser et al. (2006) say that about 7 percent have unmet needs in the U.S. due to financial constraints, while 3.5 percent of Canadians undergo unmet health care needs because of long waiting times. 

Uninsured Americans receive the worst access to care, low-quality care, and fewer medical services than insured Americans. Most health care outcomes reveal that uninsured persons in the U.S. receive deteriorated care compared to Canadians. Also, access to care in the U.S. is discriminatory due to racial and ethnic disparities, unlike in Canada. The study by Laser et al. (2006) illustrates that among the 8 percent of depressed people in the U.S., people of color were less likely to obtain treatment. Non-whites in both countries had a decreased perceived care quality and satisfaction. As demonstrated, U.S. citizens compared to Canadians were more likely to have unmet health needs, a regular doctor, and an increased likelihood of preceding needed medicines. Besides, foreigners in the U.S. experience more challenges in accessing health care services than foreigners in Canada as they are treated unfairly by the system. 

What the United States Can Learn from the Canadian Healthcare System

Canada could be a suitable model for a better U.S. health care system. Experts regard the Canadian universal health care system as a superior model to the U.S. health care system. Dubbed a single-payer system, the Canadian system is funded by the public. The U.S. system comprises a multi-payer model but is mainly privately financed. Canada’s system records higher satisfaction levels, while the U.S. health records increase dissatisfaction. The U.S. should establish a universal health care system to offer care services to the entire population irrespective of their job status, income, or socio-economic status. The single-payer system in Canada is cheaper since it uses 10.4 percent of its GDP on health care, while the U.S. uses approximately 17.8 percent. Health outcome measures such as life expectancy and infant mortality are better in the Canadian universal health care system; thus, applying the U.S. model will exert tremendous results. The U.S. needs to implement a system that lowers the cost of seeking care services and treatment. 

The U.S. healthcare system is regarded as a discombobulated, fragmented system. Since it is highly disconnected, it imposes high administrative costs, making health care unaffordable in the U.S. Unlike the United States, Canada’s health system focuses on primary care rather than hospitalization, specialist care, and other sophisticated and costly procedures. As a result, the system keeps its costs down. Canada’s health care system encourages people to embrace a proper lifestyle rather than live a sedentary lifestyle that leads to chronic ailments such as high blood pressure and heart disease. Contrariwise, the U.S.’s health care system has a much greater emphasis on expensive procedures such as cancer treatment instead of paying attention to primary care. 

The Canadian health care system is characterized by a significant restriction on private funding and core medical services provision (Barua & Globerman, 2019). The Canadian Health Act limits private activity, unlike the Affordable Care Act in the U.S. In Canada, insurance plans are provided on a not-for-profit basis and cover necessary services offered by hospitals and physicians. The U.S. records high costs of care provision because it is highly privatized and loosely regulated to contain the costs. The U.S. could efficiently prohibit private insurers from offering coverage for not covered services within a government program. Even though private coverage is permitted in Canada, private insurance only covers the medical procedures and services not covered by Canadian Health Care. Regulating private insurance is vital for cost containment.  

Canadians have attained irrefutable success with universal health coverage at low administrative costs. However, Canada still experiences longer waiting times, especially for non-urgent care. Canada has been productive in offering care and containing costs for various reasons. Unlike the U.S., healthcare institutions in Canada do not focus on profit generation as it focuses on expressing core national values (Martin & Galea, 2017). The United States should concentrate on structuring the health care system to ensure organized care delivery. The U.S. should learn from single-payer systems that provide that health care services are brought under the umbrella of a single, accountable authority. The U.S. also needs to restructure its system to protect one another from illnesses and prevent harm to promote society’s worth. 


The U.S. health care system differs from the Canadian system. In the U.S., the Affordable Care Act encourages individuals to subscribe to health insurance as it offers subsidies and mandates all citizens to acquire insurance coverage or face penalties. On the other hand, The Canada Health Act provides universal health care coverage to all its citizens, and the provinces are entitled to contain and control the costs. During emergency treatment, the Canadian system does not restrict care to affected individuals, as witnessed in the U.S. The Canadian system is also equitable as the resources are fairly distributed. This allows patients to access medical services on need without having to worry about paying for the services. Healthcare in the U.S. is costly because it does not focus on primary care but pays increased attention to hospitalization and treatment of complicated diseases and procedures. The U.S. can learn a lot from Canada and discards the multi-payer system for a single-payer system to improve healthcare delivery efficiency and reduce inflated treatment costs. 


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Barua, B., & Globerman, S. (2019, December 19). Lessons from the Canadian health care system. The Heritage Foundation.

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Martin, D., & Galea, s. (2017, March 27). What Canada can teach the U.S. about health care reform. STAT.

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