Comparing US-Canadian Healthcare Systems

Health care in many parts of the world is considered a basic right that should be given to people. Access is crucial in order to ensure the efficient delivery of basic health care services. In general, health care systems are organized in order to provide treatment of diagnosed health care problems and these systems are usually government-run, meaning they utilize the people’s taxes. Though most of the health care systems differ, they share common goals and outcomes as well as features that identify them with the universal health standards. Since the end of the Second World War, universal health coverage remained a contentious public issue in the United States. Today, it is the only wealthy nation in the world to not yet adopt universal health coverage. The debate is often framed by comparing the efficiency of the U.S. healthcare system with that of other affluent nations.

Though practically “joined to the hip” in terms of history and geography, the health care systems of the U.S. and Canada are always basis for comparison because they offer two contrasting models. Canada, like many developed countries in Europe, follow a universal and single-payer healthcare system while the U.S. has decided to retain a limited and multi-payer system of health care. A comparison of the health care systems of both countries reveal that in terms of accessibility, cost-effectiveness, and health care outcomes, the Canadian health care system may be a better model from which the U.S. could learn from.

Public Policy, Coverage and Access:

It is presumed that the government, being the sole purveyor of public policies must address the aspect of health issues and its impact on the citizenry. There is an extensive involvement in the medical market place including financing, direct supervision, regulation, and subsidization (Henderson 2008). In addition, 45 percent of health care spending comes from government sources such as Medicare, Medicaid and various health plans for both civilian and military (Henderson 2008).

The United States remained to be the only economically developed country that has not provided universal health care access to its population so that today, millions of Americans remain uninsured (Brown and Lavarreda 2007). Moreover, because there is no universal access to health care services, not all Americans are entitled to even the routine and basic health care services (Shi and Singh 2009). The issue of health insurance coverage remains to be a contentious point because it is the principal financial means where people can obtain their health care services. Its importance is noted on several studies that compare the access of insured and uninsured people as well as in the studies that validates over time the effects of losing or acquiring insurance and its health status. Since absence of the universal health care access is present in the United States, several subsystems have evolved from either through market forces or the need to take care of certain population segments (Shi and Singh 2009).

In Canada, a single-payer system is managed by the government for the delivery of healthcare. This entitles every citizen to have a universal access regardless of the ability to pay (Howard-Hassmann and Welch 2006). The universal single-payer system differs from what is being employed in the United States’ privately funded system. Here, every citizen carries a health care card that can be used in seeking medical intervention without the burden of paying the bill immediately (Howard – Hassmann and Welch 2006). The funding is generally from the federal government but certain provisions vary depending on the province. It was in 1962 that a major reform in the health care delivery policy of Canada was done starting with the province of Saskatchewan, which was subsequently adopted in the whole country (Kendall 2008).

Reform attempts in the United States during Clinton’s administration faced a strong opposition from insurance companies who held most of the funding (Howard – Hassmann and Welch 2006). In addition, various obstacles such as political and ideological factors, the complexity of the proposed reform plan and the diverse opinions in all the fifty states all militated against the passage of much-needed health care reform (Howard – Hassmann and Welch 2006). Until present, the problem persists and more than 40 million Americans are not covered by health insurance (Shi and Singh 2009).

The Price and Quality of Health Care:

The concept of quality of care in the booming health care industry is more than just an idea. It entails essential details for patient care and the ability to cover up the finances. According to the Institute of Medicine (1990), quality is defined as the degree to which health services for individuals and populations increase the likelihood of desired health outcomes (quality principles) and are consistent with the current professional knowledge (professional practitioner skill) and meet the expectations of the healthcare user (the marketplace) (Cohn and Hough 2008). This view suggests that good clinical quality produces quality outcomes because the efficiency of the medical practice reduces medical malpractice liability and ultimately enhances financial viability (Cohn and Hough 2008).The National Quality Forum (NFQ) as a non-profit organization seeks to promote new guidelines, standards and quality measures to resolve serious and persistent quality deficiencies; it also seeks to reconcile the superfluous and often incompatible guidelines, standards and measures of reporting be various health care organizations dedicated to the improvement of quality health care management (Jonas, Goldsteen and Goldsteen 2007).

The issue of regionalization that started in Saskatchewan was seen by others as a way of redirecting the responsibility of budget and funding allocations from the Cabinet down to the province’s regional board (Beach, et al. 2006). This leads to the major advantage of the Canadian health care system over the United States reflected in the reduction of administrative costs. Administrative costs reach 20 percent of the U.S. health care dollar while Canada covers only 10 percent (Kendall 2008). Altogether, with the introduction of the publicly funded system, the cost is well controlled and the Canadian health expenditure per capita increased from 1975 to 1991 but significantly declined by 0.3 % per year (Rapoport, Jacobs and Jonsson 2009).

From an economic perspective, the price of health care should equal to the marginal cost of production where most of this scheme prevails in competitive free market ensuring fair profit (Marchildon, et al. 2004). Since 1960, the United States healthcare expenditures increased yearly in both absolute and relative terms and in 1980, the annual rate of increase was always in the double-digit range (Jonas, Goldsteen, and Goldsteen 2007). Uncontrolled health care cost and spending accounts much of the reason for increasing costs of health insurance in the United States plus a decline in the employment based insurance reflected a fundamental flaw in the current health care system (Andersen, Rice and Kominski 2007).

Health Care Outcomes:

Health of the population is a concern for governments and certain goals and standards must be met to ensure a better quality of life. Based on health indicators used to evaluate the effectiveness of services rendered, a study concluded that the current health care system delivery of the United States resulted to poor outcomes (Henderson 2008). A health indicator reflects more than the health care delivery as it either praises or fault a system where life expectancy and infant mortality rate indicates whether aspects such as environment, lifestyle choices, and social problems are properly addressed.

In the U.S., male life expectancy at birth was lower at 75.2 years and female life expectancy at 80.4 years. In Canada, male life expectancy was 77.8 and 82.6 years for females. The infant mortality rate in the U.S. is also higher by 5.3 percent than in Canada (Henderson 2008). The poor performance of the U.S. healthcare system could mean that the higher investment in health services does not generate an equal return for its consumers and the consumption of health services is not really value driven (Cohn and Hough 2008).

The assessment of the quality of care faced two key challenges and these reflects the involvement of varied factors outside the health care system (Andersen, Rice and Kominski 2007). Adequate methods in managing the variations in health profile and severity of illness must be compared in using the first key challenge in comparison of health plans and providers (Andersen, Rice and Kominski 2007). Moreover, the second challenge is the issue of attribution in using the outcomes data where the determination of the extent to which the health plans or physician that is being evaluated is responsible for the observed outcomes.

Despite the use of several indicators to assess the effectiveness of health care systems, several factors can affect the health outcomes and not all of these can be modified by the health care delivery system (Andersen, Rice and Kominski 2007). This could mean that the lower infant and mortality rate in Canada reflects the quality of care and tells us more about the social conditions rather than the quality of health care delivery itself (Weitz 2009).

Impact on the Economy:

Economic evaluation is an important tool to gauge the impact of the healthcare outcomes because it considers both the financial and the social attributes of the health care system delivery. The most prominent and widely-used technique for analysis in the economic evaluations of health care systems is cost-effectiveness (Henderson 2008). Cost-effectiveness is integrated into the healthcare policies in Canada, Australia and Europe but the increasing value of it must not be rendered the sole factor in funding for a treatment project (Henderson 2008).

Based on spending, Canada and the U.S. allot a significant percentage of their GDP to healthcare, higher than most industrialized nations. Canada’s healthcare spending comprises 10 percent of its economy while the U.S. spends as much as 16 percent on healthcare. This big gap on spending between the two nations is due to the difference in overhead. Because of its single-payer system, Canada does not require the service of actuaries who set premiums or lawyers who deny care as the U.S. does. Nonetheless, the contribution of the health industry to the U.S. economy in many levels is a major factor why attempts toward major healthcare reforms have faced difficult opposition. In addition, the health sector makes major contributions in the overall income and employment in the United States (Cohn and Hough 2008). It was predicted that 16 percent of all new jobs created in the year 2012 will be in the health service industry with 10 of the 20 of the fast increasing job will be from the health care sector (Cohn and Hough 2008). Moreover, a ripple effect is created in the continuously growing healthcare industry due to its interconnectedness with the U.S. economy. Beyond its economic impact, there are plenty of qualitative reasons why healthcare is important. A strong healthcare infrastructure plus a leading health care organization would likely increase a community to be settled as a permanent residence for many individuals. Also, the presence of a healthcare facility in a community is important in business because of the industry’s economic stability (Cohn and Hough 2008).

Analysis:

The comparison between the two countries’ respective health care system has presented knowledge about the differences in terms of public policy, coverage and access, price and the quality of healthcare, health care outcomes and the economy. The aforementioned literature has noted that government involvement played a major role in healthcare as governments have direct supervision, control, and regulation of the health care industry. Public policies addressed towards the need for universal access and coverage of healthcare differed in U.S. and Canada. All Canadians have a health care card that enables them to have access to basic health care services without the burden of directly paying because the government allocated a certain portion of their budget for the subsidization of health care costs. In the United States, there is no universally accessible health care delivery system because such service is restricted to the elderly and the most disadvantaged. The fact that most of the Americans do not have insurance is a problematic feature that drives calls for major reforms in the industry. What the Americans have are profit-centered insurance companies. This is the primary reason why the cost of health care in the U.S. is much higher than in Canada. Though reforms have been attempted, the issue is still unresolved as the healthcare industry threatens economic consequences should the private insurers and pharmaceutical companies start losing its profits. These companies, along with political pressure from anti-reform legislators have blocked the way for a major healthcare reform in the United States. Canada however was successful in the implementation of health care reform beginning in Saskatchewan in the 1960’s In terms of expenditures, the literature also pointed to the high administrative costs make up bulk of healthcare cost in the United States. In Canada, this is properly subsidized by the government utilizing the decentralization of their public funding relegated to their provincial governments.

In terms of healthcare outcomes, the United States has a relatively poor performance in the most important evaluative tools of measuring the efficiency of its health care delivery. Infant morality rates scored high in the U.S. than in Canada along with the lowest years in both female and male life expectancy. This indicator reflects the kind of environment and the kind of sociopolitical issues the country is facing characterized with a high prevalence certain lifestyle diseases. Though not the sole reason for measuring quality of care, it is indeed a factor in the overall outcomes of health for both countries. In addition, the results of the health indicators for both countries emphasize not only the quality of care but also the social conditions present in each of their environment. Such conditions are very important aspects in the area of business of health care. People tend to choose their residence in a place where there is a visible and quality infrastructure such a state-of-the-art healthcare facilities.

From an economic point of view, the health care industry proves to be a recession-proof industry as the need and demand for health care services are in constant in the community. The multibillion health care industries in the United States contributed much to the stability of the national economy of the country and this is also the reason for the failure of healthcare reform to materialize. Jobs and revenue generation constitutes a major issue in tackling health care in the United States, as with Canada. However, the subsidization is in effect in the Canadian health care system whereas in the U.S., some features of subsidization are being emulated in certain U.S. states, such as the value of cost-effectiveness in the measurement of their services over the price of services over time.

Conclusion:

Although the United States and Canada lie close to each other in terms of geography, the difference in their health care delivery system is unmistakable. In evaluating the various literature comparing the health care system of both countries, the Canadians seem to have a better health care delivery system than the United States based on three grounds. First, Canada’s universal accessibility and coverage among its citizens to acquire basic health care services allows for the greater enjoyment of health rights than the restricted coverage offered in U.S. health care. Second, the health care outcomes that measures and evaluates the quality of care rendered among the healthcare consumers is relatively better in Canada than in the U.S. Lastly, the cost-effectiveness of the single-payer healthcare delivery system in Canada makes it a suitable model for other countries to follow.