Skip to main content

US and Canadian public health care costs compared

USA government health care costs far exceed Canadian costs

Despite the lack of universal public insurance, U.S. governments actually spend much more on health care than Canadian governments.  

Public sector health expenditure in the U.S.A. accounts for 8.5% of the economy, 7.9% in Canada, and 6.8% through the OECD (the club of 34 rich nations  which, unlike the U.S.A., primarily finance health care through the public sector). 

Indeed, the U.S. public sector spends more per capita on health care than any other OECD nation except Norway $4066 per capita (in 2011).  The universal Canadian system spends $3183, while the OECD average is $2,499. 

The main feature of the US system that distinguishes it from the systems in other developed countries is that it is highly privatized.  

Moreover, it's not that the U.S. hasn't quite got privatization right: basic problems remain despite multiple reforms to private health care.

As the U.S.A. is the leading model of private health care provision, why would any jurisdiction consider moving towards more private health care?

Ontario U.S.A.: Despite the negative results of the privatized U.S.  health care model, Ontario is trying to expand private health care delivery through private surgical and diagnostic clinics.  

Past experience shows that private clinics are much more aggressive at collecting private payments from patients for services than public hospitals.  

So it is notable that Ontario already has the highest share of private payment for health care in the country, according to data in a recent report from the Canadian Institute for Health Information (CIHI).  Private expenditures in Ontario run to 32.3% of total health expenditures, higher than any other province (Saskatchewan is at only 24% private expenditures, Manitoba at 25.3%, and Alberta 27.1%).  

In dollars, private payment for health care is 5.3% higher in Ontario than Canada as a whole ($1,883 in compared with $1,787).
  
Total public sector expenditure for Ontario in 2013 is forecasted at only 67.7% of total health care expenditure, significantly below the Canada-wide average of 70.1%.  Public sector expenditures in Ontario would need to increase 6.3% just to meet the Canadian average (and the Canadian average is significantly below the OECD average).

Photo: Canada-USA by Eric Fisher

Popular posts from this blog

Deficit? Public spending ain't the cause. Revenue, however...

With the election over, pressure to cut public programs has become quite intense. In almost all of the corporate owned media someone is barking on about it.

Another option -- increasing revenue from corporations and the wealthy is not mentioned.  However, data clearly indicates that Ontario does not have an overspending problem compared to the other provinces.

Instead, it indicates Ontario has very low revenue. 
Ontario has the lowest public spending of all the provinces on a per capita basis (see the chart from the 2014 Ontario Budget below).  So there is little reason to suspect that we have an over-spending problem.  If anything, this suggests we have an under-spending problem.







The Ontario government has also now reported in the 2014 Budget that Ontario has the lowest revenue per capita of any province.  This is particularly notable as other provinces are quite a bit poorer than Ontario and therefore have a much more limited ability to pay for public spending.  (Also notable in this…

Budget underwhelms on health care. Bait and Switch is such a nasty term

Last year the government promised a 4.64% health care funding increase in 2018/19. Then, earlier this month, they announced they would deficit spend to improve hospitals, mental health, home care, and child care.   Three of the four items cited by the government for improvement were part of health care. 

As it turned out the government did in fact promise in today's Budget to deficit spend $6.7 billion. (Due to a $1 billion fall in expected revenue, the extra spend amounts only to an extra $5.7 billion for 2018/19 programs – but that is still a significant chunk of new found cash for program spending.)  
If health care had gotten even a proportionate share of this new $5.7 billion in program spending, it would have added an additional $2.4 billion to health care  --  in other words about another 4% increase.  

But all health care got -- despite the government’s health care rhetoric -- was an extra $284 million. That may sound like a lot but with a total health care spend of $61 bill…

Ford government promise falls far short of solving hospital hallway medicine problem

Tens of thousands of new Long-Term Care (LTC) beds needed just to offset aging
The new Progressive Conservative government in Ontario has promised 30,000 new long-term care beds over the next ten years, often connecting this to their promise to end hospital hallway medicine.  But how does this promise stack up with growing demand for these facilities?
Most people 85 and older live in collective dwellings (LTC facilities, seniors residences, multiple level of care facilities).  The setting with the largest number of elders 85 and older is LTC facilities, with about 35% of the population 85 to 89  years old and almost 40% of the population 90 to 94 years. Older people are even more likely to be in a LTC facility.
The population 85 and older is the main driver of the need for long-term care beds.
An additional thirty thousand LTC beds by 2028 will only partially offset the rapid growth in the 85+ population.  The ministry of finance projects 42.5% growth in the most relevant population (85 a…