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…

Six more problems with Public Private Partnerships (P3s)

The Auditor General (AG) has again identified issues in her annual reportwhich reflect problems with Ontario health care capacity and privatization.   First, here are six key problems with the maintenance of the 16 privatized P3 ("public private partnership") hospitals in Ontario:
There are long-term ongoing disputes with privatized P3 contractors over the P3 agreements, including about what is covered by the P3  (or “AFP” as the government likes to call them) contract.The hospitals are required to pay higher than reasonable rates tothe P3 contractor for  maintenance work the contractor has deemed to be outside of the P3 contract. Hospitals are almost forced to use P3 contractors to do maintenance work the contractors deem outside of the P3 contract or face the prospect of transferring the risk associated with maintaining the related hospital assets from the private-sector company back to the hospitalP3 companies with poor perf…

Health care funding falls, again

Real provincial government health care funding per-person has fallen again this year in Ontario, the third year in a row.  Since 2009 real funding per-person has fallen 2.6% -- $63 per person. 

Across Canada real per person funding is in its fourth consecutive year of increase. Since 2009, real provincial funding across Canada is up $89 -- 3.6%.
In fact the funding gap between Ontario and Canada as a whole has gown consistently for years (as set out below in current dollars).

Ontario funds health care less than any other province -- indeed, the province that funds health care the second least (B.C.) provides $185 more per person per year, 4.7% more.  
Provincial health care spending in the rest of Canada (excluding Ontario) is now  $574 higher per person annually than in Ontario. 

 Ontario has not always provided lower than average health care funding increases-- but that has been the general pattern since 2005.
Private expenditures on health care have exceeded Ontario government increases …