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

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