Emanuel Baisire

Comparative Study: U.S.A. and Canada Health Care Systems:
Introduction:
The main thrust of the paper is t...
In order to understand U.S health system, it is important to understand the role of federal,
state, local and private sect...
This has left forty three million American without health insurance (U.S. Census, 2005).
For the case of employment-based ...
To briefly summarize U.S health care system, it is important to look at the advantages
and disadvantages of U.S health car...
individuals, employer- based health programs, government sponsored programs. The rest
of the population remains with no he...
As regards to health care access, Canada provides health care to all its citizens (Ayre,
1996).Canada’s universal health c...
Disadvantages
I. The fee for service system in Canada encourages doctors to perform
unnecessary operations in order earn m...
Even though Canadian health care system is more favorable compared to U.S., it also
experience some problems. Although the...
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US and Canada Health Care System- Emanuel Baisire

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The main thrust of the paper is to compare United States health care system with Canada’s universal health insurance program. The paper compares different health care insurance programs provided by U.S. and Canadian government. In this case, health insurance coverage will refer to groups of people qualifying to enroll in U.S and Canada health programs. The analysis of U.S. health program will mainly focus on Medicare, Medicaid, and private insurance programs. For the case of Canada, the analysis will explore the strengths and weaknesses of Canada’s universal and single payer health insurance system. In a bid to make a clear comparative study of both countries; the evaluation will be based on health care cost, health care accessibility level and the general health status.

U.S. Health Care System:
The United States health system has a combination of both publicly and privately funded programs. The U.S health care system is considered to be excellent in certain fields but not faring well in many quality measurement compared to other developed countries (Manning, 1991). Unlike Canada, the United States does not have a national insurance program but have two most important public health care programs, Medicare and Medicaid (Irvine, 2002). Another equally important federal funded health program is the military medical services and veteran’s medical.

The national health insurance initiative was first proposed by President Roosevelt in 1943 but was opposed by some lawmakers and a cross section of the general public (Reinhard, 1992). Medicare and Medicaid were enacted as Title XVIII and Title XIX of the Social Security Act to provide health insurance to Americans aged 65 and above, low-income families and people with disabilities.

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Transcript of "US and Canada Health Care System- Emanuel Baisire"

  1. 1. Emanuel Baisire Comparative Study: U.S.A. and Canada Health Care Systems: Introduction: The main thrust of the paper is to compare United States health care system with Canada’s universal health insurance program. The paper compares different health care insurance programs provided by U.S. and Canadian government. In this case, health insurance coverage will refer to groups of people qualifying to enroll in U.S and Canada health programs. The analysis of U.S. health program will mainly focus on Medicare, Medicaid, and private insurance programs. For the case of Canada, the analysis will explore the strengths and weaknesses of Canada’s universal and single payer health insurance system. In a bid to make a clear comparative study of both countries; the evaluation will be based on health care cost, health care accessibility level and the general health status. U.S. Health Care System: The United States health system has a combination of both publicly and privately funded programs. The U.S health care system is considered to be excellent in certain fields but not faring well in many quality measurement compared to other developed countries (Manning, 1991). Unlike Canada, the United States does not have a national insurance program but have two most important public health care programs, Medicare and Medicaid (Irvine, 2002). Another equally important federal funded health program is the military medical services and veteran’s medical. The national health insurance initiative was first proposed by President Roosevelt in 1943 but was opposed by some lawmakers and a cross section of the general public (Reinhard, 1992). Medicare and Medicaid were enacted as Title XVIII and Title XIX of the Social Security Act to provide health insurance to Americans aged 65 and above, low-income families and people with disabilities. 1
  2. 2. In order to understand U.S health system, it is important to understand the role of federal, state, local and private sector in financing health care. Medicare: In 2004, there were 41 million Medicare beneficiaries (health insurance) covered for by the federal government (U.S. Census, 2005). The program requires a federal payment of $ 237 billion annually to function. The payments are mostly financed through payroll taxes on current workforce, premiums and pension funds (Irvine, 2002).There are three types of Medicare coverage for pensioners; Medicare A, Medicare B and Medicare+Choice (CMS, 2005).Eligibility is based on age and monthly premiums to receive supplemental health care services. Despite increased critics of the program and growing shortfalls of funding, Medicare remains popular among politicians and beneficiaries. Medicaid and State Children’s health Insurance Program (SCHIP): This is a need based program that provides healthcare to poor families, children, people with disability and low-income elderly (Stone, 1993). It is estimated that 43 million individuals received Medicaid benefits by 2004 at the cost of $ 246 billion in federal and state payments (U.S. Census, 2005). Medicaid is jointly funded by federal and state government and each state’s contribution is determined by its income levels (Mechanic,2001). Individual states are given the mandate to formulate their own Medicaid program and eligibility requirements in line with federal guidelines (Kaiser, 2001). This explains why Medicaid benefits and eligibility requirements vary from state to state. Medicaid recipients can access public or private hospitals of their own choice but coverage to a private physician is normally controlled by the program’s low payment rate (Irvine, Pp.2.) Medicaid is the largest single payer for long-term health care needs for the elderly and disabled that are not enrolled in Medicare or private insurance plans. Private Health Insurance program: It is estimated that 200 million Americans are insured under employment-based health insurance or individually purchased insurance plans (Kaiser, 2001). It is often very expensive and difficult to purchase a non employment-based health insurance in the U.S. 2
  3. 3. This has left forty three million American without health insurance (U.S. Census, 2005). For the case of employment-based health insurance, U.S. employers usually set limits on the type of health benefit an employee is entitled to receive (Reinhard, 1992).Employers normally put a ceiling on total expense an employee is entitled to utilize and sometimes requires an employee to participate in a managed care plan. Many employers restrict employee’s choice to visit a preferred doctor as a way of minimizing costs (White pp.14). Patients are normally requested to seek approval before visiting a medical specialist outside the managed health care plan. According to Irvine (2002), 90% of American workforce and their dependants are covered under the Health Maintenance Organization (HMO) and Preferred Provider Organizations (PPO). Therefore, in order to make a clear comparison of U.S health care system with Canada, the analysis will be based on cost, accessibility to health care and good health. The United States has the highest health expenditure compared to other developed countries. The U.S health expenditure grew to $1.7 trillion in 2003 and accounts for 15.3 % of U.S. GDP (Levit Et al, 2004). Unfortunately, this most expensive health care system in the world does not deliver the highest health care services to its population. U.S health care delivery system has been ranked as poor-to-middling results (OECD, 2005). The high cost of U.S Health care expenditure has been attributed to investment in medical technology, expensive prescription drugs and administrative cost (Woolhandler, 2001). As regards to health care accessibility, U.S. is the only country within OECD members that does not provide health care to all its citizens (Ayre, 1996). This has resulted into 43 million American to remain uninsured compared with Canada’s universal health care coverage. The lack of health insurance has left many Americans sick and unable to visit a physician. This phenomenon has increased medical expenses because uninsured individuals tend to visit a doctor only when the disease has progressed and in need of emergence operations (ACP, 2001). 3
  4. 4. To briefly summarize U.S health care system, it is important to look at the advantages and disadvantages of U.S health care patterns compared to Canada. Advantages: Due to huge investments in medical technology, U.S physicians have access to new technology and easily adapt to advanced medical technology. For example U.S has taken a lead in the use of MRI units and CT scanners. The U.S also enjoys a lead in the use of new technology in treating heart patients compared to Canada (Tech Research Network, 2001). Compared to Canada, U.S does not have a long waiting period for optional surgical procedure and it has also been confirmed that U.S. heart patients are more likely to undergo invasive cardiac procedure than Canadian patients (Kosterlitz, 1989). The U.S does not have a universal health system but provides access to emergency services for critically sick patients. Under U.S law, hospitals are required to treat patients regardless of their insurance coverage and ability to pay. The U.S health system provides incentives for physician to advance their skills with the goal of earning higher incomes. This has resulted into a great percentage (75%) of U.S doctors being specialists compared to Canada with only 50% of medical specialists (GAO, 1991). Majority of U.S hospitals are privately managed thus enabling hospital officials to reach quick decisions without government delay in resource allocation (Sclar, 2000). U.S hospitals compete with each other for patients and this leads to improved services and use of advanced medical technology (Bernard, 2001). Disadvantages: The United States’ price for health care service is very expensive to the government. It has been argued that better health care services in the U.S is accessed by a few rich 4
  5. 5. individuals, employer- based health programs, government sponsored programs. The rest of the population remains with no health care services. The U.S has low level medical services. U.S patients have a relatively low annual physician visit and hospital stay per capita due to patient’s fear of paying out of pocket for medical expenses (OECD, 2005). The existence of powerful private health insurance companies and managed care companies in the U.S limit the range of political choices in health care reforms. Canada’s Health Care System: Canada’s health care system is a publicly funded program which provides universal health care coverage to all residents. The health care system in Canada is provincially administered and equally financed by federal and provincial governments (Bernard, 2001). For provincial governments to qualify for federal government contribution, provinces have to ensure that more than 95% of their residents are enrolled in the program (Kosterliz, 1989). Under the National Health Act (1966), provincial health care plans have to be uniform in order to qualify for federal government’s financial support. To discuss Canada’s health care system, it is important to understand the origin of Canada’s health care system. The general notion of universal health coverage in Canada was first established in Saskatchewan province by Canada’s social democratic party in 1959 (Terris, 1990). The model faced strong opposition and criticism by doctors, insurance companies and the public (Benard, 2002) However, the Saskatchewan model became popular among politicians and was later replicated nationally under the federal National Health Act of 1966. Canada’s health care expenditure is relatively low even when it provides universal health coverage to its citizens. Canada’s health expenditure accounts for 9.9% of GDP (OECD, 2005). Canada’s health spending per capita was $ U.S.3003 in 2003 compared to United States health spending per capita of $ 5635 (OECD, 2005). 5
  6. 6. As regards to health care access, Canada provides health care to all its citizens (Ayre, 1996).Canada’s universal health care coverage allows Canadians to seek free medical services regardless of their income or age. This phenomenon has contributed to improvement in Canadians quality of life (Bernard, 2002). Over the years, Canada’s life expectancy at birth has risen to 79.7 years compared to U.S with 77.2 years (OECD, 2005). Canada has also experienced a fall in infant mortality rate of 5.4 per 1000 live birth in 2002, which is lower than the United State’s 7 death per 1000 live birth. These figures suggest that Canada’s standard of living fares well compared to the United States. Therefore, in order to understand the benefit of Canada’s health care system, it is important to look at the advantages and disadvantages of the system. Advantages: I. Canadians have managed to build a universal system that caters for healthy needs of the poor and rich without any medical restriction. II. Canadian patients have more freedom to visit a physician of their choice unlike U.S patients who are mostly controlled by the managed care system. III. Canada’s single payer system has managed to contain administrative cost compared to the U.S which has over 2000 insurance providers with different billing and administrative system resulting into increased medical cost. IV. Canada’s system is also physician friendly because it allows hospitals and clinics to treat patient without worrying about patient’s ability to pay. V. Private health insurance companies are prohibited from providing health policies covered under the comprehensive provincial plan. This is important because it avoids duplication of services and protects the universal coverage plan from being undermined. 6
  7. 7. Disadvantages I. The fee for service system in Canada encourages doctors to perform unnecessary operations in order earn more income. This results into a waste of resources and time. II. Canada’s national health care program attracts administrative delays and bureaucratic interference in implementing critical health decisions. III. Provincial government are reluctant to invest in new technology due to fear of rising health cost, unlike in the U.S where decisions to invest in new technology is vested in individual hospitals seeking to gain competitive edge in the market. IV. Due to high demand for specialized medical operations, there are long waiting period for patients seeking elective surgery and diagnostic procedures. V. There is a widening difference among Canadian provinces in determining which health policy to be included in the comprehensive plan. Some provinces pay for certain medical operations while others don’t. In summary, the comparison between Canada and the United States clearly indicates that providing universal health care services to the whole population improves the quality of life. This is indicated by Canada’s longer life expectancy at birth and low infant mortality rate compared to the United States. Another striking feature of Canada’s health system is that it provides comprehensive health care services and better health results at a lesser cost compared to the United States system that does cover the entire population. 7
  8. 8. Even though Canadian health care system is more favorable compared to U.S., it also experience some problems. Although the system advocates for equality to health care services, it does not guarantee equality in health care services. According Terris (1990), a fifth of rich Canadians tend to live 5 years longer than poor Canadians. Canada’s national health care program attracts bureaucratic interference in resource allocation by health care providers. The system control doctor and patients relationship by determining which surgical operation should be done first according to the waiting lists for medical care. Conclusion: The United States health care system is under attack due to increased health care costs and limited access to health care services. There is a need for health care reform supported by politicians and interest groups. Policy makers need to improve the efficiency of health care spending and extend health care coverage to people who can not afford to purchase health insurance. The Canadian model of national health care provides useful information for policy makers to craft a comprehensive health care policy that is affordable to all Americans. My proposal is that U.S. policy makers should not adopt Canada’s health care system as it is but learn from Canada experience to build a stronger system that incorporate positive features of U.S. health care system. 8

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