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  1. About Ross University Schoool of Medicine
  2. Blog
  3. US vs. Canadian Healthcare: What is The Difference?

US vs. Canadian Healthcare: What is The Difference?

Tue, 11 May 2021
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Healthcare reform is a subject of intense debate in the United States and much of the world. We can understand the choices available by comparing the health system in the United States with that of other countries. In particular, the Canadian healthcare system. By comparing the US healthcare system to the Canadian healthcare system, we can help clear up misunderstandings and make our choices clearer.

People sometimes say that Canadians have “free” healthcare, but Canadians pay for their healthcare through taxes. In the US, patients are likely to pay for healthcare through premiums or copays. Healthcare is never free. Economists have compared Canadian vs American healthcare to figure out how much an average patient pays in each country.

The Canadian Institute for Health Information provides information on Canada vs US health care statistics. Healthcare for Canadians costs $7,000 per person as of 2019. In the United States, healthcare costs more than $10,000 per person according to CNBC. But what does this mean for patients?
 

The Canadian Healthcare System

There is more shared in the US healthcare system vs Canada healthcare system than there are differences. Both countries are ranked relatively high in international surveys of healthcare quality according to the World Health Organization (WHO). Both countries are relatively wealthy compared to much of the world, with long life expectancy. But Canadian life expectancy is slightly higher. 

In Canada, the national government funds health insurance. Most of the services patients would receive from a hospital or general practitioner (GP) office are covered by government insurance. According to the National Center for Biotechnology Information (NCBI) it is actually illegal in Canada for private insurance to cover services covered by government insurance. Thus, Canadian healthcare is a “single-payer” system according to Harvard Health Publishing. The Canadian healthcare system was established by the Canada Health Act of 1984.

The government provides insurance for Canada healthcare, but it generally doesn’t own hospitals or employ doctors directly. In the United Kingdom, the government directly employs providers, but in Canada they are privately employed according to the (NCBI). Doctors practice independently, though they meet insurance requirements for reimbursement. 

Under the Canadian healthcare system, citizens can and do buy private health insurance for some services. For example, dentistry and cosmetic services are not covered by government insurance. There are also some minor differences in coverage between Canadian provinces, which are equivalent to US states. 

One of the major differences between healthcare in Canada vs US is in how much the patient pays at the time of care. Also, while Canadians generally pay for healthcare through taxes, higher earners are taxed at a higher rate according to the Government of Canada website. In practical terms, this means that high earners pay more for healthcare than low earners do. 

Costs per person are lower in Canada in part because the government has a better negotiating position. For example, the Canadian government has more negotiating leverage than any private insurer could in negotiating pricing agreements with drug companies. 
 

The Health System in the US

The biggest contrast in Canada vs US health care is that about half of Americans get insurance through their employer, according to Kaiser Family Foundation’s Canada vs USA healthcare chart. This private insurance is usually paid for through a combination of employer and employee payments. The cost and coverage of private insurance varies by state and employer. Since 2014, even private insurance has had to meet certain core requirements, because of the Affordable Care Act (ACA). 

The poorest Americans often have insurance through Medicaid. Seniors have insurance through Medicare. But the working poor often do not qualify for this government insurance, and many jobs do not provide health insurance as a benefit. As a result, many Americans struggled to afford private insurance. Today, millions of Americans remain uninsured, even after the ACA. 

Americans pay more for healthcare, but they also can face unexpected or sudden costs. There are many different private insurers, with different rules for reimbursement. Copays and deductibles vary widely. Patients sometimes face high out-of-pocket costs for urgent care, or for factors outside of their control. The US healthcare system is a leading cause of bankruptcy as stated by the (NCBI). 
 

Differences Between the Systems

There are some other differences apart from insurance between US and Canadian healthcare. There are more GPs per capita in Canada than in the US. About half of all doctors in Canada are GPs as stated by the NCBI . Only about a third of doctors in the US are GPs according to the Agency for Healthcare Research and Quality (AHRQ). 

Usually, Canadians need a referral from their GP to see a specialist for non-urgent care. Canadian specialist doctors even suffer financial penalties if they see a patient without a GP referral. 

Partly because of this referral requirement, wait times for specialist services are generally longer with Canada healthcare vs USA healthcare. If a Canadian needs emergency care, they receive the care immediately, but for some services, such as knee or cornea replacement, Canadians typically wait weeks longer than Americans according to the NCBI. 

Healthcare in Canada vs US comes down to different choices. Canadians cover everyone with health insurance, but they limit costs by limiting the number of specialists, which can lead to longer wait times. In the US, the wait might be shorter, but the patient typically pays more.  

Related Links:

  • RUSM Canadian Medical School Applicants 
  • RUSM Admissions
  • RUSM MD Program 
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