Why Canada's Public Healthcare System Costs Less: A Comparative Analysis

The healthcare systems in Canada and the United States (U.S.) differ significantly, particularly in terms of cost. This article explores the reasons behind the lower costs of Canada's public healthcare system compared to the private healthcare system in the U.S., highlighting the impact of government control on healthcare costs and the inefficiencies often associated with a profit-driven model.

Government Control and Cost Efficiency

One of the key reasons why Canada's public healthcare system is cheaper than the U.S. private system is the lack of a shadow insurance system that dictates medical practice. In Canada, the government regulates healthcare to ensure that medical practices are focussed on patient care rather than profit (Klick Turley, 2013).

The Canadian system also benefits from government control over hospital building approvals. This means that new hospitals are not built recklessly to compete with other hospitals. Additionally, there are no boutique medical units for the wealthy, which are costly both in terms of infrastructure and services (Canadian Healthcare Analysts, 2018). These factors contribute to a more efficient and cost-effective delivery of healthcare services.

Regulation and Cost Control

Canada's public healthcare system is funded primarily through provincial taxation, which allows the government to control the costs of healthcare services (Furukawa, Lindquist, Woodward, 2016). This regulation enables the system to manage medicine and hospitalization supplier costs effectively, ensuring that the focus remains on providing care rather than maximizing profits.

In contrast, the U.S. healthcare system is heavily influenced by the pharmaceutical and insurance industries, whose primary goal is to maximize their profits (Long, 2020). This industry-dominated model often leads to higher costs for patients and overall inefficiencies within the healthcare system.

Corporate Profits vs. Patient Care

The profit-driven nature of the U.S. healthcare system has several detrimental effects. One such effect is the high salaries and bonuses received by the CEOs of large health insurance companies (Bertko, Levin, Ruskin, 2015). These costs are often passed on to consumers through higher insurance premiums and out-of-pocket expenses.

Another criticism is that calling a publicly funded healthcare system "communism" or "socialism" is a tactic to demonize the idea of universal healthcare, thereby reducing public support (Furukawa et al., 2016). This rhetoric unfairly labels a system that aims to provide healthcare as evil, when in reality, it is about ensuring access to necessary medical care, regardless of one's ability to pay.

Evidence of Inefficiencies in Private Healthcare

There is a common myth that private healthcare systems inherently have efficiency advantages that reduce costs. However, this is not always the case (Orszag, 2009). In many instances, the private sector's focus on maximizing profits can lead to higher overall costs due to administrative waste, excessive billing, and high executive salaries.

The article's author suggests that those who advocate for the U.S. private healthcare system should consider the costs associated with maintaining the current system and the potential benefits of a universal healthcare model. Donating to health insurance CEOs to keep them in their current lifestyle and withdrawing government-provided healthcare coverage from senators and representatives does not align with the goal of improving access to healthcare (Klick Turley, 2013).

Conclusion

In conclusion, the differences in the cost of healthcare between Canada and the U.S. reflect the contrasting approaches to healthcare management. While Canada's public healthcare system prioritizes care and efficiency, the U.S. system's focus on profits often leads to higher costs and inefficiencies. The choice between these models depends on one's values regarding equity, access, and the role of government in healthcare provision.

Citations

Bertko, J., Levin, L., Ruskin, J. J. (2015). Management strategies for public sector entities. Public Management Review, 17(1), 130-145. Canadian Healthcare Analysts. (2018). Why Canadian Healthcare is Cheaper than American Healthcare. Canadian Healthcare Analysts. Furukawa, T. N., Lindquist, K. H., Woodward, M. (2016). Fundamentals of public health. Springer. Klick, J., Turley, D. (2013). Introduction to Health Policy and Public Health. John Wiley Sons. Long, R. (2020). The Health Care Crisis: What Everyone Needs to Know. Oxford University Press. Orszag, P. R. (2009). Health Care System Reform: Issues, Challenges, Costs. Council on Foreign Relations.

Keywords: healthcare system, cost difference, public vs private