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The American Health Care System Versus The Canadian Health Care System Essay Sample

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The American Health Care System Versus The Canadian Health Care System Essay Sample


The American healthcare system versus the Canadian health care system is significant social debate regarding the cost of health care, problems in equity and the unequal distribution of health service in the United States as compared to Canada. These issues have been a focal point of concern interaction between medicine and society[1]. Although, organized medicine has consistently opposed social legislation that might affect the fee-for-service system of medical practice and the entrepreneurial role of the physician, the passage of Medicare and Medicaid signified the emergence of public awareness that medical profession’s interests were not always those of the general public. Efforts at health reform represent the beginning of a potentially profound change in the system of health care delivery in the United States-one that would guarantee access to health care for Americans and establish health as a social right like in Canada. Contrary to , in Canada, socialized oriented medicine (publicly funded )refers to a system of health care delivery system in which health care is provided. Survey consistently reports that Canadian health care system succeeded in maintaining its quality and lower cost. The Canadian government is the nation purchaser of health service, paying a set fee to doctors for patient care and for providing a set budget for operating cost to hospital.


             According to Bryan Turner (1988) one way to introduce politics in modern democracy is to view the issue from the social point of conflict theory which leads to change. In economics, the work of Karl Marx and Max Weber, also focus on differences between interest groups as they maneuver for advantages in the political system. This paper is virtually to study the mechanism how society and individual satisfy their wants materialistically with scanty resources. And this is exactly what is happening with respect to current measures in healthcare. Several social working in the tradition of conflict theory have argued that Americans would best be served by adopting a national health insurance system to the one in Canada[2].  A more socially responsible argument is that medical care represents a special case. More in the nature of an opportunity rather than a commodity. Quality healthcare should be available as a right to all Americans, regardless of living conditions or financial status similar to that available to Canadian citizens.

Body Content

International trends highlight the confluences of economics, politics and legal consideration in the health policy process. Research studies by Organization for Economic Cooperation and Development state that the Unites States spends more on health care than any other country. However, on most measures of health services used the United States is below the Organization for Economic Cooperation and Development median. These facts suggest that the difference in spending is caused mostly by higher price for health care goods and services in the United States. Research conducted by Steffie Woolhandler, M.D., M.P.H., Terry Campbell, M.H.A., and David U. Himmelstein, M.D[3].


 A decade ago, the administrative costs of healthcare in the United States greatly exceeded those in Canada.It investigated whether the ascendancy of computerization, managedcare, and the adoption of more businesslike approaches to healthcare have decreased administrative costs.

Methods for the United States and Canada, it calculated theadministrative costs of health insurers, employers’ health benefitprograms, hospitals, practitioners’ offices, nursing homes,and home care agencies in 1999. It analyzed published data,surveys of physicians, employment data, and detailed cost reportsfiled by hospitals, nursing homes, and home care agencies. Incalculating the administrative share of health care spending,it excluded retail pharmacy sales and a few other categoriesfor which data on administrative costs were unavailable. Itused census surveys to explore trends over time in administrativeemployment in health care settings. Costs are reported in U.S.dollars.

Results In 1999, health administration costs totaled at least$294.3 billion in the United States, or $1,059 per capita, ascompared with $307 per capita in Canada. After exclusions, administrationaccounted for 31.0 percent of health care expenditures in theUnited States and 16.7 percent of health care expenditures inCanada. Canada’s national health insurance program had overheadof 1.3 percent; the overhead among Canada’s private insurerswas higher than that in the United States (13.2 percent vs.11.7 percent). Providers’ administrative costs were far lowerin Canada.

Between 1969 and 1999, the share of the U.S. health care laborforce accounted for by administrative workers grew from 18.2percent to 27.3 percent. In Canada, it grew from 16.0 percentin 1971 to 19.1 percent in 1996. (Both nations’ figures excludeinsurance-industry personnel.)

Conclusions the gap between U.S. and Canadian spending on health care administration has grown to $752 per capita. A large sum might be saved in the United States if administrative costs could be trimmed by implementing a Canadian-style health care system.

Total health spending per capita. US per capita health spending was $4,631 in 2000 an increase of 6.3% over 1999. The US level was 83% higher than Canada. There are several plausible explanations for this difference.First, the inputs used for providing hospital care in the UnitedStates—health care workers’ salaries, medical equipment,and pharmaceutical and other supplies—are more expensivethan in other countries. Available OECD data show that healthcare workers’ salaries are higher in the United Statesthan in Canada. Second, the average U.S. hospitalstay could be more service-intensive than it is elsewhere. Third, the U.S. healthsystem could be less efficient in some ways. The highly fragmented and complex U.S. paymentsystem, for example, requires more administrative personnelin hospitals than would be needed in countries with simplerpayment systems. Several comparisons of hospital care in theUnited States with care in other countries, most commonly Canada,have shown that all of these possibilities may be true: U.S.hospital services are more expensive, patients are treated moreintensively, and hospitals may be less efficient.

U.S.-Canada comparisons. Some in the United States believe that Canada is rationing health care by placing tight constraints on capacity and waiting lists. That impression is reinforced annually by the annual waiting list survey of Canada’s Fraser Institute. Exhibit shows that hospital admissions per capita, indeed, were lower in Canada than in the United States in 2000. Remarkably, however, Canada actually had a higher acute care bed density than did the United States and also reported a greater number of acute care hospital days per capita. The explanation for this seeming condition could be the much longer average length of hospital stay in Canada. In both 1990 and 1999 the Canadian length-of-stay exceeded the comparable U.S. numbers by about 20 percent. To the extent that bed capacity is a binding constraint in Canada, further reductions in average lengths-of-stay could help to relax that constraint.

Measured in terms of share of GDP, the United States spent 13% on health care and Canada 9.1%. There are important differences in the financing of the two medical care systems, differences that have attracted considerable attention in recent years. In Canada, expenditures for health care are controlled by the government, whereas in the United States there is much less government control. Because of these structural differences, a lower percentage of the gross national product has been spent on health care in Canada than in the United States (9 percent vs. 11.5 percent). Along with budgetary constraints have come limitations on the availability of expensive procedures, such as coronary arteriography and revascularizationThe effects of these constraints on patterns of clinical practice have been difficult to document, as a recent analysis of the two health care systems indicated. That analysis found little difference in the frequency of diagnostic and therapeutic interventions. Perhaps the inability heretofore to document such differences has been a result of the type of analysis performed — i.e., one that does not compare specific situations requiring the ready availability of certain services, in which differences would be highlighted. Or perhaps the differences are new and have developed since the earlier analyses — a change that could have accompanied the increasing budgetary constraints of recent years.

The administrative structure of Canada and the United States health care system depends upon its political history and institution[4]. The U.S. health care administration exists for fundamental reasons, including a pervasive populardistrust of centralized authority, a federalist governmentalstructure, insistence on individual choice,the continuing and unabated power of large economic interests,and the virtual impossibilityof radically restructuring the nation’s largest industry. For thesereasons, careful scrutiny of how the United States administersits health care system, with discipline to how it can be improvedwithin the limits imposed by history, politics, and economics,is useful. But analytically flawed comparisons with Canada,whose systems differ, may address policymakers and others, butprovide them with little useful guidance.

Canadian and American societies have adopted radically different systems of reimbursements[5]. The results are of increasing interest to Americans, because the Canadian approach has avoided or solved several of the more intractable problems facing the United States. In particular, overall health expenditures have been constrained to a stable share of national income, and universality of coverage (without user charges) eliminates the problems of uncompensated care, individual burdens of catastrophic illness, and uninsured populations. The combination of cost control with universal, comprehensive coverage has challenge American policy maker, who have questioned its reality, its sustainability, or both. A comparison of the Canadian and American data on expenditures, identifying the sectors in which the experience of the two nations diverges most, and describing the processes of control[6]. In any system, cost control involves conflict between providers and payers. Political processes focus this conflict, whereas market processes diffuse it. But the stylized political combat in Canada may result in less intrusion on the professional autonomy of the individual physician than is occurring in the United States. Politically Canadian health care system creates doubts about efficiency of current system regarding timely treatment delivery but highest life expectation (about 80 years) and lowest infant mortality rates of other developed countries prove the effectiveness of the Canadian Healthcare System.


All nations in organizing social policy of health care are faced with rising demands for quality health care in the face of limited resources and the high cost of care has presented special problems in achieving desired outcomes. Exact comparisons in terms of the effectiveness of the respective health care delivery system is difficult because of varying political structures, diet, degree of technological advancements, social commitment to national healthy care, and cultures, which have an impact on the overall health profile. Differences between the United States and Canadian expenditure on health care administration for universal health coverage, the American policy maker would realize that administrative savings from adopting a single pair, no cost sharing system would cover the added service costs that result from such a system.

Under current situation no plausible US system would completely exclude cost sharing or private insurance. The Unites State version of a national insurance system would include sizeable costs for the administration of deductible and co-payment and for administration private insurance. In Canada, private insurance to cover services is prohibited under various provisional health plans. However, in the early nineteen nineties Canada experienced a crisis in health care as spending and to meet rising costs out stripped the government’s ability to pay. The long-term outlook is serious. Canada’s population is aging which means that fewer people will be working and paying taxes to support the health care system. At the same time demands on the system will be increasing because older people need care. Canada face challenges in maintaining the quality of its health care. Following points have an effect on health care policy in the future of the two nations.

  • Considerable attention is being paid to the cost of health care and controls over such costs are an important aspect of health policy
  • Preventive medical services are more emphasized as more attempts are being made to keep well people healthy.
  • Efforts are being made to design a more effective administration of large health care systems.
  • There is more demand in increased responsiveness on the parts of governments and policy makers to provide health care systems that meet needs of national health.


  • Cockerham, William C. (1998), Medical Sociology (7th. Ed.), Prentice Hall
  • Division of Health Services, Research and Development, University of British Columbia, Canada.
  • Bevan G, Robinson, R (2005). The interplay between economic and political logic.
  • Brox A.C. Filon K.B, Zhang X, Pilot- L (2003). In Hospital Cost of Abdominal, Aortic Aneurisam Repair in Canada and United States.
  • RG Evans, J Lomas, ML Barer, RJ Labelle, C Fooks, GL Stoddart, GM Anderson, D Feeny, A Gafni, GW Torrance (March 2, 1989), Controlling health expenditures–the Canadian reality, The New England Journal of Medicine.
  • Gerard F. Anderson, Uwe E. Reinhardt, Peter S. Hussey and Varduhi Petrosyan (2003): 89-105, Its The Prices, Stupid: Why The United States Is So Different From Other Countries, Health Affairs Journal.
  • Aaron, Henry J. Ph.D. (August 21, 2003), The Costs of Health Care Administration in the United States and Canada — Questionable Answers to a Questionable Question, The New England Journal of Medicine.
  • Steffie Woolhandler, M.D., M.P.H., Terry Campbell, M.H.A., and David U. Himmelstein, M.D.( August     21, 2003), Costs of Health Care Administration in the United States and Canada, The New England Journal of Medicine.

[1] Cockerham, William C. (1998), Medical Sociology (7th. Ed.), Prentice Hall

[2] Cockerham, William C. (1998), Medical Sociology (7th. Ed.), Prentice Hall

[3] Steffie Woolhandler, M.D., M.P.H., Terry Campbell, M.H.A., and David U. Himmelstein, M.D.( August     21, 2003), Costs of Health Care Administration in the United States and Canada, The New England Journal of Medicine.

[4] Aaron, Henry J. Ph.D. (August 21, 2003), The Costs of Health Care Administration in the United States and Canada — Questionable Answers to a Questionable Question, The New England Journal of Medicine. 

[5] RG Evans, J Lomas, ML Barer, RJ Labelle, C Fooks, GL Stoddart, GM Anderson, D Feeny, A Gafni, GW Torrance (March 2, 1989), Controlling health expenditures–the Canadian reality, The New England Journal of Medicine.

[6] Gerard F. Anderson, Uwe E. Reinhardt, Peter S. Hussey and Varduhi Petrosyan (2003): 89-105, Its The Prices, Stupid: Why The United States Is So Different From Other Countries, Health Affairs Journal.

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