Online presentation us & canada

US Healthcare system vs. Canada Healthcare system

Fall 2013 HealthCare In the USA By Keum Joo Lee

COMPARATIVE HEALTHCARE SYSTEM

How to reform the US Healthcare system• The Canadian system is often held up as a possible

model for the U.S. The two countries' health care systems are very different-Canada has a single-payer, mostly publicly-funded system, while the U.S. has a multi-payer, heavily private system-but the countries appear to be culturally similar, suggesting that it might be possible for the U.S. to adopt the Canadian system.

• Canadian system is seems to do more for less. Canada provides universal access to health care for its citizens, while nearly one in five non-elderly Americans is uninsured. Canada spends far less of its GDP on health care (10.4 percent, versus 16 percent in the U.S.) yet performs better than the U.S. on two commonly cited health outcome measures, the infant mortality rate and life expectancy.

Canadians Healthcare is “free...?”• Many Canadians and commentators in other countries lauding Canada's government-dominated approach to health care refer to Canadian health care as "free." If health care actually were free, the relatively poor performance of the health care system might not seem all that bad. But the reality is that the Canadian health care system is not free -- in fact, Canadian families

• Pay heavily for healthcare through the tax system. • That high price paints the long wait times and lack of medical technologies in Canada in a very different light.

Introduction

• According to the research, Canadians strongly support the health system's public rather than for-profit private basis, and a 2009 poll by Nanos Research found 86.2% of Canadians surveyed supported or strongly supported "public solutions to make our public health care stronger.” A Strategic Counsel survey found 91% of Canadians prefer their healthcare system instead of a U.S. style system. Plus 70% of Canadians rated their system as working either "well" or "very well”.

• According to the research, a 2003 Gallup poll found 25% of Americans are either "very" or "somewhat" satisfied with "the availability of affordable healthcare in the nation", versus 50% of those in the UK and 57% of Canadians. Those "very dissatisfied" made up 44% of Americans, 25% of respondents of Britons, and 17% of Canadians. Regarding quality, 48% of Americans, 52% of Canadians, and 42% of Britons say they are satisfied.

THE CANADIAN HEALTH CARE SYSTEM: Why the interest?

• There have been rapid increases in U.S. health care costs and growing concern over the large number of uninsured.

• Is Canada's health system a possible model for reform in this country?

• There is a widespread perception in the U.S. is that Canada has successfully developed a comprehensive and universal national health insurance program that is cost effective and highly popular.

•Key Facts about Canada & the US Canada is geographically larger than the United States but has slightly more than one-tenth the U.S. population.

• The Canadian health care system is often

• Compared to the US system. The US system spends the most in the world per capita, and was ranked 37 th in the world by the World Health Organization in 2000, while Canada’s health system was ranked 30th. The relatively low Canadian WHO ranking has been criticized by some for its choice of ranking criteria and statistical methods, and the WHO is currently revising its methodology and withholding new rankings until the issue are addressed.

• Canada spent approximately 10.0% of GDP on health care in 2006, more than one percentage point higher than the average of 8.9% in

• According to the Canadian institute for Health information, spending is expected to reach $160 billion, or 10.6% of GDP, in 2007. this translates to $4,867 per person.

The Uninsured: At Serious Risk(US)• The uninsured in the U.S. face huge obstacles when attempting to access health care:• Many private providers will not accept them

• The burden is placed on community health centers, public hospitals, and emergency rooms

• Difficult to find medical home• Some are considered uninsurable due to pre-existing conditions, but cannot qualify for Medicaid

• Cannot afford full cost of visits• This can lead to medical bankruptcies and foreclosures• There is some evidence that cost-shifting has resulted in the

uninsured being billed for full charge, even higher than commercially insured patients

The U.S. also faces problems related to:• Health Care Disparities

• Racial/Ethnic, Language, and Gender differences in outcomes and access

• These differences persist even with insurance coverage

• Medical Errors• 44,000 to 98,000 preventable deaths

• Emergency Room overcrowding• Waiting Times• Throughput, Discharge Planning, Staffed Bed Supply

• Some areas do not have appropriate numbers of primary care and specialty physicians (i.e. physician maldistribution)

• Hospital Re-Admission Rates

• The extraordinary U.S. interest in Canada's approach is attributable to the fact that Canada and the United States share a long border and similar heritage in terms of language, culture, and economic institutions. o Although a wealthy country, its GDP per

capita is only about 80 percent of the U.S. level.

o Canada has a relatively high level of social services, with public expenditures representing 42 percent of GDP compared to 34 percent for the United States.

Health Care Spending per Capita,1980-2004

- adjusted for cost of living differences –

Health Care Spending per Capita,1980-2004

- adjusted for cost of living differences -

o With a national health system providing universal coverage, public funds account for more 70% of total health spending while it’s 45% in the U.S.

o However, not all services are covered (e.g., vision, dental, prescription drugs, semiprivate and private rooms), meaning that private funds account for nearly a one-third share that has grown in recent years.

o Canada has maintained lower health spending and share of GDP per capita than the United States, despite its higher bed-population ratio and longer lengths of stay.

o Canada's physician-population ratio is 12 percent lower and its nurse staffing level 27 percent higher than the U.S. level.

o Americans spend 82 percent more per capita on health care ($5,267 vs. $2,931), although about 15 percent of the U.S. population goes without insurance coverage at any time.

o Despite lower spending, health status indicators-such as life expectancy (about 2 1/2 years longer for both men and women in Canada).

o Public opinion polls indicate that Canadians support their system more than Americans support theirs and are concerned about any threats to it.

BACKGROUND • The Canadian system of financing and delivering health care is known as Medicare

• Each of the 10 provinces and 3 territories administers a comprehensive and universal program that is partially supported by grants from the federal government.

Various criteria established by the federal government with respect to coverage must be met.

1. Coverage must be universal, comprehensive, and portable, meaning that individuals can transfer their coverage to other provinces as they migrate across the country.

2. There are no financial barriers to access3. Patients must have free choice in the

selection of providers. (i.e. usually no out- of-pocket charges)

• Hospitals are also private institutions, although their budgets are approved and largely funded by the provinces.

• The Canadian system originated in the 1930s when compulsory health insurance programs were introduced by some provinces.

• Since 1972, every province and territory has provided universal coverage for hospital and physician care.

Health researchers have focused on the sources of the savings under the Canadian plan.

U.S. fees were considerably higher in each category. The net incomes of U.S. doctors were also substantially higher than were their Canadian counterparts.

Fuchs and Hahn • disparity in spending on physician services it was 72 percent higher in the United States

• 178 percent higher for the procedures component. (The relative ratios of Iowa to Manitoba were slightly lower.)

Fuchs and Hahn (1990)•Because spending is the product of prices and quantities, it seems logical to pursue differences in fees (prices) and utilization per capita (quantities).

•Overall, fees were 239 percent higher in the United States for 1985. U.S. fees were considerably higher in each category.

•The net incomes of U.S. doctors were also substantially higher than were their Canadian counterparts.

Fuchs and Hahn (1990)

•Perhaps more surprising than the fee differentials are estimates of the service volume.

•Despite the much higher spending per capita for physician care, the quantity of care per capita was considerably lower in the United States.

•Thus, the savings in Canada, at least for physician care, do not come from reduced volume of care.

WHY ARE FEES AND HOSPITAL COSTS LOWER IN CANADA? •Patients in Canada have longer lengths of stay, in part because of the greater use of Canadian hospitals for chronic long-term care.

•Nonetheless, after adjusting for differences in case mix between the two countries, the cost per case-mix adjusted unit was roughly 50 percent higher in the United States. Several reasons can be proposed for this phenomenon.

•Why?•Single purchaser of medical services keeps prices below market rates.

• In Canada, unlike the United States, physician fees result from negotiation between physicians' organizations and the provincial governments, as well as from other limits on total spending.

•Physicians cannot evade the fee controls by charging extra (sometimes called balance billing) to patients who can afford it.

• Hospital costs are similarly regulated by the provinces through approval of hospital budgets.

• Hospitals and provinces negotiate operating budgets financed by the provincial governments. The capital budget may include other sources of funding, but provinces still must approve capital expenditures.

• Thus, a centralized mechanism allocates resources to the hospital sector and determines the distribution of resources among hospitals.

• Occupancy rates are higher in Canadian hospitals.

• The provinces have limited the capital costs associated with expensive new technologies.

•One study provides comparisons on the availability of several relatively recent and expensive technologies among Canada, the United States, Germany, and South Korea, with some other OECD countries available for comparison.

•Although analyses from the 1980s indicated that the United States has greater availability of many of the technologies, data for 2002 suggest that other countries are catching up.

ADMINISTRATIVE COSTS •The centralized system of health care control in Canada has led to theories about the possible economies associated with administrative and other overhead expenses.

•Administrative costs in the United States increased account for about 31 percent of health care spending.

•Similar costs in Canada are about 14 percent. (If we could get to this percent, the savings are estimated at about $160 billion.)

A COMPARISON •Canadian system appears to be more effective than the U.S. system in several respects.

•Costs are lower, more services are provided, financial barriers do not exist, and health status as measured by mortality rates is superior. Canadians have longer life expectancies and lower infant mortality rates than do U.S. residents.

•However, the comparisons do not tell necessarily imply that the United States should adopt the Canadian approach.

•Many Canadians are no longer confident that the provinces will be able to afford their current systems.

•As a result of unprecedented federal deficits, the Canadian government has reduced substantially its cash transfers to the provinces.

The provinces are thus faced with the following options to cope with their increased burdens:

• find new sources of tax revenue, • impose more stringent fee and budgetary controls on health providers,

• find ways to increase efficiency in health care delivery,

• scale back on benefits by no longer insuring some previously covered services, and

• impose user fees.

(Similar to the shift we have seen for the U.S., the provinces have forced large reductions in hospital capacity with a corresponding substitution of outpatient care for inpatient care.)

US vs. Canada(1)

A similar argument may be made for life expectancy. The gap in life expectancy among young adults is mostly explained by the higher rate of mortality in the U.S. from accidents and homicides. At older ages much of the gap is due to a higher rate of heart disease-related mortality in the U.S. While this could be related to better treatment of heart disease in Canada, factors such as the U.S.'s higher obesity rate (33 percent of U.S. women are obese, vs. 19 percent in Canada) surely play a role.

To compare how the countries perform on other health outcome measures, Canada/U.S. Survey of Health, a survey of about 9,000 residents of the two countries conducted in 2002-2003. While this measure is subjective and may be influenced by factors outside the health care system, it is widely used by researchers. They find that self-reported health status is similar in the two countries-if anything, more people report themselves to be in excellent health in the U.S.

US vs. Canada(3)

Next, the examine three other outcome measures: an index of overall health, a depression index, and a pain indicator. Focusing on whites (to sidestep differences in the racial composition of the two populations and the problem of racial disparities in health outcomes), they find that the two countries score similarly on the overall health index and pain indicator, while the U.S. has a slightly higher incidence of depression.

assures: an index of overall health, a depression index, and a pain indicator. Focusing on whites (to sidestep differences in the racial composition of the two populations and the problem of racial disparities in health outcomes), they find that the two countries score similarly on the overall health index and pain indicator, while the U.S. has a slightly higher incidence of depression.

Conclusion • Overall, we could consider several measures of the success of the two health care

systems. The first and perhaps simplest measure is the level of satisfaction reported by patients. Americans are more likely to report that they are fully satisfied with the health services they have received and to rank the quality of care as excellent.

• Also, we’d examine whether Canada has a more equitable distribution of health outcomes, as might be expected in a single-payer system with universal coverage. To do so, they estimate the correlation across individuals in their personal income and personal health status and compare this for the two countries. Surprisingly, they find that the health-income gradient is actually more prominent in Canada than in the U.S.

• Finally, while it is commonly supposed that a single-payer, publicly-funded system would deliver better health out-comes and distribute health resources more fairly than a multi-payer system with a large private component, their study does not provide support for this view. They suggest that further comparisons of the U.S. and Canadian health care systems would be useful, for example to explore whether the higher expenditures in the U.S. yield benefits that are worth their cost.

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