Single-payer health care warning for the U.S.

When comparing Canada’s single-payer health insurance system with the pluralistic system in the United States, many people assume that Canadians enjoy universal coverage while receiving the same quality and quantity of medical goods and services as Americans, but at lower costs. But the alleged superiority of single-payer health care is not consistent with the evidence.

The reality is that, on average, Americans spend more of their incomes on health care, but get faster access to more and better medical resources in return for the money spent.

Health care appears to cost less in Canada than in the United States partly because Canadian government health insurance does not cover many advanced medical treatments and technologies that are commonly available to Americans.

If Canadians had access to the same quality and quantity of health care resources that American patients enjoy, the government health insurance monopoly in Canada would cost a lot more than it currently does.

A recent study shows that the pluralistic public-private US system outperforms Canada on almost all key indicators of available health care resources. The US system even performs nearly as well as Canada in terms of providing “effective” health insurance coverage for its population.

Americans spend 55 percent more than Canadians do on health care as a percentage of their national economy. Yet, the US has 327 percent more MRI units and 183 percent more CT scanners per population than Canada. The US also produces 100 percent more inpatient surgical procedures per population than Canada. Plus, American patients do not wait as long as Canadians for medical care; the US has 14 percent more physicians and 19 percent more nurses per population than Canada; US hospitals are newer and better equipped than Canadian hospitals; and Americans have access to more new medicines than Canadians.

Advocates of Canada’s system like to point out that the American system fails to provide universal health insurance coverage. Yet, the truth is that Canada doesn’t do much better than the US when it comes to actually delivering insured access to necessary medical care.

Statistics Canada data show that an estimated 1.7 million Canadians (aged 12 and older) were unable to access a regular family physician in 2007. Without access to a family doctor a person can’t obtain regular primary care or referrals for elective specialty medical services. When Canadians can’t get access to health care because they can’t find a physician or wait so long that they are effectively uninsured, they are no better off than uninsured Americans.

Access to a waiting list is not the same thing as access to health care.

Research also shows that the actual number of “effectively” uninsured Americans is less than half of the 47 million reported and that being uninsured is usually only a temporary condition.

Do the math and the estimated percentage of the population that was “effectively” uninsured for non-emergency, necessary medical services at any given time during 2007 was not really that different in Canada and the US: 7.9 percent in the US compared to six percent in Canada.

The point of this comparison is not to advocate for American-style health care. The point is to show that all of the costs of a single-payer health care system are not as obvious as the dollars spent.

Advocates of single-payer health care systems tend to point to the lower monetary costs of Canadian health care, but they ignore the lack of access to medical resources. The truth is that health care in Canada appears to cost less relative to the US largely because Canadian public health insurance does not cover many advanced treatments and technologies, medical resources are in short supply, and access to health care is often severely delayed.

Single-payer health care in Canada is failing and policy makers across North America should look to other health systems if they want to provide universal coverage. The Swiss and Dutch health insurance systems are probably the best real-world examples for how to achieve universal health insurance coverage on a sustainable basis.

In Switzerland and the Netherlands, the population is required to individually buy basic health insurance in a regulated, competitive private-sector market just like any other kind of insurance, and then taxpayers subsidize low-income folks so they can afford it too. This kind of system completely replaces the need for public health insurance and leads to huge reductions in the tax burden freeing up personal disposable income so people can buy the tailor-made insurance coverage they prefer.

The evidence from Switzerland and the Netherlands indicates that there are more economically rational approaches to achieving universal health insurance coverage.

Brett J Skinner is Director of Bio-Pharma, Health and Insurance Policy at the Fraser Institute (Toronto). He is the principal author of the recent study, The Hidden Costs of Single-Payer Health Insurance: A comparison of the United States and Canada.