Why Do Americans pay more for Healthcare than Canadians?

Great Debates
41

Based on my experience on both sides of the border, I think the U.S. pays a lot more for two reasons.
The first is because things are just way more expensive in certain areas. The second because of wastage. Wasted paperwork, and wasted time and effort of doctors.

While I was living south of the border, I’d get bills, bills, no-bills, near-bills, notification notices, and other asst’d crap paperwork – both from my insurance company and any doctor/medical professional I’d been to see. The amount of paperwork that went back and forth was completely stupid – repeat that by the number of people who see doctors in the U.S., and that’s a crapload of bureaucracy doing stuff that doesn’t exist in Canada. Inform a Canadian how much his procedure costs? Never happens.

But, the advantage of seeing all that paperwork is seeing how much everything cost, and being somewhat familiar with how much procedures cost in Canada, I found that prices for all medical procedures in the U.S. were much higher. Eg. physiotherapy. In the U.S. a half-hour treatment would cost my insurer about $200. I’m pretty sure that’s about triple what their Canuck counterparts charge.

Dental procedures, although not covered by Canadian health care, had similar ratios. A simple cleaning and x-ray in the U.S. cost my insurer $500, while the same thing in Canada only costs $150.
But the other wastage in the U.S. comes from patients themselves. I don’t know how many times I heard something like “Oh, I’m not feeling well, I’m gonna see my cardiologist,” from someone south of the border. And off they’d trot to a very expensive appointment with a specialist for nothing worse than heartburn. Heck, most of them had never had a heart problem in their entire lives! That’s something that just cannot happen in Canada.

Canada’s health system is run like the best HMO in the U.S. – every doctor’s in the system, and no procedure is ever denied. That means the first stop is always, always your GP (unless you don’t have one, in which case you hit a Clinic, or the ER). That doctor then refers you to your specialist if needed. But making your first stop a specialist? That’s just stupid and expensive.

42

[QUOTE=Waenara]
Do you really think another insurance company would be able to offer a competitive insurance premium compared to Alberta Health? I pay $44 per month in Alberta Health care premiums. So does everyone else. Couples pay $88 per month, and there’s no additional premium for children. From the anecdotes I’ve heard from the American system, I’d find it unbelievable that another insurance company would be able to offer a lower premium than that.

[/QUOTE]
Look at my location–I pay $44 a month to Alberta Health too. But when I lived in Ontario, I paid nothing directly to OHIP (the Ontario Health Insurance Plan): not $44 a month, not one penny; and OHIP never sent me a quarterly invoice like Alberta Health does. Still, you couldn’t reasonably say that “another insurance company wouldn’t be able to offer a lower premium than that.” Of course it couldn’t; you can’t beat a price of “free.” But it wasn’t free, of course; funding had to come from somewhere. However, premium payments were pretty much invisible to the Ontario consumer, since the Ontario system was all funded through various personal and corporate taxes. Ontarians simply did not know what their health care premiums were; they never saw them broken out from their taxes.

That’s why I don’t know what the entire insurance premium really is in Alberta, since we pay premiums directly (that’s the $44) and through taxes. Do you have any idea? (In other words, is it, say, one-third of your provincial taxes?) If we knew, then we might be able to answer the question of whether a private insurer could offer a competitive premium. I don’t believe that any insurer, including the Alberta government, could administer heath insurance solely on $44 a month from each adult Albertan.

For what it’s worth, I think we get a pretty good deal here in Alberta–even if it does cost me $44 a month more than it did in Ontario. :wink:

This is no surprise; it is the same as in other provinces. Provincial health care plans are nothing more than insurance; doctors are business people, most of whose income comes from treating patients covered by provincial insurance plans. The rest of their income comes from charging for items not covered by provincial plans or by private supplementary insurance, or from people with private insurance plans (for example, visiting Americans who need health care while in Canada).

I’ve been trying to find the Ontario Schedule of Benefits listing what procedures OHIP covers and for how much, but it seems to be offline, and I cannot find my paper copy either. (I helped rewrite part of it about twenty years ago, so while I may not have current dollar figures at my fingertips, I do have the copy I worked from; and my memory of how the Ontario provincial health plan worked at the time. I don’t imagine it’s much different now–except for services that are no longer covered.) At any rate, you may want to have a look, if it comes back online. Google “OHIP Schedule of Benefits.”

43

One factor is that in the US, health care is a business. Businesses get run to make profits. Health care businesses charge what the market will bear.

Another factor is economics of scale. Individual patients have very little bargaining power over health care providers. Large insurance companies are in a better position to negotiate for better prices. The government is in an even better position to do so.

Administrative streamlining is also a factor. In a private health care system, you’ve got hundreds of health care providers and health care consumers each with their own policies and procedures. Organizing all this takes staff resources. In a government run health care system, there’s one centralized set of procedures.

And there’s the issue that many health problems get more expensive to treat the longer they exist. People may avoid paying for a minor preventive treatment in hopes that they will never need a more expensive cure. Some of them are unlucky. In a public health care system there’s no incentive to forego preventive treatments.

44

[QUOTE=Balthisar]

The uninsured in the USA are still insured. They won’t be denied life-saving services due to their inability to pay. My own uninsured mother is going through all of this right now, and is quite depressed at the mounting bills she’ll never, ever be able to pay. She’s gotten all required treatments anyway, though.
[/QUOTE]

She got all her required treatments, but she will be extremely fortunate not to feel the impact of those unpaid bills on her life. People who get saddled with the bills for expensive and/or catastrophic health care have their lives, CC/loan and insurance rates, and even employment prospects wrecked for years because their credit rating will be ruined. The impact of no health insurance goes far beyond the actual treatment issues.

[QUOTE=Little Nemo]

And there’s the issue that many health problems get more expensive to treat the longer they exist. People may avoid paying for a minor preventive treatment in hopes that they will never need a more expensive cure. Some of them are unlucky. In a public health care system there’s no incentive to forego preventive treatments.
[/QUOTE]

Some people drag their feet going to the doctor early on when a problem is easier/less expensive to treat, sure. But the insurance companies themselves like to balk at providing preventative care, because they’re playing the odds the same way.

True story: my boss was headed overseas to a third world country, a place where the CDC recommend that you have a bunch of vaccinations prior to travel if you’ll be in rural areas for more than a week. Recommended vaccinations included hep A & B, typhoid, yellow fever, Japanese encephalitis, adult polio booster, tetanus booster, and a scrip for anti-malarials. He got into an enormous argument with Oxford Health because they refused to cover the cost of any of these (cost totaling around $1,000). They said that the vaccinations fell under the heading of preventative care, and as a rule they didn’t cover such. My boss asked them if they really thought that taking the risk of his getting seriously ill overseas and having to be medivac’ed home at considerable expense was worth not paying for his vaccinations up front… and the answer came back, yes.

Similarly, I once had to go for a full physical and a series of blood tests before taking part in a work-related (but voluntary) trip to a remote area, to make sure we were in decent health. The gov’t organization sponsoring the project gave everyone a stipend to cover the cost of that work, because they knew that no one’s health insurance would cover the cost - again, because it would be categorized as “preventative care.”

The business of health insurance is more than happy to take the risk that it won’t have to shell out more. The difference here is that if they gamble and lose, the person affected may also lose.

45

Where I live in Ontario, travel shots are also not covered by the government. I had all the exact same shots and scripts you mentioned, paid out of my own pocket and the total cost was under $200 Can. So there is still some big differences in costs to be sure.

I may be paying a lot of taxes for all the coverage I receive as a Canadian but it’s definitely worth the security and piece of mind that comes from knowing that my families financial future, - my parents life savings, my child’s college fund, my home, my own credit rating - will never be at risk due to medical care costs.

46

[QUOTE=Apollo’s Towel]
True story: my boss was headed overseas to a third world country, a place where the CDC recommend that you have a bunch of vaccinations prior to travel if you’ll be in rural areas for more than a week.
[/QUOTE]

Was this a personal trip or a business trip? I’d fully expect the employer to cover all of this unless it’s a personal trip. :confused:

47

[QUOTE=Balthisar]
Was this a personal trip or a business trip? I’d fully expect the employer to cover all of this unless it’s a personal trip. :confused:
[/QUOTE]

It was a work-related trip. No, our employer would not cover the cost, because the trip was funded by a federal research grant. (Pursuit of research is required by the university, but they are hands off in all aspects except as far as administering the grants is concerned.) And in our particular university, the bean counters were very strict about allowable expenses… and “ancillary” health costs were not considered permissible use of the funds. That’s what insurance is for! :rolleyes: So he wound up paying out of pocket.

48

[QUOTE=Diceman]
Over half the world’s drug research is done in the US. Even European companies perform much of their research here. If the US went to a government-controlled system, in all likelyhood most of that research simply wouldn’t get done, because there would be no way to make any money from it.
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Not this old chestnut.

For one, it misses the fact that a significant portion of drug R+D is being done in universities and other research centres - about as far away from the “free market” as you can be. For two, drug companies will still need to innovate in order to secure new revenue. Innovation requires R+D.

49

The U.S. system is schizophrenic! We mandate treatment be provided regardless of ability to pay, and then claim to have free-market health-care. If we truly believe that the free market is the best means of providing the highest quality of health-care at the lowest cost we would allow hospitals to demand payment before providing medical care. This would mean that hospitals could let a trauma patient bleed to death rather than giving them 20 stitches, but that is the free-market capitalist way. If we are not prepared to let corpses stack up outside our hospitals then we might just have to admit that there are situations where socialist polices, are better that capitalism. Then we could work on ways to provide the best quality care to the largest number of people at the lowest cost.

50

[QUOTE=Apollo’s Towel]
It was a work-related trip. No, our employer would not cover the cost, because the trip was funded by a federal research grant. (Pursuit of research is required by the university, but they are hands off in all aspects except as far as administering the grants is concerned.) And in our particular university, the bean counters were very strict about allowable expenses… and “ancillary” health costs were not considered permissible use of the funds. That’s what insurance is for! :rolleyes: So he wound up paying out of pocket.
[/QUOTE]

Wow! I hope it worked out towards his 2% of income for work-related expenses. I’ve gone out for the country for no less than three different employers, and they’ve always covered recommended immunizations. An even great quantity of people that go to these places with us are our many, many, many suppliers, who also spring for this legitimate work-related expense. On the other hand, foreign service is less uncommon for all of us these days.

51

[QUOTE=Balthisar]
Wow! I hope it worked out towards his 2% of income for work-related expenses. I’ve gone out for the country for no less than three different employers, and they’ve always covered recommended immunizations. An even great quantity of people that go to these places with us are our many, many, many suppliers, who also spring for this legitimate work-related expense. On the other hand, foreign service is less uncommon for all of us these days.
[/QUOTE]

I’m sure he would have tried to do something with his taxes.

The difference between your situation and his I think lies in the nature of research in academia, as opposed to the corporate world. He was paid as a professor 9 months a year; was responsible for raising his own summer salary/research costs. The university doesn’t care what you do for research, only that you are sufficiently successful at bringing in money and propping up the school’s rep. If you feel you have to go abroad because of your specific research interests, you have to go, but the university can’t be said to be requiring you to go. So any personal needs related to that travel are of no interest to the school, and not their responsibility.

52

People in Canda pay for their health care, and then they tip their politicians to regulate it. Why would anyone want to grow their government tip? It really is as simple as that. No price fixing scheme in history has changed the intrinsic value of the product. It has only hurt both ends.

53

[QUOTE=DanBlather]
Drug companies pay more for marketing than they do on research.
[/QUOTE]

Here’s a cite.. If marketing costs (often called convincing consumers they have an illness) are reduced, drug prices can go down.

The problem with drug companies appears to be that they have been very inefficient at innovating, and are making up for it by buying smaller companies with better inventions. (Just like the electronics industry.) I’ve never heard of examples of specific, high value, research not done because of money. I’m sure there are plenty of researchers who don’t get their budgets approved, but that doesn’t mean it would be a good idea to fund them.

54

[QUOTE=bob_co]
People in Canda pay for their health care, and then they tip their politicians to regulate it. Why would anyone want to grow their government tip? It really is as simple as that. No price fixing scheme in history has changed the intrinsic value of the product. It has only hurt both ends.
[/QUOTE]

What’s the intrinsic value of health care? That’s the problem - it is easy to charge a whole bunch to restore your sight.

Evidence that politicians in Canada are getting rich from this?

Plus, as has been posted, they’re paying less than we are. Does that make sense to you?

55

[QUOTE=Barbarian]
Based on my experience on both sides of the border, I think the U.S. pays a lot more for two reasons.
The first is because things are just way more expensive in certain areas. The second because of wastage. Wasted paperwork, and wasted time and effort of doctors.

[/quote]

Just about every doctor and dentist I go to in the US has at least one full time employee handling insurance work. (Not a job I’d want!) Do Canadian doctors have this expense?

I suppose this can happen if you pay for yourself, but not if you’re covered by insurance. I’m in a PPO plan, and we have to get referred to a specialist by our GP. I’d suspect a true faker would get stalled. Someone with a real history of heart problems, however, might get referred, since they don’t really want to miss a relapse.

56

[QUOTE=Voyager]
What’s the intrinsic value of health care? That’s the problem - it is easy to charge a whole bunch to restore your sight.

Evidence that politicians in Canada are getting rich from this?

Plus, as has been posted, they’re paying less than we are. Does that make sense to you?
[/QUOTE]

That would be what it cost to provide a Canadian his health care. Taxes are higher there becuase of the health care costs. You don’t think that they get it for free do you? You get the cost of the health care plus the cost of the regulation. Right?

57

Forgive me if I am wrong here, but a resource does not change it’s value based on morals, does it? The cost of natural resources doesn’t change no matter the need, or regulation over it.

58

Canadian health care + Canadian Political income = American health care + American freedom of choice

59

Every step that is placed between the patients hand and the physicians pocket, makes the process more inefficient. These social engineering projects have never worked. The Canadians are paying for it in the loss of their rights to their government.

60

[QUOTE=Voyager]
Just about every doctor and dentist I go to in the US has at least one full time employee handling insurance work. (Not a job I’d want!) Do Canadian doctors have this expense?
[/QUOTE]
IANAD, but I worked as a transcriptionist in a busy surgeon’s office for a year. There were a few part-time transcriptionists, one receptionist and one office manager. AFAIK, only the office manager handled any billing, including billing for Alberta Health Care, Workers Compensation Board claims, and any other insurance companies. The office manager was full-time, but she had many other duties in addition to billing.

I had a friend who worked in another clinic with two full time OB-GYN’s. They had two receptionists/clerks and one nurse, but they didn’t do any of the billing. They had one part-time person who’d come in for a couple hours at the end of the day to handle all the billing.

YMMV.