Health Care Costs: Canada vs. United States

by John McKiggan

Recently my wife and I took our family to Florida for Spring break. My son Liam made friends with Richard, from Texas. Liz and I had several interesting discussions with Richards parents.

One of the topics we discussed were the differences between the Canadian and American health care systems.

I hear complaints about the wait times of sick patients. Our American friends couldn’t comprehend that patients in Canada might have to wait months, or even years for treatment.

However, I do not often hear complaints from Canadians about hospital bills, something our friends from the South know a lot about.

American health care costs

For those Americans who are uninsured, or underinsured, facing a mountain of medical bills is a real possibility. At the ‘top-notch’ hospitals in the U.S. patients are usually required to pay up-front.

“Asking for advance payment for services is a common, if unfortunate, situation that confronts hospitals all over the United States”, according to Julie Penne (Communications Manager for MD Anderson Cancer Center).

The total cost that Sean Recchi, a 42-year-old from Ohio, was told to pay in advance was $83,900 for the treatment plan and initial doses of chemotherapy. Due to his recent employment decisions, Sean had a basic health insurance plan that only covered treatments up to $2,000. per day, an amount way below the costs required by MD Anderson. A breakdown of Sean’s bill shows some extravagant markups, including an approximately 400% markup on the cancer drug Rituxan.

Steven Brill, author of the article Bitter Pill: Why Medical Bills Are Killing Us, makes an interesting observation:

“When we debate health care policy, we seem to jump right to the issue of who should pay the bills, blowing past what should be the first question: Why exactly are the bills so high?”

Brill goes on to note that in 2013 Americans are estimated to spend $2.8 trillion on health care, which is 20% of their GDP and, percentage-wise, approximately double most other developed countries.

Health care costs in Canada

The cost of medical care in Canada is mostly carried by government, rather than individuals. But does this mean that the total cost of care is cheaper? Or more expensive?

According to the Canadian Institute for Health Information, the total cost of healthcare in Canada is approximately $207 billion per year.

With just over 9 times the population, the USA spends just about 14 times the amount that Canada spends on health care every year. Canada spends 11.6% of our GDP on healthcare.

Imagine what the government of Canada would spend on healthcare if the hospital bills and other expenses were inflated as they are in the U.S.?

While we frequently hear complaints from Canadians about the state of the healthcare system, I think we have to be thankful that we don’t face Sean Recchi’s predicament.


What do you think? Have an opinion on the healthcare situation in Canada? Let me know by leaving a comment below.

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