Evaluating North American Health Systems


Compensating the affairs of economic efficiency with the
demands of sociopolitical rights is a constant source of
tension in Canada and the United States alike. In no other
element is this tension more apparent than in the group of
complex markets we call the health care system. 

Canadians have been fortunate enough to receive a universal
health care system for nearly forty years. This is a
single-payer system funded by the governments, both
provincial and federal, but at what costs? Is health care
not unlike any other commodity, or is it the privilege of
every citizen? Health care has elements of common economic
behavior, however, there are also certain social values
associated with it. It is this struggle of defining what
health care is that causes such anxiety among economists.
The Canadian health care system is slowly crippling the
economy, and reforms must be devised to preserve the pride
of Canada; our health care system itself. 

The pluralistic health care scheme of the United States, as
well, has serious socioeconomic implications, and American
policy makers are looking toward the model of the Canadian
system for answers. Both the United States and Canada must
reform health care policy, but to what extent? Obviously
these questions cannot necessarily yield clear, concise
answers, however they will provide insight into analyzing
the current and proposed systems of health care. 

Certainly if Canada is to maintain a high standard of care
it must adopt an economically efficient, revenue generating
system. Moreover the United States must adopt the
single-payer system of Canada while still retaining a
strong revenue base. This paper will discuss the strengths
and shortcomings of the Canadian health care system, and
how health care is a sociopolitical enigma. Furthermore,
how the single-payer system is the only realistic response
to the growing inadequacies within the American
socioeconomic status.
Serving as a general background in its appraisal, it is
necessary to outline the history and the ambient factors of
the Canada health care structure that is so sought after by
the United States. The Canadian health-insurance program,
called Medicare, is administered by provincial governments
and regulated and partly financed by the national
government. Medicare pays basic medical and hospital bills
for all Canadians, where the governments determine the
criterion of basic care, to insure and maintain a standard
level of service. As early as 1919, Canada's Liberal party
promised national health insurance, but the first real step
was taken in Saskatchewan, where in 1947 province wide
hospital insurance was introduced. A national
hospital-insurance act followed in 1958, and by 1960, 99%
of Canadians were covered by government run hospital
insurance. Saskatchewan was again the first in 1961 to
introduce medical-care insurance which covered doctors'
services as well. 

This was not an easy transformation. In 1962 when the
Medical Insurance Act was implemented, the doctors of
Saskatchewan went on strike. As a part of the settlement,
the government agreed to a modified plan that addressed
some of the doctors' grievances. Despite the opposition
from provinces, doctors and insurance companies, national
Medicare legislation was in place by 1967, and today health
care is a constitutional right. 

The arrangement reached by all provinces by 1972 was that
the federal government paid half the cost of the provincial
plans, provided the plans met five principles:
accessibility, universality of coverage, portability from
province to province, comprehensiveness of service, and
government administration. Under the system the health care
provider bills the provincial plan directly. The Canadian
Health Act, effective in 1984, clarified the national
standards and may penalize provinces that allow doctors to
bill for more than the Medicare rate. 

The Canadian provinces spend a third of their budgets on
health and hospitals. High-tech medicine and an aging
population have caused Canada's medical costs to rise
significantly over the past decade. Increasingly,
governments attempt to control costs by promoting personal
fitness, cutting back the number of hospital beds and
establishing caps on doctors' earnings. The costs have
become so overwhelming some provinces have considered
revoking coverage of prescription drugs for seniors,
optometry, physiotherapy, and chiropractic treatments.
There are no doubt different views regarding spending for
health care, however, few wish to revert to a free market
system. In fact, most Canadians consider the health care
program the pride of Canada and that they have an advantage
over the United States system that costs Americans more.
"Canada spends $1000 less per capita on health care than
the US, but delivers more care and greater choice for
patients." The Canadian health care system has gone through
extensive transitions and is a part of an evolutionary
Over the past several years, the provision of medical
services has increasingly become the responsibility of the
state in developed nations, except for in the United
States. "Unlike the rest of the world's systems, the United
States medical care system remains largely private and
entrepreneurial." The popularity of free market health care
systems was fueled by its successes in technological and
pharmaceutical inventions that followed the wartime
experiences. This reinforced the American public to resist
government interference in health matters. Nevertheless,
public funds have been used, and there has been a certain
degree, public administration in the health system. "The
inability of millions of citizens to obtain or to pay for
even minimal levels of care forced the federal government
to intervene." It was not until the early 1960's the United
States government passed the Medicare and Medicaid laws
that established the federal government as an integral part
of the health system. 

The US medical care system is primarily based on the
private practice of medicine and job related health
insurance programs. American health care is essentially
entrepreneurial, with physicians earning their income
through a variety of reimbursement mechanisms other than
salary, such as the following: fee-for-service, capitation,
and per-session. However, this structure is changing as
more and more doctors are employed by health maintenance
organizations (HMOs). These organizations offer
comprehensive service and maintain a certain level of
control of spending by regulating doctors' billing. Costs
have risen enormously forcing the government to raise more
and more funds to accommodate the needs of the public. The
following pie graphs illustrate the economic scope of the
American health care system of 1990 and that of the dawn of
the 21st Century.
Laborious efforts have been made to contain and control
costs, without limiting access and the availability of
service for the poor, aged, and debilitated. Consequently,
the mixture of private and public health care systems is
characterized by maldistribution of resources and serious
inadequacies of access. The current health care system of
the US is laden with deficiencies. To illustrate these
shortcomings; 17% of the population, some 40 million
people, are not covered at all, and another 40 million are
only partially covered. Some HMOs make it a condition of a
physician's salary that he or she not overstep the
boundaries of insurance costs. This raises questions of
whether the doctor may be tempted to limit needed services
or fail to take adequate steps to establish a diagnosis,
and may discharge a patient prematurely. 

In the early 1990's the United States was in a state of
uncertainty. Despite highly trained staff and stock piles
of high technology, the United States health care system
was a statistical failure. It ranked 16th in the world for
infant mortality rates, and life expectancies fell short of
that of most industrialized countries. President Clinton
has made the most visible attempt to reform the health care
program in the United States. Both he and his spouse,
Hillary Rodham Clinton, have developed a strategy to
prepare and propose a health reform program that the public
would understand and accept, and that would neutralize
opposition from pharmaceutical manufacturers and the health
insurance industry. This illustrates the necessity not only
for the evaluation, but the development of alternatives to
attain greater economical and social efficiency. 

The current system is clearly inadequate, the problems are
evident: a large percentage of the population cannot access
sufficient medical care, and is not covered or protected
against the climbing costs. A system whose costs are out of
control, and a growing national deficit that the health
care system heavily contributes. Unmistakably, the United
States health care system is grossly incompetent in
providing the public with a standard level of care, and
reforms must be taken to contain the swelling costs.
Economic efficiency and sociopolitical rights consistently
clash in a capitalist democracy, and this tension is
prevalent in the health care system. A basic economic
concern is whether health care is like any other commodity.
The health care industry can be analyzed with economic
frames of reference: wealth, risk aversion, efficient
transfers, and utility. However, there are certain symbolic
elements of health care that cannot be easily measured.
Cultures have fundamental beliefs that encompass the
valuation of life and health. Bearing this in mind, it
would only seem realistic that there is some sort of right
to health care. Nowhere in the American Constitution is it
stated that an individual has the right to some basic set
of health care services, however, there are certain
undefined responsibilities the government has. It can be
argued that the Declaration of Independence supports the
right for each and every citizen to have the basic care
needed to sustain life so as to exercise one's liberty and
to allow the pursuit of happiness. It has been argued that
there is a common-law right to equal services, a right of
equal access to basic services: such as drinking water.
Furthermore this right extends to all citizens.


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