In Critical Condition:
Health Care In America Canada's Way

What a universal health care system delivers, good and bad

Barry Brown, Chronicle Foreign Service, Thursday, October 14, 2004


Toronto -- Discovering he had colon cancer came as a shock to John Kioussis, but after 10 days in the hospital, attended by a battery of medical specialists, technicians, nurses and other staff, his bill came to less than $85 in American dollars -- and that was only for his phone and cable TV.

Under Canada's government-funded health insurance system, Kioussis' care, from the first visit to a family doctor, through visits to two specialists of his choice and his hospital stay, was free, paid for by Ontario's publicly funded universal health coverage.

"When you're sick like that and off work, the last thing you want to worry about is how to pay the bill," said Kioussis, 55. "I had excellent care and one of the top specialists in the country, the same doctor who would treat the prime minister."

That's the side of Canadian health care familiar to many Americans -- a system that provides free cradle-to-grave treatment to all, regardless of income or employment status.

The fact is, though, that Canada's system is riddled with problems, many stemming from inadequate funding. As a result, delays of several months are common before seeing a specialist or getting nonemergency surgery.

For his part, Kioussis said the month he waited between seeing his family doctor and his surgery did not seem unreasonable. He admitted, though, that because of a personal connection between his brother and the surgeon, the doctor operated on him just before he left for vacation.

Although delays and other problems have caused support to dip slightly, Canadians still overwhelmingly back their universal health program. They think of their health care system as a mark of their national identity, something that separates them from Americans.

Meanwhile, a recent ABC News poll showed that while Americans value the quality of U.S. health care, 62 percent think the nation should shift to a universal health insurance program like Canada's.

As a result of the sharply differing approaches Canada and the United States have taken toward financing health care, their medical systems have developed in contrasting ways.

The United States has more hospital beds per person than Canada because most American hospitals are private, while almost all Canadian hospitals are publicly funded. As a result, American hospitals compete for patients, while Canadian hospitals "don't fund excess capacity," said Sharon Sholzberg-Gray, chief executive of the Canadian Healthcare Association.

By many measures, Canadians are healthier than Americans, with a longer lifespan and lower infant mortality, even though they spend much less on medical care. Canadians devote about 10 percent of their gross domestic product, the total of a nation's goods and services, to provide full health coverage for all citizens. American health costs account for about 14 percent of GDP, yet 45 million Americans have no health insurance and many more have limited coverage.

One of the main culprits pushing up the cost of care in the United States is the expense of administering a plethora of complicated health plans. It has been estimated that any large health insurer in a midsize U.S. state spends more on administration than is spent on health administration in all Canada.

Dr. Catherine Kurosu is a gynecologist at two San Diego hospitals. A Canadian, she said the biggest differences between the two systems are that poorer Americans won't seek medical care until their problems have become serious. In addition, she said, American insurers often play games to avoid paying bills.

In San Diego, a lot of pregnant women -- especially illegal immigrants -- show up with problems that could have been avoided with prenatal care, she said. The idea that they can't get this kind of care "still seems foreign to me," she said.

"My patients are always interested in finding out about the health care system when they find out I'm Canadian," she continued.

When it comes to billing, the Canadian system is a simple matter of sending an invoice to the Ministry of Health, which pays on a fee-for-service basis, she explained. In the United States, there are so many insurance companies, each with its own rules covering not only the patient but also the doctor -- as Kurosu learned when she had to wait months for an insurance company to approve her.

U.S. health insurers nickel and dime doctors by always sending bills back and questioning everything, she said. "It's like a game to see how long they can forestall payment."

Eleven years ago, Colleen Burns started a medical imaging business in Buffalo, N.Y., right across the border from Ontario. She expected 20 percent of her business would come from Canadians willing to pay $300 to $600 in U.S. for quicker access to high-tech diagnostics. Instead, the proportion is only about 8 to 10 percent, she said.

Canadians need to feel a sense of urgency and have the money before coming to the United States, "because they can get an MRI for free in Canada," she said.

The health system is now itself in need of emergency care in order to continue offering the benefits Canadians have come to think of as their birthright, according to many experts.

Dr. Albert Schumacher, president of the Canadian Medical Association, warns that shortfalls of cash and medical staff have left the system unsustainable without major reform.

Twenty years ago, Canada's federal government unified the various health insurance programs run by the provinces.

Ottawa offered to pay 50 percent of the programs' operating budgets, provided the provincial plans accepted five basic principles, including nationwide acceptance of each provincial plan, comprehensive coverage and no out-of-pocket costs (co-payments or deductibles) for insured services.

"But since then, the federal share has dropped to as low as 14 percent," said Schumacher, a family physician from the border city of Windsor, Ontario.

In the 1990s, Canadian governments at all levels began attacking their budget deficits with single-minded intensity. With health care accounting for about 40 percent of public sector spending, hospitals were closed, physician fees were frozen or cut, nurses were laid off, and spaces for medical students and medical technicians at government-funded universities and colleges were cut back.

Along with a money crunch, Canada "has a terrible shortage of physicians, " particularly specialists and surgeons, a high proportion of whom are over 55 and ready to retire, Schumacher said.

Fixing the health care system has become a high priority for Canada's political leaders.

Last month, Prime Minister Paul Martin made good on his main election promise to inject more cash into provincial health programs and move to shorten waiting lists.

At a national health care summit, Martin told provincial leaders Ottawa would ante up the equivalent of an additional $34 billion in U.S. funds over 10 years to provincial and territorial health programs, as well as an additional $3 billion to ease wait times for hip replacement surgeries, cardiac and cancer treatments. He also agreed to a plan for monitoring waiting lists to determine the best method of reducing them.

As in the United States, the main problems bedeviling Canada are the soaring cost of prescription drugs and an aging population. Canada's provinces had called on Ottawa to use its hefty budgetary surplus to launch a national drug plan and leave to them the remaining health care costs, including home care and services like psychiatry and chiropractics.

But during the summit, provincial leaders abandoned that effort in exchange for more overall funding from Ottawa.

Sholzberg-Gray of the Canadian Healthcare Association said another challenge plaguing the Canadian system is the drain of doctors and nurses lured by higher pay and lower taxes in the United States.

"There is also a circular effect, because some doctors come back so they don't have to collect bills," she added.

On the issue of waiting lists for nonemergency surgery, Sholzberg-Gray believes the federal government should establish time limits for treatment.

One feature of Canada's health care system is that if someone wants to bypass the public program and, for example, pay a doctor to perform hip replacement surgery after hours, he cannot. Because of fears that slipping the doctor a little something extra could lead to the breakdown of the equal- access-for-all principle, paying for insured services is illegal.

Those who believe that more private care clinics would solve the problem of funding and shortages have taken their case to Canada's Supreme Court in an effort to open the system.


The United States is the only developed nation without universal health care. Although health insurance systems worldwide are straining as populations age, safety nets have largely remained in place. Here are brief descriptions of insurance systems of several nations..


Health care as percentage of GDP: 9.6

Health expenditure per person: $2,567

Universal care funded through mandatory health insurance provided by Social Security, with private supplemental coverage filling gaps..


Health care as percentage of GDP: 10.8

Health expenditure per person: $2,820

All individuals are enrolled in government-approved health insurance plans partly financed by employer and employee contributions, although high- income workers may buy private insurance instead..


Health care as percentage of GDP: 8

Health expenditure per person: $2,131

A dual system in which workers enroll in insurance programs through their jobs, while all others join Japan's national health insurance plan..

United Kingdom

Health care as percentage of GDP: 7.6

Health expenditure per person: $1,989

A publicly funded National Health Service provides free care, with the option of private insurance for those wanting treatment outside the state system..

United States

Health care as percentage of GDP: 13.9

Health expenditure per person: $4,887

Federal and state governments pay most of the cost of care for seniors and the poor, with employer or individually financed insurance available for others. About 45 million people lack coverage.

*2001 figures

Source: World Health Organization, Chronicle research

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