Five Differences between Canadian and American Health Care Systems

The numbers in this article come from the Organization for Economic Co-operation and Development’s Frequently Requested Data 2009 unless noted otherwise.

A Surprising Similarity

Often people talk about the Canadian health care system being public and the American health care system being private. It is a surprise, then, to learn that both systems have both public and private health insurance. Private health insurers in Canada provide supplementary health insurance for services not covered by the public system. America has several public health insurance programs.

1. In 2007 100 per cent of Canadians were covered by the public system, while in America 28 percent were covered.

In Canada no one is uninsured, while in America about 15 per cent are uninsured. Almost 68 per cent of Americans have private health insurance. See American Census Health Insurance Coverage Status.

The American public system covers people over age 65, veterans and people with low incomes. During a person’s life almost half of all health care spending is after age 65. See Alemayehu, B. and K.E. Warner 2004.  Since most of people covered by the American public system are age 65 or older, the cost per person covered is higher than for private insurers.

2. In 2007 health care in Canada made up 10 per cent of the economy, while in America it made up 16 per cent.

The health care system in America is a bigger part of the economy than in Canada. This was not always the case. In 1960 health care was 5.8 per cent of Canada’s economy and 5.3 per cent of America’s economy. Health care costs in America have grown faster than in Canada.

3. In 2007 Canada’s public system paid for 70 per cent of health care, while in America the public system paid for 45 per cent.

In 1960 Canada’s public system covered 43 per cent of health care costs while America’s public system covered 23 percent. During the 1960s both the Canadian and American Medicare programs were introduced and by 1971 Canada’s program covered 73 per cent of health care costs, while America’s program covered 37 per cent. Canadian public coverage peaked at 77 per cent in 1976 and has gone down since then. American public coverage continued to grow.

In America, about 19 per cent of health spending is “out of pocket”. See The Medical Expenditure Panel Survey.    In Canada about 17 per cent of health spending is “out of pocket”. See Exploring the 70/30 Split: How Canada’s Health Care System Is Financed.

4. In 2007 total health care spending in Canada was $3,895 (USD) per person, while in America it was $7,290 (USD).

On a per person basis, America spends nearly 90 per cent more on health care than Canada. While Americans have always spent more than Canadians, the gap has widened over the years. In 1960 Americans spend about 19 per cent more than Canadians. The gap was 65 per cent in 1992 and reached 90 per cent by 1996.

5. In 2007 public system health care spending in Canada was about $2,700 (USD) per person, while in America it was about $3,300 (USD).

It was not always the case that America public spending was higher than Canada’s. From 1960 to 1993, Canada’s public system spent more per person than the American public system. Between 1992 and 1996, the Canadian government kept public health care spending fixed at about $1,450 per person. Public health care spending grew after 1996.