Good System of Providing Healthcare

Introduction

Ida (2001) argues that a good system of providing healthcare ensures good health, is responsive to people expectation and very importantly is fair in terms of financing. It should seek to improve the health status at minimum cost. It must be responsive enough to meet the constantly changing peoples’ expectations (p2).

A country’s labour productivity is dependent mainly on the educational level and on the health status of the workers. Poor health status is a huge hindrance to labour productivity. Authorities all over the world endeavour to constantly improve health standards for their population. In fact, the healthcare standards such as infant mortality rates, maternal mortality rates and others are key indicators of economic development in the world.

Two channels are used in provision of healthcare services. First, is by private providers. Under these method private facilities in the form of hospitals, clinics are the sales points for healthcare services and products. This method is however more costly and less affordable by a significant proportion of the populations in countries where it is implemented. Secondly, the government can take the task of availing affordable healthcare to the citizens using taxes. If well executed, this model avails healthcare services cheaply and to the widest population as it is not driven by the profit motive.

Differences in Profile of care systems

Canada operates a very functional universal insurance system. The federal and provincial authorities jointly finance Insurance covers. The sick are free to choose preferred practitioners but payment is made by public insurance entities located in each of province. The US healthcare system is run by private practitioners. Most patients pay for medication whenever they receive it. Healthcare insurance is accessed privately. The government only comes in to support of the patients by encouraging a combination of public and private arrangements involving employees and employers.

The US has several categories of insurance schemes. First, the employer can decide to shoulder the medical burden of the workers. Under the arrangement, employers pay or refund expenditure incurred by workers in accessing certain medical services and products. Secondly, the employer can pay for insurance cover contracted out to insurance companies. Under this arrangement, the employer foots the insurance premium bill for the workers. Some very large companies go to the extremes of operating their own health facilities as a cost cutting measure (Odette, 1992, Para 3-7).

In Canada, healthcare is universally accessible. The country operates a ‘single payer’ system of healthcare provision. The government solely finances of healthcare services through a public insurance scheme where all citizens residing in a province are effectively entitled to medical services equally. No biases based on income levels, age, gender or even disability. Persons visiting different provinces for a period not exceeding three months are insured by the active covers back home.

In the US, the situation is different. Access to healthcare is highly varied. The main determinant of the extent of access as well as the quality of the services accessed is the economic standing of the individual. The elite can afford and thus access the more expensive comprehensive insurance while the poor and financially unstable have none at all. This is because the highly paid individuals working in large companies already have insurance covers but are also able to further supplement the covers to meet their own demands. Smaller companies cannot even manage to offer the most basic insurance products. Due to the large number of such small businesses a large proportion of the population remains uninsured. Statistics show that there were 46.1 million uninsured Americans in the year 2007 representing 18% of the total American population. For children, the number was estimated to be 7.3 million. The population insured stood at 255.1 million of whom 201 Million were privately insured (U S CENSUS BUREAU, 2008, Para 3).

It is however worth noting that these percentages of the uninsured have been on the rise. The tabular presentation of the statistics collected in the year 1991 shows that only 14% of the population was left uninsured. This is much les compared to 18% in 2007

Health Insurance Coverage in the United States, 1991:

Type of Coverage Number of Persons
(millions)
Covered by privately operated medical insurance plan 156
Covered under Medicare 35
Covered under Medicaid 27
No coverage at all 35
Total U.S. Population 253

It is therefore correct to conclude that as the population rises more and more people are left out of with no health insurance covers a very dangerous trend..

Other statistics shows that over 32% of the uninsured in 1991 were Native American Indians and Alaskans. Black Americans also had a higher proportion. (Joseph, & Dorothy, 2009, p2).

Differences in Quality Standards

Quality of healthcare is the fundamental aspect in healthcare provision. It is measured in terms of its ability to keep people healthy and lower mortality rates. The “care for all” system adopted by the Canadian authorities has proved more effective than the American mixed system. Statistics show that poor people are more prone to falling sick than the rich and have higher mortality rate. The Canadian system effectively eradicates the detrimental connection between income and healthcare access.

A study conducted in the US and Canada on the relationship between income inequality and mortality rates in the 1990s showed that government policies on healthcare were the determinants of how close the relationship between the two variables was. The study showed that in the US, mortality rates were very sensitive to changes in income levels as opposed to Canada (Holly, 2006, Para 4).

The overall mortality rates in the US are high at 8.4 per 1000, In Canada it is 6.5 per 1000 yet the US is the richest nation in the world (U S CENSUS BUREAU, 2008, Para 3).

Infant mortality rate in Canada is 4.7 per 1000 births ranking 23rd out of 225 nations. The US the mortality rate is 7.1 per 1000 and is ranked 43rd, close to no any other developed country (U S CENSUS BUREAU, 2008, Para 2-6).

Differences in Financing

As described above the Canadian healthcare system is run by the government as opposed to the American system. The publicly run system is not subject to market forces and the profiteering goals of entrepreneurs. In America, the government only finances the healthcare to those in need. They argue that market forces ensure efficiency, cost control and quality due to competition (Odette, 1992, Para 2).

The US is known to spend much more on healthcare globally. On a per capita basis a 2006 analysis showed the average spending to be $6714 while in Canada it stood at $3678, close to half that of the US. In the same year, the U.S spent 15.3% of the GDP while Canada spent only 10% of the GDP on healthcare. This are very striking disparities considering that only 46% of healthcare spending was financed by the government while government financing in Canada stood at over 70% of healthcare expenditure (OECD Health Data 2009 p1).

The US government insures the public selectively in two main programs. They are Medicaid and Medicare. Medicaid is run differently by different state governments applying different criteria for eligibility. Medicare on the other hand mainly covers those above 65 years, the disabled and those who may have certain conditions such as permanent kidney failure. Medicaid covers low-income earners of all ages. Medicare is run by the federal government and is administered uniformly over the whole country. The rest of the population is expected to be insured through employers or privately (Joseph, & Dorothy, 2009, Para 5).

The table below shows the great disparities in modes of healthcare financing in the two countries in the year 1990.

Health Care Financing by Source of Funds, 1990:

Canada United States
Percentage of Total
Federal Government 28 30
Provincial/State and Local Governments 44 13
Out-of-Pocket Spending and Private Insurance 27 52
Others 1 5
Total 100 100

In Canada only 27% of the financing was out of pocket while over 50% of the financing in the US was done by individuals.

In the year 2005 statistics indicate that per capital expenditure on health in the US stood at $6350 while that of Canada stood at $3419.

Cost Comparisons

Due to the multiple players involved in providing insurance, administrative costs are very high in the US as compared to those in Canada. The Canadian system takes advantage of economies of scale by centrally managing health insurance. This makes the administrative costs negligible. The low administrative costs the trickle down in form of lower healthcare expenditure while still ensuring high standards are met.

Researchers estimate that the US spends about $1.9 Trillion annually on healthcare. The per capita spending is about 44% more that that of Switzerland, the country with the second highest spending. It is actually 134% more than the median for member states (Danap, & Elizabeth, 2004, para4).

Canada on the other hand operates a relatively cheaper healthcare system. The main reason is government control. The profit motive by the private practitioners in the US has continually pushed the medical bills up. It is estimated that over 60% of bankruptcies in the US are related to medical bills.

The high proportion of uninsured population in the US poses a major challenge. They take longer in reporting ailments as they try to avoid the high out of pocket spending. This implies that ailments which could otherwise be quickly and effectively treated worsen and demand more expensive treatment procedures.

Conclusion

The above analysis shows that the Canadian healthcare system is cheaper and more effective in delivery of quality health to the population. Systemic inefficiencies have hindered the full application of market forces in the US system to competitively lead to lower prices. The result has been a highly expensive and ineffective system which largely discriminates on the basis of incomes. The Canadian system should thus be adopted and implemented to save money and improve health standards in the US.

Reference

Danap, G. & Elizabeth, M. (2004). U.S. HEALTH CARE Facts About Cost, Access, a Quality. RAND HEALTH. Web. 

Holly, D. (2006). Has Canada Got the Cure? Yes! Web.

Ida, H. (2001). The US Healthcare System: Best in the world or just the most expensive? University of Maine. Web.

Joseph, L.and Dorothy, M. (2009). NOLO. Web.

Kao-Ping, C & Jack, R (2006). Canadian Healthcare System Fact Sheet. American Medical Student Association. Web.

Odette, M. (1992). The Canadian And American Health Care Systems. Depository services Program. Web.

OECD Health Data, (2009). How Does Canada Compare? Web.

U S CENSUS BUREAU, (2008). Income, Poverty, and Health Insurance Coverage in the United States: Web.