Canada's Bloated Health Care System Is Nothing To Brag About
There are many advantages of having the United States as our neighbour. We are proximate to its vacation destinations, have easy access to its big commercial centres and get lots of same-time zone live entertainment offered in the GOP's polemical circus.
One disadvantage however is the false comfort that select comparisons with the world's largest economy give to us. There is the misconception that given our health care system is better than that of the U.S., our system must therefore be very good. We are all very proud of our health care system. We can thus sleep well at night.
Misconception indeed. Canada is a great country. Our health care system is anything but. The World Health Organisation (WHO) ranked our national health care system at 30th in the world. To put some colour to it, they ranked our system behind those of Colombia and Morocco.
The study, the most comprehensive of its type, is now 16 years old, so there's the argument that it's dated. Unfortunately subsequent comparative studies have merely confirmed our poor performance.
The Commonwealth Fund studied the health care of 11 industrialized countries in 2014, and ranked Canada's at 10th place, ahead of only the U.S. In short, our health care system isn't one worth to brag about.
It's not merely Canada's poor health care performance that's a cause for concern. The agitation doesn't just end there, no sir. The World Bank's most recent data calculates that Canadians pay US$5,718 per person per year for health care, through taxes (71 per cent) and private payments (29 per cent).
In contrast, the average cost of health care in the 29 countries that ranked higher in the WHO study than Canada is US$3,847. Each Canadian man, woman and child thus pays US$1,871 more per year on healthcare than do folk in better-performing health care systems.
And that reflects an interesting trend -- in 1980 we spent seven per cent of our GDP on health care. In 2015, we spent 11 per cent.
If we paid the average per person costs of the 29 better health care systems, the average Canadian household of 2.5 people would pay US$4,678 less per year for (better) health care. At current exchange rates, that's CA$534 per month.
This is significant when half of us have less than CA$1,000 saved for emergencies, 38 per cent of us are struggling to pay our monthly living expenses and an extraordinaryone in seven amongst us lives in poverty.
We would save lives if Canada's health care costs per capita were in line with those of better health care systems, and the savings were redirected towards helping those who are struggling to put food on the table.
What explains the combination of high cost and low performance, a place that without putting too fine a point to feels like a rip-off? One potential explanation is Canada's size, that most of our citizens live in hard-to-get places.
In this argument, health care costs are going to be stretched by long distances and difficult places. Again using the most recent World Bank data, that position unfortunately doesn't hold water. 82 per cent of Canadians live in urban areas. The average amongst the 29 countries is 83 per cent. Without making a fuss about a single percentage point, we are as urban-living as the average of the 29 countries.
Another possible explanation could be that we have an aging population. Health care costs are skewered to the elderly, rising to varying degrees dependent on country after the age of 65.
One study suggests that half of our lifetime's medical costs occur in those senior years. Perhaps the higher cost of our health care reflects that we have many more old folk than do other countries? Again, that argument doesn't have mileage. Sixteen per cent of Canadians are aged 65 or over, whereas the average for the 29 countries is 15.5 per cent. We are as much of an aging population as are the 29 countries with cheaper and better health care systems.
Finally, there's the argument that the cost of everything is higher in Canada than it is elsewhere, that our cost of basic living is high. Have you, for example, seen Vancouver's real estate market? The average price of a home on the West Side is now CA$2.5 million. The average selling price of a detached home was CA$1.8 million in January 2016, up 40 per cent in a year.
The problem with this argument isn't only that 93 per cent of Canadians don't live in the Greater Vancouver Area but more importantly that the cost of living in Canada is surprisingly low. There is not a single Canadian city in the world's hundred costliest cities. Vancouver ranked 119th. Other places are far pricier to live in than is Canada.
So, where do we go from here? For a start, we need to recognize that the arguments by health care providers, such as the Ontario Medical Association, that we increase government spending on health care are plain ugly and selfish. We are already paying some 49 per cent more capita for health care than are folk living in 29 better performing health care systems.
Increasing tax revenues and private payments into a costly and under-performing system is stupid. Yes, some health care employees are struggling to make ends meet. They however need to be the first to engage the question of where the health care dollars are being spent, because either somebody somewhere is making a fortune out of the health care industry or there is absurd wastage.
Any national health care system is a complex and delicate ecosystem. Advocating specific spending cuts, such as for the three largest cost buckets being hospitals (29.5 per cent of health spending), drugs (15.7 per cent) or physician pay (15.5 per cent) is dangerous without understanding the knock-on effects both within the system and beyond.
That said, interestingly since 2007 spending per capita on physicians has increased at three times the rate than has spending on drugs and more than twice the rate than has spending on hospitals. Is there fat there?
After all, in Ontario alone, in 2014 more than 400 physicians each billed the government more than CA$1 million. Specialist physicians in Canada earn some 4.7 times the average national wage, which contrasts to 2.9 and 2.6 times in France and Italy, respectively the two top performers in the WHO study.
This is the universe that the recently inaugurated Canadian health minister, Dr. Jane Philpott, now finds herself in. Her support behind the pan-Canadian Pharmaceutical Alliance to co-ordinate public sector purchases of drugs is important and praiseworthy. Where else these cost savings are to be had should be a priority for her and the provincial health ministers.
As funders to the system, Canadians need to assert themselves more vigorously than they have to date. We no longer want to over-pay for mediocre performance. We want better health care performance for much less, in part because some of us can't put food on our tables. And that's a message which the health care industry as a whole needs to start thinking about.