Lifestyle & Belief

US Medicare spending dramatically outpaces Canadian healthcare spending


A new study showed that the US Medicare system may have much to learn from the cost-saving Canadian model.


David McNew

The US Medicare system has a lot to learn from its Canadian counterpart a new study suggests.

Researchers at the CUNY School of Public health said that if the US had followed the single-payer Canadian model, Medicare would have saved $2.15 trillion since 1980.

"Canada's Medicare program has been much more successful in controlling costs than the US Medicare program," said Steffie Woolhandler, of CUNY's School of Public Health, reported HealthDay.

"Canada's system is a real single-payer system -- our system is single-payer for only a portion of the population," she said.

Indeed, Medicare costs have increased three times faster than its Canadian counterpart, despite the latter's ban on co-pays and deductibles.

According to MedPage Today, the report found that spending per Medicare enrollee increased from $1,215 in 1980 to $9,446 in 2009.

In Canada, where Medicare does not exist, per capita expenditures on  elderly patients rose from $2,141 to $9,292, during the same period.

Researchers said that there are rather straightforward explanation as to why.

Administrative costs in the US are far higher in the US (31 percent compared to 16 percent) as the single-payer Canadian system is less complex.

Also, hospitals in Canada are paid less than those in the US, reported HealthDay, and drug prices are negotiated by the government in Canada pushing costs down.

The Washington Post also said that Canadian provinces tend to have global budgets that cap healthcare spending and pay for doctors - an idea that the US has not embraced fearing a lack of coverage.

The US also has many more specialists that charge more money, whereas Canadians rely more on primary physcians.

Canadians wait more than double than their American counterparts on average for an appointment with a specialist said the Post.

Despite the lower cost, health outcomes in the US and Canada are largely the same, with Canadians living slightly longer than their southern neighbors.

The study was published in the Archives of Internal Medicine.