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Why is the Canadian healthcare system faring better than its counterpart in the US?

The pandemic has exposed how privatised healthcare systems fall short compared to their universal neighbors.

Adam Almeida
14 April 2020
Healthcare workers applauded outside St. Paul's Hospital in Vancouver, Canada, April 6, 2020
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unreguser/Xinhua News Agency/PA Images

It has been nearly two months since the World Health Organization (WHO) declared the coronavirus outbreak a worldwide pandemic. The global economy is in freefall, nurses and doctors are fighting for the lives of patients without sufficient personal protective equipment, and the working class continues to carry out fundamental labour to keep society afloat. World leaders, and their citizenry, are searching frantically for solutions to curtail one of the largest public health emergencies of modern history.

While countries like China, South Korea and Singapore have been able to stabilise their sick populations through the use of contact tracing, mass testing and early adoption of social distancing measures, North American and western European states have failed to implement and scale up these provisions in sufficient time and are on track to experience the heaviest burden of the outbreak. The urgency of the epidemic requires these immediate, coronavirus-specific solutions that allow us to 'flatten the curve' and save as many lives as possible.

But as our hospitals and frontline workers are pushed to their absolute limits, the public is facing the stark question: which health systems are able to cope with the newly applied pressure and which will collapse under its weight?

As governments have spent the past decade implementing austerity projects across the West, the healthcare field has been no exception. Across Europe and North America, national health systems have been systemically and chronically defunded to the point of near basic functionality, whilst an explosion of privatised medicine has cropped up in its place.

Following the financial crash of 2008, severely impacted member states of the European Union (Portugal, Ireland, Italy, Greece, Spain) were forced into vital bail-outs by agreeing to harsh cuts to their health expenditures. This resulted in a critical starvation of public health systems and the brain drain of health workers to the private system and onward to wealthier nation states, such as Germany, France, Switzerland and the United Kingdom.

In the US, where free market capitalism runs wild, citizens face worsening health outcomes while the very prospect of universal health coverage remains a "pie-in-the-sky" proposal amongst the political establishment. Yet its neighbor to the north stands as a glaring outlier.

In Canada, the employment of a single-payer, universal healthcare system represents a central and popular pillar of society. In a 2012 nationwide online poll, 94% of respondents identified universal health coverage as a source of personal and collective pride to Canadians. Even Conservative politicians haven't called for the outright privatisation and defunding of its services. And the responsiveness of the Canadian healthcare system to the COVID-19 outbreak helps make the case for its universal coverage: all citizens are able to receive quality and accessible healthcare should they begin to show any symptoms, regardless of their insurance or employment status.

Although we are at the beginning of the pandemic, differences in case distribution across Western nations are already beginning to show. Despite having 11.5% of the population size of the US, Canada has less than 5% of total cases and 3% of coronavirus-related deaths when compared to their southern neighbour. This divergence is perfectly crystallised in the two cities of Windsor, Ontario and Detroit, Michigan, which are separated by the Detroit River. While Detroit, MI now contains over 10 000 confirmed cases of COVID-19, Windsor, ON has just under 250 cases.

In the current era of political gridlock over healthcare, it is useful to understand the milieu which first prompted the Canadian universal care system. The single-payer plan dates back to the 1960s, but was implemented at the federal level with the enactment of the Canada Health Act in 1984. As Dr. Danielle Martin outlines in her 2017 book, 'Better Now: Six Big Ideas to Improve Health Care for All Canadians', the two chief reasons for the transformation to Medicare for all Canadians were the principles of fairness and the lack of medical-related administrative costs. The system was designed to address medical issues on the basis of need, rather than on the basis of wealth or insurance status of the patient. There would be one single insurance plan available to all Canadians, controlled and tailored at a provincial level to meet local needs and funded through taxation at a federal level. This means that one central body would negotiate the prices of different health procedures and pay doctors directly for services rendered, leaving little administration for Canadians to interact with in the form of billing and co-payments for essential services.

Today, Canadians continue to enjoy the same founding tenets of universal health coverage since the establishment of a single-payer system. The Canadian government maintains the availability of publicly accessible health services by financially disincentivising provincial governments from introducing any measures of privatisation. Attempts to privatise were in fact made in the 1980s, by introducing hospital-based user fees and physician extra-billing (physicians charging patients more than the true cost of the procedure) and in the 1990s, with the growth of out-of-hospital private surgical clinics to cater to individuals seeking to cut the queue for non-essential surgeries.

Both attempts were thwarted by the federal government, as they were deemed antithetical to the principle of health equity and any provincial government which allowed such fees to exist were threatened with divestment at the federal level for healthcare funding. As a result, the Canadian single payer health system has also remained a single-tier health system. All Canadians, regardless of their income, wealth or socioeconomic status, receive relatively the same quality of treatment and care from the same central provider. This concept of universality means that the viability and success of the healthcare system depends on the outcomes it provides to all of its users, including those who hold the most power in society.

In this way, the Canadian Medicare system differs from the British National Health Service (NHS), which has allowed the existence of two separate health systems and therefore, societies: one for the wealthy who can afford preferential treatment, and another for the rest of the country. The tiered system makes the perfect case for the government to serve the UK's elite, as they are able to enjoy better health outcomes and profits garnered from the private system fall straight into the hands of the wealthy individuals who own it. Of course, gaps in accessibility and health outcomes in Canada persist along the lines of race, class, gender, Indigeneity and geographic location. But these differences are bounded closer to each other in Canada than they are in the United Kingdom, and certainly much closer than they are in the United States.

The Canadian single-payer system contributes an average of 2% of its spending to administrative costs, while the average American private insurance company will spend approximately 18% of revenue generated on billing and administration. Limitations in the single-payer system, as well as savings on administrative costs, exist however, as only 70% of Canadian healthcare is funded publicly. The majority of the remaining 30% of healthcare costs is consolidated in the spheres of pharmacare, dentalcare and eyecare. All three are not covered by centralised provincial health insurance plans and require Canadians to obtain private insurance to supplement their coverage.

Unlike the rest of our healthcare system, the Canadian system mimics the American one in these three areas. Prices of necessary medications in Canada are some of the highest in the global North and an ever-increasing amount of health spending goes towards supplementing private insurance plans. Access to drugs, dentistry and optometry is almost always provided through employment-based plans, which contends to be urgently worrying as the coronavirus outbreak poses the largest economic crisis and possibly the highest levels of unemployment in Canadian history.

Yet building political will in support of universal pharmacare, dental care and eyecare is a much easier case to make for Canadians than their American counterparts. The history of universal care in Canada has instilled the right to health as part of the national culture. In contrast, 40 years of political isolationism, exceptionalist ideology and austerity policy leaves the US looking to their past for answers to their health-related crises, instead of searching around the globe. Conservative politicians in Canada will have to work rigorously hard to convince voters that we would benefit from one of the overloaded, two-tiered systems in Europe, or even harder to sell the case for dialling the clock back to the Canada of the 1950s and adopting the American health system.

The radical difference between the Canadian system – one of universal healthcare built and maintained over decades, and those of other Western nations – of private insurance and systemic underfunding – goes a significant way to explaining Canada's uniquely successful response to the current crisis. In the case of COVID-19, the clear divide in infection rates could easily be chalked up to the difference in health systems. This view would be unfairly simplistic, yet also largely true. Canada's specific responsiveness to the current coronavirus is aided by the fact that we experienced another major coronavirus outbreak less than 20 years ago: the 2003 SARS epidemic. Canada was the most affected country outside of Asia, resulting in 438 probable cases and 44 deaths. The caseload prompted the WHO to call for a ban on non-essential travel to Toronto (Canada's most endemic city), which placed 25,000 residents in the Greater Toronto Area under quarantine and paralysed the province's health sector for weeks.

In the wake of 2003, the Government of Canada was committed to improving public health and safety as a preventative measure and created the Public Health Agency of Canada. As well, Canada called upon a set of leading epidemiologists and healthcare workers to generate a report which outlined lessons to be learned from SARS. They introduced recommendations to reform the health system into one that was adept to address future epidemics in coherent and collaborative ways. The knowledge was effectively institutionalised, and Canada now stands to deal with coronavirus more effectively than other Western nations. The centrality of the healthcare system permits reforms and changes to be swiftly taken up, executed and available to all users as immediately as possible.

Out of the catastrophe of the current pandemic, lessons from the Canadian system must be learned to allow us to withstand future epidemics and health crises. But beyond this, the recognition of a single-payer, universal access system as the most viable health model will only occur once healthcare is recognised as a fundamental human right to be enjoyed by all and that for-profit driving forces have no place in the funding of health systems.

Who's getting rich from COVID-19?

Boris Johnson's government stands accused of 'COVID cronyism', after handing out staggering sums of money to controversial private firms to fight COVID-19. Often the terms of these deals are kept secret, with no value-for-money checks or penalties for repeated failures which cost lives. And many major contracts have gone directly to key Tory donors and allies – without competition.

As COVID rates across the country surge, how can we hold our leaders accountable? Meet the lawyers, journalists and politicians leading the charge in our free live discussion on Thursday 1 October at 5pm UK time.

Hear from:

Dawn Butler Labour MP for Brent Central and member of the House of Commons Committee on Science and Technology

Peter Geoghegan Investigations editor, openDemocracy, and author of 'Democracy for Sale: Dark Money and Dirty Politics'

Jolyon Maugham Barrister and founder of the Good Law Project.

Peter Smith Procurement expert and author of 'Bad Buying: How Organisations Waste Billions through Failures, Frauds and F*ck-ups'

Chair: Mary Fitzgerald Editor-in-chief of openDemocracy

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