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Publicly Funded Healthcare (Canada) vs. Privatized Healthcare (US) Essay


            The health system in the United States has been under scrutiny over many years with the government and the population at logger heads over how much healthcare is sufficient for its population. Currently, the American government is the largest spender on healthcare but seems to lag behind when it comes to efficiency and accessibility of its health system to the citizens. In as early as 1993, during the proposed health reforms the government held a debate on the implications of implementing a publicly funded health system, with progressives supporting this change and conservatives opposing it. This debate has ranged on over the years as the health system of the United States has continued to become more expensive, more inaccessible and discriminative.

            In the recent past, there have been wide criticisms over the health system in the United States and debate is raging over whether the citizens are getting what they pay for in terms of quality. In addition, the high costs have led the government to allocate the highest income as compared to other countries to support of its health system, are a primal concern for all the stakeholders. The US government is currently allocating more than 20% of

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its GDP to healthcare. This is more than two trillion dollars very year. The health system in the United States is employer based whereby the employer pays insurance for the employees. In a recent survey by world health, the system of the United States ranked in the 37th position in terms of health delivery, efficacy and overall efficiency and the first in terms of cost (JAMA, 2007).

            The access to quality and affordable health care is a human right. The United States has championed the implementation of health rights all over the globe and currently stands on the podium as a model for all other countries to emulate. It is however challenging, when more than forty percent of the population is uninsured and cannot access the much needed health care. Of the population that is insured more than 20% is underinsured and cannot meet the extra expenses they are required to pay.

            The issue of reforms in the healthcare system is critical to address the issues of lack of proper coordination, inefficient systems, inadequacy of the existing medical care, accessibility and affordability of the current healthcare system. Canada’s health system employs a publicly funded system with a single payer who is the government. The taxes from the entire population irrespective of the status quo are allocated to the health fund. This implies that there is universal healthcare for the whole population and the rich contribute to the medical needs of the poor.

            For America a health system which is nationalized would address the problems that the healthcare system is currently facing. Though the Canadian system is not problems free, it seems to be the best model to address the current problems that are in the existing employer based health system. Such a system would serve as a model for the American policy makers, of creating long lasting reforms in the healthcare system. The target of a new health system would be to meet challenges of increasing the efficiency and the accessibility of healthcare services for all American citizens while still maintaining relatively low prices. Increasing the coverage of healthcare to meet the needs of the lower and middle classes citizens will ensure that the population in general will have better health and productivity impacting economic growth positively.

            This dissertation will compare the efficacy, service delivery and the cost of both employer based health system and the publicly funded health system and will aim to make recommendations on the best system of the two.

Background of the issue

The US health care system
The healthcare system that is implemented in the United States is employer based. The employer is mandated to purchase insurance premiums as part of the benefit that they offer the employees. This mode of group health insurance was first implemented in the period of World War II when employers introduced it as a means of enticing workers. This created the rising need for insurance companies. Currently, there are over one thousand twelve hundred registered insurance companies in the United States.

            The government uses more than two trillion dollars annually on healthcare. This is the highest amount of funds per individual in the whole world. Through the employer based system only 60% of the American population has any form of insurance (JAMA, 2003). The government steps in and pays for the healthcare of the uninsured, the disabled, the poor and the veterans. This is through programs such as Medicare, the veteran administration program, Medicaid and the military healthcare program.

            There is a rising concern over the constantly increasing amount of money that the employers are mandated to pay for the employees insurance. These funds are exempted by the government from taxes but are at times so high that employers omit health benefits or offer substandard premiums to their employees. The tax waiver that the employees receive from the government totals close to 150 billion dollars every year (Evans, 1998).

            The US health system has been credited with providing good healthcare for its citizens. It is however dependant on the type of insurance that the patient has. This implies that it leaves out the healthcare needs of the poor and the middle class. In most case these groups cannot afford the appropriate healthcare premiums and are often either underinsured or even uninsured.

            The United States has one of the best research divisions in healthcare. In a study on the efficiency of healthcare systems, researchers found out that the system of healthcare in the United States is the best equipped (Anderson, 2002). There has been recent concern over the number of specialist doctors who are currently getting trained over primary doctors. Most of the doctors in the United States are opting for specialist training which has better remuneration than the primary healthcare givers. This is creating a shortage of the primary medical personnel in the hospitals.

            The current system leaves out the health needs of close to 15% of American citizens. This implies that close to forty million American citizens are totally uninsured due to the cost of the insurance premiums (Krueger& Reinhardt, 2002). This is the highest rate in any industrialized country. This population mainly comprises of minority populations and one thirds of the individuals in this group are children. This creates and contributes to already existing disparities in healthcare.

            In the study by world health organization this employer based health system ranked 37th in efficiency and service delivery out of the 191 evaluated systems. It was position 72 in the overall performance yet the most expensive using up more than 15% of the total GDP and also the most responsive In a study that compared this system to the one in Canada, researchers found out that the US health system has a higher administrative overhead which is twice than that of the Canadian system. Researchers also rated the employer based system in use in the United States as the 72nd in terms of overall health level of the citizens (KFF, 2005).

Canada’s single payer system
The Canadian health care system is a publicly funded or socialized system with the single payer being the government. It originated in the late 1950’s in Saskatchewan and was adopted in all the provinces. This system is universal for all the Canadian citizens allowing equal access to healthcare facilities for all Canadian citizens (Beagle, 2005).

            This system ensures that access to healthcare is not determined by employment or wealth. The benefit of such a system is that it offers the whole population the same features regardless of the status quo. This accessibility of all citizens to healthcare ensures that Canadian citizens can always get treatment when they need it.

            65% of Canadians however buy supplemental coverage premiums to take care of any additional benefits that they would want including pharmaceutical drugs and dentistry services. To this effect, a lot of private companies like WBC have come up that offer priority access to medical services in Canada (Beagle, 2005). There are also employers who offer additional insurance for their employees as an additional benefit.

            The money that funds the system is provided by the provincial administration through taxes which are imposed to the citizens as well as an addition of some funds from the central government. Both the provincial governments and the Canadian government allocate funds to support the health system. In total the government allocates about ten percent of its gross domestic product in to healthcare. The government pays for 70% of the total health needs of the citizens. The rest is paid for through the private sector (KFF, 2005).

            There is an emphasis on primary care physicians with very little in specialists. This ensures that consultation is relatively cheaper. The Canadian health system is currently facing dire shortages in healthcare professionals with two doctors for every one thousand patient. This has had implications on the time it takes to see a doctor with patients having to wait for more months or even years before seeing a doctor (Zedlewski, 2005).

            Patients can access medical care from any part of Canada due to a centralized system of record keeping. This has led to the wide application of information technology ensuring a faster access to records and an increased efficiency, as it becomes relatively easy to trace case histories.

            The government of Canada supports different health programs although the largest of these is Medicare, through which the government channels most of the healthcare funds. The government of Canada also takes care of the health needs of children, the disabled, the veterans and military (Boychuk, 2001).

            Hospitals in Canada are owned by the government and are not for profit. The doctors who are there are employed by a board of trustees. Their remuneration is determined by the patients that they attend to. The provincial governments are responsible for regulating hospitals in their respective jurisdictions.

            The administrative costs are lesser than those that are experienced in the healthcare system of the United States. In a research by the Kaiser family foundation, the researchers concluded that the administrative overhead of the system in Unites states was double what Canada used. This analysis also concluded that Canadians had the most confidence in their health system (Anderson, 2002).

Extent/implications of the issue

            Access to healthcare services is vital for all people. The accessibility to healthcare in an industrialized country should not be based on the ability to pay. The United States is the only industrialized country whose Health care system is not publicly funded.

            In the United States, paying for healthcare insurance is a challenge to more than half of the population.  Researchers have discovered that more than 16 million citizens of the US are underinsured and more than 46 million people are totally uninsured (KFF, 2005).

            Universal healthcare is a primal concern for all countries in order to ensure that there is equality for all its citizens. Quality and affordable Healthcare should be available for all the American citizens. The current health system in the United States is discriminatory. It ensures that the poor cannot access appropriate medical care (Hsiao, 1998). This has created disparities that need to be addressed critically. In this regard we have ethnic minorities receiving less quality and in some cases, no healthcare since they cannot afford it. Ethnic minorities feel that the healthcare system was structured to discriminate them and more of these populations avoid consulting doctors all together, resulting to many avoidable deaths (Keller, 2000).

            These exorbitant health costs have led to investors in the United States outsourcing jobs to avoid paying for health insurance. This has led to a lot of complaints since the United States is already facing job shortages like every other part of the world. In addition, there are a reduced number of foreign investors who prefer to invest in other countries to avoid paying for the exorbitant health insurance for their employees.

            The government uses more than two trillion dollars on healthcare every year. The tax payer already takes care of the healthcare needs of the poor, the veterans, the uninsured and the disabled in the community since these are catered for by the government. This accounts for about 40% of the population (Anderson, 2002). By implementing a system whereby there is equal access to health with the government paying for the service we would ensure that the entire population can receive medical help.

            The life expectancy of the citizens is mostly determined by the healthcare system of a country in addition to other factors. The life expectancy of the United States was at 77.85 % as compared to that of Canada which was above 80 %( Hsiao, 1998). Some researchers have attributed this to a lot of causes including differences in lifestyles but the most significant difference in the two countries has remained access to healthcare facilities for its populations.

            Hospitals and doctors in the United States are focusing more and more on profits and not on the heath of the patients. Remuneration is based on the procedures ensuring that doctors strive as much as possible to perform as many procedures s possible regardless of their significance. The insurance companies are also caught up in the same positions whereby they try to make as much money as possible from the employers. This has led to loss of large amounts of money for the government and the employers discouraging business expansions and growth.

            The resources that the United States is currently using for its healthcare system can be directed to other critical areas that are under funded because in the long run the single payer system is much cheaper and will eliminate the various loopholes where the funds go including money that goes to the insurers and administrative overhead.

Competing points of view regarding the issue

            The policy makers in the United States have different models of healthcare systems at their disposal to compare with the health system of the United States. Though it does not offer a complete solution, the Canadian healthcare system has a lot to offer the United States. The US government is the largest spender per capita in healthcare. It uses twice what the Canadian government uses. Implementing a socialized healthcare system bears the promise of a less economic burden for the US government while still ensuing that the whole population will have access to healthcare. There are a lot of concerns as to the financial implications of reforming the healthcare system by a complete overhaul. The issue of the American government saving money has drawn major proponents in the debate supporting a complete reform.

            On the other hand the Canadian system has been accused of having the largest waiting times that lead to a lot of avoidable deaths. Waiting for healthcare consultation has both psychological and physical health consequences which often work to the detriment of the patient.

            Socializing the healthcare in the United States poses a risk of exposing the healthcare system to financial vulnerability. The fact that the single payer of the healthcare sector would be the government would imply that during economic hardships, the healthcare system would also be under funded and the health of the citizens compromised than if the employer is mandated to pay insurance for the employees. Publicizing the hospitals in the United States would imply that the purchase of the machines and innovative techniques would be left as a government responsibility. In Canada this has led to shortages of even the most basic equipment and facilities.

Alternative solutions to the issue

            The Canadian healthcare system has its own problems and adapting it as it is, would lead to the United States taking over the various challenges it is facing. Most of these problems arise from the lack of health care doctors and facilities.

            In this regard the United States has enough medical personnel. If socialized healthcare, such as the Canadian healthcare system is properly implemented, the issues of patients waiting for months before consultation will not arise.

                        The cost issue will also not be significant since already the US government is spending much more on healthcare than Canada. The administrative overhead in the Canadian healthcare system is half that of the US healthcare system and would therefore be a cheaper alternative both in direct costs and in indirect costs.

            A publicized healthcare system has greater access to the populations ensuring equality in the healthcare sector. The disparities in healthcare systems would be addressed if such a system was to be implemented because treatment would not be based on the type of health insurance the patient has but would be given equally to all the patients.

            An alternative to a complete overhaul of the American healthcare system would be an adoption of specific features from the Canadian system. To ensure that the hospitals remain technologically competent the government can absolve from the ownership and just take over the payment of the medical services rendered. A publicly funded healthcare system would remove the profit element from the healthcare industry and increase the integrity of the medical services removing the need for the doctors, hospitals and patients to prey on the patient.

Recommended solution(s)

            For the last fifteen years, the cost gap between the health expenses of United States and Canada has continued to widen and currently the per capita expenditures per healthcare for the US are almost double those of Canada. This would be justified if the state of the healthcare system in the US was better than that of Canada but this is not the case. While the health expenditures have continued escalating, the quality of healthcare which Americans are receiving has generally deteriorated. The accessibility of the American population to healthcare services has also been brought to the lime light due to the large numbers of uninsured Americans.

            Implementation of a socialized healthcare system such as the one that currently exists in Canada and other industrialized nations will ensure that the entire American population will have access to basic healthcare facilities including the poor, the disabled and the children. Such a system would remove all health disparities that Americans have tended to blame on race in ensuring equal healthcare facilities for its populations.

            In addition a publicly funded healthcare system would ensure that the government keeps it functioning optimally because it is serving all the citizens. This system would be a lesser economic burden for all stake holders.

            Implementing the Canadian system would not address all the challenges that are currently facing the American healthcare system but it would ensure that there is universal and equal access to healthcare for its citizens. A better solution would be adapting a hybrid of the current healthcare system and the Canadian system. This can be achieved by ensuring that hospitals maintain their autonomy while the government takes care of the medical bills of the patients.


            Healthcare has remained the number one concern for the citizens and the politicians in the United States. According to the United Nations the access to healthcare is a fundamental right to all humankind. In the just concluded elections, each of the candidates promised reforms in the healthcare system albeit from different perspectives

            From this analysis, it is clear that the existing employer based healthcare system is not only inaccessible to more than half of the American population, but it is also inefficient in service delivery, too expensive and therefore has no long-term financial sustainability. In addition it has very low quality. While some people argue for a complete overhaul of the American health system others argue to making changes in the existing system.

            The Canadian healthcare system has been criticized for its long waits leading to more deaths but this problem can be easily rectified due to the high number of health officers in the United States. In the United States there is an impending crisis, as majority of the doctors opt for specialist consultations because they are more monetary rewarding. To curb this, the government is increasing the number of primary doctors.

            Healthcare is becoming more unaffordable with more than 60% of Americans filing for bankruptcy directly doing so, due to healthcare charges (JAMA, 2003).  In a recent study by ABC most Americans quoted healthcare charges as their primal concern.

            There is increasing worry that if the government adopted a socialized system of healthcare this would lead to poor quality healthcare and lack of resources. For such a system to work, it is therefore imperative for all stake holders to work together in ensuring the quality and the success of the healthcare system.

            Implementing a publicly funded healthcare system would ensure that healthcare needs of the patient are met regardless of their ability to pay. This would greatly assist the less advantaged people in the society.

            The waiting times in the healthcare system in Canada are a challenge. To address this concern the government should ensure that severe cases receive precedence in the emergency rooms. In the Canadian hospitals, a recent study discovered that it took patients up to four hours to sees a doctor in the emergency room. This is due to a low shortage of doctors. The US government is currently laying policies to ensure that the number of primary doctors is increased. Medical emergencies should be evaluated based on the severities to reduce the numbers of unnecessary deaths. This can be appropriately implemented by using medical records as they would be readily available due to a centralized system all over the United States. There would also be les time as a centralized system would ensure that patients’ records are available from everywhere increasing efficiency and saving time.

            If a socialized healthcare system was properly implemented in the United States, it would serve the American citizens better than the current privately funded healthcare system.


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Kaiser Family Foundation. (2005). Health Care Agenda for the New Congress. KFF journal 7232.

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JAMA. (1993).The United States Needs a Health System like Other Countries. JAMA, 16, 956-990.

JAMA. (2003). Physicians’ Working Group for Single-Payer National Health Insurance.

JAMA 290(6), 750-803.

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Zedlewski S. (2005). Play-or-pay Employer Mandates: Potential Effects. Health Affairs 18(1):60-87.

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