The Wrong Way to Save

Canadian health care: not cheaper, not better

Rick Henderson from the July 1994 issue

Supporters of nationalized health care for the United States most often use Canada's tax-financed, single-payer medical system as their model for American reforms; an initiative to establish such a system will be on the November ballot in California. Single-payer advocates say Canada's price controls preserve quality and restrain medical costs. While Canada does spend less per person on medical care than the United States (in 1991, Canada spent $1,915, the United States $2,868), Canada has not ended health-care inflation.

The National Center for Policy Analysis notes that from 1967 to 1987 inflation-adjusted per-capita medical spending went up slightly more in Canada (4.6 percent) than in the United States (4.4 percent). Though spending in the United States has recently gone up more quickly than in Canada, the NCPA argues that Canada has chosen two dangerous methods of saving money: denying care to patients (5 percent of the Canadian population is waiting for some medical service) and scrimping on high-tech medicine (the United States has three to 10 times more CAT scanners, magnetic-resonance imagers, and lithotripters per person than Canada).