Why U.S. Health Care Costs More Than Canada's: "A Mercedes Costs More than a Corolla"

Q&A with the Montreal Economic Institute's Michel Kelly-Gagnon

"The American [health care] system is more expensive than the Canadian system," says Michel Kelly-Gagnon, president of the Montreal Economic Institute. "To that, I answer that a Mercedes is indeed more expensive than a Toyota Corolla."

"Thank god for that," he says, explaining that innovation depends on early adopters who are far more likely to be well-off and pay high rates for new and better options. That doesn't mean only the rich benefit, though. "Certain treatments that are only available to the richest people," he says, "will eventually become more economical and the whole world will benefit."

Kelly-Gagnon says that some variation on universal coverage is already a "political reality" in most developed countries, where citizens don't let large numbers of people die from curable diseases. But the focus on coverage rates obscures the problems created by single-payer systems such as Canada's, where costs are kept down via rationing and long wait times for services taken for granted in the United States. "Once you've established that [universal coverage] is how it's going to be," says Kelly-Gagnon, the real question is "how do you find more private solutions" that will serve more people at better rates.

About 3.20 minutes.

Produced by Anthony L. Fisher. Camera by Josh Swain.

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  • sarcasmic||

    Interesting. So from what this guy says, coercion is the highest form of morality.

    Is this guy Tony or something?

  • Paul.||

    I didn't get that at all. He indicated that the "political reality" was that because a huge majority of populations in the developed world believe that some government mechanism will kick in if a person can't afford catastrophic care, it's a political reality you're going to have to deal with.

    That's different than endorsing it.

  • R C Dean||

    And if we had some government mechanism that would kick in if a person couldn't afford catastrophic care, I might actually support that.

    But that ain't what we have, or Canada, or any European nation.

  • Paul.||

    I don't disagree with that. What we have is a system that forces me to pay for birth control pills because the cost of the pill is a human tragedy.

  • C. S. P. Schofield||

    On the other hand, do you really want the little twits who are making that argument to breed?

  • Nazzy||

    I thought it was private insurance companies that had to cover the cost of birth control pills to people who were already paying for their premiums... The only reason Sandra Fluke didn't get the pills that she paid for and were covered in her premiums was because she was in a religious institute... I don't think anyone wants your money Paul.

  • The Craig||

    Non-coercion is shooting someone who is sick in the head, or something like that.

  • Raston Bot||

    Big takeaway for A/V techs: the best way to clean up excessive hand language in post-production is to zoom in on their face

  • Mike M.||

    "To that, I answer that a Mercedes is indeed more expensive than a Toyota Corolla."

    "But it's not fair that some people can't afford a Mercedes, therefore you're all getting a Ford Pinto."

    -The Chony Krugnuttian left

  • Woolagaroo||

    This begs the question. If the healthcare system of the United States is so much better than that of Canada (a Mercedes to a Corolla, if you will), then why do Canadians live, on average, 2.5-3 years longer than Americans (and score higher on most other health care and health metrics).

    The issue for American health care is not simply that we spend so much on it, but that we don't seem to come even close to getting our money's worth.

  • R C Dean||

    Actually, Wooly, the question being begged is the extent to which a health care treatment system impacts those metrics.

  • Delroy||

    Exactly. Correlation =! Causation

  • sarcasmic||

    Because life span is a function of more than simply the care one gets from their doctor.


  • robc||

    Its a mix paradox.

    Let me give another example outside health care, answer it and you might find an analogous answer:

    Which has the better public school system, Wisconsin or Texas? Hint: WI scores much higher on standardized tests than TX. Does that answer it? Well, let me give you another hint.

    Whites in TX score higher than whites in WI.
    Blacks in TX score higher than blacks in WI.
    Latinos in TX score higher than latinos in WI.

    Does that change your answer?

  • The Hammer||

    Which has the better public school system, Wisconsin or Texas? Hint: WI scores much higher on standardized tests than TX

    He stopped reading right here.

  • robc||

    we don't seem to come even close to getting our money's worth.

    That is bullshit.

    If you cut off you fingers in a kibbutz in Israel, they dont fly you to Toronto to have them reattached.

    They fly you to Louisville.

    Who is getting their money's worth now?

  • Mike M.||

    The smartass answer: carrying the world on our shoulders is really hard and takes years off our lives.

    The real, serious answer: it's probably a combination of many different factors, such as the high levels of violence and stress in America. And yes, many of us are fat and don't eat well and don't exercise enough; that's a problem as well.

  • ||

    As a Canadian, I can assure you we're not in the best of health either. We don't exercise as much and we do have obesity issues.

    I've always wondered about the apparent oxymoron of superiour American care not translating into "better statistics" I guess designed by the OECD for universal systems which the U.S. doesnt have.

    We have very average quality of care in terms of access to top notch hopsitals and equipment. Great doctors and staff but the rest leaves much to be desired.

  • Brandybuck||

    Life expectancy is affected by a whole bunch of things besides health care. Traffic accidents are higher in the US for example. Violent crimes are also higher. We also report stillbirths as deaths, while most countries do not (not sure about Canada though). There's also the problem of comparing data from sources with different collection and classification methodologies.

    It may not be an apples to oranges comparison, more like lemons to oranges, but you still can't draw much of a meaningful conclusion from it.

  • ||

    Actually, the violent crime rate in the USA is half that of Canada and about a quarter of that in England.

    What is higher in the USA is the homicide rate. Though, to be sure, this is a major factor in the USA's seemingly low life expectancy.

    However, life expectancy at birth is not really a valid measure for reasons that have been explained better than I can above.

    The US is in the top three countries for cancer survival rates.

    It is also worth noting that when life expectancy at age 60 is considered, the gap between the US and Canada narrows to about a year and a quarter.

  • ||

    I agree. Canada has high assault and rape stats.

  • jili5||

    Our cancer survival rates are very deceptive. They claim someone survived cancer if they get chemo and knock the cancer into remission for a year or two, but then have the cancer come back and kill them. According to the government that person "survived cancer". Our five year post treatment survival rate is terrible and that's why insurance companies won't cover anyone that's had cancer and used chemo to treat it until they've survived 5 years.

  • mgd||

    Compare outcomes for given conditions, e.g. cancer or heart attacks, across systems. You'll see that the U.S. system produces better outcomes. I don't have exact figures handy, but you'll see things like the survival rate for cancer victims are significantly higher for U.S. patients than in other countries.

  • IceTrey||

    I think he missed the point. The reason heath care in the US is so expensive can be summed up in two words, government interference.

  • ||

    Are you.... familiar with Canada's health care system?

  • ||

    By the way, for the record, Canada has the highest spending per person in the OECD except the USA.

    The Fraser Institute does good work regarding health care in Canada.It's the only think-tank that I know of that at least tries to make sense of our extremely rigid system.

    There's no way we're getting bang for our buck compared to Germany, Italy, France and Switzerland - each in various studies considered to have the "best" systems in Europe.

  • ||

    Hm. Some stats have Canada's spending at fifth. Anyway, we spend more than most.

  • ||

    I was referring to the comment about "government interference".

  • nomoss||

    If US healthcare is a Mercedes, and Canadian healthcare is a Corolla, then Swedish healthcare is half of a spoke from a rusted tricyle wheel.

  • ||


    Prices are kept down in countries without socialized medicine as well.

    Plus I can buy a Corolla and a Mercedes....but i cannot buy different health care at the different prices. Nothing prevents someone in Mexico for paying for the Mercedes version of healthcare....it is illegal for me to buy Corolla insurance in the US.

    Also a Corolla is a car model and Mercedes is a car company.

  • ||

    I'm not really sure what part of what he said you're responding to, or what point you're making here.

  • C. S. P. Schofield||

    Where your analogy breaks down is that there are factors that prevent the person in Mexico from buying health care below the market rate (say, the equivalent of buying a bicycle) and there is nothing in the United States that prevents you from buying a Bentley.

  • Sevo||

    "innovation depends on early adopters who are far more likely to be well-off and pay high rates for new and better options."

    In a universe far, far away, and a time long, long ago, some bozo claimed there was no elasticity in medical costs.
    My answer was; 'if there wasn't, we'd all still be dying at age 35. And you'd better hope it isn't outlawed if you'd like to live longer than you might now'.

  • C. S. P. Schofield||

    I am perpetually amazed at the number of people I meet who are firmly convinced that the government lied about WMDs in Iraq, conspired to loose HIV on the world, faked the loom landing, etc. …. and want the government to administer their health care.

    I'm not totally convinced we shouldn't let them have what they appear to want, I just don't want to be forced to join them.

  • Matt J.||

    Don't forget "Introduced crack into black neighborhoods." Always a classic...

  • jili5||

    I don't think ours is more expensive because it's better at all. Numerous people are now leaving the country for healthcare because they can't get it here. If you want to try stem cells you have to leave the country. If you want doctors educated in non-patented medicine you either have to dig very deep in the U.S. or leave the country. Sometimes the cheaper medicine is the best and we don't have an incentive for that in the U.S. because doctors are in the pockets of pharmaceutical sales reps.

  • oteil1@yahoo.com||

    Some people can only afford a Corolla. How ridiculous would it be if everyone who couldn't afford a Mercedes was nevertheless forced to buy one? A car market with no Corollas in it is absurd.

  • tipuasher||

    Explaining which creation depends upon early adopters who have been distant some-more expected to be affluent as well as compensate tall rates for brand new as well as improved options.

  • julieanderson||

    We can't compare as they have been in build with there own issues!Nice video and informative!

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