Canadian healthcare system shows how much money America could save

The Great White North has found a way to provide universal healthcare with more salubrious results and trimmed national costs. Take notes, America.

  • The United States scores dramatically lower than other high-income countries in healthcare benchmarks, despite overspending them.
  • A recent report published in JAMA suggests this discrepancy results from runaway administrative costs and U.S. practitioners charging more for the same medical services.
  • By taking lessons from Canada's single-payer system, the U.S. may be able to reduce its healthcare costs but simultaneously improve medical access for wider range of the population.

Americans are split over Canada's single-payer healthcare system. Some see it as a model to be adopted by the United States. Others see it as an inefficient system that will hinder America's competitive edge. Proponents of either side can, of course, regale you with stories of former neighbors, distant cousins, or one-time coworkers who fled across the border to seek that elusively greener healthcare on the other side.

In truth, each system has its flaws. Canada's healthcare is universal, assuming you ignore the gaping oversight of not covering essential prescriptions; meanwhile, the U.S. has some of the best healthcare in the world, if you don't mind bankrolling a litany of unnecessary tests and treatments.

But Canada dominates its southern neighbor in one healthcare facet: cost savings. Despite publicly funding universal healthcare, Canada spent only 10.45 percent of its national GDP in 2014. The United State's expenditure was 17.4 percent of GDP. Per capita, Canada spent $4,641. The U.S.? Double that.

How does Canada do so much more with less?

Amputating administrative costs

(Photo from Our World in Data)

In 2014, Canada spent 10.45 percent of its national GDP on healthcare. The United State's expenditure was 17.4 percent.

According to a report published in the Journal of the American Medical Association, the reason the U.S. outspends Canada — and 10 other high-income countries —is not due to social spending or healthcare utilization. The culprit was price inflation across the board.

The report detailed that in the U.S. medical practitioners earn significantly more, individual services cost more, and Americans spend more on pharmaceuticals per capita.

Administrative costs were also singled out as a major price driver. According to the report, U.S. administration accounted for 8 percent of healthcare expenditures. In other high-income countries, that amount ranged from 1 to 3 percent.

"We have this discombobulated, fragmented system that leads us to have very high administrative costs, and everything is disconnected," said Dan Polsky, executive director of the University of Pennsylvania's Leonard Davis Institute of Health Economics. "You have to go from one system to another when you go from one provider to another. Some health [information] gets lost with the transfer from one provider to the next. And there's a private healthcare system that funds you when you are under 65, and when you're over 65, you get funded by Medicare."

A simplified overview of the U.S. healthcare system shows it comprises Medicaid, Medicare, Tricare, the Veteran's Health Administration, and a panoply of private health plans.

Further adding to the discombobulation, many Americans manage coverage through a patchwork of policies. A senior citizen, for example, may be on Medicare (a government-run program) but augment her coverage with a Medigap policy (insurance provided by a private company specifically to offset Medicare costs).

Meanwhile, the Great White North is currently debating whether to extend universal healthcare to encompass prescriptions. A report published in the Canadian Medical Association Journal, titled "How to pay for national insurance," found that implementing such a plan in 2020 would require $9.7 billion in new public funding.

The benefits? In addition to providing universal access to pharmaceuticals, national pharmacare would save the private sector $13.9 billion, a net savings of $4.2 billion.

The CMAJ report found that "[a]ccess to medicine is best facilitated when direct charges to patients are limited" and "[c]ost control is best achieved by single-payer systems that reduce administration costs and consolidate purchasing power."

So how much would America save if it adopted Canada's low cost, universal approach? According to a Commonwealth Fund report, the U.S. would save $1.4 trillion if it adopted Canada's healthcare approach.

Spending more, getting less

If the U.S. adopted Canada's healthcare approach, it could save as many as 101,000 lives from preventable deaths.\u200b

(Image from the Commonwealth Fund)

If the U.S. adopted Canada's healthcare approach, it could save as many as 101,000 lives from preventable deaths.

The United States' unprecedented spending would be worthwhile if it could produce results above and beyond those of Canada and other high-income countries. Sadly, the data suggests the opposite is true.

As noted in the JAMA report, the U.S. system covers less of its population — 90 percent compared to the 99–100 percent range of its peers. Americans go to the doctor less often and spend fewer recover days in the hospital.

The consequences of these differences are stark. Canadian citizens sport a higher life expectancy (82.21 years compared with 79.24 in the U.S.). The country's maternal mortality rate is also significantly lower. Only 27 pregnant women died in Canada in 2015, compared with 550 in the U.S. In fact, the United States' maternal mortality rate is the worst in the developed world.

As for those infamous Canadian wait times, they do exist but their effect on the Canadian healthcare system has been greatly exaggerated. They are mostly applied to elective procedures as a means of reducing cost.

As such, adopting Canada's healthcare approach would save the U.S. more than money. The aforementioned Commonwealth Fund report noted that the U.S. would avoid 101,000 fewer preventable deaths, 4,800 fewer infant deaths, and 42 million fewer American adults neglecting care because of costs.

Saving more than money

How is it that the U.S. system outspends so many other high-income countries, yet produces far less salubrious outcomes? The answer is an unequal distribution of healthcare, with spending being concentrated at the socio-economic top.

In the United States, the top 1 percent of spenders account for more than 20 percent of total healthcare expenditures. The spending of the top 5 percent accounts for almost half.

According to Esteban Oritz-Ospina and Max Roser, inequality in healthcare spending is to be expected — the elderly and individuals with complicated health conditions will always require larger expenditures. However, the discrepancy of spending in the data suggests to them that the United States suffers from an "inequality of access over and above inequality in need."

In contrast, Canada uses cost control to curb administration costs, allowing the country to cast a wider healthcare safety net that extends from the top to the bottom.

In sum, Canada's healthcare system isn't without its flaws, but we shouldn't make the best the enemy of the good. If the United States would learn from Canada's example, it could do a lot of good — and save some money in the process.

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Why Epicurean ideas suit the challenges of modern secular life

Sure, Epicureans focused on seeking pleasure – but they also did so much more.

Antonio Masiello/Getty Images
Culture & Religion

'The pursuit of Happiness' is a famous phrase in a famous document, the United States Declaration of Independence (1776). But few know that its author was inspired by an ancient Greek philosopher, Epicurus. Thomas Jefferson considered himself an Epicurean. He probably found the phrase in John Locke, who, like Thomas Hobbes, David Hume and Adam Smith, had also been influenced by Epicurus.

Nowadays, educated English-speaking urbanites might call you an epicure if you complain to a waiter about over-salted soup, and stoical if you don't. In the popular mind, an epicure fine-tunes pleasure, consuming beautifully, while a stoic lives a life of virtue, pleasure sublimated for good. But this doesn't do justice to Epicurus, who came closest of all the ancient philosophers to understanding the challenges of modern secular life.

Epicureanism competed with Stoicism to dominate Greek and Roman culture. Born in 341 BCE, only six years after Plato's death, Epicurus came of age at a good time to achieve influence. He was 18 when Alexander the Great died at the tail end of classical Greece – identified through its collection of independent city-states – and the emergence of the dynastic rule that spread across the Persian Empire. Zeno, who founded Stoicism in Cyprus and later taught it in Athens, lived during the same period. Later, the Roman Stoic Seneca both critiqued Epicurus and quoted him favourably.

Today, these two great contesting philosophies of ancient times have been reduced to attitudes about comfort and pleasure – will you send back the soup or not? That very misunderstanding tells me that Epicurean ideas won, hands down, though bowdlerised, without the full logic of the philosophy. Epicureans were concerned with how people felt. The Stoics focused on a hierarchy of value. If the Stoics had won, stoical would now mean noble and an epicure would be trivial.

Epicureans did focus on seeking pleasure – but they did so much more. They talked as much about reducing pain – and even more about being rational. They were interested in intelligent living, an idea that has evolved in our day to mean knowledgeable consumption. But equating knowing what will make you happiest with knowing the best wine means Epicurus is misunderstood.

The rationality he wedded to democracy relied on science. We now know Epicurus mainly through a poem, De rerum natura, or 'On the Nature of Things', a 7,400 line exposition by the Roman philosopher Lucretius, who lived c250 years after Epicurus. The poem was circulated only among a small number of people of letters until it was said to be rediscovered in the 15th century, when it radically challenged Christianity.

Its principles read as astonishingly modern, down to the physics. In six books, Lucretius states that everything is made of invisible particles, space and time are infinite, nature is an endless experiment, human society began as a battle to survive, there is no afterlife, religions are cruel delusions, and the universe has no clear purpose. The world is material – with a smidgen of free will. How should we live? Rationally, by dropping illusion. False ideas largely make us unhappy. If we minimise the pain they cause, we maximise our pleasure.

Secular moderns are so Epicurean that we might not hear this thunderclap. He didn't stress perfectionism or fine discriminations in pleasure – sending back the soup. He understood what the Buddhists call samsara, the suffering of endless craving. Pleasures are poisoned when we require that they do not end. So, for example, it is natural to enjoy sex, but sex will make you unhappy if you hope to possess your lover for all time.

Epicurus also seems uncannily modern in his attitude to parenting. Children are likely to bring at least as much pain as pleasure, he noted, so you might want to skip it. Modern couples who choose to be 'child-free' fit within the largely Epicurean culture we have today. Does it make sense to tell people to pursue their happiness and then expect them to take on decades of responsibility for other humans? Well, maybe, if you seek meaning. Our idea of meaning is something like the virtue embraced by the Stoics, who claimed it would bring you happiness.

Both the Stoics and the Epicureans understood that some good things are better than others. Thus you necessarily run into choices, and the need to forgo one good to protect or gain another. When you make those choices wisely, you'll be happier. But the Stoics think you'll be acting in line with a grand plan by a just grand designer, and the Epicureans don't.

As secular moderns, we pursue short-term happiness and achieve deeper pleasure in work well done. We seek the esteem of peers. It all makes sense in the light of science, which has documented that happiness for most of us arises from social ties – not the perfect rose garden or a closet of haute couture. Epicurus would not only appreciate the science, but was a big fan of friendship.

The Stoics and Epicureans diverge when it comes to politics. Epicurus thought politics brought only frustration. The Stoics believed that you should engage in politics as virtuously as you can. Here in the US where I live, half the country refrains from voting in non-presidential years, which seems Epicurean at heart.

Yet Epicurus was a democrat. In a garden on the outskirts of Athens, he set up a school scandalously open to women and slaves – a practice that his contemporaries saw as proof of his depravity. When Jefferson advocated education for American slaves, he might have had Epicurus in mind.

I imagine Epicurus would see far more consumption than necessary in my own American life and too little self-discipline. Above all, he wanted us to take responsibility for our choices. Here he is in his Letter to Menoeceus:

For it is not drinking bouts and continuous partying and enjoying boys and women, or consuming fish and the other dainties of an extravagant table, which produce the pleasant life, but sober calculation which searches out the reasons for every choice and avoidance and drives out the opinions which are the source of the greatest turmoil for men's souls.

Do you see the 'pursuit of happiness' as a tough research project and kick yourself when you're glum? You're Epicurean. We think of the Stoics as tougher, but they provided the comfort of faith. Accept your fate, they said. Epicurus said: It's a mess. Be smarter than the rest of them. How modern can you get?Aeon counter – do not remove

This article was originally published at Aeon and has been republished under Creative Commons. Read the original article.


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