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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

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

(Photo from Our World in Data)

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

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

(Image from the Commonwealth Fund)

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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  • Researchers have found that some basic words appear to be more memorable than others.
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Cognitive psychologist Weizhen Xie (Zane) of the NIH's National Institute of Neurological Disorders and Stroke (NINDS) works with people who have intractable epilepsy, a form of the disorder that can't be controlled with medications. During research into the brain activity of patients, he and his colleagues discovered something odd about human memory: It appears that certain basic words are consistently more memorable than other basic words.

The research is published in Nature Human Behaviour.

An odd find

Image source: Tsekhmister/Shutterstock

Xie's team was re-analyzing memory tests of 30 epilepsy patients undertaken by Kareem Zaghloul of NINDS.

"Our goal is to find and eliminate the source of these harmful and debilitating seizures," Zaghloul said. "The monitoring period also provides a rare opportunity to record the neural activity that controls other parts of our lives. With the help of these patient volunteers we have been able to uncover some of the blueprints behind our memories."

Specifically, the participants were shown word pairs, such as "hand" and "apple." To better understand how the brain might remember such pairings, after a brief interval, participants were supplied one of the two words and asked to recall the other. Of the 300 words used in the tests, five of them proved to be five times more likely to be recalled: pig, tank, doll, pond, and door.

The scientists were perplexed that these words were so much more memorable than words like "cat," "street," "stair," "couch," and "cloud."

Intrigued, the researchers looked at a second data source from a word test taken by 2,623 healthy individuals via Amazon's Mechanical Turk and found essentially the same thing.

"We saw that some things — in this case, words — may be inherently easier for our brains to recall than others," Zaghloul said. That the Mechanical Turk results were so similar may "provide the strongest evidence to date that what we discovered about how the brain controls memory in this set of patients may also be true for people outside of the study."

Why understanding memory matters

person holding missing piece from human head puzzle

Image source: Orawan Pattarawimonchai/Shutterstock

"Our memories play a fundamental role in who we are and how our brains work," Xie said. "However, one of the biggest challenges of studying memory is that people often remember the same things in different ways, making it difficult for researchers to compare people's performances on memory tests." He added that the search for some kind of unified theory of memory has been going on for over a century.

If a comprehensive understanding of the way memory works can be developed, the researchers say that "we can predict what people should remember in advance and understand how our brains do this, then we might be able to develop better ways to evaluate someone's overall brain health."

Party chat

Image source: joob_in/Shutterstock

Xie's interest in this was piqued during a conversation with Wilma Bainbridge of University of Chicago at a Christmas party a couple of years ago. Bainbridge was, at the time, wrapping up a study of 1,000 volunteers that suggested certain faces are universally more memorable than others.

Bainbridge recalls, "Our exciting finding is that there are some images of people or places that are inherently memorable for all people, even though we have each seen different things in our lives. And if image memorability is so powerful, this means we can know in advance what people are likely to remember or forget."

spinning 3D model of a brain

Temporal lobes

Image source: Anatomography/Wikimedia

At first, the scientists suspected that the memorable words and faces were simply recalled more frequently and were thus easier to recall. They envisioned them as being akin to "highly trafficked spots connected to smaller spots representing the less memorable words." They developed a modeling program based on word frequencies found in books, new articles, and Wikipedia pages. Unfortunately, the model was unable to predict or duplicate the results they saw in their clinical experiments.

Eventually, the researchers came to suspect that the memorability of certain words was linked to the frequency with which the brain used them as semantic links between other memories, making them often-visited hubs in individuals's memory networks, and therefore places the brain jumped to early and often when retrieving memories. This idea was supported by observed activity in participants' anterior temporal lobe, a language center.

In epilepsy patients, these words were so frequently recalled that subjects often shouted them out even when they were incorrect responses to word-pair inquiries.

Seek, find

Modern search engines no longer simply look for raw words when resolving an inquiry: They also look for semantic — contextual and meaning — connections so that the results they present may better anticipate what it is you're looking for. Xie suggests something similar may be happening in the brain: "You know when you type words into a search engine, and it shows you a list of highly relevant guesses? It feels like the search engine is reading your mind. Well, our results suggest that the brains of the subjects in this study did something similar when they tried to recall a paired word, and we think that this may happen when we remember many of our past experiences."

He also notes that it may one day be possible to leverage individuals' apparently wired-in knowledge of their language as a fixed point against which to assess the health of their memory and brain.

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