Does Universal Health Care Work? (Lessons from Canada)

In recent years, there has been a push to nationalize health care in the United States. Proponents claim that this would decrease costs, make medical care more accessible, and increase the overall health of this nation. However, I believe it would do none of these. The concept of nationalized health care is not supported by sound economics, or by the results in countries that have implemented it. Canada is a current example of a country with an unsuccessful nationalized health care system. By studying the effects of the Canadian health care system and comparing with our health care system, we can determine if such a system would truly benefit our country.

For decades, economists and politicians alike have been deploring the condition of the United States health care system. Skyrocketing medical care costs, rampant waste, and the declining number of practicing physicians are touted as evidence of the seriousness of the situation. Entire books have been filled with accounts of individuals who have allegedly been denied medical care. Many feel that the relatively high percentage of uninsured Americans is yet another indication of the failings of our health care system. The United States spends more money on health care per capita than does any other industrialized nation, and yet our country is the least healthy (in terms of health outcomes) of the developed nations.1 These factors and diverse others have caused many to declare that the United States is in the midst of a health care crisis.

One proposed solution to these problems is known as universal health care. Universal health care is the catch phrase for a mandated, nationalized, government-funded, single-payer health care system. This would be a radical change from our current market-driven system. Universal health care has been debated for years, most notably during the Clinton administration, with First Lady Hillary Clinton’s failed attempt to nationalize the health care system. Now, with the beginning of the Obama administration, it is likely that the health care debate will once again gain national attention.

In 2007, then-Democratic Presidential candidate Barack Obama gave a speech at the Families USA Conference. He expressed dismay over the current state of the nation’s health care system, and asserted that the only solution is the nationalization of health care. Furthermore, he said, “…the emergence of new and bold plans from across the spectrum has effectively ended the debate over whether or not we should have universal health care in this country.” 2 In reality, however, the debate is far from over. Universal health care is still a controversial topic. In the political world, what is promised and what is delivered are often different things. In the case of universal health care, it is fitting that we look closely at what is proposed and compare with the results in countries that have implemented such systems. In comparing our health care system with Canada’s, I will first refute several common myths regarding health result discrepancies between our nations. Then I will point out some of the major problems with the Canadian health care system.

Out of the all the wealthy, democratic nations in the world, the United States is the only country without a nationalized health care system. Perhaps the main argument made by proponents of universal health care is that these other nations all have better health care access and results than we do. Canada’s nationalized health care system is often considered a model that should be emulated by the United States. Arnold Bennett and Orvill Adams espouse this view in their book, Looking North for Health: “Canada…has an immensely successful health care system. Judging by health outcomes, it can be argued that Canada provides better care than we receive. Canadians live longer. Their babies are healthier. Their old folks are better looked after…. And they do all this while paying less for health care than we do. Because they organize it right, and we don’t.” 3

But can the health disparity between Canadians and Americans be wholly attributed to the differences in our health care systems? I think not. Many factors affect the health of a nation. These factors include the environment, behaviors and practices, culture, economic status, education levels, and even race.4

In 2005, Canada’s infant mortality rate was 5.4 (per 1000 births),5 while the infant mortality rate in the United States was 6.86 (per 1000 births).6 Proponents of universal health care would have you to believe that Canada’s lower figure is due to a health care system that provides more access to prenatal care. However, lack of prenatal care is not completely responsible for infant deaths.7 Babies born to teenage mothers are 50% more likely to be low birth weight, and therefore more likely to die in infancy, than those born to mothers of age twenty or twenty-one.8 Teen pregnancy rates are significantly higher in the United States than Canada. In 2002, the teenage pregnancy rate in the United States was 76.4 per 1000,9 and in Canada, the rate was 33.9 per 1000.10 The large number of teenage pregnancies in the United States helps to account for the higher infant mortality rate.

Race is also a big factor in infant mortality.11 The infant mortality rate among African Americans is more than double the rate for whites.12 According to the National Center for Health Statistics, “In 2005 there was a more than threefold difference in infant mortality by race and ethnicity…. many of the racial and ethnic differences in infant mortality remain unexplained.”13 In fact, the infant mortality rate for whites in the United States is only slightly higher than Canada’s total infant mortality rate.14 The United States has a much higher percentage of minority groups than Canada does.15 For example, the percentage of African Americans in the United States is 13.4%, while the percentage is only 2.5% in Canada.16 Thus, asserting that Canada’s health care system can be credited for the country’s lower infant mortality rate is a non sequitor.

Life expectancy is higher in Canada than the United States,17 but again, this cannot be attributed to Canada’s health care system. Obesity is one of the factors that affects life expectancy, and it is much more prevalent in the United States than Canada. In 2004, 34% of adults in the United States were obese (with a Body Mass Index of 30 and higher),18 while only 23.1% of Canadians were obese.19 Race also hugely affects life expectancy. In fact, “…the life expectancy at birth for an African American man is sixty-eight years, seven years less than for a white man in 1990…. African Americans are more likely than any other racial or ethnic group to develop cancer, and thirty percent more likely to die from it.”20 So although the United States has a lower life expectancy rate, and a higher infant mortality rate than does Canada, we cannot blame the American health care system for these short fallings.

Let’s move onto another common argument in the health care debate. American-made pharmaceutical drugs are more expensive in the United States than they are in Canada.21 Some would declare that this is evidence of the superiority of the Canadian health care system. However, noted American economist Thomas Sowell disagrees. He argues that pharmaceutical drugs are expensive in the United States because manufacturing companies must not only cover the cost of ingredients, but must also charge for the high cost of inventing the drugs. It can cost up to eight million dollars to create a single drug. Brand name drugs are expensive because the manufacturing companies are trying to recover the money invested in the development process. However, after the patent expires, other drug companies use that formula and market it as a generic drug. These generic drugs are less costly because their manufacturing companies do not have to charge for the cost of invention. Canada’s health care system can then make a very low offer—covering only manufacturing costs—to the American drug company, which then has the choice of selling the drugs cheaply, or losing a large amount of business. Usually it takes the former option. This is the reason for the lower drug prices in Canada.22

Although some would say that this method of forcing down prices is beneficial, I would contend that it is demonstrably counter-productive. Forcing pharmaceutical companies to accept less money than covers production costs causes both quality and the rate of invention to decline. Currently, the United States is a world leader in drug innovations.23 This is a direct result of our market-based health care system. But if we instated a government-run health care system that dictated prices to the pharmaceutical companies, our leading position in drug discoveries would be compromised. Sowell writes: “Reducing the brand-name producers’ abilities to recoup their costs means reducing the incentives for continuing the development of new drugs to deal with other diseases and conditions.”24 This is just one example of the potential negative effects that would be realized if we implemented a national health care system and the price controls that go with it.

Another inherent problem with nationalized health care is lack of funding. Dr. William E. Goodman attested to this in a speech he gave at a meeting of the Association of American Physicians and Surgeons in 1989. Dr. Goodman is an otorhinolaryngologist who practiced medicine in Toronto for many years both before and after the advent of nationalized health care. He said: “…the basic and unalterable flaw in any system like the Canadian model is that, in economic terms, it is an open-ended scheme with closed-end funding. In other words, the potential demands are completely unrestricted, but the money to pay for them is not.”25 Goodman maintains that lack of funding is a huge problem in Canada, and the country continually raises taxes and goes deeper into debt to pay for health care.26

Americans already suffer from a high tax burden. With a nationalized health care system, we would undoubtedly begin paying even more. Canadians do. Goodman illustrates, “If an American works full-time for a full year…the total burden of taxes is so heavy that it consumes his entire income from January 1 to May 3. …the comparable figures for a citizen of Ontario are January 1 to July 7th! A Canadian has to work over six months solely to satisfy government’s constantly increasing demand for taxes.”27 And yet, even after imposing this high tax burden, the Canadian health care system lacks the funding it needs.

One result of this lack of funding is that some Canadian physicians’ salaries are capped by the government, meaning that they can only make up to a certain amount of money per year. Once a physician has met this amount, he has absolutely no incentive to continue working, because he would not be compensated. The patients that need his services suffer the most from this arrangement, as they may need to wait many months for an appointment.28

Dr. Goodman also claims that the promised “universal access” is not a reality. Price controls and capped salaries have caused shortages, declining quality, and less access to medical care. Often, patients cannot get the medical care they need because the system does not have the finances. Yet the government has made it illegal for the patients to pay for their needs themselves. In this case, the only way to get proper treatment is to go out of country. Many do. The fact that Canadians often travel to the United States to get the medical care they need is more proof that the Canadian system is not adequately providing for its constituents.29

Besides lack of funding, the Canadian health care system is troubled by many other flaws. Loss of doctors is a major problem. Canadian physicians and other health care workers, realizing that they are not being adequately compensated for their work, either retire early or immigrate to a country where they can get proper pay. If the United States implements universal health care, our already limited number of health workers will likely dwindle as well.

These are only some of the many problems with the Canadian health care system. I believe that by studying Canada’s failures and the devastating effect of nationalized health care in that country, Americans will come to realize that universal health care is not the answer for our country. Though our system is not ideal, nationalization would only make matters worse. I am convinced that Americans can work together to find a solution that will not compromise our current standing in the world. Canada is proof that universal health care does not live up to its name, nor fulfill the promises we’ve heard from American politicians. By increasing awareness of the Canadian failure, we can prevent repeating that disaster in this nation.

FOOTNOTES

1 Rudolph Mueller, As Sick as it Gets (Dunkirk, New York: Olin Frederick, Inc., 2001), 2.
2 Barack H. Obama, “The Time Has Come for Universal Health Care,” 25 January 2007, (accessed 4 April 2009).
3 Arnold Bennett and Orvill Adams, Looking North for Health (San Francisco: Jossey-Bass Publishers, 1993), 145.
4 Arthur Garson Jr. and Carolyn L. Engelhard, Health Care Half-Truths (Lanham, Maryland: Rowman and Littlefield Publishers, Inc., 2007), 4.
5 “Health—Infant Mortality,” 9 April 2009, (accessed 9 April 2009).
6 Recent Trends in Infant Mortality in the United States, October 2008, (accessed 9 April 2009).
7 Garson and Engelhard, 6.
8 Kids Having Kids: A Special Report on the Costs of Adolescent Childbearing, 1996,
(accessed 9 April 2009).
9 Stephanie J. Ventura, Joyce C. Abma, William D. Mosher, and Stanley K. Henshaw, “Recent Trends in Teenage Pregnancy in the United States, 1990-2002,” 15 October 2008,
(accessed 9 April 9, 2009).
10 Trends in Teen Pregnancy in Canada with Comparisons to U.S.A. and England/Wales, 2006, (accessed 16 April 2009).
11 Garson and Engelhard, 7.
12 Recent Trends in Infant Mortality in the United States, October 2008, (accessed 9 April 2009).
13 Ibid.
14 Ibid.
15 “Demographics of the United States,” (accessed 16 April 16, 2009); “Demographics of Canada,”
(accessed 16 April 2009).
16 Ibid.
17 Bennett and Adams, 129.
18 Obesity Among Adults in the United States, 4 December 2007, (accessed 16 April 2009).
19 Michael Tjepkema, “Adult Obesity in Canada: Measured Height and Weight,” 16 November 2008, (accessed 16 April 2009).
20 Garson and Engelhard, 4.
21 Thomas Sowell, “Letters About Medical Care,” 18 November 2003, (accessed 16 April 2009).
22 Ibid.
23 Thomas Sowell, Applied Economics: Thinking Beyond Stage One (New York: Basic Books, 2004), 85.
24 Ibid, 87.
25 William E. Goodman, “Can it Work? --- Anywhere?” February 1990, (accessed 16 April 2009).
26 Ibid.
27 Ibid.
28 Ibid.
29 Sowell, Applied Economics, 76.

WORKS CITED

Bennett, Arnold, and Orvill Adams. Looking North for Health. San Francisco: Jossey-Bass Publishers, 1993.

“Demographics of Canada.” (accessed 16 April 2009).

“Demographics of the United States.” (accessed 16 April, 2009).

Garson, Arthur Jr., and Carolyn L. Engelhard. Health Care Half-Truths. Lanham, Maryland: Rowman and Littlefield Publishers, Inc., 2007.

Goodman, William E. “Can it Work? --- Anywhere?” February 1990. (accessed 16 April 2009).

“Health—Infant Mortality.” 9 April 2009. (accessed 9 April 2009).

Kids Having Kids: A Special Report on the Costs of Adolescent Childbearing.
1996. (accessed 9 April 2009).

Mueller, Rudolph. As Sick as it Gets. Dunkirk, New York: Olin Frederick, Inc., 2001.

Obama, Barack H. “The Time Has Come for Universal Health Care.” 25 January
2007. (accessed 4 April 2009).

Obesity Among Adults in the United States. 4 December 2007. (accessed 16 April 2009).

Recent Trends in Infant Mortality in the United States. October 2008. (accessed 9 April 2009).

Sowell, Thomas. Applied Economics: Thinking Beyond Stage One. New York: Basic Books,2004.

---, “Letters About Medical Care.” 18 November 2003. (accessed 16 April 2009).

Tjepkema, Michael. “Adult Obesity in Canada: Measured Height and Weight.”
16 November 2008, (accessed 16 April 2009).

Trends in Teen Pregnancy in Canada with Comparisons to U.S.A. and England/Wales.
2006. (accessed 16 April 2009.

Ventura, Stephanie J., Joyce C. Abma, William D. Mosher, and Stanley K. Henshaw. “Recent Trends in Teenage Pregnancy in the United States, 1990-2002.” 15 October 2008. (accessed 9 April 9, 2009).