During the debate about the Affordable Care Act (ACA, or “ObamaCare”), you probably heard complaints about the U.S. heading toward socialized medicine and a single-payer healthcare arrangement similar to Canada’s system.
Is there a difference between socialized medicine and a single-payer system, and does the ACA truly take us down the path of socialized medicine? The answer is not always straightforward because people’s perceptions and definitions of the terms are blurred.
Generally, socialized medicine is a system where physicians work directly for the government. In a single-payer system, physicians have their own practices and are paid by a single insurer – which in this case is a government, using funds acquired through taxation.
In Canada, individual provinces set up their own healthcare systems and receive financial support from the federal government as long as they maintain certain standards of access. Funding (payment) is public, but care can be obtained through public or private options. That sounds a bit like the U.S. Medicare/Medicaid system, doesn’t it?
In fact, single-payer proposals in the U.S. have been referred to as “Medicare for all”, since they would extend the basic Medicare/Medicaid coverage to all Americans. The framework of this was outlined in the 2009 bill H.R. 676 (Expanded and Improved Medicare for All Act), among other resolutions.
Let’s contrast a few specific areas of the U.S. and Canadian systems.
- Coverage – Canada’s system provides universal healthcare coverage that is portable and not tied to your job. ObamaCare has increased the number of insured, but about 15% of Americans still do not have health coverage, and the majority of coverage is still provided as an employment benefit.
- Benefits – Canadian benefits differ slightly from the ObamaCare “essential health benefits” that define minimally qualified plans, but are nevertheless quite similar. They include inpatient and outpatient hospital services, preventative treatment, and services deemed medically necessary. Each province has its own list of additional services.
- Cost – Estimates are all over the map on the cost to individuals. In Canada, you do not pay co-pays and deductibles as in the U.S., but you are paying higher taxes to support it. In the U.S., you are paying co-pays and deductibles, insurance premiums, and some lesser amount of taxes. A direct cost-benefit analysis is difficult, if not impossible.
However, when comparing medical costs per capita using data from the Organization for Economic Co-operation and Development (OECD), we find that the U.S. spends far more than all other OECD countries. We spend $8,233 per person, over 2.5 times the OECD average, almost $3,000 higher than the second place country (Norway), and significantly more than the $4,445 per capita spent by Canada.
Does the U.S. receive its money’s worth in care? Perhaps, but it is not necessarily apportioned fairly.
- Appointments – Wait times are often cited as the problem with the Canadian system, but the U.S. is not far behind. Many nations with nationalized healthcare or single-payer variants fare better.
In a 2013 survey by The Commonwealth Fund, Canada ranked the worst out of the eleven nations surveyed in the ability to get a same-day or next-day appointment (41%) and those who waited six days or more for an appointment (33%). The U.S. was the second worst in same-day/next-day (48%) and third worst for long waits (26%).
However, in wait times for specialists, the U.S. was third best in both categories, while Canada finished last again. That is an indication of both our specialized-care emphasis and our tiered system. Specialized procedures that make more money are addressed more rapidly.
Part of the U.S. problem is supply and demand – with many new uninsured people entering the system, there is almost certain to be an increasing physician shortage over the next few years, especially for general practitioners and those serving rural areas.
- Choices – Single-payer systems do allow you to choose and keep your doctor, but you are more likely to wait longer for an appointment. Insurance networks and prohibitive out-of-network costs limit the choice of doctors in the U.S., but in general, access time is quicker if you do not care which doctor you see.
It is reasonable to argue that ObamaCare could be a preliminary step toward a single-payer system, through implementation by the states. Vermont has announced intentions to go down that path.
Should a single-payer system ever be established throughout the U.S., it will likely have different definitions of what constitutes basic care, and is likely to contain additional private insurance tiers for procedures beyond the basic single-payer options.
In other words, it will be some sort of Frankenstein’s monster blend of systems – much like ObamaCare is now – and by the best definition of the word, it will never be socialized medicine. However, your taxes will be paying for it.