Health Care in Canada: A Citizen’s Guide to Policy and Politics

Katherine Fierlbeck
University of Toronto Press
ISBN: 978-1-4426-4003-0
A Review by Susan Froetschel

With aging populations and rapid new developments in technology, the cost of providing health care weighs on national budgets. Attempts to reform health care prompt immediate comparisons with systems in other nations, but the complexity of financing, convoluted regulations and layers of competing special interests have transformed  such endeavors into giant puzzles.   

Cross-country comparisons are sorely needed as all nations seek to contain rising health-care costs.  Health Care in Canada: A Citizen’s Guide to Policy and Politics by political scientist Katherine Fierlbeck analyzes the Canadian system, compares it with systems in other developed nations, and offers a vigorous defense against criticisms lobbed at Canada’s system by its American neighbors before passage of the US Patient Protection and Affordable Care Act in March 2010.

Before the mid-20th century, health care was a private family responsibility. Canadian and US methods for health-care delivery were similar.  After World War II, businesses and governments invested in health care, and the complex systems for financing diverged. Canada has since eliminated the most severe inequities; today, the poorest Canadians have the same life expectancy as Americans with average incomes. Canada spent $4196 per capita on health care in 2009, compared with $7140 in the US, and enjoys a higher life expectancy.  By allowing a corporate model to develop when its population was young and healthy, the US lost an opportunity mid-century to reduce costs.

US officials keep hoping that free-market competition will reduce costs, but health care is a paradoxical combination of products and services with mixed responses to price pressures.  The healthy anticipate no future need and resist high fees for care or insurance policies, while the ill are desperate for treatment at any cost. The capital markets demand growth. So private insurance, held by 65 percent of the American population, has led to a two-tier system with bureaucratic administration, fees that do not control costs, overcapacity in profitable areas, overtreatment of the wealthy, and neglect for the poor and sick. 

Canada’s public system is fragmented, controlled by the provinces and coordinated by the federal government; Ottawa funds about 17 percent of health care and provincial budgets cover up to 50 percent. Participation in the Canada Health Care Act by the provinces is voluntary The Canadian provinces could allow private insurance, but no critical mass among the population is willing to pay the higher prices. Care is covered, but not medical goods and services, pharmaceuticals or long-term care.  “In Canada, the debate is less about replacing the public system with a private one and about supplementing the current system with more private options,” Fierlbeck writes.  Most Canadians mistrust the US corporate model of health care that prioritizes profits over care.

Canadians and other nations with universal, single-payer health care must remain vigilant about cross-border influences from US health insurers and multinational firms led by CEOs who earn salaries in the millions to generate growth. The New York Times in 2003 reported on the confidential budget of the Pharmaceutical Research and Manufacturers of America, which designated $450,000 to slow sales from Canadian online pharmacies and $1 million to “change the Canadian health care system.”

US foreign policy was a key influence over Canada’s drug policy with the Canada-US Free Trade Agreement of the 1980s. After hospital costs, the largest category of health-care expenditures is devoted to pharmaceuticals. The Canadian government limits prices but does not cover drugs.  Privatized drug plans in Canada pit citizens with coverage against those without, Fierlbeck explains, and prices of prescription drugs can vary by tenfold across the country. International oversight of the multinationals offers promise, she writes, adding that since 2009 US and European regulators have joined forces to monitor clinical trials and marketing.

The strict wall between public and private endeavors in the North American Free Trade Agreement, or NAFTA, could effectively prevent Canada from toying with privatization schemes for basic health care, at least as long nearly 90 percent of Canadians express support for universal health care. As long as Canada’s health care remains a public service, it’s hands off for NAFTA, in force since 1994. “Once Canada begins to permit health care services (such as insurance) to be offered in the private sector, anti-competition rules can be applied,” Fierlbeck explains, adding that potential  treaty arbitrations could likely follow the lead of the European Court of Justice, which has ruled that the public sector has an unfair advantage over private firms.

The health care industry has many reasons to resist cost containment and reforms, and lobbying can trample citizen preferences. Before 2010, US citizens expressed a preference for an affordable public option, but instead ended up with a despised mandate to purchase insurance that will protect more citizens but also boost industry profits. Fierlbeck urges caution about creeping commercialization as pharmaceutical firms fund academic research, journals, continuing education and drug-friendly advocacy groups.

Nations struggle to balance cost containment with  equity, universality, responsiveness and efficiency, and in comparing Canada’s system with those in the US, along with Britain, Sweden, France and Germany , Fierlbeck repeatedly demonstrates how emphasizing one goal automatically strains the others. The US is an outlier among developed nations in failing to achieve the kind of balance that provides economic security and citizen satisfaction.  

Troubled economic times promise more health challenges, rising costs and political battles, and Fierlbeck cautions that few issues fall outside the rubric of health care: “The health of entire populations is determined not only by the existence of pathogens but also by social inequality…. considerations of the trade-off between kinds of health care are being surpassed by debates over the trade-off between kinds of social policies and health care itself.”  One report suggests that 75 percent of Canadians’ health is determined by physical, social or economic environments.

With only a few frustrated asides, the book offers a solid framework for conducting policy debates and cross-border comparisons of health care. Governments and citizens must understand the politics of health-care financing and the many competing motivations, because as Fierlbeck concludes, only those who understand their system can shape it. 

For developed nations with aging populations or developing nations investing in new programs, cross-country comparisons of health-care systems and their financing mechanisms are useful for containing health-care costs.
Copyright © 2011 Yale Center for the Study of Globalization