Canada’s Healthy Health System

Eribert Loehner

Another area where Canada leaves the US for dead

By Eribert Loehner in Vancouver

The underlying message of my previous articles has been how much Canada and the United States are the same, yet different. But when it comes to health care today, there are virtually no similarities.

Given the efforts in the U.S. by the previous Obama administration to establish a program to provide health insurance coverage for citizens who presently do not qualify under private insurance underwriting criteria, and the present Trump administration’s efforts to repeal and replace this program, it’s worth looking at how Canada handles health care.

Canadian Health Care Structure

Unlike the United States, Canada has a publicly funded health care program called Medicare. It was the final iteration of many previous federal and provincial health care programs, some started as early as the 1940’s.

Occupational therapist Jennifer Shaver helps Adel Doss (54) at the Providence Healthcare Centre in Toronto

The present complex program was formally established in 1966 by the government of then Liberal Prime Minister Lester B. Pearson. Responsibilities of the various stakeholders were further clarified by the Medical Care Act in 1984.

The basic premise of this program is that everyone in need of medical services can access them regardless of their ability to pay.

The federal Medicare program is only responsible for providing direct medical services to certain groups: indigenous First Nations people living on reservations, northern Inuit, serving members and qualifying veterans of the Canadian Armed Forces, inmates of federal penitentiaries, and refugee claimants.

Ten Provincial systems

Each of Canada’s ten provinces run their own health care programs, as do Canada’s three northern territories that run a common health care program. These individual programs are responsible for providing the bulk of Canadian medical services.

The federal Medicare program is also responsible for setting and administering national standards for each of the provincial and the territorial programs and provides funding to support these programs.

All provincial and territorial programs must conform to the following conditions:  

  • Accessibility, all those who are registered must be allowed access to medical services.
  • Portability, someone registered in one provincial or territorial program must be given access to services in all other provinces or territories.
  • Universality — medical services offered will be the same for all who are registered regardless of their economic or social status.
  • Comprehensiveness, treatments provided in all provinces and territories must be based on best established practices.

How the system works

The city hospital in Ottawa

To access medical services such as physiotherapy in Ontario, one needs to be registered with a provincial or territorial health care program.

A patient needs to be either admitted directly to a hospital for emergency services or visit a family practitioner. A family practitioner will either treat a minor condition directly or refer the patient to a specialist for specific procedures.

There are some issues with the program, but for most patients the system works extremely well.

Rising Costs

All the Canadian health care programs are known as single-payer systems. Medical services are paid for by a government administered health care program and not individual patients. Governments raise money to support these programs through taxation. If you want to hire someone for hospital price transparency, then you can check it out here! 

The cost of providing services, specifically treatments that now require expensive technology or complicated procedures have put a strain on government finances. The pricing for medical procedures and services is negotiated with professional colleges and associations on a regular basis. This does control the cost of services to some degree.

US costs rising faster

In the United States, where government has little influence on health care costs, these have increased substantially more than in Canada.

In the early 1960’s Canada and the US had similar health care systems and costs were virtually the same.  

Since then the cost of providing health services have increased in Canada at about the same rate as those experienced in most other countries with government run health care programs. In 2006 the Canadian annual per-capita health care expenditure was US$3,678.  In the US, by comparison, the annual per-capita health care expenditure was $6,714.


Right from the onset of government involvement in providing health care services, groups within the medical community have opposed government health care programs.

Today there are a number of private clinics and medical laboratories operating in Canada who, in contravention of the Medical Care Act, bill their clients directly. They are essentially breaking the law and are facing prosecution.

Fears about a ‘two-tier’ system

The concern most Canadians have is if medical services can be offered for fees paid directly by clients in parallel with the existing government funded programs, it will result in a two tiered system.

Service providers and infrastructure will flee to provide services to only those who can pay any price.  This would undermine the publicly funded programs that are constrained by contract pricing for services. A two tiered system will detrimentally affect access to medical services for the vast majority of Canadians.

There are a number of law suits pending where physicians and private health care corporations are challenging the government’s right to restrict the collection of fees directly from patients.

The various governments are well aware of the risk this poses and are vigorously defending the existing programs.