Canada’s Medicine Explained

Health Tips / Canada’s Medicine Explained

Several years ago, I happened to be in Toronto when the results of a national survey asking Canadians to select the one Canadian they most admired were announced. By universal acclimation–beating out both Alexander Graham Bell and Wayne Gretzky–they selected Thomas Clement “Tommy” Douglas.

“Who is Tommy Douglas?” I wondered.

Every Canadian knows the story of Tommy Douglas. Born in Scotland in 1904, he sustained as a boy a significant injury to his knee, and because his family could not afford surgery, Tommy was virtually crippled by his condition. When his family immigrated to Canada, he remained hobbled by his knee until an orthopedic surgeon took pity on him, used him in a teaching demonstration, and restored his ability to walk normally.

From that point onward, Tommy Douglas vowed that no one in Canada would ever be deprived of access to health care because of lack of funds. He first entered the ministry, becoming a Methodist pastor in the province of Saskatchewan, and then politics, becoming the province’s premier in 1944, roughly comparable to state governorship in the US.

Douglas’s recurring campaign promise was free health care for all in Saskatchewan. In 1947, all hospitals became free. Then, five terms later, in 1961, Tommy Douglas engineered a tax-funded public insurance plan in Saskatchewan to cover all medical treatment, in or out of the hospital. He dubbed this new plan “Medicare,” although its full name is National Health Insurance.

Ultimately, this new plan proved so popular (except among doctors, who went on strike for 23 days, but then capitulated) that the remaining Canadian provinces and territories adopted it as well. Four years later, in 1965, the US copied the Tommy Douglas model along with its name for our own Medicare guaranteed health coverage for those over 65. Other countries, including Taiwan and South Korea, adopted this model later.

Ironically, this model is similar to the 2006 medical care act covering all residents of Massachusetts that former Governor Mitt Romney now regrets having signed into law.

Whereas our own Medicare system is a single-payor model, meaning that doctors and hospitals bill the federal government for reimbursement of their services, the Canadian system remains essentially a regional one. Doctors and hospitals remain private–not government employees or part of a governmental agency–and send their bills to an office in the province where their practice or hospital is located. The funding for all health care comes from tax dollars collected by the Canadian federal government, headquartered in Ottawa, Ontario. Tax money is then distributed back to the provinces.

Medicare for all, upsides and down
The easiest way for Americans to understand Canadian medicine is to think of the phrase “Medicare for All.” The closest we ever came to this would have been the proposed public-option section of President Obama’s Affordable Health Care Act. Private health insurance companies feared (not without reason) that in time everyone would drift to the public option and the Blue Crosses, Aetnas, and Humanas would go the way of the great auk. Threatened with extinction, you can appreciate the health insurance industry’s pulling out all stops (“death committees!”) to kill the public option.


The beneficial aspects of the Canadian health care system seem obvious:

  • Everyone living in Canada is guaranteed access to health care at virtually no cost.
  • Rates for every service are determined by the government and standardized across the country.
  • Negotiation with providers controls costs so that, for example, Canadians pay much (much!) less for the same prescription drugs (same pill, same manufacturer) than we do in the US.
  • Because of this ready access to health care, Canadians are simply healthier than we are: longer life spans, lower infant mortality, fewer complications from chronic illness, etc.
  • All medical records are available electronically. Canadians don’t (yet) carry their records on one plastic card like the French and Germans, but all points of medical service are linked and your entire health history is readily available to any physician you visit.
  • There are virtually no personal bankruptcies because of health care costs.
  • Medical schools are subsidized so that young physicians leave with far less debt that their counterparts in the US.
  • Malpractice insurance is paid by the government and malpractice suits are really quite rare.
  • Overall, surveys among Canadians show high levels of satisfaction with their system.

All this said, the Canadian system has problems that would probably be unacceptable to Americans who have health insurance, leaving aside the 50 million who don’t.

As a percent of Gross National Product (GNP), Canadians pay far less for health care than we do (8% versus our 15%). Nevertheless, providing universal health care is an extremely expensive undertaking, especially for a country whose GNP is tiny in comparison to our own. Faced with less revenue, the government response has been to spend significantly less on health care than the country seems to need.

This has led to shortages on all fronts. Because physician incomes don’t keep pace with the work they have to do, fewer Canadian college graduates seek med school admission and there’s a definite doctor shortage. There’s also less diagnostic equipment and fewer hospital beds.

Such shortages lead to long waits, as described in the book The Healing of America, by T.R. Reid. Although you can see a primary care doctor fairly quickly, it may take months to get an appointment with a specialist, months for an MRI, and months to have elective surgery (like a hip replacement or bypass surgery).  Importantly, these shortages and long waits apply to everyone. Even if you have the money, you can’t use it to “jump the queue” in order to have your test or surgical procedure quickly.

Opponents of the Affordable Health Care Act reported that Canadians were coming to the US in droves for health care. But careful investigation found this to be incorrect. Canadians were arriving simply to get warmer. Seriously, data show Canadians don’t come here for care and in fact when Canadian snowbirds come south they purchase health insurance for the length of their stay in the US…using the insurance to get them home in case they become ill.

This situation with shortages and long waits led to an important lawsuit that challenged the “jump the queue” restrictions. A physician filed suit on behalf of a patient demanding that the patient not suffer unnecessarily waiting before having elective surgery. The Supreme Court ruled in favor of the physician and his patient. In response, fearing a two-tiered system in which those who could afford better care would buy it, the federal government voted massive increases in health care spending on all fronts. But funding this health care will remain a challenge in a country that simply doesn’t have the kind of revenue needed to keep up with health care costs.

For myself, I have mixed emotions about the Canadian system. Like our Medicare, the Canadian system will pay for “medically necessary” services. What is necessary is determined by the government, both theirs and, in the case of Medicare, ours. Here in the US, especially with steadily declining Medicare reimbursement rates, primary care physicians with a largely Medicare-age patient population rely on volume, seeing 40 to 50 patients per day to stay financially afloat. That averages one patient every eight minutes.

By Medicare logic, the WholeHealth Chicago model of an hour scheduled for new patients and 30 minutes for follow-up visits, is “medically unnecessary.” I was told exactly that during a Medicare audit when we first opened and it led to my decision to opt out of Medicare. Were we to be reimbursed by its standards (Dr. Kelley and I see about 14 patients each per day), we’d be bankrupt in a month or compelled to transform into an assembly-line medical practice.

And yet Dr. Kelley and I agree with most American physicians who believe that no one should be deprived of health care for financial reasons. Americans should not be tallying up shorter lives or unhealthier babies than our neighbors to the north. There should be no such thing as a medical bankruptcy.

The Affordable Health Care Act, imperfect as it is, seems a reasonable place to start. The process of developing our health care system should give us pause to question our priorities as a nation.

Be well,

David Edelberg, MD

0 thoughts on “Canada’s Medicine Explained

    Good report. Unfortunately, your hopes for a solution are probably in vain. I’m seventy and have engaged in this debate for decades. While our current system is not sustainable and will soon crash, cultural and political forces together with lots of ignorance will doom the emergence of a viable course of action. It comes down to values. As long as we view essential medical care as just another commodity, we will spend more on it and yet leave more unprotected than other developed nations.

    Don Schoenbeck
    Posted March 20, 2012 at 7:09 am

    Very good article, as usual. I value all the info. Good to know.

    Gail Mendenhall
    Posted March 20, 2012 at 7:34 am

    Bravo………Cecilia……why are there not more doctors like you? Brave enough to buck the system, thereby changing the system. Greed is NOT in your practice. You are there for the patient.

    Posted March 20, 2012 at 9:14 am

    Bravo, Cecilia

    Posted March 20, 2012 at 9:14 am

    Informative article, as usual, but I believe the conclusion is wrong. Although I believe in libertarian principles and a MUCH smaller government in general (whatever issues government touches, the outcome is almost always worse than if it had never gotten involved), I now believe that the health care system is so badly damaged that the only possible solution is to go to a single-payer system. Unfortunately, the Affordable Health Care Act is just a bastardization of the current system that will only make a bad situation much worse. It does nothing to actually reduce costs or improve care (with alternative methods and otherwise), and helps the insurance and drug companies to continue their pillaging of the American public.

    Rick Farmer
    Posted March 20, 2012 at 9:45 am

    Thank you for this simplistic yet detailed explaination of Canada’s health system. It has perplexed me for the longest. Yet I’m still confused how Medicaid plays into this? I know it is for the underserved not yet 65 and children. It is the population such as me who would be part of the 50 million uninsured. That do not qualify for either. Is the Affordable Act advantageous for us?

    Jackie Smith
    Posted March 20, 2012 at 10:58 am

    The real problem with the Affordable Care Act is how our healthcare became totally capitulated to the health insurance industry much the same way we capitulated Medicare Part D to the pharmaceutical industry. We will become “option-less,” compelled to buy an insurance product from a for-profit industry with a bad track record for placing the interests of the patient-consumer first. What’s very troubling is how the health insurance industry is now buying medical practices, clinics, urgent care centers, ultimately to control everything

    Dr E
    Posted March 20, 2012 at 11:23 am

    Your article should be titled, ‘Canada’s Medicine Criticized’.
    Seems to me the only people complaining about the Canadian health care system are Americans.
    It’s naive to think you understand another country’s system when you cannot even understand your own.
    Why do you care what Canadians do?! Maybe you should concentrate on taking care of your fellow man instead of justifying or accepting 50 million Americans without healthcare insurance.
    If you have the perfect recipe for health care why not implement it?!

    Lori O'Gorman
    Posted March 20, 2012 at 1:40 pm

    I agree wholeheartedly!

    Posted March 20, 2012 at 2:25 pm

    Hi Lori
    I am very much surprised you read this as a criticism of the Canadian system. I truly admire a system where everyone receives healthcare, no one has to worry about facing bankruptcy if they become ill, and everyone is healthier than the nation along its southern border.
    As for my own understanding of the American healthcare system, having been in the frontlines of it for almost four decades, I do feel reasonably qualified to express my observation that by leaving fifty million uninsured, it is severely dysfunctional and failing the people it is meant to serve.

    Dr E
    Posted March 20, 2012 at 4:53 pm

    As long as we have a democracy, flawed as it is, WE are the government, and its failings are our failings. Voting isn’t the end of our civic responsibility. We’re responsible for monitoring the behavior of our elected officials, for organizing and protesting and making our voices heard when they misbehave. We are responsible for the failings of our healthcare system, not some abstract idea of a self-existent government. The feeling of helplessness coming through some of these comments is absurd.

    Posted March 21, 2012 at 7:12 am

    The Affordable Care Act isn’t the solution but it’s a first step. Employment based insurance is gradually being phased out much like what happened to pension plans. This trend coupled with a possible Republican dominated government will result in significantly more people -young and old- having to deal with individual health insurance gouging or paying medical bills on their own. When that happens, more people will go without care and revenue to health care providers will drop significantly.

    Don Schoenbeck
    Posted March 21, 2012 at 7:22 am

    To Don
    I completely agree with you on this. The current system with its egregious pricing structure has to implode. I wrote about this topic six months ago

    Dr E
    Posted March 21, 2012 at 8:42 am

    Thank you Don and Dr. David E. for your dialogue. I had suspected Don would enjoy the good doctor’s writing ability, and vice versa. I am a patient of Dr. Edelberg’s, Don is my old friend from age 10 on…

    abner cunningham
    Posted March 21, 2012 at 8:53 pm

    Thank you for taking the time to provide this valuable information to your patients. As one of your patients for over 15 years, I have appreciated the time you have spent with me. Unfortunately, I will be moving to Medicare this fall and this article made me realize you can’t (and for good reason) accept Medicare patients. Still, you are doing the right thing for your patients.

    Dawn Lullo
    Posted March 25, 2012 at 12:12 pm

    Do you two believe it is unconstitutional to require everyone to purchase health insurance (or anything else)? (Hi, Dr. Kelley!) Thank you..

    Carol Smith Litten
    Posted March 25, 2012 at 6:17 pm

    Hi Carol
    To my knowledge, no one has tested the constitutionality of our legal requirement to own auto liability insurance so I personally have been puzzled why all the fuss has been made about health insurance.
    However, I do believe it is within the limits of the constitution that a law can be created requiring every citizen to purchase health insurance. The constitutions of both France and Germany are actually similar to ours. These laws are on their books and have gone unchallenged for years.
    What I believe is irrelevant. The Supreme Court is wrestling with just this issue right now.

    Dr E
    Posted March 26, 2012 at 1:03 pm

    The constitutionality question in re health care requirements is partly related to the Tenth Amendment, which states: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” The States’ rights issue is probably the reason the Supreme Court agreed to hear the case. Auto insurance requirements are State laws.

    Posted March 26, 2012 at 2:32 pm

    Good morning,

    I agree that the Affordable Health Care Act is a good starting point. Hopefully, the individual mandate will not be rescinded by the Supreme Court or the Republicans.

    I, however, did not see any “death committee” type negative ads by the insurance industry. I did see a reasonable, well-balanced TV ad in which the industry stated its opposition to the public option but also stated its support for the individual mandate and no underwriting.

    Please refer me to your documentation that the insurance industry used “death committees” or similar “all stops” ads.


    Mike Welborn

    Michael B. Welborn
    Posted March 27, 2012 at 10:43 am

    Canadas system sounds wonderful. It is too bad that we have so many people here (way more illegals than Canada also) who don’t seem to understand that they, too, should be paying something in taxes, to pay for their health care and many other things.

    linda wolf
    Posted April 3, 2012 at 9:01 am

    I have always enjoyed your letters to us, the patients, but I was extremely dissapointed to learn that you opted out of Medicare. I’m 65 yrs. old and since I attended the last open house and met you I’ve thought of making an appointment to see you. I have two doctors that I see all the time( I have CLL ), I have four other doctors that I see between once and three times a year and they ALWAYS give me the time I need and they all take MEDICARE!!!

    Ellen Novak
    Posted April 8, 2012 at 3:38 pm

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