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How the Canadian Universal Health Care System Works

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My experience with a broken ankle illustrates the strengths of the Canadian health care system.

My experience with a broken ankle illustrates the strengths of the Canadian health care system.

A Broken Ankle

It was one chilly January morning in Ontario, Canada, when I slipped and broke my ankle. Up until that point, at 27 years old, I had never had a major injury or illness. Now I was faced with my first and was then faced dealing with a universal health care system.

After a visit to the ER, where the bone break was confirmed, I was sent for surgery that evening to have a titanium plate screwed into my fibula and sent home afterward. The break to post-op recovery took 15 hours. My American family members later asked me how much everything cost. The ER visit, the surgery, the five follow-up appointments, air cast, crutches, and 12 weeks of physiotherapy brought my grand total to $30 for parking at the hospital.

My surgically repaired ankle with a titanium plate and seven screws.

My surgically repaired ankle with a titanium plate and seven screws.

No extensive insurance forms, co-pays, health savings accounts, or a GoFundMe page were needed. Just my Ontario Health Card and some basic supplementary health coverage from my employer. The same American family members would then ask me the natural question: How does this system work?

It is important to note that for this article, I am speaking from the Ontario perspective. While overall health care coverage is comparable across Canada, each province and territory has its own unique system. A Canadian can receive health coverage if fallen ill in another province, however, regardless of residency status in that region.

What Is Covered Under Canada's system?

Let's start with a basic question of what's covered under Canada's health care system beyond what is described in my story.

Canada's system is formalized in the federally mandated Canada Health Act that sets out standards for the provinces and territories to administer universal health care for their residents.

What this means is that taxes are paid at the provincial level to pay for the actual health care system. This is why health care coverage varies across the country depending on where you live, but each province must adhere to the federal standards of universal, non-profit health coverage.

Ontario's system (OHIP) is considered universal. At the same time, it does not include dental or prescriptions for all. A wide array of basic health care is covered under OHIP, such as:

  • family doctor visits
  • trips to the emergency room
  • walk-in clinics
  • non-elective surgeries
  • childbirth and lactation specialists
  • cancer treatment
  • flu shots and most vaccinations (i.e., Hepatitis B, MMR, Polio, etc.)
  • eye exams (for children)
  • non-elective eye surgeries, such as cataracts

There is much more that is covered, including partial coverage of physiotherapy sessions and certain dental procedures. Not everything on the spectrum of potential health and wellness needs is covered under OHIP, but it is quite comprehensive.

Who is Covered Under Canada's Universal Health Care System?

In Ontario, OHIP is not reserved only for Canadian citizens. There are a number of statuses that qualify for coverage.

Here is a list of those who have access to health coverage under OHIP:

  • Canadian citizens
  • Those with permanent residence status
  • Those designated as part of an Indigenous group in Canada as registered under the Indian Act
  • Those who have been named a "protected person" or a convention refugee
  • Those with a valid work permit of over 6 months and are a spouse or dependent child of the person with the valid permit
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There are also several people who are eligible depending on the qualifying work program, such as the Seasonal Agricultural Worker Program administered at the federal government level.

How do Hospitals and Doctors Operate in Canada?

Like many modern, industrial nations, Canada has had a universal health care system for decades which means its hospitals and doctors have developed into a fairly cohesive system of cooperation with the province.

As I live in Ontario, my universal health care experience is different than, say, someone in Quebec or British Columbia. Doctors in Ontario operate similar to a small business, but a heavily regulated business. If they have an office, nurses, and support staff, this would be typical overhead for the doctor to pay for our of their revenue earned from the province for services rendered for their patients.

Doctors are paid under a "fee for service" agreement where they are paid by the province for every procedure and patient they see. The doctor is "reimbursed" by the province for procedures done at a specific rate making the cost to the government quite regulated compared to the United States.

Hospitals operate as a non-profit with doctors working within the hospital but separate within their individual practices. While nurses and support staff are employed directly by the hospital through budgets that are funded at the provincial level. Most hospitals also have charitable foundations that pay for additional programs and services, such as shuttle services for cancer patients and capital expenses like new equipment.

There are further nuances to these descriptions, such as doctors working together in family health teams that act like a joint venture, but I do not believe these differences are vital to the description of the overall system.

Are Canadians Taxed Heavily for Health Care?

The answer to the question of whether Canadians are heavily taxed for health care is fairly relative. For example, according to a report by the Organisation for Economic Co-operation and Development (OECD), Canadians pay an average tax burden lower than that of Americans. As opposed to trying to make an apples-to-apples comparison, which is quite difficult given the difference in systems, let's look at how much is spent by Americans and Canadians on their public systems, Medicare in the US, and the Canadian universal health care system.

The U.S. federal government spent $702 billion in 2017 on Medicare, which serves 58 million Americans. This equates to a cost of approximately $2,163 USD per capita. Meanwhile, Canadians spent $242 billion (CAD) or $192.3 billion USD in the same year. This comes out to $5,265 USD per capita.

Yes, Canadians pay more per capita for public health care, but when factoring in how much the average American pays in private insurance, that number goes up dramatically. The calculations above also do not factor in the nearly 300 million Americans who are not covered under Medicare but pay for the $702 billion program in taxes regardless of whether they received services from it.

According to eHealthInsurance, an average American in 2016 would have spent approximately $3,852 in health insurance coverage, and if they spent another $4,358 to meet their deductible, they would pay out of pocket a total of $8,210 per year for health insurance. This would bring the total cost of health care in taxes and insurance for the average American to $10,373 per year.

And it is important to note that this is just the insurance cost, not factoring in the cost of covering the patient cost of procedures and doctor's visits that insurance does not completely cover.

Supplementary Health Insurance in Canada

As in most universal health care systems, supplementary health insurance can be purchased to fill the gaps that the public system does not cover. In the case of Ontario, this includes dental, optical, prescription drugs, paramedical services (i.e., chiropractic services, counseling, physiotherapy, and registered massage therapist), and can also enhance existing public services.

This last part can be illustrated in additional benefits around things like birthing suites at hospitals. For example, when my children were born, our hospital had a few options for physically staying in the hospital. We had a private birthing suite, but because of our enhanced insurance coverage through my wife's employer, it ensured we would have a private room after the birth. This came in handy when our oldest had an extended stay in the Neonatal Intensive Care Unit for a few extra days post-birth. OHIP covered everything from the birth to lactation specialists and even the NICU stay for our son, but the enhanced benefits granted us an added layer of comfort over the days following the birth.

Most supplemental health insurance plans are offered by employers of a certain size, and depending on the company, the cost can be 100% covered by the employer. Self-employed Canadians, or those unable to receive benefits through their employer, can also purchase insurance themselves. This is most often utilized for family dental, optical, and prescription medicine coverage, but plans range in options and level of coverage.

How Good is Canadian Health Care?

Canadians are quite proud of their health care system. It serves millions year after year, ensuring every citizen, regardless of their wealth, has access to comprehensive health care, not just for emergencies.

I will be the first to say that the Canadian system is not perfect. Wait times for doctors and at emergency rooms remain a consistent issue. Rural communities can have a difficult time recruiting doctors. And receiving a referral to a specialist has routinely been a point of contention among public health advocates in Ontario.

There is also no universal pharma-care coverage, which is a topic that is emerging more and more during election years, both at the federal and provincial levels.

That being said, the average life expectancy in Canada is 82.0 years, according to the OECD, while it is 78.6 years of age in the United States. Canada's infant mortality rate is not the best when compared to fellow G7 countries at 4.5 per 1000 births, but the United States is last at 5.8 per 1000 births. The United States also has the highest rate of death from cancer among its G7 counterparts and is the only one without universal health care.

So, while there are flaws in Canada's system that frustrate many, the statistics show our American neighbors are not seeing the overall benefit of one of the most advanced health care systems ever created.

This was a brief overview of a complex system. There are many individual stories and details, pros and cons, making Canada's universal health care system what it is, for better or for worse. We can only hope that it gets better and remains a pillar of a nation that prides itself on its universal health care system.

This content is accurate and true to the best of the author’s knowledge and does not substitute for diagnosis, prognosis, treatment, prescription, and/or dietary advice from a licensed health professional. Drugs, supplements, and natural remedies may have dangerous side effects. If pregnant or nursing, consult with a qualified provider on an individual basis. Seek immediate help if you are experiencing a medical emergency.

© 2019 David Tubbs


David Tubbs (author) from Ontario, Canada on August 15, 2019:

I found that during my research, much of the G7 were comparable on a lot of things from the health care perspective, except for the U.S. It remains an odd outlier and with Canada so close to the U.S., many people here only see the low wait times at ERs and specialists and think it's perfect. I do wish people could have a chance to truly experience both and make an informed decision.

Liz Westwood from UK on August 15, 2019:

It is interesting to see the parallels between the Canadian system and the National Health Service in the UK. Although the NHS struggles to keep up with the demands of a growing and aging population, we are fortunate in its provision. A relative of ours had an experience similar to yours and he paid nothing.

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