TORONTO, ON—Canada’s government-monopoly health insurance system is the sixth most expensive among 28 OECD countries but ranks far below average when it comes to providing medical resources and services, according to a new report from the Fraser Institute, Canada’s leading public policy think-tank.

The report, Value for Money from Health Insurance Systems in Canada and the OECD, finds that patient cost sharing, private competition in medical services and comprehensive parallel private health insurance are commonly found in the majority of OECD (Organization for Economic Co-operation and Development) countries studied. The study’s authors recommend that the federal government suspend enforcement of the Canada Health Act to allow the provinces to experiment with five-year comprehensive policy trials to see whether these commonly used policies would improve the value for money spent on Canadian health care.

“Canada is one of only four OECD countries studied that do not require some form of patient cost sharing for medically necessary health care services and it’s the only country that does not allow its citizens to purchase private comprehensive medical insurance,” said Mark Rovere, Fraser Institute associate director of health policy research and study co-author.

“Despite having one of the highest levels of spending, the Canadian health insurance system fails to provide Canadians with the same levels of access to medical resources and services as most other comparable countries.”

Quebec’s Liberal government announced in its 2010 budget that it would implement health care user fees in 2011, but reversed its position under political pressure and scrapped the plan.

The Institute’s study also follows a recent report from the Paris-based OECD in September that recommended Canada adopt user fees and encourage competition within its health care system in order to slow the unsustainable rate of growth in public health spending.

The Fraser Institute’s study uses the most recent comparable data from 2007 to compare the performance of health insurance systems in 28 OECD countries, including Canada, by examining national health spending as a percentage of GDP and 18 indicators of medical resource availability and output of medical services.

The study found that the United States had the highest rate of health insurance expenditures at 15.7 percent of GDP, followed by France (11.0 percent), Switzerland (10.6 per cent), Germany (10.4 percent), and Austria (10.3 percent).

“The United States spends the most on health care but at least is in the top ranks when it comes to the availability of medical resources and services. By comparison, Canadian health care costs are among the highest in the world but our system produces relatively poor access to medical goods and services,” Rovere said.

In terms of medical resource availability and provision of medical services, Canada fell below the OECD average and ranked sub-par in 12 of the 18 indicators. Canada exceeded the OECD average on just six of the 18 indicators.

The study points out that the countries that surpass Canada in terms of delivering health care and medical resources have insurance systems with at least one or all of the following attributes:

• Some type of consumer/patient cost sharing for the use of publicly funded hospital care, general practitioner care, and/or specialist care;
• Medical care is financed through some form of social insurance where individuals and employers make direct and significant contributions to premiums; and
• Private for-profit hospitals are permitted to bill public insurers for services.

Additionally, Canada is the only country where private comprehensive medical insurance is effectively prohibited. In Canada, private insurance is only permitted to cover goods and services that are not covered by the universal government-run health insurance plan, mainly dental services and prescription drugs.

“The evidence shows that Canada’s government-run monopoly health insurance system does not produce good value for money. The system is expensive and is increasingly characterized by the rationing of health services, long waits for medical treatments, and limited availability of the latest medical technologies,” Rovere said.

“It’s time to try some of the things used successfully in other countries. We need to experiment with cost-sharing, competition and consumer choice here in Canada.”