Why is Canadian medicine less expensive?

post by Bill Gardner

Canada spends less on health care than America does (see the chart to the right, from Aaron Carroll at The Incidental Economist). Brendan Saloner asks,

Where are the big areas where Canadian hospitals are saving money? Medical billing is one obvious area where they spend less (and I've seen the research on that), but where else are savings coming from?

Here are my impressions, with the warning that it is based on working in Nova Scotia, rather than expertise in the literature or experience with the rest of Canada. In no particular order:

• Canadians get drugs and services at lower prices (see Kevin Outterson here).
• Canadians spend less on the amenities of health care. The orthopedic specialty hospital that worked on my wife's foot last year had an atrium with a waterfall that descended three floors, and rooms that could have served well in a high-end business hotel. Canadian hospitals feel more like VA hospitals in the US.
• Canadian medicine is leaner. There are, I believe but cannot document, fewer images taken per hospital stay. There is more discussion about the cost of treatments.
• Canadians themselves are also leaner: they have a (worrisome) 24% obesity rate, compared to 34% in the US.
• There are longer wait times for many services and procedures in Canada. This means, for example, you see more elderly people using canes and walkers in Canada. Presumably, some of their US counterparts are rocking artificial hips and knees.
• Canadian physicians are paid less than American physicians. Canadian docs may, however, work fewer hours. 
• Canadian care may be better integrated than US care, leading to efficiencies, but I am not sure how to document that.

Thanks to The Incidental Economist bloggers, who more or less wrote this post for me.