Canadian Health Insurance:

Lessons for the United States

HRD-91-90: Published: Jun 4, 1991. Publicly Released: Jun 4, 1991.

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Pursuant to a congressional request, GAO reviewed Canada's universal, publicly funded health insurance system, focusing on the implications for health care costs and access if the U.S. adopted elements of the system.

GAO found that: (1) the Canadian system provided health insurance coverage to all residents regardless of financial or health status, with access limited only by each province's annual health care budget; (2) Canada's single payer arrangement lowered the cost of administering private and public health insurance and helped reduce the administrative costs borne by hospitals, physicians, and patients; (3) the single payer framework limited spending growth for physician services by controlling physician fees; (4) Canada constrained hospital costs by allocating lump-sum budgets to individual hospitals and setting constraints on the acquisition and use of high-technology equipment and services; (5) Canadians experienced few problems with access to primary care services, but limited hospital operating budgets for new medical technology limited patients' access to some high-technology services; (6) Canadian patients with immediate or life-threatening needs rarely waited for services, but waiting lists for elective surgery and diagnostic procedures were sometimes several months long; (7) if the United States employed a system of universal coverage and a single payer arrangement, the savings in administrative costs would be more than enough to offset the expense of universal coverage in the short term; and (8) in the long term, effective limitations on provider payments through global budgeting and negotiated physician fees could significantly constrain the future growth of U.S. health spending, leading to further cost savings.

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