The Hidden Costs of Single Payer Health Insurance

A Comparison of the United States and Canada

by Brett Skinner, Mark Rovere, and Marisha Warrington
Fraser Institute
September 2008

In practical terms, Canadian patients are unable to buy quicker access or better care than what the government health insurance program provides. In this sense, Canadian patients on waiting lists are worse off than uninsured Americans who may legally use their own money or credit to buy health care if they lack insurance coverage.

The Canadian single-payer system is an example of what not to do in health care. The fact is that single-payer systems are probably the worst way to achieve universal health insurance coverage. If Canada is currently witnessing the failure of its own single-payer health insurance system, why would Americans want to adopt such a system for themselves?

Nevertheless, the problem of the uninsured needs to be solved before a “tipping point” is reached and Americans have a Canadian-style health policy disaster foisted upon them by single-payer advocates who are not fully disclosing all the facts about health care in Canada.

The evidence indicates that the best approach to achieving universal health insurance coverage is to make people prioritize their own income toward the purchase of their own health insurance, not to make some taxpayers buy health insurance for everyone through a redistributive, government health insurance monopoly.

This report will be used by the opponents of single payer health reform in the United States. You should be aware of it so that you can dismiss it as a resource lacking credibility.

The Fraser Institute supports “a free and prosperous world through choice, markets and responsibility.” The quote from their report leaves no doubt as to their ideological preferences for relying on individual responsibility, and rejecting government health insurance.

This report itself is typical of the Fraser Institute in that it presents a very dishonest case in support of their ideology (while accusing U.S. single payer advocates of not fully disclosing all the facts about health care in Canada, a blatantly untrue assertion). Although the report is rife with distortions and untruths, only one example will be discussed here since the compromise in methodology is representative of the others.

The U.S. Census Bureau reported that the uninsured rate of the U.S. population was 15.8 percent in 2006. The Fraser Institute adjusted the number down to 7.9 percent by excluding those who could have been insured, even though they weren’t. (Those who were uninsured for part of the year were also excluded from the Census Bureau numbers; thus the numbers, just as easily, could have been adjusted upwards to represent the total uninsured for all or part of the year.)

Although 100 percent of Canadians are insured, they classified 6.0 percent as “effectively uninsured” because they were unable to establish a relationship with a primary care physician (a problem that we also have in the United States, though no adjustment was made for that).

Thus they conclude, “Based on these figures, the estimated percentage of the population that was ‘effectively’ uninsured for non-emergency, necessary medical services at any given time during 2007 was roughly the same in both countries: 7.9% in the United States, versus 6.0% in Canada.”

Zero percent uninsured in Canada is the same “effectively uninsured” rate as 15.8 percent uninsured in the United States!? In full self-confidence, you can tell the single payer opponents that they can take their Fraser report and… (censored).

Additional comment from a reader: I believe the important thing to keep your eye on in this discussion is OUTCOMES. At the end of the day, this is the measure of whether our system is succeeding or failing. As we found in our research for the American Human Development Report, with $3,326 per person per year, Canada is buying an average of 2.5 additional years of life for their citizens, as compared with our annual expenditure per person of $6,401 on healthcare– nearly double! Canadian life expectancy at birth is 80.4 years, ours is 77.9. Again, looking at other important measures of bang for the buck, Canada has lower infant and child mortality rates than the U.S., far lower rates of low birth weight babies and more. A focus on outcomes seems to be me to be the way to cut through the ideologically-charged discussion of “nanny government” and socialized medicine. I’m attaching a nice editorial board piece that just came out in the Seattle Post-Intelligencer using this argument:

Thx for excellent work following the news and research on this critical issue,

Sarah Burd-Sharps, Co-Director
American Human Development Project