Various studies have proved that macro-economy factors have a significant impact on health care costs and the same is explained hereunder:
Impact of Inflation:
Evil effects of inflation can also be experienced in health care sector. High inflation rate in health care sectors have subsequently increased the health care cost. For instance, cost of modern medicines is not affordable to most households in lower income and middle income counties. According to a study, around 20-30% of households are forced to sell their assets to cover up their health care expenses.
Impact of Exchange Rates:
Flexible Exchange Rates directly affects the price of imported vaccines, equipment and medicines.
Policy of the government related to taxation on health insurances is a major contributor in determining the cost of health care. This directly affects as how many people will have insurances and how many will be deprived of it because of high cost of health insurances.
Both the Canadian and US Health care systems are different from each other. During 2004, despite of the fact that per-capita spending in US($6714) was double than that of per-capita spending in Canada($3678), healthcare in US is still not as good as in Canada. This is evident from the finding that, while life expectancy is higher in Canada, the infant mortality rate is lower as compared to US.
In another statistical comparison of hospital-care, physician services, and drug prescription service expenditure per GDP in US and Canada., in a report issued by Canadian Institute for Health Information(CIHI), we see that the hospital-care spending per GDP in 1975 and 1980 was higher in the U.S. than in Canada. It was 3.2% and 3.6% in 1975 and 1980 respectively in the U.S., while in Canada 13 it is 2.9% in 1975 and 1980. However, the gap was high in 2008; it is 5.5% in the U.S. while it is 3.1% in Canada.
Similarly, the physician services expenditure per GDP was also higher in the U.S. compared to Canada. It was 0.6% in Canada in 1975 and 1.5% in the U.S. and in 2008 it was 3.8% in the U.S. while in Canada it is 1.4%.
In another comparison, the drug prescription expenditure per GDP has been higher in Canada compared to the U.S. since 1975. It was 0.6% in 1975, 1.0% in 1990 and 1.4% in 2000 in Canada while in the U.S. it was 0.5% 1975, 0.7% in 1990 and 1.2% in 2000. However, between 2008 and 2012 the drug prescription expenditure in the U.S. was higher compared to Canada after several years. It was 1.8% in 2008 in the U.S. and 1.7% in Canada.
These statistical evidence proved that the despite of higher expenditure on heath care in the United States, Canadian Health Care System is far better and indeed a model for US Health Care System. According to a report published by WHO on health care systems during the year 2000, while US was ranked 37th, Canada was on 30th rank.
The Major difference between health care systems of both the nations is the source of funding. In canada, major portion of the health care is a single payer and public funded, while in the United States, it is multi payer and heavily privatized.
In Canada, although each province and territory administers its own health care plan, but every Canadian individual can expect to be covered under a number of health care services irrespective of their province or territory. The major expenditure on health care in Canada is provided by the government.
In contrast, there is a lot of unresolved friction between the state and regional health care plans and now with the launch of Obamacare and with the decision of the supreme court to end the obligation of the federal government to aid the medical coverage of regional and state health care plans, it is expected that these differences will further exacerbate.
Anazia, C. (2012). Comparative Analysis of Healthcare Expenditure in. Logan: Utah State University.
Hsiao, W. (2000). What should macroeconomists know about health care policy? International Monetary Fund.
MAIONI, A. (2013, october 3). Obamacare vs. Canada: Five key differences. Retrieved February 16, 2014, from The Globe and Mail: http://www.theglobeandmail.com/globe-debate/obamacare-vs-canada-five-key-differences/article14657740/