US Health System Costs Four Times More To Run Than Canada’s Single-Payer System


Americans pay roughly four times as much as Canadians for healthcare and both have roughly similar overall health.

American citizens pay nearly four times as much as Canadians for healthcare, where a single-payer system has been in place since 1962, found a study published this week in the Annals of Internal Medicine, according to The Los Angeles Times

Americans pay an average of $2,497 per year while Canadians pay $551 per person. 

Progressive candidates for the Democratic nomination, including Sen. Bernie Sanders (I-Vt.) and Sen. Elizabeth Warren (D-Mass.), are calling for a “Medicare for All” system. Centrist candidates, including former Vice President Joe Biden and former South Bend, Ind., Mayor Pete Buttigieg, wonder if turning the government into the nation’s sole health insurer is the most effective and efficient. 

The U.S. Centers for Disease Control and Prevention found the overall health of Americans and Canadians to be roughly similar.

Yet, the cost of administering a single-payer system amounts to 17 percent of Canada’s national expenditures on health, whereas it costs the United States twice as much, at 34 percent, which goes to the salaries, marketing budgets, and computers of healthcare administrators in hospitals, nursing homes, and private practices. 

The cost of administering the U.S. network of public and private healthcare programs is $812 billion each year, but 27.9 million Americans remain uninsured, mostly because they cannot afford to enroll in the programs available to them. 

“The U.S.-Canada disparity in administration is clearly large and growing,” the study authors wrote. “Discussions of health reform in the United States should consider whether $812 billion devoted annually to health administration is money well spent.”

America’s Health Insurance Plans, a group representing private health insurance companies, argue that administrative practices shouldn’t be blamed for increasing the cost of care in the U.S.

“Study after study continues to demonstrate the value of innovative solutions brought by the free market,” AHIP said in a statement. “In head-to-head comparisons, the free market continues to be more efficient than government-run systems.”

However, the study authors concluded that bringing the U.S. healthcare system in line with Canada’s could save Americans $628 billion a year while getting the same healthcare. 

“The United States is currently wasting at least $600 billion on healthcare paperwork -- money that could be saved by going to a simple ‘Medicare for All’ system,” said senior author Dr. Stephanie Woolhandler, a health policy researcher at Hunter College.

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