Private Insurers and Private Individuals

The remaining 30% of health costs are divided about equally between private insurers and private individuals paying out of pocket. Private insurance takes two forms. Most commonly, Canadians purchase private insurance to cover services not included in the national health insurance system. In addition, some provinces now allow residents to purchase private insurance that covers services that are included in the national health system. Such insurance enables individuals to buy these services immediately rather than having to wait their turn in the national health insurance system.

Paying Doctors and Hospitals Hospital doctors in Canada are paid on salary. Most nonhospital doctors work in private practices and are paid on a fee-for-service basis by the government insurance systems. Doctors submit their bills directly to the health insurance system using fee schedules negotiated annually between the provincial med- ical associations and provincial governments. Unlike in the United States, doctors in Canada can’t balance bill (or “extra bill,” as it is known in Canada): billing patients for the difference between what the patients’ insurance will pay and what the doctor wants to charge. In addition, some provinces control costs by setting annual caps on the total amounts they will reimburse doctors. In practice, this means reimbursing doctors less for each service rendered as the total number of services rises.

Canadian hospitals (almost all of which are nonprofit) annually receive an operating budget and a capital expenditure budget from their provincial insurance system. Hospitals can spend their budgets as they like as long as they provide care to anyone in their region who needs services.

Access to Care Canadians average eight doctor visits per person per year com- pared with four visits for U.S. citizens. Waiting times for tech- nologically complex care have been a problem in Canada, although rarely in life-threatening circumstances. Most importantly, Canadians are far less likely than U.S. residents to go without needed health care for financial reasons or to risk bankruptcy if they do seek health care. Moreover, although Canadians are less likely to receive certain high-technology procedures such as coronary artery bypass surgery, this may reflect overuse in the United States rather than underuse in Canada.