Canada: #23 in the 2021 World Index of Healthcare Innovation

Introduction

Canada ranked 23rd in the 2021 WIHI Analysis — a drop from 17th a year before. In many ways, Canada was emblematic of many countries in the WIHI analysis; it performed well in specific Dimensions but less so in others. For instance, in the Dimensions for Choice and Fiscal Sustainability, Canada ranked 22nd and 26th. However, in the Dimensions for Quality and Science and Technology, it ranked 11th and 17th, respectively.

Background

Canada’s single-payer system began in individual provinces like Saskatchewan in 1947. Then, in 1966, the federal government passed the Medical Care Act that established single-payer coverage for physician costs at the provincial level. Block grants fund these physician services. (Interestingly, while many in the U.S. view the Canadian system as a form of “socialized medicine,” it employs a decentralized approach to health system management akin to what many U.S. conservatives want for Medicaid.)

In Canada, public coverage is universal and free at the point of care. But over two-thirds of Canadians buy complementary private insurance for services excluded from federal reimbursements, such as dental, vision, and home care. Private insurance also covers many prescription drugs and private hospital rooms. Nevertheless, private insurance accounted for around 12 percent of total health spending. Moreover, public insurance accounted for approximately 70 percent of Canada’s total health spending.

There is a balance between private and public hospitals in Canada, with nonprofit hospitals managed predominately by regional hospital boards representing the community. Some provinces — like Ontario — feature mostly private, nonprofit hospitals, while other provinces feature publicly owned regional hospitals. Hospital-based physicians are not hospital employees and are paid directly via a fee-for-service mechanism.

Cost-controls occur through single-payer purchasing — evidenced through mandatory federal budgets for hospitals and regional health authorities, drug formularies, and negotiated provider fee schedules. Additionally, the Patented Medicine Prices Review Board serves as an independent body regulating the introductory prices of patented medications. Provinces typically hold jurisdiction over the costs of generic drugs and control pricing under public drug plans, leading to some inter-provincial variation of pharmaceuticals available to the public.

Economically, Canada enjoys a low debt-to-GDP ratio of near 39 percent and health care costs around 11 percent of GDP. Although many Americans look to purchase prescription drugs in Canada, Canadians endure the second-highest drug prices in the world.

Quality

Canada ranked 11th in the WIHI Dimension for Quality. In particular, Canada scored well in three Elements: “Measures of Preventable Disease” (9th), “Patient-Centered Care” (10th), and “Infrastructure” (13th). In the newly calibrated Element “Pandemic Preparedness and Response,” Canada ranked 17th.

Choice

Canada ranked 22nd in the Dimension for Choice. While the Canadian system ranked highly in the Element “Access to New Treatments” (4th), it performed poorly in the metric “Freedom to Choose Health Care Services” (23rd). The affordability of its health insurance sat near the median and ranked 16th in the Element “Affordability of Health Insurance.”

Science & Technology

Canada ranked 17th in the Dimension for Science and Technology, just slightly below the median. In particular, two Elements held Canada’s score back: “Medical Advances” (24th) and “IT” (25th). It performed above average in the Element “Scientific Discoveries” (14th).

Fiscal Sustainability

Canada ranked 26th in the WIHI Dimension for Fiscal Sustainability. This low ranking stemmed from two Elements in particular, “National Solvency” (22nd) and “Public Health Care Spending” (23rd). The Canadian system held a respectable debt-to-GDP ratio and curtailed its health care spending-to-GDP growth over the last decade, as reflected in the Element “Growth in Public Health Spending,” where it ranked 16th.