Canada: #17 in the 2020 World Index of Healthcare Innovation

Introduction

Canada ranks 17th in the World Index of Healthcare Innovation, with a score of 47.05. Canada performed best on Quality (61.55, #11), but is weakest on Fiscal Sustainability (53.48, #23).

Canada enjoys a low debt-to-GDP ratio of 39.0%, driven by its relative parsimony on health care (10.7% of GDP). While many in the U.S. seek to purchase prescription drugs in Canada, Canadians actually must endure the second-highest drug prices in the world. And Canadian patients benefit from the availability of high-quality care in the United States, should they be unable to receive treatment in Canada.

Background

Canada’s single-payer system was built by individual provinces, starting with Saskatchewan in 1947. In 1966, the federal government passed the Medical Care Act, establishing single-payer coverage for physician costs at the provincial level via block grants. Indeed, while the Canadian system is viewed as a left-wing one in the United States, Canada’s approach to decentralized health system management is more akin to what U.S. conservatives have advocated 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, like dental, vision, and home care, as well as prescription drugs and private rooms in hospitals. Yet, private insurance accounted for nearly 12 percent of total health spending, while approximately 70 percent of total health spending came from public sources.

There is a balance between private and public hospitals, with nonprofit hospitals being predominately managed 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 fee-for-service. Across Canada, electronic health records are being adopted, with a 73 percent adoption rate by primary care physicians in 2015.

Cost-controls occur through single-payer purchasing, as 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 costs of generic drugs and control over pricing under public drug plans, leading to some inter-provincial variation of pharmaceuticals available to the public.

Quality

Canada’s overall quality (11th) ranked in the top third of countries. In particular, Canada scored well regarding the measures of preventable disease and patient-centered services, each ranking 10th in their respective subcategory analyses.

Choice

The Canadian system does not allow as much patient choice as other world health systems, ranking it near the bottom third (19th). While the patient access to new technologies ranked high (6th), the freedom to choose health care services ranked 25th.

Science & Technology

Canada’s overall contribution to scientific and technological innovation ranked slightly below the median at 17th. Canada’s slow adoption of nationwide EHR usage (25 of 31) lowered the overall subscore.

Fiscal

Canada’s long-term fiscal sustainability ranked near the median at 15th. The Canadian system faired well in debt-to-GDP ratio at 10th and in curtailing its spending-to-GDP growth over the last decade at 8th. However, Canada has a high rate of public health spending per capita (23rd).