Health care ‘rationing’: Canada vs. the USA

Once again, and I hope you will forgive the digression, I’d like to talk a bit about something that has absolutely nothing at all to do with the usual topics of this blog. This topic is one that is more in line with my professional interests rather than my personal ones (if those two can be really thought of as distinct – I chose this career for a reason). As I may have intimated previously, I am a passionate believer in public provision of health care services.

While private-sector advocates often point to the increased competition and innovation possible in a for-profit delivery model, they neglect two important factors in their argument. First, health care is consumed almost entirely at a point of crisis. People walking into a hospital are not really in a position to “shop around” – they have an acute need and are therefore far less capable of making a dispassionate consumer choice. Second, the only way a for-profit health care delivery system could work is if it is either stringently regulated (a position that is wildly unpopular) or if we just stopped caring if sick people get gouged by unscrupulous corporate interests. Private delivery has the interest of maximizing profit, and while increasing efficiency is one avenue of doing that, companies have figured out that extra billing and price fixing are much more lucrative ways of turning a profit.

The debate over health care reform in the United States has introduced a new word into the public lexicon: rationing. Basically, rationing refers to the belief that under a publicly-administrated health care system, only a certain level of care would be available, and if you want more than that, it’s tough shit. It is from this idea (and an intentional misrepresentation of ‘end-of-life counselling’) that the now-infamous “death panels” became a talking point. People became outraged at the idea that the government would step in and say “grandma can’t have that hip replacement, because it’s too expensive”.

First, here’s what’s true about that argument: a publicly-provided health care system will introduce rationing. There will be medications, technologies and procedures that people will not have access to because of lines drawn by government about what is acceptable care and what is excessive.

However, there is already rationing in the American system, and it happens all the time. Any health care system will require rationing – the demand for health care services will always exceed the amount of available resources. Our concepts of disease and health are plastic, and shift as new innovations are made and the understanding of the human body increases. In order to understand health care we must first understand that there is no method of delivery that is free of material constraints – the question then becomes “how can we provide the greatest level of health care with what we’ve got?”

Canada’s approach, and indeed that approach of most industrialized nations that have publicly-funded health care delivery, has been twofold. First, a list of services is drawn up. The Canada Health Act allows for all “medically necessary” services – a definition that is intentionally vague. This imprecise wording means that the number of services that are provided can expand and contract based on need and resource availability. If you have a specific medical need that is not listed – for example, you have a rare disease or want a type of drug that is not covered – then you will have to pay out-of-pocket for it. Obviously, this is non-ideal, but by delineating it this way and drawing up the list in such a way that covers the majority of health care needs, the Canadian system can provide some form of care to everyone, even if it is not the absolute best.

Second, the Canadian system rations in terms of accessibility – the notorious waiting lists. Given a finite level of capital resources (and I am putting human resources on this list as well), demand may fluctuate in such a way as to exceed the availability of the system to deliver services immediately to all people. For example – if you have the ability to do 10 bone scans a day and 11 people walk in the door, 1 person is going to have to wait until tomorrow (when, hopefully, only 9 people will come in). These waiting lists can be managed with varying levels of efficacy, and we’ve gained some ground in recent years. The fact remains, however, that people cannot necessarily get immediate care for all health conditions (although acute and emergency needs are always prioritized and get attention reasonably fast).

Rationing in the United States is far less publicized, and far more dangerous. Given the same situation (finite resources, high demand), the USA’s system handles rationing by artificially reducing demand by curtailing access. Whereas there may be the same proportion of people requiring care, the United States simply does not provide care to certain people. By knocking people off the rolls (prohibitively high cost of insurance, de-insuring people for a variety of reasons, making coverage contingent on employment), the system ensures that everyone who can get care gets it quickly and to the extent they want/can pay for.

The reason why I call this type of non-explicit rationing more dangerous than the Canadian solution is because the consequences are far more dire for individuals and the economy. For individuals, because losing health coverage (or never having it in the first place) means that people are unable to get care for anything but emergency conditions. For the economy, because those emergency conditions are far more expensive to treat than they are to prevent, and because medical bankruptcy has a ripple effect through the economy at large. This is to say nothing of the reality that public provision is far cheaper than for-profit schemes (despite what free-market advocates would have us believe).


While “rationing” sounds like a scary word, people need to realize it is the inevitable result of a level of demand that is always greater than available supply. Rationing is no more rare in a for-profit system than it is in a publicly-funded one; the only difference is the method of rationing we choose to use. The Canadian solution is to provide services up to a certain level with some barriers to access (waiting times). The American solution is to curtail the number of people who are able to access any level of care. These solutions have different effects, and for reasons of both utilitarian ethics and personal/economic outcomes, the Canadian approach is superior.


  1. CHADMAC says


    I was actually living in the US for much of the healthcare debate, and I couldn’t go a day without hearing someone mention “death panels”. My reaction to that was to ask about the insurance companies denying coverage or denying payment of benefits. They are literally deciding who will live and who will die based on the maximizing of shareholder profits. The only moral way to operate the health care system is to take the for-profit motive out of it.

  2. Curt says

    This was a fantastic read!
    I have to admit I was fairly ignorant of much of the info you covered in this post. It certainly gives me a more solid reasoning to be against a two-tiered system.

  3. says

    Thanks for your comment, Curt!

    Yes much about the health care system is a bit counter-intuitive, which is why these arguments never seem to go away. Hopefully you’ll be able to point friends/family here if you ever get into this debate again.

  4. Curt says

    Absolutely. Fortunately I’ve yet to run into any friends or family that would debate the point otherwise.
    If you are interested in a topic along a similar line, I would be interested to hear your opinions on the…I guess you could call it the back door two-tiered system, in which Canadian’s cross the border and seek specialists in the US rather than wait in line for things that may require months of waiting in Canada. I recall listening to a brief talk about that topic on, I believe, White Coat, Black Art on CBC Radio.

    Also, just so you know I found your blog via After seeing your interactions with Joe over there I felt compelled to read more of your stuff! 😉

  5. says

    It’s a knotty problem, because as you note there is a de facto parallel system south of the border for those that can afford to pay. My objection to two-tiered health care delivery is more practical than ideological – two-tiered delivery simply doesn’t work. Part of the reason for that is the fact that American health care providers don’t advertise to Canadians, or offer “border crosser specials” at the expense of public perception of our system. If that started to happen, then we’d have a more interesting debate on our hands. No system is perfect, and we have to live in the world (I have a post coming up on that exact subject soon, so keep an eye out for that). White Coat, Black Art is a great series.

    As far as Joe goes, I’m going to avoid the temptation to trash him on my blog, and just be thankful that he has driven at least one reader my way 😛

Leave a Reply

Your email address will not be published. Required fields are marked *