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Government and public health and public policy analysts often make a comparison of the Canadian and American health care systems because the two countries at one time had very similar health care systems until the Canadians began reforming their system in the 1960s and 1970s. The U.S. spends much more on health care than Canada, both on a per-capita basis and as a percentage of GDP. In 2006, per-capita spending for health care in Canada was US$3,678; in the U.S., US$6,714. The U.S. spent 15.3% of GDP on health care in that year; Canada spent 10.0%. In 2006, 70% of health care spending in Canada was financed by government, versus 46% in the United States. Total government spending per capita in the U.S. on health care was 23% higher than Canadian government spending, and U.S. government expenditure on health care was just under 83% of total Canadian spending (public and private).

Studies have come to different conclusions about the result of this disparity in spending. A 2007 review of all studies comparing health outcomes in Canada and the US in a Canadian peer-reviewed medical journal found that "health outcomes may be superior in patients cared for in Canada versus the United States, but differences are not consistent." Life expectancy is longer in Canada, and its infant mortality rate is lower than that of the U.S., but there is debate about the underlying causes of these differences. One commonly-cited comparison, the 2000 World Health Organization's ratings of "overall health service performance", which used a "composite measure of achievement in the level of health, the distribution of health, the level of responsiveness and fairness of financial contribution", ranked Canada 30th and the U.S. 37th among 191 member nations. This study rated the US "responsiveness", or quality of service for individuals receiving treatment, as 1st, compared with 7th for Canada. However, the average life expectancy for Canadians was 80.34 years compared with 78.6 years for residents of the U.S.

The WHO's study methods were criticized by some analyses. Some argue that Canada has had higher mortality rates for some conditions, such as heart disease, owing to the use of particular medications. Although there is a measure of consensus that life-expectancy and infant mortality mark the most reliable ways to compare nation-wide health care, a recent report by the Congressional Research Service carefully summarizes some recent data and notes the "difficult research issues" facing international comparisons.

The health care system in Canada is funded by a mix of public (70%) and private (30%) funding, with most services delivered by private (both for-profit and not-for-profit) providers.

Through all entities in its public-private system, the U.S. spends more per capita than any other nation in the world, but is the only wealthy industrialized country in the world that lacks some form of universal health care.

Health care costs in both countries are rising faster than inflation. As both countries consider changes to their systems, there is debate over whether resources should be added to the public or private sector. Although Canadians and Americans have each looked to the other for ways to improve their respective health care systems, there exists a substantial amount of conflicting information regarding the relative merits of the two systems. In Canada, the United States is used as a model and as a warning against increasing private sector involvement in financing health care. In the U.S., meanwhile, Canada's mostly monopsonistic health system is seen by different sides of the ideological spectrum as either a model to be followed or avoided.

Government involvement

In 2004, government funding of health care in Canada was equivalent to US$ 1,893 per head of population. In the U.S. government spending per head of population was US $2,728.

Canada and the United States had similar health care systems in the early 1960s, but now have a different mix of funding mechanisms. Canada's universal single-payer health care system covers about 70% of expenditures, and the Canada Health Act requires that all insured persons be fully insured, without co-payments or user fees, for all medically necessary hospital and physician care. About 91% of hospital expenditures and 99% of total physician services are financed by the public sector . Ophthalmology and dental services account for a lot of the private expenditures in Canada. In the United States, with its mixed public-private system, 16% or 45 million Americans are uninsured at any one time. The U.S. is one of three OECD countries not to have some form of universal health coverage; the other two being Turkey and Mexico. (by November 2008 Mexico established a universal healthcare program)

The governments of both nations are closely involved in health care. The central structural difference between the two is in health insurance. In Canada, the federal government is committed to providing funding support to its provincial governments for health care expenditures as long as the province in question abides by accessibility guarantees as set out in the Canada Health Act, which explicitly prohibits billing end users for procedures that are covered by Medicare. While some label Canada's system as "socialized medicine," the term is inaccurate. Unlike systems with public delivery, such as the UK, the Canadian system provides public coverage for private delivery. As Princeton University health economist Uwe E. Reinhardt notes, single-payer systems are not "socialized medicine" but "social insurance" systems, because doctors are in the private sector. Similarly, Canadian hospitals are controlled by private boards and/or regional health authorities, rather than being part of government.

In the U.S., direct government funding of health care is limited to Medicare, Medicaid, and the State Children's Health Insurance Program (SCHIP), which cover eligible senior citizens, the very poor, disabled persons, and children. The federal government also runs the Veterans Administration, which provides care to veterans, their families, and survivors through medical centers and clinics.

The U.S. government also runs the Military Health System. In Fiscal Year 2007, the MHS had total budget authority of $39.4 billion and served approximately 9.1 million beneficiaries, including Active Duty personnel and their families and retirees and their families. The MHS includes 133,000 personnel, 86,000 military and 47,000 civilian, working at more than 1,000 locations worldwide, including 70 inpatient facilities and 1,085 medical, dental, and veterinary clinics.

One study estimates that about 25 percent of the uninsured in the U.S. are eligible for these programs but remain unenrolled; however, extending coverage to all who are eligible remains a fiscal and political challenge.

For everyone else, health insurance must be paid for privately. Some 59% of U.S. residents have access to health care insurance through employers, although this figure is decreasing, and coverages as well as workers' expected contributions vary widely. Those whose employers do not offer health insurance, as well as those who are self-employed or unemployed, must purchase it on their own. Nearly 27 million of the 45 million uninsured U.S. residents worked at least part-time in 2007, and more than a third were in households that earned $50,000 or more per year.

Despite the greater role of private business in the U.S., federal and state agencies are increasingly involved in U.S. health care spending, paying about 45% of the $2.2 trillion the nation spent on medical care in 2004. The U.S. government spends more on health care than on Social Security and national defense combined, according to the Brookings Institution.

Beyond its direct spending, the U.S. government is also highly involved in health care through regulation and legislation. For example, the Health Maintenance Organization Act of 1973 provided grants and loans to subsidize Health Maintenance Organizations and contained provisions to stimulate their popularity. HMOs had been declining before the law; by 2002 there were 500 such plans enrolling 76 million people.

The Canadian system has been 69–75% publicly funded, though most services are delivered by private providers, including physicians (although they may derive their revenue primarily from government billings). Although some doctors work on a purely fee-for-service basis (usually family physicians), some family physicians and most specialists are paid through a combination of fee-for-service and fixed contracts with hospitals or health service management organizations.

Canada's universal health plan does not cover certain services. Non-cosmetic dental care is covered for children up to age 14 in some provinces. Outpatient prescription drugs are not required to be covered, but some provinces have drug cost programs that cover most drug costs for certain populations. In every province, seniors receiving the Guaranteed Income Supplement have significant additional coverage; some provinces expand forms of drug coverage to all seniors, low-income families, those on social assistance, or those with certain medical conditions. Some provinces cover all drug prescriptions over a certain portion of a family's income. Drug prices are also regulated, so brand-name prescription drugs are often significantly cheaper than i

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