The Problem With Canadian Health Care

The Problem With Canadian Health Care

It’s miles ahead of the American system. But its prescription drug coverage is far from perfect.


Rowan Burdge was diagnosed with type 1 diabetes just over a decade ago, when she was 21 years old. Since then, she estimates that she’s spent over $100,000 on prescriptions, co-pay, deductibles, and premiums to manage a complicated, chronic illness.

This is a familiar problem in the United States, with its deeply unequal, exorbitantly expensive health care system. But Burdge doesn’t live in the United States. She lives in Canada. And while two of the five insurance plans she’s enrolled in are public—British Columbia’s medicare program and the province’s supplementary drug plan—the financial hoops she has had to jump through just to “stay alive,” as she puts it, would be right at home in a story about a country without single-payer health care.

People living in the United States spend almost twice as much on health care as people living in nearly every other high-income country—including Canada, which outperforms the United States on everything from life expectancy to infant mortality. That doesn’t erase the fact that the Canadian system still falls short: Canada is the only country in the world that has a national, universal medical insurance program, but no equivalent drug plan, otherwise known as pharmacare.

Canada’s approach to drug coverage looks less like a unified system than a patchwork, with over 100 different government-run drug plans and 100,000 private plans across the country. Even when doctors’ visits are covered, many Canadians are forced to pay out-of-pocket for prescription drugs, buy into a private drug insurance plan, or hope that their employer will help cover that insurance for them. One in five people living in Canada have either inadequate coverage for their health needs, or no coverage at all. Households with coverage still pay an average of CAD 1,000 annually (about $755) in out-of-pocket costs, including premiums and prescription co-pays, and differences across the various public drug plans run by each Canadian province and territory mean that the price someone pays for a drug in one place might be a lot more than they’d pay in another.

To Americans, these average costs might not sound that bad. But the bills add up fast for someone with a chronic condition; Burdge estimates that she spends between CAD 800 and 1,200 (about $600 to $900) on health needs every month. A report from the Canadian Federation of Nurses Unions found that financial barriers to prescription medicine cause hundreds of premature deaths each year in people aged 55 to 64, to say nothing of other age groups. For one in 10 Canadians—about 3.5 million people—the cost of medicine makes it hard to fill prescriptions, which in 2017 led 1.6 million Canadians to either skip doses or forgo filling a prescription, most often for mental health medication.

The fight over universal pharmacare is a hot issue. In the run-up to last year’s federal election, Prime Minister Justin Trudeau’s Liberal Party pledged to implement a national pharmacare program if reelected. Months after the Liberals were reelected as a minority government, the details of their plan remain mysterious. Calling their bluff, the New Democratic Party—a social-democratic opposition party—has announced that it would introduce a bill in Parliament to freeze drug prices and implement a national, universal pharmacare program by the end of the year. The NDP would face an uphill battle: The legislation would have a slim chance at passing without the Liberals’ backing, and they are faced with a slate of Conservative provincial leaders who are hostile to the idea.

Over the last several years, Canada has emerged as something of a rhetorical yardstick in US health care debates, as public support for Medicare for All has turned the Canadian system into a compelling foil for our own. References to Canada crop up in in fiery op-eds both for and against implementing a single-payer system, as well as on the campaign trail, as Democratic candidates have been pushed to articulate their positions on health care. Just last summer, Bernie Sanders took a bus trip across the border with a group of Americans who have type 1 diabetes, in order to purchase cheaper insulin. (It’s a stunt he’s been repeating since 1999, when he drove a group of women with breast cancer into Canada to buy the drug tamoxifen.) A 2014 video featuring a Canadian doctor testifying before the US Senate about Canada’s health care system has been watched over 1.6 million times.

This rosy view does not reflect the impact of the Canadian system on someone like Burdge, who has become an outspoken advocate for pharmacare. “For folks like myself who are managing a complicated chronic disease, where we have to be injecting ourselves with drugs…the financial burden of that causes more stress and makes us sicker,” she says, pointing out that Canada’s lack of pharmacare also prevents people from accessing new medical devices and remedies. “That is really sad in a country where we’re sort of touted as this country of fairness and equality. That’s absolutely not the case, in my experience.”

The founder of Canadian medicare never intended for it to be this way. Tommy Douglas, a democratic socialist who was premier of Saskatchewan before becoming the first leader of the NDP, fought vigorously to instill his vision of a comprehensive system that would cover every Canadian. Douglas initiated a hospital insurance program in Saskatchewan in 1947, inspiring other provinces to eventually adopt their own models. By the mid-1950s, rising hospital costs across the country spurred popular support for federal intervention, and the federal government soon agreed to provide joint funding for universal hospital insurance programs.

When Douglas was up for reelection in 1960, he announced that his provincial government would expand the program to cover physician services and clinic visits. The local medical establishment—with support from national medical associations in both Canada and the United States—came out swinging against Douglas’s plan. (The American Medical Association—the same association that is fighting single-payer in the United States now—also funded the Saskatchewan anti-medicare campaign.) The anti-medicare lobby fought to protect the private insurance industry and maintain a fee-for-service system, decrying medicare as “socialized medicine” and flooding local airwaves and newspapers with propaganda that ranged from threatening (doctors will flee the province en masse!) to ridiculous (medicare might institute compulsory abortion). After Douglas’s party won reelection, thousands of doctors went on strike across the province. Business owners, conservative activists, and prominent doctors continued to attack medicare; some burned effigies of Douglas in the streets and characterized government leaders as Nazis. But the Saskatchewan government refused to give in, and with the help of a British mediator, brought the doctor’s strike to an end 23 days later. The resulting agreement paved the way for medicare to go national.

That Saskatchewan was one of the poorest provinces in the country at the time proves governments “don’t need to be wealthy—[they] need the combination of political leadership and grassroots support to get this done,” says Dr. Joel Lexchin of Canadian Doctors for Medicare, a national advocacy group that opposes the privatization of Canada’s health care system. By the early 1970s, every province and territory had implemented its own version of Saskatchewan’s program. Eventually, the Canadian government would begin to provide joint funding for this too, requiring all provinces and territories receiving federal cash to make sure their medicare programs met five criteria: public administration, accessibility, comprehensiveness, universality, and portability. Today, Canadians can walk into a doctor’s office, clinic, or hospital anywhere in the country and receive care with minimal to no co-pays, deductibles, or fees.

Still, Canada’s health care system is not the comprehensive program focused on “keep[ing] people well, rather than just patching them up when they get sick” that Douglas once envisioned. He saw medicare as the first step—to be followed by universal coverage for dental, vision, drugs, long-term and home care, and mental health support. Instead, he spent the last decades of his life fighting the slow creep of private insurance plans and billing practices that threatened to create a two-tier system. Neoliberal politicians, along with NAFTA and the World Trade Organization’s General Agreement on Trade in Services, have encouraged the outsourcing, downsizing, and privatization of swaths of Canada’s public health care system, while opening up its markets to multinational drug corporations. Budget cuts and austerity policies under consecutive Conservative and Liberal governments through the 1990s and 2000s further destabilized medicare, hitting First Nations and Inuit communities, front-line health care workers, refugees, and working-class people hardest.

Canada’s most recent Conservative prime minister, Stephen Harper, was a vocal opponent of universal health care and openly encouraged privatization: His party refused to monitor provinces’ compliance with the five criteria for funding and slashed the federal government’s share of health spending by $36 billion over a decade. Harper also changed the formula that guided federal funding so it no longer took into account the average age of a population, which penalized provinces and territories with older populations and created regional disparities. (Trudeau’s Liberals campaigned on a promise to reverse these funding cuts. They haven’t done that.)

Prescription drugs play big role in health care: Around half of all Canadian adults now take a prescription medicine regularly, and up to two-thirds of Canadians aged 65 and up are prescribed five or more daily medications. Prescription medicines constitute the second-largest cost in Canadian health care, after hospitals; Canadians shelled out CAD 34 billion for drugs in 2018. Only people in the United States and Switzerland spend more per capita. The current system—in which medicare only covers drugs administered at hospitals—has introduced absurd loopholes. “I know some diabetics who will just walk into emergency to get their insulin, because one part of the system is in place, but the other part of it is not,” says Burdge.

Provincial and territorial public drug plans differ dramatically, and are usually tailored to specific groups, such as seniors, children, or people with low incomes. The federal government covers registered First Nations and Inuit communities, and provinces and territories generally ensure that “catastrophic” drug costs are covered for everyone. But the vast majority of working-age adults are left to pay for prescriptions out-of-pocket, or pay into private plans offered by their employers—which is difficult, when the very capitalist logic that has chipped away at medicare has also fueled the rise of precarious, gig-economy jobs. Some provinces don’t even offer comprehensive coverage for seniors.

Danny, who lives in British Columbia, is among the roughly 1 million Canadians who must cut back on groceries or turn down the thermostat to afford prescription drugs. (He asked The Nation not to share his last name.) After Danny had tried more than a dozen different antidepressant medications—some with crippling side effects—and endured two lengthy psychiatric hospitalizations, his doctor gave him samples of an antidepressant that he describes as “the first medication that has done anything for me.” But his current insurance, a private plan he pays into through an employer, won’t cover the drug. Nor will the province’s supplementary public drug plans. There isn’t a generic version of Danny’s medication on the market, and BC’s drug costs are considered to be among the worst in the country; the out-of-pocket price is prohibitive. “I’m devastated,” says Danny. “I’ve spent the last few days crying about it.”

Ninety-one percent of Canadians support national pharmacare, according to one poll. Last summer, an expert advisory committee to Trudeau’s Liberals released a strongly worded report that urged the federal government to move forward with a national plan—something that provincial and territorial leaders urged a previous Liberal government to do back in the early 2000s. (The NDP has said its bill will follow the 2019 report’s recommendations.) Pharmacare would save Canadians more than CAD 4 billion (about $3 billion) per year, including CAD 1.2 billion ($900 million) just from cutting back on unnecessary emergency visits and hospitalizations.

So why can’t Canada get it done?

If there’s one thing the American and Canadian governments have in common, it’s their fealty to Big Pharma. Despite various legislative efforts—including one championed by Nancy Pelosi—it remains illegal for the US government to negotiate drug prices directly with pharmaceutical companies. Private insurance intermediaries negotiate with drug companies instead. Conditions are different in Canada, but drug companies still have a stranglehold on political action there. As medication prices have skyrocketed over the past decade, so have Big Pharma lobby visits to Canadian politicians and doctors. Since 2006, the number of drugs that cost more than CAD 10,000 (about $7,500) per year has more than tripled.

There has been some progress: USMCA, the NAFTA 3.0 deal reached this December, dealt a small, somewhat unexpected blow to Big Pharma by removing some industry protections, and the Canadian government has reined in the prices on patented drugs. Nevertheless, Canadians are still being forced to defend basic medicare while pushing for better drug coverage.

Trudeau made national pharmacare a plank of his campaign for reelection. But the Liberals are often said to campaign from the left and govern from the right, and the pharmacare plan they’ve proposed remains vague. Now that Canadian Parliament is back in session, the NDP could beat the Liberals to the punch, dropping their pharmacare bill before the ruling party does: The NDP has been actively courting provincial and territorial leaders, and sent letters to Trudeau and the other opposition parties to ask for their support.

Whether this will successfully force Trudeau’s hand is unclear. Provincial and territorial buy-in is critical, and some Conservative provincial leaders have already said they would try to opt out of a national program. The Alberta government recently announced changes to its public drug benefit for seniors that could cause around 46,000 people to lose coverage, inciting protests across the province. Ontario premier Doug Ford has ushered in cuts to the province’s health insurance program and made changes to the public drug plan that would impact young people, especially those seeking birth control.

If Trudeau refuses to support the NDP’s private member’s bill, his government will likely use a fill-in-the-gaps approach, codifying the current patchwork instead of establishing the kind of program that would actually increase Canada’s purchasing power and lower drug costs. As a Federation of Canadian Nurses Union report points out, maintaining a fragmented, multi-payer system would preserve profit margins for Big Pharma and insurance companies. Rowan Burdge interprets the possibilities this way: A robust pharmacare program would support “a health care system based on patient health,” she says, while a fill-in-the-gaps approach would prioritize “how much money folks are going to make, based on charging sick people a lot of money to stay alive.”

Just as American voters’ enthusiasm for Bernie Sanders’s Medicare for All proposal pushed other Democratic candidates to articulate their own versions, an outpouring of public support for the upcoming NDP bill could pressure Trudeau to collaborate on pharmacare. Otherwise, Canadians won’t have a clear answer on how, or when, the Liberals’ version of pharmacare would be implemented until at least March, when the federal government will table the 2020 budget.

No matter what happens in Canada, its medicare system will remain a potent comparison in the Democrats’ US health care debates. There are existential policy differences between Sanders’s Medicare for All, Pete Buttigieg’s Medicare for all who want it, Elizabeth Warren’s Medicare but not so fast, and the various shades of the dreaded “public option.” As Canadians’ half-century of struggles to defend and improve their health care system shows, compromising on single-payer from the start would hurt Americans in the long run. A truly universal, comprehensive system requires constant political commitment, solidarity, and popular defense of the public good. Passing legislation is just the first step.

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