The Fraser Institute

The Fraser Institute

January 21, 2016 05:30 ET

Fraser Institute News Release: Cost Sharing the Norm for Universal Health Care Countries Throughout the Developed World; Canada Is the Outlier

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Jan. 21, 2016) - Canada remains one of the few developed countries with a universal-access health care system that doesn't require patients to participate in paying for care through some form of user fees, finds a new study released today by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.

"Most countries in the industrialized world with universal coverage for health care charge user fees for access to hospitals, general practitioners or specialists with exemptions for low income citizens and individuals with chronic long-term illnesses. Canada is an outlier," said Steven Globerman, Fraser Institute senior fellow and author of Select Cost Sharing in Universal Health Care Countries.

A prominent feature of Canada's health care system, as mandated by the Canada Health Act, is an absence of any charge for publicly-insured health care services.

The study finds that this isn't the norm elsewhere. Most universal health care countries in the developed world - including Australia, the Netherlands, Sweden and Switzerland - utilize cost sharing (ie: co-insurance, co-payment or deductible) as a means to improve the decision-making of patients when accessing health care services.

For example, in Sweden in 2014, the cost of a consultation with a physician in primary care cost between $18 and $45 while the cost for consulting a specialist at a hospital was between $30 and $53. To ensure that vulnerable and high-risk groups are not adversely affected, out-of-pocket payments are capped at $165 per year and pregnant women, children and the elderly are either exempted from any user charges, or granted subsidies.

Another example is Switzerland where residents are required to purchase statutory health insurance from competing private insurers. There is a minimum annual deductible for adults of approximately $400 after which the insurance kicks in.

"Clearly, based on the examples of other industrialized countries, cost sharing mechanisms are compatible with universal health care," Globerman said.

A common argument against cost sharing is that it may discourage some individuals from accessing necessary medical services when needed.

But Globerman argues that the empirical evidence shows that cost sharing does not result in adverse long-term health outcomes and that those risks are likely mitigated by the exemptions and subsidies granted to certain demographic groups such as the elderly and low-income.

"The most optimal cost sharing policies - that is, policies that will result in the most efficient use of the health care system including reductions in wait times for patients - must be sensitive to the demographics, health status and income of a country's population," Globerman said.

"The fairly large number of universal health care countries that employ some sort of cost sharing system suggests that policymakers see the net benefits in such schemes."

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The Fraser Institute is an independent Canadian public policy research and educational organization with offices in Vancouver, Calgary, Toronto, and Montreal and ties to a global network of think-tanks in 87 countries. Its mission is to improve the quality of life for Canadians, their families and future generations by studying, measuring and broadly communicating the effects of government policies, entrepreneurship and choice on their well-being. To protect the Institute's independence, it does not accept grants from governments or contracts for research. Visit www.fraserinstitute.org

Contact Information

  • Media Contact:
    Steven Globerman
    Senior Fellow, Fraser Institute
    Kaiser Professor of International Business,
    Western Washington University

    For interviews with Mr. Globerman, please contact:
    Aanand Radia
    Media Relations Specialist, Fraser Institute
    (416) 363-6575 ext. 238
    aanand.radia@fraserinstitute.org
    @FraserInstitute