Health Care Choices and Decisions in the United States and Canada

Media speculation about the scope of proposals for health care reform in the United States has led many Americans to be “very concerned” that changes will limit their choices in the future.¹ Health care choices are made on 3 levels: insurance plans, sources of care (physicians and hospitals), and clinical decisions (diagnostic tests and treatments). In this Commentary, the extent to which Americans currently are able to exercise choices is discussed. For context, the US environment is compared with that in Canada, partly because the Canadian health system, with much greater government involvement, is often publicly portrayed in the United States as limiting choice.

All US citizens, other than those aged 65 years or older and the very poor, make the choice to purchase private health insurance (or not). It is estimated that nearly 47 million individuals have no coverage. It is unknown how many choose not to purchase coverage, cannot afford coverage, or cannot obtain coverage. Uninsured persons are severely limited in all other health care choices. They must either receive charity care or pay for care out of pocket, possibly incurring substantial debt or bankruptcy.

The choice of insurance plan is also often limited; 96% of US Metropolitan Statistical Areas have insurance markets that are highly concentrated, consolidated among only a few companies.^{2 - 3} Employers who offer health insurance also frequently limit choices. One plan is often established as preferred and made less expensive through lower premiums and co-payments. Few working adults can afford to purchase plans outside of their employer because other plans' costs and risks are neither subsidized nor pooled. In addition, loss or change of jobs often results in loss of insurance coverage or substantially higher payments to retain existing coverage.

In contrast, insurers have the choice to accept or deny individuals coverage for innumerable reasons, often related to prior or current medical conditions. They may even deny coverage among those they insure for specific care related to preexisting conditions.

All Canadian citizens and landed immigrants are eligible to receive health insurance through the 1 government-sponsored plan administered by their province or territory. Because the application process is simple, without screening for current or preexisting health conditions or means testing, unenrolled individuals who seek care are routinely enrolled by clinical practices and hospitals, removing the need for charity care. Insurance coverage is not tied to employment and so does not change with loss or change of jobs.

The Canadian government mandates that all provincial plans cover “necessary care,” including most physician and hospital services. However, there are private insurance plans to obtain coverage for services that are not covered by some provincial plans, such as pharmaceuticals, private rooms in hospitals, dental care, home care, physiotherapy, and chiropractic care.

The choice of hospital or physician is often made by an individual's insurance plan. Whether structured as a health maintenance organization, preferred provider organization, or otherwise, most plans attempt to limit costs by designating hospitals and physicians, offering either discounted coinsurance or additional benefits to promote their use. Receiving care “out of network” requires that individuals pay substantially larger co-payments.

Health insurance plans often require individuals to choose a primary care physician on enrollment who arranges referrals to specialist physicians. Forty percent of sicker adult Americans report difficulties seeing a specialist, 40% because of long waiting times, 31% because of a denied referral or waiting for a referral, and 17% because they cannot afford private insurance.⁴

Choice is also influenced by availability of care. The United States ranks last in international comparisons for patients finding it somewhat or very difficult to obtain care on nights or weekends without going to an emergency department.⁵

Canadians may choose to receive care from any physician or hospital anywhere in Canada. Typically, a family physician provides primary care and makes referrals to specialists. There is no limit to the number of different physicians a patient can see. If patients are not satisfied with the care of one physician or hospital, they may change to another. Specialists generally require a referral from another physician (not necessarily the family physician) to be reimbursed for a “consultation” but can evaluate any patient and be reimbursed for an “assessment.” Individuals may present to any hospital emergency department and request specialty care, which is scheduled as long as the emergency physician, who has no incentive not to, agrees.

The common presumption is that there is access to every new diagnostic test, procedure, medication, and intervention in the United States. However, insurance plans make use of formularies that restrict medications. Generally, at least 1 medication in any pharmacologic class is offered among “first-tier” medications, for which co-payments are the least expensive. Choosing less expensive or generic medications is also facilitated by requiring prior authorization for brand-name medications when a generic alternative exists or by offering 1 medication in a class at a lower co-payment after contracting with the manufacturer to obtain a discounted price.

Similarly, although many routine, less expensive services are not restricted, prior authorization is often used to limit the use of expensive health care services such as magnetic resonance imaging or experimental interventions.

In international comparisons, US waiting times are consistently shorter for elective surgeries and procedures.⁶ However, even though physicians and hospitals generally are able and willing to provide care quickly and efficiently, insurance plans are not necessarily similarly willing to fully reimburse charges. Often, it is not until after the procedure and utilization review that patients become aware of the substantial portion of the payment they must incur.

Virtually all health care services available in the United States are also available in Canada. There is regionalization of specialized services, such as surgical, oncology, or imaging procedures. For services unavailable in all parts of Canada, such as gamma knife surgery, governments will reimburse care received in the United States, but patients are required to apply in advance. In contrast with common perception, Canadians' use of elective health care services in the United States is not common.⁷ For care in Canada, there is no utilization review and all services are covered in full without co-payment. Physicians and hospitals are paid promptly by the government. Patients receive no bill and fill out no forms. However, as opposed to prior authorization, the use of expensive health care services is limited by supply; there are fewer facilities per capita that provide this care. Provincial and private drug plans use formularies similar to those in the United States.

Waiting time is less a health care issue than a political one. Both federal and provincial governments have responded to media-facilitated public pressure to reduce wait times for specific services, such as hip and knee replacement, cataract surgery, cancer surgery, and emergency care through strategies that resemble pay for performance.^{8 - 9} Moreover, there is provincial variation in reliance on private facilities that charge individuals directly for common diagnostic services (eg, blood drawing, imaging); some provinces have allowed (or tacitly encouraged) these facilities, allowing patients to choose to pay for some routine care to receive it sooner.

Government-sponsored plans like Canada's are frequently publicly portrayed as limiting choice. However, there is clear evidence that for Canada's health care system, less choice in insurance coverage (although guaranteed) has not resulted in less choice of hospitals, physicians, and diagnostic testing and treatments compared with the United States. In fact, there is arguably more choice.