Models of Government Business Relations in USA and Canada


The Organization for Economic Co-operation and Development (OECD) is an international organization which was believed to have been formed on 16th April 1948 with its first name as Organization for European Economic Co-operation (OEEC) which was led by Robert Marjolin of France, to help in administering the Marshall Plan. The organization headquarters was then established in Chateau de la Muette in Paris, France, as the Marshall Plan faded this made OEEC focus more on the economic questions and issues. It is believed that in 1950s the OEEC provided a multilateral framework for negotiations that aimed at determining the conditions for setting up a common European Free Trade Area; this was to bring all the Common Market of the Six and other OEEC members together. In 1958, they set up a European Nuclear Energy Agency. The main aim for this was to enable the reconstruction of Europe after the Second World War After the 1950’s Rome Treaties that led to the Launch of Europe’s Common Market, the Convention on the Organization for Economic Co-operation and Development was therefore drawn with an aim to reform the OEEC.

The Convention was totally signed in December 1960 and the OECD was hence officially superseded the OEEC in September 1961. Later after this period, the membership was extended to non-European states. Today it is an organization that comprises thirty countries that accept the principles of representative democracy and a free-market economy. Most of these OECD countries are members who come from high-income economies hence they are regarded as developed countries.

The USA and Canada medicare systems

After understanding what the OECD countries are the two countries to be compared are the United States of America and Canada with a major focus on the health service industry. The best model to start with is the health care model of Canada which is referred to as the Medicare system which is publicly financed but privately run. This system of Canada is based on five founding principles which include Care must be universal, Portable, Comprehensive, accessible, and publicly administered (Pollard 2002). Firstly, if we start with the assessment of the accessibility of citizens of Canada to health care services compared to citizens of America with a major concern on private insurance and publicly funded health care services, primarily focusing on physician and hospital services. According to the journal article on Joint Canada/United States Survey of Health 2002/2003, citizens of Canada have universal access to publicly funded health care services, primary physician and hospital services compared to those of America who majority require private insurance to cover the cost for the medical services and therefore the public insurance is only provided for the poor (Medicaid)and those with age over sixty five (Medicare) making it hard for some citizens of America who do not have cover to access treatment.

Secondly, the health care system of the United States is more expensive compared to that Canada The medical care costs of America are believed to be rising at an alarming rate more than individual income making it difficult for many Americans to afford the services they want and to the extent of some even suffering and dying without proper care (Hans 1989). According to the journal of Canadian and American Health Services published July 2007, this issue has raised concerns where businesses both large and small are having bitter complaints due to rising costs. Hans argues that employee health care costs in American companies are approximately $ 792 million per year. These expenses seem to be more expensive to the company which makes the company being forced to lay off workers to reduce the medical expenses. When compared to Canada’s national health care system it imposes substantially lower costs on companies where it is believed that the sick should be cared for (Hans 1989).

Another advantage that Canada’s system has over America’s system is in terms of health care expenditure where according to studies conducted in 2006 by the World Health Organization on the Health care systems of America and Canada it showed that the United States spends much more on health care both on per capita basis and its total Gross domestic product. For example, the Statistics taken by the World Health Organization showed that in 2006 America’s spending on health care was around $3,678 which is about 15.3% of the total Gross Domestic Product. On the other hand, Canada’s health care spending in 2006 was a total of Canadian dollars $ 991 which is almost 70% of the total health care spend by the public sector system which is funded primarily by tax dollars this makes the Canadian government make some cash transfers to the provinces but these provinces sometimes may levy their own taxes to help defray the costs. Pollard argues that the private sector spends around $39.2 which is almost 30%. From his studies, it showed that in 1998 Canadian government’s contributions decreased significantly where Canadian government payments currently make up only 20% of provincial medical care costs (Pollard, 2002). Further studies by Esmail and Walker show that the provincial government share of health spending in 2002 totaled 63.8%. The private sector spending accumulated to 30.3 %, this includes expenditure which goes towards the cost of services such as clinics for eye laser, surgery, or in-vitro fertilization which normally are not covered by provincial health insurance programs that are finally divided between out-of-pocket expenditure and insurance. This confirms that a total of 70% is spent on health care by a mix of public and 30% private funding with most services delivered both for-profit and nonprofit delivers. While America spends more per capita than any other nation in the world on Health care which is a burden to the citizens of America (Esmail & Walker, 2005).

Considering the government involvement of both nations, they are both involved but central a structural difference between the two is in health insurance. The Canadian government is more committed to providing funding support to the provincial government for health care expenditures than the American government (Esmail & Walker, 2005). Hence this guarantees accessibility of Canadian citizens to medical easily since it’s outlined in the Canada Health Act which explicitly prohibits billing end-users for procedures that are covered by Medicare. Canada’s system is more socialized compared to America’s system of public delivery, Canadian system provides public coverage for private delivery while America’s direct government funding is limited to Medicare, Medicaid, and the State Children’s Health Insurance Program(SCHIP), which only covers eligible senior citizens, the very poor, disabled persons, and children(Hans 1989). Though American runs a Veterans Administration, which provides care to the veterans, their families and the survivors through medical centers and clinics are uninsured which covers about 25% of America’s population. Some people are eligible for these programs but remain unrolled (Hans 1989).

Analyzing the coverage and access of the citizens to medical care, access has been a problem but according to research conducted on Health Care Systems an International Comparison, 2001, studies showed that 40% of America’s citizens lack adequate access to health care compared to 5% of Canadian citizens. For example, according to the 2007 Consumer Reports study on America’s health care system, the underinsured account for almost 24% of the total population who are believed to live with skeletal health care insurance that barely covers their total medical needs hence leaves them unprepared to pay for any major medical expense they may incur. Furthermore, a total of 40% of the American population with ages between 18-16 have inadequate access to health care. When compared to Canada according to the Consumer Reports study based on 2007 data from the Canadian Health Survey an estimated 1.2 Million which is approximately 5% of Canadians report that they do not have regular doctors because they cannot find and just twice that number report they do not have because they haven’t looked and those with regular visits are 3.5 times more. In addition, a peer-review comparison study of health care access in the two countries published in 2006 concluded that -reviewed comparison that America’s residents are a third less likely to have a regular medical doctor this makes it difficult for the residents to access medical care. Furthermore, more than twice are likely to forgo needed medicines because they don’t have the ability to purchase them. These problems were heavily faced by the entire uninsured American citizens since those who lack the insurance were much less satisfied, less likely to have seen a doctor and much more likely to have been unable to receive desired care (Klatt, 2002).

Another major advantage the Canadian system has over the American system is an issue concerning wait times though citizens of both countries have complaints whether it is in terms of specialists, major elective surgery such as hip replacement, specialized treatment, such as radiation for breast cancer, etc. According to the 2003 survey of hospital administrators conducted in the United States and Canada, in America patients on Medicaid, the low-income government programs are forced to wait for three months or more to see specialists. On the other hand, since Medicaid payments are low, doctors are always reluctant to see Medicaid patients this has forced them to go the extra mile to make appointments not at the doctor’s office,but at the clinic, where appointments have to be booked one month in advance. Compared to Canadians they also experience waits for medical emergency and specialists services but it was found that there are high numbers of people waiting for America’s system than Canada’s system. Studies by the Commonwealth Fund found that 24% of Canadians waited for four hours or more in the emergency room which is around 12% comparable to America’s where it was 57% who waited for four weeks or more to see a specialist ((Esmail & Walker, 2005

Analyzing the cost of drugs in both the two countries both the two have limited prescriptions to helping the needy. In Canada, the health care system has developed province programs that assist the poor and other seniors to have great access to drugs with two-thirds of the Canadian population having a private prescription on drug coverage, mostly through their employers. When compared to the American system which uses the Medicare Part plan, this happens to cover only a partial population with a significant population not fully covered by the program. In a study carried out in 2005, it was found out that 20% of Canada’s and 40% of America’s sicker adults did not fill prescriptions because of cost (Esmail & Walker, 2005). Moreover, the Canadian system takes advantage of centralized buying through the provincial government that has more market heft and always buys in bulk. This normally lowers the prices of medicines when this is contrasted with America which has explicit laws that prohibit Medicare or Medicaid from negotiating drug prices. In addition, price negotiations by Canadian health insurers are based on evaluations of the clinical effectiveness of prescription drugs this, in turn, allows for the relative prices of therapeutically where similar drugs to be considered. Also, the Canadian Patented Medicine Prices Review Board also has the authority to set a fair and reasonable price on patented products, either comparing it to similar drugs already on the market, or by taking the average price in seven developed nations. Prices are also lowered through more limited patent protection compared to America where drug patents may be extended for more than five years in order to make up for time lost in development. In America, a drug patent may be extended five years to make up for time lost in development (Esmail & Walker, 2005).

Finally, based on the World Health Organization’s ratings of health care system performance among nine member nations published in 2000, Canada was ranked 35th while American was ranked 72nd which is a clear indication that Canada’s health care system is more preferable to its citizens than that of America’s. According to Guyatta, Canadians are, overall, statistically healthier than Americans and show lower rates of many diseases such as various forms of cancer. On the other hand, evidence suggests that with respect to some illnesses (such as breast cancer), those who do get sick have a higher rate of cure in America. When we compare the life expectancy of the two countries, studies in 2006 showed that life expectancy, Canadians live to an average of approximately 79.9 years while American’s 77.5 years which indicates that the American system does not perform to the required standards as compared to Canada. A joint US- Canadian study found Americans have slightly higher rates of smoking and alcohol consumption than do Canadians as well as significantly higher rates of obesity. Another study found that Americans have higher rates for health risk factors and chronic conditions which include physical inactivity, diabetes, hypertension, arthritis, and chronic obstructive pulmonary diseases (Guyatt, 2007).


  1. Pollard, S, (2002), Canadian Health Care, report commissioned by Civitas
  2. The Joint Canada/ United States Survey of Health (2002-2003). CDC-National Center for Health Statistics
  3. Hans Stennholz,(1989), Will America Copy Canada’s Calamity
  4. Canadian and U.S. Health Services – Lets Compare the Two,” (2007), Letters, Wall Street Journal
  5. Health Care Systems (2001): An International Comparison. Strategic Policy and Research Intergovernmental Affairs
  6. World Health Organization (2006) Statistics on the Health care systems of America and Canada
  7. Consumer Report (2007), on American Health Survey on uninsured Consumer Reports (2007), on Canadian Health Survey Statistics
  8. Peer-review (2006), comparison study of health care access in the two countries
  9. Esmail N, Walker M (2005), “How good is Canadian Health care
  10. Klatt, I (2002), Understanding the Canadian Health Care System
  11. Survey of hospital administrators conducted in the United States and Canada (2003)
  12. Guyatta, G. H.etal (2007), A systematic review of studies comparing health outcomes in Canada and the United States. Open Medicine, Vol 1, and No 1
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