What President Clinton Can Learn from Canada About Price Controls and Global Budgets

Policy Backgrounders | Health

No. 129
Tuesday, October 05, 1993
by Michael Walker & John C. Goodman


Lack of Access to Technology

Figure I - Technology Comparison

Figure I gives the latest available statistics comparing access to modern medical technology in the United States and Canada, based on information from Medical Economics magazine. As the figure shows:

  • On a per capita basis, the United States has 10 times as many magnetic resonance imaging (MRI) units- which use magnetism instead of x-rays- as Canada.
  • The United States has three times as many computerized axial tomography (CAT) scanners per person.
  • The United States also has about three times as many lithotripsy units (to destroy kidney stones and gallstones with sound waves) per person.
  • And, per capita, the United States has about three times as many open-heart surgery units and eleven times as many cardiac catheterization units (for the treatment of heart disease).

"There are more MRI scanners in Washington state than in all of Canada."

Rationing Scarce Technology. Seattle, Washington (pop. 490,000) has more CAT scanners (used, for example, to detect brain tumors) than the entire province of British Columbia (pop. 3 million). There are more MRI scanners in Washington state (pop. 4.6 million) than in all of Canada (pop. 26 million).5 While critics of the U.S. health care system claim that the U.S. has too much technology, all the evidence suggests that Canada has too little-as a result of the conscious decisions of government officials.

Delaying New Technology. Some argue that Canada and other countries with global budgets delay the purchase of expensive technology in order to see if it works and is cost-effective. If true, the downside of this approach is that patients are denied access to potentially lifesaving treatment while government bureaucracies evaluate it. During the 1970s, for example, lifesaving innovations were made in kidney dialysis, CAT scanning and pacemaker technology. Yet:6

  • The rate of pacemaker implantation in the United States during the mid-1970s was almost 20 times that of Canada.
  • CAT scanners were more than three times as available in the United States as in Canada.
  • The treatment rate of kidney patients was more than 60 percent greater in the United States than in Canada.

Canada develops almost no new medical technology and spends very little on research and development. By contrast, research and development spending in the United States result in innovations that benefit the U.S., Canada and the rest of the world.


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