The 5% · Canada · Hospital prices

Why Canada hospital prices are lower

The province is the buyer. Hospitals run on a budget, not a different secret multiple for each plan. In the US the must-have hospital extracts 2–3× Medicare from job plans that cannot drop it. That is hospital market power, passed through as premiums — not an insurer markup on a cheap night.

Provincial global hospital budgets

How it works

Provinces fund hospitals with global budgets. Physicians bill a provincial fee schedule. Hospitals are not billing a US-style job-plan multiple. Wait times are the trade — not a second chargemaster.

Why it holds

Single buyer for the building. The tower cannot threaten to leave the network; the province is the network. Canada’s top 5% took 60% of spending in Wammes — more concentrated than the US — and still cheaper, because the night is a Canadian night. CT is the extreme: $97 vs US $896 (Papanicolas 2013).

The invoices

SKUUnited StatesCanada
Hospital unit vs US commercialmodeled$1.0042¢
CT scan (2013 PPP)sourced$896$97
Inpatient night (Wammes PPP)modeled$3,180Canadian budget, not US commercial

See iFHP, RAND hospitals, Papanicolas, Wammes.

Also: Why Canada brand drugs · Who bargains with whom · Bargaining chips · The rulebook · Problems / solutions · National debt · Hospital voices · Back to The 5%