Bell CM, Crystal M, Detsky AS, Redelmeier DA. Shopping Around for Hospital ServicesA Comparison of the United States and Canada. JAMA. 1998;279(13):1015-1017. doi:10.1001/jama.279.13.1015
From the Department of Medicine and Health Administration (Drs Bell, Detsky, and Redelmeier and Mr Crystal) and the Program in Clinical Epidemiology and Health Care Research (Drs Bell, Detsky, and Redelmeier and Mr Crystal), University of Toronto; Department of Medicine, Sunnybrook Health Science Centre (Drs Bell and Redelmeier); Department of Medicine, the Mount Sinai Hospital (Dr Detsky); and Department of Medicine, The Toronto Hospital (Dr Detsky), Toronto, Ontario.
Context.— Historical comparisons indicate that US hospitals are more expensive
than Canadian hospitals, but health care system reform might have changed
the relative costs and timeliness of health care in the 2 countries.
Objective.— To estimate the price and convenience of selected hospital services
in the United States and Canada for patients in 1997 had they paid out-of-pocket.
Design.— Cross-sectional telephone survey conducted May 1996 to April 1997.
Participants.— The 2 largest acute care general hospitals from every city in the United
States and Canada with a population greater than 500000.
Measures.— Each hospital was telephoned and asked their price and waiting time
for 7 services: magnetic resonance imaging of the head without gadolinium;
a screening mammogram; a 12-lead electrocardiogram; a prothrombin time measurement;
a session of hemodialysis; a screening colonoscopy; and a total knee replacement.
Waiting times were measured in days until earliest appointment and charges
were converted to American currency.
Results.— Overall, 48 US and 18 Canadian hospitals were surveyed. Median waiting
times were significantly shorter in American hospitals for 4 services, particularly
a magnetic resonance imaging of the head (3 days vs 150 days; P<.001). Median charges were significantly higher in American hospitals
for 6 services, particularly for a total knee replacement ($26805 vs $10651; P<.001). Individual services showed no association between
shorter waiting times and higher prices within each country, with the exception
of a total knee replacement in the United States.
Conclusion.— US hospitals still provide higher prices and faster care than Canadian
hospitals for patients who pay out-of-pocket.
CANADA SERVES as a taunting reminder that a health care system can be
much less expensive than that of the United States. Data on aggregate expenditures
suggest a one-third higher cost per person in the United States than in Canada,
equivalent to spending about $300 billion more each year.1- 5
Moreover, life expectancy at birth and at age 60 years are both lower in the
United States than in Canada.6,7
Some specific diseases are better managed in the United States,8- 13
whereas others are better managed in Canada.13- 18
Regardless of clinical outcomes, aggregate projections of health care costs
are less favorable for the United States than for Canada.19- 26
The American health care system has changed substantially in recent
years, thereby calling into question historical comparisons. In the United
States, widespread adoption of managed care has partially stabilized health
care costs.27 By contrast, Canadian governmental
deficit reduction strategies have been less intense.28
Perhaps the differences between the 2 countries are disappearing. In this
article, we provide an updated analysis on the price and convenience of selected
hospital services in both countries. We take the perspective of an individual
consumer who is seeking medical care in the late 1990s and willing to pay
We identified cities in the United States and Canada in 1997 with a
population of at least 500000.29,30
In each city, we selected the 2 largest acute care general hospitals.31,32 For the United States, we excluded
facilities that were classified as governmental or specialty service hospitals.
For Canada, we excluded facilities that were long-term care or specialty care
hospitals. Of note, Canadian hospitals tend to be owned by private nonprofit
corporations that are dependent on public funds and approvals for their mandate.
We selected services satisfying the following criteria. First, the service
could be plausibly sought on an elective basis. Second, the service was available
in most hospitals. Third, the service was reasonably standardized so that
different hospitals could be compared fairly. The final list included the
following 7 diagnostic and therapeutic services: magnetic resonance imaging
(MRI) of the head without gadolinium, a screening mammogram, a 12-lead electrocardiogram,
a prothrombin time measurement, a session of hemodialysis, a screening colonoscopy,
and a total knee replacement.
From May 1996 to April 1997, we surveyed each hospital by telephone
and asked for the waiting time and total price for a patient willing to pay
out-of-pocket for the designated service. If a particular hospital did not
offer the designated service, an alternate local provider as specified by
the index hospital was sought and subsequently contacted. To avoid inadvertently
cueing individual respondents, each hospital was contacted about only 1 service
at any 1 call with sufficient time between contacts to avoid carryover effects.
Additionally, data were obtained directly from individuals in the responsible
department whenever possible.
We constructed scenarios to justify our request. For example, data for
hemodialysis were elicited by stating, "I'm planning a business meeting in
your city and need to schedule a hemodialysis session. I will arrange the
meeting around the earliest open spot. I need a 4-hour treatment with an F-80
filter and no erythropoietin. What is the total price and waiting time at
your hospital?" Hospitals were informed that amounts would be paid by credit
card and should include all taxes, technical charges, and professional fees.
When asked, we commented that other hospitals were also being contacted. Prices
were converted to American currency using a standard exchange (US $1=Can $1.35).
The study included 48 American and 18 Canadian hospitals in cities accounting
for about 30.6 million Americans and 12.6 million Canadians. The hospitals
had a similar median size (709 beds vs 799 beds; P>.20)
and proportion with teaching status (74% vs 94%; P>.20).
We contacted all selected hospitals or their designated alternate provider
(100% response rate). We collected data on all services with no missing values
(100% completion rate). No adverse reactions followed from our survey and
no respondent made remarks to suggest they had detected our research.
Respondents varied in the precision of their schedule but none failed
to state an expected waiting time. Overall, median waiting times were never
longer and sometimes much shorter in American than in Canadian hospitals (Table 1). The largest difference was for
a MRI of the head. The difference between American and Canadian hospitals
for a total knee replacement might have been larger had it not been for the
3-week wait following autologous blood donation, which was more common in
the United States. The smallest difference in median waiting times was for
a 12-lead electrocardiogram and a single prothrombin time blood test.
Some hospitals reduced their prices when reminded that the patient would
pay by credit card, and we used these smaller prices for analysis. The median
price for every service was significantly different between hospitals in the
2 countries (Table 1). Only 1
service, a single session of hemodialysis, had a lower median price in the
United States. The largest absolute difference in median price was for a total
knee replacement and the largest relative difference in median price was for
a 12-lead electrocardiogram.
In neither country did hospitals negotiate by bargaining about waiting
times or charges. The strongest association between higher charges and shorter
waiting times for American hospitals was found with a total knee replacement
(r=0.44; P<.001). For
all other services, the association between charges and waiting times was
small (absolute r<0.25) and not statistically
significant (P>.05). Canadian hospitals showed no
statistically significant association between higher charges and shorter waiting
times for any service. For one, a screening mammogram, the relationship was
marginally significant and in the contrary direction.
We identified 7 well-defined services and surveyed the waiting times
and prices at the 2 largest hospitals in every large city in North America
for patients paying out-of-pocket. We found much longer waiting times for
some services in Canada and much higher prices for some services in the United
States. Overall, the relative differences in median prices were similar to
the relative differences in median waiting times. We found no direct relationship
between speed and price for any service in either country, with the exception
of a total knee replacement surgery. We found no evidence that those who can
pay always go to the front of the line.
Our data illustrate dramatic differences in prices for identical hospital
services in the 2 countries. The most striking example was for total knee
replacement surgery, which amounted to about a $15000 higher price. We found
no simple explanation why some charges were so much higher in the United States,
or why the differences in charges were much greater than would be expected
from aggregate differences in hospital expenditures.1- 5
Note, however, that hemodialysis is exceptional in the United States as a
national health service where the government determines the charge and 1 patient
can receive thousands of treatments.33
Most previous reports comparing waiting times in the 2 countries have
been limited in scope. The best data are for knee replacement surgery, which
suggest that waiting times are much shorter in the United States than in Canada
(3 weeks vs 8 weeks; P<.05) but still acceptable.34,35 Data for other services are generally
not available, anecdotal, or incomplete.36- 41
One theory explaining the uniformly shorter waiting times in the United States
is the greater availability of facilities, personnel, and flexible service
hours.42 Reduced amounts of waiting in the
United States can be an economic benefit if associated with gains in societal
Our study has several limitations but a few merit special emphasis.
First, we tried to identify comparable services but there may be unmeasured
differences in quality. However, we doubt that these differences are sufficient
to account for the magnitude observed. Second, the sample size was small,
may not apply to rural hospitals, was collected during a brief time interval,
and relied on self-reported disclosure. Third, the analysis examined prices
for individual purchasers but only about 1 in 7 patients in the United States
is uninsured (from whom about 1 in 3 dollars of charges are eventually collected).44- 50
Bulk purchasers may obtain lower prices, yet generally they do not disclose
Are charges irrelevant? Health economists have claimed that charges
are a poor measure of true societal costs.51
Typically, charges include excess profits due to market imperfections and
monopoly conditions. One approach for reconciling costs with charges is to
apply a standard "cost-to-charge" ratio that removes excess profits. We argue
that such ratios are imprecise and often not necessary. First, the oversupply
of many resources in the United States may increase competition and curtail
excess profits. Second, charges are the ideal measure of opportunity cost
for those who pay. Third, detailed accounting approaches almost always appeal
to market prices to assess unit costs and thereby rely on the same assumptions
In accord with historical comparisons, we found that American hospitals
are still more expensive than Canadian hospitals. We have shown this difference
for well-specified services delivered to patients with the same severity of
disease, comorbidity, and socioeconomic status. American hospitals also tend
to provide faster service. In addition, the data indicate that aggregate analyses
do not necessarily reflect the variation experienced by individual patients.
We did not explore how the shorter waiting times might improve productivity
in the American economy. Likewise, we did not explore whether high prices
are associated with higher profits.