Hospital expenditures in the United States and Canada

Expenditures per capita for hospitals are higher in the United States than in Canada. If the United States had the same spending pattern as Canada, the annual savings in 1985 would have exceeded $30 billion.

We used data from published sources, computer files, and institutional reports to compare 1987 costs for acute care hospitals on three levels: national (the United States vs. Canada), regional (California vs. Ontario), and institutional (two California hospitals vs. two Ontario hospitals). Expenditures per admission were adjusted for the case mix of patients, prices of labor and other resources, and outpatients visits.

The United States had proportionately fewer hospital beds than Canada (3.9 vs. 5.4 per 1000 population), fewer admissions (129 vs. 142 per 1000 population), and shorter mean stays (7.2 vs. 11.2 days). Higher costs per admission in the United States were explained in part by a case mix that was more complex by 14 percent and by prices for labor, supplies, and other hospital resources that were higher by 4 percent. Hospitals in the United States provided relatively less outpatient care, particularly in emergency departments (320 vs. 677 visits per 1000 population). After all adjustments, the estimate of resources used for inpatient care per admission was 24 percent higher in the United States than in Canada and 46 percent higher in California than in Ontario. The estimated differences between the two pairs of California and Ontario hospitals were 20 and 15 percent.

Canadian acute care hospitals have more admissions, more outpatient visits, and more inpatient days per capita than hospitals in the United States, but they spend appreciably less. The reasons include higher administrative costs in the United States and more use of centralized equipment and personnel in Canada.