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International Health Care- How Macroeconomic Factors Affect Health Care Costs

International Health Care- How Macroeconomic Factors Affect Health Care Costs

Macroeconomic Factors Affecting Healthcare Costs

Macroeconomic factors greatly influence healthcare costs. The factors include but are not limited to inflation, economic growth, income levels, and government policies.


Inflation refers to the general price increase over time. In health care, inflation affects the cost of medical supplies, equipment, medications, and services (Güneş Kurtaran & Ali Coşkun, 2019). When the prices of these inputs rise due to inflation, healthcare providers may pass on these increased costs to patients, resulting in higher healthcare expenses.

Economic Growth

Economic growth is characterized by increased production and consumption of goods and services. Individuals tend to have more disposable income when the economy grows, leading to greater demand for healthcare services (Güneş Kurtaran & Ali Coşkun, 2019). An increased need can increase healthcare prices, as providers may have more bargaining power to charge higher fees.

Income Level

Income levels significantly impact individuals’ ability to afford healthcare services. In economies with higher average incomes, people may have more financial resources to pay for health care, leading to increased demand and potentially higher costs (Güneş Kurtaran & Ali Coşkun, 2019). Conversely, in economies with lower average incomes, individuals may face difficulties accessing and affording necessary health care, which can have consequences.

Government Policies

Government policies, such as regulations, subsidies, and taxation, can significantly influence health care costs. For instance, if a government implements price controls on pharmaceuticals or medical procedures, it can limit the price increase of these services (Güneş Kurtaran & Ali Coşkun, 2019). Conversely, if government regulations impose significant administrative burdens on healthcare providers, they may pass these costs to patients.

Comparative Statistics for the Canadian and U.S. Healthcare Systems

The Canadian and U.S. healthcare systems have distinct characteristics and exhibit several differences.

Healthcare Spending

The U.S. spends the most per capita on healthcare globally, spending significantly more than Canada. In 2019, the U.S. spent approximately $11,072 per person, while Canada spent $4,974 per person (Papanicolas et al., 2020). Despite the higher spending, the U.S. only achieves better health outcomes than Canada.

Healthcare Coverage

The healthcare system in the U.S. relies on public and private insurance. Approximately 67.2% of the U.S. population had private health insurance coverage in 2019, with the remainder depending on government programs such as Medicare and Medicaid (Papanicolas et al., 2020). In contrast, all citizens and lawful permanent inhabitants of Canada are covered by Medicare, a freely provided universal medical program.

Out-of-Pocket Costs

In the U.S., individuals often face substantial out-of-pocket costs, including deductibles, copayments, and coinsurance. These expenses can be a significant burden, particularly for those with chronic conditions or low incomes. In Canada, some out-of-pocket costs for certain services are generally lower than in the U.S. (Papanicolas et al., 2020).

 Access to Care

In the U.S., individuals with private insurance typically have more options and shorter wait times for specialized services. However, those with adequate insurance may need help accessing timely and affordable care. In Canada, access to care is generally more equitable, but there can be long wait times for certain non-urgent procedures and specialist consultations (Papanicolas et al., 2020).

Financing in the  U.S. and Canadian healthcare systems

In both the Canadian and U.S. medical systems, financing is provided through a combination of private and public systems.


The Canadian healthcare system is primarily financed using taxes. Transfer payments from the federal authorities to the regional and territory administrations are responsible for delivering health care services. Each province and territory administers its health insurance plan, funded through income taxes, sales taxes, and other revenue sources (Applequist, 2022). The publicly funded system covers essential medical services, while individuals may have to pay for additional services or opt for private insurance to cover those costs.

United States

Healthcare financing is comprised of both private and public sources. Private health insurance is predominantly employer-based, where employers and employees share the cost of premiums. Government programs like Medicare (for individuals 65 and older) and Medicaid (for low-income individuals and families) provide coverage for specific populations. The Affordable Care Act (ACA) created medical coverage markets where people may buy private insurance policies, frequently with incentives based on income level (Applequist, 2022). Unfortunately, a sizable section of the populace continues to lack or have inadequate insurance, leading to challenges in accessing affordable care.


Applequist, J. F. (2022). A Comparative Analysis of the U.S. and Canadian Health Care Systems. Journal of Comparative Policy Analysis: Research and Practice, 1-18. doi: 10.1080/13876988.2022.2094501

Güneş Kurtaran & Ali Coşkun. (2019). The Impact of Macroeconomic Factors on Healthcare Expenditure: A Panel Data Analysis for OECD Countries. Retrieved from

Papanicolas, I., Woskie, L. R., & Jha, A. K. (2018). Health Care Spending in the United States and other high-income countries. JAMA, 319(10), 1024.


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ou are interested in learning more about the health care reform that is occurring in the United States. You want to determine how this relates to international health care. Using the library, Internet, and other resources, conduct research and address the following:

International Health Care- How Macroeconomic Factors Affect Health Care Costs

International Health Care- How Macroeconomic Factors Affect Health Care Costs

Explain how macroeconomic factors affect health care costs.
Find comparative statistics for the U.S. healthcare system and the Canadian healthcare system. What is currently the major difference between the U.S. healthcare system and the Canadian healthcare system?
By comparing and analyzing the Canadian and the U.S. health care systems, describe how financing is provided to both national health care systems.
Responses to Other Students: Respond to at least 2 of your fellow classmates with at least a 100–200-word reply about their Primary Task Response regarding items you found to be compelling and enlightening. To help you with your discussion, please consider the following questions:

What did you learn from your classmate’s posting?
What additional questions do you have after reading the posting?
What clarification do you need regarding the posting?
What differences or similarities do you see between your posting and other classmates’ postings?
For assistance with your assignment, please use your textbook and all course resources.

Discussion Board Rubric

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