Why are Hospital Costs Lower in Canada Where Hospital Stays Last Longer?

During 1992 and 1993, researchers at the University of Michigan Medical School compared the utilization of all diagnostic imaging and selected laboratory tests for patients from eight hospitals (four university and four community hospitals) in Canada and the United States.

The primary purposes of the project were to:

  • Study the differences in the use of in-patient ancillary services (radiology, electronic-diagnostic tests, laboratory and cardiovascular services).
  • Examine the extent of bias and accuracy in the computerized ancillary service databases, as such differences and biases contribute to overall health care costs.

Key Findings

  • Overall, US hospital patients received 22 percent more services than their Canadian counterparts.

  • The project demonstrated that Canadian physicians employ a more conservative practice style with regard to ancillary service use, specifically around more costly testing such as CAT Scan (CT) and magnetic resonance imaging (MRI), and that this conservative tendency was more marked with elderly patients than with younger patients.