Zeev, your basic point is correct but you exaggerate the difference in health care costs. The latest OECD figures (2002) show U.S. spending 14.6% of GDP with Canada at 9.6%.
On a per capita level, in US$, the U.S spends $5267 while Canada spends $2931. Pharmaceutical spending (per capita) is $673 in U.S. compared to $485 in Canada.