Health

Drugs and money

ANITA ELASH October 20 1997
Health

Drugs and money

ANITA ELASH October 20 1997

Drugs and money

Health

ANITA ELASH

Health Minister Allan Rock has not exactly reneged on his government’s pre-election promise concerning fully funded national pharmacare and home-care programs. But the more he talks about them, the more it sounds like they might be a long time coming. Before the June election, the government committed itself to explore both ideas. But in August, Rock, who took over the Health portfolio after the election, told doctors he had no idea where the money would come from. In mid-September, after meeting with the provincial health ministers in Fredericton, he called the proposals “exciting possibilities” that are “very much in the exploratory phase.” The speech from the throne, setting out the government’s agenda at the end of September, referred only to the need for a plan to give Canadians “better access” to prescription drugs and to “support” those who need home care. We’re still very much in the early stages,” said a health department spokesman last week. “There is no identifiable target date.”

Given the obstacles to setting up such ambitious programs, Rock’s apparent reticence is perhaps understandable. A study done for the Pharmaceutical Manufacturers’ Association of Canada concludes that a drug plan funded entirely by public money would cost governments an additional $4.3 billion a year, more than doubling the $3.5 billion they now

spend on various drug plans. There are no well-researched estimates of how much a national home-care plan would cost. But with governments facing continuing pressure to keep spending under control and eventually cut taxes, Ottawa is “obviously not in a fiscal position” to pick up the tab, says Jeremiah Hurley, co-ordinator of the

Centre for Health Economics and Policy Analysis, which conducts health policy

research at McMaster University.

Ottawa’s position is especially difficult because health care is a provincial, not federal, responsibility—and the provinces have not embraced the pharmacare and homecare proposals. Detailed dis-

cussions on pharmacare are to begin in January at a meeting of health ministers and special interest groups in Saskatoon. A similar session on home care is scheduled for March in Halifax. But the provinces are still struggling with cuts to transfer payments that have left them paying 70 per cent of the health-care bill, up from 50 per cent two decades ago. Unless the federal government resumes paying half the tab, some provinces say they have no interest in pharmacare or home care. We are going in a different direction,” says Saskatchewan’s minister, Clay Serby, whose government has promised a tax cut Dismissing the Liberal proposal as a

“half-baked” re-election ploy, Ontario’s former health minister, Jim Wilson, called on Ottawa to restore support for existing programs be fore asking the provinces to set up new ones.

Just 12 per cent of Canadians— mainly those who are self-employed or who work for a small business— have no drug insurance or subsidies whatsoever. But few Canadians g get away without paying anything, S says Mike Farrell, assistant direc| tor of the National Anti-Poverty g Organization. Most private plans £ charge premiums or deductibles, | and provincial insurance schemes Í2 for welfare recipients and the el! derly charge user fees. The overall result, says Farrell, is that many low-income earners do without prescriptions they need to maintain their health.

Cost-cutting measures and advances in medical techniques are also resulting in patients being sent home from hospitals earlier than ever—often within hours of surgery Many then arrange for care or pay for drugs that would have been provided without cost in the hospital. “Prescription drugs are becoming essential services,” says Raisa Deber, a University of Toronto health analyst.

While changes in health-care delivery place new demands on home-care providers, many of those services are not covered by government funding. Until recently, inhome workers spent most of their time cooking meals for the elderly and looking after patients with long-term disabilities. Now, the focus is on acute care functions such as administering chemotherapy, tending to infected wounds and looking after patients recovering from surgery. Those services are largely unregulated, and the amount of government coverage varies from province to province or even between municipalities. As a result, says Dawn Walker, executive director of the Ottawa-based Canadian Association for Community Care, many home-care workers are performing procedures for which they are not properly trained. ‘We are concerned,” she says, “that patients may not be getting the right person at the right time.”

Pharmacare and home-care plans would likely eliminate those risks by providing national standards, says Steven Lewis, a Saskatoon-based health analyst and member of the federally appointed committee that proposed the programs in February. And, he says, pharmacare could cut drug costs by

Call (JttctWcl Q0liv0r Oil its promise of a national drug program!

up to 20 per cent. The savings would be achieved under a program in which the federal government decided which drugs are medically necessary, drug companies were banned from advertising their products to patients and prescribing practices were carefully monitored to eliminate overuse of drugs. But even with all its benefits, Lewis concedes a fully funded national plan may be impossible to achieve. “It is not doable,” he says, “unless there is pretty strong national consensus.”

Rock is a long way from achieving concensus. Aside from the lack of provincial support, he likely faces an uphill battle in his own cabinet. The government intends to restore roughly $1 billion a year to its health and social transfer budget—currently at $52.7 billion—for the next four years. But that does not take pharmacare or home-care needs into account. And although Finance Minister Paul Martin expects to balance the budget next year, there are already heavy demands on any surplus.

Given the fiscal facts of life, pharmacare’s best hope may lie in the business community, says McMaster’s Hurley. Canadian companies already contribute $3 billion towards their employees’ prescription drug and health benefits, an amount Hurley says could be converted into a payroll tax. But that idea, too, is unlikely to get much support. For starters, the Canadian Life and Health Insurance Association, representing 90 per cent of private health insurers, says as many as 10,000 workers would lose their jobs if drug insurance went public. The switch could also make it uneconomical for private insurers to provide other benefits such as dental and vision coverage, says association president Mark Daniels. But the notion of a new payroll tax creates discomfort in other parts of the business community as well. “Once you kick in a program like pharmacare, it only grows,” says Garth Whyte, a vice-president of the Canadian Federation of Independent Business. ‘We are concerned about who pays and will the costs go out of control.”

Canadians could still end up with a watered-down version of the Liberals’ original concept of a program to provide prescription drugs and home care. Alternatives to fully funded, government-run pharmacare include a partnership with private insurers, or a program that includes some user fees. According to the drugmakers, a 25-per-cent user fee and an increase in spending on health care of $1.5 billion a year would offer the “best opportunity” for national pharmacare. Canadians can expect “lots of posturing on all sides” when the ministers start discussing specifics early next year, says Lewis. Whether there is any agreement, he adds, will depend on “the political climate, the fiscal climate and probably the alignment of the stars.” □