Evidence of meeting #74 for Health in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was system.
A recording is available from Parliament.
4:10 p.m.
Liberal
John Oliver Liberal Oakville, ON
I also haven't mentioned the fees that are being paid to manage the 100-and-some private insurance plans. These fees of around 4% to 5% aren't built in here as savings.
4:10 p.m.
Associate Professor, School of Public Policy and Administration, Carleton University, As an Individual
Absolutely.
4:10 p.m.
Prof. Steven Morgan
To answer your question, the logic of the way Canadian medicare was supposed to work, the way our system was supposed to be built in stages, including prescription drugs and eventually things like home care and long-term care, was that it would be provincially and territorially administered with cost-sharing at the federal level.
The lump sum of money to bring the provinces along probably needs to come from the federal government, so some new revenue tool needs to be introduced, but there will be a lot of payers who will benefit significantly from that.
4:15 p.m.
Prof. Steven Morgan
You have to find it. You can't necessarily immediately grab it, for instance, out of the extended health insurance from which public sector employees currently benefit. Eventually, that will become a savings both to those employees and their employers, but in the short run, to incentivize the program you need to find a revenue tool to bring money into the system.
One of the things you have heard from private sector employers at this committee is that they are willing to embrace a model of pharmacare. There have been surveys of employers in Canada in recent years that show a surprising number of Canadian employers would be willing to contribute in some way to a publicly run plan, because the public plan is better capable of managing the costs. One of those things means they won't pay for just anything at any price, because no rational country in the world does that. The only actors doing that, unfortunately, are Canada's private insurers, and it is costing us dearly as a result.
4:15 p.m.
Chair, Canadian Doctors for Medicare
The only other thing I'll add is that the provinces are already starting to act on this, because many provinces recognize this as a huge gap in the health care system. We've seen Ontario launch the OHIP+ program for those up to age 25 to expand publicly paid prescription drugs. That is rolling out in January. For my younger patients who are working in a gig economy and contract jobs, who can't find work and instead are driving Uber cars or delivering pizza, that is going to make a huge difference.
4:15 p.m.
Liberal
John Oliver Liberal Oakville, ON
The logical direction then would be to go back to the Canada Health Act and add into the definition what provinces and territories are responsible for covering. It would be a statement around the coverage of medicines that are prescribed by—
4:15 p.m.
Prof. Steven Morgan
I can quickly answer that. I'm not entirely sure about going into the Canada Health Act, which is what Roy Romanow recommended for prescription drugs as a long-term goal. There are certain principles of the Canada Health Act that might not be consistent with the way you manage a pharmacare program, such as having no user charges to patients for any of the eligible drugs covered. In fact, as Dr. Gagnon has pointed out, most systems do use some kind of patient cost-sharing as an incentive to get patients to at least use the cost-effective treatments first before moving on.
You might decide to move it into the Canada Health Act, but it would require some tweaking. You could create an analogous Canada pharmacare act, and it would have the same purpose and maybe have more specific language about how this would be run, what kind of national agency would manage the formulary, how they would be subject to some budget constraint. I think there's expert consensus, for instance, that we make sure this program is budgeted so that it's not a white elephant.
4:15 p.m.
Liberal
The Chair Liberal Bill Casey
Your time is up. Thank you very much.
Mr. Frank, you wanted to make a comment.
4:15 p.m.
President and Chief Executive Officer, Canadian Life and Health Insurance Association
Yes, I wanted to address the concept of administrative cost savings, which I think an individual raised.
I want to remind everyone on the committee that we don't administer drug plans. We administer the business of supplemental benefits, which includes a wide range of things: dental coverage, paramedical, vision care, hospitals. You cannot assume that if prescription drugs were taken over by government, the cost to employers of providing those services would go away. I think you need to be careful when talking about billions of dollars of savings there.
The other thing I would point out is that generally when you move from a private to a public plan, you leave behind a lot of individuals who are covered for things today that will not be covered on the public plan.
In the PBO report there is reference to that. It's a throwaway line about the $3.9 billion that's spent. It is just assumed that this cost will continue to be picked up by employers. I think the committee needs to reflect on what $3.9 billion means. It means hundreds of thousands of people getting reimbursed for therapies today that this model assumes are not going to be covered in the future, and they will somehow have to find coverage.
Frankly, when we talk to employers—and we have lots of experience, particularly with public sector unions and anyone else who has collective agreements—that's the biggest reticence to making change. Insurers want to provide really robust and advanced drug management tools. It's the employers who are reticent to do that. In some cases it's the collective agreement and bargaining clients who are the most difficult to move, because they're acutely aware of what they'll be leaving on the table.
The committee needs to understand that moving from private to public has costs. People will get left behind, and it's not as easy as it is being portrayed by many of the people proposing it.
4:15 p.m.
Liberal
4:15 p.m.
Conservative
Marilyn Gladu Conservative Sarnia—Lambton, ON
Thank you, Chair.
Thank you to all the witnesses for coming back. I am new to the dance and I wasn't here when you were here the last time. I appreciate your testimony.
I really want to come up with an answer that will address the gap of the 12% that the parliamentary budget officer has indicated are people who today can't get prescription drugs, either because they have no coverage or they have an inability to pay. When we selected Quebec for the costing model, it was because that was thought to be the Cadillac.
I'm a bit disturbed to hear the testimony from Monsieur Gagnon that in Quebec 8.8% of adults are not able to fill their prescriptions due to finance, because when I compare that to the 12% who were without coverage. the gap that we were trying to fix, it means we're only fixing a third of the problem.
Do you have information about why they can't pay? Is it the copayment? Is it deductions? Is it a combination, or some other factor?
4:20 p.m.
Associate Professor, School of Public Policy and Administration, Carleton University, As an Individual
Yes, absolutely.
We need to understand that when we implemented the regime in Quebec, it was in order to cover the low-income workers with no private coverage at all. We expanded coverage. In terms of the working population, you have much better access for the working population in Quebec.
Seniors, for example, have very large copays and deductibles they have to pay as well, and an annual maximum contribution of up to more than $1,000 a year now. The thing is, when you compare seniors in Quebec versus Ontario, for example, seniors in Ontario have much better access than seniors in Quebec.
We have better access for the working population, but the non-working population in Quebec is much more problematic. In fact, for a while they also imposed copays for people on social assistance in Quebec, but then the costs that it generated elsewhere in the health care system were so huge that they decided to repeal the copay for people on social assistance. That's the main reason.
4:20 p.m.
Conservative
Marilyn Gladu Conservative Sarnia—Lambton, ON
Yes, I see that and I agree with that, because what we are seeing is that the 12% who can't afford to pay really can't afford to pay, whether it's five bucks for the copay or the deductible or any of those things.
Mr. Morgan, go ahead.
4:20 p.m.
Prof. Steven Morgan
I think one of the flaws of the Quebec model was that it was based on an insurance industry's model of what prescription benefits are, rather than an integrated model of a health benefit that includes prescription drugs.
Systems around the world that integrate medicines into their equivalent of our medicare system make sure that preventative medicines are free of charge to as many people as possible, so that at least the stuff that keeps people out of hospitals is actually getting filled when prescribed appropriately.
We have to recognize that in Quebec, for the average beneficiary of any of the plans available, there are significant monthly deductibles and co-insurance charges that just don't make sense from the logic of managing this as a health benefit. If we move forward with pharmacare in Canada, I think there is expert consensus that we want to make sure that carefully chosen medicines are available to all without financial barriers. For other medicines, there may be copayments or co-insurance, but there would be what were referred to as tiers in the formulary or in the charges for patients.
October 19th, 2017 / 4:20 p.m.
Conservative
Marilyn Gladu Conservative Sarnia—Lambton, ON
Very good.
There is another thing I'd like to see. I don't have great confidence that the government, if we gave it the responsibility of administering national pharmacare, wouldn't return the same kind of service that we get today from CRA, immigration, and a number of other departments. I have been on the receiving end when I try to interact with those departments myself. I would like to see this plan implemented quickly.
I am very interested in the idea Mr. Frank was talking about. I don't quite understand how the provinces pay out their insurance. For people who are covered under social assistance and everything else, the province is covering that insurance. Are they covering it from one of the 24 companies that are in the pCPA? How is that covered today?
4:20 p.m.
President and Chief Executive Officer, Canadian Life and Health Insurance Association
If it's a public drug program, they would be funding it out of general funds. A senior in Ontario on the senior ODB plan would present their OHIP card at the pharmacy. That would get adjudicated on the back end and paid out of Ontario government finances.
4:20 p.m.
Conservative
Marilyn Gladu Conservative Sarnia—Lambton, ON
Okay, so it's not really from an insurance company there. It's the private companies that—
4:20 p.m.
President and Chief Executive Officer, Canadian Life and Health Insurance Association
It has nothing to do with the insurer. An employee of the Province of Ontario would be sponsored through an insurer. It depends on which province you are talking about. In that instance, it would go through a different channel, the way that payment would be settled. Sometimes it goes through the insurer; sometimes they pay directly. It's complicated.
4:20 p.m.
Conservative
Marilyn Gladu Conservative Sarnia—Lambton, ON
Is the cost different for province-provided insurance than it is for firms like Sun Life, Great-West Life, Blue Cross, etc.?
4:20 p.m.
President and Chief Executive Officer, Canadian Life and Health Insurance Association
Yes. That's what I was referring to in my remarks.
What we have today is a scenario where governments have banded together. They negotiate lower prices on new drugs coming to Canada, but they do that only for the benefit of their own beneficiaries, their employees. Anyone else in the province who is on a private plan is basically left to fend for themselves.
I'll reiterate: when you look at the savings that everyone estimates are going to come from pharmacare, you see that the bulk of those come from doing a better job of pooling our resources together and negotiating lower prices using the whole volume of the Canadian market. There is a very simple way to do that: we just agree to start doing it. You invite everybody to the table with the pCPA, and we can start to realize those savings.
4:25 p.m.
Conservative
Marilyn Gladu Conservative Sarnia—Lambton, ON
To address the 12% who are not covered today, would your recommendation be that we put them into the existing provincial plans immediately? We could just say, “Okay, we're going to cover everybody who doesn't currently have coverage in those provincial plans.” Would that be a start?
4:25 p.m.
President and Chief Executive Officer, Canadian Life and Health Insurance Association
To be really frank, I don't know that we understand who those 12% are. I don't think we understand why they are not filling their prescriptions. Is there a certain class of drugs that is the problem? Is there a certain regional distribution that is the problem? We don't know enough for me to say that I can help you design a target solution.
In a normal environment, when 95% or 96% of people are getting everything they want and you have a gap that's 4% or 5%, you do try to find solutions to address the gap. You don't suggest we throw everything out and start from scratch.
In the short term, that's the way we would propose, the way it would logically make sense to move forward.