Canada may not have the world’s best health system but there is one area where we know no equal: Writing reports on how we could do better.
Since the Royal Commission on Health Services issued its recommendations on reforming still wet-behind-the-ears medicare in 1964, there have been dozens upon dozens of earnest reports, each saying more or less the same thing and each greeted with bons mots, then dutifully filed on a dusty shelf.
On Wednesday, we racked up another medal in the navel-gazing Olympics with the release of Pharmacare Now: Prescription Medicine Coverage for All Canadians.
The report from the House of Commons Standing Committee on Health, predictably, called for Canada’s patchwork of private and public drug plans to be replaced with a national single-payer pharmacare system.
The HESA report provides a good recap of the shortcomings of our current approach to prescription drug purchasing and coverage:
- Unlike hospital and physician care, prescription drug coverage is not universal; about 2 per cent of Canadians have no drug coverage, and 10 per cent have inadequate coverage;
- There are 102 public drug insurance programs and 113,000 private plans so there is a lot of bureaucracy;
- Coverage is inequitable: The percentage of prescription drug costs covered by public insurance plans varies markedly between jurisdictions, ranging from 27 per cent in Prince Edward Island and 55 per cent in Saskatchewan;
- Formularies (the list of drugs covered) are different for every public and private plan, so coverage varies depending on where you live and where you work;
- Canada has the third-highest drug costs in the developed world, after only the U.S. and Switzerland;
- Costs are high, in part, because there is little centralized purchasing. There are roughly 13,000 approved prescription drugs in Canada, but Ottawa and the provinces have joint purchasing agreements for only 100 brand-name drugs and 18 generic drugs;
- A national pharmacare program could save $4.2-billion a year, according to the Parliamentary Budget Officer – if we had joint buying, stricter regulation of drug prices, more aggressive use of generics and a strict formulary.
But there are a lot of ifs and buts.
Even if predicted savings are achieved – and the notion that pharmaceutical companies will happily grant 25-per-cent price cuts and private insurance companies will surrender a profitable market without a fight is delusional – a national program would result in at least $7.2-billion in costs being shifted from private employers to the public treasury.
For a report prepared by politicians, the HESA recommendations are shockingly naive – or perhaps deliberately oblivious – about the political challenges.
Last year, Canadians spent $34-billion on prescription drugs. Of that total, $14.5-billion was covered publicly – $12.4-billion by the provinces, $760-million by the federal government and $1.3-billion by workers’ compensation.
Another $12.1-billion in prescription drug costs were covered by private insurers and $7.4-billion paid out-of-pocket.
If you move the current $19.5-billion in private spending (or a little less if the savings come about) to the public side, who is going to foot the bill – Ottawa or the provinces?
Just as importantly, how are they going to pay? Corporate taxes, payroll taxes, premiums? The HESA report states simply that a “new revenue tool would be required.”
In an era where “taxation” is a dirty word, that’s a mountain, not a molehill.
While a universal single-payer system has the potential to save money, those savings would come at a price.
Big public drug plans save money with bulk buying and by limiting choice. There are between 4,400 and 8,000 drugs on public drug formularies in Canada, and up to 13,000 drugs on private formularies. In New Zealand, the country with the world’s lowest drug prices, the formulary has 2,000 drugs.
We have to be upfront about those trade-offs.
If Canada is serious about universal pharmacare, it needs more than a recitation of hosannas to a single-payer system.
It needs a firm proposal that includes how costs would be shared between Ottawa and the provinces, if and how existing private plans would be replaced, who would oversee the national formulary, how new tax revenues would be raised and a clear timetable for implementation.
That role will fall to Dr. Eric Hoskins, who heads the newly created Advisory Council on the Implementation of National Medicare.
His report is due next spring.
Yes, another report – just when the country is gearing up for the October 2019 federal election.
What could possibly go wrong?