December 12, 2001

Health Commitee Report

Notwithstanding outrageous recommendations throughout the report of the Select Standing Committee on Health with respect to financing health care, the report is worth reading. Its recommendations on reference based pricing got it right and eliminated the need for the committee appointed by Minister Hawkins. Its recommendations on primary care reform deserve serious attention. Even the outrageous sections deserve a good read as they will help to stimulate debate and hopefully end attempts to simply offload costs rather than properly manage care.

Cancer victims could look forward to thousands of dollars in extra taxes if Val Roddick and her health committee had its way. That's what it means to make health services a taxable benefit. Suppose you get cancer. Let's say it costs $50,000 to treat you; then you would pay taxes as if you had earned an extra $50,000! How's that for going back to the days of combining sickness and financial hardship?

That is the kind of lunacy that runs through many of the committee's recommendations on cost offloading. The ten backbench liberals (the only New Democrat didn't participate) endorsed a report that ignored evidence that the lower one's income the more likely one is to need and use health care. Their cost shifting recommendations would mean poor people would be penalized by being sicker, dying earlier and paying more for the privilege.

The Committee did recommend "that any health care reform does not place undue financial hardship on individuals or certain sectors of society." They didn't say where they would draw the line between "due" and "undue" financial hardship. They did say that a $5 per month increase in MSP premiums would raise $100 million for health care. That comes from a bunch of backbenchers that supported massive tax cuts for high income earners. To give the six figure income set thousands of dollars in tax cuts while imposing an increase in the flat premium tax for the working poor ought to embarrass even the Campbell government.

The Committee's recommendations for seniors are amongst the most disturbing, and they may indicate the escape route for yet another broken "New Era" promise. The government promised to "Work with non-profit societies to build and operate an additional 5,000 new intermediate and long term care beds by 2006." The Committee recommended "Long-term, intermediate, assisted and supportive housing should be considered as a housing issue with a health component rather than a health issue with a housing component. This will enable a much different look at what residents pay for their housing." Is that a different look at what residents pay for their housing, or is that a rationalization to dramatically increase user charges for people who can no longer live in their own home?

The Committee recommended handing responsibility for the BC Ambulance Service off to the regions. While claiming they support having adequate funding accompany the offload, the committee went on to recommend that government "Encourage service clubs - such as Rotary clubs, Lions clubs, etc. - to help purchase and provide some of the high-tech monitoring equipment needed in ambulances - for instance, automatic defibrillators or cardiac monitors." The next you know they will ask nursing staff to hold bake sales to finance the operating rooms!

---

December 11, 2001

Select Committee on Reference Based Pricing
Retreat from a New Era Error
(why can't they do this on a $9 million plus "referendum")

Sindi Hawkins appears to have been undermined yet again.

The Select Standing Committee of the Legislature on Health released its report on federal budget day. That is unfortunate, because the timing deprives it of the attention it deserves. Many of its recommendations are controversial (much more later), but one recommendation deserves special attention. The Committee (all Liberals except for Joy MacPhail ) answered the question posed by the New Era Document on Referenced Based Pricing for Pharmacare.

That section of the Committee's report is copied below, but first consider why the Minister without Deputy, that would be Sindi Hawkins, Minister of Health Planning, would now proceed with the committee she appointed to review referenced based pricing. Hawkin's Committee is the one where the chair resigned due to an apparent conflict of interest (sitting on a board funded by a major pharmaceutical company which opposed referenced based pricing). What if Hawkin's Committee comes up with different conclusions from the Legislative Committee? That should prove more than a little interesting!

"REFERENCE-BASED PRICING"
"One of the ways B.C. has been able to help control its drug costs is through a policy called reference-based pricing (RDP). Other provinces have tried to curtail costs by increasing deductibles, taking drugs off the formulary or making people ineligible for coverage. B.C. looked to evidence-based medicine for answers and, using five classes of drugs, began to treat all medications within a category as "therapeutically equivalent." When drugs are known to be equally safe and effective, Pharmacare pays for the least expensive one - the reference drug - within the category. It will pay for more expensive ones if the reference drug fails or is inappropriate. Doctors must ask for permission to prescribe a higher cost drug, citing the medical reasons, by faxing their request to pharmacists on staff at Pharmacare through a process called 'special authority.'"
"Since B.C. introduced the policy in October 1995 the controversial program has been the centre of much discussion and study. The preponderance of evidence indicates that reference-based pricing saves the government a considerable amount of money and does not hurt patient care. A recent Canadian study concludes that after RDP was introduced, Pharmacare expenditures on just one class of drugs prescribed to seniors - nitrates - declined by $14.9 million. Three years ago the office of the auditor general of B.C. reported that Pharmacare saved the government $25 million a year as a result of applying RDP to the first three of its drug categories. Yet another more recent, Harvard study concludes that B.C.'s RDP policy 'may be a model of successful cost containment without adversely affecting patients or cost-shifting.'"
"Nevertheless, aspects of the program continue to invite criticism. Pharmaceutical manufacturers condemn it, because the money RDP saves is lost profits for them, and as a result the companies have withheld investment from B.C. as a protest against the policy. Manufacturers of generic drugs, as the makers of the lower-cost alternatives, support the RDP program and told the committee that the program should remain in place. Physicians, who condemned the program at its inception, have now become accustomed to it. However, the often slow, cumbersome and frustrating process of faxing in special authority requests is a still a source of irritation."
"Abandoning the program would be a fiscal step backwards and, indeed, expansion of the program should be considered to include more classes of drugs. The special authority process, however, could be streamlined. For example, the B.C. Pharmacy Association suggested that local pharmacists, using PharmaNet, would be capable of assessing whether the reference drug had been tried or was inappropriate and give the authority for the high-cost drug."
"Your Committee recommends that reference-based pricing be retained and potentially expanded but that solutions be explored to streamline the special authority process. Pharmacists, physicians and government should negotiate a more effective special-authority process, including whether local pharmacists could take on the task."