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April 13, 2010

Health Costs: Patient Funding, Big-Smoke and Big-Pharma

On Monday, April 12th, the Campbell government launched its much anticipated "patient funding initiative". The temptation for some critics is to automatically say that anything the government does is wrong; however,  Falcon's experiment should be carefully monitored and transparently evaluated.  Health care needs experiments; the early stage in Falcon's funding experiment commits $250 million over two years.   Of course, that's not "new" money; it's held back from the budgets the hospitals would have received.  Missing from Health Minister Falcon's announcement were the evaluation methods and criteria which will be used to assess his experiment, as well as evaluations of patient funding as used in the countries that impressed him.

At the same time Falcon was announcing his experiment in health funding, the Canadian Medical Association Journal released a study which looked at data between 1996 and 2006 and found that the smoking ban in Toronto decreased hospital admissions because of cardiovascular conditions by 39% and because of respiratory conditions by 33%. Of course, the usual qualification applies - more research is necessary. What is clear is that the Campbell government has sided with big tobacco and thus against more effective preventive health care. Within months of coming to power in 2001, it interfered with plans by the Workers' Compensation Board (WorkSafe BC) to protect workers from second hand smoke. Currently, smoking regulations for outdoor patios depend on local municipalities rather than on the provincial government. If the Campbell government were serious about reducing health costs and improving outcomes, it wouldn't pass the buck to municipalities on controlling smoking.

Not as serious as tobacco control for health outcomes, but more significant for cost control is the cost of prescription drugs. It may take years to see savings from reducing tobacco-caused illness, but drug costs are immediate.  Ontario is currently engaged in a major fight with Shoppers and other pharmacies over the government's attempt to stop what amounts to kickbacks from drug companies to pharmacies; the polite term is "professional allowances". The Ontario government expects to save $750 million per year by stopping this practice.

I was one of the people who put together BC's original Pharmacare program in the early 70s. In 1978 we negotiated a pricing formula that consisted of the "actual acquisition cost of pharmaceuticals" plus a dispensing fee. Pharmacies cheat on the "actual costs"; that is what the fight in Ontario is about, and the stakes are in the hundreds of millions.

The Campbell government dealt with rising Pharmacare costs by cutting benefits to seniors with the introduction of "Fair Pharmacare" in mid-2003, a major cost shift. BC could follow the lead of Ontario by taking on the drug companies and pharmacies over violations of the agreement to charge true acquisition costs plus dispensing fees, but the Campbell government appears to be in the pocket of the drug industry and more willing to cut benefits to BC families.

Big-Pharma's influence with the Campbell government is dramatically illustrated with the elimination of funding for UBC's therapeutics initiative, the program which helped to counter the massive efforts of drug companies to influence the prescribing habits of physicians.  The government appointed a committee, stacked with friends of the industry, which recommended that the therapeutics initiative no longer be part of BC's drug review process.  That was the initiative's reward for being internationally recognized for controlling costs.

It is one thing for Health Minister Falcon to experiment with new hospital funding models without any criteria and evaluation tools in place, it is another thing to measure his government's performance against its efforts to stop damage from tobacco or from the plunder of the pharmaceutical industry.

When big smoke and big-Pharma have the government in their pockets, you can't believe what government says about efforts to control costs and protect you. There are billions of dollars at stake in how health care is regulated; don't believe the rhetoric from the government around sustainability and increasing costs when they are looking after their friends. Ask why the Campbell government won't follow the lead of Ontario in taking on the drug industry!