Universal Pharmacare and Federalism

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Policy Options for Canada


Canada is the only OECD country with universal health insurance that does not include coverage of prescription pharmaceuticals. Some provinces have taken steps to provide drug insurance coverage for the poor, the elderly and people facing catastrophic costs (there are some 70 drug funding programs across the country). However, access to essential medicines depends on factors such as age, medical condition, income and province of residence. It is estimated that approximately 20 percent of Canadians have no drug insurance.

A number of reports have recommended that Canada’s public health services be expanded to cover pharmaceuticals. This possibility is now under serious consideration, with the establishment by the federal government of the Advisory Council on the Implementation of National Pharmacare, led by Eric Hoskins (a former Ontario cabinet minister). The council is mandated to report by spring 2019.

This study explores options for universal pharmacare in the context of Canadian federalism. The authors define universal pharmacare as a system of insurance for important medicines that is progressively financed (i.e., contributions reflect users’ income) and has no access barriers due to costly copayments. Such a system would ensure access to important medications for millions of Canadians and improve the return on investment for the money spent on pharmaceuticals. However, there is very strong opposition to universal pharmacare from private insurers and pharmaceutical companies, which often argue for “filling the gaps” rather than comprehensive reform.

The authors outline two policy options that, based on their analysis, are feasible given the constitutional division of powers. The first would be for the provinces to delegate the power to administer drug insurance plans to a new arm’s-length agency funded by the federal government. An example of such an organization is Canadian Blood Services, which on behalf of the federal, provincial and territorial governments is responsible for the provision and management of a $500-million drug portfolio.

The second option would be for the federal government to adopt legislation similar to the Canada Health Act and provide an annual pharmacare transfer to the provinces and territories. This would give them flexibility in the design of their respective insurance systems, with federal contributions contingent on compliance with two critical criteria: (1) universal coverage should be provided for a basket of essential drugs, without copayments or deductibles; and (2) decisions over what to include in the basket should be made by an arm’s-length body (or bodies) that would negotiate with drug companies for the best prices.

The authors point out that, under either option, private insurers would not be eliminated. However, their business model would need to change to focus on brands of drugs not included in the universal public plan.

Acknowledging the challenges of reaching the necessary intergovernmental agreement, the authors call on the federal government to make a firm commitment to leading Canada toward universal pharmacare and to begin negotiations with the provinces and territories.

Reduced health care costs by decreasing rates of prescription nonadherence

Equitable financing rather than saddling patients with costly medical bills

More affordable medicines due to lower administrative costs than the current multipayer systems

Equitable access regardless of one’s age, health condition, or economic status

Vancouver health authority ends contract with private surgery centre over patient-pay issues


PAMELA FAYERMAN Updated: August 30, 2018

Vancouver Coastal Health is ending a contract with False Creek Healthcare Centre, and as of next week 115 surgeons and anesthesiologists with privileges at regional public hospitals won’t be able to use the operating rooms at the Vancouver clinic.


Dr. Dean Chittock

A memo to medical staff from a vice-president of Vancouver Coastal Health, Dr. Dean Chittock, said the health authority “made the decision to repatriate False Creek surgical activity back to the health authorities effective Tuesday, September 4, 2018.”

The change comes a month before new legislation comes into effect imposing harsh penalties on private clinics and physicians where medically necessary services are paid for directly by patients seeking faster treatment. Private clinics have gone to court seeking an injunction to block the bill that will be effective as of Oct. 1. There are dozens of private surgery clinics in B.C. which have always offered three streams of patient service — publicly funded (through health authority contracts), privately funded for expedited service and third-party treatment for agencies like WorkSafeBC and certain patients covered by federal government agencies.

For a few decades, health authorities have been contracting out day surgery cases to private clinics because of over-capacity problems causing long delays in non-emergency, non-urgent surgeries. Last year, Vancouver Coastal Health paid False Creek clinic $1.9 million for a range of operations or other treatments on patients who would otherwise have to wait many months or even years for procedures like hernia repairs. The year before, the private clinic received just under $1 million. In the past three years, Vancouver Coastal Health has contracted with the False Creek clinic for about 3,400 cases.

Other health authorities are not severing contracts with private clinics and health minister Adrian Dix told Postmedia that “a significant role for private surgical clinics” remains, as long as they don’t charge patients for surgeries that are typically publicly funded.  A spokeswoman for Island Health in Victoria said it has contractual arrangements with private surgical facilities “and we have no foreseeable plans to change those contracts.” View Royal Surgical Centre is one of the newest such facilities in B.C. and it has a major contract with Island Health for thousands of surgical cases as well as the provision of colonoscopies. Fraser Health also contracts with private facilities when cases can’t be done quickly enough in public hospitals.

According to sources, the provincial government directed Vancouver Coastal Health to cancel its contract with the False Creek clinic. In a statement, Dix said the False Creek clinic had “issues that it needs to address.” After the NDP was elected last year, audits were done on a few clinics, apparently showing that they were accepting private payments by patients, against rules in the Medicare Protection Act.

Dix opened the door for reconciliation: “For False Creek Healthcare Centre, I don’t exclude a future role for their work in B.C.’s public health care system,” he said.

Earlier this year, Dix called on health authorities to open up unused operating rooms. With additional funds from the province, two unused operating rooms will be recommissioned at Vancouver General Hospital and St. Paul’s Hospital. As well, capacity will be increased at Richmond and Lion’s Gate hospitals, Dix said.

Centric Health, which owns False Creek clinic, would not comment on the contract cancellation.

About 60,000 surgical procedures a year are done in private clinics in B.C., and there are currently about 85,000 patients waiting for surgery in hospitals. Capacity problems were illuminated in the most recent report card from Vancouver Coastal Health which stated it was missing its target for performing non-emergency surgeries within medically acceptable times, largely because of nursing and operating room shortages.

Dix said operating room staffing levels have improved so “they can now move some of their previously contracted surgical capacity back in house.”

The report card said that as of earlier this year, 49.2 per cent of patients were waiting longer than the benchmark time frame; the target was less than 20 per cent. And while the Ministry of Health said no patient should have to wait longer than half a year for surgery, 28.7 per cent were waiting longer than 26 weeks.


Dr. Amin Javer performs sinus surgery on a patient at False Creek Surgery Centre. ARLEN REDEKOP / PNG

Sinus surgeon Dr. Amin Javer said now that Vancouver Coastal Health was ending its contract with the False Creek clinic, 150 of his patients who were planning to have surgery there would have to “go back into the public health care system, and back onto waiting lists that will get much longer.”

Javer is the surgeon who operated on the B.C. Supreme Court judge presiding over the eternally long constitutional challenge of the Medicare Protection Act — commonly called the Brian Day trial because he’s the orthopedic surgeon who co-owns the Cambie Surgery Centre, which is the lead plaintiff in the trial which resumes next month after a summer recess.

Justice John Steeves was able to have his sinus surgery expedited because of the now expunged contracting out agreement between Vancouver Coastal Health and the False Creek clinic.

In court documents, Javer said he’s been doing about three sinus surgeries a week at the False Creek clinic, in addition to operations he performs at St. Paul’s and Mount St. Joseph hospitals where patients wait up to 2.5 years because of insufficient operating room time.

Reached while travelling in the Middle East where he is teaching and lecturing, Javer said he was distraught by the Vancouver Coastal Health action.

“The government is basically blackmailing the private centres with their Sept. 4th deadline, (saying) ‘if you do private surgery, you don’t get our business,’ even though the public system wait-lists keep growing out of control and ultimately all patients suffer. If an injunction fails for the private centres, the wait-lists in the public system are going to become even more unbearable than they are now. Current waiting lists will immediately double and the small percentage of patients who can afford it will go out of the country to have their surgeries, treatments, and diagnostic tests done. That would be a real shame — it’s a lose, lose situation for everyone.

“The government seems to have forgotten the patient in this radical move that they are trying to make. There is no extra funding to increase volumes in the public hospitals. In fact, we are being told not to work hard and to take time off.”

In an affidavit filed in the Day trial, Javer said he’s been offered jobs around the world. But in an email Wednesday, he said:

“Canada is my country and B.C. is my province. I do not want to move. I’m happy to just work in the public system, but I feel for my patients, so yes, I am exploring options. I already hate the long wait-lists and they are only going to get longer with the current administration. The whole thing makes no sense to me.

“I’ve built a world-class sinus centre. I’ve got thousands of patients depending on my care and I do care about them a lot. If I wanted, I could go work anywhere, but I truly care for Canada, and for my patients. I’m very torn (and) at this point, I’m just waiting to see what happens without making any rash decisions. I feel that someone along the way (people) will see the mistakes being made and start correcting them.”


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