Proceedings of the Standing Senate Committee on
Social Affairs, Science and Technology
Issue 60 - Evidence
OTTAWA, Wednesday, June 5, 2002
The Standing Senate Committee on Social Affairs, Science and Technology met this day at 3:36 p.m. to examine the state of the health care system in Canada.
Senator Michael Kirby (Chairman) in the Chair.
[English]
The Chairman: Today we will continue our discussion of the Canadian health care system. Our witnesses from the Canadian Healthcare Association, CHA, are Ms Sharon Sholzberg-Gray and Mr. Larry Odegard. With us from the Canadian Association of Chain Drug Stores, CACDS, are Ms Lori Turik and Deb Saltmarche. Welcome.
Ms Sharon Sholzberg-Gray, President and CEO, Canadian Healthcare Association: On behalf of the CAH's board of directors and our provincial and territorial members, I should like to thank you once again for the opportunity to appear before you. As you noted, Mr. Larry Odegard is with me today representing the CEOs of the provincial and territorial health and hospital organizations across the country that are the members of CHA. We would like to share with you some of our thoughts on volume 5 of your report.
Of the 20 principles that are contained in your report, we must say that we enthusiastically support 10 of those principles and recommendations. In my introductory remarks, I will not spend more time talking about those, although there are issues that we might want to discuss later. We must also say that we are cautious about the process of implementing eight more of the principles, while supporting them in substance. Finally, there are two principles, one related to service-based funding and one to internal markets, that do not have the support of the CHA's board of directors or of our provincial and territorial members.
Some weeks ago, when we sent you an earlier version of our brief, we said that we would have further discussions at our board meeting in May. We have had those discussions and have since confirmed the substance of the briefs that we sent to you weeks ago, with minor changes and additions in wording. I hope, though, that during the discussion period we will have the time to address all of the principles, because many of them are extremely important and we would like to say how much we appreciate the wording you have used in many of them.
First, I will speak to the issues of service-based funding and internal markets. Our association fundamentally disagrees with the proposal to change current hospital annual global budgets to service-based funding. Our concerns are many and they are outlined in our background document. I will highlight a few of them now.
While our members enthusiastically support the need for a rational basis for health funding and to improve performance measurement, we dispute the committee's proposal that the best way to achieve these objectives is through service-based funding. Our members believe that the needed costing and performance initiatives outlined by the committee are occurring within existing global budgeting systems. Our members have raised a number of ``reality check'' issues related to shifting to an entirely service-based funding system. These include the fact that service-based funding supports the notion of sickness care rather than health care; it focuses on procedure-driven care rather than on comprehensive, integrated care, which is the aim of global funding; it does not lend itself to a population-needs-based approach; it requires costing data that does not yet exist, although hopefully it will in the immediate future; it can lead to government micromanagement; and it would not, in and of itself, decrease waiting times.
Global funding allows for the allocation of funds according to local needs and encourages efficiencies. A savings in one area can be distributed to another area of need. Accountability can be achieved within global funding by developing service agreements that include stated performance measures related to levels of services and outcomes, such as improving the health of individuals and communities.
The committee's report also suggests that service-based funding would lead to the development of centres of specialization for the provision of certain surgeries or treatment of certain conditions, particularly in large urban areas. We must say that we support the development of centres of specialization or centres of excellence, but we also believe this can and does occur within a global budgeting system.
While CHA's members agree with the committee that it is important, indeed critical, to develop robust costing data that will shape the health system, there are significant practical issues that need to be addressed outside the budgeting system for health services. The focus of the committee should be on encouraging case-costing initiatives to be used as performance indicators to benchmark activities and to improve performance, and not as a funding mechanism or a competition tool.
The second principle with which CHA's members fundamentally disagree is related to the development of internal markets. The committee suggests that internal markets, in which primary health care teams would purchase health services provided by hospitals and other health care institutions on behalf of their patients, should probably be created. We are heartened by the term ``probably,'' because we hope this signals the committee's openness to reconsidering these principles. Our members have pointed to the failure of the internal markets created in the United Kingdom's Fundholder practices. It is our understanding that these internal markets are being abandoned in Britain, so we do not think we should copy what we consider to be a failed experiment.
Significant issues related to creating internal markets for health services have been identified. These include the need for an excess capacity of health providers and facilities to create competition. At this time of global shortages of health providers and constrained physical capacity, we need to focus, not disperse, our limited pool of resources. Internal markets, particularly those related to primary care groups, can create another level of bureaucracy and could be a barrier to the implementation of primary health care reform, which we have been talking about for 50 years. Internal markets can also provide an easy scapegoat such that government's funding decisions are blamed on providers. I am sure you have heard previous testimony about ``cream skimming,'' which is the logical outcome of internal markets.
We are also concerned that the focus on the patient and the need for access to services can be lost, particularly when striving for the lowest cost. We are also concerned, frankly, about the destabilization of existing hospitals. Hospitals cannot operate on a stop-and-go approach. They cannot have short-term contracts where, for example, they have an orthopedic department one year and then lose it the next. In our opinion, internal markets, particularly small clinics that deliver services that hospitals are delivering efficiently today, would not work.
You cannot create competition when there is only one service provider and your choice is to receive service in only one place. To quote one of our members, ``We have a lot of choice: It is Saint John's or Saint John's.'' Let's talk about the issue of excess capacity. There is excess capacity in health services in the United States. Excess capacity drives up costs; it does not drive them down. Empty beds cost a great deal of money.
Overall, CHA is not aware of evidence that would support the development of internal markets. Our members believe that there are alternatives to internal markets that will help improve efficiencies, such as primary health care reform, which you have mentioned; new models of physician remuneration; better information tracking and performance measurement; the development of electronic health records; and evidence-based approaches, so that we can always provide appropriate care. We think this is the way to go, rather than using internal markets as the panacea — somehow the saviour.
Finally, I should like to speak briefly on the issue of options for increasing federal revenue. We have presented to you in the past, I believe, our policy brief on the private/public mix in the Canadian health care system. In that we deal with many of the myths and realities of the system. The committee's earlier reports have done that too. One such myth is that public expenditures on health care services in Canada are some of the highest amongst the OECD countries. Another myth concerns the denominator effect in health spending, whereby decreases in overall government spending automatically make spending on health look higher. Sometimes health spending looks like it is going through the roof when in real per-capita terms it is staying even. The reality is that in real per-capita terms, health care spending in this country has only gone up 1 per cent per year over the last 10 years.
We have also suggested looking at tax cuts versus an investment in health. We have pointed to the competitive advantage our publicly funded health system provides. We have noted that everyone knows that individual Canadians are the ultimate source of funding, whether through taxes or out-of-pocket expenses. We have heard much about the mythical businesses and employers who wish to increase their health costs. We have said — and actually the committee's report seems to say this also — that increased private sector funding is not the answer and not a panacea.
Let us look at the issue of private delivery. We raised some of these issues when we talked about internal markets. I must say at the outset that in our brief on private/public funding and delivery in Canada's health system, we say that private delivery is not inherently evil — not at all. There is room for it here and there, within strict guidelines and accountability frameworks. However, it is not the magic answer. In fact, we are suspicious of any magic answers. We have concerns about compromises on quality jeopardizing accessibility; about cream-skimming; and anything else that involves excess capacity at a time of a shortage of health human resources.
It is interesting to note that there is currently a great deal of talk in Canada about increasing the number of private hospitals in our system, without noting that, in the United States, which has perhaps the most entrepreneurial system in the world, only 10 per cent of hospitals are private for-profit, while 70 per cent are private not-for-profit and 20 per cent are publicly owned. They have much private sector involvement on the funding and payer side, but on the delivery side, only 10 per cent of American hospitals are private for-profit because they know there is not much money to be made in the delivery of complex care.
They are also paying for all of those empty beds that I talked about earlier.
Let's look at increased federal revenues. I want to refer for a second to the issue of premiums. I notice that, in most reports, premiums are on the same line as user fees. We want to make it clear that we understand premiums to be a regressive tax for individuals or an increased business cost for employers, and we would urge the committee to make it clear that premiums are really a form of taxation. That is an important point to note, but we are not making a comment about it one way or another. In our last appearance before the committee in March, however, we did say that we opposed a targeted health tax because we were concerned about a full array of targeted taxes that would tie government's hands in terms of the future expenditure needs in this country. For instance, there might be new social or other needs that the government must spend money on that would also enhance the health of Canadians, and we would not want to restrict governments to collecting taxes for particular purposes.
We are concerned that volume 5 focuses almost exclusively on hospitals and doctors' services, although you make the point that that was the intent, and yet you recognize that the major cost drivers are outside this range of services. We are concerned that the other principles be addressed in a thematic way, because what we want to see in the end is a blueprint, a template, for an integrated health system that looks at the wide range of services to which Canadians need access and the ways in which those services can be funded and delivered: Some of them, as you note, provided on a publicly funded basis within the principles of the Canada Health Act; another group of services where there might be mixed opportunities within the publicly funded system; and then another group that will probably have to be privately funded entirely. It seems to me, though, that we must still look at things in an integrated way, or else Canadians' health needs will never be met.
In closing, I wish to say that our association, representing the people who deliver and manage health services in this country, that is, not the government but those who are involved in the community governance of our health system — something we should not lose sight of — feels that we are in a unique position to offer advice. After all, our members are the ones who will have to implement any solutions that people propose, and we want to be at the forefront of any system renewal. We look forward to a continuing discussion.
The Chairman: Thank you for your opening presentation and your brief. There will be a number of issues we want to talk to you about.
Ms Lori Turik, Vice-President, Public Affairs, Canadian Association of Chain Drug Stores: Thank you for the opportunity to provide input on implementing the principles for restructuring and financing the health care system, specifically the drug programs, in Canada. I should like to take a moment to introduce Deb Saltmarche, our CACDS Director of Pharmacy, who is also a community pharmacist and is here to answer questions during our discussion.
On behalf of our members, let me begin by commending the committee on its thorough, cogent and consultative approach to examining health care reform in Canada. We sincerely appreciate that.
Before I begin the formal presentation, I should like to emphasize two key facts about pharmacy. Retail pharmacy is a unique part of the health care system because it offers a public-private partnership for the delivery of quality health services that are valued by the public and are highly accessible. These services contribute directly to the Canadian economy, and in turn sustain the health care system from which we all benefit. We also appreciate the committee's recognition that community pharmacy in Canada is an under-utilized resource that has the capacity to help contain costs, improve patient outcomes and contribute to the sustainability of the national health care system.
In the remainder of the presentation, we will focus our discussion on three key principles from volume 5, areas where we believe chain pharmacy has a key role in implementation and can offer for your consideration some solutions. These would include health services not covered under the Canada Health Act, primary care renewal and a national health human resources strategy.
On the question of whether prescription drugs should be funded through public or private insurance, I should like to make the following three main points.
First, we believe that the most efficient approach to addressing gaps in drug coverage is to build upon the existing public-private insurance infrastructure and extend public insurance both to individuals whose lack of insurance for medically necessary drugs is a barrier to appropriate treatment, and individuals who require high-cost drugs for serious conditions that exceed their ability to pay; second, that fully involving pharmacists in collaboration with other primary care providers in optimal drug use management will contain drug costs and offset pressures in other areas of the system; and third, we believe that the federal government will need to share in the costs of an extended drug safety net.
The fundamental goal of —
The Chairman: Please make your points, but I do not think you need to read the full 15 pages. I want to ensure we have time for questions.
Ms Turik: The fundamental goal of drug program reform on a national level must be optimal drug utilization to achieve quality health outcomes and sustain costs. The key factors we would encourage you to consider are a public- private blend of insurance for medications. A universal public drug program for all Canadians would place unsustainable pressures on the system, result in increased rationing of drug therapies and restricted access to new and more efficacious drugs, and cost shifting to individuals, which would have negative consequences for patient care. To achieve the goal of access, we believe that the safety net is required and that the public system should be the payer of last resort.
We believe that the common drug review process now in development and formulary harmonization may present made-in-Canada opportunities for reducing administration and ensuring consistency across provincial plans. Most importantly, the formulary decisions must be based on outcomes evaluation, including pharmaco-economic assessments and increased post-marketing surveillance. Another means for creating consistency may be to conduct a national review of provincial special benefits programs for serious, high-cost diseases, with possible harmonization across the country. We also strongly advise that in order to have a viable private insurance market, competition among private insurers must be retained.
How should enhanced public drug insurance coverage be financed? We know that access to appropriate drug therapy and collaboration between prescribers and pharmacists will reduce costs in other areas of the health care system such as physician visits and hospitalizations, and can significantly contribute to improved health outcomes. Thus, health care finances must be, in our view, patient centred and allocated and based on consideration of the entire system, not on a silo approach.
We would also encourage the committee to consider administrative options that have proven effective in improving efficiencies and reducing avoidable costs while improving the quality of drug therapy. Administrative options will complement effective medication use. Cost sharing with consumers is an administrative measure that can control costs without creating a barrier to appropriate drug therapy. However, we caution that cost-sharing measures must not place undue burdens on patients that would prevent them from seeking appropriate care.
To achieve a balance between responsible use and access to therapy, approaches should be considered on a combination of individual means and medication use, up to a maximum.
On the supply side, the most effective way to control prices over the long term is to retain competition in the supplier marketplace. Low-cost alternative programs, such as those in Alberta and Quebec, have demonstrated success in providing the ``best possible price.'' In contrast, the bulk purchasing models, where there is one manufacturer for each molecule, decreases competition and leads to cost rebounds. Bulk purchasing will negatively affect compliance because patients will be required to switch from medications on which they were once stabilized. We believe that we should consider further expansions to improve and expedite the use of generic medications.
Electronic health records would also enable the dissemination of prescribing guidelines and retrospective drug utilization reviews to evaluate the correct drug use patterns based on quality standards. Chain pharmacies have an extensive IT infrastructure that links with the provincial and private drug plans and could form a building block in this regard.
To ensure equity, those who benefit from an integrated health infrastructure must share the costs and risks. The central goal of the national pharmacare initiative must be optimal drug therapy.
We would like to convey our views about how community pharmacy could be integrated into primary care renewal. We would encourage you to consider certain key factors.
Positive incentives need to be created for pharmacy primary care services that encompass both the distribution of the product as well as the clinical services to improve medication use and outcomes. Second, it is essential to integrate primary care providers based on maximum utilization of existing scopes of practice before determining the need to expand scopes. Third, approaches to integrating community pharmacy must be flexible enough to adapt to different models. Fourth, the most efficient, cost-effective approach to integration is utilization of the existing community-based pharmacy infrastructure.
I would like to highlight that consumer choice drives pharmacies to compete based on delivering patient-focused products and services at a very reasonable price. Also, capital infrastructure and human resources in community pharmacies are financed privately and provided to the public at no cost, representing a significant cost avoidance for the publicly funded health care system.
The chief barrier to integrating community pharmacy is not physical location. It is the absence of mechanisms to enable timely, consistent communications and collaboration.
I will now address the principle of adequate supply and optimal use of health care providers. We believe that the full utilization of pharmacists in provision of primary care services is contingent on an adequate and stable supply of pharmacists. We believe the federal government's leadership is required to foster and expedite a national pharmacist human resources strategy to resolve the current national shortage, to monitor labour market trends and plan to provide an adequate supply in Canada.
There is an immediate need to increase pharmacist enrolment and to move towards self-sufficiency in pharmacist resources. As models of health care become integrated and multidisciplinary, the federal government must work with their provincial counterparts, academic institutions and health professionals on national, cross-disciplinary health human resources planning to most effectively meet the anticipated changes in patient care needs. The supply, mix of providers and scopes of practice must be guided by evidence about the resources required to achieve positive outcomes at an affordable price.
We would be glad to take your questions.
The Chairman: Before turning to questions, I want to make one observation about the statement from the Canadian Healthcare Association. Thank you very much for the material at the back of your brief regarding the principles with which you agree, but nevertheless have some cautionary notes on implementation. That is exactly the kind of thing for which we are looking. That is very helpful to us.
For the record, I will mention that we want to focus on your views, not so much on the internal market. As you correctly said, we were less definitive on that principle than we were on the service-based funding. You are the first institutional providers to come out against service-based funding. All the other evidence, whether from CEOs of regional health authorities or university teaching hospitals — quite a cross-section of people — have substantially favoured service-based funding. We need to get into that in some depth.
Senator Robertson: Both presentations were most interesting and raise more questions for us to consider. My first question is to the Canadian Healthcare Association.
On page 2 of your brief, you support the principle of a single funder, but include a cautionary note about an arm's- length agency. How could we overcome your concerns? There is some legitimacy to them. We also have government- funded services at arm's length.
The Chairman: I will ask a supplementary question in the same context. We believe that in order for Canadians to agree to put more money into the health care system, they need to believe that the new money is actually going to go end up in the system. A Minister of Finance, federal or provincial, cannot siphon it off six months prior to an election.
Although we did not articulate it quite in this fashion in our report, one of the advantages that we saw to an independent agency was that governments could not get at, for example, CPP funds. If Canadians are going to be persuaded to make this extra contribution, governments most be prevented from shifting the funds in their times of need.
Senator Robertson had the misfortune of being the Minister of Health at times when her Minister of Finance wanted to get hold of some of that money. We would be delighted to find a way around that problem.
Ms Sholzberg-Gray: That is the same concern that we have. We are very concerned generally about the principle of accountability. We have seen, over and over again in this country, regional health authorities that are, in a sense, acting as independent semi-commissions or crown corporations. They are acting as the buffer between the government and the public.
It is not often clear whom they serve. Do they serve the public? When they are elected by the public, they usually think that they do. Often, they are appointed by the government. There are often mixed models. They are unsure. Do they report to the public or their masters?
The establishment of that so-called ``independent'' body is not, in and of itself, solving the problem. We think that making sure that roles and responsibilities in our health system are absolutely clear would solve the problem.
One, the government must provide adequate funding. It must say what shall be included in the publicly funded framework. Without question, that is the role of government.
Two, we have said repeatedly that the government ought not to micromanage the health system. Some of the problems have occurred because governments tried to do that. Some people say that the government is making bad decisions. Devolving all of those things to some other entity — the regional health authority or, in Ontario, the hospitals — has not solved the problems of the government not giving enough funding, not having clear roles and responsibilities, or not having clear responsibility for outcomes. They make rules saying that you cannot run a deficit. What happens if you have twice as many heart patients as were expected?
That is not likely to happen, because usually you can predict a little better than that. However, it is a complex and complicated area. You will never remove the government entirely — nor should that happen. Second, giving it to this crown corporation without a clarification of roles, proper funding and proper performance measurements is not going to solve the problem.
That is our point. We are not saying that having that corporation is a bad thing. We are saying that the absence of all of those definitions on roles, responsibility and adequate funding is a problem.
Governments often hide behind a crown corporation or they interfere with its operations.
They may fire the community-based board or send a supervisor into a hospital. In other words, without those other issues being resolved, we are not going to solve the problem.
Senator Robertson: There is another problem that you have not mentioned. This committee has been concerned about it. The public is concerned about it. It is the constant quarrelling between the provinces and the federal government. There seems to be no end to it. People are telling us to find a way to eliminate the fighting and give them some decent health care. Some witnesses advised that an arms-length commission — I will call it that for want of better wording at this moment — would be a step in the right direction of alleviating some of the haranguing that goes on regularly.
We all know the problems of financing in governments. We are very much interested in having your opinions on these matters because soon we will have to bite the bullet on our financing recommendations.
We have also been asked about multi-year funding. This committee is almost convinced that single-year funding just will not work. If you have any recommendations on to how to coordinate multi-year funding, so that we do not have these deep cuts without any proper explanation, we would like to hear them. It increases the arguments between the provincial and federal governments.
Ms Sholzberg-Gray: You asked two questions. First, you asked about a crown corporation or some independent, arm's-length commission somehow doing something to decrease the federal-provincial wrangling. If the federal government does not give enough money to this commission, all of those issues will not be resolved. They will be resolved when the federal, provincial and territorial governments decide together that they ought to act in the interests of Canadians. They have to be pressured to do so. They must understand the responsibilities that they have to undertake.
For example, if this committee tells the federal government — it looks like it may be on that road, based on this report — that there is not enough to fiscally sustain the health system and that it is still not paying its fair share, a commission will be almost be irrelevant. The government should be told that a multi-year funding process, with a proper base and an escalation, is proposed. Our association favours certain targeted and transitional funding to achieve certain goals.
The government should make it clear that the money is being given for specific things. They should not micromanage what is done in provinces, but they should ensure comparability across the country in certain objectives. That would work.
It is not necessarily so that a commission could do those things, without the proper framework or the proper amount of money. The multi-year commitments, and knowing that the money is to pay for change, are important.
I do not want to refer to things happening in Ottawa that are not relevant to the health system. However, there have certainly been many stories in Ottawa about relationships between crown corporations and ministers. That is not necessarily the answer. It could be, but you need all those other things as well. That is really our response to that.
Senator Robertson: I agree that it needs a lot of control.
Ms Sholzberg-Gray: At the end of the day, I am not sure how a minister can stand up and say, ``It is no longer my responsibility. I gave the money to the crown corporation. It is their fault that they are not delivering the service in an efficient way.'' It is always a government responsibility. Those other things also have to be place for it to work.
Mr. Larry Odegard, CEO, Forum, Canadian Healthcare Association: There has been integration and regionalization in a number of the regions. For instance, in British Columbia we have five regions with billion-dollar budgets, plus one other with a budget of only $300 million. Calgary and Edmonton are billion-dollar organizations, as is Winnipeg. We have very large organizations. I am not sure that much more could be achieved by bringing those together under another umbrella group.
Second, the chairs of the health authorities for each jurisdiction in the West meet regularly as a council, and the CEOs meet with senior ministry officials. I know that in British Columbia, and I understand in other jurisdictions, they are moving to multi-year funding.
British Columbia particularly is requiring the boards to sign performance agreements. Those would deal with the chair's concern about the money flowing to the bedside and not to paving roads.
It is important that there be that accountability. Our associations help to ensure that the money flows as it should by asking those questions. There is enough concentration of administration and control that many of those issues are addressed.
Senator Robertson: You said that there is not much point in having competition because everyone does as well as they can within the hospital structure. I am not sure that that happens, from the witnesses that we have heard. It is nice to be in that position, but it is not a reality.
I have a quick question for the Canadian Association of Chain Drug Stores. We have said before that your group is under-utilized in advising on the health system. Any suggestions you may have for a better distribution would help.
We are very much concerned about senior citizens and expensive drugs. Senior citizens all across the country have trouble coping with drug costs. In fact, some witnesses have suggested that we should look at adding another one or two to the five principles of the Canada Health Act. They think that maybe that should be reviewed. Mr.Chair, we may want to do that.
You mentioned that the federal government should be involved in certain areas. If I heard you correctly, you want the continued participation of the public and private sectors. You would not want a general drug program? Could you go over that again for me, please? Financing is extremely important.
Ms Deb Saltmarche, Director of Pharmacy, Canadian Association of Chain Drug Stores: You addressed a couple of areas. Perhaps I will start with the national pharmacare plan. To cover all drugs for all people is not sustainable. Therefore, we believe that a national pharmacare plan should be based on optimal utilization of drugs. Pharmacists have a great role to play in that area. It should be based on a mix of public and private funding. There should be a safety net approach addressing catastrophic costs for groups such as seniors and the underinsured and uninsured who cannot afford drug costs. We suggest that the federal government does have a role in addressing catastrophic drug costs, not just for seniors, but also for the underinsured or uninsured population.
You mentioned whether we should add drug coverage to the Canada Health Act. We believe it is too soon for that. Establishing positive incentives, in terms of better utilization of the system to create optimal outcomes, is probably the first approach to take.
Senator Cordy: I have a supplementary going back to your belief that there should not be a universal drug program: 97 per cent of Canadians have some form of drug coverage, but that number is actually misleading, because in Atlantic Canada, large numbers of people, between 23 and 27 per cent, have no health coverage. I am not talking about prohibitive costs, but about people who have no coverage whatsoever.
As an Atlantic Canadian senator, I regard a national pharmacare program as very important. Could comment further on that?
Ms Saltmarche: Perhaps I could clarify our approach to national pharmacare. A national formulary definitely has a place in health care in Canada. However, we believe that a national formulary that covers all drugs will be too extensive and not sustainable. A better approach would be to institute a national drug use management body to oversee a core number of drugs on a national formulary that could then be administered provincially to provide coverage.
The Atlantic provinces are a good example of where we do have uninsured people. Again, we suggest that there is a place for a national structure, although not all-inclusive and covering all drugs for all citizens, that takes a more rational approach, using a national drug utilization mechanism to create a formulary.
Senator Cordy: Are you saying you would like a national formulary, but not national coverage?
Ms Saltmarche: Yes, we would have a national formulary. It would not cover all drugs for all people. We suggest that, initially, a national formulary be established with control mechanisms and a drug-use management plan.
The first area where we should look at coverage is for catastrophic drug costs, whether those are high-cost medications for the population that cannot afford them, or chronic medications for someone who is underinsured.
Senator Cordy: Yet in Atlantic Canada, the reality is there are a lot of people who are not covered by a drug plan.
Ms Saltmarche: Yes, that is the population we would say should fall initially into that catastrophic drug cost plan.
Senator Cordy: Would your definition of ``catastrophic drug costs'' cover people who have no coverage whatsoever?
Ms Turik: Yes.
Senator Cordy: When I think of catastrophic drug costs, I think of people who are covered, but for whom the 20 per cent co-payment is in fact very high.
Ms Saltmarche: We would say that applies to both populations.
The Chairman: I want to pick up on that point, partly because Senator Robertson is a former Minister of Health in New Brunswick. You quote, on page 6 of your report, something you call the ``Fredericton Pharmacy Initiative.'' You do not necessarily need to go into a lot of detail about it now, but do you have more information on that?
It seems to indicate, in the two examples you talked about, which were asthma patients and gastrointestinal diseases, a dramatic drop in cost by virtue of the pharmacists' role. First, I think our research staff would like to see the study. Can you tell me what the pharmacists' role was? How did their role in that study differ from what a pharmacist would normally do? How did that lead, in turn, to the cost savings you quote?
Ms Saltmarche: The pharmacists did not go beyond what most community pharmacists are capable of doing. We standardized the approach to patient care to measure the effect on outcomes.
Basically, the patient went through a 10-minute interview with the pharmacist. The pharmacist educated the patient on lifestyle issues, triggers for disease and device management. There was then a follow-up with the patient to ensure proper compliance to medication.
There was no expansion of the role of the pharmacist. There was cooperation between pharmacists and physicians. It was to demonstrate the value that is already being added to the health care system through the role of the pharmacist. They are under-utilized, and there is great potential for realizing cost savings across the health care system that we realized through the study.
The Chairman: Instead of just filling a prescription, the pharmacists sat down with the patients to explain to them how they could best use their medication. Was there any attempt to find out whether or not the patients actually used it? Was there a control group?
Ms Saltmarche: We did not have a control group in the study, which I admit is a failing. You made a very good point there, senator; we went beyond the basic dispensing. Normally, you go in and get your prescription filled; everyone has been through that scenario.
Through that service, we offered an example of what an expanded role for pharmacists in primary care is able to contribute. One of the opportunities with community pharmacy is that we are recognized financially only for the distributive function we perform, not the cognitive services we are able to provide that can offset health system costs.
The Chairman: You are simply paid a dispensing fee, not a fee based on applying your knowledge in a broader context.
Ms Saltmarche: The fee we are paid only covers the distributive cost of employing the staff and running the store.
The Chairman: In the following paragraph you talk of a similar study. If you could send us any other information, that would be helpful.
Senator Morin: I will start with Ms Turik and Ms Saltmarche. I am not clear on your answer.
A national formulary is a list of drugs that can be prescribed in a given pharmacare program. It is not the same as safety net insurance. Senator Cordy was not talking about a national formulary, she may or may not be in favour of that. She is talking about a type of pharmacare insurance for where the problems are especially acute, such as in the Atlantic provinces.
The issue here is that all provinces west of the Atlantic provinces have very different coverage. Some are more generous than others, as you know. The problem with national funding, which you recommend, is that it is a difficult issue to fund one part of the country and not another. If you just fund gaps, that will mean more money for the Atlantic provinces, which may be an excellent thing, but some other provinces that also have few resources have invested heavily in the pharmacare program — Quebec is a good example — and would be deprived of federal funds this way. Have you thought of that issue?
Ms Turik: Yes. I would like to refer back to our definition of ``catastrophic drug costs,'' as it does respond to the question you are posing.
In our experience, there are two components to catastrophic drug costs. One is serious or life-threatening conditions where the costs exceed an individual's ability to pay. The second is for populations whose lack of insurance, or underinsurance, for more routine medically necessary drug therapies, such as for chronic or debilitating conditions, is a barrier to their receiving that therapy.
In many cases, one could argue that the situation in the Atlantic provinces falls into the second category of those who are either underinsured or where insurance would not cover the costs they incur, thus preventing them from accessing the appropriate drug therapy. For these cases, we strongly recommend that there needs to be an expanded safety net, and once a definition of ``catastrophic drug costs'' is in place, it would allow for expanded coverage for individuals who may fall into those categories.
We do believe that additional funding will be required. It would be our argument that the federal government should cover those additional costs.
We appreciate that different regions of Canada and different provinces have different levels of insurance coverage, but we do believe that that does need to be equalized across the country.
One step toward that may be the development of a common review process; a second step may be the development of a common formulary, so that each province has listed a common set of medications; and the third step is the safety net where individuals require that form of publicly funded insurance.
This catastrophic drug plan, or public funding, needs to build on the already well-established and well-developed infrastructure of insurance that exists for many individuals, rather than creating a national drug program that would cover everyone. It would be strictly a safety-net approach to ensure that people have access to what is necessary.
Senator Morin: You referred to the utilization of pharmacists for primary care services and that this may be a cost- saving procedure. I am never sure of that. An economist who appeared here said that a similar service leads to similar pay. We have a good example of that in Quebec, where the morning-after pill is now prescribed by pharmacists, instead of having people running around trying to find a doctor at whatever time they need it, which is an excellent thing.
Everyone agreed on this, including the college of physicians in Quebec and so on. However, the first thing that happened was that the pharmacists required an honorarium that was exactly the same as what physicians receive for an office visit.
People say that using other professions will save money. I do not think it should. If the same service is rendered, it should be paid for in the same way, whatever the profession. Cost saving is good, but it is not on a cost-saving basis that we shift responsibilities from one profession to another.
Ms Saltmarche: I agree with that. Economics is about allocating resources to get the most efficient mix and optimal outcomes. Whether a pharmacist or a physician is providing the service, the value to the patient is the same. In that instance, we may reduce costs in other areas of the system by increasing access. Physician's offices are not always open, while pharmacies have extended hours. In B.C., where pharmacists were able to prescribe the morning after pill, we saw that the number of abortions went down, while physician visits went up. Patients were following up with their physicians. The cost of an abortion is $800, and the cost for the provision of the service through the pharmacy is $40 to $50. There is a cost saving there. The pharmacist, as well as increasing access to the product, is freeing up the physician to provide other services the pharmacist is not able to provide, such as diagnosis.
Senator Morin: I fully agree with that. There is a cost saving there.
Are there any provinces using standing order contracts or bulk purchasing for drugs?
Ms Saltmarche: Yes. Saskatchewan uses them, and our members have found that system to be very unsatisfactory, both in terms of supply chain and distribution issues and patient care. They have to shift patients from one medication on which they are stabilized to another because of a change in contract, or a change or interruption in supply.
Senator Morin: Does this mean that if there are two generic drugs available, only one would be used in Saskatchewan?
Ms Saltmarche: Yes. It also reduces competition, which can lead to a rebound increase in price.
Senator Morin: Ms Sholzberg-Gray, before I make my comments, I should like some information about page 15 of your document, dated May 2002. This is point 19, concerning the matter of health promotion.
There is a statement here about something of which I was not aware. It is extremely important. ``Recently, the federal government funding for health promotion activities has been decimated...'' How recent is that? Are we referring to the program review of the 90s, or is this more recent?
Ms Sholzberg-Gray: We hear in the news about the importance of physical activity, exercise and so on, yet we all know that it was not that long ago that Participaction was axed.
Senator Morin: Do you have dollar figures on that?
Ms Sholzberg-Gray: No, but we could produce them. When governments reduce programs, which happened in the aftermath of program review and continues to happen, many health promotion-type programs, in which funds go to communities to enhance health, get cut.
Senator Morin: We recommended in our report that the federal government increase its support for the activities for which it is responsible, such as health promotion and protection. If there has been an important cut recently, then it would help us to know that, so we could recommend at least getting back to the initial level of funding, and then increasing it. It is a matter of information.
Ms Sholzberg-Gray: There has been constant reorganization of those programs. For instance, there are programs through which non-governmental organizations received funds to promote health and support certain healthy activities in communities. Those get cut back, or the infrastructure to support them does.
Senator Morin: These are pilot projects?
Ms Sholzberg-Gray: Yes. Things keep changing. There has been no effort to increase or improve those programs delivered through Health Canada to enhance the health of Canadians. There is a lot of talk about it, but not much more than lip service is paid. Look at the total amount of money that the federal government spends on health, and the miniscule amount it spends on health promotion. We will give you examples later.
Mr. Odegard: I was a member of the board of health in Saskatoon some years ago, and, when I was a CEO of a region, we ran a ``healthy communities'' project. Five or six years ago, these were quite common in the country. About three years ago, that was cut in British Columbia.
The challenge here is partly, as Ms Sholzberg-Gray has suggested, the competition within the health care system between disease prevention and health promotion activities. Even within the health sector, there is competition between the health inspection branch, the medical officer of health, and so on. It is a challenge.
Senator Morin: I agree with that. It was the statement you made there, that it has been cut. I wondered if you had a dollar figure for that.
Mr. Odegard: We end up with a series of projects that are either cut or expire. That may help with part of the explanation.
Senator Morin: We state in our report that the evaluation of the health care system should be done nationally, and we feel that the two organizations that should be responsible for that are CIHI, to which you referred, and the Canadian Council on Health Services Accreditation. We have not heard from them, and we probably will not.
You are very much involved with that second organization. Can you give us some information on who supports it financially and what its responsibilities are? This way, we can have it on the record for our report.
Mr. Odegard: I just happen to have with me a copy of a recent publication, which I will show to your research staff. I understand these were to be made available to you. The publication is entitled, ``AIM: Achieving Improved Measurement.'' It has been jointly developed by the Canadian Institute for Health Information, CIHI, and the Canadian Council on Health Services Accreditation, CCHSA.
The Chairman: Is this a new document?
Mr. Odegard: Yes, it is new, within the last month. In that document, there are specific, objective and quantifiable measures that will address those very points. Unfortunately, it is compromised by the lack of reliable data, and we need to continually work on that area. It is national in scope, and that is its real value. As a former accreditation surveyor, I can say that we were generally using subjective rather than quantifiable measures, but we have done quite well in that area recently.
Senator Morin: Are you funded by the institutions that you survey?
Mr. Odegard: Yes. We have had this discussion with the president of the council. We feel there would be some value in having another source of funds. I would think it would be in the federal government's interest to have a national evaluation measure, in part through supporting the council — as they do significantly — but also have the voluntary quality improvement process, which is reflected in accreditation, continue. Maybe there could be some splitting of that so that you encourage improved performance.
The Chairman: I have not looked in detail into how the current accreditation system works. I have been at conferences where people involved with this process have described it as being ``very much like an old boys' network that goes out and evaluates each other.''
To what extent is the process objective? To what extent is it simply one subgroup of the organization evaluating someone's institution today, and six months from now a different subgroup goes out and evaluates someone else's institution?
Mr. Odegard: I would enjoy that debate as well. I am a great supporter of the accreditation process. As a former ``old boy,'' I was asked to discontinue surveying one year after leaving an accredited facility. You must be with an accredited organization to continue as a surveyor. You do not survey within your own province or jurisdiction, and you are always part of a multidisciplinary team. You seldom go back to the same organization that you surveyed in the past.
There is an entirely automated and now very objective set of measures that tries to deal with any built-in bias. If there is any bias, it is probably more towards competition than patronizing the involvement of others.
The Chairman: The impression I had was that it was akin to judging figure skating. I am talking about what I heard and I do not pretend to know anything about it. It is useful to have your comments on that for the record.
Ms Sholzberg-Gray: First, a number of corporate members are on the board of the Canadian Council on Health Services Accreditation, including the Canadian Healthcare Association. In fact, our representative on the board is the newly elected chair of the CCHSA. That does not mean it is an ``old boys network'' or ``old girls network,'' or anything of that sort.
The move to objective measurement, the use of indicators, computerized forms of evaluation, and standards that everyone must meet — noting that, for the first time, the CCHSA will report on the results — makes comparisons between like institutions very important.
Having said all that, I must tell you that the institutions and regional health authorities that are accredited have concerns about the process. In the past, they have expressed concerned about the paperwork compliance. The accreditation process is supposed to produce continuous quality improvement. It should not be something you do just to become accredited. They are looking at having a yearly process whereby only parts of an institution or regional health authority receive their accreditation. That would be an improvement. It is not meant to be paper compliance or ``old boys'' judging people. Rather, it is meant to be an objective measurement, and the public reporting authority goes hand in hand with all of this. They do have to work with the Canadian Institute for Health Information, because health care is their area of expertise. Together, they would produce some kind of objective performance measures that would be of benefit to Canada.
That is not to say that everything is out of the woods and is perfect, because there is a continuous self-improvement effort to address the concerns with the accreditation process that you mentioned.
The Chairman: Thank you for those helpful comments.
Senator Morin: That is an important issue. I should like to move now to the issue of service-based funding.
I read the initial report carefully and I think it is logical. I do not know who wrote this, but it is well written and logical, although I do not agree with all of it. It is an analytical document.
As you know, the Bedard report in Quebec has recommended service-based funding. Minister Legault has decided that we are moving in that direction. In other countries, this has been in existence for quite some time. Denmark has been using this method for many years now, apparently with some success.
I will group both issues together. Service-based funding, the purchaser-provider split and internal markets are all within the same area. You must have some recognition of the cost of a defined service if you want to change it. I realize that in your document you separated them, but I will keep them together.
The point here is the search for efficiency. I presume this kind of funding is more efficient than global funding. Your document refers often to the fact that hospitals provide procedure-driven care. A primary care professional will refer a patient to a hospital for a specific procedure. Up to a point, a hospital is responsible for a population, but not in the same way as a community clinic or a primary health care group.
I agree with that. However, the issue for the modern hospital is to provide efficient care such that there is an acceptable cost/benefit ratio. I fully agree with you that we do not have costing and outcome data, which we should have before we do this. Once we have that data, though, it is not a matter of closing down the hospital, as you say in your report, or having unoccupied beds, but rather of having the procedures done in hospitals where that is more efficient. We do this all the time. Our colleague, Senator Keon, who is not here, unfortunately, understands this well, whereas we do not because we do not have that information. Senator Keon is in a position to decide where a particular procedure is to be done. That is what he has to do. This type of decision is made continuously, but we do not have access to the same information because it is all under global budgets. Perhaps surgery is twice as expensive in hospital A as it is in hospital B. If it is, either hospital A corrects the situation or it stops doing it.
You will close the hospital and leave it unoccupied. The beds will be there, and that will be expensive. I fully agree that we cannot implement this today, and I see where you are coming from. There has been micromanaging by the government and going line by line. However, if the purchasing is done at another level — not by the Minister of Health, but by the region or private providers or trusts, as in Britain or elsewhere, or communities, as in Sweden — I think it can be efficient. I cannot see how we can condone continuing to do certain procedures in hospitals if it is more expensive and the outcomes are not good. That is the whole point. I realize there are difficulties, but I think that the whole issue of efficiency in our hospitals is vital.
Do any private clinics or private providers belong to your organization? If not, is there another organization they can join? Are you representing them?
Ms Sholzberg-Gray: Actually, we are a federation of provincial and territorial hospital and health organizations. The provincial health authorities of Manitoba or the provincial health authorities of Alberta are members of our association, and to the extent that they contract out to a variety of providers within their regions, then indirectly, private providers are part of our federation. However, the actual members of our federation are using public funds to purchase a variety of services.
In many of the provinces, as you well know, there are private diagnostic, blood testing and laboratory services, and our members contract out to them. Our members are the publicly funded and, we think, publicly accountable provincial and territorial hospital and health organizations.
Senator Morin: Up to a point, you do represent private clinics. Let us take Alberta, for example. There are private, for-profit clinics there. Does your organization represent them?
Ms Sholzberg-Gray: We do to the extent that the regional health authorities contract out to them. We are a national association, without question. I should note also who actually names the board members. In fact, three people from Alberta vied to be on our board and they had to have a public election. It is the chairs of the various regional health authorities in Alberta who choose the representative on our board. You are right. They have a variety of delivery mechanisms within those regions, and hopefully they make decisions on the most effective way to deliver health services.
Mr. Odegard: As an example, in the Health Association of B.C., we have 85 members who are not amalgamated into a region. They are independent operators. Some are faith-based and some are for-profit, private. For a third of my career, I worked in the for-profit, private side of health care. I can represent some of their interests as well.
Ms Sholzberg-Gray: You are trying to detect whether there is a prejudice in our information. First, can we go back to the long question you asked concerning service-based funding as opposed to global funding? You were talking about hospitals, and we tended to expand our discussion to include integrated approaches to health care and needs- based, not procedure-driven approaches. You noted that hospitals are procedure driven.
What we noted in reviewing some of the testimony of people who came before this committee to speak about service-based funding is that they were all careful to say that we do not yet have the information that would make this possible on a 100 per cent basis. We mentioned this.
Second, they all wanted ``special complications'' formulas — that is, if you are a teaching hospital, one formula; if you are in a remote area, a different approach; if you do certain things, another approach.
Third, many of them said they could do service-based costing for certain procedures, but they wanted you to exclude all of their out-patient and outreach activities. Hospitals do this, by the way. Even the University of Ottawa Heart Institute has a lot of health promotion activities and outreach programs for heart patients, all very good, and follow-up by phone for outpatients. They do not want to include any of these programs in their service-based cost approach or cost-per-case approach. In the end, they can only include 50 to 60 per cent of their activities. It is not necessarily that easy to do.
In a sense, we are saying the same thing. We are saying that to have the most efficient service, you need to know the cost per case, and that we do not want things done in institutions if there is a high cost per case, or, even worse, bad outcomes. By the way, we know that volume creates positive outcomes. Perhaps we might find that having a lot of little clinics does not produce good outcomes. All of those factors come into it. We also do not equate the service-based approach to funding hospitals, as opposed to global-based budgets, with the whole notion of internal markets or competition. We think they are two separate issues.
As for cost per case, I can give you a personal experience. I had a hip replacement three years ago in a tertiary care hospital. I knew with certainty that there was a cardiologist on staff and a hematologist who worried about blood clots and came in for a consultation on blood thinners. There was also an infection control specialist, because there is a danger of infection when having a hip replacement. You could be in trouble for the rest of your life if you get an infection. Even if a hip replacement could be done more cheaply at a small clinic that did not have that range of staff, I would not go there and I do not think most Canadians would. We have to talk about quality of outcomes, safety and all of those things. There have been many horror stories about private plastic surgery clinics, for example, that do not have a full range of staff, not even a proper anesthetist, and we know that the outcomes there are bad. Cost cannot be the only factor; it must be cost versus complication, versus outcomes and so on. That is important.
I note a tremendous similarity between the list of concerns that we expressed in looking at that approach and the points that people who say they ultimately support it made. In other words, there is a convergence of ideas there. Cost per case information is absolutely crucial. We say that there must be centres of excellence, rather than lots of little clinics. You might be able to have a hernia clinic in two, three or four centres in our country, but most places could not sustain one because there are not enough hernia procedures to make it feasible. In fact, everyone in Prince Edward Island has to leave the island for tertiary care. We have to be realistic about that.
We also cannot develop a big city model and say that it works for all of Canada. We must state up front that this is a big city model. I do not want to get confused between internal markets and competition, because competition ought not be on price alone; rather, it ought to be on all of the other factors, such as outcomes. I do not think that those two subjects should be confused.
I am concerned that the committee's report keeps going back to internal markets as the way to drive down costs. The way to drive down costs is to collect all of that information and report it publicly. It is to have accountability mechanisms and for people to know for what they are accountable. It is to ensure that the outcomes are appropriate and that appropriate services are also being carried out. A procedures-driven approach does not necessarily do that. For instance, we might have a lot of cheap tonsillectomies done in this country, and we could say that all children should have their tonsils out. It would be a totally useless thing to do now that we know that taking out tonsils is not appropriate for everyone. Just because the procedure is cheap or efficient does not mean that we should do it. In other words, appropriateness should also be a test. There are a lot of things in this mix, not just the cost per case or how cheaply can you do it.
I am concerned about setting up artificial competition and increasing capacity and increasing beds, for instance, at a time when our country has just gone through a difficult process of cutting beds. We decided in the last five years that because of new technologies, we had too many beds. It seems to me that to start increasing the number of beds because of some future cost-cutting goal is not the way to go, especially at a time of reduced levels of health human resources.
We are not opposed to costing; we are not opposed to reporting; we are not opposed to centres of excellence — we support all of those things. Your report seems to say we should go to service-based funding as quickly as possible. However, we do not think it is the way to determine hospital budgets today. Even those who say it might be the way in the future believe that we cannot do it now. They then say, ``You will have to leave out 50 per cent of our budget because we cannot do that on a cost-per-case basis.''
Senator Morin: I would like to thank you very much and especially commend you for the amount of work you have done in preparing the documentation for us.
The Chairman: Having listened to your answer, I realize that your thought process and ours are much closer than I first thought upon reading your brief. I would have been inclined to put your reaction to the service-based funding principle in the category of the ones with which you agree in substance, but offer words of caution regarding implementation. Maybe I have a rose-coloured view of what you said. However, the sense I gained was that all the things you were concerned about, we are concerned about too.
Mr. Odegard: A quick comment on that. I was CEO of a region in Alberta where we used service-based funding prospectively in the whole funding process. We received population funding adjusted demographically for gender, age, Aboriginal numbers, remoteness or whatever, in advance. The reconciliation was on service-based funding. We frequently provided services to people from outside the region, and our community members went to Edmonton for tertiary services. The service-based component is the efficiency measure; it is the after-the-fact reconciliation. It does not motivate the system to go in the wrong direction of being sickness rather than health focused. There is a role for it, but it may be after the fact rather than in advance.
Senator Roche: I would like to put three questions to Ms Sholzberg-Gray. My first concerns your dissent. It is because I have such high respect for the Canadian Healthcare Association, as well as esteem for you personally, that I am concerned. Would it be correct, Ms Sholzberg-Gray, to say that your association supports 18 of the 20 principles, leaving the modifiers aside?
Ms Sholzberg-Gray: Yes.
Senator Roche: I am concerned about the two remaining principles. We have just had a good discussion on service- based funding. What I got out of it, Mr. Chairman, is that we may be closer than first appeared to be the case.
The Chairman: Exactly.
Senator Roche: I am going to leave that aside. I would like to turn to your second dissent on internal markets, which is principle 13. Principle 13 reads as follows:
... an ``internal market'' should probably be created in which primary health care teams would purchase health services provided by hospitals and other health care institutions on behalf of their patients.
When I read that at the draft stage, it seemed okay to me. Maybe it is because I do not know enough about this subject, certainly not as much as you do. I have read your material here and also your background document. Is there some idea here that ``internal markets'' is a code term for further privatization and for-profit health care that I missed? As the chairman knows, I did not dissent. I gave my assent to this in good faith.
The Chairman: That is right.
Senator Roche: Was I wrong? You are saying that you ``fundamentally disagree'' with the principle. That is rather strong. What should we do about the fact that your association does not agree with principle 13 as we proceed into volume 6? In what manner can we make an adjustment or apply this principle as we move forward into the financial- based recommendations?
Ms Sholzberg-Gray: Principle 13 refers to internal markets created by the purchasing power of primary care provider groups. It seemed to us that this would be better left in the hands of regional health authorities in those provinces where there is regionalization. To us, either permitting or insisting that primary care provider groups purchase services on behalf of their clients merely adds another layer of bureaucracy. One can just imagine the number of purchaser-provider groups there would be.
Second, in most regions of this country, there are not many providers. In small provinces, there would not be even one tertiary care provider, let alone two. It is not as if they could bargain for tertiary care services. They usually have to send people out of province or to a city. Buying hospital services on behalf of clients would not really work in most provinces.
At best, this would be a big-city model that could apply to maybe three or four cities in this country. Even in a city like Ottawa — I wish Dr. Keon were here — I do not really think that another entity could set up a heart institute in competition with the University of Ottawa Heart Institute and provide services at the same level of efficiency and quality. That is not on.
Senator Roche: Let me resurface as an Albertan, and particularly one from Edmonton, where the Capital Health Authority is famous. Does the manner in which the Capital Health Authority operates in this regard meet with your approval?
Ms Sholzberg-Gray: First of all, you are talking about Bill 11 — buying private services and having small clinics do overnight surgery. Here we are talking about relatively minor procedures that could be provided in a repetitive way. It is not a question of competition or internal markets; it is obviously a question of insufficient capacity.
Senator Roche: Are you afraid that the implementation of principle 13 will lead to more bills like Bill 11? Can you tell me what your real concern is?
Ms Sholzberg-Gray: Yes. The report constantly talked about internal markets and suggested that it would be a good thing in this country if all sorts of private health clinics, private hospitals, private providers were set up in competition with current not-for-profit providers, and that somehow — this was the interesting thing — that would drive down costs. Our reading of it would be that, in the end, it would drive up costs. The reason is that, if you develop extra providers or more facilities than you need to provide services, some of them will have excess capacity.
An example of this is the United States, where providers are operating at 60, 70 or 80 per cent capacity. Frankly, we are operating at too high a level right now, with capacity close to 100 per cent, and even higher, in most of the hospitals in this country. In other words, because the health system is not an ordinary market, excess capacity drives up costs. It does not drive them down. That is really our concern.
Also, we have seen no evidence that any of these other providers are providing services more cheaply than the current not-for-profit providers. They might be providing them as cheaply sometimes, but that is largely because they are skimming off the easy things to do and cherry-picking, that kind of thing.
We have repeatedly said that we do not think that private delivery is inherently evil. We think it is a fine thing in many areas. There is much good delivery, depending on the area and what is being done, in such ancillary services as food, laundry and so on. There is sense in contracting out laboratory, blood testing and diagnostic services in the publicly funded system. There might be a role for providers of simple procedures.
As soon as you get into something more complex, we do not think you can make a lot of money. Therefore, the burden will end up on the current not-for-profit entities, and not new entities that are presumably being set up in competition with them.
We also need to look at the history of this country. Community-supported health and social services began about 100 years before medicare. It was the religious and ethnic groups in this country that developed the hospitals. They had to charge patients, of course, because there was no universal medicare, although obviously, some of those that could not afford it were not charged. I would think twice before giving up 135 years of history in this country whereby the hospital system was developed by communities to serve communities.
I would note again that in the United States, only 10 per cent of hospitals are private, for-profit businesses. Why? There is no money to be made unless you cherry-pick. There is a place for private delivery, and there are examples of successful private delivery in home care and long-term care. I would ask how they could provide quality care when governments are not giving them enough per diems, but that is another issue.
Mr. Odegard: I would like to add a specific response to your Edmonton example. When I was vice-president of operations at University Hospital in Edmonton, we were involved in discussions with orthopedic physicians, for example, on which prosthesis they would use. Through that discussion, and because facts and information were provided, they chose the right thing to improve quality and reduce costs. We brought them into the discussion.
Later, when I was vice-president of planning and evaluation with the Capital Health Authority in Edmonton, we created an exemplary project, the North East Centre, which you may be familiar with, a primary care centre that involves physicians and other providers in the decisions relating to the health of people in their immediate community.
All of this is based on the capacity to generate good data, good costing, and to involve the right people in those discussions. There are examples of those processes taking place. However, our aim here is not to artificially create a market, but just encourage the use of good data, involve providers and make the right decisions. I do not think we need another layer that may compromise that development.
Senator Roche: Mr. Chairman, do you see a way in which we can bring the committee and our guests together on this point, without elaborating on it now? Can you see a way ahead?
The Chairman: I am always an optimist.
Senator Roche: Ms Sholzberg-Gray, the CHA is against a targeted, health-related tax. I would like you to spell it out for me here. It is my understanding that the committee, and indeed a lot of Canadians, would support a tax or increase in taxation for a restructured, improved health care system if it was dedicated, so that other ministers could not run off with the money. Could you explain to me again why you are against that?
The paragraph of explanation in your brief does not convince me, namely, that this could lead to a full array of targeted taxes. The Canadian people might then be reassured about where their tax money is going. Leave that aside.
Why would you not support a dedicated health tax, if it was done in an equitable manner?
Ms Sholzberg-Gray: First of all, I would like to refer to the POLLARA poll that was announced last week at our national conference. We are one of the partners in that annual health survey, which said 7 out of 10 Canadians would be willing to pay higher taxes — which is an interesting issue — if they could be assured that the money would be used to support improved access and a broader basket of services.
Mike Marzolini, the CEO of POLLARA, said he never before had a response to a poll saying Canadians were willing to pay more taxes so they can get the services they need. That gave us some food for thought. What it really means is the public does not trust the government to use those increased taxes for the things that they want them to be used for.
Our concern is you cannot have a dedicated tax for everything. My guess is there would not be that much support from the public for a set of taxes to go to welfare. Depending on where you live in this country, there might not be much support for foreign aid. We like the fact that Canadians are willing to pay more taxes for health care, and we would like to find a way to assure them that any increases in taxes would be used for that.
Senator Roche: Did you say 7 out of 10 Canadians support a tax for health care?
Ms Sholzberg-Gray: Yes, they would.
Senator Roche: Was that in general terms, or did that poll specify that those who assented to this wanted it to be dedicated?
Ms Sholzberg-Gray: It said 7 out of 10 Canadians wanted to pay more taxes for improved access to health care, to improve the health system generally, and for a broader basket of services. They wanted to be assured it was a dedicated health tax, without question.
Senator Roche: If this committee did come out in favour of a dedicated tax in its financial recommendations, would you then oppose it on the grounds you have given us so far?
Ms Sholzberg-Gray: That would put us in a difficult position. We have said that Canadians are prepared to pay taxes for health care. We are being responsible citizens here. We would like that dedicated tax because we want more money for health care. At the same time, we are saying that perhaps at some future date, money might be needed for housing or environmental issues, which also impact on health. We would be nervous about setting aside in perpetuity a sum of money for health that might be needed in other areas.
The Chairman: Just to add to your interpretation of the poll, I read it and the question did not use the words ``dedicated tax.'' The question was: Would you be prepared to pay more money if you could be assured absolutely that the money goes into health care? In effect, it was a dedicated tax.
Ms Sholzberg-Gray: Maybe they were thinking of a national health premium. In the next poll, we will certainly have to word the question more precisely.
The Chairman: By the way, we agree with you, a premium is a tax.
Senator Roche: Would you support a national premium?
Ms Sholzberg-Gray: I should not have raised it here, as I do not want it to become a headline. In general, we do not like the idea of premiums either.
Senator Roche: They are not equitable.
Ms Sholzberg-Gray: They are regressive.
Senator Robertson: A supplementary question on this: Given what you have said about a dedicated tax, do you disagree with the Canada Pension Plan, Workers' Compensation, Employment Insurance and that sort of thing?
Ms Sholzberg-Gray: To be perfectly honest, Employment Insurance premiums go into the Consolidated Revenue Fund.
Senator Robertson: They do now.
Ms Sholzberg-Gray: The Canada Pension Plan is not a tax; it is a contribution to a particular pension.
It is a contribution to pension benefits. Canadians might view it as a tax, but it is not.
Workers' Compensation is a tax. You are right; it is a dedicated tax going into a separate fund. That is why, contrary to what the public thinks, Workers' Compensation health care expenses are included in the public basket, not the private basket, according to the definition of the Canadian Institute for Health Information.
Senator Roche: Health is so important that it might indeed justify a dedicated tax without raising the worry that you would have to have a dedicated tax for everything. You used the example of foreign aid. How many people would be unwilling to pay a foreign-aid tax because they do not understand it, and so on?
I would like to continue this discussion. It is fascinating and I am learning a lot. In the interests of time, I want to move to the third area, which again draws on your not inconsiderable political experience in our country.
Do you think, Ms Sholzberg-Gray, it would be a foolish to recommend the opening up of the Canada Health Act to include some new principles, for the possible fear that those — and let us put it bluntly — who do not take my position on health care, which is a strong social justice position, would then try to diminish it? In that case, we would have a debate in which the minuses would cancel the pluses for health care, and therefore we had better leave it alone and make some improvements in the existing system. What is your view?
Ms Sholzberg-Gray: I can tell you what the view of our association has been. We have been always on record as very strongly supporting the Canada Health Act and its principles. Frankly, I think this committee does too. We are concerned from a political perspective about opening up the Canada Health Act. We are concerned that some of the principles that we hold dear, given other circumstances that might occur at the time, might be watered down. It might result, for instance, in the Canada Health Act being opened up at a time of either bad or good federal-provincial relations that might impact on what would be included in the new act. There is always a considerable minority in this country that somehow thinks that the Canada Health Act constrains change or reform. We do not think it does. There is nothing in the Canada Health Act that prevents all the reforms we are talking about from taking place. We would like to keep the Canada Health Act as it is.
Senator Roche: Would you follow the old principle that if it ain't broke, don't fix it?
Ms Sholzberg-Gray: Except parts of it are broke. We would like to have a companion act, if possible. There are companion acts to it right now. The act that created the CHST is a companion act, in a sense. We would not mind a companion act or acts. We would not mind having a little more on accountability, although it seems to me you could always have regulations under the Canada Health Act that were more precise in those areas. No regulations have ever been promulgated under the Canada Health Act since the time it came into force in 1984, even though that was possible. That is a way to proceed. We agree with the notions of accountability and equality. Those things have to be part of the act. We also agree that services such as home, community, and long-term care, and some parts of pharmacare, which is a subject for another day, could find their way into a national act. It could be a companion act that would benefit Canadians.
We would be nervous about opening up the act at this time. I have a great deal of regard for Monique Bégin, who is a friend. She is not concerned about opening up the act. She is concerned about ensuring that home care that is replacing acute care, catastrophic pharmaceuticals, and other crucial principles are included in an act immediately. We are nervous about doing it. We are nervous about the government of the day that would be in charge of it. We are nervous about the political climate at the time it was opened up. On balance, we would recommend not doing it. Do it through a companion piece of legislation or through regulations.
The Chairman: You said in your answer that you might have some information on something on which we have none. Even if it were rough information, it would be useful.
You talked about home care, and I presume you would have added drug care that is a direct replacement for acute- care hospital coverage. We have been trying to get a handle on the cost, however much of a ballpark figure or an estimate it would be, recognizing you would have to make all kinds of crude assumptions, such as, perhaps, that it only covers the first seven days out of hospital or something like that. It is very clear what has transpired in the last several years. There has been a transfer from public sector funding to private sector funding through making people leave hospitals earlier and requiring that they pay for the home care and the drug care.
Let me speak just for myself, because we have not discussed this officially. That strikes me as a clear violation of the Canada Health Act. It is certainly a violation of the spirit of our medicare program. One must also understand the huge difficulty in getting into a national home care program. It would be interesting to us to hear, however much of an estimate it was — and if you do not have an answer now, that is fine — how one could circumscribe it enough that so it was not completely open-ended. It could cover the immediate costs of people being sent home earlier than they would historically have been.
It would be wonderful if you people could do some thinking about how we could circumscribe it. I believe that you have to begin with small steps. Once you have established a principle, expanding it in the future becomes much easier. It is the first step that is difficult. If you could help us with that, it would be useful.
Senator Morin: People are not sent home earlier. They are sent home at the right time, because procedures have changed. People are not operated on in the same way. Now, there is laparoscopic surgery. They leave after two days, and that is it. Nobody is sent home earlier than they should be.
The Chairman: Let me phrase it differently. This is the advantage of having a doctor on the committee.
The reality is that the public perception is that our medicare program would cover the costs of all doctors — that is not at issue here — and the costs of receiving treatment in a hospital. If, as a result of having received treatment in a hospital, you incur certain immediate follow-up costs, my instinct is that most people would think that, consistent with the spirit of medicare, those ought to be covered.
I am now a layman talking to experts, which you two are. Is there a way to circumscribe it so it would not be some new, open-ended program, but at least the first small step toward moving into the home care area?
Ms Sholzberg-Gray: I am not sure if Peter Coyte has ever appeared before the committee. He is from the University of Toronto. He has done a lot of work on costing home care. It might be useful for you to speak to him. I am a member of the advisory committee for his institute at the University of Toronto, which is the only home care research program at the university level. He is an economist and has a chair in that area. You might get some figures from him.
It is logical that acute-care replacement home care be universally accessible, or at least that people be assessed before they leave the hospital to determine the extent to which follow-up care is needed. Different technologies and new approaches to surgery might lead to shorter stays. Some people need blood thinner injections for 10 days after being released from the hospital. Some people need to have their dressing changed for 10 days. Those things ought to be followed up. It seems to me that is a first step.
We have not sufficiently distinguished between ongoing, chronic care needs of certain population groups, including seniors, and acute care.
Home care straddles both.
The Chairman: That is exactly why I am trying to somehow separate them.
Ms Sholzberg-Gray: We have to separate them. Marcus Hollander does a lot of work out in British Columbia on continuing care. He has been trying to distinguish between acute care and long-term continuing care, which are susceptible to different principles and different approaches. Both of them require that people have access to the services they need, but different principles, perhaps not Canada Health Act principles, would apply to ongoing chronic care as opposed to acute care. It is not simple, but it can certainly be done. People have done work in the area.
The Chairman: My clerk just informed me that the professor at U of T whom you mentioned is appearing before us.
Any information you have on that would be helpful.
Mr. Odegard: A number of health authorities are already tracking the costs of TPN, or total parenteral nutrition, which would normally be a reason for keeping someone in hospital, intravenous therapy, wound management, a number of these post-acute treatments that would allow people to go home, as well as early discharge of mothers and babies and follow up through home care. A number of health authorities are allocating funds to provide for that while ignoring the Canada Health Act — it is immaterial to them — in providing that service. We could seek that information from our provincial members.
The Chairman: If you could do that, it would be helpful, recognizing that progress must be made in feasible steps. If we were to recommend something in that area, it would have to be reasonably circumscribed, in the sense, as Ms Sholzberg-Gray has said, that you need to draw a line between post-acute care and long-term care.
Ms Sholzberg-Gray: We are saying long-term care is a critical issue that must be addressed.
The Chairman: We are on the same wavelength; however, I am trying to suggest that it might be pragmatically possible.
Senator Morin: Mr. Odegard is saying that it is being done in many provinces and institutions.
Ms Sholzberg-Gray: New Brunswick is a leader in that area.
Senator Morin: Yes, and it is being done in Quebec and out West. It is being done already.
The Chairman: We had some discussion already about the so-called ``hospital without walls'' in New Brunswick.
Senator Cordy: I wish to comment on the targeted tax for health care that Senator Roche brought up, and which you are against. When I look at the results of the POLLARA poll that showed Canadians are willing to take an increase in taxes provided the money goes to health care, I could easily read that as being in favour of a dedicated tax. Your own suggestion is that perhaps next time, the question should be a little more specific to determine whether or not that is what Canadians meant by the answer that they gave to Michael Marzolini.
The other questions that I have are on service-based funding; however, in your explanation to the committee, indeed we are not that far apart. The questions are actually for clarification.
You agree with the committee on the need for stable and predictable funding for provincial governments, hospitals and so on, in order to provide health care services for Canadians. You said that when this funding is provided, clear objectives should be established. Do you mean earmarked funding? What do you mean?
Ms Sholzberg-Gray: A lot of governments are asking CEOs of regional health authorities for contracts based on performance outcomes and so on. We are not opposed to that.
We are really in favour of people knowing the amount of money they have to spend and what they are responsible for providing with it. Currently, governments give money to regional health authorities or hospitals and then say, ``This is what you are getting, but give care to everyone, everything they need, and by the way, if you have a deficit you are not being good managers.'' That is not the way to go. They must know what they are responsible for providing and they must have enough money, or else — and this where you have another recommendation — when there are funding cuts, they should be explained. In other words, we need rules and responsibility, clarity on what outcomes are expected, and the ability to say in advance, ``For that money, we cannot do that.''
Senator Cordy: In other words, Canadians are not seeing that money as going into this big black hole.
Ms Sholzberg-Gray: We do not like a black hole.
Senator Cordy: Exactly. We have said that over and over again. You are suggesting accountability, are you not?
Ms Sholzberg-Gray: Yes, but there is more to it than that. We have to understand that 70 to 80 per cent of health costs are for labour, and we must understand also that during the years of cost cutting there was pent-up demand in terms of labour contracts, and rightly, a lot of provider groups, like nurses, are trying to make up for that. Governments sometimes impose a 5 per cent contract on the managers of the health system, whom they do not entrust with the negotiations, and that takes up all of the increase for that year, so the public will not necessarily notice any increase in services.
Senator Cordy: If, in fact, they received an increase in budget.
Ms Sholzberg-Gray: There are real problems. In other words, we must know what we can realistically expect for the amount of money that is provided.
Senator Cordy: Basically, you are not calling it ``universality,'' but access to comparable services for all Canadians, and you are saying that there should be a standard assessment of service needs. Are you looking at income, or what specifically?
Ms Sholzberg-Gray: We were not talking about an income test. We were trying to address there the need to ensure that people have access to the community services or the facility-based services or the home care that they need. We are talking here about continuing care. There should be a standard assessment. There are all kinds of modalities out there.
Senator Cordy: I was not sure what that was.
Ms Sholzberg-Gray: People should not fall through the cracks and be left with nothing, assuming we will never have a health service in this country that will provide everyone with 24-hour, around-the-clock home care. That will not happen.
Senator Cordy: I was not aware of the bulk purchasing of drugs in Saskatchewan. It was stated that it negatively affects compliance with medication. The committee has heard, and certainly I heard in Nova Scotia when talking with doctors, that compliance is a major problem, whether or not we are purchasing in bulk. Doctors must watch their patients closely to ensure that they are taking medication. We are probably all guilty of having one or two tablets left in our prescription bottle after we have been to see the doctor.
Do you have statistics or evidence that you have gathered that shows compliance has been affected more negatively by bulk purchasing?
Ms Saltmarche: We do not have it with us, but I can look into that and get back to you with that data.
Senator Cordy: I was also pleased that you concur with us that pharmacists are a vital part of primary care. You talk about the need for positive incentives to bring pharmacists into the primary care system. Would you explain what positive incentives you were referring to on page 10 of your brief?
Ms Saltmarche: Our members and their pharmacists are very ready to meet the challenges of integration into the primary care system to obtain full utilization of their skills. One incentive we need to look at is the reimbursement model. We touched earlier on the dispensing-fee model and the reimbursement for primary care services. We also need to look at educating other health care providers and encouraging utilization. Although that is not a direct incentive for pharmacists, you need to encourage the other providers, via education, I would suggest, to better integrate the pharmacists into the primary care model.
Senator Cook: Thank you for helping us once again with our challenging study.
I should like to return to principle 8. When I read the body of that in our chapter 5, and then look at your report, I see that we are drawing the same conclusions. However, we are probably using different wording, because our principle 8 contains two conditions. That is found on page 38 of the report, where it says: ``All institutions, no matter what their ownership structure is, are subject to the same rigorous and independent quality control and evaluation system'' that you will find in principles 15 and 16.
It is my understanding that if we change one of those principles, then we would be changing direction on this because one is dependent on the other. When I attempt to understand the concerns, I see the linkages, and then I am comfortable with it.
You tell me that the health system does not have the information systems or the personnel to provide the detailed information required. Would you share your vision as to what we can do to achieve that, and in so doing, make the principle a reality?
Ms Sholzberg-Gray: Without necessarily supporting principle 8, we certainly support the principle of having totally accurate costing data. There is no question about that.
It will take an investment of money to achieve that. We have determined that it needs targeted funding from the federal government. For instance, let's say that the federal government decided, together with the provinces and the territories, that we had to have, as one step, an electronic patient record. Putting $500 million into Canada Health Infoway will not accomplish that. It will take more like $6 billion. What is the point of saying that it will work and that is the objective, when that kind of money will not achieve it? A targeted fund is absolutely essential to reaching that goal.
The money would not be going into a black hole. The money is an investment, so that in the future, we will be able to know more of the things that we should know about our health system. That is the approach we would take. If you want to achieve something, determine your objective; provide the right amount of money; say what you expect for that money; and get it done. Tell people that it is an investment.
We cannot take that money away from front-line care tomorrow. Some people say there is enough money; it only needs to be better managed. All of the reforms that we discussed will achieve better outcomes and efficiencies. However, we cannot take $6 billion out of front-line care and put it into information technology tomorrow and expect the Canadian public to be happy about it. We need a targeted fund.
Senator Cook: I understand what you are saying. I am a board member in Newfoundland, and we naively believed the government when it said that if we closed hospitals, we would achieve the savings that we needed. That day, less than 10 years ago, it was $1 million, and as of last week when I enquired, it was up to $11 million. We are just a small blip on the health-care radar screen.
In your last paragraph, you ask us to refocus our attention on replacing global funding to promote integration of hospital and community services, which would reduce inappropriate placement in hospital beds, et cetera. Where do you see us including that in the principles that we have outlined in our report?
Ms Sholzberg-Gray: You have to have a principle such that Canadians have access to a broad range of services to meet their needs and that the health system should take an integrated approach. I am not sure where you would place it. However, that is an essential principle, which is linked to the principle of appropriate care in the appropriate setting by the appropriate provider. That is the kind of thing that ultimately will also save money.
That principle is crucial. It is not just a question of cost per procedure or better costing information, which are also crucial, but appropriateness of care linked to an integrated approach, rather than having many separate silos, which still exist in our health system, even in the provinces where they have regional health authorities and have made best efforts toward integration.
That is why we are concerned about creating too much separation of hospitals and doctors, with primary health care reform somewhere in the middle, and long-term continuing care and community support services somewhere else. In other words, we must have principles that apply to all of it, so that we can approach the kind of integration that will actually create some of the savings and efficiencies that we want to achieve.
Senator Cook: I believe that as a society, we are at a point where we must take risks on the best evidence-based information that we have because change is being forced on us. Let's do it in a rational manner and move forward together. We will be faced with that over the summer when we make an informed decision as to the dollars and cents attached to those principles.
Senator Robertson: I have a supplementary question. Part of the work of this committee is to reflect on the role of the federal government in the delivery of health care. I was wondering if you could make some recommendations on how the federal government can improve the delivery of health care, whether it is something to reduce the cost or to make it more efficient. I do not have a particular issue in mind.
For example, Ms Turik, are you satisfied with the approval process for drugs? Can that be streamlined or better administered? Do your members in the hospital associations feel that there is enough support from the federal government in other ways? We must come back to our federal responsibility.
The Chairman: Take the electronic patient record. The ideal would be to have one national system. Why not have the feds fund the whole thing and give it to everyone?
Ms Sholzberg-Gray: I agree. We will have to have provincial buy-in, because ultimately, that will achieve further efficiencies for us. It may well be that if the federal government will agree to fund it 100 per cent, then the provinces will agree to use it. That is why we say that $500 million is ``nowhere'' in all of this.
All of the discussion in your report on the federal role is excellent and important, and we fully support it. There are two roles for the federal government. The first is that of steward of medicare. Canadians look to the federal government to ensure that they have access to comparable services wherever they live in this country. Some of the federal health care services may be fraying around the edges, but it is still the health-care tier that Canadians look to, and they look to the Canadian government to guarantee it. We would say that the federal government has not been funding its fair share of that. The committee should say that openly in their recommendations.
The committee should also say that the federal government should buy changes such as the electronic patient record. Money can buy things, and government can use the spending power for positive purposes. It has the constitutional right to do that. There might be limitations that the federal government could agree to, but there are openings. They could use the spending power. They have done it in other areas in the past and there is no reason why they should stop now.
The federal government has to keep operating in areas that are in addition to ``the saviour or the protector or the steward'' of medicare.
Those are all the other things that the federal government does that we have discussed, including health promotion and wellness, where there have been cuts, drug approval programs, and support to research and development and chairs of excellence. It has done a lot with the CIHI. It must unequivocally fund the information-gathering initiatives. We cannot have organizations like CIHI continually going cap in hand and wondering if they will continue to exist. If we agree that there must be an objective collector of information, then we must ensure, first, that there are enough funds in the health system to provide the information; and second, enough funds for the collector, whoever that will be, and assuming it will be the groups that we talked about before.
That is what the federal government can and must do. There should be none of this squabbling about, ``I am paying this amount and you are paying that amount.'' If you are not currently paying your fair share, how about paying more and using the money to achieve purposes from which everyone will benefit?
Ms Turik: We would make recommendations that are consistent with those of our colleagues here today. In particular, we would strongly encourage that the federal government take a role in terms of a national formulary, a review process, and ensure that there is coverage for catastrophic drugs.
The second area I should like to speak to is primary care incentives. The federal government has already initiated a process of incenting the involvement and inclusion of health care providers other than physicians in primary care, but there is a lot more that could be done in an organized and strategic way to encourage primary care reform within the provinces. In particular, we strongly recommend that they take a central role in information technology expansion and the electronic record and move forward as expeditiously as possible.
The other area that would be critical for them to consider is privacy. They could have moved more quickly to address some of the privacy concerns arising in Bill C-6 for the health sector, which would allow for more consistent standards across the country.
The third thing that we would very much like to advocate is that the national government implement a national health human resources strategy as expeditiously as possible. It is an international concern and an international challenge for all health care sectors. Without national leadership in this area and the active participation of the national government, Canada in particular will experience major shortages, because other countries have moved forward in addressing the problem. We must have a national domestic supply that we can count on in the future.
The Chairman: I wish to thank all four of you for coming here this afternoon. You have been terrific witnesses and very patient.
The committee adjourned.