Topic: If America adopts Canada's health care system

[cupper]

 

 

[Thucydides]

The Prime Minister implicitly recognizes where the solution lies, but needs to find a way to release the provinces to explore different solutions before health care consumes all of our budgets:

http://freedomnation.blogspot.com/2011/12/harper-is-right-health-care-solutions.html

Harper is right: health care solutions must come from provinces but first he has to show leadership

In his end of year interview Stephen Harper said something on health care policy that is both useful and true. He said that it is up to the provinces to find the solutions to the problems in the health care system. This is not an abdication of federal leadership but a recognition that there are some things that the provinces are better at doing. Provincial governments are the ones that run the health care system and there is a limit to how much a federal bureaucrat can understand the details of each provincial system. Also provinces need to find solutions that work for their own particular circumstance and come up with political compromises that are acceptable to their own populace. Federalizing the issue of health care does nothing but hopelessly complicate an already complex policy dilemma.

So I am very happy to hear the Prime Minister admit the limitations of the federal government and encourage provinces to take action. At the same time he has to recognize that the federal government is preventing provinces from exploring any meaningful reform. The Canada Health Act severely limits the range of policy options that would be possible even while maintaining the goal of universal access.

Too many Canadians are stuck in a simplistic comparison between Canada’s and America’s health care system. Instead we should be looking at the policies in Europe and seeing how universal or near universal access can be achieved without the single/public-payer system. Models from the Netherlands or Switzerland, neither could be called havens of extreme capitalist thought, would be violations of the Canada Health Act.

The way that the federal government enforces the Canada Health Act is through the funding that they provide to the provinces. With health care spending eating up half or nearly half of provincial revenue, the provinces are reliant on the money that the federal government sends them. If any provincial government does anything that the federal government interprets as a violation of the Canada Health Act and that funding will dry up. The upshot is that if Ontario wants to take inspiration for solutions that have worked well in the Netherlands, they would face financial ruin at the hands of the federal government.

Despite Mr. Harper’s reputation for being open to reform in the health care system, his government has consistently reconfirmed its commitment to enforcing the Canada Health Act.

Mr. Harper is right that the solutions must come from the provinces but he has to allow them the tools to fine those solutions. Although it may be politically difficult, for reform to be possible the Canada Health Act cannot remain unchanged.

The most positive change that the federal government can make is to remove the requirement of a single/public payer as a condition for federal financing. Note that this is not the same thing as removing universal access as a principle of the act. As the Europeans show us, single/public-payer is not the same thing as universal access.

It is in reforming the Canada Health Act that Stephen Harper not only can but must show leadership.

[Thucydides]

An expanded look at how Canada's healthcare system is changing towards more flexibility and competition:

http://www.winnipegfreepress.com/canada/breakingnews/a-canada-with-no-health-accord-provinces-grapple-with-the-possibilities-136904598.html

A Canada with no health accord? Provinces grapple with the possibilities
By: Heather Scoffield, The Canadian Press
Posted: 01/8/2012 10:44 AM | Comments: 91 (including replies) | Last Modified: 01/8/2012 11:54 AM

OTTAWA - The provinces are grappling with the real possibility that they may soon be delivering health services without the guidance of a formal, national health care accord, The Canadian Press has learned.

They are scrambling to figure out how to move forward after Finance Minister Jim Flaherty took them by surprise last month when he handed them a 10-year funding package for health care with no policy strings attached.

Health Minister Leona Aglukkaq is now touring the country to see how her provincial counterparts want to proceed, with the official aim of stitching together a new accord that would set national standards and hold provincial governments to account for their spending.
And provincial premiers are preparing to hash out a some sort of plan when they meet in Victoria on Jan. 15 to 17.
But a no-accord approach is a distinct possibility, say provincial and federal officials.

"It's a possibility that we have no codified accord," said one federal source, who spoke on the condition of anonymity.

That's because the new funding arrangements for 2014 to 2024 were presented without negotiation, pleasing some of the Western provinces but upsetting the rest of the country. Now the federal government has signalled that it will be taking a back seat in setting health care policy.
Prime Minister Stephen Harper was asked this past week in a radio interview whether Ottawa is, in effect, telling the provinces to take full responsibility for health care.

"Well, that's partly what we're saying," Harper said during an appearance on the Rutherford Show, an Alberta-wide radio call-in program.
"Look, most provinces are already projecting reductions in their own growth rates and health-care spending. But the provinces themselves, I think, are going to have to look seriously at what needs to be done to make the system more cost effective."

Flaherty's fiat cements financing until 2024. It gives provinces some fiscal certainty about their levels of funding. But it also comes with no mechanism to ensure national standards or service improvements.

At the same time, the new 10-year funding arrangement will be allocated to the provinces based purely on a per-capita basis, eliminating any consideration for poorer provinces, fragile tax bases or higher costs in remote areas.

That means the distribution of the funding will swing heavily in favour of richer provinces west of Manitoba, to the detriment of Manitoba and east.

The equalization formula is also up for negotiation soon, so there is no guarantee poorer provinces will see additional federal cash to make up for the
health redistribution.

The concern is that without national standards, have-not provinces will see their health care systems deteriorate, as the health services in richer provinces flourish.

"Is it appropriate that the federal government just washes its hands of the country's most important social program?" asked one provincial official, who was not authorized to speak publicly.

Some of those have-not provinces are contemplating a co-ordinated push back against the unilateralist nature of Flaherty's funding.
They would argue that Harper promised a collaborative approach to health care during the last federal election campaign, and has also committed to reducing wait times and improving accountability and health care services more generally.

But they are far from united heading into their meeting in Victoria. And it's not clear Harper would have any obligation or incentive to listen to them anyway.

"There's not a hell of a lot the provinces can do about it," said University of Regina professor Greg Marchildon, who was the executive director of Roy Romanow's royal commission to reform health care a decade ago.

"They can complain publicly but they cannot force the federal government to come to the table and negotiate."
The provinces will have a difficult time forging a national accord as long as one of the key players — the federal government — is absent from those discussions, Marchildon said. And Harper has shown little inclination to join in.

"There can't be an accord unless there's an agreement to have a meeting," he said. "The federal government does not want a meeting so there can't be an accord."

The provinces could decide to take matters into their own hands and all go their separate ways on health care. Or they could decide to work together in some areas without the federal government, using the Council of the Federation as a secretariat.

Health care has not always been directed through a federal-provincial accord. That practice started in about 1999 with social-union talks that morphed into the more formal 10-year accord of 2004.

Poorer provinces or provinces that have mismanaged their finances like Ontario and Quebec will have a huge incentive to find efficiencies and reduce costs. Now they could use the "Washington Monument" strategy ("If our funding is cut we will close the Washington Monument to tourists"), but ironically, most provinces have already done tis repeatedly so voters are quite tired of threats of further cuts to emergency rooms and even longer wait times for surgury and specialist care.

My prediction; the province that figures out how to put patient needs ahead of the hospital administration and health care bureaucrats will become the hotbed of "medical tourism" from other provinces and perhaps the United States, which will force other provinces to follow suit and change their systems.

[GAP]

Having worked peripherally within the health care system, I can vouch for the massive empire building in even the remotest locations....get rid of that and the carpet bagging and you will have a decent system. It has to stop somewhere.....

[Thucydides]

A toxic combination of American government intervention in the market and Canadian governments ditorting the market with perverse incentives. Even if I had the ability to raise a processing plant from the ground, there is no incentive for me to create a "second line" facility to fill the market niche:

http://www.nationalpost.com/todays-paper/Trouble+with+cheap+drugs/6353030/story.html

Trouble with 'cheap' drugs

Ninety per cent of Canadian injectable drugs come from Sandoz. Revamping of the plant to meet U.S. regulations, and a fire, have led to a nationwide drop in supply since February.

Marni Soupcoff, National Post · Mar. 24, 2012 | Last Updated: Mar. 24, 2012 4:05 AM ET

While the House of Commons has unanimously passed an NDP motion to require drug companies to notify Health Canada in advance of potential shortages, such warnings don't address two potential underlying causes of the country's current dearth of drugs: overzealous regulation and short-sighted sole sourcing.

The sudden slowing of production of some medications at Sandoz Canada's Boucherville, Que., plant in February - combined with a subsequent fire that temporarily ground production to a halt at the same location - has left Canadian emergency rooms, intensive care units and operating rooms in the lurch.

Sandoz is the only supplier for approximately 90% of the injectable drugs the nation's hospitals use every day - in surgeries, emergency treatment and intensive and palliative care. The result has been an unnerving, if not yet critical, shortage of painkillers, anesthetics and other drugs.

But the Sandoz bottleneck did not start at home. It was the regulatory tentacles of the United States Food and Drug Administration (FDA) that sparked the initial slowdown (we can only assume the fire was God's work) when the agency warned the company about manufacturing deficiencies in Boucherville. Sandoz, whose Quebec plant also produces drugs for the U.S. market, responded with voluntary operational upgrades that necessitated pulling back on production.

This was not an isolated incident. For several years now, the FDA has been intensifying its enforcement of quality control measures on pharmaceutical companies - a move that sounds unimpeachable. Who wouldn't want to ensure the safety of drugs we count on to restore our health? Yet many government skeptics, such as Walter Olson, of the libertarian Cato Institute think-tank in Washington, D.C., believe the agency's stepped up enforcement is far exceeding what safety requires - and is creating record drug shortages in the United States, as well.

"In particular," Mr. Olson wrote of the FDA last year, "it now proclaims zero tolerance, barbed by tough fines, for many technical infractions whose actual impact on patient risk is at best doubtful, and it is unafraid of shutting down production lines again and again for retooling until its regulations are satisfied to the letter." He pointed out that there were then 246 drugs considered to be in shortage in the United States.

John C. Goodman, president and CEO of the National Center for Policy Analysis, a non-profit free-market research organization based in Dallas, Tex., has similarly criticized the FDA for "forcing manufacturers to abide by rules that are rigid, inflexible and unforgiving" - a practice he believes is contributing to the difficulty of getting lifesaving drugs to the patients who need them.

Of course, whether or not the FDA has become dangerously overzealous would be of much less consequence to Canadians if this country had more than one supplier to turn to for the vast majority of its injectable medications. But in the search for cost containment and less expensive drugs, the provinces have been moving toward a bulk purchasing model. Either on their own, or by joining a large group purchasing organization, they enter into agreements to buy drugs in large quantities to get a lower price per item. It reduces the governments' overall pharmaceutical costs, but tends to result in far fewer suppliers.

"It's a winner-takes-all approach," says Mark Rovere, associate director of the Health Policy Research Centre at the Fraser Institute. Which is fine so long as the "winner" is able to deliver the goods. But there's no incentive for other companies to invest in the infrastructure necessary to step in should the winner falter. Hence, when Sandoz slowed production to focus on revamping its plant, there were no other big pharmaceutical companies set to jump in and start producing the scarce injectables - or (even less likely) with the needed products already sitting around, gathering dust on their shelves.

How did this happen?

"A lot of it is rooted in the national pharmacare issue," Mr. Rovere says, referring to the decades-long push for universal government coverage of Canadians' prescription drug costs. The longing for a centrally planned, collectivist approach led to a focus on, as he puts it, "How do we get cheap drugs for everyone?" Bulk purchasing "does result in cheaper drugs," he says "but it has unanticipated consequences." Consequences such as the cancellation of non-essential surgeries and the rationing of painkillers.

HealthPRO Canada is a national health care group purchasing organization that buys drugs for 255 Canadian hospitals and health authorities. Its own promotional material does a good job of capturing the company's dominance on the scene: "HealthPRO brings together the most significant purchasing power ever assembled within our country's public health care system."

In February, HealthPRO released a statement saying that it had made changes to its contracting strategy in order to address concerns about ongoing drug shortages.

The announcement explained that the new plan "strives to strike the right balance between competition, purchasing power and a more reliable supply chain" and requires its suppliers to, among other things, provide "correction plans for drug shortages lasting more than 60 days for hospital-specific items."

That can't hurt. But given what a dramatic impact depending on barely more than one source of injectable drugs has proven to have on the country's supply of medication, bolder changes are surely in order.

Rather than focusing on adding reporting requirements to companies such as Sandoz, Canada would do well to learn its market lessons from this incident.

First, use the results of the FDA's purported regulatory nitpicking as a cautionary tale. Second, remember the complexities and distortions that arise when the focus shifts from the individual to the universal (cheaper drugs for everyone somehow leads to hardly any drugs for anyone). Finally, and of most immediate importance, when purchasing drugs on behalf of a province - or becoming a member of a purchasing group that will do the same - do your best impression of a truly responsible and self interested buyer by naming rational conditions that will protect you in the future.

One of these conditions might be: Never accept a deal that results in an entire class of drugs being supplied by a single source. It'll come back to bite you if you do.