Thursday, August 12, 2004

Pharmacare plan about who pays, not better health care

VICTORIA - It sometimes looks like Canadians' brains turn to mush when we start talking about health care.
Take the premiers' proposal that Ottawa create a national pharmacare program, taking over from the provinces. The premiers plucked the idea out of the air when they met to prepare for Paul Martin's televised health care summit next month. At this point, they don't know how it would work or what it would cost - estimates range from $7 billion to $12 billion.
A national plan actually makes good sense. It could help to ensure more efficient and effective drug purchasing and use. But that's not the premiers' focus. They looking at who pays, the provinces or the federal government.
And despite all the talk about sustainability, and controlling costs, and efficiency, that's mostly what we debate - who should pay.
Who cares? Pay taxes to Victoria for pharmacare, or pay taxes to Ottawa for pharmacare - that's hardly a critical health care reform question.
Even the debate about two-tier care or delisting services is about who pays. Allowing some people to pay extra for speedier or higher quality care doesn't reduce the amount we spend on health care by one cent. It just shuffles the cost around.
Right now, people pay taxes for the care we agree is needed. Under a two-tier system, taxes would be less and people would pay more out of their own pockets. Health care spending wouldn't change. (The U.S. has such a system, and health care costs actually consume a larger share of its GDP. If spending was at the same level in B.C., our health budget would be $2 billion higher.)
We're dancing around the problems, not dealing with them.
Take drug costs. They are one of the most rapidly increasing health care expenses. If we can find ways to control those costs - as B.C. has done with reference-based pricing, which ensures that the cheapest effective medication is used - then we'll have more to spend on other areas.
But we don't even really know if drug spending increases are a good or bad thing.
In B.C., prescription drug spending was $360 per person in 2003; the national average was $505. That could mean that we're doing a good job of controlling costs, or our doctors are more careful with prescriptions or simply that we're healthier - all good things.
Or it could mean that we're failing to make effective use of prescription drugs, and as a result more people are requiring surgery. We just don't know.
A national pharmacare plan that focused on effectiveness, not who pays, could help answer those questions. It could ensure that new drugs were only approved when they offered wide, cost-effective benefits. It could bargain effectively with big drug companies. And it would prevent drug companies playing provinces off against one another, winning approval for a new drug in one place and then supporting patients in other provinces pushing for the same thing.
The good news is that we have time to do this right. There is no health care sustainability crisis.
Yes, costs are rising rapidly and that should be a concern.
But despite all the doom-and-gloom, an internal federal finance department review released this year projected that health care spending would remain easily manageable until 2040 and beyond. Canadian health care spending as a percentage of GDP - the critical measure - was the same in 2001 as it was in 1991. There is no crisis.
The premier's pharmacare proposal isn't going anywhere. Prime Minister Paul Martin doesn't want the expense or the responsibility. His new interest is wait times. But shorter waits mean more money, and neither Martin nor most of the premiers want to spend more.
Maybe, under the bright television lights, the First Ministers will give up on arguing about who pays, and start talking about how we can deliver health care more effectively.
Footnote: One challenging in controlling drug costs is saying no. Drug companies regularly offer much more expensive new drugs with relatively small improvements in benefits for most patients. Governments that decide that it's not worth paying for each new drug can face intense pressure from patients, pressure groups and the pharmaceutical industry.

Tuesday, August 10, 2004

Economy needs lowest possible BC Ferries' fares

VICTORIA - What's the big deal about spending a bit more for ferries, anyway?
Quite a lot, actually. Just look at how past ferry rate increases have damaged the economies of the province, and Vancouver Island.
B.C. shipyards should have been giving a chance to bid on construction of three new ships for BC Ferries, a contract that could be worth $500 million. It's just wrong that a government-owned corporation barred the leading local shipyard from even submitting a bid.
But lots of critics have argued that it's worth paying more to buy locally, while remaining vague on where that extra money will come from.
It's not likely the government will write a cheque to cover the extra costs, which leaves ferry riders on the hook.
And that would be very bad news, for Vancouver Island, coastal communities and the province.
Ferry rates matter. BC Stats concluded earlier this year that three decades of big increases are costing Vancouver Island's tourism economy more than $25 million a year in hotel and room revenues alone. Figure on other spending, and you're looking at a $50-million annual loss to the economy because ferry fares went up faster than inflation.
And it's not just a regional issue. Because Vancouver Island is a destination for visitors from outside the province, it's likely that B.C. tourism as a whole has been hurt by the rising rates, the report found.
BC Stats established average fares from the Mainland to Vancouver Island over the last 30 years, factoring in traffic types and the impact of reservation fees. It found fares have steadily increased faster than inflation over the last three decades.
Since 1975 the Vancouver cost-of-living index has gone up by an average 4.5 per cent a year. Ferry rates have gone up by an average 6.5 per cent a year.
Back in 1975 a car and driver could get across to the Island for $5. If costs had matched inflation, then today's fare would be about $17. Instead the average fare for a car in 2003 was $30, a 77-per-cent real increase.
Still a bargain by world standards, some might say.
But that misses the point. The real cost of using the ferries has been steadily rising, and that has inevitable consequences.
For some people, mostly locals who have to use the ferries, rising costs are an irritant, but it doesn't alter their travel plans.
But the basic laws of economics hold that if the cost of a discretionary purchase - like a holiday - increases, then a certain number of people will cancel their plans.
And they have.
The number of passengers on BC Ferries went up 33 per cent from 1980 to 2003.
But B.C.'s population rose 55 per cent. The overall tourism industry exploded. BC Ferries hasn't kept up.
Back in 1989, Vancouver Island had a 20.2-per-cent share of room revenues in the province, a standard measure of tourism activity. But the Island has been steadily losing ground to the rest of B.C., and in 2003 its share had fallen to 18.4 per cent, according to BC Stats.
Sounds like a small drop. But it translates into $25 million in lost revenues, and a whack more in the money those people would have spent. (The study wasn't skewed by picking one rough year; the decline was steady through the period.)
"The trend in Vancouver Island’s share of room revenues has closely followed changes in ferry prices," BC Stats reported. "This suggests that BC Ferries has been, to a degree, pricing Vancouver Island out of the tourism market."
None of this justifies shutting local shipyards out of the building.
But it should be a caution for those who are willing to pay a premium for local ships - and want ferry users to foot the bill.
Higher prices for ferry travel do matter, and their effects reverberate through the economy.
Footnote: BC Ferries own studies confirm the report. In its prospectus filed as part of its borrowing plans the corporation said that for every 10 per cent fares went up on the main routes, about three per cent of travellers cancelled trips. The corporation's last annual report blamed large 1997 rate increases for falling passenger volumes.

Monday, August 09, 2004

Ellard case doesn't make show need for jury system change

VICTORIA - You'd have thought the halls of justice were crumbling around us by some of the reaction to the Kelly Ellard case.
There's been much debate about the jury system since Ellard's second trial for the murder of Reena Virk ended in a hung jury.
The jury system is fundamental to justice. You have the right to have your case decided not by a judge, appointed by the state, but by a randomly selected panel of your peers. All 12 members of the jury have to agree that the Crown proved its case beyond a reasonable doubt before you're found guilty.
We should treasure that right.
But the Ellard case sparked a lively, passionate and useful debate. Some people decided that the case showed the jury system doesn't work. A single juror was unconvinced by the Crown's case, and stuck to her position. The result was a hung jury, and the need for another trial.
The critics' arguments around the Ellard case are dubious. They weren't in the court and didn't hear evidence or arguments, but have apparently decided Ellard should have been found guilty, so the system is somehow broken.
But it could be argued that the jury system worked perfectly. The Crown made its case, but couldn't convince all the jurors of guilt. They reported that to the judge. That's what's supposed to happen.
But what if one juror is perversely, unreasonably blind to the facts, the critics say.
Fair argument. Attorney General Geoff Plant said it might be time to look at having smaller juries - perhaps eight people - to allow a greater chance of unanimity.
Or, he said, juries could make their decision on a majority vote, without requiring all to agree. Judges in England can accept a jury decision based on a 10 to two vote.
But the arguments for change are weak, in large part because it's not even clear if this happens often enough to be a concern. B.C. doesn't track hung juries, but the best estimate is that fewer than three per cent of criminal jury trials end up in am mistrial as a result of a deadlocked jury. That doesn't seem like a problem; just part of the checks and balances.
That's another objection to those changes, which Plant says the first ministers will discuss this fall. They are basically designed to make it easier for the Crown to convict people; perhaps it's as important to keep people safe from wrongful conviction. After all the Crown has the chance to try the case again is a jury is split, while a person wrongfully convicted is off to jail.
Plant also suggested simplifying the judge's instructions to juries, which have become increasingly long and complex. The judge's instructions in the Ellard case, delivered after a lengthy trial, ran to 165 pages, all read to the jurors before they started deliberating.
Supreme Court Justice John Bouck agrees. He wrote The Times Colonist in Victoria arguing for a system of simpler, shorter instructions. As appeal courts have overturned verdicts because juries were not properly instructed in the law, judges have been forced to add more and more detail. "Jurors become glassy eyed and unreceptive to the judge's strange legal words as they valiantly try to stay awake," he observes.
The instructions don't just add to jurors' confusion. They also are a fertile ground for appeals, by both Crown and defence. Verdicts are overturned and retrials ordered far more often because of problems with jury instructions than because of hung verdicts.
Bouck studied a useful U.S. alternative. Under the guidance of a high court, judges, lawyers, academics and public representatives agree on what juries need to be told about the law in different situations. The resulting instructions are short and clear, and can not be the basis of an appeal. Some method of simplifying instructions to juries seems a useful exercise.
But beyond that, it's hard to see any dramatic need for change.
Footnote: Plant took a lot of unfair criticism from people who said his comments on the jury system undermined Ellard's right to a fair trial next time around. Rubbish. He was asked about a policy issue and he responded. That's his job, and he did it. The last thing we need are more silent politicians.

Tackling health care wrong way round, again

VICTORIA - The premiers' proposal for a national, federally funded pharmacare plan highlights what's wrong with the way we approach health care.
There's a certain tactical cleverness to the idea, hatched -- apparently with little preparation -- at meetings last week.
The premiers were trying to figure out how to approach next month's televised health care summit with Prime Minister Paul Martin, who had already struck his own pose with an empty campaign promise to cut waiting lists.
The premiers needed a response.
Fundamentally, they want more money from Ottawa. But that demand is wearing thin, not least because the public recognizes that provincial and federal governments tap the same pool of taxpayers.
So the premiers came up with a twist. The federal government should create a national pharmacare program, they decided, and come up with the required $7 billion to $12 billion. (The range indicates just how well this has been thought through.) And, of course, the premiers still want Ottawa to come up with $5 billion a year in extra health transfer payments.
Don't expect any fast action.
The provinces can't even say what sort of plan they want Ottawa to provide. Provincial pharmacare plans now vary widely. P.E.I. covers 30 per cent of total prescription drug costs, with the rest paid by private insurers or individuals; Manitoba's plan covers 53 per cent of all prescription drug costs. Working out a coherent, nationally acceptable model would be a huge task.
The federal government has no interest in taking on all responsibility for the fastest-growing component of health care costs.
And the public recognizes that this proposal does nothing to address the real issues The premiers' rhetoric is about rising costs, greater effectiveness and sustainability. But their pharmacare plan doesn't tackle those tough issues. It simply takes the status quo and shuffles the financial arrangements around.
A real national pharmacare strategy would be useful.
Prescription drugs are taking an increasing share of health care spending, with little evidence on whether the money buys useful results.
In B.C., prescription drug spending was $360 per person in 2003, about $145 less than the national average, according to the Canadian Institute for Health Information. But there's little evidence as to why we spend less, or whether it's a good thing.
Perhaps reference-based pricing is keeping costs down; perhaps we're simply healthier; or perhaps we're under-prescribing and as a result more people are inding up in hospital. We don't know.
A national strategy, based on the best information available, could improve the assessment and approval process for new drugs and provide better ways of managing costs (including more effective bargaining with the drug companies.) When that is done -- the important work -- the question of who pays can be resolved.
It's difficult work. Deciding not to pay for the latest, more costly drug variations brings pressure from patients who believe they can improve their lives, and drug companies that believe they can improve their bottom lines. But it's the only way to real reform.
So far, once you get past the rhetoric, the talk is all about who pays. Even the advocates of two-tier care acknowledge it doesn't reduce costs or increase effectiveness. The health care expense is the same; the difference is whether we pay collectively or allow people to pay individually for speedier care.
We're not in any sort of health care sustainability crisis. Cost increases are worrying, but Canadian health care spending as a percentage of GDP was unchanged between 1991 and 2001. A federal finance department review released this year projected that even without changes health spending would remain easily manageable until 2040 and beyond.
That means we have time to make the difficult decisions about the kind of health care system we want and are prepared to pay for.
Instead, our politicians are still bogged down on debates about whether the taxes we pay to Ottawa or the taxes we pay to Victoria should be allocated to health care costs.
And that's a debate that has very little to do with better patient care.
- From the Vancouver Sun