The paper comes out at a time when all Canadian provinces face significant pressure to reduce the rate of growth of health spending while continuing to improve access and quality of care but when there is no agreement on the specific changes needed to ensure that public healthcare dollars are more efficiently utilized. As a result, individual provinces are experimenting with a variety of reforms. In BC, the two major policy options being introduced are an activity based funding (ABF) model for hospital surgical procedures; and an integrated model for caring for people with chronic conditions and complex needs in the community. Though both of these are formally priorities of the Ministry of Health, ABF is receiving the vast majority of the financial resources and technical expertise.

Our paper raises serious concerns that the current preoccupation with reforming hospital funding is simply too narrow to effectively address BC’s most pressing health care challenges, many of which have roots outside the hospitals (in our inadequately funded community care system). This is why we titled our report Beyond the Hospital Walls: Activity Based Funding Versus Integrated Health Care Reform.

The current focus on ABF is a reflection of the conventional, hospital-centric model of health care that our system was built on. While this worked well to meet the health care needs of Canadians in the 1960s, it’s outdated in the 21st century when chronic disease management — which is better handled in the community, not the hospital — is increasingly becoming a pressing concern.

But what’s worse is that ABF is not just a distraction from the real problems in our health care system: it may actually reinforce the silos and fragmentation within the health care system, hindering efforts to improve overall system integration and coherence (this stand in the way of priority #2). This is why jurisdictions where ABF has been in place for a number of years are increasingly looking to move away from it towards funding mechanisms that incentivize integration across the system (among hospitals, family doctors and community care services like long term care and home support).

The paper outlines a strategy for health care reform that is timely, practical and evidence-based, and that will address the root causes of problems in our health care system.

Our review of the international evidence on health systems reform suggests that the best performing systems are the ones that have developed mechanisms to collaborate and share accountability across services and providers. The key to their success is understanding the patient experience across the continuum of diverse health services the patient needs at any one time. High performing health systems are organized in a way that allows providers to be jointly accountable for providing cost-effective care in whichever venue is medically appropriate – the patients’ home, the family doctor’s office or the hospital. There are many examples of how this can be done, both internationally and from our own backyard (Northern Health Authority is a leader in this area). All that’s needed is for the BC government to show leadership, look at the evidence, and actually implement the initiatives that have proven successful province-wide.

We hope that Canada’s premiers, who are currently meeting to discuss health care in Victoria, find a way to avoid getting bogged down into narrow issues like hospital funding reform and engage in a broader discussion of how to improve quality, increase access and ensure the cost effectiveness of the overall health care system.

Here’s what I just submitted:

Submission to the BC Legislature’s Select Standing Committee on Health

From: Seth Klein, BC Director, Canadian Centre for Policy Alternatives

Re. Sustainability of the Health Care System

Date: Jan 13, 2012

Thank you for this opportunity to offer this written submission to your committee’s deliberations.

Given the topic you are investigating, I want to make sure that you are familiar with some relevant peer-reviewed reports that have been published by our institute.

Of most direct relevance is a 2006 report by our senior economist Marc Lee entitled Is BC’s Health Care System Sustainable? A Closer look at the Costs of Aging and technology. The report can also be found here.

Like your committee’s mandate, this report estimated the financial implications of demographic trends on the health care system into the 2030s. Among the report’s key findings:

This paper finds that population aging, in and of itself, is but a small contributor to rising cost pressures in the health care system. Based on current projections there is little to suggest a demographic time-bomb about to go off. Instead, the real challenge for financing the health care system is advances in technological possibilities, broadly defined to include pharmaceutical drugs, new surgical techniques, new diagnostic and imaging technologies, and end-of-life care. These challenges can be addressed most efficiently and equitably in the context of a public system…

• Population aging has been a cost driver in the system, but a very small one compared to other sources. The impact of population aging was 0.9% per year over the 1995 to 2005 period. This is consistent with other studies of population aging.
• Inflation (as reflected in salary increases and higher cost of supplies) has been the biggest cost driver over the 1995 to 2005 period, with increases averaging 2.4% per year, followed by population growth at 1.2% per year.
• The expansion (or “enrichment”) of health care services over time (such as new technologies, long-term care, home care and pharmaceutical drugs) is also an important factor. The average British Columbian receives one and a half times more health care services as his or her equivalent 30 years ago.

I would also like to draw you attention to a number of other CCPA reports relevant to your work:

• Why Wait? Public Solutions to Cure Surgical Waitlists, by Alicia Priest, Michael Rachlis and Marcy Cohen (2007), available here.
• What’s in a Scan? How well are consumers informed about the benefits and harms related to screening technology (CT and PET scans) in Canada, by Alan Cassels et al (2009), looks at how unnecessary and sometimes harmful scans can drive up health care costs. It is available here.
• An Uncertain Future for Seniors: BC’s restructuring of home and community care, 2001-2008, by Marcy Cohen et al (2009), looks at how inadequate investment in community care is placing more pressure on the more expensive acute care system. It is available here.
• Innovations in Community Care: From Pilot Project to System Change, by Cohen et al (2009), is a companion paper that highlight successful innovations that, if scaled-up province-wide, could take pressure off the acute care system. It is available here.
• The Cost of Poverty in BC, by Iglika Ivanova (2011), looks at how poverty increases costs to the health care system. In particular, it finds that poverty in BC is adding an additional $1.2 billion per year to the province’s health care system. It is available here.

Thank you for this opportunity.

Almost everything that is vital to a healthy community, from life expectancy to levels of depression to crime rates, is affected by inequality. This is true in both rich and poor countries.  (The Spirit Level: Why Equality is Better for Everyone, by Richard Wilkinson and Kate Pickett).

Social factors begin to affect us at conception, so that life in the womb and the perinatal period can affect well-being later on.  Even if exposed to stress in the womb, however:

A nurturing environment after birth can provide the child with enormous potential to change their course of development. This is known as “developmental plasticity,” which means that the brain can adapt and change as the child grows with a positive environment.

The important message here is in how we as a community support pregnant women. Stressful lives are most often linked with socioeconomic disadvantage. This research shows we should be targeting these women with support programs to ensure the stress does not negatively affect the unborn child.  (Repeated Stress in Pregnancy Linked to Children’s Behavior)

Poverty can even cause brain damage. Researchers discovered that U.S. children from “low socioeconomic environments” displayed a response in their pre-frontal cortex that was similar “to the response of people who have had a portion of their frontal lobe destroyed by a stroke” (Poor Children’s Brain Activity Resembles That Of Stroke Victims, EEG Shows).

The damage may result from conditions such as poor nutrition, lack of time with over-worked and over-stressed parents, or fewer opportunities for intellectual stimulation – all of which may affect the quality of care that a child receives.  This does NOT mean that all poor children are so afflicted, but the average poor child is more likely to suffer.

Every dollar invested in the young not only saves lives and prevents illness, but it will also save at least $7 dollars in future social costs. For instance, lead poisoning, ADHD, and autism resulting from toxic chemicals and pollution in the United States cost $77 billion annually. Globally, almost 350,000 women die each year in childbirth – most of whom could be saved for the cost of just six fighter jets. Even worse: over 22,000 children under the age of 5 die every day from hunger and preventable diseases – almost 9 million every year. This year’s U.S. military budget is around $800 billion, and the world spends twice that on war. The simplest change would be to redirect wasteful military spending to end the worst elements of global poverty.

In 2009, the combined net worth of the world’s 1,011 billionaires increased to $3.6 trillion, up $1.2 trillion in just one year. This NEW wealth alone could end global poverty.

Perhaps the most important point is that none of these social, economic, and environmental problems are necessary. All scarcities, as Murray Bookchin pointed out over 40 years ago, are artificial. We possess the knowledge and the wealth to eliminate the worst of these afflictions. Why aren’t we doing so?

That works out to about 12 people dying every single day, in just one city.

The British government does not seem worried about this horrific toll. To put their response in perspective, imagine the reaction if 12 people were murdered every day by terrorists. There would be a national mobilization, restrictions on civil liberties, and billions would be allocated to public safety.

However, since the killers in this case are mostly manufacturing, industrial, and fossil fuel corporations, almost nothing is done.

It’s no better here, however.

The Canadian Medical Association estimates that, in 2008 alone, 21,000 Canadians died from heart and lung illnesses brought on by polluted air.

That is about 60 Canadians dying every single day. From breathing.

Another “700,000 Canadians will die prematurely over the next two decades because of illnesses caused by poor air quality,” the CMA reported.

The Harper government has done nothing to combat this silent slaughter. Instead, it denies that there is a problem, while continuing to give away billions of dollars of public money to oil and gas corporations.

The CMA also found that, in 2008, the “costs of dirty air, in terms of treating the illnesses in hospital and visits to doctors, as well as indirect expenses for time off work”, added up to $10 billion.

The Conservatives are also promoting the development of the Tar Sands in Alberta, which will mean enormous increases, not only in air pollution, but also to global warming.

For its part, the Liberal government in B.C. has paid lip service to the environment. The result is that, in 2008, the Heart and Stroke Foundation gave Metro Vancouver a “D” for its air quality and cardiovascular risk, while the Interior was rated “F”.

What is to be done? The most immediate action that citizens can take is to make the environment a central issue in the federal election.

This does not necessarily mean that one should vote for the “Green” party.

What it does mean is that we have an opportunity to organize now – when politicians of all parties pay more attention to what voters want.

As Bill McKibben writes: “We need to be able to explain to them that continuing in their ways will end something that they care about: their careers. And because we’ll never have the cash to compete with Exxon, we better work in the currencies we can muster: bodies, spirit, passion.”

Most importantly, we have to organize to increase public awareness that, the sooner we force governments to act, the easier it will be to transition to a sustainable economic system.

There is no guarantee of success, but as McKibben pointed out in his recent talk at UBC: “The only moral position is to change the odds.”

If we organize and do whatever we can, together we WILL make a difference.

Last week, the Alaska Highway News reported that during her first installment of promised town hall meetings Premier Christy Clark pledged to a gathering in Fort St. John that her government would investigate the threats to public health and safety associated with sour gas developments.

Calls for an investigation have been growing, spearheaded by a local citizens group – the Peace Environment Safety Trustees Society – who are alarmed at the growing number of sour gas leaks, related deaths and injuries of gas industry workers, and a range of health care complaints by area residents.

If Clark’s commitment to the society (PESTS) is acted on, it promises to highlight a contradiction inherent in her stated policy objectives. On the one hand, Clark has staked out ground as a staunch defender of children and families, which presumably includes their general health and well-being. On the other, she has made it abundantly clear that she sees increased revenues from an expanded oil and gas industry as a cornerstone of her government’s fiscal plans.

In many areas that oil and gas companies currently operate in in B.C.’s Peace River region, sour gas is a frightening fact of life. As Vancouver Sun columnist Stephen Hume noted recently, hydrogen sulphide, the toxin in sour gas, is absolutely deadly. People exposed to gas leaks where the toxin is present at levels of just 250 parts per million have been known to die in minutes. In some northeast B.C. gas wells, hydrogen sulphide concentrations reach as high as 160,000 parts per million.

In a detailed brief submitted to the provincial government on behalf of PESTS and written by environmental lawyers Calvin Sandborn and Tim Thielmann, it is noted that over the past three decades, at least 34 workers in B.C. and Alberta have been killed in sour-gas related incidents and hundreds more disabled. Massive, uncontrolled releases of sour gas have occurred in B.C., but to date have not been near communities with large numbers of residents. The same could not be said for residents living near Gao Qiao, in Chonquing, China where, in 2003, a massive sour gas leak there forced the evacuation of 64,000 residents and killed 243 people in what became a 25-square-kilometre death zone.

In 2009, an uncontrolled release of sour gas near the Peace River community of Pouce Coupe spewed 30,000 cubic metres of toxic gas into the night air. The estimated eight-hour gas leak forced the evacuation of 18 residents, killed a horse and resulted in at least one emergency hospitalization. The leak occurred at an EnCana Corporation well site. Former EnCana chairman, Gwyn Morgan, is a senior advisor to Clark.

Clark did not mention such events during her town hall meeting in Fort St. John. Instead, she spent much of her time extolling the virtues of expanded oil and gas developments in northeastern B.C., noting at one point that revenues generated by the region’s energy industry provided roughly $1.3 billion of wealth to provincial coffers each year. An amount, she said, that allowed health care professionals primarily in the south of the province to perform 96,000 knee replacement surgeries.

“One of the things that happens when you’re down South is you find a lot of people who are against everything. They’re against hunting, forestry, mining, oil and gas, you name it,” Clark said. “People need to remember that if you’re against everything, eventually you don’t have the money left to be able to pay for the things that are important to us.

“I want to make sure that everybody in British Columbia understands what an important role the North plays in making sure that we’re able to have all the things we want as a province.”

Clark was later reminded, however, that there is a dark side to gas developments in the region and that it is people living in the region that are most directly affected.

“We appreciate the economic activity the [oil and gas] industry has brought to the area, but there has never been an assessment of the cumulative health impacts it’s having on people and the environment,” PESTS member, Lois Hill, said.

Letters of support for the PESTS-led initiative have flowed in from numerous quarters, including from local health officials, elected members of the regional district government, First Nations and even from Blair Lekstrom, local  MLA and Minister for Transportation and Infrastructure.

In response to Hill’s comments, provincial Health Minister Mike de Jong, who attended the town hall meeting, replied that a panel of experts drawn from the University of Northern B.C. and elsewhere should be called upon to study the impacts of sour gas developments on air, water and soil in the Peace River region. De Jong used words like legitimate, fair and reasonable to characterize the broadening call for an examination into the human health threats posed by sour gas.

What remains to be answered is just what form the Clark government’s commitment will take, and whether or not the natural gas industry’s controversial and rapidly expanding use of hydraulic fracturing or fracking operations will form part of any future inquiry.

Fracking involves the pressure-pumping of immense amounts of water, fine-grained sand and chemicals below the earth’s surface to stimulate gas production. The controversial technique was found to be a contributing factor to the Pouce Coupe gas leak and has been linked to at least 18 incidents involving unwanted “communications” between gas wells – meaning that fracking activities at one gas well have caused contamination corridors to open to another well that may be 700 metres or more away. Such unwanted events have resulted in corrosive frack sand from one well being blown hundreds of metres into another, sand that in high enough concentrations can lead to well failures and uncontrolled gas leaks.

PESTS and legal experts acting on its behalf want a formal inquiry called under the provincial Health Act – a process that would result in pubic meetings and the calling of witnesses. It remains to be seen, however, whether Clark’s commitment to the health and well-being of children and families will result in such a process or something less formal and less likely to shine as bright a spotlight on a dark side of the gas industry.

“While minister Lekstrom has assured us that money has been set aside for a permanent air-monitoring program, that program is going to be led by the energy industry regulator, the Oil and Gas Commission,” Hill says. “We have not been informed officially of any plans for a broader inquiry. Air monitoring is just one component of what we’re looking for. What we want is an empowered Ministry of Health, to set standards, monitor compliance and investigate health impacts associated with this industry. And before that happens, we think we need a full, public inquiry.”

Dr. Glenn, who is the Dean of the Santa Barbara Graduate Institute, began by saying that, “Economists, writers, and researchers are beginning to discover…what we have known for decades: that the events and environment surrounding pre-conception, pregnancy, birth, and early infancy set the template out of which we live our lives.”

“The time is right,” she added, for a shift in the paradigm.”

Recent coverage such as on prenatal health in “Time” magazine, and epigenetics in “Newsweek”, symbolize this profound change in consciousness.

Some of the specific insights that Dr. Glenn mentioned included:

*  “Early experiences determine brain architecture.”
*  “By the sixth prenatal month, most of the 100 billion neurons found in the adult brain are already there.”

She also highlighted the most important point of all: preventing trauma in the first place.  For instance, she noted that a father’s supportive involvement during pregnancy can reduce infant mortality.

Dr. Glenn also quoted Nobel prize-winning economist James Heckman, who points out that every dollar invested “in the very young” not only saves lives and prevents illness, but it will also save from $4-17 dollars in future social costs.

Heckman has written:

“Recent research demonstrates important differences in the family environments and investments of advantaged and disadvantaged children. Gaps in cognitive stimulation, affection, punishment, and other parental investments for children from families of different socioeconomic status open up early.” (Read the full article here.)

My presentation at the Congress overlapped with Dr. Glenn’s focus, beginning with the current state of Dr. Arthur Janov’s Primal Therapy, and how the emerging consensus supports his long-held contention about just how fragile we are while in the womb.

I pointed out how Janov believes that too many children have been emotionally damaged from an early age, and that one element of healing is to re-connect with the buried memories.

The second part of my talk discussed how to PREVENT hurting children in the first place.  In short, research has shown that providing optimal conditions for pregnant women, such as low stress, adequate nutrition, and quality pre-natal care could prevent children from suffering from a host of intellectual, emotional, and physical illnesses.

In addition, around 500,000 women die each year in childbirth.  Adam Jones (UBC Okanagan) has pointed out that most of those mothers could be saved for the cost of – six fighter jets.

Canada, for instance, could set an example for the world by forgoing the unnecessary purchase of the F-35 fighter jets, save the lives of countless women, and still have money left over for vital domestic needs.

Providing optimal conditions for mothers and their children would cost only a tiny fraction of what the world spends on advertising, or the Olympics, or the military.

This Paradigm Shift can’t happen too soon.

That’s the take-home message from a recent talk by UC Berkley economist and public policy professor Jesse Rothstein who came to SFU to present his latest research on using standardized test scores to measure teacher effectiveness in the US. 

Prof. Rothstein was involved in a 3-year pilot project in Tennessee designed as an experiment to check whether offering teachers bonus pay would improve students’ test score performance. Teachers were randomly assigned to two groups, one was offered bonus pay if their students did well on standardized tests (experimental group) and the other one wasn’t (control group).

After 3 years, there weren’t significant differences in student achievement on standardized tests between the two groups, clearly showing that offering teachers bonus pay did not improve student achievement. Yet, the Obama administration (for which Professor Rothstein worked recently) is continuing to explore incentive pay as a way to improve the education system.

Come to think of it, the idea of incentive pay has become the holy grail in governments’ quest for improving the performance of complex social systems like health care and education. On the surface, there’s a certain intuitive appeal to the idea of paying more to those doing a better job. The “economic theory” behind it is that offering to pay people more for doing a good job will lead to increased work effort as rational individuals choose to maximize their pay.

That’s what’s driving US policy makers to test schemes of offering teachers incentive pay to improve school achievement. That’s what’s driving BC Health Minister Kevin Falcon to offer hospitals funding based on the number of surgeries they do (what he calls patient-focused funding).

But when used mechanically — by tying incentives to some quantitative measure of performance, like test scores or number of surgeries done — such schemes are likely to fail.

The devil — as usual — is in the details. And the details here are that before policy-makers can give somebody a bonus for doing a good job, they need to be able to measure what a good job looks like. This is where standardized tests come in along with other quantitative measures such as the number of medical procedures performed, or the length of hospital stay.

But it turns out — surprise! — that it’s really hard to measure quality in complex social systems and employing simplistic quantitative measures can backfire. In fact, Prof Rothstein quoted an obscure scholar of methodology by the name of Donald Campbell, who coined a rather pessimistic “Campbell’s law” in the late 1970s:

“The more any quantitative social indicator is used for social decision-making, the more subject it will be to corruption pressures and the more apt it will be to distort and corrupt the social processes it is intended to monitor.”

In other words, the perverse incentives that pay-for-performance schemes create in complex social systems may well outweigh any positive incentives for real improvement.

Campbell looked at education in particular (see his working paper here), and argued that

“achievement tests may well be valuable indicators of general school achievement under conditions of normal teaching aimed at general competence. But when test scores become the goal of the teaching process, they both lose their value as indicators of educational status and distort the educational process in undesirable ways.

What does this tell us about BC’s new incentive-based funding model in health care?

—

Kudos to the SFU Centre for Education Research and Policy for organizing the public event.

What have we learned from last year’s pandemic?  Read on…

http://tinyurl.com/23otvdw

Cholesterol drugs don’t help the healthy

This month the new coalition government cancelled the controversial Building Schools for the Future program.  Michael Gove, the Conservative Secretary of State for Education said the P3 school program had been hit by:

“massive overspends, tragic delays, botched construction projects and needless bureaucracy.”

He said: “There are some councils which entered the process six years ago which have only just started building new schools. Another project starting this year is three years behind schedule”

Earlier reports also suggest Britain’s National Health Service is having problems with the cost and inflexibility of P3 hospitals.  The Financial Times reported:

Traditionally, when spending is tough, NHS hospitals put maintenance on hold to retain doctors, nurses and other services.

But Nigel Edwards, head of policy for the NHS Confederation, said: “A hospital with a PFI scheme does not have that option. They are contractually bound to keep the maintenance up – and if you are spending 10 or 15 per cent on your buildings it means all the other efficiency and productivity gains you need have to come out of only 85 or 90 per cent of your budget.”

Not surprisingly, despite problems with the P3s, parents in areas where projects to replace substandard schools have been cancelled are furious.  They are even more furious because the government appears to be funding plans to convert schools to “academies” that can ignore national curriculum.  These academies were just one more form of privatization promoted by the Tony Blair’s Labour government.  With academies, companies and religious institutions invest in schools and get to control them.

The problems with these P3 projects in the U.K. are only coming to light years after they were initiated.  Here in BC, and in Alberta with its commitment to P3 schools, it gives us something to look forward to.

As discussed in an earlier blog, British Columbians have been paying far more than consumers in other jurisdictions for generic drugs.  Alberta, Quebec and Ontario had already taken steps to correct this and now BC has joined the group.

Under the BC deal, in coming years the cost of generic drugs in BC will fall from about 65 per cent of the cost of comparable brand name drugs to about 35 per cent of the cost.  Just as important, the deal covers purchases by individuals and employee benefit plans as well as purchases by BC’s PharmaCare.  An earlier interim agreement had only covered drugs purchased under the province’s drug plan.  In Ontario a similar arrangement resulted in costs for individuals and benefit plans rising while purchases by the province’s drug plan fell.

The deal should save hundreds of millions of dollars for the province and individual purchasers but there are a couple of things that will bear watching.

First, while the cost will fall to 35 per cent in BC, Ontario generic drug prices were reduced by legislation to 25 per cent of the cost of comparable brand name drugs.  Quebec has legislation requiring drug companies to match the lowest price they sell to any other province.  That means that the two largest provincial drug purchasers in the country will be saving more than we are saving in BC.  In coming years we will need to look at whether the BC agreement got sufficient value for the money it left on the table.

Second, the province has raised dispensing fees to pharmacies to help make up for the money they are losing.  But they have also capped both mark ups for drugs and dispensing fees for PharmaCare purchases.  These protections have not been extended to private buyers or to employee drug plans.  That raises the possibility that pharmacies will seek to get their money back by raising fees and mark ups for private purchasers.

That may not happen.  Large drug chains may keep their dispensing fees down to bring in customers and large employee benefit plans may be able to negotiate for lower fees.

Information on dispensing fees is available from the province’s pharmacy database so we should be able to find out what is happening.  But the province has apparently been making access to this information more difficult.  If the province begins to shut down access to this kind of information we will have cause to be concerned.

The article’s authors look at social spending in the OECD and find changes in social spending directly related to changes in mortality.  Even more, they find the impact of social spending on health to be much greater than simple increases in the gross domestic product of a country.  The article finds:

This means that the potential health benefits of increased wealth crucially depend not just on increasing income but on what fraction goes into social welfare spending from governments.

The authors cite a recent report to the British government on health inequalities that found:

Children who receive better education, have safe environments in which to play, and who live in good quality housing are more likely to grow up healthy than those who do not.  Adults in secure and safe employment, receiving wages above the level of need merely to survive, are less likely to adopt hazardous lifestyles (such as smoking, drinking, or unhealthy diets) and can expect to live longer.

The BMJ’s editorial points out:

That fair employment practices – freedom from coercion, job security, a fair income, job protection, respect and dignity – are not “nice to haves” in hard economic times.  They have been shown to narrow the gap in health inequalities and to improve a nation’s overall health.

In British Columbia our government has adopted a policy that sees social programs cut back first in both good times and bad.  The BMJ might help us to count the cost.

Brand name drugs are protected by patents and only the company that holds the patent can produce them.  When the patent lapses many different generic drug companies can produce the drug. 

This should drive the cost down but in recent years a number of studies have found that Canadians pay among the highest prices in the world for generic drugs.  In 2008 Canada’s Competition Bureau issued a report saying:

Canadian taxpayers, consumers and businesses could save up to $800 million a year if changes are made to the way private plans and provinces pay for generic drugs. The potential savings could climb to over $1 billion per year in coming years, as several blockbuster brand name drugs lose patent protection. Obtaining these savings, however, requires changes to allow the price Canadians pay for generic drugs to be based on the competitive price of the drug.

The higher price for generics in Canada is explained by the relationship between the generic drug companies and pharmacies.  The generic drug companies offer pharmacies fees and rebates to stock and sell their products and these payments are added to the customers’ price.  As a result, information from Alberta and Ontario shows that if a brand name drug cost $100, the public could expect to pay $75 for a comparable generic drug that would do the same job.

This all has huge implications for BC.  BC’s Health Minister told the legislature last month that currently 40% of the PharmaCare budget goes for the purchase of generic drugs.  But in the coming years a number of very popular brand name drugs will go off-patent and the Minister expects the figure for generics to rise to 52%.  One drug, for example, that will soon be available generically is Lipitor.  According to the Health Minister, PharmaCare now pays $47 million annually for the drug and BC employee benefit plans and individual purchases buy another $60 million worth of it.

Provinces across Canada have taken steps in recent years to reduce the costs of generics.  Ontario acted most aggressively first reducing the amount it would pay for generics to 50% of the cost of comparable brand name drugs.  Now they have gone much further reducing their payment to 25% and outlawing some of the practices that drove up costs.

In late 2008 BC struck a deal with the province’s pharmacists limiting PharmaCare’s cost for generic drugs to 50% of the price of an equivalent brand name drug.  The Minister estimates that move saved nearly $30 million annually, $9 million of which was returned to the pharmacies for payment of services.  Now BC has joined provinces like Ontario and Alberta in calling for more savings.  In April the Finance Minister told the Globe and Mail he was giving pharmacies until the end of June to negotiate a new deal.  He said:

The status quo is unacceptable…We are aiming to reduce our costs significantly, and will go to unilateral action, as Ontario has, if forced.

Done right, all of this sounds like welcome news from government, but there is a chance things could go wrong for many British Columbians.  In the first round of measures to cut costs neither BC nor Ontario insisted that the savings they were getting for their provincial drug plans be shared with employee benefit plans or with people who paid for their own drugs.  As a result, an article in the Canadian Medical Association Journal reported that while costs fell significantly for Ontario’s drug plan, they rose significantly for employee benefit plans and individual purchasers.  Comparable information for BC is not available.

Employee benefit plans are already facing mounting cost pressures.  Employers are pushing to cut back on employee benefits and their costs.  Employers will push even harder if the BC generic deal ends up saving money for PharmaCare but paying for it through higher costs for benefit plans.  Middle income individuals with no benefit plans and too much money for PharmaCare risk being left out in the cold again.

So far, the Minister of Health refuses to say if benefit plans and individuals will share the same savings as PharmaCare under the new deal.  He says he will not “get into our negotiating position and strategy.”

This time around Ontario is extending its policy to benefit plans and individuals.  In BC pension plans, unions and individuals are urging our Minister to do the same.

 Remember that hospital housekeeping workers, who are the first line of defense against super bugs and other infections for patients, had their wages lowered when their jobs were contracted out to a large multinational.  Contrast their current wage of $14.10 per hour ($29,328 per year, IF they can get 40 hours per week) with Murray’s $158.65 per hour ($30K bonus included, for a 40 hour week).   

 Evidence in a newly-released report from the UK calculated the real value to society of a range of different professions; bankers and cleaners, childcare workers and advertising executives, tax accountants and people who recycle household waste.  The study indicates that for every pound or dollar that they earned, hospital cleaners contributed 10 times that amount in benefits to society.  Childcare workers generated seven to 10 times their wages in social and economic benefits, but bankers on million dollar salaries and bonuses actually destroyed social value.  (In BC the majority of child care workers make less than $20 per hour.)

 This is our money, folks.  I’d like a little better value for mine.

That’s why British Columbians should be concerned about a report released earlier this week by the Dieticians of Canada — The Cost of Eating in BC 2009.

Unfortunately, the Dietitian’s report received virtually no media coverage. But it makes a vital point — British Columbians on social assistance and those working for minimum wage cannot afford a healthy diet. For them, meeting the Premier’s great goal is simply out of reach.

Here’s the report in its own words:

Dietitians publish the report to bring attention to the fact that not all British Columbians have enough money to buy healthy food.  While shelter and food costs have risen significantly over the past decade, income assistance rates have remained virtually unchanged and minimum wage, once the highest in the country, has remained at $8.00/hour. For those receiving income assistance or earning minimum wage there simply is not enough money to pay for housing and food, let alone other necessities. Unemployment is up and more people are relying on assistance.  There are too many living in poverty in BC and too many lined up at food banks. Dietitians are calling for the provincial government to take some additional action to address poverty in this province. Other provinces are taking action.  Quebec and Ontario have anti-poverty legislation, while Newfoundland & Labrador, Nova Scotia, Manitoba and New Brunswick all have poverty reduction plans.  Common to them are significant changes to income assistance and increases to minimum wage.

The report contains important calculations, comparing the cost of basic necessities (including a healthy diet), set against the income provided by welfare or a minimum wage job. For example, a family of four on income assistance would need more than 100% of their income for shelter and food alone, leaving nothing for anything else.

The core finding of this report isn’t just of concern to those families caught in this untenable situation. In truth, we all pay for this policy failure. A poor diet means poor health, and we all pick up the tab for that. That’s why the Dietitians have joined the call for a comprehensive poverty reduction plan for BC