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Proceedings of the Standing Senate Committee on
Social Affairs, Science and Technology

Issue 40 - Evidence


MONTREAL, Thursday, November 1, 2001

The Standing Senate Committee on Social Affairs, Science and Technology met today at 9:00 a.m. to examine the state of the health care system in Canada.

Senator Yves Morin (Acting Chairman) in the Chair.

[Translation]

The Acting Chair: This morning, the Chair will be directing the proceedings in French, given that our original Chairman, Senator Kirby, is unfortunately unable to be with us for a while.

I would like to welcome the Quebec Association of Optometrists, represented by Dr. Langis Michaud, President, in the centre; Ms Marie-Josée Crête, Assistant Director General, on my right; and Mr. Clermont Girard, Advisor to the Association, who is seated to my left. Welcome.

Mr. Michaud, I imagine you will be making a brief presentation. After that, there will certainly by questions from members, since this is a topic of great interest to us.

You have provided us with a document that we are currently distributing. Dr. Michaud, please proceed.

Dr. Langis Michaud, President, Quebec Association of Optometrists: I want to thank the Standing Committee for inviting the Quebec Association of Optometrists to appear. It is a pleasure to meet with you today and present our views on the health care system in Canada.

I would first like to take a few minutes to talk about the status of optometry in Quebec. Based on my discussions with a number of politicians, it would seem that they do not always have a clear understanding of the status of optometry in Quebec.

In the 21st century, practising optometrists perform duties that go well beyond simple eye examinations, dispensing glasses to patients and providing eyewear-related services. They are top professionals, with a university degree based on five years of study. One of the only schools of optometry in Canada is located here in Montreal, at the University of Montreal. The other is in Waterloo, Ontario. There are 40 graduates a year in Montreal, and 60, in Waterloo.

We are in fact the gateway to front-line oculo-visual care, both in Quebec and across Canada. Our training relates to ocular pathology, recognition of the signs and symptoms of ocular pathologies, as well as vision, visual training, strabismus, crossed eyes and learning problems. These are services we provide on a daily basis.

In Quebec in particular, we have, since last year, had the right to prescribe medication to treat eye disease. Along with the Yukon, we are the fourth province to have given optometrists the right to prescribe medication to treat eye disease, which has been common all across the United States since 1976. So, we are really front-line players, like general practitioners, when it comes to providing eye care, in addition to playing our traditional role in terms of performing eye exams and dispensing optic products such as eye glasses and contact lenses.

Despite this change in status in recent years, for the purposes of the health care system in Canada, we are still considered to provide so-called complementary services. As you know, the Canada Health Act and its extension to Quebec go back a long way, to the point where the definitions set out in the legislation no longer jibe with the current reality. As far as we are concerned, "complementary services" under the Act no longer fits the reality of modern optometry, as I have described it.

The fact that we are deemed to provide complementary services led the government of Quebec, along with many other provincial governments, to de-list some of our services in 1992-93. And last year, we faced the threat of complete de-listing of our services, a threat that was withdrawn at the last minute, but is still present.

Because we provide front-line care to Canadians, we see this classification of services as unfair, and the constant threat of de-listing of government-funded services, even more unfair. This would deprive citizens, particularly in areas where there are no other front-line services available. Ophthalmologists, who provide other oculo-visual services, practice primarily in the major cities. There 200 of us in Quebec City, and 1,200 scattered across the province. So, the Gaspé, the North Shore and the Abitibi, for example, are regions where few ophthalmological services are available. Optometry is the only access point. In places like Trois-Rivières and Thedford Mines, which are semi-urban areas, ophthalmologists are not taking any more patients. Services are therefore provided by optometrists. So, the de-listing of these services would be disastrous for the majority of the people living in these regions, since they would be forced to go to urban areas, like Quebec City, Montreal or Sherbrooke, to access them, or rely on university centers, where ophthalmological services are concentrated.

The de-listing of services in 1992-93 did not include services for children aged 0 to 18 or people 65 years of age and over. They continue to be insured. Since people aged 19 to 64 have been deprived of insured services, we have noted a decline in the frequency of consultations by patients in this age group. We are no longer providing preventive services, even though we know that prevention is the key to maintaining good health. We now provide strictly curative services. People come to us when they have to, but consult us much less for preventative purposes.

Furthermore, successful re-entry into the labour force requires good vision and good eye health. As regards eye emergencies, the current system is quite poorly defined, which means that services are not necessarily insured. People aged 19 to 64 have to pay out of their own pockets to receive our services. To a certain extent, that forces people to consult physicians in the hospital setting and at emergency departments, which clogs the health care system even more and results in longer waiting lists.

The current situation is unfair and has severely penalized practitioners in our field, as well as limiting patients' access to services, particularly in the regions I mentioned earlier.

That was a brief overview of the situation in Quebec. I am now available to answer your questions, if you have any.

We have reviewed the report you released touching on some of your work, including Volume 4, which has just been released. We agree with almost all your findings.

I would like to focus on the three most important points we make in our brief. First, we say that we endorse thefive conditions set out in the Canada Health Act, including public administration, which is the basis for our health care system. However, we believe that in order for these conditions to continue to be met, adequate funding is needed. In the absence of adequate funding, it becomes difficult, if not impossible, to force the provinces and health care administrators to meet those five requirements. You cannot impose conditions unless you're prepared to provide the financial support that is needed for those conditions to be met.

Second, we believe the Canada Health Act should be amended. It focuses on so-called medical services - in other words, those provided in the hospital or by a physician. In optometry, as in many other areas, the most efficient way of providing health care is not in physicians' offices and hospitals. There are currently a number of players, including optometrists, providing such services.

Because our services are not consistent with the definition of medical services or hospital services, we end up being lumped in with complementary services and, depending on the vagaries of provincial budgets, services may or may not be insured. We are of the view that at the very least, therapeutic services, eye emergencies, eye care and treatment of eye disorders must be provided for under the Canada Health Act. Here we are not talking about eye examinations and eyeglass dispensing; we are talking about our actual workload, which includes the medical aspects of optometry. We should be taking an approach based on the services to be provided, rather than the person providing them. So, instead of referring to physicians or hospitals, we should be talking about insurable services, whoever the provider may be, as long as the person providing them is a registered professional qualified to prescribe medications, with a university medical degree or registered under the laws of the province or territory where they apply. The other essential point is that the service is what must be insured, rather than the physician or the hospital.

The third point we want to emphasize is that the administration of the health care system must continue to be a provincial responsibility. The role of the federal government is obviously important with respect to health, research, standardization of services all across the country and, of course, financial support. But the management and organization of services in the field must be geared as closely as possible to the needs of citizens, and as far as we are concerned, it must remain a provincial prerogative. That being the case, we agree that our services must be partly funded by the federal government. However, the way those services are organized in the field, as well as the definition of insured services or otherwise, must be determined by the province.

The Acting Chair: Thank you, Mr. Michaud. Some of the members' questions will be asked in English. However, we do have interpretation, if you care to use it. You may answer in the language of your choice.

Before I give the floor to Dr. Keon, I would like to ask a question myself, because you are the first optometrist we have heard from.

What is the current situation in terms of the prerogatives enjoyed by optometrists and they way they organize their work? Could you give us a brief overview of the way optometrists operate outside Quebec? Are there differences from one province to the next as regards rights, health care system claims, and so on?

Mr. Michaud: First of all, with respect to training, as I pointed out earlier, there are two schools in Canada - one in Waterloo and one in Montreal - where most Canadian optometrists receive their training. There are a certain number of Canadian applicants who train in the United States, and because space is limited in our universities, this gives an advantage to American schools. Some students train in the United States and come back to Canada to practice. Our two schools are recognized by the Council on Optometric Education, an organization connected to the American Department of Education, which ensures that optometrists receive standardized training throughout North America.

The school in Montreal is recognized as being in the top quartile of optometric schools, which means that it can be considered among the top North American schools. It is the same for Waterloo. Our Canadian schools have a very good reputation in relation to American schools. All Canadian optometrists have the same basic training, meaning that they have completed a five-year program. Training for professional doctors of optometry focuses on traditional vision problems, visual rehabilitation, binocular vision, the way both eyes work together - in other words, strabismus, and so on. But their training also focuses on recognizing eye pathologies and, now, on the treatment of such pathologies.

The first province to legislate eye therapeutics in Canada was Alberta, in 1995, followed by Saskatchewan and New-Brunswick in 1996. Yukon followed suit in 1998. In 2000, Nova Scotia and Quebec passed similar legislation, giving optometrists the right to prescribe drugs.

Some provinces still do not provide for eye therapeutics, but we expect that within the next two or three years, most provinces will have passed legislation to give optometrists the right to practice ocular therapeutics. Training has already been provided. Optometrists are already trained to provide such services.

In the United States, the process was similar. It began in the Midwest in 1976, and between 1976 and 1990, the 50 States passed legislation one after the other to allow optometrists to practice ocular therapeutics.

With respect to government reimbursement, only two or three provinces have no system in place to reimburse examination fees. Therefore, whatever their age, people are required to pay their own examination fees. Most of the other provinces, with the exception of Ontario, insure people aged 0 to 18, as well as those over the age of 65. About two weeks ago, British Columbia de-listed such services for people aged 19 to 64. In that province, it will therefore be more difficult, for budgetary reasons, to have one's eyes examined. Again, according to the federal Act, such services are deemed to be complementary. In Ontario, everyone is insured, but people are limited to one eye examination every two years. This creates problems because optometrists have to check with Ontario Government authorities to determine whether their patient has been examined by another Ontario optometrist over the last two years. Thus an authorization number is needed for every patient. In terms of administration, that is an extremely cumbersome system.

The Acting Chair: What provinces do not insure any of these services?

Mr. Michaud: If memory serves me, there are some in the Atlantic region - Newfoundland and Prince Edward Island, if I am not mistaken. Nova Scotia has now agreed to insure services related to medical emergencies, diabetes, diabetes-related examinations, and eye emergencies associated with ocular therapeutics. Other examinations are not insured.

The Acting Chair: Thank you very much.

[English]

Senator Keon: Would you lead me through the process of remuneration for you for those services that are covered? How do you receive payment?

Dr. Michaud: Those people who benefit from the coverage of medicare, that means those people under 18 years of age and over 64, just have to present their medicard and I bill the government directly. I receive the payment from the government. Other patients I charge directly, up front. They pay for their examination immediately after the examination.

The only exception in those aged between 19 and 64 are those patients who have security revenue, Welfare. They are entitled to one examination every two years, and I charge exactly the same amount as I charge for those patients who have a medicard.

Senator Keon: What patients would be covered if they consulted an ophthalmologist rather than an optometrist?

Dr. Michaud: All patients are covered for ophthalmological services, except if the service is required only for a visual examination, the refraction.

We just completed a survey of ophthalmologists in our province. Many ophthalmologists are too busy to perform only refraction and vision exams. In that sense, all their services are covered because they intervene in only medical conditions.

Senator Keon: Could, for example, a person who becomes hypertensive use that as a reason for seeing an ophthalmologist, and have the refraction paid for?

Dr. Michaud: Yes, but the patient will have to pay. More than that, if a diabetic patient is seen by his general practitioner, and the general practitioner wants to have an opinion on the ocular health of that particular patient, he has to refer to an ophthalmologist or to an optometrist. We are allowed to perform the fundus evaluation of a diabetic patient under dilation. If the patient is seeing an optometrist, this is not covered by the medicare program, and he has to pay for his examination. The same service, delivered by an ophthalmologist, is covered by Canadian law, but the patient will probably have to wait six months. However, he will be covered at that time.

It is certainly not fair, particularly for patients who live in rural regions or for Aboriginal people, many of whom suffer from diabetic conditions. If they see an optometrist on their reserve they have to pay. It is unfair.

Senator Keon: Do the insurance companies go by the same rules as the Quebec government?

Dr. Michaud: About one third of the patients are covered by private insurance programs. However, that is part of the private sector-public sector debate. If you consider the cost for a patient who requires ocular health services, if he has to pay on the basis of his income tax, and you add to that an insurance fee, it will cost more than it does to be covered by the public services.

Senator Michael Kirby (Chairman) in the Chair.

The Chairman: I have a supplementary question, and if this is unfair, please do not answer it. Is the fee you get paid by the government for someone over 65 the same as what you would receive if you performed exactly the same procedure on someone who was paying for it himself or herself and who was, say, 50 years old?

Dr. Michaud: No. We charge higher fees for private patients.

The Chairman: That could be for one of two reasons: either you are allowed to do that, or there are higher administrative costs and so on associated with a private patient.

Dr. Michaud: What we charge to the "private patient" represents what is our administrative cost to perform an examination. For some reason, we are underpaid by the government. It is as a result of negotiations with the government.

Mr. Girard: There is another reason for that. You know, when you have a public program and there is no fee barrier, the number of patients is assured, that is, those under 18 and over 64. However the number of patients decreases when they have to pay. Therefore, we see fewer patients, but we have the same expenses. The volume is down, so to get the same income to cover your expenses, you have to increase the fees on the private side.

The Chairman: That is helpful. Thank you.

[Translation]

Senator Pépin: I understand that costs are staying at the same level, whereas the number of patients is declining. Is that why, when you consult an ophthalmologist, even if you show your health insurance card, you are asked to pay an additional $25 or $35, to cover administrative services?

Mr. Michaud: Yes, that is correct.

Senator Pépin: So, that is the reason.

Mr. Michaud: Some practicing ophthalmologists take certain liberties with respect with incidental service costs. They may say they are charging for the drops they use to dilate your pupil or they may apply so-called administrative charges. Theoretically, if you look at the provisions of the Act carefully, it does not give them the right to charge for drops. So now they talk about administrative costs. As a result, the patient is required to pay twice, even though the service is insured by the province.

Among optometrists, the practice at this time is not to ask insured patients to pay for such things as drops. I believe only about 10 per cent of optometrists have adopted such a practice. Ordinarily, we accept whatever the province pays us for insured patients. Of course, the rates charged uninsured patients, given that they are higher, include the use of drops and associated administrative costs.

Senator Pépin: In the Abitibi, for example, or in other remote areas, are your services insured by the government, or are they still provided privately?

Mr. Michaud: No, it is the same thing.

Senator Pépin: Oh, I see.

Mr. Michaud: The insurance is exactly the same everywhere, whatever the region, even if ophthalmological services are not available. Trois-Rivières is the best example of that. Trois-Rivières is not part of the Third World. And yet there are only three ophthalmologists left there, and one of the three is only in private practice. He performs laser surgery and cataract surgery, but no longer accepts patients insured under the provincial health care plan. The other two ophthalmologists are so overloaded they cannot see any new patients.

So, if a patient develops glaucoma or an eye pathology that we are unable to treat - because there are limits to our treatment capability - we have no choice but to send that patient to Quebec City or Montreal. That only increases waiting lists in Quebec City and Montreal. The system thus becomes overloaded, not to mention the fact that the patients have to pay for their own travel costs, and that these patients are often seniors. Frequently the spouse or a member of the family provides transportation. Some have to take taxis or use public transit, which still costs them a certain amount of money. These are insidious health costs.

People say the system is expensive, but when we are looking at the overall costs, we have to consider that the average citizen absorbs these kinds of costs, which could easily be covered if there were fair access to our services through public funding, and if no one were forced to travel.

Senator Pépin: I may be wrong, but perhaps your representations concern the provincial government more than the federal government.

Mr. Michaud: We know that the federal government considers our services to be "complementary." And in that sense, it is important to emphasize that we are talking about prescription medical services - not about eye examinations. So, because we are deemed to provide complementary services, the province has the choice of insuring our services or not insuring them. As a result of the budgetary pressures that all provinces have experienced, our services were de-listed in 1992-93, meaning that only minimal insurance was available.

It is not even a matter of re-insuring medical services, because the province does not have the money. That is why we are saying to the federal government that it has two responsibilities: first, to broaden the definition of insured services under the Canada Health Act, which is currently limited to physicians and hospitals, and focus on insured services, rather than the prescribing physician or facility; and second, to provide adequate funding of insured services under the Canada Health Act.

The federal government has the responsibility to change the definition, and then to provide adequate funding, once the new definition is in place. The legislation still refers to medical services. Obviously, the current situation could not have existed in 1970, when the Act was passed, because optometry as it was practiced then did not include treatment of such disorders in 1970, and thus was not the form of modern optometry we are referring to here. Such disorders are currently being treated by optometrists. So, we believe the legislation must evolve to jibe with the new reality. We are not blaming anyone.

Senator Pépin: And then there are the Aboriginal people.

Mr. Michaud: Yes.

Senator Pépin: You referred to the Aboriginal people. Are none of the services provided to members of Aboriginal communities paid for?

Mr. Michaud: As regards Aboriginal communities, we have just finalized an agreement with Health Canada. We are trying to get the Department to recognize diabetes-related eye examinations and eye health assessments. We have said we will do general examinations. They have agreed to pay for vision assessments. The cost is about $43 or $44, which is about the amount charged a patient privately. That is a little more than what the province gives us.

There can be partial examinations, as required, if the patient's condition deteriorates further. For example, if a patient is diabetic and needs to have specific types of examinations, then that is done by special request. This always involves requesting an exemption or special authorization, and is always dependent on budgetary contingencies.

And yet we did try to make the point that diabetes is a significant problem in Aboriginal populations. We are now recognized by the Medical Council of Canada as being able to examine cases involving diabetes, but not to provide laser treatment, of course, since that is a secondary or tertiary service that must be provided by an ophthalmologist. However, the assessment at least may be made by an optometrist. So, we are asking to be paid for this service, which would prevent Aboriginal people from experiencing a deterioration in their vision and improve services on the reserves, so that they are not forced to take a plane from Sept-Îles to Baie-Comeau to consult an ophthalmologist, an arrangement that is costing the federal government a fortune.

Senator Morin: Could you summarize, please? I was trying to follow you. The Aboriginal question is important to us. Could you just summarize in a few words what you do not like about the current system?

Mr. Michaud: With respect to eye health, the key point is the need to provide the necessary budgets for these services.

Senator Morin: Yes. But I understand you just signed an agreement, is that correct?

Mr. Michaud: Yes.

Senator Morin: Or at least you are in the process of signing one. What is there about that agreement that you consider to be unsatisfactory?

Mr. Michaud: They have refused the eye health examination.

Senator Morin: Including special exemptions?

Mr. Michaud: They are available with special exemptions, yes, but we need to have an earmarked budget for this service.

Senator Morin: It is costing us $7 billion.

Mr. Michaud: Yes, I agree with you. But still, we are always subject to exceptions and the uncertainty that surrounds them. We never know - especially if we happen to be number 22 on the list and they stop paying when they reach number 20 - whether or not we are actually going to be paid for the services we provide. We are always going to be asking for exemptions, even though diabetes is known to be an issue in Aboriginal populations; it is a significant problem. So, we really wanted there to be a specific examination focusing on that, and that it be insured and officially recognized, without our having to go through cumbersome administrative procedures.

If the physician treating the patient knows that the process will involve several steps with no guarantee that any of it is insured, his preference will be to refer his patient to an ophthalmologist 300 kilometers away and let him take a plane there for his consultation, whereas if this service was included in the agreement, such an arrangement would be easy enough to apply in the field.

Senator Morin: Then what you want is for this service to be included in the agreement, rather than being subject to exemptions?

Mr. Michaud: For it to be statutory.

Senator Morin: Statutory?

Mr. Michaud: Yes, exactly. Because there are optometrists practicing on every reserve. The services are provided on the reserves in the Lower North Shore, in Chibougamau and James Bay. There are optometrists everywhere providing these services.

Senator Morin: If I understand what you have explained, Mr. Michaud, you essentially consider yourselves - probably rightly so - to be part of front-line services?

Mr. Michaud: Yes, exactly.

Senator Morin: On an equal footing with front-line service providers. You are aware of the reforms that have been recommended. The Clair commission, the Fyke commission - indeed, every commission that has looked at this has recommended that front-line services be reformed and that interdisciplinary or multidisciplinary - for some people, those terms mean different things - teams be constituted that would be responsible for a given population and be compensated based on a capitation formula. Do you also think there is a responsibility to ensure that comprehensive care is provided to the population? Do you see yourself as a potential member of this kind of team?

Mr. Michaud: Yes, of course, and we are in fact discussing that very issue with the Quebec Federation of General Practitioners. As you know, following the Clair commission in Quebec, the Ministry of Health set up thirteen groupings of family doctors, who are trail blazers for what will be the new way of providing front-line services in doctors' offices. These doctors' groups, according to the ministry's current definition, will include both physicians and nurses whose role will be extended to include psychosocial services currently provided by CLSCs. So, there will be liaison between doctors' groups and CLSCs.

What we are currently establishing as a template - and there is a real willingness on the part of both physicians and optometrists to look at this - involves including optometrists as an additional resource that a group of family physicians could offer its patients.

Of course, we cannot be grouped in with the physician group per se, because that would mean our work would be subordinate to that of physicians, which is currently the case with nurses, when in fact we are an independent profession on an equal footing with physicians. So, we are really trying to establish a partnership between optometrist office in a given region and the physician group that has been set up there.

Therefore, whether the patient consults an optometrist or a family physician, there will automatically be a linkage between the two. When he goes to his family doctor's office, the doctor will be able to treat the patient's condition, and we agree with that. As is currently the case in regions where there are no available ophthalmologists, if the physician wants a second opinion on his diagnosis or proposed treatment, he can direct that patient to an optometrist who could examine him that day or the next day. They would also exchange reports.

If the patient goes to see an optometrist who is registered with a family medicine group, that optometrist would be required to forward his report to the physician to make him aware of the patient's condition and the treatment he has received.

One of the shortcomings of this system, however, is that because we are not sure our therapeutic services will be insured by the province, and therefore covered by federal funding as well - since the federal government funds the health care system - physicians are somewhat reluctant to get involved because they know full well that if they refer a patient to the hospital or to an institutional ophthalmological unit, even though it may take more time, the patient will not have to pay, whereas if he comes to us directly, it will cost him money.

That is what is currently preventing this ideal front-line service model from making headway. Once again, patients are being referred to institutions or secondary services, where physicians pretty well feel they have no choice but to go as far as they can in terms of the care they provide their patients, when in fact it would be easy enough for their patients to consult an optometrist.

Senator Morin: Mr. Michaud, if that were the case, would you be prepared to accept a capitation-based compensation system?

Mr. Michaud: All compensation systems are possible. We are prepared to talk about anything. In terms of per capita based regimes, I guess that would depend. It would also be possible to implement a hybrid system - in other words, fee for service in some cases, and capitation payments in others. One thing that is quite common in Quebec among optometrists - and which helps patients stay at home - are visits to institutions or residences when patients are unable to get around.

We are still compensated on the basis of a fee-for-service system in such cases, but that method really is not ideal under the circumstances, because they take a lot more time and require portable equipment. Also, the dynamic is not necessarily the same as in a private office.

Senator Morin: As part of the plan to reform front-line care, if we establish the principle of responsibility for a given population, then a capitation payment would be easier to set up as a method of compensation than a fee-for-service system.

Mr. Michaud: Yes, absolutely.

Senator Morin: Would members of your profession have any objection to that form of compensation?

Mr. Michaud: No, not at all.

Mr. Girard: But capitation could not really be considered under a system where certain groups of people are insured, but not others.

Senator Morin: What do you mean by insured and uninsured?

Mr. Girard: Well, such as people aged 0 to 18 at the present time.

Senator Morin: Yes. But under such a system, we could assume that the entire population would be insured.

Mr. Girard: Yes. And that taking this kind of approach would have certain repercussions.

Senator Morin: Yes, exactly. We would have to assume that the entire population was covered for all types of services. What you are describing seems rather complex.

Mr. Girard: Yes, it does.

Senator Morin: At the present time, people consult an optometrist directly without having to be referred by a family physician.

Mr. Michaud: Yes, that is correct. And as regards red eye and eye health problems, we are increasingly seeing that in those regions where optometrists are abundant, that is how the system works. But there are always limits on the cost of consultations.

Senator Morin: Yes.

Mr. Michaud: People have a choice between going to a hospital, seeing their physician or consulting an ophthalmologist directly, in some cases.

I could cite the example of New Brunswick or Alberta, where the Therapeutics Act has been in effect longer than it has here. Payment of eye therapeutics is not insured in those provinces either, which effectively prevents cooperation with optometrists within the health care system, as well as more efficient optometric services. There is still the issue of the costs that patients are forced to bear. The situation in Quebec applies equally to the other provinces. It is important that those provinces insure therapeutic services. The reference is always to eye care of a medical nature or emergency care.

Senator Morin: As far as Canada as a whole is concerned, all the provinces currently grant the same privileges to optometrists. Is that what you are saying?

Mr. Michaud: Except with respect to therapeutics and the right to prescribe medication.

Senator Morin: What provinces do not allow that?

Mr. Michaud: Newfoundland and Prince Edward Island - I am listing them starting from the opposite end of the country - Ontario, Manitoba and British Columbia. In all the other provinces, those services are currently insured.

Senator Morin: And you say there are negotiations underway in the other provinces?

Mr. Michaud: Yes.

Senator Morin: And do you think they are headed in the right direction?

Mr. Michaud: Well, we think it is inevitable. It is like in the United States, where this is occurring gradually. Of course, some regions are more reluctant than others. And every time legislation is introduced, a segment of the medical lobby steps up to oppose any such progress in the way optometry is practiced. In Quebec, we have made some headway. We are talking to ophthalmologists and general practitioners, and we have a good agreement. There is less reluctance here in Quebec than elsewhere, which is why legislation was passed in this province somewhat before it was elsewhere.

Ideally, optometric therapeutic services would be available all across Canada immediately. And in any case, it is inevitable: I believe that within five years at the most, all provinces will be insured.

Having said that, if there was some assurance that these services would be funded, the provinces might be more inclined to act quickly to make that happen.

Senator Morin: Thank you very much, Mr. Michaud,Ms Crête and Mr. Girard for being with us today. We very much appreciate your contribution.

Our second witness, Mr. Paradis, was unfortunately unable to be with us.

I would like to welcome Dr. Yves Lamontagne, President of the College of Physicians, and who is actually my boss now, since I am still a member of the College. Dr. Lamontagne has played a pivotal role not only in terms of providing policy direction to the College and its conduct of professional affairs, but with respect to the organization of health care delivery here in Quebec. I wanted to recognize his important contribution in this area before giving him the floor.

Welcome, Dr. Lamontagne and Dr. Garon. You have provided us with a document which we will obviously read carefully. Perhaps you could make a short presentation, after which we will have questions for you. Questions may be addressed to you either in French or English. You may answer in the language of your choice. Please proceed, Dr. Lamontagne.

Dr. Yves Lamontagne, President, Quebec College of Physicians: Mr. Chairman, thank you very much for inviting us to meet with you this morning. Senator Morin, you have already introduced Dr. André Garon, who is the Deputy Secretary General of the Quebec College of Physicians, responsible for External Affairs.

First of all, I want to say that the College has repeatedly made the point to the Government of Quebec - and it is our sense that we may have a better chance of being heard here since you are appointed, rather than being elected - that what we advocate and have been saying for a long time is that it is time to stop playing politics with health care and start developing good health care policy.

Let me give you two examples at the federal level. As you well know, a little more than a year ago, Alberta passed legislation intended to allow the private sector to deliver publicly funded health care services. And, of course, during the last election campaign - probably to get votes, the federal Minister of Health planted doubt in the minds of voters as to whether or not the Alberta initiative was consistent with the Canada Health Act.

I also have no doubt that it was as a result of political pressure that the federal government passed regulations, just a few weeks ago, on the therapeutic use of marijuana. By so doing, it once again threw the problem back into the physicians' court, in terms of the responsibility to determine the use of a product that contains a number of substances, most of which are probably injurious to health. By taking this action, he contravened his own legislation by deciding to authorize the use of a so-called health product whose effectiveness and safety have yet to be proven. Just to conclude my introduction, I would remind you that the ultimate goal of a health care system is to improve the health of all Canadians, and not to win votes.

Having said that, we have a very good idea of what the health care issues are in Quebec. We laid them out very clearly before the Clair Commission, which in fact accepted most of our recommendations. We agree with you about the need to reorganize front-line care, review physicians' compensation, update the professional system, and provide more home care and effective medications.

Today, our presentation will focus on a subject that particularly concerns the federal government: the principle of financial accessibility set out in the Canada Health Act.

In that respect, my first point is that the reason we have a public system, as you know as well as I, is to guarantee access to health care, when needed, to all citizens. The application problems we are currently experiencing are the result of fairly strict interpretations of this principle which, paradoxically, leads to accessibility problems as soon as governments start rationing the service offer by cutting back budgets.

I would also remind you that when public insurance schemes were first introduced, the federal government was responsible for 50 per cent of hospitalization and health care costs. Basically, the federal government spent one dollar for every dollar spent by the province. That is called bridge funding, a mechanism linked to the spending power intended to stimulate the introduction of social programs by the provinces. And that share was an opportunity for the provinces to interpret the federal government's funding role, through which it was intended that stable funding be provided to ensure the viability of the health care system in Canada.

Once public systems were put in place all across the country, the federal government gradually began to cut back its financial contribution, which now amounts to 17 cents for every dollar spent in Quebec. Let's just say the bridge has become considerably weaker, despite recent injections of funds by the federal government. And unfortunately, I think that is contributing to a kind of mistrust of the federal government when it comes to spending by the provinces - or at least Quebec, but I will not say anything more about that.

In Quebec, in 1991, those doubts prompted the government to consider introducing, not user fees but fees to guide people's use of the health care system. In order to act on the problem of inadequate health care funding, there was an attempt to establish a co-payment arrangement that would force citizens who had bad consumption habits to behave more responsibly. That would have injected new money into the system from the users, in addition to taxpayers' money. Such a fee was never actually introduced, however, for fear of financial reprisals.

In 2001, we believe it is absolutely necessary that we all agree on how the accessibility principle is to be interpreted. Even though the financial situation in Canada and Quebec is consistently improving, uncertainty about the future suggests to us that we should consolidate our conception of collective responsibility, particularly by strengthening individual responsibility. Thus, the prohibition on co-payment arrangements for medical and hospital services should only be maintained when the care provided and received is considered most relevant, most effective and most efficient.

In Canada, unfortunately, we have an unfortunate arrangement whereby public monies are used to pay either all medical and hospital services, or nothing at all. It is the "all or nothing" formula: 100 per cent or zero. There is no room for anything in between. And to be in good standing, a province that wants to discourage a particular practice has to completely uninsure it, or de-list it, rather than refunding only 50 per cent or 75 per cent of the cost, for example. That "all or nothing" approach is part of the Act.

What we are saying is that the right to access publicly funded health care services - and these services should certainly continue to be funded in this way - does not mean that the user has no duty to contribute when his use of a service is not what it should be. And there are a number of examples cited in our brief. For example: X per cent of the cost of care provided to ambulatory patients in a hospital emergency department will be borne by the patients. Y per cent of the cost of care provided in a clinic to patients who are not registered with a family physician who belongs to a clinic will be borne by patients. Twenty-five per cent, rather than 100 per cent, of the costs of magnetic resonance imaging tests provided in a private sector clinic will be borne by users.

It should also be noted that the Quebec Health Insurance Plan requires co-payment, whereas the Canada Health Act prohibits co-payment under hospitalization and health care insurance schemes. That is the kind of inconsistency that we should be aiming to remove. To that end, the Canada Health Act should allow the provinces to set up their own co-payment schemes based on certain quality parameters.

As far as we are concerned, throwing public money at the system will not yield adequate benefits if no other steps are taken. On the other hand, injecting private money, as we see in the United States, to the point where health care spending as a percentage of GDP increases from 9 per cent to 15 per cent, means going from health care spending of $90 billion in Canada to $150 billion - only to end up with poorer health care indicators and a segment of the population with no protection whatsoever against health care emergencies.

We believe there is a happy medium that opting for one extreme - an all public system - or the other - an all private system - cannot offer. So, we must find that happy medium, because otherwise the federal government will have to cut other expenditures and go back to paying the share of health spending it was responsible for previously.

In conclusion, we read in your report that there was room to debate new options, even though they may seem troubling. This morning, we tried to outline possible avenues for change to ensure the long term viability of our health care systems.

Depending on whether the federal government is seeking a new contribution in the health care system through actions that assist citizens in need, there is currently one area where little is being done, and that is with respect to compensation for victims of medical mishaps. The current rules relating to professional third party liability mean that only some of the victims of medical malpractice are compensated. The only insurance company to provide coverage, the Canadian Medical Protective Association, has no mandate to protect the victims, and even less so victims of medical mistakes that while they do not constitute malpractice, cause harm to the victim. And that is both a serious and common problem which provincial governments have really taken very little interest in thus far.

Mr. Chairman, have I exceeded my time?

Senator Morin: One of our witnesses could not appear at the last moment, so you still have some time.

Mr. Lamontagne: I would like to make some very specific comments with respect to parts of your Executive Summary.

On page 12, you say that the role the federal government plays with respect to population health focuses on prevention, rather that treatment of disease. I just want to make a comment on that. For some years, I have noticed that there has been a lot of talk of prevention and promotion, as though that was all we did and no one ever died. But we do need to provide treatment. And as physicians, we are the persons responsible for providing treatment. But because of the obsolescence of equipment, conditions in hospitals, and so on, we have a long road ahead of us.

I think we should also be investing in treatments, mainly as they relate to three conditions: the impoverishment of society, especially since we are in a recession and we know that a poor society is one that generates more illness; new diseases, such as AIDS, that cost more, are more complicated to treat and require much more expensive medications; and finally, the aging of the population. This results in multiple pathologies and far more complex forms of treatment.

I completely agree with you when you say, on page 12, that the health care sector bears no resemblance to a modern industry. I will come back to that later. And when you say the health care industry is very much like a cottage industry, I must say I agree with you. There are three main issues: inadequate funding, a system of management that does not jibe with the kind of management practiced in the 21st century, and health care administrators who manage expenditures rather than managing revenues and expenditures. If you want to improve something, you have to cut something else. I've never seen a company able to operate like that; it would go bankrupt within three months. On page 13, you say:

... review the benefits of establishing specialized service units, an important component of a modern system.
I fully agree with that. You know, I have the feeling - and I do not know what it is like in the other provinces - that we have sprinkled money throughout the system, creating kings all across Canada in small kingdoms, rather than valets who are part of one large kingdom. I am very much in favour of local hospitals providing basic services, regional hospitals providing more specialized services, and university institutes and hospitals providing ultraspecialized services.

Senator Morin: That will make Dr. Keon happy.

Mr. Lamontagne: Really? Well, that's great.

Senator Morin: He is the Director of the Heart Institute in Ottawa.

Mr. Lamontagne: Oh, really! Then let's take the example of cardiology. As regards cardiac surgery, in the Montreal area alone, there are eight different centers operating; however, in Sweden, there are only one or two for the entire country, if memory serves me. I think we could have one in Montreal and one in Quebec City. And if those kinds of situations exist here, they must surely exist in the other provinces as well.

Senator Morin: And one in Ottawa, of course.

Mr. Lamontagne: Yes, of course. But you know, I am not really talking about Ontario.

On page 15, you say:

Can the government continue to discourage the provision of private services while prohibiting private insurance?

I think the answer to that is no. Let's look at the situation in Australia, where they have supplementary insurance that costs about the same amount as a driver's licence would cost us here - about 500 $ a year. And this is not for the rich, but for people whose average income is about $23,000 CAN. That makes it possible to inject additional funds into the health care system.

People here spend thousands of dollars a year on lottery tickets but cannot spend $500 to insure that they have access to good services. There is something wrong with that picture. I realize that lotteries bring in huge amounts of money, but it seems to me we could be investing the money in the right places.

Two-tier medicine is a reality. In fact, I think there are two kinds of two-tier medicine: private/public and a two-tier system that nobody talks about and that does not bring in much money. I will use the same image I often use: if you want to be well looked after in a hospital these days, it is really quite simple: either you scream your head off and join a lobby group, or you have friends who will make sure you are taken care of. There is not much of a financial return in that. Maybe we should be organizing things so that at least we can make money out of this.

Let me tell you a little story. I like telling stories. A Montreal hospital provides - dare I say - check-ups to influential businessmen right in the hospital. At one point, they said: "Listen, we are prepared to pay to come in on Saturdays. We have no problem with your making a profit on that. So, we'll just line up the limousines one after the other, and we'll pay you for your services."

But that arrangement was not accepted. So, they have to have their check-ups during the week like everybody else. One businessman in particular gave a Mont-Blanc pen to all the secretaries and technicians. I can assure you that he gets an appointment on the day and at the time he wants.

It is very nice for the secretary who gets a beautiful Mont-Blanc pen ouf of it. But what does the hospital get out of it? Nothing. If that were subsidized, we would be able to talk about managers managing income and expenses.

On page 18, you say:

There is a need to increase efficiency and effectiveness and find new ways of operating.

That is true. We have been injecting money into the health care system for thirty years now. For thirty years we've been investing in the health care system, assuming that things will get better, but things never get better. So, there must be other problems. And that is basically what I was saying earlier. There is a management problem. There is a private/public partnership problem, but everyone is afraid to talk about it because they think the private sector will gobble up the public sector and that we will end up with two-tier medicine, when actually we would be able to afford to have a second tier of medicine. That is the difference. So, we need both.

In Sweden, which is a much more social democratic country than Canada, the largest hospital in Stockholm was sold to the private sector; it is now listed on the stock exchange. And when people go to see their doctor, they are responsible for a co-payment of $25 if they consult their doctor at his office, or $35, if they visit an emergency department.

On page 19, you say:

All physicians should be required to work a certain number of hours in the public system.

We agree with that. We think that would be possible if we have a private/public partnership. And Bonin, an economist who wrote an excellent book on the management of various government systems in Quebec, suggested that all physicians should be forced to work 35 hours a week in the public system, and then, if they wish to work additional hours in the private sector, they would be able to do so.

There would be an advantage in doing that. With the ceilings in place in Quebec, physicians only work as many hours as the ceiling allows, then after that, they go and play golf. While that is happening, people are not being treated. The people who would be treated under those circumstances would not be treated within the public system. And it is highly likely that fewer physicians would leave Canada to practice elsewhere because they are paid less here.

You also say that the public system could guarantee waiting times and that if those were exceeded, the government would pay for the treatment to be provided by a private facility. That is something that must really scare the government, for two reasons.

First, we should not even be talking about waiting periods and waiting lists. There are waiting lists for cardiac surgery, and so forth. That makes absolutely no sense. And for breast cancer surgery, people are often required to wait a number of weeks. But when you are sick, you do not want to wait weeks. You should be treated immediately. So there is a danger in that kind of approach.

Of course, there would be a danger in indirectly subsidizing the private market, which could clearly demonstrate that it provides better services, so we will try to slow down the public system as much as possible to bring the money in that way.

On the same page, you say there is a need for:

an independent, mandated organization to ensure that technology used in the public system is as advanced as that available in the private sector.
I believe we are way behind as far as technology goes. The danger I see is again that we will just expand the bureaucracy by creating another organization. And if there is not adequate funding to allow us to be as advanced as the private sector, we clearly will not see any results.

The President of the Conseil des technologies du Québec told ministry officials one day: I produced these great reports, but you never act on the recommendations. Why do you pay us to write reports that you have no intention of implementing, because you do not have the funds to do so?

On page 27, in relation to technology:

Modernize, purchase, operate...

What a great idea! In terms of information technology, you say it is a cottage industry. That is terrible! We are not in the modern era here. Shareable computerized medical records, patient medication, laboratory analyses that come in by computer, diagnostic and therapeutic aids - all of this would save a great deal of money. And it would mean that patients would receive better treatment.

The problem is that everybody is off doing his own thing, without telling anybody else about it. If we computerize the entire system, I predict that in a few years, we will face a great many problems. How will we ever be able to harmonize all these small computer systems here and there, when we probably should have developed a provincial or national plan? When someone gets sick in Vancouver, using a computer, we could find out what medication the patient is using in Montreal. I guess that is wishful thinking.

You refer to pilot projects. In Quebec - and I do not know what it is like in the other provinces - it seems to me we have been overdosing on pilot projects. At the College, we have assessed hundreds of pilot projects, some as ridiculous as the one on the use of combi-tubes by ambulance operators, and things like that.

Instead of basing ourselves on research principles, we launch pilot studies, show that something is effective, proceed to carry out a "multi-center" study, and then apply it.

I am not very keen on pilot projects.

Senator Morin: I want to be sure I understand your point, Dr. Lamontagne. What you're saying is that rather than carrying out pilot projects where there is not proper control and verification, we should be doing "multi-center" studies. Is that what you mean?

Mr. Lamontagne: It seems that every time we launch a pilot project, we are out to discover something new. But take the informatics sector, for example. There are a great many things that have already been discovered and applied throughout the world.

Let me give you an example relating to computerized medical records:

There is currently an excellent program in place in Australia, which could easily be translated into French. In Quebec, we are carrying out pilot projects, when in fact we would simply have bought that program from Australia, started applying it in English immediately, and then had it translated into French. Ten years from now, we would have to update it. But let's stop doing research in areas where it has already been carried out. There are a lot of companies developing very interesting things. We seem to find that rather scary.

The same applies to tele-health. Because of the size of our country, we really need to develop tele-health. I'd like to cite a very personal example of that. Two years ago, my daughter got a concussion while skiing in New Hampshire. There is a small hospital there serving a population of about 20,000 that had aCAT scanner; they did the CAT scan and when I asked where the radiologist was, they told me they didn't have one, but that Tele-health Boston would provide an answer within a half hour.

Three quarters of an hour later, we were told that it was not serious. I left the hospital with a bill of $935 US. But that is real efficiency! And they are saving money, because they do not need a radiologist and everything is carried out using tele-health.

In terms of resources, we have a shortage of physicians. A long time ago, we must have done some serious miscalculations with respect to physician manpower. We are starting to have a clearer idea now and are realizing that there is in fact a shortage all across Canada. I will not dwell on that any further.

The current rules define what various professionals can and cannot do. We can talk about this more later. We are also currently considering the idea of shareable procedures, which I will address later.

Indeed, we have to review our entire system of shared procedures. This goes back to what the optometrists were saying earlier. But we also need to be careful: we have to avoid replacing one health care provider with another and thus driving our health care system down to the lowest common denominator.

In Quebec, the Bernier Committee considered this. We have to avoid turf wars, or giving something to Pierre that we then take away from Jacques, to the point where we end up with lower quality medicine.

At the political level, this could result in savings and increased access. In terms of economics, there is a chance that costs would be reduced. However, I am not so sure that services would be as good.

And finally, the good stuff: physicians' compensation. Everyone agrees on the need to review fee-for-service - at least in Quebec. It all began in Quebec with this business of a lump sum based on a percentage of procedures performed. Actually, with capitation, it is about the same thing; there is a lump sum and a percentage of procedures. I think that is most likely the best approach.

The most important factor in decreased productivity is without a doubt salary, because physicians really become public servants.I have seen that happen in certain European countries.

In last Monday's La Presse, a doctor was saying that he was leaving the CLSC for private practice, because he was only seeing patients about eight hours a week. We should not be paying physicians to go to meetings on public health; we are paying them to see patients. So that is certainly a problem. And perhaps individually based compensation would be helpful in that respect.

I should say that my former specialty is psychiatry. As long as physicians - indeed, like other people - see themselves as entrepreneurs - and let's not kid ourselves, they are - we have to provide for enhancements - hence the need, in my view, for a mixture of forms of compensation for physicians.

Senator Morin: Senators' questions will be addressed to you either in French or English. You may answer in the language of your choice.

Mr. Lamontagne: No problem.

[English]

Senator Keon: Dr. Lamontagne, you certainly covered the entire waterfront, and you covered it very well. You threw out all kinds of dilemmas that are confronting everybody.

I want to bring you back to the physician remuneration system. Mr. Claude Castonguay was here yesterday morning, and I mentioned to him that, when the CLSCs came in, my brother was a general practitioner in western Quebec and he thought this was a great idea because it, for example, provided social workers who would deal with non-medical problems that were taking up about 30 per cent of his time. That left him free to deal with medical problems. However, you have pointed out some of the pitfalls of the system.

You also mentioned tele-health. The Heart Institute in Ottawa has been involved in tele-health for quite a long time. We have installations in Baffin Island and other remote area so that the local people can transmit their medial information to Quebec and Ontario. The major barrier to setting this up is that there is no way of paying the doctors. At the Heart Institute, where physicians are salaried and they share the total pot of money according to formulas, there is no problem at all. If a physician has to spend time on a tele-health clinic, it does not hurt his income any more than teaching or research. However, in the small communities, the doctor will not be paid for that service. You have to ask the doctor to work for nothing for a morning so that this can be done.

I feel very strongly that the medical profession has to lead the way in advising government about alternate payment plans. I agree with you in that I do not think there should be a universal plan. However, we have to assist government in developing payment plans that can make the system work in primary care, in academia, and so forth.

You covered this area to a degree. You said very forcefully that you do not want to see doctors become civil servants, and I agree with that. We want to leave some incentives. The fee-for-service system does not work in many systems. Maybe you could go through that a little slower than you did on your first run at it, because you covered so much material. Could you give us your thoughts on the various systems of payment that could solve the problems in primary care, in academic institutions where people have to devote a lot of time to teaching and research, and in leading edge programs where there is no fee in the fee schedule? It appears there will not be one for four or five years with some of the new things that come out. There has to be a way of remunerating doctors so that we get leading edge health care to the patients. Tele-health is a good example of that.

What kind of a system do you think could be implemented? Let us limit it to Quebec now because you know the scene in Quebec very well. What kind of system do you think could be implemented in Quebec that would solve some of these problems?

Dr. Lamontagne: I will make two comments. The first is related to the CLSCs that you talked about. I will give you an example of this partnership. When this all started there were physicians in private practice in one building, and suddenly the CLSC was at the next corner. They were practising medicine and then more and more they began to treat social problems rather than medical problems. Of course, they stopped talking to those people in private practice, and it was the same the other way around.

That is an example of one partnership that could be formed. You could combine the CLSCs with doctors working in private practice. Hopefully, doctors working in CLSCs would work very closely with those in private practice so that they would have a connection to treat psychological and social problems. As it is now, physicians in private practice and CLSCs do not communicate.

Of course, there would be one major problem. If, as a CLSC salaried doctor I am working eight hours a week and I am very satisfied with that, I would not be very happy to start seeing patients 35 hours a week. You would certainly have to find some new reinforcers that would encourage these people to get into the new system.

On the subject of payment, I believe that what you have at your hospital is what we would call the pool system. In university hospitals I think operating with a pool system is a very good idea. However, people always become worried when there is any suggestion of changing a routine. You have to give them some reinforcers to get them into a new system. I might also add the there may be a cultural element because, in Montreal, the pool system is working much better in the English university hospitals than in the French hospitals.

However, I think it is a good idea. I have been teaching at a university for 25 years. As in a private business, at the end of the year, if you are in the pool system you have to show what you have done during the year in terms of teaching, research, publishing, grants, clinical services, and so on. That creates very good competition. If you do not meet certain criteria, you are fired. That encourages entrepreneurship and leadership. In my opinion, the pool system is a good thing for university hospitals.

However, in primary care, I think that a mixture of "forfait" as they say in French, that is, a flat rate or fixed sum, and a percentage of the fee for service is not a bad thing. Doctors working in an isolated region where they are expected to undertake all sorts of new activities could be paid on a forfait basis. If the task is related to clinical work, then you would add to that a percentage of a fee for service. Of course, that is not part of the responsibility of the College of Physicians and Surgeons. That falls on the shoulders of the federations, which are really the unions. They would have to discuss with the government, what work would be paid for.

Our college prepared a report on télé-médicine. When tele-health started there was no provision for payment for a consultation by tele-health. Nobody was paying for that service.

I think a mixture of "forfait" and a percentage of fee for servide would be appropriate for doctors in outlying regions. Of course we have the whole problem of trying to keep physicians in the regions.

Senator Keon: Do you think part of the problem is that we have two separate pools of funds? Tele-health or télé-médicine is, perhaps, a framework within which to discuss this. There is a pool of funds to remunerate physicians, and there is a pool of funds to pay for institutions, fundamentally. There are no funds for anything else. There are, of course, piecemeal little bits of money for this and that.

The problem is that, when a new program is approved in the institutional sector there is not, at the same time, approval to remunerate physicians from the pool of funds, because they are already short of funds. On an annual basis, they try to decide how to equitably divide the funds they have. They must decide whether specialists are making too much, and family physicians are making too little, and all of these problems. To include a new program in the fee structure is almost impossible.

One of the major barriers is the fact that we have thesetwo pools of funds. Perhaps what is needed is the creation of a development fund that would fund programs both from the institutional sector and from the personal sector until an appropriate mechanism for funding them from both pools of funds comes about. We have nothing like that right now. This is a tremendous barrier to the development of new and efficient programs.

[Translation]

Mr. André Garon, Deputy Secretary General, External Affairs, Quebec College of Physicians: We have in fact noted the problems that would result from having two sources of funding, two programs that would be complete and utterly separate from one another. Before the Clair commission, and more recently before another parliamentary committee in Quebec, we argued for what we call a health care "hydro". Basically what we would like is an insurance system where one manager would oversee all insurance schemes to ensure that there is a comprehensive approach.

We realize that as part of the negotiations between the Minister and physicians' representatives, we could certainly agree on methods of compensation and rates. That works in favour of certain kinds of practices rather than others, and focuses on one approach; however, the public system, the funding of the public system and hospital funding focus on another approach. Insurance systems do not talk to each other. That results in mixed messages, inconsistencies, wasted energy, wasted money and everything else. If it were possible to develop bridges between these different funding schemes, we think that could be an attractive approach.

I want to come back to the question you asked earlier, to add something about compensation, and particularly physicians' compensation. We believe that one method or the other each has its benefits but also enormous disadvantages. The method involving fixed honoraria, lump sum honoraria, and salaries has advantages, but also significant disadvantages. The same can be said about the fee-for-service method. We believe it is time to consider some combination of the two, both for specialists with teaching and research duties and general practitioners providing front-line care.

What is most important at this stage in Quebec is to determine how we could combine the concept of client registration with a method of compensation that would introduce a form of capitation or a certain percentage of capitation payment. Perhaps 66 per cent of a physician's compensation could be based on capitation and33 per cent on the procedures performed. You immediately see what the effect of that would be. And the capitation portion would be modulated on a basis of the patient base registered with the family physician.

There is no doubt that caring for a 35 year old man is ten times less onerous, in terms of the workload, than caring for a 60 year old suffering from multiple pathologies. So, the compensation has to be modulated on that basis. However, we do think there are some very promising avenues that are worth exploring, in addition to the one you seem to support, which would involve interface between public insurance schemes.

The Acting Chair: I think that's excellent. I really think your suggestion about 66 per 100 being based on capitation and 33 per cent on procedures performed an excellent one. Did you arrive at that figure after a study?

Mr. Garon: I cannot tell you whether it stems from a study or not, but the idea or principle behind it is to ensure that more than 50 per cent of the compensation is paid for the fact of being responsible for a patient group. And that is fundamental. The fee-for-service system does not include a procedure called case management for which there is a charge, does it?

The Acting Chair: That is exactly our thinking. Senator Keon, do you have any other comments?

[English]

Senator Keon: I did want Dr. Lamontagne to expand on co-payments.

Let me try to present something that we discussed with other people across the country. We are in a situation now where hospital care and the doctors' charges are pretty well covered in the system, but then there items at the front end, in preventive health, and so forth, where there is no coverage at all. For example, in the Heart Institute we run smoking cessation programs, primary prevention programs, and so forth. We are able to fund these out of our global budget because of efficiencies, but the programs are not as large as we would like them to be.

In terms of preventive programs, what happens is that American hot-shots out of California come up, set up shop in town, give cooking lessons, and they charge people to go to these classes. Of course, only the richer people can afford to go to these classes.

At the other end, when you talk about home care and custodial care of various kinds, including physiotherapy at home and other things, the funding runs out and the patient has to pick up the tab. This has become a serious problem, particularly for older people where their government payments run out and their insurance runs out. The family is left to pick up the tab for some kind of care, and it almost wipes them out financially.

As I read your remarks, you say that you see a co-payment system existing across the board. In other words, the government pays part of everything and the individual pays the other part. Am I correct in my understanding?

Dr. Lamontagne: Yes, but there is a problem with that. What will happen to the poor people? If they cannot pay, they will not seek medical care and, if they do not do that, then they may die. It will be like it is in the States: If you have no money you can die on the street. I do not know the answer to that. Perhaps we would consider a system that is equivalent to Legal Aid which assists people who cannot afford to pay their legal fees. It applies to people whose income is, say, less than $20,000 a year. People who earn more than that have to pay their own legal costs. If we can do that for legal aid purposes, why can we not do that for medical purposes? If you have money, you pay; and if you have more money, you pay more. It is quite easy to check income against annual income tax reports. We must remember that there are poor people, and they have to be treated as well as those who are rich.

I would agree with there being a co-payment for everything. If we start charging $5 for this and $10 for that and $25 for something else, then we will be back to a bureaucratic sysem. How are we going to deal with that? What is worth $5 and what is worth $25? It could take years to come to decisions on that. I think that doing it across the board would be the best way to proceed.

To come back to my example in Sweden, if a patient goes to see his doctor with cold symptoms or because he has pneumonia, that costs $25. If the patient goes to the emergency, for whatever reason, it costs $35. That applies as long as a person can pay. I would agree with you that. It should be as simple as possible.

You talked about the Americans giving cooking lessons to those people who will pay for that. Well, that is quite nice, but I would say it is also very American. I quite agree with that. People should pay for that type of thing. However, I think that they shouldfirst pay into the system when they are sick.

Minister Trudel will be coming forward with the suggestions made by the Clair commission about what might be called old age security. Of course, on a political level, you will not win an election on that platform because lots of people would vote against that. Personally, I think it is a very good idea. On one side things are becoming so expensive and, on the other side, salaries are not increasing. If we get sick, we will not be able to afford any medical services. We also have to think about what our children will have to pay for us 20 years from now. There will be more old people than young people around 2016. That is why we should bank some money for that type of eventuality. I know that governments make a lot of money on lotteries, but they do what they want with that money. They certainly do not put it into health care. If you put some money aside, you know it is there and, when the time comes, there will be money to help you.

I agree with that but, politically, it is very tough to sell that to the population.

[Translation]

The Acting Chair: Dr. Lamontagne, before I recognize Dr. Keon again, what you are saying seems to be somewhat contradictory to what you said in your brief about co-payment. You said that co-payment should be prohibited for medical and hospital services except where the services provided and received are considered relevant, effective and efficient. You said we should prohibit co-payment, and then you gave a series of examples.

The example I really liked, and which we will certainly be focusing on, relates to the percentage of care provided in a clinic to patients who are not registered with a family doctor. In other words, patients have the choice of registering or not registering. You certainly cannot force people to do it. But where they aren't registered, there would be a co-payment for any care they receive outside of the front-line medical care team. That is on page 4, under "Y". I really like that one, and this is the first time I've seen it. We are always talking about reforming front-line care, saying that patients have to be registered, and so on.

At the same time, we know that we cannot force people to register if they do not want to, nor can we force things on patients. As you point out on page 4, patients that refuse to register with a front-line medical team, for all sorts of different reasons, would have to bear a percentage of the costs, if they want to consult their pediatrician, gynecologist or psychiatrist directly. I think that's an excellent idea.

Mr. Lamontagne: I would like to elaborate on that for a moment, Dr. Morin, and then I will let Dr. Garon comment, because he is the one that wrote the brief. My first comment would be that we have to make this as simple as possible. Because as it currently stands, the system is complicated. If we could make it as simple as possible, at least in terms of co-payment, we would avoid the problem of additional bureaucracy.

If we charged a fee that would be the same for everyone, we would at least avoid a major administrative problem. We all know how expensive it is to administer the public system.

Now, when you talk about registered users, well, I guess I am going to play the devil's advocate here. If we introduce a capitation-based system in Quebec and ask people to register, there will be more people registering than the people who vote in municipal elections next Sunday.

It is pretty difficult to find a doctor. If we were to decide that people who do not register will have to pay, I am pretty sure 98 per cent of the population would line up to register.

Senator Morin: I would like to talk about direct access to a specialist to whom one has not been referred.

Mr. Lamontagne: I will let Dr. Garon answer.

Mr. Garon: As I am sure you understand, Dr. Morin, the idea here is to encourage healthy behaviour, behaviour that fosters efficiency and effectiveness, and to discourage other kinds of behaviour both among consumers or users and providers of care. We do not feel it is desirable for patients to be able to consult specialists directly, without having to go through the family doctor they are registered with. That being the case, we have to find some way to discourage conduct that we consider to be undesirable.

With respect to pharmacare, Quebec currently has a co-payment scheme which makes it possible to ascertain electronically what portion of the costs the patient has to defray and what portion is covered by the government. Management of this co-payment system involves very little bureaucracy. The system is computerized and works electronically. And an individual purchasing medications immediately knows what his or her share is. There is always a ceiling. The payment can never be excessive.

By using this kind of co-payment system, we would be fostering good behaviour on the part of the prescriber as well. For example, good old penicillin could be 100 per cent insured, but Cipro might only be 25 per cent insured.

Senator Morin: I do not know why you chose the example of Cipro.

Mr. Lamontagne: I am sure you will have noticed that I skipped that paragraph in the text.

Mr. Garon: All of this to say that modulation must be something each province can do. In Quebec, in the 1990s, preventive dental care for children up to the age of 12 was not insured. We went from 100 per cent to 0 per cent. We aren't always smart about the way we do things. When we took that action, we lost all information on consumption of such services. We could have maintained a formula whereby 25 per cent or50 per cent would be paid by the government for such care. The other costs would then have been borne by the family. But no. We went right from 100 per cent to 0 per cent.

In Canada, our basket of health care services is not all that wide. But it is certainly deep. It is 100 per cent. In European countries, however, it is wide. It includes much more than medical services - things like optometric services, drugs, or physiology. It is much broader, but it isn't based on a 100 per cent formula. We do not need to have a fixed standard of either 25 per cent or50 per cent. It can vary depending on efficiency.

Senator Morin, I think you know what I mean. Medicine is not always practiced on the basis of meaningful information. And consumers do not always make their choices based on what is most desirable.

Senator Morin: Thank you very much.

Mr. Lamontagne: Dr. Garon's example of dental care is an excellent one. As you can see, we could have gone half and half. At that point, people with average incomes could have continued to benefit from some assistance, in order to access this care, whereas average families that can no longer afford to pay for it have completely written it off. And ten years from now, we will be dealing with major dental problems in these children whom we completely ignored, because it had to be 100 per cent or0 per cent.

The other point Dr. Garon made earlier relates to the need to encourage positive behaviours and discourage negative behaviours. I know something about this because my training is in behavioural science. All health systems discourage negative behaviours, but positive behaviours are never encouraged.

And yet we know that in behavioural therapy, positive reinforcement is much more effective than negative reinforcement. So, we have to steer the train back onto the right track, whether we are talking about physicians' compensation or the contribution we are asking people to make, either financially or in terms of system organization. But there has to be positive reinforcement somewhere. I believe we have to re-think our whole approach and focus more on positive reinforcement, rather than always providing negative reinforcement.

[English]

Senator Keon: I think I have taken too much ofDr. Lamontagne's and Garon's time. I will give the floor to somebody else for a while.

[Translation]

Senator Pépin: Dr. Lamontagne, I really appreciated your article.

Mr. Lamontagne: I must admit there are some in Quebec who appreciated it a lot less.

Senator Pépin: I want you to know that if you were Minister of Health, I might consider running again.

Mr. Lamontagne: I do not want to be.

Senator Morin: I just realized that we did not receive that article.

Senator Pépin: Well, I cut it out of the magazine. It was published in L'Actualité, and it is an excellent article. It says that we need a health care system that operates like Hydro-Québec.

Senator Morin: We should have it photocopied.

Senator Pépin: Yes. I will provide it to you so that you can distribute it to all the members.

I agree with what you said in your presentation about focusing on treatment and not just on prevention. You said that there have been no studies of aging. We do not know what the impact of it is or all the needs associated with it. That is something we may want to do in the near future.

You also talked about the importance of having a team in place to manage both revenues and expenses, instead of just expense managers. I agree with you on that.

I also agree with your views with respect to local, regional and university hospitals.

To make our hospitals and health care facilities more efficient, we could have them operate seven days a week. If we combined public and private services, that would put money into the system and probably make it a lot more efficient.

You talk about work being performed in teams. I would like you to tell us how you see that working, because we are talking about physicians. I find that pretty serious that a doctor would only be seen patients eight hours a week. But it there were teams made up of doctors, nurses, lab technicians, social workers and ophthalmologists, how would you actually design that team to ensure it would be functional and worked to the advantage of each team member, according to his or her particular discipline?

You referred as well to computerized medical records. In that regard, there is one thing that concerns me, and that is confidentiality. Thus far, no one has been able to reassure us with respect to confidentiality. There are a couple of issues we really have to look at.

Mr. Lamontagne: Senator Pépin, your first question had to do with team work, did it not?

Senator Pépin: Yes. Hours of work.

Mr. Lamontagne: Well, because there are a lot of us, we have to work together using an interdisciplinary approach. The number of disciplines has increased. In the 1950s, the approach was based on the physician-nurse-patient triad, where all three worked hand in hand. Obviously the team has expanded. Now we have all kinds of technologists. From a human standpoint, the issue is that everyone has started to "peck" at patients - taking pieces of skin, blood, urine, et cetera. And the patient feels as though he is kind of lost in a jungle where everyone is jumping all over him but he has no idea who is really looking after him. I think that sort of describes the current situation.

Senator Pépin: You get the feeling that the patient is at the bottom.

Mr. Lamontagne: Yes. So I think we have to reinstate concepts such as team spirit and strengthen the linkages between different health care professionals. Now that I am no longer president of a union association, I can talk about money. I think that way of doing things would be helpful and have the effect of improving relations with other health care professionals. It is an interesting idea from the standpoint of the way in which society has evolved.

In the 1950s and 1960s, when there were still enough physicians, there was no question of relinquisking certain duties to nurses or anyone else. But now we are facing a shortage, and all of a sudden, I see young doctors who are ready to hand over all sorts of responsibilities to others.

Senator Pépin: But they would have to increase nurses' salaries in that case.

Mr. Lamontagne: Oh! I do not want to get into that. As I say, now I am a professor. But I do think that something can be done. In that sense, I would say we are well on the way, and we will be meeting with the ministry again to talk about what we referred to as "shareable activities."

Senator Pépin: Yes.

Mr. Lamontagne: So, we are fully aware of the fact and support the idea that as physicians, we need to have highly specialized nursing personnel. In terms of hemodialysis, intensive care, and neonatalogy, for example, we have described all of these tasks and are prepared to let nurses provide such care based on a medical protocol, insofar as they have adequate training, which means more than Cegep level.

Senator Pépin: I agree.

Mr. Lamontagne: Secondly - and this does not concerns me - they need to be paid for the work they do, and relieve physicians as much as possible of those tasks that other health professionals are able to perform.

For example, why does a doctor have to administer vaccines, when a nurse is perfectly capable of doing so? Every year, as soon as a new vaccine becomes available, we have to revisit this issue and delegate the task to nurses once again. And I must admit the delegation process takes so much time that sometimes the vaccination date is past before we are actually able to delegate that task.

We are talking about specific duties here. We have looked at the various processionals. We are in the process of reaching an agreement with associations of specialized physicians to determine to what extent they can delegate certain tasks to an inhalation therapist or physiotherapist - not just a nurse.

We have to do that, first of all, in order to improve our cost-benefit ratio and, secondly, to release the physician from certain duties. Some people with better training are now able to do things that doctors had to do previously. So, let's let them. That was my comment in answer to your first question.

Now let's talk about computerized medical records and confidentiality. Last week, I gave a lecture before the Quebec Hospital Association as well as one at a symposium organized by the Access to Information Board. At one point, we brought an ethics advisor into the College to discuss the issue of computerized medical records. He had some wonderful slides to show us on his computer. I said to him: "Mr. Péladeau, if we take your advice, by the year 3000, we still will not have computer-based diagnostics."

I realize there are certain concerns with respect to confidentiality. Protection of computer systems is not adequate. As for paper records in hospital - and this is my argument - the housekeeping staff have access to them. When a nurse is not at her station, any visitor can go behind the desk, access the files and take whatever he wants.

Senator Pépin: Yes, but there is less likelihood that people will see this information on a screen.

Mr. Lamontagne: Yes. But, as I say, computer systems are sophisticated enough now that there are ways of blocking access. And with smart cards, two cards are needed. If you do not give me your card, I cannot access your records. When you come to my office for a consultation, you insert your card; then, to let the system know that you can get in, I insert my card and access your records. It works very much like a credit card. If you do not give me the card, the payment cannot go through.

And in cases where records are shared among several professionals, I am told that as far as the computer system is concerned, I could decide that only the physician, nurse and psychologist would have access. I may not want the social worker or pharmacist to see that information. So, it is possible to configure the system so that only certain people have access to the records, but not others. The technology does allow that to happen.

Senator Pépin: I see.

Mr. Lamontagne: There will be pilot projects in this area. IBM has started to develop shared files. Other companies are also getting on board, because there is a market for this, isn't there?

They give you the equipment, because there are some very, very attractive potential clients out there. It starts up in one place and moves to another. At some point, we will want to be able to talk to each other across the province. If my computerized records are in Montreal and I fall into a coma in Chicoutimi, how are we going to set up the system in Montreal, which is a pilot study, with the one in Chicoutimi, which is also a pilot study? How are we going to make all this work?

I must admit I would be very pleased, if I'd been involved in a serious traffic accident in Chicoutimi, to know that the physician in Chicoutimi could simply take the card out of my pocket and use it to find out what drugs I am taking, and so on. So, the day is coming when that will be a reality. I think it will allow us to save lives.

Senator Pépin: The other thing you talked about is tele-health.

Mr. Lamontagne: Yes.

Senator Pépin: We know that there are significant problems in remote areas. If we could work out an appropriate system of payment for Aboriginal communities, tele-health would be a really attractive solution to some of their problems.

Mr. Lamontagne: You are absolutely right. I am not as familiar with Aboriginal communities, but remote regions can just as easily be Chibougamau as elsewhere. These people are paying taxes like everybody else and they are entitled to medical services. At the same time, we have to be realistic. We cannot implement this kind of system everywhere, as I said earlier. The best examples are the famous scanners. Everybody wants a scanner. But four years later, it is already obsolete. It seems to me that only the hospitals that really need one should have a scanner.

Let me give you another political example. In one region of Quebec, we have a traumatology unit in one riding, and a scanner, in the neighbouring riding. Politically, that works really well. The patient arrives at the hospital in a thousand pieces, but we practically have to put him on a dolly to give him a CAT scan 60 miles away. That is not medicine. That is just plain ridiculous!

Those are the kinds of things that simply make no sense, from a clinical standpoint. Why? Because they never asked a physician whether it was important to have a scanner at the traumatology unit.

With tele-health, it is the same thing. I was telling you earlier about my daughter's experience in a small hospital in New Hampshire, in the middle of nowhere. There was no need then to pay for a radiologist, was there? Thirty minutes later, the results were there. But do not worry: the radiologist who looked at the pictures was well paid. He got most of the $835 or $935 I paid. It is a good thing I had insurance!

In Quebec, we have started a project in pediatric cardiology. There are now seven centers that are linked by cable, and it is working very well. We want to develop more such systems.

At the same time, there is a management problem. There are seven centers linked by cable for pediatric cardiology, with wonderful rooms, equipment and so on. I would be willing to bet that it operates from 9 to 11 in the morning, and then the key is in the door. In the afternoon, there are psychiatric consultations with other professionals until 3 p.m. Then from 3 to 5 p.m., there are endocrinology, internal medicine or other consultations. Then at8 o'clock at night, it is something else - just to keep the machine running.

I lost a good friend who used to live across from me - a surgeon who went to practice in New York. He worked very little. One day a week at Hôtel-Dieu, one day a week at Victoria, and the three other days, he would schedule his patient visits; that was it.

We have patients who have to wait a year for surgery. Our system so exasperated him that we ended up losing him. It was not a question of money. He used to say that the reason he had trained to be a doctor and surgeon was to be able to perform surgeries.

We communicate by e-mail. Once he said to me: "Here, I could operate 24 hours a day, seven days a week, if I wanted to, ask for any kind of instruments, and it wouldn't be a problem." But he also told me: "I miss Quebec." If only we had that here.

Senator Pépin: I would like to address a more touchy subject: women physicians. We read that the President of the Quebec Federation of General Practitioners declared, following a poll, that women physicians worked fewer hours than their colleagues because they have children and have to look after them. And I recently read another article to the effect that in gynecology and obstetrics, 38 per cent of those admitted are women, and that their number is increasing.

Do you think that this trend will have consequences? And what would the impact be on the overall availability of services?

Mr. Lamontagne: You are leading me onto a very slippery slope, Senator.

Senator Pépin: That is why I said it was a touchy subject.

Mr. Lamontagne: There is no doubt that women physicians work fewer hours than men, for obvious reasons that I understand, and it clearly is a good thing that they look after their children. But the end result is that they work fewer hours. Also, they see fewer patients than male physicians. That is a good thing. They are more human, have a closer relationship with their patients and feel more empathy. That is a good thing.

From an economic standpoint, women physicians also earn less money than male physicians. At the beginning of their career, they work less than men. But when they reach their 50s, because they have already raised their family, they increase their work hours. It is men who begin to work fewer hours then. So, over time, things balance out.

About 40 per cent of physicians in Quebec are women, compared to about 30 per cent in the other provinces. That is why when making comparisons between provinces, it is important to pay attention to the women physician ratio, and the number of hours worked, because of the number of female physicians.

Women physicians do not work less than men: they work just as much and often they work better. But if you look at the long term, they may well work fewer hours while they are raising their children, then work more hours when their children are grown up, whereas men tend to work fewer hours after the age of 50.

Senator Pépin: So, things do balance out.

Senator Léger: You talked about cultural differences between English-speaking and French-speaking Canada in the way health problems are resolved in Canada.

If I understood you correctly, English-speaking hospitals adopt a different solution to a given problem than French-speaking hospitals do. I am wondering how a culture can actually have its own approach to issues?

Is that the case all across Canada? Is there a difference in problem-solving because of cultural differences?

Mr. Lamontagne: It is a question of culture. We are not making this up. The Anglo-Saxon culture is a highly practical one; in our Latin culture, we are more emotional. That is just the way it is.

What can be done about this? Well, as I see it, Anglo-Saxons tend to manage their hospitals based on a much more business-like approach than is the case in French-speaking environments.

Second, they have more guts. They are not as afraid. Let me give you an example: The Director General of an English-speaking hospital got the hospital to pay his mortgage and make his car payments, and everything was fine and dandy. But a Francophone hospital fired some guy because the hospital had paid for four baseball tickets and the cost of cleaning three suits. So, somebody somewhere just does not get it.

We have to stop putting a collar on these people, and instead say to them: "We are paying you to administer, so administer as efficiently as you possibly can." We should stop splitting hairs.

[English]

The Chairman: I am sorry I missed your presentation. However, I did pick up on an answer you gave Senator Pépin. When Duncan Sinclair was conducting the study for the Government of Ontario, like the Clair commission in Quebec, by looking at a sample of billings to the government - and my numbers are approximate - he found that two thirds of the services billed for by general practitioners could have been provided by some other health professional, and roughly one third of the services provided by specialists could have been done by the family practitioner.

Has a similar type of study been done in Quebec? In other words, are the Ontario numbers totally unique, or is it reasonable for us to assume that that is the state of affairs?

Dr. Lamontagne: I would say that, although Ontario is much richer than Quebec, yes, you have the same problem as we do here, and in that regard, there is no cultural difference. It is the same thing.

The Chairman: It is the same thing. Thank you.

[Translation]

Senator Pépin: Maybe the solution is to have women heads of department or deans.

Senator Morin: Senator Pépin always has to throw that in at the end of the discussion. Before we let you go, Dr. Lamontagne and Dr. Garon, there is one extremely important issue our Committee has not looked at: compensation for victims of medical mishaps or malpractice. That constitutes a significant part of our health costs. Has the College looked at that? Have you carried out a study of the issue? Are you aware of any study relating to that question?

Mr. Lamontagne: Dr. Morin, you raise a very important point. And I am going to ask Dr. Garon to answer that question, because he sat on the ministry committee looking at obvious medical mishaps.

Mr. Garon: Yes, a report was recently submitted to the Quebec Minister of Health regarding the prevention of medical mishaps in the clinical setting. I would invite you to read it.

As you know, under the current system of liability in delict or tort, in order for a victim to be entitled to compensation, there has to have been malpractice and harm caused, and you must be able to show a connection between the two. Obviously, for the person who feels he or she has suffered harm, this can be a difficult test to meet.

I believe both American and Australian studies show that only a tiny fraction of those who are victims of a medical mishap actually receive compensation in the final analysis. The question is: How do we measure the performance of a compensation scheme? Based on the fact that it isn't too expensive or on the fact that it does compensate the victims?

If we can measure that at some point, we will probably start questioning the limitations of the current medical mishaps compensation plan. And maybe we should be looking at alternatives.

Senator Morin: Perhaps my question was unclear. Has there been any assessment or evaluation of the costs?

Mr. Garon: No.

Senator Morin: Because they could be huge. Every time a patient suffers the side effects of a drug, he could present a claim.

Mr. Garon: In other countries, studies have been done. Sweden has a no-fault system.

Senator Morin: Sweden?

Mr. Garon: Yes. Sweden has a no-fault system, and it is self-financing. Of course, I imagine that, as is the case for automobile insurance, the payment schedule must not be very generous.

Senator Morin: I see.

Mr. Garon: That said, the problem is that we lack information about medical mishaps. Thus it is difficult to assess the feasibility of a system other than the one we currently have.

Senator Morin: In closing, I would like to express my thanks to Dr. Lamontagne and Dr. Garon. I think we tested your patience by asking you so many questions. You have seen how much interest your comments and brief have generated. Thank you very much. It is possible we will ask you for additional information or clarification with respect to specific points. Again, thank you.

Mr. Lamontagne: Thank you very much.

Senator Morin: Senators, Dr. Battista was unable to attend at the last minute. I would therefore invite our next witness, Mr. Robert Dorion - a witness to whom I extended a personal invitation - to come forward. Mr. Dorion represents patients. We have heard from a lot of professionals and representatives of governments, hospital and regional administrations. Mr. Dorion represents the patients who receive care. He is appearing as an individual. I have asked him simply to tell us his story in his own words.

Mr. Dorion - and this has nothing to do with his testimony - is an engineer who resides in Quebec City. It is primarily as a patient that he is testifying this morning. I thought it was important for Committee members to hear his testimony.

Mr. Dorion, thank you so much for being with us. I know that you have travelled here from Quebec City to give your testimony. It isn't really that far, and you have come from one beautiful city to another.

Mr. Robert Dorion: Yes, exactly. And by chance, I travelled all across Canada last month on business. It was an opportunity for me to talk to fellow citizens in every region of the country. So I tried to prepare a short paper setting out some of my thoughts.

Senator Morin: Please proceed then, Mr. Dorion.

Mr. Dorion: I prepared a short text. Did you receive it?

Senator Morin: Yes. Perhaps you could summarize it for us. We will read it in full as a follow-up.

Mr. Dorion: Certainly. With going into detail, my brief first talks about my perception of the system, and the personal journey I have made, largely as a result of my father's death while he was still on a cardiac surgery waiting list. When he died, he was only a few days away from his surgery and had already had the surgery postponed three times, probably because of other emergencies.

Obviously, that is a terrible disappointment because when your father is ill, and you know his case is being managed by the system and that he is about to have surgery, you think to yourself: he'll be around for another twenty years. You are just so happy that his health problem has been identified and that the health care system is looking after him and he can get better - but then, you find yourself experiencing exactly the opposite feelings several days later.

My own experience got me thinking about a number of things. The first thing I asked myself was, why do we care so much about our health care system? Why do we spend so much time trying to define it? Last month, I was surprised to see that Canadians in a number of large cities - Toronto, Winnipeg, Ottawa - send their children to immersion programs or French schools. These are parents who didn't know a word of French but wanted their children to learn how to speak the language. And I thought to myself: I am really happy to see you making this effort.

Their response was: this is what allows us to be different. This is what allows us to distinguish ourselves from Americans. It is a type of knowledge that helps us to define our identity.

I think Canadians like their health care system because it is open, generous and is one of the things that defines us as a country. There are reasons for that, as I explained in my brief. And I think it is time we faced reality.

Based on my training and my experience as an economist involved in municipal affairs and realty, it is clear to me that as a result of the aging of our population, demand for health care among people aged 60 and over is going to double in the next twenty years. In the real estate sector, that is how you do your measurements. So, we will be facing a rapid increase in demand. It is time we face reality.

What will Canadians think if this institution, which is one of their primary concerns and part of their fundamental Canadian identity, becomes inefficient and unable to cope with demand? That may result in Canadians feeling less strongly about their country and its institutions. So, it is important to be proactive and show that our country is able to question and challenge, and take courageous and enlightened action.

Currently, if supply is inadequate to meet the demand and we cannot afford to increase it in future, we run the risk of facing a sequence of events of which we are already starting to see the signs. In 1993, when my father died, people were very careful not to talk openly about the funny business surrounding waiting lists. Yesterday, I happened to be with some friends, one of whom is a cardiologist at Laval Hospital and whose wife is an oncologist at Hôtel-Dieu, and I can tell you that now there is no doubt that this sort of thing is happening - indeed, nobody even tries to hide it anymore because unfortunately there simply is not enough room for anybody. And, as is often the case in life, it is the wheelers and dealers who end up in the front of the line.

This is of great concern to me because as a Canadian, if I am in need of a bypass or other type of operation one day - well, I know a lot of people in Quebec City. It is a small town and people know each other. It would be easy enough for me to make a few phone calls. But now I am wondering: what am I going to do? Am I going to let someone else die instead of me by taking that kind of action? Maybe that's what happened to my father; I have no reason to believe it did, but it is certainly a possibility. If supply is not adequate to meet demand, and people behave in this fashion, then morally, we have a big problem. But some have no problem with it. Some are used to getting mileage out of the people they know and there is something very human about that, but the fact remains that is what we are heading towards.

It is this message and this sentiment that brings me here today. I suffered when I lost my father and if there is any way reflection can lead to change, then I will be very happy if that is the result.

In my view, if we do not restore some balance between supply and demand within the public system, simply because we cannot afford to, we will have to be innovative and find new solutions. We have to be prepared to challenge what we do now and thoroughly examine all the issues.

In the meantime, I have resolved the problem weighing heavily on my conscience, since I decided to take out insurance in the United States in the event I become seriously ill, get cancer, et cetera. I brought the insurance policy papers with me. Dr. Morin, I can provide them to you. If I get sick I automatically receive a certain amount, and the insurance company finds me the best available spot in the United States where the services of specialists can be accessed. With the money I receive, I can travel to wherever I am to be operated on and return home. This is a very individualistic approach that I do not like much.

However, the alternative of being caught in a system that I no longer trust, given the rules it operates by, led me to the conclusion that it was probably more humane to take this action, if I had the opportunity to do so, than to make use of my many friends and acquaintances, at the appropriate time, to avoid the fate that awaited my father.

Senator Morin: Thank you very much, Mr. Dorion, for your testimony. I would like to ask you a couple of questions. We do not know much about the insurance policy you have taken out. Is this American insurance?

Mr. Dorion: No, Canadian.

Senator Morin: Could you tell us - provided you have no objection to giving us this information - how much this insurance is costing you? As I understand it, your policy allows you to receive treatment in the United States immediately if you require a bypass, surgery or treatment for cancer or similar conditions. Could you elaborate a little more on the insurance you have taken out?

Mr. Dorion: Basically, this insurance policy automatically gives me access to an amount of money corresponding to the amount for which I am insured when a symptom appears. And the way it is presented and marketed, it is almost like salary insurance - in other words, staying at home and receiving money because of illness. Or - and this is what I opted for - the company offers services which involve finding physicians in the United States.

Senator Morin: And how much is it costing you?

Mr. Dorion: At the time I signed the contract, I was smoking about four or five cigarettes a year so I did not want to take any chances; I got the "smoker's" policy. But it costs about $100 a month for a non-smoker, which I will be when I renew it. My four cigarettes a year were expensive; it was costing $150 a year. And that is for a face amount of $100,000.

Senator Morin: Thank you very much.

Mr. Dorion: I would like to make a few other comments about the system.

Senator Morin: Yes, please do, Mr. Dorion. This is your opportunity to make your arguments.

Mr. Dorion: I do not want to abuse.

Senator Morin: Absolutely not; we are very interested in hearing what you have to say. You represent the average citizen.

Mr. Dorion: Yes. My expertise is in municipal services and utilities economics at the municipal level. I was listening to discussions about the information highway and confidentiality; those are services offered by my firm.

When I was reading the documentation, much to my surprise, I saw that there was quite a lot of overlap between what we are trying to do at the municipal level and concerns at the national level with respect to the health care system. Having said that, I certainly do not claim to be an expert.

Senator Morin: Well, please give us the benefit of your comments on the system.

Mr. Dorion: Well, we are in the midst of a veritable revolution. I could send you other papers I have written specifically about the computer revolution. The fact is that all services are gradually melting, sort of speak. It is helpful to see it as a candle. The base of the candle is the Web. Above that are the operating systems, data bases and applications. Then, above the applications are the services, that may be medical services articulated around a specific structure.

Gradually, the entire candle is starting to melt away because everything is moving down to the Web level.

That means greater centralization of information, but also the possibility of decentralizing information and providing it to every individual. That has a major impact on the way we will be providing services in future. There will always be a bit of a race between those who want to poke holes in confidentiality rules and the others. But that is not an issue. We are already very advanced in terms of security. The banks are very open. And this will have a major impact on the way we provide services.

As a business manager, the day I was able to provide pharmacare, I said to the employees: if you want to continue to benefit from 100 per cent coverage, it will cost you so much per month, whereas for 75 per cent coverage, the amount drops. They all opted for 75 p. 100 coverage. And I noticed that there was a dramatic drop in the use of drugs among company employees.

But this sort of thing is well known. Installing water meters in homes resulted in a drop in consumption of about 20 per cent. And it is the same with highways. Nowadays, some highways are being funded through private sector participation.

With respect to the funding options that you laid out, mention was made of an annual statement that would be appended to the income tax return. I think that is absolutely essential. According to what I've been told, no other health care system is as open as ours is when it comes to refunding expenses. And we have no knowledge of those costs. We pay, but we do not know what we are paying.

I think we would appreciate those benefits more and strengthen Canadians' attachment to Canada if people were told what the country is doing for them, even though they cannot see it. We are receiving health care services, but we do not know how much they cost.

I think that is preferable to taxing people. The way the principle works, you levy taxes to make people think, and I believe Dr. Lamontagne explained this very clearly earlier. There is one possible tax option that was not addressed in your paper: estate tax.

When the health care system was put in place forty years ago, our society was not as rich as it is now and family wealth was certainly much less considerable. Wealth has been created in this society but is not being taxed. It will be passed on to future generations after our death. The following generation does not need it yet because it does not have it right now. But when the current generation dies, it will not need it either because these people will be dead.

I think there is an opportunity here, not to levy excessively high taxes but a reasonable amount, such as 5 per cent. That represents more than $1 trillion. And on $1 trillion, we are talking about $50 billion; over twenty years, that's $2.5 billion per year. That is pretty well the percentage of GDP, the 0.5 per cent we are lacking to properly fund health care.

So I do not think we should shy away from challenging our young people and showing them that they will have to be as hard working as their parents have been. And even if they receive less of an inheritance, I do not think that is a big problem.

Senator Morin: Perhaps we should leave it at that, Mr. Dorion. I am sure there will be questions about your testimony.

[English]

The Chairman: Thank you. I have two questions. One is, does an insurance policy in the United States cover everything, or does it only cover procedures for which there are major waiting lines such as heart and cancer surgery, and joint replacement?

Mr. Dorion: What attracted me to this policy, was that it was targeted to those kinds of diseases.

The Chairman: Let me just digress for a moment to say that I was very sorry to hear about your father.

Mr. Dorion: Thank you.

The Chairman: Let me go back to the issue. Essentially, what happened when governments cut back on health care budgets is that they basically rationed the supply of health care services.

Mr. Dorion: Yes, I explained that in my paper.

The Chairman: There are only two solutions to that problem, because the demand will stay the same.

Mr. Dorion: It will increase.

The Chairman: There are two solutions. First, you try to make the system more efficient so you can handle more people. However, at some point you will need more money. There are two ways to get that money. The government can raise taxes and put it into the health care system, or individuals can put money directly into the health care system by paying for services.

Mr. Dorion: Yes. That would be a major shift in our society.

The Chairman: Exactly. In you view, which of those alternatives is best?

Mr. Dorion: You have to work on several fronts. On one hand, you have to rationalize the demand at all levels of services. If I start charging $40 for a consultation the demand would be cut back by 60 per cent. Because the service is free, people have no hesitation in going to the doctor`s office. We have to discourage that. People have to think about it. When you put "tarification" on water, the water demand is cut by 20 per cent. We have to be available, but we have to work on that front.

I would suggest that inheritance tax would be justifiable if those monies are identified for health care and not put into a general account. Perhaps there could be an additional income tax. If you have insurance then perhaps the first $500 or the first $1,000 would be added to income. In that way, people who do not receive that revenue will not pay. I am sure I do not have to remind you that it is important to keep that in mind.

On the other hand, if somebody receives a health care bill, and he does not pay taxes, it could be used as a tool to find people who are not paying their fair share of taxes. It would tie income tax to health care. It is an additional tool.

I am not at all shy about saying that everybody should pay his or her share of taxes. As an assessor, when somebody tried to fool me with his false information, I send it right into court. I jack up the assessment to make sure that he will file a complaint. I have no sympathy for people who do that. We set the rules, and we must live with them.

We must remember that the supply is fixed. I did not touch on that in my paper, but I do want to make a point of the fact that we have a strong culture in the hospital environment. We are good at educating and encouraging competent people in the health care system. However, if it were a private business, we would do two or three times as well. We would be servicing the world with our talents. Now we are rationalizing it. We are good, we are competent, we have dedicated people, and we control their "formation" because we cannot afford to pay them.

We must remember that there are people who are willing to pay for medical services. While he was on the waiting list, I am sure my father would have been glad to pay $25,000 to have the doctor who would have otherwise been watching T.V. in the evenings perform his heart surgery. Instead of that I inherited money that I did not really need.

The Chairman: Thank you.

[Translation]

Senator Morin: Mr. Dorion, thank you very much for being with us. Your testimony was greatly appreciated and extremely useful. We will be looking carefully at your brief. Thank you once again for travelling to Montreal to present your views today.

Mr. Dorion: It was a pleasure.

Senator Morin: It has been very useful for us.

The meeting suspended.

[English]

The meeting resumed.

The Chairman: Senators, our first witnesses this afternoon are representatives from Canadian Life and Health Insurance Association, CLHIA. May I remind you that, when they testified before us at an earlier time, we got into a lengthy discussion with them about the gaps in drug coverage for Canadians. We asked them to think about the question of how to design a drug plan that, at the very least, would cover the catastrophic end of the business. By "the catastrophic end of the business," I mean that it would cover the kind of situation, which our report documents, where an employee, with an employer with a very good drug plan, nevertheless would end up having to pay $12,000 or $14,000 a year as his part of the co-payment because his wife had a terminal illness.

The industry was kind enough to use some of their experts to do some program designs for us. We are delighted to hear from them today. Mr. Mark Daniels, the president of the association will open. Would you introduce the people with you, please?

Mr. Mark Daniels, President, Canadian Life and Health Insurance Association Inc.: Honourable Senators, my colleagues and I very much appreciate the opportunity to participate in your deliberations on this very important work related to Canada's health system. With me today are Mr. Greg Traversy, Executive Vice-President; and Mr. Yves Millette, Senior Vice-President, Quebec Affairs.

Over the next few minutes each of us will address different aspects of your recent "Issues and Options" paper. First, I will focus on its overall vision of the roles of the public and private sectors; second, Greg will comment on your paper's drug insurance options, basically to look at the question Senator Kirby just raised; and third, Yves Millette will briefly review our industry's real world experience with one of the public-private partnership options for drug insurance which your report puts forward. We thought that Yves joining us, Mr. Chairman, would be helpful because he is very familiar with the plan here in Quebec. In fact, he had a great deal to do with helping the industry work with government to put it together.

At the outset, however, let me just make a general point about the "Issues and Options" report. It is an excellent piece of work, and we are pleased to be able to contribute to it. It is an impressive piece, which demonstrates candour, open-mindedness and a willingness to think, if it is not too hackneyed to say these days, "outside the box." In that sense, it is a refreshing contribution to a vitally important debate which is too often characterized by, from our point of view, incivility, intolerance, and downright demonization from time to time. It is a pleasure for us to be asked to comment on some of these issues.

The Chairman: Thank you for that.

Mr. Daniels: Our submission paper, which relates to your "Issues and Options" report, may be relevant in other ways to your ongoing work.

One aspect of the committee's approach which we admire is that your vision of Canada's health system encompasses, among other things, complementary and constructive roles for both the public and private sectors, both in the financing of health care as well as in its delivery. In our view, that vision captures both the current reality of Canada's health system since medicare's inception, as well as its best hope for future sustainability.

Our industry's role is focused almost exclusively on the financing side, providing funding to meet Canadians' health care needs through supplementary health insurance plans. Our submission examines the role of supplementary health insurance plans in Canada's health system. Most of it will not come as any surprise to this committee. Indeed, the profile set out there very much confirms the validity of this committee's vision of constructive partnership between the public and private sectors in Canada's health system.

As it indicates, supplementary health insurance plans, first, complement our public health insurance plans by picking up where public plans leave off. Second, they provide funding to meet important health needs such as prescription drugs, dental care, artificial limbs, wheelchairs, and many other valuable services simply not covered by public plans. Third, supplementary plans protect about 20 million Canadians. They paid out $10.6 billion in 2000, the latest year for which we have comprehensive data. This makes supplementary plans in Canada, Mr. Chairman, a significant direct payer for health services.

Indeed, in 1998, supplementary plans accounted for 11 per cent of direct total health spending in Canada, thus placing fourth after the Ontario government, which handles 23.9 per cent. Out-of-pocket spending by individuals on health related products and services accounts for 16.4 per cent, and the Quebec government is responsible for 15.4 per cent. Supplementary plans handle a good chunk of the total bill. As part of these total expenditures, supplementary plans provide $1 billion a year in payments to our hard-pressed hospitals.

On balance, as this committee is obviously well aware, there is no question that supplementary health insurance plans are a major partner with our public health insurance plans in providing funds to meet our health care needs. They play a vital role in averting and reducing pressures on our public health insurance plans. Over the next few years as public policy in the health area evolves, it will be critically important to ensure that the capacity of supplementary plans to continue to play that major partnership role is maintained. Indeed, many expect, ourselves included, that that role might have to be significantly broadened in the years ahead. If the role of supplementary plans is not at least maintained, the result will be a massive further increase in the already huge pressures on our public health insurance plans.

Sustaining the capacity of supplementary health insurance plans will require dealing with some major challenges. One of these, which your report highlights, is the fact that provincial governments have loaded a tax burden of $1 billion a year in premium taxes and retail sales taxes on supplementary health insurance plans. Moreover, the province of Quebec takes a further $200 million in income taxes from supplementary group insurance plan members since employee contributions to group plans in Quebec are taxed as income in the hands of workers.

Another challenge is rising costs, particularly drug costs, which impact the vitally important drug insurance component of supplementary health insurance plans.

I will now ask Mr. Traversy to comment on your report's drug insurance options.

Mr. Greg Traversy, Executive Vice-President, Canadian Life and Health Insurance Association Inc.: Mr. Chairman, as Mark indicated, drug expense insurance is a central element of supplementary health insurance plans and, as your report notes, it is also of greatly increasing importance in the context of Canada's public health insurance plans.

Your paper's options with respect to drug insurance raise four approaches: first, a comprehensive public program; second, a comprehensive public-private partnership; third, a public-private partnership initiative to protect against financial hardship due to high drug expenses; and, fourth, a tax based initiative to protect against high drug expenses.

With respect to option one, given that the great majority of Canadians already have some form of coverage for drug expenses through federal or provincial drug programs, and/or through private supplementary health insurance plans, it would seem terribly wasteful to proceed as if no Canadian had any drug coverage whatsoever by putting in place a new comprehensive program from the bottom up. This would amount to bulldozing into the ground a highly developed system of public and private drug programs which already cover the vast majority of Canadians. One immediate consequence of dismantling the drug insurance component of supplementary health insurance plans would be that the new public program would face the $4.3 billion in drug costs currently covered by private plans.

Mr. Chairman, it would seem far more sensible to leave the bulldozer approach of option one aside and to focus instead on how to use our country's scarce resources most efficiently to adjust the current system to deal with the remaining public policy challenges. As your report notes, the current system is by no means perfect from a public policy perspective. Hundreds of thousands of Canadians simply do not have any drug insurance coverage at all. There are significant regional disparities in coverage. Even among those who have drug coverage, many are exposed to at least some risk of undue financial hardship if they or their loved ones should require one of the high cost blockbuster drugs. Indeed, your report cites an example which very clearly illustrates that even the co-payment portion of a $50,000-per-year drug requirement can be a very heavy financial burden indeed.

Could options two, three or four address these challenges more effectively and efficiently than option one? My colleague Yves will be addressing option two in a moment. Option three would require a public-private partnership approach which would involve the federal government providing the financial support required to permit provincial drug benefit plans and private supplementary drug insurance plans to put an upper limit on the out-of-pocket expenses of individual plan members at some threshold such as, say, $1,000 a year. Special emphasis would be placed on "incenting" provinces and private plans to extend protection to those who currently have no drug coverage whatsoever.

Under option three the federal government would essentially absorb the risks associated with the relatively rare but extremely costly cases where individuals require very expensive drug therapies.

It would be premature to come to any final conclusion on option three, or any other option, perhaps, but there is every reason to believe that more work on option-three-type approaches would be a very worthwhile investment of the committee's efforts, and we would certainly be delighted to contribute any information that you wish, if that proves to be an area you want to further explore.

Finally, with respect to option four, the taxed-delivered approach, as your report notes, there are, no doubt, some real opportunities to use our tax system more creatively to address the public policy challenges facing Canada's health system. However, given the backwards-looking, one-year-in-arrears nature of tax filing, it is very difficult to foresee the tax system alone dealing effectively with undue financial hardship due to high drug expenses. On balance, Mr. Chairman, option four certainly appears to have far less potential than option three.

Senator Morin: Do we have a document with this information? It seems we do not. Could we have the options again?

The Chairman: Correct me if I am wrong. I am going to do this from memory. Full national primary care is option one. Option two is a mixed public-private system. Option three relates to catastrophic coverage. It would kick in when the total cost of drugs to a particular individual or family exceeds some threshold amount.

Senator Morin: Do we have caps on Canadian insurance? Do we have private drug plans in Canada where there are maximums?

Mr. Traversy: Yes. There are drug plans in both the public plan area, as well as supplementary private plans that have caps. For example, the universal drug program in Quebec which my colleague Yves will address, has a cap on individual out-of-pocket expenses of, I believe, $750 a year.

Senator Morin: I am not talking about that. I am talking about a cap after a certain amount of coverage.

Mr. Traversy: Do you mean where they do not pay beyond a certain amount?

Senator Morin: Yes, say, $20,000.

Mr. Traversy: Not that I am not familiar with.

Senator Morin: It exists in the U.S.

[Translation]

Mr. Yves Millette, principal vice-president, Corporate (Québec) of the Canadian Life and Health Insurance Association: It is true, that type of program is quite rare in Canada.

Senator Morin: In Canada, but you do find it in the United States.

Mr. Millette: You might find it more often in the United States, but here in Canada you have almost nothing but group policies with unlimited coverage underwritten buy employers.

Senator Morin: That means that a person covered in Canada under a private plan will not need special catastrophe insurance. Plan number 3 will therefore not apply to people covered by private insurance in Canada.

[English]

The Chairman: No, because the example we use in the report is the person who had a $70,000-a-year income, and a very good plan, like the federal plan, and whose wife had $50,000-a-year drug costs, for which he had to pay 20 per cent so, on a $70,000, income he was paying $10,000 a year in drug costs. Therefore, even in a co-payer system, at the catastrophic end, even someone with a good health plan, let alone a bad health plan - I mean, a 50-50 plan would be worse - can still run into problems.

Senator Morin: Does the Quebec plan have a cap on the co-payments?

Mr. Millette: Yes, it has, but we still have problems. We need a pooling system in Quebec because, if you do not have a certain pooling fund, it will become too expensive for small enterprises, small employers.

The Chairman: Is that in option four?

Mr. Millette: No.

Senator Maheu: What is option four?

The Chairman: That is the tax incentive system.

Mr. Daniels: Our comment on the tax system is simply that it pays in year one for expenses incurred in year zero. However, for those who have had to deal with a catastrophic situation, it will not help them much to get the money back the next year. They still face a real problem.

The Chairman: In other words, you would get to the end of the tax year and you would claim a deduction on your tax form. The problem is that you file your tax return in April and you might have incurred the expenses in January of the previous year. You might be out of pocket for 15 months, which is something you cannot afford.

Senator Morin: Should we exclude option four?

The Chairman: They are suggesting we exclude option four.

Mr. Millette: I am sorry about that.

The Chairman: You can tell we are interested in the subject, because we started asking you questions before you finished your presentation. Please go ahead.

[Translation]

Mr. Millette: Mr. Chairman, the second option outlined in your report would be a partnership between the public and private sectors to create a universal drug insurance plan.

In Quebec, our industry has been working together with the government since 1997 in order to offer this type of general drug insurance plan. In Quebec, everyone must be covered by this type of insurance.

Those who are part of a private group plan set up by their employer must subscribe to it with their dependents.

Self-employed people and their dependents also have to subscribe to a private group plan set up, for example, by some professional body they belong to.

The insurance companies have to include drug insurance in all group health and disability insurance plans offered to the public, to employers or to associations in Quebec and no potential subscriber may be turned down on medical grounds.

Those who do not have access to an employer or association-run group plan must subscribe to the plan set up under Quebec's health insurance plan. The annual QHIP premium is $385.00, but private plans are free to set their own premiums.

On average, the private plans' pre-tax premium is roughly the same as the government plan's. All the private plans as well as the Quebec Health Insurance Plan must include the following conditions: The deductible part of drug expenses must be no higher than $100.00 a year. The insured person must not have to pay more than 25 per cent of his or her drug expenses.

Furthermore, no insured person should have to disburse more than $750.00 per year for medicine. The idea is to relieve insured persons of the financial burden of high drug costs.

Senator Morin: Would you repeat the figures, since they might be new to some of us here.

Mr. Millette: There is a $100.00 deductible per year. Under the government plan, since it is a monthly deductible, it comes to $8.33 a month.

No insured person has to cover more than 25 per cent of his or her drug costs and none has to disburse more than $750.00 annually for drug purchases.

With the $100.00 deductible and the 25 per cent ceiling, you get an annual maximum of $750.00 no matter what the cost of the drugs required that year.

All the drugs listed in regulations must be covered. And if I am not mistaken that includes something like 93 per cent of the drugs generally prescribed by doctors.

Senator Morin: Very generous of Quebec.

Mr. Millette: Yes, very generous. The QHIP also include a financial assistance scheme which extends both to premiums and to drug expenses.

This assistance is pegged to a person's income but is not offered to people insured under a private plan.

Since 1997, people living in Quebec are therefore covered under various combinations of private plans and the government plan according to their particular needs.

From the industry point of view, the general drug insurance plan works reasonably well. Compared with other universal drug insurance plans, Quebec's plan is flexible enough to dovetail with the coverage offered by insurance companies.

The establishment of this plan has had little permanent impact on the day-to-day activities of most group insurance providers.

For example, when this plan came into effect, there was no need to modify policies since the law did not require the officialization of provisions.

Nor did the plan's coming into operation complicate the processing of insurance claims.

And finally, the most difficult thing we had to do was to put into effect a system of mutualization where you provide for catastrophic risk in a way that enables small and mid-size businesses to keep offering their employees coverage even when one of them has to take a particularly expensive drug.

Because of this mutualization of risk, the premiums remain affordable even for small and mid-size businesses.

The industry's input in solving the mutualization issue creates the basis for an even greater cooperation in the future in terms of catastrophe insurance, which is option 3 outlined by your committee.

I cannot speak for the Quebec government, but I believe that from their point of view the results attained thus far may not be entirely satisfactory but the government has attained some of its key objectives.

First of all, everyone in Quebec can now be covered under an insurance plan which, as you were saying earlier on, is relatively generous.

Everyone has standard coverage. Everyone is also covered in case of financial hardship. And, what is significant in terms of tax dollars, elderly people and people receiving social assistance now, depending on their income, pay a larger part of their drug costs than before.

On the other hand, the government is faced with a number of difficult challenges. First of all, the rapid increase in the QHIP's drug expenses. That is obviously also a problem for private insurance plans considering the rise in the cost of medicine.

The government is perpetually trying to keep health insurance plan premiums affordable while at the same time assisting low-income people.

The costs underwritten by Quebec's Treasury Board are continually going up and each year the health insurance plan loses money.

Furthermore, the cost to high-income elderly people has gone up, since the plan was put into effect, from a few dollars per prescription to a $385.00 annual premium, and this has caused a measure of discontent among the people concerned.

The premiums paid by this category of policy holders is, however, to a large degree subsidized, for a retired person's participation in a private group insurance plan actually costs about $1,200.00 a year.

Experience has taught us, Mr. Chairman, that the second option outlined in your report is workable. We suggest, however, that your committee take into account, in considering this second option, the costs that might have to be borne by the public sector.

The putting into effect of a universal plan can obviously weigh on the public purse, even if the private sector plays an important complementary role, especially with an aging population.

Mr. Chairman, this concludes our testimony. We will now gladly answer any questions.

[English]

The Chairman: We do not have a copy of your opening statement. We have the red book you gave us. If you can pull all your papers together and leave us with a copy of your opening statement, that would be helpful.

You will remember that, in our volume 4, we had some data which indicated, that 97 per cent of Canadians had some form of drug coverage, and so on. A number of witnesses do not accept that data. Can your staff and our staff ger together and come up with an agreed set of numbers? I am not suggesting that your numbers are wrong. During your first presentation to the committee we had a discussion as to whether or not the numbers were right. We must get a handle on the data so we do not get into factual arguments with people.

Mr. Daniels: We would be happy to share our information with you. We are currently undertaking an update of that data so you will have more. We have seen some preliminary runs, and the general trend of this data is not changing at all.

Mr. Traversy: That is absolutely correct, Mr. Chairman.

The Chairman: We would like to be able to respond to the critics.

My next point concerns the one that, in fact, Senator Morin raised. If you look at the history of pension plans, you will remember defined benefit plans. Of course, you are familiar with those. A defined benefit plan is one where your pension is based on so much per year times the number of years worked. Over the last 10 years, as those types of plans became very expensive, the move was towards so-called defined contribution plans, in which the employee and the employer put a certain amount of money into an RRSP every year. How much the pension is worth at the end is a function of how well the RRSP does. If the markets go down, the pension does not pay as good a pension as it would otherwise.

We have some anecdotal evidence which suggests that the same kind of switch is now starting to occur with respect to drug plans. In other words, as opposed to a drug plan like the federal one, where the federal government pays 80 per cent, the employee pays 20 per cent, and there is no cap, there is a trend towards paying a maximum amount per year. This is because it is becoming very expensive for employers, particularly as biotech drugs are put on the list.

There is no question that is occurring in the United States, but I happen to know of some employers who have made such a switch in Canada. I need not identify them here. I am trying to understand the extent to which that is an aberration. In 10 years from now, is that where we will be?

Mr. Traversy: I would not want to hazard a guess as to where we will be 10 years from now.

The Chairman: Make a try.

Mr. Traversy: I am certainly aware of plans in which non-drug benefits are being replaced by, or at least somewhat substituted by, what are sometimes called "health spending accounts." For example, previously, an employee might have had entitlement to eye glasses or whatever, but now, rather than adhering to a long schedule of health related items, they give him a certain amount, say, $500, and the employee can purchase whatever health related items he needs.

I am not aware that that is a significant phenomenon with respect to the drug component of supplementary health insurance plans at this time. Certainly, in our recent discussions with our member companies and other very knowledgeable persons, I have not heard that that is commonplace yet, although I stand to be corrected.

The Chairman: As biotech drugs kick in with their very large costs, perhaps thousands of dollars a shot, is there any anticipation that that might happen?

Mr. Traversy: There is no doubt that high-cost drugs are a real concern for plan sponsors now. You are quite right, Mr. Chairman, to raise the prospect that plans will have to adapt. The adaptation you have just suggested, I am sure, would be one of the options that will be considered, and perhaps sooner rather than later. There is no question that they really are a problem for employer-sponsored drug plans.

The Chairman: Think of the example where the individual with an income of $70,000 is paying $10,000 a year in his co-payments. To some of us, if not all of us on the committee, that is wrong in a country that believes an individual should not suffer undue financial hardship as a result of being sick, particularly in view of the fact that, if the person were hospitalized, he would get the drugs for nothing and the government would, in addition, incur a cost of $1,500 a day, or whatever it costs to keep him in the hospital.

How would we go about designing a proposal, which is close to your option three, that is aimed at dealing with those kinds of cases? In other words, not disrupt anything that is going on now, but deal with a situation where the drug burden became very heavy. I recognize that we would have to define "very heavy", and that would depend on someone's income. I mean, "very heavy" would be a much smaller number if a person's income is $20,000 a year as opposed to $200,000 a year. How do we go about designing a plan that would pick up all of those people and would solve Yves' problem in the sense that, if it is a national plan, the sample would be big enough that it would be easy to manage? I am not suggesting that is the answer; I just want to know what process we should follow.

Mr. Daniels: Senator, I would make the very general comment that the burden of our testimony here is that option three is eminently doable.

We are already, in this province, dealing with an option two, although it is not perfect.

The Chairman: Option three deals with the catastrophic situation.

Mr. Daniels: A catastrophic drug plan is doable. It will be for the governments of the day to judge whether the costs are manageable. In our view, they are within the kind of envelope that would be manageable.

The Chairman: I am sorry to press you, but it will take a lot of technical knowledge that does not exist on this committee or in our staff to come up with a precise proposal that would define, for government and for the people, what is too much and relate it to income. People can then argue about that. The concept to me is very clear, but I do not know how I go from the concept to suggesting that someone ought to buy a certain plan or a version of it. That is where the input of industry will make a difference. You people have all this information.

Mr. Traversy: Mr. Chairman, your committee has already taken a very important step in that you now have an approach on the table that has obviously galvanized attention in circles like our industry, and others. We would be delighted to contribute anything we can, should your committee want to pursue this. We know you have at least one more report to prepare. In the months ahead, should you want to delve into this more fully, we will certainly bring whatever we can to the table. As Yves has mentioned, there are a number of approaches you can take. In the context of the Quebec experience, the whole problem of high drug expenses had to be dealt with in order to put the $750 cap in place and make it affordable, even in small work places.

[Translation]

Mr. Millette: Yes, we may have limited experience with this, but our first true encounter with catastrophe coverage was with the mutualization scheme we had to set up in order to preserve insurance coverage for small businesses.

The experience has been interesting up to now since it has enabled us to group the calamity claims and spread them out over the whole of the population. That might be something that could be taken over by government.

Except that under the system as set up by the industry, at the present time only some of the claims are mutualized. I think the annual figure is currently around 15 million dollars. But I know that is increasing very quickly, by some 30 per cent a year.

Let me recall, for the sake of example, that this week we submitted a report to the minister of Health outlining our experience thus far since the plan started to pay out claims exceeding various amounts depending on the number of employees in a given company. But, for example, in the drug insurance plan's first year of operation in Quebec, that is to say 1997, the Compensation Fund did not have to pay out anything. In that year, there were no claims for expenses over $20,000.00.

In 1998, there were 46 such claims. And 76 in 1999, the last year we have the figures for. You can see that the numbers are going up very quickly. I mean the claims for amounts over $20,000.00.

If you scale that back and look at the $10,000 claims, you begin to see minimum payouts of $5,000.00 per year, and that builds up very quickly.

A cursory examination shows that in 1999 there were 8 claims for amounts in excess of $50,000.00, both private plans and the government plan.

If we bring that down do $20,000.00, the number of claims is 72, but that is for a limited group only.

If you take all the various plans together, that is to say companies with at least 125 employees, plus the government plan, you get a much higher figure, with around $700,000.00 worth of claims in excess of $50,000.00 this year.

If we look at the $20,000.00 claims, we estimate that the total amount would be in the tens of million of dollars.

If you come down to $10,000.00, then you are looking at hundreds of million of dollars. And if you go down to $6,000.00, you get, just for Quebec, calamity compensation of around 1 billion dollars in compensation for catastrophe claims.

So the more generous your catastrophe coverage is, the higher the costs, with an exponential rate of increase.

[English]

Mr. Traversy: Mr. Chairman, I have a supplementary piece of information on the incidents of these very high drug expenses. Recently, someone who has been conducting a national study of the frequency distribution of high drug expenses was telling me that the cases where an individual patient requires drugs exceeding the $5,000 per year threshold, constitute between 1 per cent and 2 per cent of all patients. However, those 1 per cent to 2 per cent of cases account for 15 per cent to 20 per cent of the overall drug cost in the system.

Senator Morin: That is true of every situation in health care costs.

The Chairman: That absolutely confirms the need for a catastrophic plan. You are saying that that 1 per cent or 2 per cent are having to absorb 15 per cent to 20 per cent of the cost. They are exactly the kind of people government ought to be helping.

Might I suggest that some time in the next couple of weeks your staff and our staff get together and figure out how we can put a real plan together? That group should include Yves, because it is important to have someone who understands the Quebec model.

Mr. Daniels: We would be happy to do that. However, I just want to make it clear that the broad outlines of a catastrophic plan already exist. A lot of thought and work has already gone into this. We are not starting at ground zero. Quite apart from the critical, practical information that we have learned out of the Quebec milieu, we have done a lot of work on a catastrophic plan.

The Chairman: Thank you.

Senator Morin: How many provinces do not have a catastrophic plan? I am referring to the situation where a a citizen may have to pay out-of-pocket drug expenses of $5,000. My impression is that that would be a relatively small number of provinces.

Mr. Traversy: I believe there are five provinces in which that would be the case. The four Atlantic provinces and the province of Alberta have a program which is voluntarily accessible to any citizen who wants to go into it. However some do not go in and they could be exposed to these high costs.

Senator Morin: That is a special issue. They make that choice.

Am I correct in saying that Alberta subsidizes a private company?

Mr. Traversy: Yes.

Senator Morin: It would be ridiculous not to take advantage of that. What percentage of the Canadian population do the Atlantic provinces represent?

Mr. Daniels: Less than 20 per cent.

Senator Morin: Catastrophic insurance applies to less than20 per cent of the population.

The Chairman: Just so that we are clear: the people in the Atlantic we are talking about have no coverage. My suggestion was that the catastrophic insurance would apply in the case of the example in our report, where someone has a drug plan, but the co-payment portion of the drug plan is still catastrophic. It is the 1 per cent or the 2 per cent that I am worried about.

Senator Morin: I am certain that this would not apply to Quebec, and that it would not apply to those people in Alberta who are covered. At least two provinces are out.

The Chairman: I am sorry, but that is wrong. Please understand the difference. The difference is whether you have no coverage, or whether you have to pay a co-payment. Under the Alberta Blue Cross plan it is a co-payment system.

Senator Morin: There is no cap on the co-payment.

The Chairman: That is the problem.

Senator Morin: Is Quebec the only province with a cap on the co-payment?

Mr. Daniels: No. I think B.C. may have a cap on total exposure. They have just raised it from $800 to $2,000. However, if I recall correctly, it does not kick in until quite late in the day.

Mr. Traversy: Ontario has the Trillium Plan which is intended to assist those who face expenditures above 4 per cent of their total income. That is not a plan, however, that is necessarily universally known. In a number of provinces you could find public programs that have an upper limit. That, as the Chairman has mentioned, is not the same as saying that all citizens would have knowledge of and/or access to those provincial plans. People can be in a very good private plan, but still face a significant burden through co-payments and whatnot.

Senator Morin: Even if we do have a catastrophic plan, we must consider what the various provinces are already offering.

Mr. Traversy: Absolutely.

Senator Morin: What is the industry position on the Alberta plan? Here we are subsidizing private industry. That is not one of our options. What is your opinion of that, Mr. Daniels?

Mr. Daniels: Mr. Chairman, the industry is quite comfortable with the arrangement in Alberta. Alberta deals effectively with its own company on this. Of course, you can find us quarrelling about the fact that the majority of my members do not get to compete.

Senator Morin: Would you favour that? Can you compare that to a mixed plan like the one that Mr. Millette was describing?

Mr. Daniels: I do not think it makes sense to make changes in a system that is working relatively well. Overall, as we have said, we have a good complementarity between the core public programs and the envelope of private programs that fit around that. Our companies try to make the systems we have in place now work better, which is what gave rise to the situation in Quebec. I am not quite sure, in historical terms, what gave rise to the Alberta model. I do not know what it was that led Alberta to want to deal with a local company, but I can guess what it was, and that is not an unfamiliar situation in Canada.

By and large, we want to use mechanisms that are already in place, mechanisisms that we understand, and that, quite frankly, work. I cannot recall a time when our industry councils have suggested that we toss out a system and start with something new.

[Translation]

Senator Morin: I have one last question for Mr. Millette. You gave us a clear description of the advantages of Quebec's drug insurance system. The major drawback that people find is that a contribution is also required of people receiving social assistance and of elderly people with low incomes.

Perhaps more will be said about this later, but research does point to a decline in the health of elderly people, since they began to contribute in a way that was not required of them before this plan went into effect.

I would like to have your thoughts on that matter and also on the fact that although government expenses are going up, these expenses are not increasing as quickly now that low income social security recipients and elderly people have seen their premiums go up under the co-payment system.

In the first year of operation, the government of Quebec made a significant profit because of the $100 deductible and the co-payment scheme for elderly people.

Mr. Millette: We believe that the main problem with the Quebec's plan is that it includes under one program both drug expense refunds and an assistance plan.

We believe that Quebec's plan should keep those two aspects separate. We feel that the financial assistance plan should come under a tax program instead of being funded under the drug insurance plan since that completely distorts the figures and prevents us from knowing exactly how much is being paid out for drug expenses.

What most people criticize in Quebec's plan however is the insufficient level of assistance, at least as far as certain people are concerned.

The support given to social assistance recipients is significant, however. The great majority of them will end up not having to pay the premium themselves and most will have to pay not $750.00 a year, but $200.00 only.

So the premium is subsidized as are some of the drug expenses incurred by people receiving assistance.

What people most dislike about the drug insurance plan, I think, is the $8.33 a month that they have to pay. But there might be a way of overcoming that.

[English]

Senator Keon: Can I shift the focus, gentlemen, to another area of catastrophe, and that is out-of-country health catastrophes that are causing tremendous problems for people now? I am talking about someone who has been buying supplemental insurance, has a heart attack, and has to travel out of the country often and cannot get appropriate insurance coverage. That person faces financial ruin if he is caught with a health catastrophe in a foreign country. In your executive summary you mention that supplementary health insurance plans can deal with out-of-country health care. They can certainly deal with most circumstances, but they cannot deal with a catastrophic situation. Where does the solution lie?

Mr. Daniels: I will make a couple of remarks, and I will ask my colleague, Mr. Frank Fotia, Vice-President of Group Insurance and Pensions, to speak to the details of group plans.

It is my understanding of the characteristics of most group plans that they do not put any limits on pre-existing conditions. If a retiree with a heart condition has a group plan with no limits, he can pretty much travel. However, if there are limits on the group plan, and he has to buy private coverage then, as costs go up abroad, the costs of getting coverage like that will be higher. In some cases it is impossible to get that coverage.

Mr. Frank Fotia, Vice-President of Group Insurance and Pensions, Canadian Life and Health Insurance Association Inc.: For the most part, as Mr. Daniels mentioned, in a group plan this is not an issue. The issue that you raised deals primarily with retirees who no longer have access to coverage through a group plan. Having some experience in the travel insurance industry, I can say that most people over 65 who are at least medically stable have access to out-of-country medical insurance through a variety of providers, albeit their assessed premium is based on their individual risk. The greater the risk factor that they present, the greater the premium.

A very small percentage of travellers, because of their pre-existing health conditions, are virtually uninsurable. It is extremely difficult for that small percentage to get coverage simply because of the risk factors and the enormous cost that would be associated with a medical emergency. I can assure you that they represent a very small minority.

Senator Keon: However, a fairly significant group of people falls into that category. I am thinking of the small businessman who is self-employed, who is not part of a large corporation and a group plan, and who has to travel for his livelihood. I am also thinking of the seniors that I have come in contact with, many of whom are women who were housewives and who raised their families in the traditional way. They were buying supplemental insurance when they travelled but, if they suddenly got a serious diagnosis, they could not get insurance. I believe that this is a serious problem that we, as a society, have to address.

Mr. Daniels: You certainly raise an issue of real importance. The question of out-of-country medical insurance did not become an issue until provincial plans starting dropping. You will recall that, in the province of Ontario, that at first it was unlimited and we were a cash cow for the Florida hospital system. Then we moved to $400 a day, and now we are at $100 a day, or whatever it is. Of course, into the breach step the private carriers.

That did not present a problem for the group plan holders. Of course, when dealing with individual coverage, then the carriers do not have experience ratings, so they will price as best they can. The dimension of the problem that you have raised, senator, put in a demographic context, means that the problem will not go away. It will get bigger.

Not to beg a question, because I certainly have no answer for it, but I thought you were going to ask me about terrorism insurance. It is a huge issue. There are terrorism exclusions in most travel contracts. They are not being enforced this time around, but they certainly will be in the future. I cannot imagine that new contracts that are being written that have such exclusions will not have meaning. It is not just the 65-year-old man with a heart condition who has to travel that we have to think about, we also have to think of the 35-year-old person who is travelling abroad and cannot get terrorism coverage.

If you push, Mr. Chairman, you will see how integral to the fabric of society is not just coverage for this sort of thing, but perhaps, more broadly, the huge issue of property and casualty, and the whole issue of how much we depend upon being able to offset risk with insurance. If there are risk categories that all of a sudden become uninsurable for one reason or another, then you have a real issue. You have, for example, the move that the United States Congress is currently taking to underwrite terrorism clauses. We will see many moves like that. A piece of this concerns the issue that caused you to raise the first question.

I am not aware of any comprehensive fix for all this. There is none. There is no question that the industry is certainly seized by these issues.

Senator Robertson: Gentlemen, we talked about single seniors who find it difficult to obtain coverage because of age and illness, or identifiable illness. What percentage of those single seniors is rejected?

Mr. Fotia: My understanding is that it is less than 10 per cent. These coverages are individually underwritten based on a risk factor.

It is a very competitive industry. There are many providers. Even though a person may have a pre-existing health condition, provided that they have demonstrated a period of medical stability where they are physically capable of travelling, and have a good likelihood of travelling and enjoying themselves and remaining well, they will get coverage, albeit it will be a fair bit more expensive than a healthy individual of the same age group, or someone younger.

Mr. Daniels: May I just add parenthetically, that I think it is also true that the companies are dealing with this in part by limiting the amount of time you can spend out of the country. There are various ways of shaving down the exposure. As you know, some companies will not insure a traveller for more than a few weeks.

Senator Robertson: I am asking this because next week the president of a group of "snowbirds" will undoubtedly raise this question before our committee.

You mentioned that the recipients of social assistance were looked after by the department. How do you handle the large number of seniors who have very limited incomes in Quebec? Most of their revenues would come from the federal government and not the provincial government.

Mr. Millette: The same scale of revenue is used for the seniors as for people in the welfare system.

Senator Robertson: They would have to apprise the federal government, since their social security comes from the feds.

Mr. Millette: The disclosure is made when the senior first buys drugs at the the pharmacy. Otherwise it is made in the tax return.

Senator Robertson: Does the industry have any problems with travellers buying more than one single protection plan from more than one insurance company? Is that legal, or is that limited?

Mr. Fotia: There is nothing illegal about ensuring that you have as much protection as possible, Senator. However, there is a coordination of benefits clause in these agreements so that, if there is duplication of payments, the companies will work together to ensure that they are not all paying the same loss, and that they are coordinating their payments.

Senator Maheu: I have a brief question on snowbirds coverage.

Senator Morin: You can see where our interest lies.

The Chairman: It says something about our age.

Senator Maheu: We happen to be well protected right now. With snowbirds I have heard that some snowbirds who are travelling to the United States are not insuring for the full length of their stay. They are starting to insure the last three months of their six-month stay. Is that legal? I know that is happening.

Mr. Fotia: People buying the insurance may be buying it for that period of time because they are declaring that that is the period of time they will be travelling. I would strongly advise them not to do that because it raises a misrepresentation issue. For their own protection, they should be forthright and honest on their application form as to when they are travelling, and for how long they are travelling.

Senator Maheu: I know of some who are doing it because of the cost element.

Mr. Fotia: The potential costs at the other end would be far greater than the few extra hundred dollars of premium they may have to pay at the outset.

Mr. Daniels: This is important counsel from a former practitioner. It makes no sense at all for people to ever misrepresent their intentions because, when they do that, the companies will clamp down on them. They do it not to be mean, but because, when they price these things, they price them for everybody and, if they independently start veering away from the terms of the contract, they will be putting all their policyholders at risk.

The Chairman: In closing I would just note that, when we meet, the more you can tell us about who the 1 to 2 per cent are who are costing 15 to 20 per cent of the cost, the better. We need to identify them, because they would be our target group.

I completely buy Mr. Millette's point, which is that we want to separate an income support program from an insurance program. We are in the insurance business, not the income support business.

Finally, just to put the generosity of the Quebec program in perspective, because Mr. Millette said the maximum payment anybody pays for drugs is $750 a year; in Saskatchewan seniors pay a premium - not a maximum - of $1,600 a year, going up to $2,000, for drug coverage. That is paid twice a year - $800 up to $1,000 every six months. Effectively, that is an insurance premium that seniors pay.

I want to put that in perspective with respect to Saskatchewan, where you would expect, intuitively, the number to be lower. I want to point out how effective or generous - and I do not mean "generous" in a pejorative sense - the Quebec plan is. We were quite startled by the Saskatchewan numbers, and stories about people having to decide whether they were going to buy food or pay their insurance premium at the end of the month.

Do you have any last comments?

Mr. Daniels: I just want to thank you and your colleagues for giving us the opportunity to flight-test some of these really important ideas today. I would also thank you for this opportunity to inform you on these issues that will be a matter of critical public policy and industrial policy. This forum is as good as it always was.

The Chairman: Thank you for coming. We will have many more conversations with you. Yves, it was nice to meet you.

Senators, our next panel consists of Dr. Margaret Somerville, a professor of Law at McGill, and acting director of the McGill Centre for Medicine, Ethics and Law. As some of you will recall, she has testified before us before; Dr. Robyn Tamblyn, associate professor of the Faculty of Medicine at McGill University; and Mr. Kevin Skilton, the Director of Policy Planning forMerck Frosst.

Professor Somerville is an ethicist.

If we have time at the end, there is one question I want to ask you which does not relate to this. Alternatively, I will phone and ask you my question.

Mr. Skilton will begin.

Mr. Kevin Skilton, Director of Policy Planning, Merck Frosst Canada Ltd.: I want to thank you, Mr. Chairman, and the committee at large for the efforts and the energies that you are putting into this process, a process which is very important for Canadians, and very important for industry.

Mr. Chairman and honourable senators, I just want to echo some of the comments made by the previous panel.

I read your "Issues and Options" paper with great interest. It is an outstanding piece of work. I was particularly pleased to note the emphasis that the committee has placed on the use of evidence to guide decision making. I was also intrigued to see the word "behaviours" being used in the "Issues and Options" paper because I believe it shows an awareness of the complex interplay between what it is we aim to achieve and the policies that we work with, and the intended and unintended behaviours that happen at the end of the day.

It also shows a deep understanding and appreciation for the need to carefully think through both the issues and the options, and the need to rally stakeholders around a common goal. If, at the end of the day we do not find a way to work together, we will continue to do what we have been doing for the last several years, which is really working against one another.

The content of my presentation is reflected in its title, "Towards Evidence-Based Pharmaceutical Policy." My goal is to contribute to the base of evidence that the committee needs for its deliberations. I believe that the evidence presented may persuade the committee to expand, if not redirect, the options presently being considered.

The committee has chosen to focus on two areas: one, a need to contain cost, contrasted by, two, the need to expand coverage. The committee has stated that its present direction is to increase regulation and controls in the drug industry. Rather than debate whether this is right or wrong, I would like to ensure that the committee has a clear understanding of the regulatory environment in which drugs are managed in Canada. If I were to conclude my presentation at this moment, I would conclude with the following:

From an economic perspective the regulatory and policy environment is hindering Canada's ability to compete internationally for investments in pharmaceutical research and development.

From a health care perspective, the management of new drugs is contributing to sub-optimal outcomes for patients, and sub-optimal value for the health care system.

Finally, solutions do exist that can unite the interests of patients, providers, payers and industry in a collective effort that drives toward a proper focus on cost rooted in a culture of evidence. This is what we call patient health management.

The Chairman: Are you going to read the whole brief?

Mr. Skilton: No, I am not.

The Chairman: I want to make absolutely sure we have time for questions.

Mr. Skilton: In each of your packages is all of the evidence to which I will refer. I will proceed to the conclusions that are based on the evidence. There is, however, one part that I would like to deal with before I dive into the health care aspect, and that is the industrial policy aspect and the concept of integrating health and economic policies.

The benefit of ensuring that Canada's health and economic policies are synergistic and not combative is becoming increasingly clear. Changes to the Patent Act in 1987 and 1993 have opened our eyes to what is possible. Today, the innovative pharmaceutical industry invests over $1 billion a year in R&D, and the industry, clearly, is a cornerstone in the knowledge-based economy in Canada.

We built the Merck Frosst Centre for Therapeutic Research in 1991. We employ over 300 world-class scientists in our facility in Kirkland. Important discoveries have already been made in the field of asthma with our product Singulair, and in arthritis with our product Vioxx.

We have also built a world-class manufacturing facility, which by 2002 will export over 80 per cent of its production.

Under the head of "A competitive knowledge-based and global economy," we believe that to attract investments requires that we benchmark ourselves on the enabling conditions that position Canada to compete favourably with other countries.

Mr. Chairman, I would draw your attention to a report that was recently launched by the United Kingdom in which they have tabled their competitiveness and performance indicators. They are clearly benchmarking themselves against other countries and positioning their country to compete aggressively for their share of investment of pharmaceutical research and development funds. I will leave that with you.

Similarly, Australia, with its action agenda, is set up to develop key industries including pharmaceuticals. Dr. Henry Friesen who appeared before you earlier said that he thinks the role of the federal government is to articulate the vision for Canada's health care system broadly and in an inspired way, and that we are part of an effort to say that there is so much opportunity in Canada if we can get it right and work together.

The challenge that the federal government has is one of coordination in the development of health and economic policies as we move forward towards a common goal of prosperity for Canada. It is not an easy task, but if you look at the way the United Kingdom is set up, even administratively, they are set up to be somewhat more efficient. That is something that we will have to compete with and try to manage in our own system.

We now get down to the task at hand. The question that the committee posed is: What, if anything, can be done to contain the rate of increase of prescription drug costs and publicly funded plans? It is important to be clear on what the question implies, and what options are open to us as we approach the question from different perspectives. Is the rate of increase of prescription drug costs appropriate, or, put differently, is the use of drugs appropriate?

Let us look at two scenarios. One scenario is: If the evidence supports the appropriate use of drugs and stakeholders conclude that the rate of increase of prescription drug costs is still not sustainable, then clearly this leads down the path of rationing, and perhaps provides the rationale for increased regulation and control. The other scenario is that the evidence supports the appropriate use of drugs and stakeholders conclude that the need to find ways to accommodate growth in this rapidly growing area of health care is important. I believe that this was previously proposed to the committee by the Canadian Institute of Actuaries.

Of course, buried in here is the more salient question for the time. What can we do to ensure that providers and patients have a proper focus on cost benefit, while remaining rooted in evidence? A solution contains the benefits of minimizing the need for rationing, slowing the rate at which prescription drug costs will increase, and optimizing the value that new medicines bring to savings in other parts of the health care system.

As an aside, members of this committee would agree that it is in everyone's interest to work together to achieve this aim. From the perspective of the innovative pharmaceutical industry, realizing revenue growth from the overuse or inappropriate use of medicines is not a viable sustainable strategy for growth. I would like to emphasize that we are willing partners to cost-effective, evidence-based pharmaceutical care.

Clearly, the approach we must take to arrive at a set of options that reflect the challenges of our environment, as well as the needs of Canadians, involves the following few items which I will list.

It involves taking stock of current regulations. If the proposition is that we need increased regulations, then we must be mindful of what is out there today.

It involves reviewing how pervasive and how aggressive the current cost benefit management practices are, and whether they achieve the cost-benefit management goals that they are meant to achieve.

It also involves considering the evidence on appropriate use, the question being: Do physicians' prescribing practices reflect a proper focus on cost benefit and clinical evidence, or is it what many perceive it to be, a total disregard for cost?

Considering the evidence on the impact of coverage decisions on decisions at point of care, do coverage decisions, or the decisions that are made by payers, contribute to inappropriate prescribing?

In the package, Mr. Chairman, I provide the evidence to support the conclusions around those questions.

I will conclude on those points now.

The evidence shows that aggressive cost-benefit management already pervades public drug plans, as evidenced by the majority of provinces that do not list new medicines. Mr. Chairman and members of the committee, it may surprise you that, over the last several years, six provinces have chosen not to list over 40 per cent of new medicines. This results in de facto un-insurance. On the one hand we are trying to look at the need to expand coverage, and coverage is important if it covers what you need, and on the other hand there is evidence to show that prescribing practices do reflect a focus on cost benefit when the clinical criteria that defines coverage is rooted in the clinical evidence that guides care. What happens when the two do not coincide is you get friction with one another.

There is evidence that drug plan coverage decisions impact at point of prescribing and, when not rooted in evidence, we believe this poses a risk to patient health and to unnecessarily increasing overall system costs.

You will hear from Dr. Terry Montague that there is also evidence which indicates that, when stakeholders are immersed in an integrated health care system that is based in partnership and that provides easy access to measurement and feedback on care, stakeholders converge naturally towards a proper focus on cost benefit that is consistent with the evidence.

I will conclude there. I know you will have questions on reference pricing and other issues. I will be happy to respond to those questions later.

The Chairman: Thank you. Dr. Tamblyn?

Dr. Robyn Tamblyn, Associate Professor, Faculty of Medicine, McGill University: Mr. Chairman, I will be making a slide presentation.

I read with interest the committee's report. I wish to commend you for your thoughtful review of the issues. I am highly supportive of many of the thoughts contained in the report - primary care reform, specialized care units, a national health commissioner, a very interesting idea, the federal role in health promotion-disease prevention and, most important, an infostructure and infrastructure for health care delivery.

I wish to specifically highlight two issues. Let me first address issues and options for the financing role. In your report, you refer to the option of user fees. User fees, in one form or another, are a total tax on service utilization, a point-of-source fee in terms of collecting from patients who are using the system. This is a policy of making the sick pay for their health care. I am not sure that that has really been an underlying value of our health care system to this point in time.

The second area I want to talk about is disease prevention and health promotion. This is a very important goal, a laudatory goal, but the report does not suggest mechanisms for putting this action in place. The federal government could definitely play a role here, one that probably the provinces may not be able to take in that way.

The next slide discusses user fees - unsubstantiated assumptions and unintended impacts. The user fee option is based on a set of unsubstantiated assumptions; it is not strongly evidence-based. The first assumption is that free care will lead to a lot of unnecessary use by many people. It assumes that people will hang out in emergency rooms, rather than going down to the bars on Crescent Street. The next assumption is that consumers know when less expensive medications can be substituted and know about surgical interventions. It assumes that consumers will have the knowledge to make those decisions, even though we license health professionals because we believe they and only they can make those decisions.

The third unsubstantiated assumption is that user fees will reduce only unnecessary services. The fourth is that income-indexed user fees will be the answer. Quebec was a bit ahead of its time, because they tried that out, and as such can provide a prototype for you.

The next slide has two graphs on it. The Quebec government commissioned a study to look at their new policy of coinsurance and deductibles for elderly and welfare recipients that allowed them to bring in the universal health pharmacare plan, which in itself is a laudatory goal, but they increased user fees for previously insured in order to finance this plan.

A large, random sample of the population - taking into account history of medication use three years prior and one year after the policy - revealed, not unexpectedly, that user fees reduces utilization. Usually, people stop there and say, "Well, this is exactly what we wanted. We have cut our costs. People use less." They jump to the conclusion that there was unnecessary use.

User fees will of course target people who are heavy service users. In terms of prescription drug use, which is what this study is looking at, this graph shows that after the policy was implemented there was a large drop in consumption in people who used a lot of drugs.

The next slide shows the effects of user fees on prescription drug use among the elderly. The study looked at three groups: those who received a full guaranteed income supplement, those who received a partial supplement, and those who received no supplement. Those who receive no supplement have an annual income in excess of $14,000 and are in the $750 maximum zone for prescription drugs.

The first piece of good news is that income-indexing did produce a somewhat equitable distribution of reductions across the income spectrum in the elderly. The interesting thing you will see here is that the very poor - those are the people at the top, the red line - are those who are using a lot of prescription drugs; also interesting - and you may be aware of this Statistics Canada evidence - is the fact that they die on average about 10 years earlier. So, they are sicker, they are using more drugs, and they are going to die earlier. By the way, we are talking, in large part, about elderly women. This group is about 70 per cent elderly women, probably most of them single.

The next slide tells us about the unintended impact of user fees - and this has been studied on two occasions. The question we are trying to answer here is this: "Do user fees reduce both essential and less essential drug use? Now to the bad news: Across the board, user fees reduce the use of essential medications - medications for asthma, for mental illness, for hypertension, for cardiac disease. Those are the medications we looked at. The other bad news is that in populations of welfare and elderly citizens, the ratio is 2:1, two essential medications for every one less essential medication. The other piece of bad news is that essential drugs are more costly than less essential drugs.

Hence, when a co-insurance plan is put in place, there is an incentive to reduce essential drug use. This true both for the elderly and - as the next page will show - for welfare recipients, who made even more dramatic reductions.

The consequences are outlined in an accompanying paper. I will not go into them in detail here, but there were downstream impacts, even in the short term. Emergency room visits and hospitalizations were up. I do not think that is the type of consequence we want.

The last bit of news, really the most unfortunate, I think, involves the mentally ill. Special programs to reduce the burden of user fees in people with severe mental illness -schizophrenia and psychosis - did not eliminate reductions in essential drug use. Under the program, there would be a maximum payment of $16.67 a month for people with severe mental illness. The graph at the bottom of page 5 demonstrates the impact of the special program on that population. There was a very rapid reduction in the use of anti-psychotic, anti-schizophrenic medication. One of the biggest challenges in managing the mentally ill is managing compliance. Hence, any extra burden on them in terms of a financial disincentive is very counterproductive.

The graph on the final page, page 6, shows that utilization of health care services rose dramatically. For example, emergency room visits climbed by 457 per cent, followed by medical visits and hospital admissions, even at a time when hospitals were closing and there was reduced access. This was a very severe impact. To the credit of the Quebec government, however, they changed the policy and allowed free medication in this group. The government was incredibly responsive, essentially, to its own requisitioned evaluation.

Based on this information, I would hope that user fees is not something that you will consider. In my mind, they penalize the very sick, and they will penalize the poor, even with income indexing.

The final point I want to touch on involves the issue of health promotion-disease prevention. One thing we have learned from the Whitehall studies, from studies here in Canada, is that many of the determinants of health are outside the health care system. The health care system is like the final resting point, the graveyard of what you did or did not do right in your life or the conditions in the environment, et cetera.

Many of the things that will allow you to creatively and effectively bring in place things that will promote health and prevent disease will be outside of the health care system. I want to discuss an example of that - and that is injury prevention. Injuries are the first leading cause of death for people aged 1 to 40. For the most part, many of these injuries are preventable. There has been a fair bit of epidemiological research in terms of injuries prevention, et cetera. Injuries can be prevented by implementing product safety standards, by building better roads, by implementing environmental standards.

Nevertheless, it is not easy to make those changes. The health care sector is waving a red flag, but with no real model for how Consumer and Corporate Affairs and Transport Canada, for example, can implement changes. We need models for cross-jurisdictional action plans. There has been some success in terms of cigarette smoking, but the battle has been uphill.

Hence, if we are really serious about health promotion-disease prevention, we will have to come up with some creative models for cross-jurisdictional initiatives.

The Chairman: You are absolutely correct. Our paper did not contain mechanisms for implementing the population health role, partly because we were hoping that people would suggest mechanisms to us. Therefore, if either today or at some later point you have some thoughts on how we should do that, we would love to hear them.

Dr. Margaret A. Somerville, Acting Director, McGill Centre for Medicine, Ethics and Law, McGill University: Thank you for asking me to appear. I have submitted a brief written report.

I wish to preface my remarks by saying - as have the other speakers - that your report is to be strongly commended - although that does not mean that I do not find anything wrong with it. What I have done in my written presentation is to pull out some of the issues in your report that I would see as raising values, ethics issues, because, as you know, that is the area I work in. I shall go through them quickly.

You make the statement that the report is "factual and non-ideological." My concern, although not huge, about that is that the health care system and decisions about it must be based on values, and some of those values will fit with certain ideological positions and contravene others. It is very important for us to recognize that to make those decisions ethically we have to justify the value choices that we make. I do not think that that kind of approach is outlined anywhere in the report.

The second purpose of the report is to "launch a public debate," and again I commend you on doing that. I have, however, attached to my written presentation an appendix, which is an outline of a research project entitled "Ethics in the Public Square." Much as we talk about putting ethics into public policy, and we talk about having the public involved in this very important decision making - in fact, we even speak about it being an ethical imperative to have the public involved in decision making about things such as a health care system - we do not have the developed mechanisms to do it. As well, we have a very inadequately developed system of ethics at the organizational, institutional and societal levels. Most of the ethics that we have worked out in relation to health care are at the physician/patient or health care professional patient levels.

This leads me to the third point, where you point out that in order to make good public policy you have to know what the objective of that public policy is. Again, I would query the report in terms of its articulation of the values that the health care system upholds. I know you wanted to avoid ideology, but it is extremely important that you state values. I would suggest to you that many of the problems, certainly the ones that we see in ethics in the health care system, are not simply that people have perceived that they may not get the health care they want, or as quickly as they want, but also have to do with the fact that that goes to the heart of what we think are important as values both for ourselves individually and for Canadian society.

I have attached as appendix B a list of features that shows, depending on how you characterize and make the decisions that have an impact on values - and all decisions in the health care system come into that category - that you can have a very different impact. If I may, there is a typographical error in the third-to-last line. The first and second groups should be reversed: It should say, "...the decision making will have the second group of features and not the first," rather than the way it is at present. In other words, the decision making impact can be manipulated by doing things like hiding who makes the decision.

I was involved in a survey approximately 18 months ago to try to find out who decided what treatments were available for certain cancer care in Canada, and in some of the provinces we could not find out who made those decisions. If you look at this chart, you will see that that's - I am assuming intentionally that those decisions come into that second category so that they do not seem to offend values in the same way.

One feature I did not find in the report was the impact of political advantage and disadvantage in making decisions about health care, and the mechanisms that might need to be put in place to deal with that. We have not considered that in nearly enough depth.

As well, the report focuses mainly on macro-level decision making. That is extremely important, but the health care system operates essentially, as far as an individual Canadian is concerned, at the individual level. Hence, most of your impression of the health care system, and certainly the complaints that come to me, come from that individual level.

The reality is that what is ethical at the macro level might not be ethical at the individual level. That is not addressed in the report at all. You will find that I have explained this in my written presentation. For instance, a physician has a primary obligation of personal care to every patient. The physician can only take efficiency and effectiveness in saving the health care system resources into account as a secondary objective, when it does not directly harm the patient. You do say in your report somewhere that it is very hard to get physicians to take efficiency and effectiveness into account. The reason for that is that physicians have ethical and legal obligations not to do that. We have to understand those obligations, and in doing so I hope we do not decide to abrogate them. Nevertheless, they are the features that are causing that sort of reaction.

As well, there are problems with definition as to what constitutes timely health care or medically necessary. Those are not new problems, but they are ones that need to be addressed in greater depth.

With respect to evidence-based health care decision making, I agree that we need it, but I was somewhat concerned in reading the report that it might be seen as not only necessary, but also sufficient, and I do not believe that that is sufficient. There is a saying that sometimes the measurable excludes the essential. I would suggest to you that if we are concerned about healing and caring, as well as curing, then we have to be concerned about some very important intangible factors, not the least of which are the values that we uphold or we contravene in making decisions about the health care system.

Again, I did not see in the report enough of the recognition of what I would call the necessary ambiguity in some of these decisions that we have to make. We cannot expect a linear decision-making model, where we will arrive at a successful hard-based cognitive conclusion that we have to build in spaces where these other very important human factors operate and, among those, to ensure that we have a caring health care system and not simply an efficiently run one.

I would then come to the point about health care being an industry, which is emphasized in the report. The report talks about - and I thought somewhat disapprovingly - primary care medicine as being a 19th century cottage industry rather than a 21st century service industry. What that brought to mind for me was that while cottage industries do have negative features, that description also brings to mind caring personalized interaction and personal knowledge of the people - and I would emphasize to you that that should be included.

In conclusion, let me say that while there is much to be praised in the report - I thought it was thoughtful, insightful, open-minded and open-ended - my major concern is that the issues are addressed only at the macro level. The issues also need micro-level analysis. When conflict exists between those levels, and those are some of the most difficult ethical issues we face, we have to decide how we will handle that conflict - and that is true for even each of us. As Canadian taxpayers and citizens, what we decide should be available as health care often differs radically from what we want, and what we want for those we love when they need it.

I applaud the national ethical conversation that you have proposed. It will certainly help, but it will not solve all the problems. As well, it has to be an ongoing process.

Finally, I would urge you to recognize not only medicine's curing role, and what we need to do to support that, but also its healing and caring roles, and to accept that it is worthwhile to spend even economic resources to uphold those roles. Thank you.

The Chairman: Thank you for your usual provocative statement.

Dr. Terrance Montague, Executive Director, Patient Health, Merck Frosst Canada Ltd.: As a leading health care company, Merck Frosst's core business is discovering new and efficacious drug therapies for important diseases and demonstrating their value to patients and payers. I think perhaps we are all in the business of demonstrating the value of health to the patients at the moment. Recent clinical and econometric analyses across many disease states, not just in cardiology where they began, but in many disease states, have demonstrated strong positive relationships among the utilization of the innovative pharmaceutical therapies, increased longevity and national productivity, which has usually been measured in these studies by gross domestic product measures.

However, repeated research studies carried out by groups such as the Clinical Quality and Proven Network, CQIN, of which I was a founding director, and the patient health management team at Merck Frosst indicate that the optimal social rate of return of this innovation is not being realized in this country or in other parts of the developed world.

This is primarily caused by a significant remaining gap between best care and usual care. In this context, best care is defined as the accumulated body of evidence from clinical trials; usual care is defined as the level of provision of this efficacy knowledge in real-world practice. Narrowing of this care gap is difficult and complex; however, my firm premise, and that of my colleagues, both previously in academia and now in a combination of business, academia, and the community level, is that it is possible, that is, that patient care, patient outcomes, and the productivity of the nation can all be better.

In addressing the care gap over the course of the last decade, my colleagues and I have championed an approach anchored in governmental, industry, professional, and community partnerships. These partnerships are the focus of what I am suggesting to you is a possible option worthy of your consideration here and in your deliberations across the country. These broad-based partnerships have utilized the principles of evidence-based and cost-efficient care and many of the tenets of total quality management, particularly the use of repeated measurement and feedback to drive continuous improvements in care and outcomes.

Our most advanced initiative so far, at least in the last five years, since I have been involved with Merck, is ICONS - improving cardiovascular outcomes in Nova Scotia. ICONS is a province-wide initiative. It was designed and launched in 1997 with a view to improving cardiac care from the bottom up, that is, from the community up. It has a very large community face, including a 70-member steering committee representing all the health managerial districts in Nova Scotia. Participating community physicians, both primary care and specialist, nurses and pharmacists are providing regular feedback on local practices and outcomes. ICONS is much more outcomes oriented than some of the discussions I have heard today, which are so input focused. From the beginning, ICONS was designed to be outcomes focused.

The first phase is nearing completion now, with more than 40,000 patients screened and 13,000 enrolled and followed up. There has been a consistent, year-over-year improvement in utilization of efficacious drug therapies, which I have tried to highlight for you in some of the accompanying slides, with diseases like acute myocardial infarction and congestive heart failure. In the management of heart failure, which affects 450,000 people in our country, the ICONS data demonstrated that patients on proven therapies have a significantly lower risk of death and hospitalization, which are obviously important outcomes for the patients and for society. The improvement in these clinical end points is also associated with accompanying cost savings to the health system, even when the component cost of increased drug use are factored into the calculations. The system cost efficiencies contribute to the overall sustainability, I believe, of Nova Scotia's health system.

The ICONS clinical and methodological data have also begun to enter the scientific domain. There were 24 ICONS abstracts presented at the recent Canadian Cardiovascular Society meetings in Halifax. This represents a significant incremental component of the entire new gain in cardiovascular knowledge, and outcomes-research knowledge, in our country this past year .

The timely provision of data that ICONS is making available now is very important to the government partner in ICONS because it alleviates one of the enduring frustrations of public health management - the lack of comprehensive outcomes data on which to base policy decisions. The combination of clinical and component cost data is particularly powerful, since it allows an estimate not only of what we are buying for our health expenditures, the money that is spent, but also across the whole health system.

Because of the success of practice improvements, as well as the creation of innovative administrative processes to deal with access inequities to cardiac care in Nova Scotia, the ICONS partnership is now entering a new phase. It has become the platform for the development of a provincial cardiac program. The evolution of this program will be sustained with funding from the Nova Scotia Department of Health. The program will enter the fabric of everyday health care for citizens and patients of that province.

Certainly, ICONS has shown that things can be better. It has demonstrated that the promise of the best health, for the most people, at the best cost is a vision that is achievable and that, indeed, it can be realized.

If you asked me to choose the single most important contributing factor to ICONS' success, I would vote for the partnership's rigorous focus on measurement, particularly outcomes-oriented measurement. Perhaps the importance of the partnership-measurement interrelationship is best captured in a quote that I have read by Charles Deutsch, a Harvard educator, who said of partnerships:

We talk about them as if they were exhilarating, but they are usually exhausting and sometimes maddening. They have to focus relentlessly on results or they are likely to get lost attending to process.
Each time I read this and think about it, I realize that it is has to do with more than education or health care; it might even extend to marriage. It strikes me repeatedly as I read it.

In several other provinces and in several other disease states, as indicated in that last slide in the enclosure, including diabetes, asthma, arthritis and osteoporosis, which are enormous burdens for the society - 75 per cent of our health expenditures are being now spent on chronic disease, which affects nearly 50 per cent of our entire population at any given time - we are now working with additional partners from our own society, Canada's innovative pharmaceutical community, using a template similar to that pioneered by the ICONS group. It is our anticipation, and certainly our hope, based on all of the available evidence, that the outcomes improvements and the innovative administrative infrastructures and processes modeled by ICONS can be replicated and improved upon. As always, our mantra in this partnership and measurement model of evidence-based health and disease management is the belief that things can be better.

The challenges to that view of health care are not insignificant, as I am sure you are very much aware as you listen to people across the country. Leadership is required to propagate the opportunities promised by the options of ICONS and projects like ICONS. The Government of Canada is well-positioned, I believe, through initiatives like this committee's work, to assume a very important leadership role and leadership position in the country.

Let me close by emphasizing that Merck Frosst remains committed to the principles of ethical and effective health care partnerships across disease states and across the nation. We look forward to the future.

Thank you very much for allowing me to make this presentation to you today.

Senator Keon: Dr. Somerville, you raised the old doctor's dilemma. Have you seen Shaw's play, The Doctor's Dilemma?

Dr. Somerville: No, I have not.

Senator Keon: You really must see it. When you do, I would like to talk to you after. Things have not changed.

The doctor's dilemma of our time is that if doctors are not involved in health care policy and health care management the system will go forth. There is a conflict there. Some doctors feel strongly that their total commitment is to be a patient advocate. I think they have to learn to deal with responsibility to the system as a whole, because what they are advocating for most patients is an entry into the system, at least the primary care physician is, and then he or she loses control of what happens next. If the primary care physician is not making a meaningful contribution to that, the system is not going to get better.

I am just going to tease you a bit. Frequently, that might superficially appear like compromise, that the system cannot be all things to all people, and frequently the solution is the best possible compromise.

Dr. Somerville: Well, "compromise" tends to be a dirty word. There was a car advertisement that said, "We make convertibles, not compromises."

However, I would like to respond to your very important question.

First of all, the physician, I think, has two roles today, and one is as the individual protector and advocate of the individual patient. The grave danger comes when that role becomes confused with the physician's role as a policy advisor, sometimes policy maker-policy decider. We must be very careful to keep thosetwo roles operating separately, even though the physician might, at various times, play one or the other role.

Actually, at the risk of doing a bit of advertising here, I refer in my written presentation to a chapter in a book I have just written, The Ethical Canary. There is a chapter on the ethics of access to health care resources, and in it I go at some length into the very question that you have asked. One option would be to relieve the physician of that primary obligation of personal care to the patient. Personally, I think that would be a total disaster. It is the absolute foundation, the traditional base, of the trust relationship between the physician and patient.

As my written brief says, it is true that health care features similar to other industries in our society, but it is an industry like no other industry. One of the important respects in which that is true is that a physician has a relationship with a patient and power over a patient, indeed, even a kind of an intervention on a patient, that no other member of our society is privileged to have. It would be a very dangerous thing to change or damage that in any serious way. The big challenge for us is to keep those traditional and, I believe, necessary attributes of the physician-patient relationship, so that a patient knows the physician is acting in his best interest, free of conflict of interest, and, at the same time, to be able to organize our health care system so that it is viable, "sustainable," as it says in the report.

Senator Keon: Thank you for expanding on that.

Dr. Tamblyn, you just superficially touched, because of time constraint, on population health. I want to ask you what population health means to you, and before you answer I want to ramble on a bit.

I think because the health care delivery system only affects a small segment - the estimates are about 25 per cent, usually - of population health, and all the other forces are social forces, the wealth of the group concerned, the geography, et cetera, population health has not been used as the instrument it should be in the ongoing assessment of the performance of our health care delivery system. Since the Lalonde report, I have always felt - and I have not seen anything to convince me otherwise since that time - that the only way we will ever get a handle on accurate measurements of our performance in the health care system is using the basis of population health.

So, with that bit of a harangue, will you tell me what population health means to you, and then would you comment on its use as an instrument in the ongoing assessment and monitoring of the health care delivery system.

Dr. Tamblyn: We are just beginning to understand the determinants of health - "population health" to me is a bit of a slang word; it could mean many things to many people. In my mind, what you are trying to tackle is the fact that there are many things that influence people's health. It is not the health care system, it is not within its jurisdiction, it is not within its mandate, it is not within its responsibility.

With regard to the arena of injuries, in fact, most of it is outside the health care system. Related aspects are safe products, roads and their condition, driving speed and whether or not drinking and driving is happening. Those aspects are not within the health care domain. The health care domain relies heavily on jurisdictions outside of it, bureaucratic environments outside of it, in fact, to influence what ultimately they will get as the final graveyard of health problems, where they are going to have to spend money. If you really want to start much earlier in the process to determine people's health, then you will have to effectively deal with all these other sectors that will impact on health.

For example, if the Ministry of Transport decides to increase the driving speed - I was just in France, where the driving speed was 199 kilometers an hour; at least, that is how fast people were driving. If in fact that is the allowed speed, the issue is one of unnecessary motor vehicle accidents and one of energy issues.

Let's take the example of genetically modified foods. No one really knows the consequences of GM foods. That issue is in the agricultural arena. There is also the issue of antibiotic use in agricultural animals and the extent to which that influencing resistance in humans.

Let's look at education. We do not quite understand the relationship between socio-economic status and health, but we do know that there is a relationship between having poor health and being less well off and being poorly educated. Why? Are there environmental influences? Could, for example, it be that something like a big steel refinery coughing out pollution produces negative effects on the health of those living near the factory? Or is it other things?

Let's look at one specific example. We now know that exercise has a positive influence on cardiovascular "wellness."

Maybe I should not say that. Dr. Montague is sitting next to me; I am sure he could tell us more.

In any event, we know that exercise influences glucose metabolism. Hence, the epidemics of diabetes and obesity in younger kids are related to exercise programs. At the same time, the Ministry of Education is cutting education budgets and teachers are refusing to get involved in extracurricular activities. What are we doing? We are ignoring an opportunity to encourage and teach physical fitness. This will have downstream negative effects on health. We are choosing to ignoring this and instead to make immediate cuts in education, in order to not achieve the final goal of influencing the determinants of health.

Population health to me is influencing the determinants of health before you ever get into the health care system. It is one of the things that will make people healthy, keep them healthy, and that is what I am talking about.

Senator Keon: What about secondary prevention?

Dr. Tamblyn: Secondary prevention is equal - are you talking about earlier detection of disease and secondary prevention of complications?

Senator Keon: No, I am talking about after the hit has been made, after the 31 year old has had a heart attack and he is enrolled in a good secondary prevention program.

Dr. Tamblyn: Right.

Senator Keon: Where does that fit into population health?

Dr. Tamblyn: Secondary prevention, by and large, is in the health care system. It involves approaches that are put in place within the health care system. In some diseases, secondary prevention is very effective, and oftentimes underused. For example, with stroke, the biggest predictor of another stroke is your first stroke. The biggest predictor of another heart attack is your first heart attack. The biggest predictor of another injury is your first injury. Hence, it is important in those instances to have effective intervention, secondary prevention. If those are available but are not being used, and the per case cost may be in the neighbourhood of $20,000 per episode, that is a problem.

There is an orientation, culturally speaking, in the health care system to worry about today, the urgency of today, and not about tomorrow.

Senator Keon: The ICONS study is dealing with the health care delivery system, the 25 per cent that, in my opinion, is drastically affecting population health.

Dr. Montague: Yes.

Senator Keon: When we measure population health, we get distracted and do not look at the interventions in the health care delivery system itself.

What I want to steer you into is whether you have looked at the population health in the geographic area that that study applies to, and whether you have noticed any effect in population health.

Dr. Montague: Thank you very much, Senator Keon.

I do not have a definitive answer for Nova Scotia, in terms of longevity over a long period of time; we have not been doing it long enough. However, my sense is to define population health by something that we can get our hands around.

There is evidence from some constituencies, certainly Alberta, that the money spent on health care per capita from 1975 to 1995 drove well-accepted population health outcomes like longevity in that province. Some people say that the money we are spending on health care is not buying us anything; however, there is countervailing evidence, even in ICONS, which is now over five years. You see a year-over-year increase in the utilization of the proven therapies; you see an increasing or a decreasing morbidity and mortality around the end points that they are measuring in acute ischemic syndromes and heart failure.

Therefore, there is value, if you are defining population health around the whole provincial HMO, if you will. If you are looking at major burdens of illness like arthritis or cardiovascular disease, where there are a lot of endpoints that are occurring quickly, I think you will be able to see your interventions having an impact in a secondary prevention setting in a very short period of time.

Let's take a disease like osteoporosis - which affects older women, who are traditionally undermanaged and undertreated in our health system, whatever their disease. With respect to a disease like osteoporosis, which takes a long time to manifest its final clinical occurrence, despite long presence at risk, it may not be as easy to see the outcome impact of the investments that are being made. Certainly when we have presented programs like ICONS across the nation in various forms, one of the criticisms we get from audiences is that we do not have a primary prevention arm. We cannot take on everything all at once. It is not that we are going for the low-hanging fruit, but I think, senator, as you have rightly pointed out, in cardiovascular disease that low-hanging fruit is our number 1 killer; it is a very worthwhile target.

Given time, we will get into the things that Dr. Tamblyn is making apparent to us are very important. I know that those things are contributing to the overall risk, but we will get more bang for our buck going for the high-burden illnesses, where there are so many, unfortunately, still occurring endpoints. Hence, that is where we have elected to go, and to go with partners.

In summary, my concept of public health definitely has an envelope that includes projects like ICONS, with a community face and a whole province trying to be involved with all of the patients as a target with that disease. Perhaps we will have an impact starting the secondary prevention.

Senator Morin: I have one comment and two questions. Mr. Chairman, I think it is important to realize that Dr. Montague is the leading Canadian authority on disease management programs. I know your own interest on this, and I think it is a very important issue. It is unfortunate that Dr. Montague had only six minutes to develop that very important issue.

I would suggest that Dr. Montague be invited to discuss generally what it is exactly. I understand what you have been doing - I am quite familiar with your own work - but what I think is important is for us to have an idea about what disease management is. I know you do not call it that, but let's call it a disease management program for a minute.

Dr. Montague: We call it that, senator, because that is what everybody else calls it.

Senator Morin: For diabetes, arthritis, and so on, there are problems of underuse and overuse of medication, and I think this would help us. Perhaps at some time, Mr. Chairman, we could re-invite Dr. Montague, who spent most of his professional life dealing with these problems, to deal specifically with that.

The Chairman: Certainly.

Senator Morin: Dr. Tamblyn, I am very much interested in your study. I remember very well the introduction of pharmacare in Quebec. It was a real mess. There was a lot of negative publicity surrounding the program. The government was always changing user fee levels; there were problems with computer programs, and then computers kept crashing; pharmacists did not want to fill in prescriptions. I remember calling Merck to send me all sorts of samples, to give to my patients. The program was an administrative mess.

I am amazed that the government has not been sued over that. Some of my patients stopped taking their medications. They were under the impression that they could not have their drugs at all anymore. Your study found that mentally ill patients were the most affected; of course, they are the most fragile in a situation like this.

There is no doubt there were undesirable effects; I saw them.

However, I am not sure that it was a study of user fees; I think it was more a study of a terrific mess that went on for months. There was real turmoil.

I think you should repeat your study, see the same group today. I cannot recall the amount, $4 or $5 a month, but I am sure these people are back taking their medications.

I would caution you not to apply this study of user fees to the health care system or to every country in the world. I am not proposing that we should bring in user fees - but let's fact it, almost every country in the world has user fees today. In Canada, most private insurance programs have user fees. Hence, I would be very careful.

All of that was by way of a comment, not a question.

I should like to move to Mr. Skilton.

Dr. Tamblyn: I agree that it is important never to take a single study, as you point out, by itself. However, the difficulty we have is that every single study that has ever looked at this has shown exactly the same thing. It may be that the implementation of user fees always produces chaos in the consumer population, but the basis and rationale for user fees is essentially not substantiated by any evidence.

What is the evidence to suggest that the mentally ill, for example, were misusing their medication?

Senator Morin: No, you did not get my point. They were not taking it because they are more fragile; understand? When the program was introduced and the administrative mess ensued, for all sorts of reasons people did not take their medications. I just spoke about pharmacists - in any event, I do not want to get in an argument here.

Mr. Skilton, tell us a bit about reference pricing.

Mr. Skilton: Reference pricing really hinges on the assumption that all chemical molecules in a given class are the same. It also depends, however, on a price differential, and I would say a meaningful price differential between those molecules in the same class. Without that, it is a price control mechanism, or a way to get cost savings. Without a significant price differential, we will not realize any gain at all.

When you look at the price of various molecules - let's take the statins as an example. There are six, seven or eight different statins to treat cholesterol. The price differential of those molecules is plus or minus 5 per cent, with one exception, that exception being - I will not disclose which product it is, but there is one product on the market that is nearly half the cost. One might ask: Why do not we reference it to that particular product? Well, the particular product also happens to be half as effective, clinically. Hence, market dynamics work in that kind of system.

We know that if we come to market with a product that is half as effective as the rest of the products, there is no possible way we can come out with an equal parity price and expect to get anything on the market. Hence, market dynamics, I think, do work.

It is also important to reflect on two other things.

First, I firmly believe that partnership is important. I believe that we each have specific interests. I also believe that we are each committed to a sustainable quality health care system. The challenge becomes how to make it work. Reference pricing forces the hand - the interests of one stakeholder forces the hand of many others.

Reference pricing was tried in Norway. The outcome was that patients were dissatisfied because they had to pay more, and physicians were dissatisfied because they were spending more of their office time consulting on costs than care. There was significant stakeholder dissatisfaction.

Patient health management brings different partners together to look at the evidence and to look at affordability. Collectively, they implement a system that they can measure and move collectively towards a common goal. It works because all of the stakeholders are aligned towards a common goal.

The Chairman: Dr. Tamblyn, Quebec is the only jurisdiction with a universal drug plan. As such, are other studies being done on the plan - for example, who has been helped, who has been hurt - other than the one you referenced it in your handouts? You also gave us an article from the Journal of the American Medical Association.

If there are other studies, can you point us to them?

Dr. Tamblyn: A lot of money is being spent on pharmacare - there are policies across the country for formula exclusion, inclusion, cost sharing of various components - but there is really very little information about the process.

The Chairman: Are you saying that the policy evaluation process -

Dr. Tamblyn: I am saying that it is scant across the ground. It is frightening. This is virgin territory.

The Chairman: Hence, in spite of the fact that Saskatchewan, British Columbia and Quebec have programs - the Atlantic provinces do not have any. I would assume that in excess of $1 billion of public funds is being spent on those programs, right?

Dr. Tamblyn: I just talked to Ontario yesterday, and they are spending $2 billion a year on their program.

The Chairman: I am amazed, and depressed, by the scarcity of management information in the health care industry, an industry that is so information intensive. There was a time when I could ask the president of a hospital, "What does a hip replacement cost?" Today, nobody has the foggiest notion.

If everyone ran their businesses that way, we would be in a lot of trouble.

Dr. Montague: I think what Dr. Tamblyn says is correct, that there is little in terms of evidence-based policy application across the country for health care. There could be a lot more. There is a lot of data in the health system, but very, very little information.

It is very difficult to undo a policy; implementation is much easier. Hence, we should learn from research projects, like the one we have talked about here, that find unintended adverse policy outcomes. It is important for policy makers to think about these things. In the long term, it is important to have the data before a policy is put in place.

Having said all of this, of course, Canada is no different than any other country. Other countries have the same problem. It is what Minister Boudreault at the time complained about when we started ICONS - they wanted to manage by outcomes, but they were forced to manage by cost because they did not have the outcomes. However, one of the spin-offs of a measurement-oriented disease-management program is that it starts to fill in the information gap; it is not just a collection of other data.

The Chairman: Right.

So, Dr. Tamblyn, keep doing projects like that, because at some point the system will acquire enough information.

Senator Robertson: Mr. Skilton, we have heard for some time about the lengthy approval process in trying to get a new drug to market. How does our Department of Health compare to the length of time required to get approval in other countries?

Mr. Skilton: In your package, you will see a reference to a study by Dr. Rossen, who studied Canada, Australia, Sweden, and the United States in terms of the approval process. They looked at the review process for 87 molecules common to all countries. They found the process in terms of time to be similar in Canada and Australia, both of which are significantly longer than Sweden and the United States. They also did a subanalysis on priority drugs, and found that Canada and Australia lag significantly behind Sweden and the United States in getting approvals of these products, so that patients can have access to them.

I would like to illustrate with one example. It is sad and telling, at the same time. An asthma drug by the name of Singulair was discovered here in Canada; nevertheless, Canada was the 29th country to approve Singulair in the world. That is mind-boggling.

Senator Morin: Was it a Canadian discovery?

Mr. Skilton: It was a Canadian discovery.

Senator Robertson: If anyone has any recommendations about how we can improve that process, we would love to hear them. I know this topic has been kicked around for years, but the same complaints keep coming up. Surely, there has to be a better process. If any of you, perhaps with help from your friends in the industry, can design a better process, it might be rather fun to look at it.

Mr. Skilton: Let me just respond to that. The TPP has conducted several internal assessments over the last 10 years. I think it is time for a public review of that organization. I know many other countries have headed in a different direction, and it might be time for that to happen.

Senator Yves Morin (Acting Chairman) in the Chair.

The Acting Chairman: I wish to thank all the witnesses for their attendance here today. We appreciate it.

[Translation]

Senators, our next witness is the director general of the Association québécoise de défense des droits des personnes retraitées et préretraitées. Monsieur Smereka.

Mr. Myroslaw Smereka, Director General, Association québécoise de défense des droits des personnes retraitées et préretraitées: On behalf of the Association québécoise de défense des droits des personnes retraitées et préretraitées, I wish to thank the Senate committee for giving us this opportunity to speak and to put forward our arguments and recommendations in this matter.

Our association was established in 1979 and now has 40 sections throughout the province of Quebec. Our mandate is to safeguard the economic, cultural and social rights of retired and semi-retired persons.

What the AQDR is asking for is an adequate income above the poverty line, decent housing at an affordable price, home care that allows people to go on living independent lives, equality - both under law and in fact - between men and women, and free and universal access to health care and social services.

The three points we would like to raise today go beyond the goal of safeguarding the interests of seniors, that is to say the interests of one sector of the population. What we wish to address goes to the very logic of the Committee's mandate.

Our first point is to suggest we adopt the concept of patient as opposed to that of consumer of health services.

Our second point turns upon the role of private for-profit suppliers of health services as opposed to that of private non-profit agencies.

And third, the issue of the types of health care provided under the Canada Health Act as compared to the types of health care that will be dispensed as more and more of these medical services are delivered outside a hospital setting, which is to say within the community and at home.

To conclude, we will briefly comment on health promotion and preventive care for seniors, regarding more specifically the interests of retired and semi-retired people.

On the first point: We should begin by saying we agree with Dr. Noralou Roos, professor in the Department of Community Health Sciences of the University of Manitoba, and with what she stated before the Senate committee in Winnipeg, this past mid-October. Let me quote the Winnipeg Free Press of October 16:

[English]

It (the Senate report) plays into the ideological debate that the private sector is the saviour to the public sector, that is failing. Your view of private versus public health care is very unbalanced. In summary, you are not delivering a factual non-ideological report.

[Translation]

We begin by saying that we are of the same opinion.

The Acting Chairman: I should specify at this point that we are not really drawing up a report, but simply outlining options. You are therefore perfectly free not to opt for the private system. The committee has itself never expressed a preference in that regard. I do not believe Dr. Roos did either. She is opposed to the public system, is that also your position? That choice is entirely up to you.

Mr. Smereka: We will come back to that when addressing our second point. Private means private for-profit as opposed to private non-profit.

The Acting Chairman: I see.

Mr. Smereka: We are not, therefore, necessarily opposed to the private sector on this issue.

The Acting Chairman: No, I understand what you were saying.

Mr. Smereka: I would now like to speak of the distinction to be made between patient and consumer of health services.

From the economic standpoint, the provision of health services includes a series of transactions whereby a consumer, known as the patient, requests services from a supplier who in turn will be paid for the services thus provided.

To illustrate the conceptual difference between a patient and a consumer of health services, let us compare two possible scenarios: on the one hand, you have a consumer of whatever and, on the other, two possible scenarios for the consumer of health care services.

First example: You are dealing with any type of service. You call a taxi and ask the driver to take you to the other end of town. You do not have enough money to pay the fare. Should you still get taken to your destination?

Let us now go to the health care scenarios. You arrive at a hospital emergency department with a ruptured appendix. You do not have enough money to pay for the operation. Should you receive treatment nonetheless?

Second series of scenarios: You have won an all-expenses paid trip to a destination of your choice, subject to only one condition. You must embark on your trip within the next twelve months. Should you accept the prize?

Health care: You have won an open-heart operation in the hospital of your choice subject to only one condition: the operation must take place within the next twelve months. Should you accept?

We see, from this comparison, that health care is not a product like any other product, but rather a merit good provided on the basis both of need and of merit.

Market models are not designed to allocate resources on the basis of need but on the basis of demand, that is to say on the basis of what I want and what I can afford.

I may be able to say what I want, but society allows health professionals to determine what it is that I need. Consumers buy what they want, what they ask for and what they can afford. Patients receive what they need. This is all the more true inasmuch as our society considers it a breach of ethics to supply medical services we do not need.

The problem of finding the resources necessary to pay for something that we need is fundamentally different from that of paying for things that we simply want or that we insist upon.

Second point: The issue of the proper role of a private for-profit health care provider as opposed to the role of the private non-profit health care provider.

As Ms Raisa B. Deber of the Department of Health Administration of the University of Toronto stated in one of her articles, health care systems are three dimensional: there is the financing aspect, the provision aspect and the allotment aspect. Financing includes the ways in which money will be gotten from the various consumers, including from potential consumers of health care services.

Provision includes the ways these health care services are organized and delivered. Allotment includes the various ways in which financing and provision come together, for example in the way suppliers will be paid for what they do.

There are several models of how we can arrange for the money to flow between the patient and the health care provider. The difference between these various models stems from the number of intermediaries involved.

We have included, in the appendix, three examples of the way money can flow to and fro when you buy directly, as used to be the case previously under our health insurance system. Table 2 outlines our health insurance system and lists, what is even more complex, various regional or private entities, and so the money in fact flows in four directions. That is what the tables show.

But the last model, the fourth one, opens the door to private for-profit health care providers. The health care providers here take on the responsibility of making sure that a preestablished range of services are deliver to a preestablished patient population.

In Canada the health care system is mainly funded by the state, with services being provided by the private sector. But this private sector is mostly non-profit since more than 95 per cent of Canadian hospitals are administered by non-profit corporations acting under a community-based board of directors, volunteer agencies or municipalities.

The choice comes in at the allotment level. The allotment of tax moneys, either towards private for-profit health care providers or towards salaries and benefits for health care workers in private non-profit facilities.

It is easy to confuse the financial aspect and the health care provision aspect. Under the Canadian system, though health care services are not supplied by the state they are funded by the state.

Third point: This point concerns health services that are currently being provided, as opposed to those which might be provided further on.

A Health Canada pamphlet entitled "The Canadian Health Care System" clearly outlines the fundamental issue. The debate has gone beyond the health care system to address the issue of health itself, recognizing that health implies more than just health care. The new policy directions taken by the provinces follow this paradigm shift. The focus is now on a more comprehensive and integrated health concept and no longer simply on health care.

In other words, governments have responded to the need to adapt the health care system to present day realities by encompassing a number of health factors, recognizing that although health care contributes greatly to health, these must be seen as only one element among a larger number of health factors.

According to the quote from the Health Canada pamphlet, the health care system has been given a new direction and it now relies less on a clinical care model, that is to say on the services of doctors working in a hospital setting, and more on a community health care model focusing to a greater degree on promoting health and preventing disease.

The question then is the following: Do we wish to extend what is presently provided for under the Canada Health Act and the five principles outlines in it? The present plan provides for all medically necessary services dispensed by hospitals and doctors.

As a society, do we wish to extend this to care provided within the community or at home? Or do we want home care to be synonymous with fee for service. The AQDR recommends the first of these two options.

In closing, I would like to say that it is all well and good to speak in favor of health promotion and disease prevention, as governments seem to be doing, but the words must be backed by a financial commitment.

Public funds should not be going to one-shot pilot projects. The issues we should be focusing on as far as seniors are concerned are: diabetes, obesity, malnutrition and violence towards the elderly. The AQDR recommends that the federal government extend the application of the Canada Health Act to these three medical issues.

The Acting Chairman: Thank you, Mr. Smereka. Ms Gagnon or Ms Richer, do you have any comments concerning this paper?

Ms Anne Gagnon, health advisor, Association québécoise de défense des droits des personnes retraitées et préretraitées: Yes. There are a few comments I would like to make.

The Acting Chairman: I would rather you did not read them. If you would just proceed with your comments, then we will have enough time left for questions.

Ms Gagnon: All right. For fun, I spoke of "spontaneous generation". I mean by this that the day I turned 65, I did not wake up and say: Am I rich and healthy or am I poor and sick? That is the health system's cartoon version of what it means to become a senior.

As a great-grandmother, I know that health is not something you can divide up. If you look at the factors of health and try to isolate birth, early childhood, adolescence and so on, you know that you want health to go from the womb to the tomb; it is as simple as that, otherwise there will not be any healthy seniors. That is just a comment.

The Acting Chairman: Thank you very much. And you,Ms Richer, do you have any comments?

Ms Yollande Richer, vice-president, Association québécoise de défense des droits des personnes retraitées et préretraitées: On the three points made concerning privatization, we know that England will have to invest 32 per cent more because privatization is not working at all.

The United States has the most expensive system in the world. As far as HMOs are concerned, there are people who never get to go to the hospital, who are, as it were, black listed.

So in Canada we are really wondering which model to follow. In any case, almost 50 per cent of health care has already been privatized.

The Acting Chairman: So you would be in favor of maintaining the present system. But I would like to hear a bit more about the issues more particular to seniors.

I see that you have identified the problems more particular to elderly people: diabetes, obesity, violence towards seniors. Are there any recommendations you would like to make concerning the issue of violence towards elderly people?

Ms Gagnon: Yes. My recommendations, first of all, stem from one thing that we have noticed. For ten years, now, we have had CLSCs. You know how these work specifically on the problem of violence towards the elderly.

The research is there. The data is there. The legislation is also there. What we are asking then is this: when are we going to see the connection between what we know, which is violence towards the elderly, and the legislation? How are we going to enforce those legislative provisions? How are we going to manage to support seniors who cannot speak up concerning the verbal or psychological violence they are subjected to? These are the questions that concern us.

The Acting Chairman: You are right, it is a most important issue.

Senator Maheu: I am in full agreement. Several years ago I took part in some conferences on seniors settling in Arizona, in my own city at the time, and I am still surprised that you often see elected officials who do not realize the psychological, financial or medical impact of the abuse experienced by seniors.

I would like to address the issue of pharmaceutical abuse among the elderly. When I was a member of the House, there were, in my county, 27 golden age clubs. I therefore often heard about the problem. Often, you have doctors who feel they are on the leading edge of medical practices and who would rather administer drugs to seniors than have them stay in hospital and, often, the patients are sent home prematurely.

Do you have a comment on that? In the AQDR's view is there a big problem in that regard?

Ms Richer: Yes. It is said that pharmaceutical companies make larger profits than banks. That is cause for concern. It is also said that each year 939 new drugs are marketed, of which only 61 are effective.

We know that seniors are easily influenced by advertising and we know of the lobbying efforts of pharmaceutical companies. I think there is an enormous problem there and this is one of the issues that the AQDR has been promoting since the drug insurance plan was set up in Quebec.

The Canadian government is going to have to decide upon the various criteria the pharmaceutical companies and cartels will have to abide by; in that area of activity, nothing really surprises me. I also think that regulations will have to be put into place to make sure seniors are not treated like a type of commodity. And then there is the misleading advertisement. Seniors are really manipulated.

Senator Maheu: Perhaps you yourself should lobby the Canadian government.

Ms Richer: We did lobby the government concerning patents when Bill C-91 was being considered. We went to Ottawa. We testified before the committees and promoted a list of generic drugs. Very often, neither the doctor nor the pharmacist will tell seniors that they have the right to obtain a generic drug, or even tell them that such a drug exists. There is a lot to be done in that regard.

Senator Maheu: Bearing in mind, however, that if generic drugs exist it is because of the previous research, development and investments made by pharmaceutical companies.

Ms Richer: Yes. On that point, I should answer that as tax payers we paid for at least part of that research. Pharmaceutical companies do a lot of their research in universities. We are funding those research efforts. And I believe that, there too, the system is being abused. People are always saying that all this costs money, but the population is often not aware of the true costs.

Consider the case of our neighbors to the south. See the enormous amounts of money they spend on advertising. It makes no sense: they spend billions of dollars. And I think that in Canada there is a tendency to do the same.

Often, in Quebec, we are told that the blame lies with senior women since, unfortunately, men die at an earlier age.

The Acting Chairman: I am sure that senator Pépin will come to the defence of men.

Senator Pépin: Demographically, the senior category is the fastest growing one. We will have to consider both needs and access. Then, after access to medical services, to doctors, we will have to consider the issue of access to treatment.

The age category of 65 and over is getting larger all the time. You have to take that into account. You spoke of drugs. Yesterday, Mr. Castonguay and Mr. Forget spoke of drugs and of how these should be prescribed, what is the appropriate way to prescribe them and the appropriate way to use them. They consider there is a problem here that needs to be addressed.

You mentioned the equality, under the law and in fact, between senior men and senior women. Does that mean that in access to health care unfair distinctions are made in that regard? What does it mean? I am looking, on page 2 of your brief, at the principal demands put forward by your association.

Ms Gagnon: Senator, allow me to answer. I am very pleased by your question. Twenty years ago, the National Council of Welfare published a report entitled "Women and poverty; twenty years later." This report shocked and offended a number of reporters who said: it is just not possible to believe that of all the women in Canada the most badly off would be those of Quebec; surely that must be the case in Newfoundland, as always.

We said: we are sorry you are disturbed by our figures, but poverty is worst among seniors, and even more among senior women in Quebec. About twenty years ago, we brought out another publication and I regret I did not keep one. This was entitled "Montreal, two realities in one."

We were saying that Montreal was cut in two by Papineau Street. East of Papineau, believe it or not, people lived ten years less than they did west of Papineau. So there were two realities in one. This study showed the gap. The International Women's Year made people aware of the fact there was a very serious problem there.

As far as retired people or people over 60 are concerned, you have to get involved with prevention. I stress the word "prevention" since you cannot be concerned about health if you are not concerned about prevention. Another is that you cannot really address the issue of health if you do not address the issue of poverty. What to you do to alleviate poverty in order to make sure the children are healthy and that these children later turn into healthy adults? I do not see how you can have one without the other.

Senator Pépin: I fully agree with you on the matter of prevention. In fact we do broach the topic in our report. One of the witnesses was saying prevention is all well and good but you also have to ensure treatment. Our aim, in this study, is to determine what should be done to give everyone access to medical treatment.

What comes out of this is that the two most serious issues are an insufficient access to doctors and the long wait before you get treatment. We also speak of the CLSCs.

This could mean the type of team they have in the CLSCs, but including doctors, nurses, laboratory technicians, ophthalmologists and optometrists.

Ms Gagnon: And dietitians as well.

Senator Pépin: If we found that you also have to work with people who are a little bit better off, how would you see that? Are you completely opposed to a greater financial contribution from seniors?

Ms Richer: We, the senior citizens, have paid our whole lives. Federally, you had, in 1970, billions of dollars in a dedicated fund for seniors, for workers, and this sum just dissolved into the general administration of the country. The same thing happened in Quebec.

I believe it is the government that owes us money. We, the seniors, claim that we have already paid. If the baby boomers want to obtain a supplementary insurance for their retirement, let them. As far as we are concerned, the answer is no.

The dangerous thing about this new formula is that the government wants to do the same thing it did with drug insurance. We were told: this will not cost much, just a small annual tax of a hundred odd dollars. It has doubled after just two or three years.

So we will be told: Oh well, this year it will be just a hundred dollars. And then the following year, they will say: oh, we have no more money. The system is not working anymore. We will have to double premiums. Then there will be fee for service and that means privatization. You have to tell it like it is.

We are going to have to think about the type of health system that we want as a society. The American system is not working. People are beginning to talk about unnecessary surgical procedures. Doctors are beginning to speak out and to say that the system is not working. We have to find a way that works.

Ralph Nader came here to tell us that, Ted Kennedy came here to tell us that: do not change your system, you are headed for a disaster.

Senator Pépin: Maybe there is another solution.

Ms Richer: Our governments have the money, the billions of dollars to build those super hospitals they want to see set up in Montreal. The latest technology is nice, but do you need to have MRIs in every hospital. Equipment is nice, concrete as well, but what we want is health care for the population and that simply does not seem to be a priority.

In their public pronouncements, governments never address the issue of care except for a brief mention here and there. There has to be controls on spending.

It used to be health care; today there is also education, health and social welfare. Governments just reach into the till for as much as they need, anyway they want and then they shore up whatever aspect of the system seems to be in direst need. We cannot go on like this. Its unbelievable! We of the AQDR say that we cannot go on like this.

Senator Pépin: So you need teams of home care specialists.I do not know if that is really the way they are called, but we are also speaking of palliative care, in particular for people who are gravely ill.

Ms Richer: As you know, home care does not presently cost the government anything. People are released from hospital too quickly and some will have to go back in. You still have women working on a volunteer basis.

So I think that, as you were saying earlier on, we'll have to consider interdisciplinary teams of care givers. I think the time has come and the willingness to proceed is there. But there is a problem with doctors. They themselves are saying: we do not want to go work in a CLSC, we do not want to work in emergency departments and we do not want to go into home care either. So you do have a problem there.

In Ontario, there are a number of pilot projects that are working well. We in Quebec have only one and there is no follow-up to let us to know whether it is working out or not. Many doctors simply do not want to get into this.

It is going to be very difficult. The knowledge is there, the documents have been drafted, the action plan is there, but it is going to be difficult to put all this into effect.

Senator Léger: Thank you for being here. I have not been in the Senate very long, but from what I've heard up to now, the baby boomers are very concerned; they do not know what to do. So please do not stop seeking and making suggestions, because you are the ones who will come up with a solution. It must be said that this is not the end of anything, but only the beginning. So please go on.

Ms Gagnon: Senator Léger, you spoke of the baby boomers and God knows we have tried to interest them in all this. What is happening is that the seniors like us are running out of breath. When we get an invitation such as this one here, I can assure you that we are up very early that morning to prepare our testimony and to make sure we can appear before the Committee. Our budgets are very limited, and our volunteers are tired. I am very glad that you mentioned baby boomers. How can we reach them?

We try to include them since, today, they are retiring at an increasingly early age, and they are not very worried yet because they almost all have retirement funds and expect that their old age will be golden. They are going to have to understand, however, that we need them and that they should get involved in volunteer activities right away.

Senator Léger: Today, people have fewer children. What is going to happen, then? We should conserve our energy in order to be able to go on. But you are right, you must sometimes be a little out of breath. But, this is a beginning.

Senator Pépin: I would like to get back to what I call home care. Thirty or forty years ago, the family doctor would make house calls. There was also a nurse who would come by to give shots. Now we know that doctors no longer make house calls, and I am thinking that the interdisciplinary health care team might be a solution.

As far as home care is concerned, you are right to say that we are releasing people from the hospital much too quickly. Sometimes we release people who are still seriously ill and there should be someone there to take care of them. Oftentimes, these are women who leave their job and volunteer.

There is an issue there that must be addressed. We absolutely have to do something for people who are seriously ill. There will have to be home visits and services for these patients.

Ms Gagnon: To answer your question, I would have to say that we currently have palliative services for about 14 per cent of the population, which is really an aberration. Let me yield the floor to Mr. Smereka.

Mr. Smereka: I do not really know how to say this, but the federal government is going to have to make a decision because the current system is the result of a historic process of integration of all the previous bits and pieces of legislation.

As we say in our brief, for all practical purposes, you have, with regards to health care, stuck to five principles based on the idea that people who are sick will be treated by a doctor in a hospital setting.

Later, you extended this by saying: Well, the doctor could be in a clinic. But the very way we view health has changed. Health factors have become concerns. Poverty, the environment, rich neighborhoods versus poor neighborhoods, the Papineau Street divide and so on.

And yet, as a government, you decided, in 1977, to no longer share health care costs with the provinces but, instead, to transfer tax points, saying: "We will give you money and tax points and, provinces, it is up to you to decide on what you want." And you included all that in the Canadian transfer system. You put all the welfare programs and the Canada system plan together. But you are still saying to the provinces: "Do as you as you please within those parameters."

And so, in 1977, a financial decision was made. Since then, you stand accused of no longer paying your half of the 50-50 sharing agreement. What people forget is that in 1977, you turned that50 per cent into 25 per cent in cash and 25 per cent in tax points.

It is nonetheless true that as you were working towards a financial solution to the health care issue, you did not adapt the Canada Health Act to the way health factors were evolving. And that is why we ask whether the Canada Health Act should not be reviewed in order to consider how it might be extended in its application. But what should we be extending? Well, extending the insurance coverage by enforcing the five basic principles, including access.

Were you to decide that doctors should also serve outside a hospital setting, the Act contains provisions that allow you to extend coverage to home care. But you haven't passed the necessary regulations. Sure, the Act was passed, but this should have been followed-up by regulations. Regulations are required for complementary care. As for extending the scope of the Act, that is up to you.

Senator Pépin: We have to accommodate provincial governments. Provinces have the lead in this matter. We cannot just tell them where they should be spending the available funds. We cannot do that anymore.

Mr. Smereka: I am simply saying that the means are already there in the existing legislation. It is true that, historically, you did not take the necessary measures. You did not go on to phase two which was to pass the regulations that normally accompany an act.

Senator Maheu: We will have to check on that.

Senator Pépin: Yes.

The Acting Chairman: Are there any other questions?

Senator Maheu: I could say much more concerning the current situation of seniors, but I do not really have any question.

The Acting Chairman: Well then, all that remains for me is to thank Ms Gagnon, Ms Richer and Mr. Smereka. On behalf of the Committee, thank you. Your comments will certainly receive serious consideration and should we have further questions, we will be sure to contact you.

The committee adjourned.


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