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Focus
should be on supporting individuals slipping through the cracks, not subsidizing
those who don't need it
By Bacchus Barua
Senior Economist The Fraser Institute |
VANCOUVER,
BC/ Troy
Media/ - Calls for a national drug insurance program, commonly referred to as
Pharmacare, can regularly be found in Canada's media. While access to
prescription drugs is an important component of any well-functioning healthcare
system, there's little evidence that an expanded government-run single-payer
program is either necessary or ideal.
When it
comes to concerns about access to medical goods and services, it makes sense to
first examine those groups that are most vulnerable, such as low-income and
chronically ill Canadians.
Interestingly, a review of provincial drug programs reveals that
such Canadians already have comprehensive prescription drug insurance coverage.
While the levels of coverage vary by province, lower-income Canadians have
access to at least catastrophic insurance for prescription drugs (limiting
out-of-pocket costs to a small percentage of income), while those on social
assistance have coverage at very low or zero cost. Coverage under current plans
also tends to be more generous for lower-income children and seniors than for
non-senior adults, particularly those without children.
Faced with
these realities, and limited government resources, the case for expanding public
drug insurance loses steam. This is especially true when we consider the fact
that middle and higher income Canadians likely have effective private insurance
through employment or direct purchase.
That being
said, it's certainly possible that some groups of Canadians may be slipping
through the cracks. In such cases, public policy should focus on identifying and
supporting these individuals, instead of subsidizing those who don't need
it.
However,
some may still point to public drug plans in other countries and say "Well, if
they have it, why don't we?" Aside from the major questions of cost and
efficiency, it's vital to understand how drug plans in other countries actually
work. For example, take a look at Switzerland and the Netherlands - two countries with well-respected
universal healthcare systems.
Neither
country has opted for a government-run insurance scheme for pharmaceuticals (or,
incidentally, for healthcare in general).
Instead,
they both provide universal access for all
healthcare services (including pharmaceuticals) through private insurers in
schemes which involve health insurance premiums as well as some cost-sharing in
the form of co-payments or deductibles. Low-income citizens and those exposed to
high drug costs still have access to pharmaceuticals, however, through premium
discounts, cost-sharing exemptions, and other public-safety nets.
So, while
there is merit in pursuing policies to expand access to those legitimately in
need, the Dutch and Swiss models demonstrate that several avenues exist between
a government-run single-payer program and the current decentralized approach in
Canada.
Importantly, before we get into hypothetical estimates of how much a
national drug insurance system will cost, it's critical to understand the status
of current coverage already available to low-income Canadians. If, as research
suggests, these groups are already well covered, we should focus on whether
further expansion of government drug coverage to all Canadians (whether they
need it or not) would be a sound use of taxpayer dollars.
As with
the case of surgery, this is likely a situation where it's prudent to use a
scalpel instead of a baseball bat.
Bacchus
Barua is a senior economist in the Fraser Institute's Centre for Health Policy
Studies.
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