1996 ANNUAL REPORT,
PROVINCIAL AUDITOR
MINISTRY OF HEALTH
CONTENTS
Thursday 30 January 1997
Election of Chair and Vice-Chair; appointment of subcommittee
Committee business
1996 annual report, Provincial Auditor: drug benefit program
Ministry of Health
Ms Margaret Mottershead, deputy minister
Ms Mary Catherine Lindberg, assistant deputy minister, health insurance and related programs
Ms Linda Tennant, director, drug programs branch
STANDING COMMITTEE ON PUBLIC ACCOUNTS
Chair / Président: Mr Bernard Grandmaître (Ottawa East /-Est L)
Vice-Chair / Vice-Président: Mr Richard Patten (Ottawa Centre /-Centre L)
*Mr Marcel Beaubien (Lambton PC)
*Mr Dave Boushy (Sarnia PC)
*Mr Gary Carr (Oakville South / -Sud PC)
*Mrs Brenda Elliott (Guelph PC)
*Mr Gary Fox (Prince Edward-Lennox-South Hastings / Prince Edward-Lennox-Hastings-Sud PC)
*Mr Bernard Grandmaître (Ottawa East /-Est L)
*Mr John Hastings (Etobicoke-Rexdale PC)
*Mr Jean-Marc Lalonde (Prescott and Russell / Prescott et Russell L)
*Ms Shelley Martel (Sudbury East / -Est ND)
*Mr Richard Patten (Ottawa Centre /-Centre L)
Mr Gilles Pouliot (Lake Nipigon / Lac-Nipigon ND)
*Mrs SandraPupatello (Windsor-Sandwich L)
*Mr Derwyn Shea (High Park-Swansea PC)
Mr Toni Skarica (Wentworth North / -Nord PC)
*In attendance /présents
Also taking part /Autres participants et participantes:
Mr Erik Peters, Provincial Auditor
Clerk / Greffière: Ms Donna Bryce
Staff / Personnel: Ms Elaine Campbell, research officer, Legislative Research Service
The committee met at 1006 in room 228.
ELECTION OF CHAIR
Clerk of the Committee (Ms Donna Bryce): Good morning. Honourable members, it's my duty to call upon you to elect a Chair for the standing committee on public accounts. Are there any nominations for the position?
Mr Derwyn Shea (High Park-Swansea): I would be very pleased to nominate Mr Grandmaître.
Clerk of the Committee: Mr Shea has moved the nomination of Mr Grandmaître. Are there any further nominations? Seeing none, I declare the nominations closed and Mr Grandmaître be elected Chair.
The Chair (Mr Bernard Grandmaître): It's strange, but I do have a speech prepared. Considering my opponents, I think you've made the right choice.
ELECTION OF VICE-CHAIR
The Chair: Honourable members, it is my duty to call upon you to elect a Vice-Chair. Are there any nominations?
Mr Shea: I'd be very pleased to nominate Mr Patten.
The Chair: Any other nominations? Nominations are closed. Mr Patten, Vice-Chair, congratulations.
Mr Richard Patten (Ottawa Centre): Oh, thank you.
APPOINTMENT OF SUBCOMMITTEE
Mr Shea: I will move that the subcommittee on committee business be appointed to meet from time to time at the call of the Chair or at the request of any member thereof to consider a report to the committee of the business of the committee; that the presence of all members of the subcommittee is necessary to constitute a meeting; that the subcommittee be composed of the following members: Mr Grandmaître as Chair, Mr Lalonde, Mr Shea and Mr Pouliot; and that any member may designate a substitute member on the subcommittee who is of the same recognized party.
The Chair: All those in favour? All those opposed? Carried.
COMMITTEE BUSINESS
The Chair: I understand Mr Fox has a motion.
Mr Gary Fox (Prince Edward-Lennox-South Hastings): Yes. I circulated a motion here this morning for everyone to see.
I would like to move that the standing committee on public accounts request that the Ministry of Community and Social Services develop the cost comparison between institutionalized individuals (schedule 1s) and these same type of people based in community agencies within four months, as of this committee meeting (today), and that these cost comparisons be audited by the Provincial Auditor under section 17 of the Audit Act.
The Chair: Mr Fox, the fact is that we do have a few new members around this table. Could you please give us more information, if you'd like to.
Mr Fox: We've been dealing with the Comsoc people in a couple of previous meetings here, and I also have a concern with this as to the fact of my riding. We're quite concerned about the idea of closing out these institutions and moving these people into group homes, for more than just the fact of removing them and putting them out into the community. We have a particular institution in my area that is a village complex and we would like to see a cost analysis done here as to what it is costing us to keep them in the institutional fashion now as compared to in the group homes. We feel that there's an extreme cost moving them out into the group homes and a cost analysis at this time would certainly give us some more indication as to what should be done here.
Mrs Sandra Pupatello (Windsor-Sandwich): May I ask a question of the mover? In your motion, are you requesting the information within four months or for it to be tallied for a four-month period?
Mr Fox: No, the information within four months.
Mrs Pupatello: If I may continue, is that all institutionalized individuals or for a particular region or area?
Mr Fox: No, that's for everyone.
Mrs Pupatello: For Ontario?
Mr Fox: For Ontario.
Mrs Pupatello: So you'd like the costs Ontario-wide of institutionalized individuals versus individuals who are being cared for in community-service-based agencies?
Mr Fox: Right.
Mrs Pupatello: Is there a way you could narrow that? I'm thinking of the amount of work required. If you could get a sample, a subsample, say, I think you'd get the gist of the information you need without incurring the expense and volume of work by the ministry.
Mr Fox: The details of that I'd leave up to the Provincial Auditor, as to how he would like to go about it.
Mr John Hastings (Etobicoke-Rexdale): It would appear as if you'd have to have hundreds of people dealing with this subject, but it would appear to me that the Ministry of Community and Social Services ought to have in its database some overhead costs already for disadvantaged children and young adults who are in an institutionalized setting, or what the ministry defines as same. They ought to be able to take those costs and compare them to what the costs are in specific community-based agencies to which they want to move these young people and disadvantaged children. They ought to have some of those costs already.
If they don't, then I can't understand how they could be developing policy to deinstitutionalize, this whole philosophy, without a sophisticated database of costs. They ought to have some of these preliminary cost overheads to start with, and where they don't they should be able to develop them within, I would think, a month to six weeks. If you're looking at costs you would have to look at the counselling, supervision, physical overhead costs, transportation if they are taken to another agency for a specific skill they may be acquiring or for counselling purposes.
If they would want to separate that out, it would simply be on a programmatic basis of what the costs would be to have those sorts of individuals, disadvantaged children of any sort and young adults. They may have to categorize the programs down into the types of young adults or children who are sexually abused, autistic, emotionally disturbed, the folks who come from the community living context.
They ought to have some of that data already available and it ought to be on a database. I'm sure that the ministry would have some of that material, so it would require the assignment of, I would think, a limited number of people to gather that and provide that to the auditor for him and his staff to compare whether the way they're going is cost-effective or whether there are certain categories where it's cost-effective the other way.
We have been grappling with this issue for some time during the presentation that the ministry staff made, I think in late November. If one goes back and looks at the debate that went on and the questions that were raised by members of the whole committee, it was one of the primary concerns coming out of the committee. It also links back, to some extent, to the questions that have been asked in the previous fiscal year by the auditor in terms of the questions dealing with this subject.
Mr Patten: Being a new member to the committee, this may be an old issue. I'd like to get a comment from the auditor, if I could, in terms of the function of this motion. Would that enable you to address the intent of the member?
Mr Erik Peters: A number of comments, if I may: Firstly, let me just get the administrative stuff out of the way. It is perfectly within the purview of this committee to ask, under section 17 of the Audit Act, for us to perform special assignments on resolutions passed by this committee. We should do those. Our own timing is going to be fairly difficult because I have to put it in within the -- I'm allowed to put it into priorities of the office but we're going to work that in.
There are a number of difficulties with this. The original fact that we discussed at this committee was that the ministry has not funded these institutions on the basis of their actual cost but rather on percentage changes annually of the budget. You know, "This year we give you 2% more or 2% less," etc.
The main difficulty is that the ministry itself therefore has not really done cost and needs analysis of the institutions themselves, number one. Number two, the focus of government traditionally has been on input costs; in other words, how much does it cost us to provide the service? The motion itself directs itself at output cost; in other words, the cost per individual, what are we providing in output cost? That is a new slant on it and that will be interesting.
There is time given. Certainly from my office's perspective, we believe there's ultimately a cost that should be made available to members of this committee, or to the public at large; actually to the Legislative Assembly, which we serve. Ultimately, it is how we cost outputs that we should be concerned with in spending government money, as opposed to inputs, how many clerks we put into the thing. How many people are we serving, what are we providing to them and what does it cost us to provide that particular service to those people? It will be an interesting exercise.
To come back to the question, Mrs Pupatello, there is a very interesting point raised here, that there are differing costs across this big province of ours, and most likely what we're going to look at is that the costing will be done in terms of ranges. In some districts you will be able to provide that the institution costs so much per individual there as opposed to others, because normally Toronto has the higher costs and some others such as Ottawa may have some high costs, but it may be a lot less expensive in Thunder Bay or in North Bay. So there may be a matter of ranges.
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It will be a real challenge for another reason, that very little attention has been paid by governments traditionally -- and that's not unique to Ontario, it's across the system -- of how to actually cost programs: What costs do you include, what costs do you exclude in developing a certain program cost?
There are theories, and not necessarily to go to extremes here, but there are some who say that even the minister's office should be allocated to the programs the minister does and there are others who say you should only have the direct costs of who at the bureaucracy is actually delivering the service. Where you cut off and what you include and exclude are going to be a very challenging question.
I would expect that you will have probably, I would hope, a somewhat pioneering report, in terms of reporting on these costs, with a fairly long preface, I would suspect. I'm concerned about that, of assumptions made of what we assume to be in and what we assume to be out.
I hope that this report will give you a fairly good answer on comparison. Whether it will result in a fully definitive answer, I'm somewhat concerned about that because it may go a little bit all over the map, but I think we are willing to conduct this exercise and make it as useful to this committee as it can be made.
Mrs Pupatello: I just wonder, Mr Fox, as the mover were you intending for the survey to include children? Maybe we can specify that in your motion because it is a different set of community agencies that deal with children and youth than deal with adults. Mr Hastings's comments seemed to indicate he would look for the whole breadth. Rather than just saying "individuals," maybe you can specifically include children, youth and adults.
Mr Fox: Well, individuals --
Mrs Pupatello: That is what you intend? I guess that's the question.
Mr Fox: Yes, that's the intent.
Mrs Pupatello: Children as well.
Mr Fox: Everyone involved in this system.
Mr Patten: Just a friendly comment, Mr Fox: I would assume that the gathering of this information would also give us some descriptions related to the programs and some comment related to quality of life. You know, you could get, "Well, it costs the same, so why move anybody?" Objective financial figures might not tell you something, but if people are gathering this, there should be some comment in that report about quality of life and other factors in a different context in which the comparison is being made. That would be my only point on that.
If the assumption is correct that we're not just talking about somebody coming back and saying, "Well, it costs $100 a day in an institution and it costs $105 a day in the community," and we draw the conclusion that therefore we shouldn't be moving anyone out of institutions on the basis of these figures because it's too expensive, I would think that would be a wasted exercise.
The Chair: I think Mr Peters has an additional comment.
Mr Peters: If I may just make a short comment, in my reports certainly since 1993 and also before, we have commented on the fact that virtually most ministries do not effectively measure and report on the effectiveness of the program. I believe that your question of qualitative information as opposed to hard cost information gets at that point. From the way the motion is worded, and I'm not suggesting rewording, it would really widen the scope tremendously if we went into the quality issue.
One of the facts of life we're facing is that under section 12 of our act we can only report on the sufficiency or absence or presence of measures to report on the effectiveness, as opposed to in costs and efficiency we go all the way, we can audit the full scope. We're somewhat limited in the scope on effectiveness. From our perspective certainly we would encourage them to comment on this, but whether we can validate it, from the perspective of my office -- how valid that information is will be really up to the members of this committee more than my office.
Mrs Pupatello: I think we're just going to say that based on those comments, we'd be prepared to second this motion.
The Chair: It doesn't require a seconder. Let's take the vote. May I suggest that maybe once we get the report back from Mr Peters, then if you would like to go into the quality of services and so on and so forth, we can do so at that time.
Mr Fox: Exactly.
The Chair: On the motion as it has been read: For? Against? Carried. We'll now go into closed session.
The committee continued in closed session from 1027 to 1106.
1996 ANNUAL REPORT, PROVINCIAL AUDITOR
MINISTRY OF HEALTH
The Chair: We must apologize for our tardiness. We're more than eight minutes late. I want to welcome you to the committee and I would ask you to please identify yourself for the purposes of Hansard.
Ms Margaret Mottershead: I'm Margaret Mottershead, the Deputy Minister of Health.
Ms Mary Catherine Lindberg: Mary Catherine Lindberg, assistant deputy minister of health insurance and related programs.
Ms Linda Tennant: I'm Linda Tennant. I'm director of the drug programs branch.
Ms Mottershead: I would like first of all, Mr Chairman and members of the committee, to say how pleased I am to appear before you today to discuss the most recent Provincial Auditor's report and how it fits in with the Ministry of Health's efforts to create the best health care system possible for the people of this province. After my remarks the assistant deputy minister, with your indulgence and if you wish, would like to provide a brief overview of the drug program so that there is a context for the questions you might have, and also with her, Ms Linda Tennant will be happy to answer any questions the committee has about our response to the specific recommendations from the Provincial Auditor.
I'd like to begin my remarks by trying to provide some overall perspective on the ministry's activities and current direction. I wish to begin by quoting the ministry's business plan:
"We are searching for new solutions and new directions and have made changes at the top, including redefining the role of the Ministry of Health. Our new direction will result in seamless and accountable health care for Ontarians, integrating assessment, diagnosis, treatment, care, illness prevention and health promotion."
Another way to state our objective is to say that the ministry is working to ensure that the people of Ontario continue to have a high-quality health care system. To sustain the quality of that system it has to change to meet the evolving needs of the population. In our vision of health care, the patient always comes first. We want to ensure that health dollars are not lost to duplication, waste or excessive administration and that the highest quality of care is routinely accessible in every part of the province. We see opportunities for improvement because the providers and patients have pointed to areas that are perhaps inefficient and in some cases cumbersome.
We also value the input of our internal audit process and the recommendations of the Provincial Auditor. These sources of expertise are important parts of our management control processes. As our goal is quality patient care through the most effective use of resources, the Provincial Auditor plays a vital role in helping us to obtain value for our money and ensuring that our administrative activities are effective.
The audit function is a necessary evaluation of the effectiveness of controls on our programs. Specifically it assures us that existing controls are satisfactory or that improvements are needed. It also helps us to identify actual or potential control problems. A crucial function is also to help us identify changes that will improve the management, human resources, information systems and controls on our program.
To return for a moment to our business plan, it emphasizes in a very serious way the issue of accountability. Of course the Provincial Auditor is also very interested in accountability and value for money. Therefore, we welcome the auditor's recommendations as a way for us to achieve our goal of greater accountability. As explained in the ministry's business plan, we want to move from processing paper to being information managers. Part of that greater management function is precisely to be able to judge whether the ministry is administering its programs effectively and if we have adequate management tools.
The auditor's report has evaluated our programs using these criteria and has made many helpful recommendations to us to improve the way we manage our programs. Many of the auditor's comments deal with our use of information and how effective we are at managing the information we have to run programs effectively.
Again, I would like to refer back to our business plan. Under the heading of "Performance and Accountability Measurements," it says:
"The responsibility that comes with protected funding is significant and the Ministry of Health is serious about accountability of both financial measures and patient outcomes. In every sector, targets and benchmarks will be used and the best clinical data and cost-effective strategies will be employed. Results-based performance measures will determine the effectiveness of each core program and service.
"The ministry's new approach to information retrieval and management is the key to accountability. Continuously monitoring and evaluating patient outcomes, partnerships with providers, financial compliance and access to care makes it possible to identify pressures and to make adjustments. Reallocations and realignment within a defined budget ensures that resources go to where they are needed the most."
I would like now to take some time to discuss the Provincial Auditor's recommendations with respect to the Ontario drug benefit plan. The auditor made recommendations suggesting that the ministry needs to continue its efforts to monitor, assess and report on the effectiveness of the program. The auditor recommended the creation of a drug use review program to address inappropriate prescribing. It was noted that the ministry also needs to regularly review the drugs covered, examine alternate drug products and add new drugs in a more timely way, compare Ontario's prices with those paid in other jurisdictions, ensure that limited-use products are being used only by those meeting the eligibility criteria, and improve our inspection function.
Regarding the recommendation to create a drug use program, the ministry continues its work with the Ontario Pharmacists' Association to institute drug utilization reviews.
With respect to reviewing the products on our approved list, the expert external committee, the Drug Quality and Therapeutics Committee, has this task as part of its mandate. Recently, pharmaco-economic guidelines were developed to help guide the DQTC in selecting which products to include or remove.
We recognize the need to include cost-saving products more quickly, and changes included in the ministry's most recent red tape legislation will shorten approval time and allow us to include cost-saving products more quickly.
Regarding obtaining price information from other jurisdictions, the ministry is doing this as recommended by the auditor. We are also producing updated versions of our approved list of products more frequently in order to incorporate price reductions.
The auditor raised a valid point with respect to our management of limited-use products, so we have changed our criteria. There are now no exceptions to the criteria in order to receive the products.
Regarding inspections of pharmacies, the ministry is developing the pharmaceutical audit system to identify agencies to be audited. The ministry will also become more systematic by creating an annual inspection plan and standard tests for each inspection.
The Provincial Auditor did make significant recommendations. On behalf of the ministry, I would like to thank him and his staff for those recommendations. I believe we have been successful in making improvements in all the programs that were audited. That effort is a testimony to the value and respect we have for the auditor and this kind of accountability framework.
I would like now to turn to the assistant deputy minister for health insurance and related programs, Mary Catherine Lindberg, who will provide you with a brief overview and description of the Ontario drug benefit program eligibility, how it works, so that you have the context for the proceedings this morning.
Ms Lindberg: We have three drug programs in the Ministry of Health. There is the Ontario drug benefit program, which began in 1974 with eligibility tied to low-income seniors and to those individuals on social assistance. In 1975 it was extended to all seniors, regardless of income.
The drugs that we pay for and are covered are in a book called the Drug Benefit Formulary, which is this large book here that talks about all the drugs we pay for. The determination of which drugs go in there is by an external expert committee called the Drug Quality and Therapeutics Committee. The drug program provides coverage currently for about 1.4 million people over 65, about one million social assistance recipients, 54,000 home care recipients, about 2,300 homes for special care, about 68,000 residents of long-term-care facilities, and there's about 22,000 recipients on the Trillium drug plan.
Just for your further information, there are about 2,500 general listings for drugs in the formulary, 132 what we call limited-use drug products, where a prescriber must fill out a form to indicate what condition they will use this particular drug for, and then we have another section, called section 8, which is the section of the legislation that gives a physician the ability to do individual requests upon application. The Drug Quality and Therapeutics Committee reviews those applications and decides whether they will be paid for or not. There are 56 nutritional products, 16 diagnostic testing agents in the book, and we also pay for allergenic extracts.
The Drug Quality and Therapeutics Committee is an external expert advisory committee chaired by Dr Malcolm Moore, who is an oncologist at Princess Margaret Hospital. They evaluate and provide recommendations for all drug submissions from the manufacturers. No drug can be included in the formulary unless there is a submission made by a manufacturer and they meet certain criteria. They use two criteria to make a determination. One is pharmaco-economic guidelines, which gives them the ability to rate a drug against cost and benefit, as well as clinical criteria and manufacturers' standards. It provides advice to the ministry and the minister and it's a model that's used by most provincial governments across Canada to determine what drugs will be paid for by their provincial drug plans.
The current programs, all the programs, cost us about $1.2 billion. That includes both health and Comsoc for ODB, it includes the Trillium drug program and the special drug programs. For your information, that's broken down to about $900 million being spent on the cost of drugs. A third of that money is spent on the top 10 drugs listed in the book, which are mostly drugs used by senior citizens and include mostly heart and anti-ulcer drugs. We only spend about $72 million on drugs for special or limited use, and on the section 8s, where you have to actually apply for a drug to be paid for, we only spend $5 million, except they are the most costly drugs.
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We have a number of new drugs that are going to be coming on the market that will be costing this program a great deal of money. There are about four new AIDS drugs that if put on the formulary will cost about $5,000 per patient per year. There is a new multiple sclerosis drug that will come out that will cost about $12,000 per patient per year, and there are about 2,000 patients that would qualify for that, so it would be $24 million. This is the kind of thing we have to look at and evaluate, and the Drug Quality and Therapeutics Committee is the committee that looks at those particular drugs.
In order for us to operate the drug benefit program and the Trillium drug program more efficiently, we have developed a health network called the HealthNet, which is an online network in partnership with Green Shield. It does online claim adjudication for about 2,500 pharmacies. We're processing approximately 750,000 claims a week and it's the largest online system outside of Interac in the province.
The thing, though, that makes the health network very special for us and does help us manage this program is not that it pays claims on time or it determines eligibility. What it does is give us what we call prospective drug utilization reviews. It gives pharmacists messages about the patient's drugs and what they are receiving. Currently, in the last two years, we've had eight million drug-to-drug interaction messages given to pharmacists. These eight million prevent serious interactions between drugs. If the person had got one drug in one pharmacy and another drug in another pharmacy, there could be a serious interaction, and this network has given pharmacists the capability of understanding that they should not dispense it.
We've also had about 27,000 cases of duplicate prescriptions, which means that the same drug for the same claim on the same day has been prevented, and about 275,000 double-doctoring. A number of senior citizens, and you will hear this a number of times, go to more than one doctor because they have multiple conditions that need to be looked after, so they go to a GP, a specialist. What this system does is prevent a patient from getting the same drug or the same class of drugs from two different doctors on the same day or within the same week. This prospective drug utilization review has been one of the best things that's happened for us with senior citizens and helps us to make sure they are getting better value and better care within the province.
The other element with the senior citizens is that there have been claims that there have been a number of drugs dispensed and a lot of wastage. We moved in December 1995 to reduce the supply that could be given to anybody on the drug benefit program from a 250-day to a 100-day limit for all ODB recipients. This change prevents stockpiling and also prevents potential waste, so that a senior, when he or she gets a prescription, doesn't have a 250-day supply, take a week and then doesn't know what to do with the rest of it, because it can't go back to the pharmacy.
As you're aware, we've introduced a copayment charge for the drug benefit program. It became effective on July 15, 1996. We were the last province to put in a copayment and we also still have the most generous of copayment policies for both seniors and other people. The income levels come from the federal levels of the guaranteed income supplement. Those people, under $16,018 for singles or $24,175 for couples, pay $2 per prescription. Those people over those incomes pay a $100 deductible and then the dispensing fee. The maximum dispensing fee that can be charged is $6.11 but a number of pharmacies charge less than $6.11. There are about 450,000 people in the lower-income bracket and about 962,000 in the higher-income bracket.
There are currently 7,000 people a month who receive letters from the Ministry of Health two months prior to their 65th birthday that requires them to be eligible for the ODB program. These people are automatically put into the $100-deductible category and are told to apply for an application for the lower deductible, which is then being processed within 24 to 48 hours. Therefore, those people receiving their applications or their letters, if they put an application in, will be qualified for the lower income prior to their 65th birthday, which is when they become eligible for the ODB.
One of the major success factors we've had in the development of this program and in being able to continue to make benefits is the development of prescribing guidelines. We currently have three sets. One is an anti-infective guideline, one is on uncomplicated hypertension and one is on congestive heart failure. We have five more coming in 1997.
This provides two very important components to a prescriber. It becomes an education tool to allow physicians to know which drug to prescribe at what point. It also tells them about the cost of the drug so that it gives them an opportunity to prescribe a lower-cost drug. We've been told that the young doctors in training carry these guidelines around with them in their pocket, mainly because they're very helpful, and also when they give a diagnosis, what drug to use. Besides that, it also allows us over time to look at the prescribing patterns of physicians and to work with the physicians to develop different ways of prescribing so that we don't see huge variations in prescribing across the province.
We'd like to spend one second telling you about a local initiative that's been going on in Port Perry. It has been led by a local doctor who sat on the panel to develop the anti-infective guidelines. He's taken on the initiative to have town hall meetings and to work with all the other providers -- pharmacists, doctors, manufacturers -- and with the community to explain why guidelines are important, and how and when anti-infectives should be used and when they should not be used.
He's got grade 7s using these guidelines for a science fair, he's got grade 11s writing essay contests, and he has the home and school working with the children. The whole community has actually been rallied around to promote the effective use of guidelines, which is one of the ways of getting people to start thinking about how to use guidelines and how to use anti-infectives more appropriately.
For your information, 115 manufacturers have products in the formulary and one of their major concerns has been that it takes too long for us to get a product listed in the formulary. In the last two years we have been working very diligently to try to eliminate some of the submission requirements to get a drug listed. Last year, in March 1996, we harmonized with Health Canada to make sure that the kinds of criteria Health Canada were using were identical to ours so that they did not have to duplicate their submission requirements.
Previously there were 20 submission requirements or regulations that manufacturers had to comply with. We moved those down to about 11 or 12. In this last year, just now in February 1997, we've moved those to six so we are able to facilitate the addition of new products faster into the formulary. For your information, in 1994 we listed 98 new products, in 1995 we listed 132, and in 1996 we listed 269 new products.
We're also working with the federal government and the other provincial governments to develop a number of core requirements so that across Canada we have the same requirements for submissions of drugs.
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The other program I'd like to spend a few seconds on is the Trillium drug program. This is a universal drug program for people who have unmanageable drug costs relative to their income. It's a family-based program, so if an individual has high costs within the family and meets the deductible, the full family becomes eligible.
It's a yearly upfront deductible based approximately on 4% of your net income. It's based on the family net income and all members of the family become eligible. There is no upper limit on the income or deductibles that this program will cover. You have to apply every year and pay your deductible each year.
Once eligibility is established, all eligible members of the family receive the ODB benefits. You can use any Ontario pharmacy. As long as you take in your health card, the eligibility will be on the network and you pay, after your deductible, $2 for each prescription.
Applicants must disclose the following information: details about their family unit, their family income, and coverage and benefits received from a private insurer. We currently have about 255,000 people.
The Trillium drug program has an interesting age profile as it covers mostly people between the ages of 50 and 65. Those people have an income level of about $10,000 to $20,000. Those are usually the people who have some kind of catastrophic illness and have not got an employer or an employee plan that'll look after them.
That concludes my update on what's going on in the drug program.
The Chair: Thank you. Next on our agenda is Ms Linda Tennant.
Ms Tennant: Actually, no, I have nothing to add to the presentation.
The Chair: So we have about 26 or 27 minutes and we'll try and split the time. I made a deal with Mr Hastings that he would be first on the list, so we'll start with the Conservative caucus and then we'll move to the Liberals and the NDP. You have six or seven minutes.
Mr Hastings: I'd like to thank members of the Ministry of Health for coming before the public accounts committee today. I have several questions and I think you'll probably have to take some of them back with you to get some answers.
The first one I'd like to refer to is that the auditor has suggested that the Ontario Drug Benefit Act requires a change in legislation, or could it be done by regulation, to ensure that there is an additional number of years beyond the two-year retention for data that dispensing organizations have to keep for ministry inspection? That would be my first question to Ms Mottershead.
My second question relates to the whole role of the Drug Quality and Therapeutics Committee. I have had conversations through the Red Tape Review Commission and with the manufacturers, both generic and pharmaceutical, as to the long, grinding, detailed, bureaucratic, non-customer-friendly culture that they find in the Drug Quality and Therapeutics Committee and in the branch of your ministry that deals with the subject matter.
I would like to know whether you are looking at a clearer role for this group in terms of the drug approval process for getting drugs to market before you displace others, and do generics have to have the same sort of submissions for approval as the pharmaceuticals do?
It's good to hear that you have reduced the amount of time in terms of the submissions down from 20 to six.
I guess my last question would relate to how we are gathering data, unless it's through the health network, to ensure that our seniors are getting the drugs they require but do not end up becoming -- I've seen at least three examples in my constituency office of the number of drugs they had to cancel out the side-effects of one or another, in one case up to 12 different prescriptions they had. I asked them if they really required all these drugs and one gentleman said he was sure that at least three of the 12, from his own experience, that he'd been taking for at least two years weren't required. He said, "I feel like I'm a walking drugstore in terms of all the drugs I'm on." He had diabetes, high blood pressure, that sort of condition.
I guess those are my major concerns in terms of how we are spending our money in the program.
I think the auditor also brought up a very good point, and we have dealt with it with other agencies through the retail sales tax branch, of collecting money, the leakage that goes on in flea markets and small retail operations where we were concentrating on whether you should send PST inspectors in to see whether they're paying the PST.
I find a very interesting comparison with that situation with the four inspectors you have who are going in. I think my colleague from Lambton, Mr Beaubien, referenced this earlier before you arrived. We have inspectors concentrating on detailed situations from some fraud or alleged fraud and yet the amount of money collected back would probably pay maybe two of those inspectors' salaries for a year and a half.
In other words, the whole question of staff resources: Has the data collection you're getting in this program got benchmarks or some way on the computer software that you can see abnormal changes in the types of dispensing organizations?
Those are my major questions.
Ms Mottershead: I'll try and answer your questions and would ask the assistant deputy minister to also contribute.
I'll start with a response to your comments about the DQTC. What we have undertaken over the last couple of months and are close to bringing to conclusion is a sunset review of the committee. We have a team of people who are looking at the terms of reference, how the work is carried out and whether there will be recommendations to government to continue with that particular organization.
I should just mention, though, that in every province in this country there is an expert organization that has been put together to provide the kind of expertise that governments should have in making a determination on whether or not they will pay for a drug or list it in the first place.
I want to just emphasize that the very first objective of the DQTC is, and has always got to be, the quality of care, and the role that pharmaceuticals play in that quality of care is paramount.
The second consideration is cost-effectiveness of the drugs they're going to be recommending for listings, and that is a component to make sure that we do get value and we do get good outcomes for the drugs that are listed.
I think it would be irresponsible to have a group of drug companies making the direct determination that as soon as their drug is given approval, a notice of compliance, they automatically put the drug on the formulary. In our representations to the red tape commission, we tried to highlight and flag the distinction between quality of care and the role of pharmaceuticals versus having pharmaceutical companies having a direct role.
I'm not surprised that you've been hearing some of these comments being made. The red tape initiative was intended to eliminate red tape, and to the extent that we could balance the need to have quality and the need to have cost-effectiveness and a streamlined process, we have done that by streamlining the submission process, and the assistant deputy minister indicated that we've gone from about 12 to six. We have streamlined that process very carefully and in as balanced a way as possible. We will, again, have final recommendations from our committee looking at the DQTC.
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With respect to the drug network, it does in fact flag for the pharmacists who are actually dispensing products whether or not they are appropriate products for the diagnosis. It does look at other drugs that have been dispensed for the individual. Don't forget, it will have on the network the history of what drugs have been dispensed, so it's not just weekly, just-in-time information that's received but there's also the history of other drugs that have been dispensed to the patient.
I'm making a huge assumption here, and that is that the best people who have knowledge of what is required medically and what kind of drugs are to be used are the physicians. Quite often individuals tend to some self-diagnosis or try and guess that they may not need to take these many drugs or at this particular time. There are some areas where self-responsibility is important but trying to second-guess a physician as to whether you should be taking the drugs I think can sometimes get risky.
If anyone is in doubt, my suggestion to your constituents and others would be, if you are in doubt about the number of drugs you are taking, you're worried about the kind of effect they would have with respect to another three or four drugs that you're taking the same day or week, you should have that conversation with the doctor. We have to take a more proactive role in questioning: "Why do I need this? When I'm taking these other things, what is it going to do?" Let's try and understand the impact so that you know exactly what those drugs are intended to do and take a lot more responsibility for being educated about that and see the family practitioner or physician and get some answers directly from the people who have prescribed this medication.
The Chair: We must move along if I want to be fair to the rest of the members of the committee, so Mr Shea, you can blame your colleague for taking up your time. The Liberal members have seven minutes.
Mr Patten: Good morning. I have three questions, two quick ones so I'll start there first, and it relates to the comments you've just been making. My question would be: In light of the importance of the selection of drugs that would be placed on the formulary, with the concern about quality of care being number one, and then of course there's some relationship to costs, I wonder how you square sometimes, "This may be the best drug but it's too expensive," how that kind of decision might be made by such-and-such a committee?
The second one is whether you have any discussions with the OMA in terms of the physicians, mainly psychiatrists, and the follow-up that I believe they should be doing. I'm not saying this for all psychiatrists but I get so many representations and see so many experiences -- not me personally but personal experiences with friends and some with family -- where there is absolutely no follow-up at all by a psychiatrist after prescribing some kind of a cocktail for usage. It has to be an intervention by family or friends to be able to get that person back because it's not working. I want to ask you whether there is that kind of entrée or opportunity to talk with the OMA in terms of the protocol of follow-up, especially by psychiatrists, in terms of drug use and the impacts on patients.
Ms Mottershead: Yes. The DQTC's first priority is to make sure that quality care is available through the kind of pharmaceuticals that will be coming on stream.
With respect to balancing the cost issue, if there is a really high-cost drug and it is necessary for certain types of indications and it is really important, the cost issue is secondary or almost non-existent. If it's a necessary drug for certain conditions and its therapeutic value is undisputed, then it will be recommended to be put on the ODB, so that's not an issue they have to deal with.
With respect to your question around the OMA and the issue of psychiatry, there are some pretty specific clinical guidelines that go along with some of the drugs that are on the formulary or on the special drug program, section 8s and so on. One example that I give, and Mary Catherine can answer others, is the drug called clozapine or clorazyl, depending on what people are familiar with. It does require follow-up and there is follow-up. It's for schizophrenia. In that particular case, some of the detailing on that drug requires that there are blood tests that get taken every so often because of certain kinds of side- effects, so there is a mandatory follow-up requirement. Mary Catherine?
Ms Lindberg: The other thing is, to follow up on your psychiatry and prescribing of drugs, we have some guidelines being developed on mood and anxiety disorders. The other one is that we have some guidelines being developed for primary care physicians and use of psychiatric drugs to ensure there is not the kind of use of that kind of drug inappropriately. Those two guidelines will be coming out probably some time in 1997.
Mr Patten: My last area that's a big area -- and I would share this information with you, if you like, if you have not already received it, and I would also like to share it with the committee and the auditor. I had representations from a number of organizations that have a concern related to the Trillium drug program, where they feel that there are financial barriers to access. These organizations felt that the intent of the program was a good one and a needed one but a lot of aspects made it inaccessible or difficult to follow through and in some cases they were citing examples of encouraging people to actually go on welfare in order to qualify because they could not afford the kinds of drugs that they would have to pay for in terms of their particular portion.
They also had some suggestions related to the procedures: the deductibility, the procedures of how this is done. It takes so long that they cite, and I don't know where they got these figures, that 70% of Trillium applicants experience gaps in their medication. They say this is dangerous because in many cases there's a cumulative effect of their drug cocktail and if people start to choose and pick out things because they can't afford what's going on when they have to carry the costs between applications, it causes severe problems.
I haven't got time to go into all the details of that. I'd like to share this paper with you and get some reaction, and also to the auditor. But in essence what they're saying is to examine the deductibility for low-income earners, people on welfare; for others, look at spreading the payments in terms of considering the granting of interim approvals of applications; and to consider that some people are on long-term disabilities that are incurable at this stage, and while there needs to be verification, the reapplication process is burdensome and costly to the individual. I wonder if you have an initial response to that.
Ms Mottershead: Let me just start by saying that the Trillium drug program, which was introduced by the previous government and modified by the current government by adding another 140,000 people on the eligibility criteria, is the most universal program that any province has in this country. It is the most cost-effective for the patient of any comprehensive drug program in the country. We've got information and comparisons to share with you if you wish.
We have started a process of looking at minimizing the burden on those who have to accumulate so much expense towards their deductible before they become eligible. With respect to the suggestion around the reapplication, we are instituting a process that starts next week that basically will automatically re-register people so they don't have to go through the reapplication process, and that takes away a bit of the burden of going through that. There are some other initiatives under way that we are considering to make it as easy as possible for the individuals on the program. We'd be happy to receive the comments you have, Mr Patten, and look at those as part of our continuous administrative improvements in this area.
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The Chair: Mr Patten, if I may suggest, if you could share this paper with the clerk, maybe the members of this committee would be interested in following up on your findings.
Ms Shelley Martel (Sudbury East): I want to focus on the new user fees that the Conservatives have put in for drugs for seniors. I want to focus on the period in July when literally overnight you had hundreds of thousands of seniors who went into their pharmacies and found that they had been put into the higher-income category when in fact they should have been in the lower one and were then forced to make decisions about whether or not they could pay and whether or not arrangements could be made with the pharmacists and then wait for compensation. Specifically, I'd like to ask you, first of all, how many seniors were improperly classified when this program kicked off in July?
Ms Mottershead: I'll ask Linda Tennant to answer that question. She's got the statistics.
Ms Tennant: We did have some startup problems. With about 50% of the applications that we received in the first six to eight weeks people were already in the lower category. Unfortunately, regardless of how well we tried to publicize the program, there appeared to be a lack of understanding. A number of people -- 50%, as I say -- thought they actually had to fill in the form regardless. In the first six to eight weeks 50% of the people who sent us forms were already in the lower category.
Since late June we've received something like 95,000 applications for the lower category and about 85,000 have been put into the lower category. But that includes the seniors who were already 65 on July 15 and the approximately 7,000 to 9,000 seniors who turn 65 each month in the province.
Ms Martel: Can you tell me how many extra staff were hired on in July to try and deal with the applications that were coming in? We were talking to people who were working shifts that night. I'd be curious as to actually all of the costs, the staff costs, the phone line, the fax lines that were put in so that we could fax special requests or the pharmacies could fax special emergency requests. Can you also tell me then how many of those staff might currently be in place or have they been let go, and is it the ministry staff who were already in place who are now dealing with the program?
Ms Tennant: I don't have the data on the staff with me now. We did gear up in the initial stages because we knew there would be startup demand. The idea of running shifts was to facilitate the computer processing because there is a limit on the volume that the equipment could hold. That has all been stabilized as of September. We were able to process on a daily basis applications received within 24 to 48 hours. We've cut down on everything, including the time on the telephones, because the volume is so substantially reduced. But I can certainly produce the data.
Ms Martel: If you could, I would appreciate that. Then I'd have to ask you two other related questions. How many people would be left from the group in July and August who received compensation? I ask that question because I hear you telling me now that these are being processed within 24 to 48 hours, except that one of the first constituents we had in July was improperly classified. Both he and his wife were on the phone to me yet again last week, saying he still hasn't received his reimbursement.
I'd be interested in knowing, first of all, how much you had to reimburse people, because so many people found themselves in the wrong category overnight. Is that compensation now taken care of or are you still processing claims that go back to July and August? Because certainly his does, both his and his wife's.
Ms Tennant: We will be completely up to date by next week or the end of this week. The remaining outstanding accounts, the refunds that haven't been processed, haven't been finalized due to lack of information. We've had some difficulties with some receipts, making sure that the information we require was provided or available. We've also had situations where we've had duplicate receipts. The only cases that remain outstanding -- and I'm certainly not questioning you that we have some that are six months old, but all of those people have been contacted, and likely have been contacted more than once. We are trying to clear them up.
Ms Martel: In his case, it hasn't been like that. We did the work through our office just to be sure we had it right, because they don't speak English very well as a first language. My staff were contacting the program again last week.
I'd be curious to also receive any information about how much compensation then had to be paid out to people who had to initially go in and pay up front because they were in the wrong category and what the balance is that is left.
Frankly, I'm also very curious as to why the decision was made -- and I don't know if it was a political or a bureaucratic one -- to automatically classify people into the higher-income category and then force them to send in the information which proves they're in the lower category. The reason I raise this is because that affected a number of people in my riding quite dramatically, people who walked away from the counter and didn't buy their drugs, who came to our office and then we had to negotiate some arrangements with the pharmacist to set up billing statements etc.
There was a mechanism that the ministry already had in place, which I found surprising that it didn't use. Pharmacists in our riding told us that previous to the introduction of this program they could, for family benefits clients, override the ministry computers just on the basis of a call from FBA saying that person now qualified and so would get a drug card and then would not have to pay a prescription fee.
I raised this with the former minister early in August to ask why the ministry would not look at this same provision, because even though you are now mailing people information two months before and asking them to get ready, there are a lot of seniors who don't read that well, who don't understand what they're supposed to send in, who do have some kind of relationship of trust with their pharmacist and who, if they brought in their tax information to the pharmacist, that pharmacist could then override the ministry's computers, send in the relevant information, and it would probably cost the ministry less in terms of having to reimburse people later on.
I wrote to him, and I don't blame the deputy for the political response that was written back, but I think it's still worthwhile looking at it. For the life of me, I can't understand why people are still being classified automatically into a higher income tax bracket. If you're getting the names of the 7,000 people who are going to be told what they're supposed to do, surely there's got to be a way you can reference that with the tax files with the feds and make the changes yourselves without them having to send that information to you at a later date. Is that not possible?
Ms Mottershead: We did have that question and response, as I recall, during the ministry's estimates, as well as the written letter. But I guess one has to look at whether or not that's a global policy that needs to be implemented and how effective it is to deal with on an individual basis. Our concerns stem from having people give their personal information -- I mean, income information is a personal thing that is covered under the privacy laws. I understand that some individuals are quite comfortable in disclosing that information, but you can't work through the exception process.
How do you set up an override? How do you know it's legitimate? How do you know all of those questions? Having the data confirmed through one source, the Revenue Canada information, which is aggregated and not disclosed other than that you're over or under, we felt is the best way of protecting individual privacy. That's why that information is only available that way and received that way.
Ms Martel: But a pharmacist would have been able to do that on the basis of either an individual coming in and saying, "I have just qualified for FBA," or the pharmacist could have called the social services department to confirm that person was now on family benefits and at that point would have been able to override the ministry computer and provide prescriptions for an FBA client. I don't see what the difference is unless there's something about this process that has somehow changed recently.
Ms Mottershead: You're talking about two categories. The FBA category does have some seniors in it and you're also talking about the seniors' category. Are you suggesting that the program somehow be split so that if you're an FBA --
Ms Martel: No, no, I'm suggesting that the same override provision that used to be in effect for FBA clients could have been looked at and should be looked at for seniors who are trying to be reclassified into the proper category so that they don't find themselves in the position of having to send information in and make a payment up front. Before the program changed, before July, a pharmacist in the province could, when a person had just received permission to be on FBA, override the ministry computer and provide medication to that client without that client having a card in front of them etc. They could do that on the basis of a phone call to the social services department.
Why is that same mechanism not used in the case of seniors? Because the reality is, what is happening is, and I know it in our pharmacy, all of those seniors ended up bringing all their forms to the pharmacist to have the pharmacist help fill them out because they didn't know how to fill the forms out. The pharmacist was seeing their tax information anyway; he or she really was. They either came to us or they went to their pharmacist to do it, because the forms were available in the drugstore.
The Chair: Thirty seconds. We are being called for a vote.
Ms Lindberg: The difficulty we have is that we don't have the income information, so there's nobody to call for the income information. The other thing is that senior citizens have complained totally to us that we should not have that kind of information, nor should the pharmacist have that kind of information available. The onus is upon the person to disclose their information. The privacy commissioner does not want us to be involved in having that kind of information. So we do not have income information on senior citizens on file. We have the birth date, because that's on their health card application, but we do not have any kind of income information.
The Chair: I'd like to thank our witnesses this morning. This committee stands adjourned until February 6.
The committee adjourned at 1202.