(December 4, 2002) Roy Romanow’s report on reforming Canada’s healthcare system doesn’t adequately address the issue of federal funding for prescription drug coverage and home care, says Senator Michael Kirby. Following up on a speech in Toronto on Monday, Kirby, who authored his own report on healthcare, spoke further on the Romanow report today in Halifax.

Kirby’s Senate committee suggested in October that Ottawa take over 90% of prescription drug expenses over $5,000 per year. Kirby estimates that plan will cost the federal government $500 million a year and would guarantee that no Canadian would ever have to pay more than 3% of family income on prescription drugs.

Under the Romanow commission’s plan announced last week, 50% of the costs incurred by provincial drug insurance plans would be covered by Ottawa, above a threshold of $1,500 a year. But Kirby says Romanow sets no fixed maximum for prescription drug spending by individuals.

“Mr. Romanow’s plan would cost many lower income Canadians who face catastrophic drug expenses more than would the committee’s plan,” Kirby says. “Moreover, Romanow has not addressed in any way… the many private employer-sponsored plans that play a major role in insuring Canadians for prescription drug expenses.”

By shifting the burden of insuring against catastrophic drug expenses to Ottawa, Kirby argues, money would be freed up to help ensure the long-term sustainability of private drug plans. “Potential plan sponsors who have hesitated to adopt supplementary prescription drug benefit plans in the past may now be more inclined to introduce them,” he adds.

The Romanow report recommends the introduction of a national home care system, at a projected cost of $1 billion annually, including post-acute care, care for the mentally ill and palliative care.

Although the Kirby report does not address the issue of home care for the mentally ill, it does suggest that Ottawa cover patients for up to three months following their release from hospital, on a 50-50 cost-sharing basis with the hospital. Kirby estimates such a program would cost a total of $1.1 billion, compared to the $300 million Romanow has allotted to post-acute home care.

“It seems to us that Romanow has considerably underestimated the cost of an adequate, publicly funded, post-acute home care program,” Kirby says.

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  • Kirby also returned to the issue of funding in today’s speech. On Monday, he accused Romanow of relying on a forecast of “permanent” federal surpluses to pay for his proposals, suggesting that Romanow was ducking the funding issue.

    Kirby’s report recommended introducing a national health insurance premium, ranging from $0.50 to $4 per day for each Canadian, depending on income. Kirby says Romanow has chosen not to address the issue of where the money to pay for his proposals should come from. “The issue is quite simply not dealt with in his report.”

    The senator also takes issue with Romanow’s recommendation that the Canada Health Act be amended to make the provinces accountable for spending federal funds specifically targeted to healthcare. Kirby calls that “unwise and unnecessary” and argues that it will only serve to worsen federal-provincial relations.

    In a speech yesterday in Kingston, Ontario, Romanow argued that greater accountability in health spending is essential.

    “What happened to the $23.4 billion we added to the system just two years ago?” Romanow asked. “Most of it went through a block fund without an accountability framework and without basic agreement on priorities beyond a general intent to increase healthcare expenditures.

    “And where has it gone? What has been achieved from it? How have wait-lists improved, or access been enhanced or quality gotten better? We don’t know because, as the auditor general notes, we have no way of knowing.”

    A conversation about the implications of the Romanow report has already begun in the “Free for All” forum of the Talvest Town Hall. Doug Thornton, CFP, writes, “There can be no doubt that we, as professional financial advisors must redouble our marketing efforts on ‘living benefit’ policies.” Contribute to this conversation or start your own by posting your message in the “Free For All” forum of the Talvest Town Hall on Advisor.ca.

    Filed by Doug Watt, Advisor.ca, dwatt@advisor.ca.