No. It’s not progressive or fiscally responsible
The Ford government’s decision to privatize much of OHIP+, the universal public drug plan for children and youth, will not save Ontarians money or provide better coverage. Here are four reasons why.
First, there is no such thing as a free lunch. Private insurance companies do not pay for your prescription drugs. You do.
So, as OHIP+ is eliminated for children and youth eligible for private insurance, hundreds of millions of dollars in new expenses will fall on Ontario business owners and workers. Privatizing pharmacare in this way is a tax by any other name.
For workers, this will disproportionately affect the middle class: those doing well enough to have jobs with extended health coverage but for whom the increased premiums will represent a sizable share of take-home income. The consequences for small and medium sized businesses are also significant because government is handing them costs they cannot control and may not be able to afford.
Second, private insurance for necessary medicines reduces cost control.
Effective pharmaceutical cost control requires careful consideration of scientific data and effective negotiating power with multinational drug companies.
Having multiple payers who do not always consider evidence weakens a country’s purchasing power in price negotiations. This is why drug prices are about 40-per-cent higher in Canada than in countries with single-payer, evidence-based pharmacare systems.
Ontarians would be better off with a single-payer, publicly accountable OHIP+ system. Of course, such a program would never cover every drug on the market. Nor should it.
Not every medication is safe enough, effective enough, or priced competitively enough to justify universal coverage.
Third, private administration is astonishingly costly.
When prescriptions are paid for through private insurance, those footing the bill must pay for the drugs and for the private insurers’ costs of administration, marketing and profits. Those costs are far greater than the cost of public health insurance plans.
For some perspective of administration costs, the deputy minister of health for Ontario made over $400,000 in 2016 — not a bad paycheque. But the CEOs of three private health insurance companies each made over 15 times as much (yes, over $6 million each).
Consistent with executive compensation, the overall administration cost of health care paid for through private insurance in Canada is more than10 times greater than the administration cost of health care paid for by provincial health plans: 11.7 per cent versus 1 per cent.
Thus, privatizing much of OHIP+ in the way the Ford government has announced will require that Ontario businesses and families pay millions of addi- tional dollars in administration costs on top of millions of dollars for the high cost of the prescriptions themselves.
Fourth, eliminating universality will create barriers to coverage and access.
Making OHIP+ the “payer of last resort” will reduce access to medicines by more than gaps in the public formulary have done or ever would do. Because the public formulary already covers drugs that account for the vast majority of prescriptions Ontarians need, very few patients will benefit from accessing the additional choices on private formularies.
Yet, because the OHIP+ program will require a new system of registration and annual proof of entitlement, many families will fall through the cracks. Such registration processes will predictably prevent many families from accessing public benefits they would otherwise be entitled to.
When obstacles limit access to routine but essential treatments — such as insulins for diabetes or maintenance drugs for asthma — the negative consequences can be significant.
Given all of the above, Ontarians should oppose the privatization of OHIP+.
The decision to privatize much of the OHIP+ program reflects a vision of pharmacare — possibly of the whole health care system — that is neither progressive nor fiscally responsible. It benefits narrow interest at the expense of the majority of Ontario businesses and households.
Being new, OHIP+ was an obvious first public drug benefit for the Ford government to privatize this inefficient and inequitable way.
But it may not be the last. Seniors, in particular, should take note: their benefits might be next.