PACC Committee Meeting

STANDING COMMITTEE ON PUBLIC ACCOUNTS

COMITÉ PERMANENT DES COMPTES PUBLICS

EVIDENCE

[Recorded by Electronic Apparatus]

Wednesday, November 26, 1997

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[English]

The Chairman (Mr. John Williams (St. Albert, Ref.)): Good afternoon, ladies and gentlemen. I call the meeting to order.

The orders of today, pursuant to Standing Order 108(3)(e), are consideration of chapter 13 of the April and October 1997 report of the Auditor General of Canada dealing with first nations health.

With us today are the Auditor General, Mr. Denis Desautels, and Ms. Maria Barrados, Assistant Auditor General. We are also expecting later a number of witnesses from Health Canada.

Since the opening statement by the Auditor General and the department have already been circulated, in anticipation that the other witnesses will show up soon perhaps I can ask the Auditor General to give his opening statement now.

Mr. L. Denis Desautels (Auditor General of Canada): Thank you very much, Mr. Chairman.

Thank you for the opportunity to present the results of our audit of “Health Canada—First Nations Health”, which was reported as chapter 13 in our 1997 report tabled in October.

I believe your review of first nations health issues is very timely given the recent studies expressing grave concerns that the health status of aboriginal people continues to be significantly at risk.

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Expenditures for health services delivered to first nations by Health Canada amounted to about $1 billion in 1995-96. Community health programs, including those delivered under separate contribution agreements and transfer agreements, accounted for almost $450 million, while non-insured health benefits totalled approximately $516 million.

Our audit found that managers of Health Canada did not pay sufficient attention to the management of these community health programs. In two thirds of the contribution agreements we examined the department did not have the information it needs to monitor agreements effectively and to help first nations build capacity and improve management practices.

A sound framework has been developed for the transfer of some health programs to community control. However, improvements are needed, particularly in the area of performance reporting and measures of changes to health.

I would encourage your committee, Mr. Chairman, to explore how Health Canada is going to address these issues.

The audit identified significant weaknesses in the management of non-insured health benefits, including pharmacy and dental benefits and medical transportation. In particular, there is an urgent need for comprehensive solutions to address the abuse of the prescription drug system.

Mr. Chairman, I would like to go over these quite briefly.

[Translation]

The program we are talking about lacks adequate systems and controls to fight abuse of drug benefits, which means that clients have access to extremely large quantities of prescription drugs. For about the last 10 years, Health Canada has been aware of the problem of misuse of prescription drugs. However, we have not found any evidence to show that access to prescription drugs is noticeably more difficult now than before.

Departmental data indicate that people have access to extremely large quantities of prescription drugs over short periods. The quantities obtained by certain people were such that they raised serious questions about whether these people were actually taking the medication or using them for other purposes. These same people, however, continue to request excessive quantities of prescription drugs, and the department continues to pay.

There have been many reports in a number of provinces of drug addiction and death among First Nations members due to abuse of prescription drugs. The problem involves enormous human costs and it is urgent to resolve it.

In order to correct the shortcomings of the program, Health Canada is planning to launch a number of new initiatives. The department is testing a point-of-sale processing system for its drug benefits, which is to be fully operational at the national level by the end of 1997. The committee may want to study the plans, milestones and results of the pilot tests and how the system is monitored and evaluated.

[English]

The department has also recently announced that a contract for the processing of pharmacy and dental claims has been awarded to a new contractor. Given the significance of this transition and our concerns about prescription drug misuse and overbilling of services by providers, your committee may want the department to elaborate on the new contract's impact on the point-of-service claims adjudication and drug use evaluation, the verification of claims, monitoring of expenditures, and auditing of providers.

Finally, Mr. Chairman, planning is under way to transfer the non-insured health benefits program to first nations control. As I have already noted, there are significant systemic problems and weaknesses in the program. In our view, any transfer initiative must recognize the identified weaknesses and assign responsibility for fixing them.

Mr. Chairman, that concludes my opening statement. Mrs. Barrados and I would be pleased to answer your questions.

The Chairman: Thank you, Mr. Desautels.

We are now joined by Mr. Cochrane, Dr. Wortman and Ms. Conway. We have your opening statement. In the committee, Mr. Cochrane, we try to keep the opening statements to five minutes, and we append the full report to our committee.

I'm wondering if we could have a motion by the committee to append this to the report.

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Mr. Mac Harb (Ottawa Centre, Lib.): I so move.

(Motion agreed to)

The Chairman: If you would like to summarize your opening remarks over the next five minutes, Mr. Cochrane, we'd be obliged.

Mr. Paul Cochrane (Assistant Deputy Minister, Medical Services Branch, Department of Health): Thank you very much, Mr. Chairman.

First of all, we apologize. We arrived at the commissionaire's desk at 3.20 p.m. to be told that the committee deliberations had been moved to 151 Sparks St., where we dutifully followed instructions. We ended up back here to be told by the same commissionaire to go back to 151 Sparks. But being very daring, we came to this room to find the session under way.

The Chairman: Thank you very much. Our clerk will check into why you were given wrong instructions. Your apologies are accepted. Thank you.

Mr. Paul Cochrane: Mr. Chairman, as I say, I'm pleased to have been invited here today to discuss the recent chapter in the AG's report and to set these health programs in the context that the AG has pointed out in terms of the poor health status of the first nations and Inuit when compared with the Canadian population. There has been a narrowing of the gap in terms of health status inequities, but significant differences still remain.

The Auditor General recognizes that the causes of poor health status are many and varied. He mentions, for instance, that poor socio-economic conditions are a major determinant of poor health among first nations. This is certainly the case. It means that the solution to the problem must involve the coordinated effort of all involved.

Health Canada is working closely with our colleagues at DIAND and HRDC, and with first nations themselves, to maximize the impact of resources allocated to the program. Where opportunities arise, we are working with provincial departments. This is vital to ensure the non-duplication of effort and that existing programs complement each other.

In their entirety, first nations and Inuit health programs comprise more than two-thirds of Health Canada's budget.

[Translation]

I would like to emphasize some of the aspects brought up by the Auditor General regarding progress made in delivering a health program that is both effective and cost-effective.

[English]

It's the policy of the department that first nations take control of the health programs at a pace and time of their choosing. The Auditor General found that the accountability framework the department has developed for the transfer initiative is basically sound in allowing first nations to take control. In fact, more than 30% of communities have already taken control of their programs by utilizing this framework. An additional 31%—in other words, in excess of 60%—are in some stage of transfer, planning, or negotiation.

We are encouraged that the AG's report recognizes the importance of transfer. We are working to improve reporting mechanisms to best serve the accountability needs of both government and first nations.

The report comments on the lack of follow-up of reports required in contributions and transfer arrangements. What we are seeking in Health Canada is to achieve a balance between the need for reporting mechanisms designed so that first nations program managers can be accountable to community membership and ensuring that information necessary for departmental accountability is provided.

We will be placing an increased emphasis on utilizing audit resources to monitor those agreements we consider to be at significant risk for problems.

Much of the report focused on the management of the non-insured health benefits program, which has a value of just over $515 million a year. The Auditor General pointed to areas that need improved management.

In a majority of cases, we have already recognized a need for improvement and have put in place plans to address many of these, or we'll be doing so shortly. I would like to go into this in a little more detail later, but first I would like to look at the overall cost management to this program.

In 1991, a scant six years ago, the cost of the non-insured health benefit program was increasing at 22.9% a year. During the past six years, management initiatives working with first nations resulted in the fact that the program has decreased to a level at which, last year, the growth rate in the program was actually negative: minus 3%. Over six years, costs have been decreased from 22.9% down to less than zero: minus 3%.

At the same time, this program has faced the challenges of 3% population growth and cost increases in the range of 5% to 8%. In other words, the cost drivers of the program have increased by between 8% and 11%.

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The Chairman: Mr. Cochrane, I wanted you to summarize the report rather than read it in detail, so perhaps you can just summarize what is left from this point forward.

Mr. Paul Cochrane: Okay. Thank you very much, Mr. Chair.

I'll get to the issue of prescription drug misuse. The Auditor General's report recognizes that the department is implementing its system in terms of point of sale. I would like to tell the committee that as of today 90% of all the claims submitted to the system—and this system in terms of drugs reviews six million claims a year, no small number of claims—are now going through point-of-sale technology and 100% will be achieved by December. That is not to say that we do not take prescription drug misuse and associated health problems seriously; we do.

However, it's important to put it in context. If you look at the figures in the Auditor General's report, some of them talk about multiple prescriptioning and multiple visits to pharmacies. If you take those in the context of significance, what we have is a small number of people who are misusing or abusing the system. Estimates are that it is between 1.5% to 2%, at the maximum. We would say that any abuse in the system is not acceptable, but the corollary of that would state that 98% or more of all people who access the system are accessing it properly. However, we will intensify our efforts.

In terms of auditing, we have a new contract, which we can elaborate on in question period, and we are working closely with first nations to ensure that they are involved in changes to the system and ensuring that the necessary health services to improve their health status continue to be received.

Thank you, Mr. Chairman.

The Chairman: Thank you, Mr. Cochrane.

Mr. Mayfield, eight minutes.

Mr. Philip Mayfield (Cariboo—Chilcotin, Ref.): I'd like to thank the witnesses for appearing here today.

In the light of the Auditor General's report, I believe some serious questions need to be raised.

Have you been aware, as the Auditor General suggests, of this prescription abuse problem for a period of ten years or more?

Mr. Paul Cochrane: Yes, we have been aware of the problem for some considerable period of time. Indeed, in 1989, which is eight years ago, we initiated the development of the computer drug utilization system so we could monitor recipients to ensure that the correct beneficiaries were receiving drugs or medical supplies. It also set up formularies for the first time in this program. It also began to identify information that was anecdotally available to us about misuse.

Mr. Philip Mayfield: The problem I have, sir, is that you have known about this for so long and yet the Auditor General presents a report that still outlines in very graphic terms the extent of the problem and doesn't reveal how it's been fixed. Now, you're pointing out some of the things that you've done, but when I look at statistics, such as that 24 people died of overdose in the province of Alberta alone in the years 1986, 1987, 1988.... That's only Alberta, and Alberta doesn't have the largest population of native Indian people.

Can you tell me how many people have died across Canada as a result of overdosing?

Mr. Paul Cochrane: No, I cannot, sir. Nor can I tell you that as a result of accessing the non-insured health benefit system any particular individual has overdosed because of misuse, because there is no statistical connection between misuse, abuse and the unfortunate loss of lives.

Mr. Philip Mayfield: Well, it seems to me the Auditor General is able to bring some of those figures out. Why can you not do that?

Mr. Paul Cochrane: Indeed, the figures that the Auditor General used in his report about Alberta were figures that our medical officer of health had available to him in Alberta. They were figures that I believe came from some coroner's information in Alberta.

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And yes, indeed, first nations citizens do die tragically of abuse situations, whether it be prescription drug abuse, substance drug abuse, alcohol drug abuse, or violent accidents.

I would like to point out that no system of itself will be 100% perfect.

Mr. Philip Mayfield: I can agree with you, sir, about the 100%, but what I have difficulty accepting is that it's not much closer to 100%.

I don't think it would be fair to ask for you to be accountable for every accident and every death that takes place, and I'm not doing that. What I'm looking at is a system that you've set up that goes back to the last three prescriptions in the computer program that you've initiated. Why can it not be on the basis of other programs that go much further back, are much more inclusive in the details, that will give the pharmacists, the nurses, the physicians involved in this the tools they need to understand what is happening to their patients and to their clients?

It seems to me that there is a great gap, and frankly a lack of motivation in getting this done. This has gone on for a long time, and in my mind it's inexcusable.

When I read this and I thought of the number of people in my constituency, I became furious. I couldn't read it any more.

Mr. Paul Cochrane: Mr. Chair, could I answer the question, please, or attempt to answer the question?

The Chairman: Yes.

Mr. Paul Cochrane: In my opening remarks and in the report that is now tabled to your report, I indicated that 90% of all our claims now go through a point-of-service system. So there's a pre-audit to the system. That has been in effect since June and now has 90% coverage. Previous to that we had a system in place where we did post-audit; in other words, we did a drug utilization review based on information from the same system, which came to us after the fact.

Based on information from that system, Mr. Member, I can assure you that over that period of time we have taken actions with many of the partners in this process.

I think it's important to recognize that what we're dealing with is a system that is not only a responsibility of one partner in the process. For example, an individual cannot access a prescription without visiting a physician and in fact getting a prescription in their hands, which is provided to them by a licensed physician. They can't have that filled without visiting a pharmacist, who will provide that prescription based on their professional—

Mr. Philip Mayfield: My time is about finished and I need to ask you one more question.

In the Auditor General's report he makes a number of recommendations, most of which you agree with and you're working on. Our parliamentary librarian has pointed out that in paragraphs 13.36, 40.44, 50.70, 74, 114, 123, 140 and 149 this is the case.

Will you provide this committee with a detailed description of your target dates and how you intend to implement each one of these recommendations? I think this is a very serious situation, and I would like to see you accountable for what you're doing and have that monitored by this committee. Would you agree to do that, please?

Mr. Paul Cochrane: I have no difficulty with that, Mr. Chair. Each one of these recommendations in fact will be followed up with a detailed action plan, which we provide to the Auditor General. I see no difficulty with providing a copy of that report to this committee. It will detail all of those actions.

The Chairman: Thank you, Mr. Mayfield. Madam Bujold.

[Translation]

Ms. Jocelyne Girard-Bujold (Jonquière, BQ): My question is somewhat along the same lines as that of the Reform Party representatives.

It was reported that between 1.5 and 2% of people have prescriptions and are taking over-the-counter medication. What measures do you intend to take to prevent that from happening?

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[English]

Mr. Paul Cochrane: In terms of preventing or attempting to prevent some of the misuse that certainly exists, we now have three tools. As I said—and I won't go into it—we have the point-of-sale technology. We are also continuing with our drug utilization review report, which now produces profiles on clients and on practitioners, whether they are physicians or pharmacists. And in some cases we can produce community profiles.

Even with point-of-sale technology, which will enhance the front end, we continue to produce the drug utilization review reports, and we have established protocols with all provincial licensing bodies because the regulation of physicians and pharmacists is within their provincial associations. Where we detect situations that appear to be abuse, we will continue to follow up with these provincial licensing bodies, as we have in the past.

The third prong is our work with communities where we work with the leadership in the communities in terms of awareness around the issues of prescription drug misuse and abuse so the communities themselves will be better equipped to deal with some of these problems in terms of their community membership.

[Translation]

Ms. Jocelyne Girard-Bujold: On another point, many services are dispensed to Aboriginal people at a very substantial cost, but are not provided for by the Act.

What measures will you put in place to have these services for Aboriginal people provided for under the Act?

[English]

Mr. Paul Cochrane: I assume when you say the “act”, you mean “by legislation”.

[Translation]

Ms. Jocelyne Girard-Bujold: Yes.

[English]

Mr. Paul Cochrane: In the previous AG's report, which I believe was the 1993 report, the AG pointed out that he felt the program should have a legislative mandate. In the 1993 report, Health Canada made it very clear in its response that Health Canada would bring forward a policy review to cabinet in terms of the eligibility for access to these benefits and the benefit levels themselves.

The department and our previous minister followed through with that commitment. They brought the program in terms of eligibility and benefit levels to cabinet. Cabinet reaffirmed the principles of the program and reaffirmed who should receive the benefits and what benefits should be received. That is the action the department and the ministry took in response to the observation in 1993.

[Translation]

Ms. Jocelyne Girard-Bujold: Thank you.

[English]

The Chairman: Thank you, Madam Bujold. Ms. Caplan.

Ms. Elinor Caplan (Thornhill, Lib.): Thank you very much.

At the beginning of these hearings, I made the comment that in the Auditor General's report you could substitute the phrases “senior citizens” or “welfare recipients”, and if you did a review of any of the provincial drug plans, the results would be the same. It's not just the program for aboriginal peoples in this country that would have the same findings as those in the Auditor General's report. Would you agree with that observation?

Mr. Paul Cochrane: I'm going to ask Dr. Wortman to continue this, but in terms of relativity, I wouldn't describe the system we have in place as a Cadillac. I would describe the system we have in place for monitoring drug abuse and misuse as a contemporary system based on standard industry practice.

In renewing that system we've gone one step further with point-of-sale technology. The honourable member suggested that a history of three prescriptions is not sufficient, for example. In fact, the only public system we are aware of in the country that goes beyond the system we envisage in the next year is the system in British Columbia. British Columbia has changed its provincial legislation over access to information and privacy, so there is a longer patient history on file. That required a change to legislation.

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I'd ask Dr. Wortman to comment in terms of utilization and misuse, because we have done several studies.

Dr. Jay Wortman (Director General, Non-Insured Health Benefits, Department of Health): Very briefly, your observations are correct, and we confirmed this. We commissioned two studies last year to compare codeine-containing drug use in our population to those of provincial social service and seniors populations—and also benzodiazepines. In both cases, we found that our population was about the same on the codeine drugs in terms of the pattern of use, but slightly better than the provincial populations on benzodiazepine use.

Ms. Elinor Caplan: The reason I ask this question is that while it is important and interesting for this committee to be looking at the native drug program, I think it also has relevance to understanding that the problems faced with the drug program run by Health Canada for the aboriginal peoples experiences the same problems as every provincial drug plan administering drugs to the populations in the provinces—usually in seniors and social assistance recipients, but in the case of Saskatchewan, their program is in fact available to all citizens.

I'm interested in the studies you have done comparing those programs, and in any of the conclusions you have come to that would lead to the goal we all share, which is optimal therapy. What that means is that people get the appropriate drugs that they need to improve their health status or their particular condition. Did you want to comment on that?

I think it's extremely important that we understand that it's the way the drug programs were set up. The claims payment method made it impossible to manage. Initially governments were the insurance companies. They simply paid the bills without any concern, frankly, because when they first established these programs, no one thought governments should be concerned about the results or the outcomes of the use of drugs. Today, we realize that not only do we want value for money, we want to make sure people are getting good therapy for the dollars we are spending, because that's the intention of these programs.

Dr. Jay Wortman: The studies we conducted made a correlation between the extent of overuse of these drugs that were being studied, and the regulatory environments in the jurisdictions of the provinces or populations that we were looking at. We were able to draw a correlation between looser controls on drugs and the level of use in our population. That correlation was pretty much a linear correlation. In other words, the provinces that had the tighter regulatory environments on controlled drugs, or tighter controls on drugs, had a lower utilization pattern in our population.

Ms. Elinor Caplan: I think the point-of-sale system that you're contemplating is an interesting and important reform, but I'm concerned that it's not going to change the prescribing patterns or in fact lead to the goal of optimal therapy. It may deal with the issue of abuse, but I don't think it deals with the issues of optimal therapy or what Ontario in particular discovered—and I believe it's universal as well—about drug reactions. Would you like to speak about that?

Dr. Jay Wortman: I agree that the technology doesn't provide a complete solution. The devices are only as good as the people using them, so we've added other functions into our program. We've invested heavily into a pharmaceutical and therapeutics advisory body that helps us to decide which drugs need to be delivered and which drugs we should try to control in terms of limiting use and so on. We've also developed a drug utilization review committee and a working group to examine the issue of control of drugs that we feel are subject to misuse by the clients. We've also.... I think I'll end my answer there.

Ms. Elinor Caplan: I guess the concern that I have is that, structurally, we still don't have a program in place to help to achieve the goal of optimal therapy. It's my view that if you did structure your program with the goal of achieving optimal therapy in mind, there would be greater savings, because people would be better informed, pharmacists would be better informed, and physicians would be better informed, and people would be getting better care. So I'm wondering whether you've given any thought to how you would structure a program with the goal of optimal therapy as the fundamental design and principle of the program.

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Dr. Jay Wortman: I refer to our pharmaceutical and therapeutics advisory body. Their work plan includes developing optimal therapy approaches to certain disease entities. In the new technology we'll have next year as we move into our new claims processing contract, we'll be able to build that in. The system has a flexibility to allow us to design certain therapeutic approaches for certain diseases. When the clients identify with that disease, then they are automatically eligible and able to access certain drugs, whereas those drugs may be limited for other populations.

So we're looking at that. We have also developed some communication links with pharmacists and physicians. We've developed a regular bulletin we generate now. It updates them on the drug plan approach we're taking and tries to steer them towards an optimal therapy approach.

I hasten to add that with a plan that deals with 640,000 clients, scattered all across the country, we're in a different environment from the one you would be in with a provincial plan, where you're basically dealing with a captive group of providers and prescribers. So the challenge is a bit harder for us, but we're trying to build some bridges with the provincial plans with this in mind, where we can share some of the work and some of the results.

Ms. Elinor Caplan: In fact, that was my last question: any information you have on federal-provincial cooperation which would lead to the establishment of plans where the goal or first principle is optimal therapy.

The Chairman: A very quick answer, Dr. Wortman.

Dr. Jay Wortman: We've just started attending the pharmaceutical issues committee, which is the FPT body that has the plan managers. I believe Linda Tennant, from Ontario, sits on that committee. It's part of our agenda in participating in that body to develop these links and to achieve those things we can really achieve only in partnership with the provinces.

The Chairman: Mr. Grewal.

Mr. Gurmant Grewal (Surrey Central, Ref.): Thank you, Mr. Chairman.

I have read chapter 13 of the Auditor General's report and I was quite disappointed I had so many questions which were unanswered. I want to get answers to a lot of my questions.

We have found out that expenditures of about $1 billion per year, particularly in 1995-96, are spent on the health care programs, but the efficiency was completely down. There was continuous misuse and abuse of this system. Money is being abused, in many instances, continually, year after year, for 10 years. Why couldn't the ministers or managers responsible in the department find out that this is a problem and why was corrective action not taken immediately? Who is the person in charge to be held accountable?

Mr. Paul Cochrane: At present I'm the person who is accountable for the program.

If you look at the $1 billion in expenditure, the $1 billion in expenditure breaks out at roughly half for non-insured health benefits and half for community-based programs. Now, whilst the AG report has identified in the sampling that there are some inadequacies, as they describe them, in our audit and follow-up procedures, the report did not in effect identify that there was actual abuse of any significant degree in the contribution agreements or in the transfer agreements. What it did say is we should strengthen our protocols to ensure it doesn't happen.

About strengthening those protocols, I would like to point out one thing. In any program we have options for how to utilize the dollars Parliament votes to us. In our case over the last ten years, with virtually every program dollar we have received, we have ensured it has gone to the community for programs. So we haven't invested in a disproportionate way in our audit program because we wanted the resources to reach the community level.

Mr. Gurmant Grewal: But there have been instances where dentists have been overcharging or repeatedly charging—forty times, in some of the instances mentioned here in the report. Why does this happen? Why haven't you take any action to fix the problem right there as it is happening?

The Chairman: Mr. Cochrane, the members only have a very short time, so if you could keep your answers brief I would appreciate it.

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Mr. Paul Cochrane: Well, I appreciate the importance of brevity, but I also appreciate the importance of the context around an issue that doesn't have a simple solution. In this case, I will ask Dr. Wortman to respond to this question.

Dr. Jay Wortman: We actively audit pharmacists and dentists in the program who are deemed to be billing inappropriately or when there is some suggestion in the pattern of billing that attracts the attention of our auditors. In some cases we turn these practitioners over to the regulatory bodies and action is usually taken. In some cases we turn them over to the RCMP for investigation.

Currently we have several files active. At the moment I don't think we have any that are actively being investigated by the RCMP.

Mr. Gurmant Grewal: I appreciate that, but the point is why can't you stop it? Why does it keep happening year after year? Why was corrective action not taken and the results produced when you detected it?

Mr. Paul Cochrane: That's a very good question. As I started to respond to a previous question, to put up a national system that covers ten provincial jurisdictions and two territorial jurisdictions to ensure access for clients one always has to balance the issue of client access versus potential abuse. I can assure you that in balancing client access versus potential abuse we do not set up a system that assumes people will abuse the system. We set up a system that assumes practitioners will use the system appropriately.

Now that we have a lengthy history in this program and can see where practitioners appear to be abusing the system we do act, we do follow up, we do report to the college and we do have the RCMP investigate.

Mr. Gurmant Grewal: I appreciate that. I also notice that Health Canada has a plan to implement several new initiatives. But again, how will you monitor and evaluate those programs? How will we know whether those programs are effective? Who is assuming the responsibility if that is not happening any more? Because it has been happening for the past many years.

Mr. Paul Cochrane: Thank you, excellent question.

Dr. Jay Wortman: We recognize that there are weaknesses in the audit capacity in the program. We've been in discussions with our internal audit directorate. We've reached an agreement that we're going to have a review with recommendations on the audit requirements for our program with a view to having those incorporated into the next claims processing contract, which takes effect July 1, 1998. So that will be under way very shortly.

The Chairman: Thank you very much.

Next is Mr. Myers. Four minutes please.

Mr. Lynn Myers (Waterloo—Wellington, Lib.): Mr. Cochrane, you know some of the weaknesses inherent in the system. The point of service that is being implemented and the changing of contractors will presumably help with the non-insured health benefits program.

As I understand it, some of the transfers will start to take place April 1, 1998. I'm a little worried about the systemic problems inherent in this very complex area. I wonder if you could at least speak to that and address whether there is adequate time to take care of systemic problems before that kind of transfer takes place. In light of the point-of-service implementation and the new contractor, is there adequate evaluation time built into that system to enable you to look fully at that whole area before that transfer starts to take place?

Mr. Paul Cochrane: In terms of transfer, I think it's important to recognize that the protocol we're currently working on for the transfer of non-insured is being done jointly with first nations through the lead of the Assembly of First Nations, with regional representation of first nations organizations all across the country. It is not just a federal initiative to put this framework together; it's a partnership approach.

This week we have had further discussions with first nations. They continue to express some concerns about insufficient time for discussion and consultation. It has now been agreed that we will allow the consultations and discussions to continue until April 1, 1998. Based on those findings, we will implement the framework during the course of 1998-99. So, indeed, in discussions with first nations we've now extended the framework period.

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What's also important to understand is that the framework doesn't make it essential for first nations to transfer. This is the framework under which they would transfer should they choose to transfer. They will still be the ones to decide whether or not they wish to take on the responsibility.

Mr. Lynn Myers: I'm a bit disturbed by the department's inability to quantify the potential waste that has occurred over the past. Is there any way in which you can do that in a percentage term, or is that something that is simply non-quantifiable?

Mr. Paul Cochrane: The program, as I said, faces a number of pressures. I previously outlined how costs had been “driven down” from in the magnitude of 22% annually to minus 3% last year. So there was a negative growth in the actual outflow of public funds, when population is increasing by 3% and costs by 5% to 8%.

In an era when we are bringing down the cost-growth curve against an upward-inclining demand curve, I'm not suggesting to you that there aren't improvements still available in the system. I think in every system there's still room for improvements. But in terms of the management levers in the system, in terms of negotiating better arrangements with pharmacy associations, in terms of negotiating better fee schedules with dental associations, those things we have been actively doing. We continue to pursue them. We continue to look for opportunities, like in British Columbia—

The Chairman: Thank you, Mr. Cochrane.

Mr. Paul Cochrane: —and Saskatchewan, where we no longer pay dispensing fees.

So quantifying that particular statistic would be extremely difficult.

Mr. Andrew Telegdi (Kitchener—Waterloo, Lib.): I want to go back to what Ms. Caplan talked about, the therapy.

To the AG: when you pick this report up, it's a very damning report, and it's not put in any kind of context. By context I mean getting AG's reports and looking at comparatives in terms of social services, if you will, as to what is the situation there.

When you're dealing with the whole issue of prescription drugs, there has been all kinds of abuse. I've been watching some American programs where there's trafficking in prescription drugs, where once people obtain them on benefits they end up back in the pharmacy. Some pharmacists rebought them, which has all sorts of health implications outside of the fraud that's taking place.

Does your department check with the provincial AGs? I'm sure there must be some work done in this area across the country.

Mr. Denis Desautels: Mr. Chairman, I thank Mr. Telegdi for the question.

I think Mr. Telegdi called our report a damning report. I just want to say that in writing this report, as in any report, we chose our words very carefully, and we think it represents very fairly the situation that we noted. I must say that my own people were quite disturbed by some of the evidence that they found.

If I might, on that point, add just one slight comment, when we make comparisons between this situation and others, I would caution committee members to be careful, because averages can sometimes hide problems. In this particular situation that we've looked at, you can take a national average and it gives you one answer, but when we dig below you will find quite significant variations in some provinces, in some bands, from those averages. Those are the problems that we really have to worry about. So when you do that, you put your finger on some very difficult human situations that have to be taken care of.

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To answer your question in terms of comparability with other situations, where that is meaningful we do it. We're aware of similar programs in provinces. For instance, we're aware of similar programs for veterans. And we're aware that there can be, with different groups of clients, certain problems, and when we can learn from others we bring that into our audits. But I must say in this case the evidence we found was very disturbing, particularly when we dug below taking straight averages and looked into deviations from those averages.

Mr. Andrew Telegdi: I would dare say that there's a problem in the whole area of government prescription drugs, funded by various levels of government, right about the country. I would like to get some sense of that so we're looking at this particular problem not just as a problem isolated to natives, but a problem right across the country.

As well, my colleague, who was a former Minister of Health for the Province of Ontario, talks about optimal therapy as being very much a problem right across the country. We have all sorts of cases where we have over-medication for seniors; it's well known and documented, and it's costing all sorts of money.

So I would like to have things in the broader perspective, because if I pick up this report and I can say that the government is wasting money on the natives again, versus saying that there's a problem in this area and there is a problem with the federal government and there are challenges faced by the rest of the country as well, that's the biggest concern I have.

Also, getting back to the whole issue of optimal therapy, when are we going to start looking at what kind of bang we're getting for the dollar in terms of the nation's health and the kind of money we're spending? I would really appreciate it if some of the other AG's reports could be looked at to see if they could have some relevance to us.

The Chairman: Madam Barrados.

Ms. Maria Barrados (Assistant Auditor General, Office of the Auditor General of Canada): We tried during this audit to look for those comparisons. We did the reviews and we did the searches, and there really aren't very many direct comparisons.

In regard to the question you pose about the approach taken to these programs, we, as the auditors, take the programs that Health Canada is delivering and look to see how well they're doing. On the drug side, the kind of study Dr. Wortman was referring to was an effort to do that. But if you actually begin to look at it the numbers don't hold up, because you're talking about a social assistance population and you're comparing it to all the natives in that particular province. A good proportion of the natives in that province have very controlled access to prescription drugs, so those are not comparable numbers. And you start to disaggregate them and you have these phenomena in these communities where the prescription drug problem is destructive of a community—and we cite some of those examples in the report. We could not find anything comparable for any other population that would compare to this.

The Chairman: Mr. Cochrane, when I read the report I was like some of my other colleagues. I was very distressed by what I saw was a very serious management problem in this report. First of all, I think it's that we see few reports from the Auditor General that have 12 recommendations for change, and it's even more unusual for all 12 to just be agreed upon by the department. That, to me, is an indication of the department's acceptance of the very severe critical remarks by the Auditor General.

I'll now turn under the heading of “Transfer of Health Programs to Community Control”, to start managing their own health programs. As we are moving towards giving them more autonomy and direction over their own affairs, everybody recognizes it's a slow transfer. It's a transfer program they need to build up their skills.

I was looking at paragraph 13.56, at how the plans are rarely ever updated. When we look at paragraph 13.57, you're entering into a second five-year renewal of the programs, which requires updates and evaluations, and you're using the renewal based on a five-year-old plan. When we look at paragraph 13.62, we see that “reports seldom include performance information”, as is required. What is going on with the management of the department when it's not following up on its own rules and regulations?

• 1630

Mr. Paul Cochrane: If I might, Mr. Chair, I think it's important to point out at the outset that as a matter of fact the transfer framework that is on the table receives a recognition from the AG that it is a very good transfer framework. In terms of—

The Chairman: Nobody's debating. My question was not about the value or the validity of the transfer program. I said the management of the department, in supervising the program, doesn't meet your own criteria, and my question was why?

Mr. Paul Cochrane: There are many ways to meet the criteria—

The Chairman: But you have set out specific examples of audits and reviews and you don't do your own audits and reviews, and I want to know why.

Mr. Paul Cochrane: We don't do 100% audits on all of our contribution agreements or our transfer agreements, and I don't know of any organization, whether it's a health organization, a financial organization or a revenue collection organization, that does a 100% audit. I think the report doesn't recognize the fact that in working with transfer communities, we don't just work with a community, put a transfer protocol into process and never again visit or work with that community during the course of the next five years.

The Chairman: But my point, Mr. Cochrane, is in looking at 13.57, and let me quote:

The transfer framework makes it clear that the community health plan, as a key planning document, should be updated regularly to keep it current.

Towards the end of the same paragraph, he says:

We observed that about three quarters of the renewed transfer agreements were based not on updated plans but on the community health plans developed at the beginning of the transfer process, more than five years earlier.

How are you going to enter into renewal agreements when your own documentation—and maybe somebody was there—is not current and your own department really doesn't appear to know what's going on?

Mr. Paul Cochrane: I can assure you that the department does know what's going on, Mr. Chairman. In fact—

The Chairman: Let's ask the Auditor General. Do you think the department knows what's going on?

Ms. Maria Barrados: Mr. Chairman, it's very hard for me to know what's in people's heads. That's really the issue.

When you have a large number of activities, you have frameworks that are set up to have the implementation of the programs at arm's length, so the documentation becomes extremely important because that is the basis for the agreement as people change and as circumstances change. It is the basis for accountability, and it's a basis for assessing whether this agreement is working in the way it was anticipated. And all this has very serious consequence in terms of health. We didn't find that information there, and we feel it should be there.

The Chairman: Thank you.

Mr. Paul Cochrane: May I continue?

The Chairman: Yes, please.

Mr. Paul Cochrane: As I say, if a community puts a five-year agreement in place and if their community health priorities do not change during the five-year period, if they stick with the priorities they have established.... Because you might remember that in many of these communities we're not talking about trying to make incremental change in health status, we're talking about allowing the communities, under a community development model and a self-government model, to make changes that will have downstream implications. I'm not sure that during the course of a five-year period just keeping a community health plan up to date on a monthly or yearly basis is necessarily the best investment of resources. I—

The Chairman: Five years might be more appropriate, though. I'm trying to point out to you that your own agreement calls for this, and yet you don't do it. This is not something that is being foisted upon you, so why are you putting it in the agreement?

When I take a look at 13.63, I see that it says “The transfer framework requires”—this is your own policy—“that an evaluation of effectiveness be conducted by the First Nation every five years”, and funds are to be provided for that purpose.

The Auditor General says “Only four of the 24 agreements we reviewed had been in place for more than five years; two of those had not been evaluated.” The other two hadn't. Your own policies are not being followed. Why?

• 1635

Mr. Paul Cochrane: Indeed our policies are being followed, because there is nothing in our transfer agreements that says that there must be a complete evaluation of each program after five years.

We have now done two major omnibus reviews of our transfer program. We did an interim evaluation, where we brought together selected communities from across the country to review the process, to review the progress on it. We've also done a second follow-up in evaluation of the transfer process, utilizing different communities in terms of follow-up. But each agreement is not audited against all of the requirements.

The Chairman: Okay. Let me ask a quick question to the Auditor General. Do each of these agreements call for an evaluation assessment at the end of their agreements? Yes or no?

Ms. Maria Barrados: Yes, there is a requirement for an evaluation, as we've described in exhibit 13.11. In addition to that, there's a requirement for audit. So there are two requirements. The audit includes a financial audit as well as a more comprehensive audit.

The Chairman: That's a policy of Health Canada.

Ms. Maria Barrados: That's part of the structure framework for transfers.

The Chairman: So what are you telling me, Mr. Cochrane? Are you disputing what Ms. Barrados said?

Mr. Paul Cochrane: No, I'm not disputing it at all, but evaluation is carried out in many ways.

The Chairman: No, she said there's a requirement for a financial audit and an evaluation of the health. That is the policy of your department, and now you're trying to skate around it.

Mr. Paul Cochrane: No, I'm not trying to skate around it, Mr. Chairman. I'm saying that evaluation takes place in many ways. The evaluation doesn't necessarily mean that after a five-year period somebody sits down with that community and writes a report.

The Chairman: So why does your policy call for that?

Mr. Paul Cochrane: But the policy says there will be evaluation during the period. That evaluation is ongoing in many cases. We have staff who visit these communities on a regular basis.

The Chairman: I want to change the subject, if I may—

Mr. Andrew Telegdi: Mr. Chairman, you've been going on for eight minutes. You should be abiding by the time limits we get.

The Chairman: Okay, I'll finish up with one more question, Mr. Telegdi, and we may see if we can get another round here.

Moving to paragraph 13.141, which is transportation and your lack of control on the way that money is being spent, medical transportation cost some $65 million. The Auditor General says ambulances are sometimes used as taxis. There's a huge abuse, as he pointed out. One client had 150 trips in a five-month period. How are you supervising that—paragraphs 13.141, 13.144, 13.145?

Mr. Paul Cochrane: Certainly there's no doubt that in systems there is abuse. In this case—and I believe it was in Saskatchewan—in terms of this particular audit, the particular situation that's pointed out in here certainly did exist. It is not acceptable. Where we find situations like this, those situations are followed up on and reported to the authorities.

But I would indicate that in the vast majority of situations, clients access services appropriately and providers provide service appropriately. That is not to excuse situations such as this. This situation is of concern to us, and any situation like this is of concern to us.

If you look in the context of the current processing system, eight million claims are processed annually.

The Chairman: I appreciate that.

Mr. Paul Cochrane: If one were to audit the adequacy of the provision of services for each of those eight million claims, I would have no money left in my budget to provide direct services at the community level, but I would have a beautiful, 100%-correct audit protocol.

The Chairman: I think you have a serious management problem, Mr. Cochrane.

Mr. Mayfield, you have four minutes.

Mr. Philip Mayfield: Thank you very much, Mr. Chairman.

I'm interested in a couple of statements you've made that there's no abuse to any significant degree and that you do actively audit pharmacists and dentists.

I note in the Auditor General's report that there were no audits undertaken before the summer of 1995. Then for the 18-month period following that, 1995-96, there were only 47 pharmacy audits and 13 audits of dental providers, despite the fact that there are about 6,500 pharmacies and 18,000 dental-care providers.

• 1640

When the job got started, in 1996 alone there were 5,500 claims which had apparently been paid twice, for a potential overpayment of over $166,000 in 1996 alone. During that three-month period there were 160 transactions which suggested the same prescription was filled at more than one pharmacy on the same day. Is that the nature of the audits your department is running? It seems to be a very meagre view you have of what is happening across the country when I see these small numbers and the amount of abuse which turns up when you first turn the stone over.

Dr. Jay Wortman: The audit picture has been one of an accelerating process, partly driven by the availability of technology. We really couldn't do large-scope audits without having first developed the claims-processing system, which collects all the data in an electronic format, and that wasn't really up and running until three or four years ago. That's why you see fewer audits before that and then an increasing audit activity since then.

What you're seeing also is the tip of the iceberg. You're seeing the site audits, where a lot of screening work has already happened to narrow the focus down on practitioners by examining those large volumes of claims data. Sometimes that's done in an automated way.

All that having been said, though, you'll note we do agree with the Auditor General's recommendations in this area, because we recognized that the language in our existing contract was weak in the area of audit. We've put stronger language in our new contract, which takes effect a few months from now. We're also conducting a review of our audit needs, with recommendations, to ensure when we get into the new era, with the newer technology, we have appropriate audit language and capacity built into the system.

Mr. Philip Mayfield: Did you say a few months from now, sir?

Dr. Jay Wortman: That's correct.

Mr. Philip Mayfield: What concerns me is that we're not looking at a new problem. I believe this is a problem the Auditor General discussed in 1993. You've agreed it's something you talked about over ten years ago. The merest turning over of the first stone seems to indicate serious problems, yet you're really still getting into it.

I'm really concerned. Do you not have a way of accelerating handling a serious problem which is jeopardizing Canadian lives? This is more than a managerial problem, as our chairman has pointed out. This is a health problem. This is a life problem. People's lives are being sacrificed, it would seem, because we don't have a handle on the problem. For goodness' sake, it's that which concerns me.

Mr. Paul Cochrane: In responding to that question, I think it's important to recognize at the beginning that the problem we see here is a problem that is a symptom. We take this problem very seriously, but it is a symptom of an underlying problem. The underlying problem is the overall health status and the conditions that exist in most first nations communities: conditions in some cases of hopelessness, despair, and geographic disadvantage. Prescription drug abuse is a symptom.

While we are dealing with these issues, we are also spending enormous amounts of time with these communities, working on programs and working with first nations to put in place things at the community level which will in the long run, we feel, contribute to these solutions as well. If people have jobs, if people have better housing, if people have running water, which many of these communities don't have, then the condition which manifests itself in somebody becoming self-destructive we think will also be dealt with.

The Chairman: Madam Bujold.

[Translation]

Ms. Jocelyne Girard-Bujold: Sir, I am shocked. Frankly, I did not think the situation was as bad as that. The Auditor General identified these problems in terms of what you have done in the whole area of health of First Nations peoples.

• 1645

You say that you are carrying out pilot tests, that you have a new contract with a new firm to monitor this, that and the other thing. But how can I be sure that all these questions... The Auditor General indicated that he was very disturbed by the problems that were identified. I would like a commitment from you to table the results before this committee of the tests that you are going to do.

You also say that on April 1st, 1998, you will have a consultation framework with Native people, and that in 1998-99, you will have the framework to transfer non-insured health benefits to the First Nations. I think that you have a lot of work to do and that the committee will have to monitor you closely. Those are my remarks.

[English]

Mr. Paul Cochrane: I accept the—

The Chairman: You will table the report?

Mr. Paul Cochrane: I accept that. I said we would table the action plan.

We have nothing here to hide. The Auditor General says he has seen self-destructive behaviour in communities. The 1,700 staff in the medical services branch of Health Canada are in those communities every day. These are our nurses on the front line in those communities dealing with those people who demonstrate self-destructive behaviour. These are our people in these communities who are faced with suicide epidemics. These are our nurses and community health representatives. The community members are the ones who are trying on a daily basis to deal with that.

Nobody accepts the situation, but the solutions to many of these problems are not solutions that I will be able to table with this committee in two or three years. The solutions to these problems rest in the communities, with communities being allowed to create many of their own solutions in response to these problems. It's not something I can track for you on a graph over a five-year period.

The Chairman: Thank you, Mr. Cochrane.

Mr. Paul Cochrane: So I will provide all the information the committee requests—

The Chairman: Mr. Cochrane, we have a point of order.

Mr. Philip Mayfield: Mr. Chairman, in light of what Mr. Cochrane just said, I and my colleague asked him to table a report. I didn't have in mind the report coming....

May I ask you, sir, to determine when this report might be tabled with this committee?

The Chairman: Mr. Cochrane, when can we expect this report to be tabled?

Mr. Paul Cochrane: What I undertook with the committee was to table the details of the recommendations, which we will follow up as a result of the Auditor General's report.

The Chairman: When?

Mr. Paul Cochrane: Myra, when are we supposed to submit this?

Ms. Myra Conway (Director of Programs and Operations Co-ordination, Department of Health): We are planning to have the first draft completed by the end of this month.

Mr. Paul Cochrane: So we will be tabling this on the schedule prescribed in terms of follow-up to the Auditor General's report.

The Chairman: Okay.

Mr. Paul Cochrane: We will be pleased to provide the committee with a copy of the action plan.

The Chairman: Thank you, Mr. Cochrane.

[Translation]

Ms. Bujold.

Ms. Jocelyne Girard-Bujold: The Auditor General had to make you aware of all these shortcomings and identify them. Although your department has 1700 employees dealing with Aboriginal issues, who should be close to the Aboriginal people, you were not aware of all these shortcomings. The Auditor General had to point them out to you. I do not understand.

[English]

Mr. Paul Cochrane: No, the AG's job is to review our program and make comments on it. Indeed, many, if not most, of the statistics in these reports.... In 1993, when the Auditor General did his review, most of this information in fact could not have been put on the table because the systems to collect the information were not available. The systems to detect the abuse were not available.

I and my medical officers and nurses can listen to stories about situations, but without the critical information to follow up and take actions. So since 1993, which is when we put in a fully automated system, we have had a situation whereby we can identify the problem and the risk associated with it, and we can develop corrective actions. But those corrective actions will occur over a number of years. As I said before, many of the solutions just won't lie with a perfect system.

The Chairman: Thank you, Mr. Cochrane.

Mr. Mahoney, you have four minutes.

• 1650

Mr. Steve Mahoney (Mississauga West, Lib.): Mr. Chairman, I hope you will be as generous with my four minutes as you were with yours.

The Chairman: I will.

Mr. Steve Mahoney: I'm interested in the fact that we tend to blame the victims in a lot of these cases. If the committee would indulge me, I'll tell you, very briefly, a story.

Several years ago my mother had glaucoma. She was given a prescription drug for the purpose of fighting an infection. She was given, by an ophthalmologist, 29 refills of a prescription drug that any doctor would tell you will destroy the eyes. It ultimately destroyed her eyes. She's 100% blind as a result of 29 refills of this prescription. She sued and won, but she's still blind.

The comments made by Mrs. Caplan about the fact that you can substitute seniors, or almost any particular group, into this issue are really rather poignant for me. They tried to blame her because she took those eye-drops on a daily basis because they felt good.

I wonder if a little bit of the same problem exists in this situation. Somebody has to prescribe those drugs. In my mother's case, it happened to be a doctor who, thank the Lord, is no longer practising as a result of that case. Still, somebody has to prescribe them. There has to be a system. There are all these hands, it seems to me, in the picture, whether it's the physicians' and surgeons' colleges, whether it's the CMA, whether it's the provincial governments, whether it's perhaps a regional board of health or dispensing service, or whether it's the pharmacy organizations you talk abut.

My question, then, is whether there is a role here, a coordinating role. We have all heard about the devolution of powers. The latest buzzword in government these days is “devolution” of powers, watering down authority. Who actually monitors this?

I refer you to paragraph 13.91, which talks about pharmacy providers not being connected to a system or network. Yet I see where you have such a system of proof for dental services. I just heard you say that there is some kind of fully automated system, but the AG is saying there isn't.

I'll finish my little diatribe with a couple of questions. Is there a role for Health Canada to play in coordinating and taking charge of an approval system? Is there indeed an automated system that can track when a patient is being either over-prescribed or given opportunities to abuse prescriptions? That I would take beyond the native community and say that it should apply in some way to the use of prescription drugs.

These are drugs that can kill people, obviously, if they're misused. They can blind people, which I have proof of in my own family. They can cause irreparable harm to people. Is there a role for Health Canada to play in this?

Could I ask you to respond in a way that, with due respect, is maybe not so defensive? I appreciate your defending your department and the passion with which you defend your nurses and those people on the front line. I understand that. But rather than being defensive about that, is there something out of this we can come away with that would prevent a situation like my mother's problem happening and would prevent some of the terrible tragedies the AG's people have uncovered in the native community?

Mr. Paul Cochrane: I'll let Dr. Wortman speak to that first.

Dr. Jay Wortman: You're quite correct. I think we need to consider that when a person obtains drugs that end up causing a problem—in your case, an inadvertent problem with your mother, which I'm very sorry to hear about—there are four parties involved: the physician who prescribes the drug; the client who takes the prescription; the pharmacist who fills the prescription; and our program, which pays the bill.

Now, in the past, when that bill was sent in by mail, in paper, and handled at a distance, and at some point in time after the transaction occurred, there was very little you could do to understand the pattern of misuse or prevent the misuse. You were doing something retroactively, much later, at a great distance from when it happened.

Things have changed. There are electronic systems now available and in fact installed in many parts of the country, one of which we are currently rolling out ourselves through our current contractor. All pharmacists are connected in real time to a central claims processing system that has the capacity to check things like drug-drug interactions and inappropriate patterns of drug usage. It can be programmed to limit how many prescriptions of a certain drug a person can take.

• 1655

In the case we're talking about here, it can recognize patterns suggestive of misuse; for instance, a prescription that has already been filled somewhere else, somebody who has had a pattern of visiting multiple pharmacies or seeing multiple physicians.

Those systems exist now. Ninety percent of our claims are flowing through a system like that now, and we'll be entering into a better, more flexible, more modern system in July of 1998.

We feel that that system is going to do a lot to address the problem that you've raised here and that was raised in the Auditor General's report. But I hasten to add that those systems are only as good as the people who operate them. So it doesn't relieve us from a lot of the other activities that we continue to do, which means monitoring how effective those systems are and how well they're achieving those targets.

Mr. Paul Cochrane: If I could just add to that for a moment, sir....

Mr. Steve Mahoney: You can add to it, but what I'd like to ask after you add is, does the auditor concur with that?

Mr. Paul Cochrane: What we don't have yet—and I'm not aware of any jurisdiction that has it—is a system whereby our system will be completely interlocked into the provincial system, with the possible exception that if we go to the same technology as in British Columbia, you would have one interlocked system. So, as health practitioners across the country, we still struggle with having one single interlocked system of prescription drug delivery.

Mr. Steve Mahoney: But you'd like to have one.

Mr. Paul Cochrane: Yes, we certainly would.

Mr. Denis Desautels: Mr. Chairman, I agree with the representatives of Health Canada that this is a major move, a major improvement, which happened sometime after we completed our audit and we're fully supportive of that.

As Dr. Wortman said, however, it won't automatically cure everything. There will be a need to use the system properly, to monitor what messages it's throwing out to Health Canada and the contractor. Also, different protocols will have to be worked out with pharmacists and others who can, if they want to, override the system. We have to consider incentives for those people to make the right decision and still not lose out financially.

Mr. Mac Harb: Dr. Wortman, speaking about the information at the pharmacies—if somebody goes to a pharmacy, all of the pharmacies are connected in real time and they'll be able to find out who he visits and so on—where does that sit in terms of the privacy of the individual? Are you violating any privacy act here?

Dr. Jay Wortman: For privacy reasons, the system does this behind the scenes; the adjudication happens in the computer and the computer sends a message to the pharmacist. So the pharmacist does not actually see the client's history, or their medical record, or their history of prescriptions, or where they've been in the past; but it sends a message to the pharmacist saying, this is a concern, multiple pharmacies seen. Then the pharmacist has to make a decision and gather more information.

Mr. Mac Harb: Is that dummy-proof, is it intelligence-proof?

Dr. Jay Wortman: It's not foolproof, because pharmacists can override the system. That's necessary, because often there is a valid reason for why the prescription should be given.

In British Columbia they addressed this problem by changing their privacy legislation in the province, which in fact allows the pharmacist to see a 14-month prior history of prescriptions. To my way of thinking as a physician, that's an ideal situation. However, the problem is that we deal with all jurisdictions in the country, so we have to have a system that's acceptable in all jurisdictions.

Mr. Mac Harb: I sense personally that we have two types of problems here. One is what Mr. Cochrane brought up, and that is the situation in the native communities. We have a housing crisis in the native communities; we have an educational crisis in the native community; we have a high level of suicide; we have a lack of unemployment; we have health problems.

Has the Auditor General had a chance to look at this whole package altogether to find out, in terms of the native situation and all of those different categories, whether we are really doing the right thing?

• 1700

In a sense now, we have a situation that the health department can't cope with because there is a crisis, and perhaps.... I don't know who is directing the housing situation there, but they probably have a similar situation. And who's in charge of education? They probably also have a similar situation.

I'm speaking loudly because there seems to be a lack of a central coordinating mechanism in place to look at all of the checks and balances, in my view. In fairness to the Department of Health, rather than chasing them, because they are dealing with one part of the problem, perhaps we have to look at the whole situation objectively. Is there any way we can look at something like this, under your authority perhaps?

Mr. Denis Desautels: Mr. Chairman, we are quite aware there are a multitude of problems within our native communities—not only within our native communities, but they have their particular problems, and you've highlighted quite a number of those. We've looked at some of those separately over time, and reported back on housing, for example, or other issues.

I think we've talked to the native communities a lot as well, about how they perceive their situation and their relationship with the crown. They themselves would tell you that they would like to have better coordination and consistency in their dealings with the crown. For instance, we're talking today about Health Canada. Well, that's one department they're dealing with. They also deal with HRDC. They deal with DIAND. they would like the Government of Canada and the crown to deal with them on a more consistent basis, and to make it easier for them to relate to the Government of Canada.

So there are certainly improvements that can be made along those lines, but it's not that.... You know, we're dealing with complex issues. There's no magic solution, but I think we owe it to members of Parliament to try to relate each one of those single problems to the greater set of issues.

Mr. Mac Harb: Mr. Chair, I have just a very quick one.

Since the report of the Auditor General has come out, it seems to me that a number of initiatives have been undertaken by the department to address some of those concerns. I think it would be very helpful for us, as members of the committee—and to the Auditor General as well—if the department were to come up with a progress report sometime within the next six months in terms of some of those issues, for example.

From my end, I just want to thank them very much for being so upfront. I also want to thank the Auditor General for bringing this issue to our attention.

The Chairman: Thank you, Mr. Harb.

Mr. Mayfield, one question.

Mr. Philip Mayfield: Thank you very much, Mr. Chairman.

You mentioned the computer systems, and you raised a flag for me by isolating British Columbia. I'm aware you do have some problems in British Columbia with the lack of agreement with the B.C. Pharmacy Association. I'm aware of some of the ramifications of that—you have somebody show up to pay cash at a dispensary each day, for example, which raises a whole group of questions about accountability there, too. But the question I want to ask you is in regard to the problems that you do have in British Columbia. How are you relating your computer system to the British Columbia computer system? If you are not, what provisions do you have to make that connection possible within a short period of time?

Dr. Jay Wortman: British Columbia is a special case because of its Pharmanet system, which is a fairly advanced system compared to the others in the country. In fact, when any citizen in B.C.—and that's including our clients—presents a prescription, whether they're paying cash or whether they're getting it paid for by us or by the B.C. Pharmacare system, they are subject to the same adjudication, the same checks, the same internal checking on their history of prescription drugs. So in British Columbia, I think our clients benefit from our program. We benefit from that systematic approach to all prescriptions in British Columbia, and that applies to all citizens there.

• 1705

As you point out, we did have some difficulties in coming to an agreement with the pharmacy association in B.C., but in my latest meeting with the executive director of that association I think we got past the problems we had with them initially and I expect things there will go smoothly fairly soon, if they are not already going smoothly.

Mr. Philip Mayfield: Mr. Chairman, I didn't quite understand about the computer. Could I just have that clarified in the question I asked?

Dr. Jay Wortman: It's my understanding the British Columbia Pharmanet system—

Mr. Philip Mayfield: Are you hooked into it?

Dr. Jay Wortman: No, we're not directly hooked into it, and I'm not sure we will be. It's something we would like to do, but I don't know if it's feasible at this point.

That system monitors every prescription dispensed in the province to every individual, whether it's paid for through a pharmacare plan administered by the province, a private plan, us, or cash. So the checks and balances the computer brings to this system, the monitoring of patterns of abuse and so on, apply to any citizen in B.C.

Mr. Philip Mayfield: Does that information come to you?

Dr. Jay Wortman: No, we don't get that direct information, but the information goes to the pharmacist at the time the client is there to pick up the prescription.

The Chairman: Mr. Myers, one question.

Mr. Lynn Myers: Mr. Chairman, I want Mr. Cochrane to go back to the non-insured health benefits program just for a minute, specifically the prescription drug abuse and the overbilling by health care suppliers and some of the ambulance abuses which were in the Auditor General's report.

The perception, as I see it, anyway, is that Health Canada has somehow failed to intervene and eliminate the kind of waste inherent in that. I wonder how you respond to that perception of the waste that was part and parcel of that whole benefit program.

Mr. Paul Cochrane: One has to look at the problem in context. When you're dealing with individuals who need a service and you're dealing with a system that is mandated to provide this service, you have to make sure the “gatekeeper function” is not so rigorous or so perfect, you might even say, that one would deny service to somebody who needs the service. In designing the system one has to balance the need to access service, the requirement to access service, against the gatekeeper function. If I have a first nations client who is in essence my responsibility and one is going to err in this process—and in this process one does err from time to time—to err on the side of access is probably a good thing to do, rather than to deny the service provision to an individual who needs the service.

That does not relieve us of our obligation to follow up where we find abuse. But that is the determination we always have to make in setting up systems: what does it mean to deny access versus what does it mean to gain access? When you allow the gaining of access, you have to live with the implication of potential abuse and the follow-up.

The Chairman: Let me ask the Auditor General about this.

Mr. Desautels, Mr. Cochrane is trying to say he errs on the side of ensuring the service is available, but the way I read it, when somebody uses an ambulance 150 times in five months, or when I find a dentist claims 40 times the provincial average.... But more on the case of being able to provide a service there, do you think Mr. Cochrane's position that it's far better to have a bit of wastage to ensure the service is there...or to your mind can we eliminate a lot of this wastage and still ensure service is being delivered?

Mr. Denis Desautels: Mr. Chairman, I'll start the answer and I'll ask Mrs. Barrados to complete my answer.

I think it's possible in these programs to make improvements in delivery without sacrificing accessibility for those who are really in need. We would not want to deprive anybody of accessibility when they need it just to please the system and our criteria.

I think there is scope for improvement, and I think at the end of the day there are two benefits to that. First of all, if you cut out some abuse you might free up more resources, more money for those people really in need.

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The other advantage is that accessibility for people who are not really in need carries a lot of danger. From our work we've seen some human tragedies that are made possible by easy access. I think we all have to share responsibility in those situations.

When you're balancing accessibility with tighter controls, you have to keep that in mind as well. The federal government is paying for those services and has a duty to make sure it is not too easy for people who are not in need to access the system.

Maria, would you like to add anything to that?

Ms. Maria Barrados: I have just a couple of things.

Mr. Cochrane is absolutely right, there is an obligation to provide service here to people in need. But as we point out and as he has described, the program also has had a problem of escalating costs. The department has made some real progress in bringing some of the costs down, as Mr. Cochrane described, but those costs are still going up in the transportation and pharmacy areas. So a lot needs to be done to contain the costs and make sure the people who need the service have the service provided to them. That's where the obligation of management kicks in.

There's no effort here to say that people who have a medical need shouldn't get the service. On the contrary, we would like to be sure the people who have the need get the service and the people who don't have the need don't get the service.

The Chairman: The question I have deals more with the cost overruns on the dental side. Quoting from paragraph 13.136, it says “All audits of dental care providers found questionable billings.” It goes on to talk about $20,000 for one person, $15,000 for another, another person was convicted, and so on. In exhibit 13.16 you say a dentist claimed $27,000 for 356 coloured surface restoration procedures and that's 40 times the average performed by dentists in the province. What percentage of claims was being audited?

Mr. Paul Cochrane: I would like to discuss our action plan rather than our past actions, because you asked me to bring solutions to the committee.

In the case of dental work, we have implemented a predetermination model across the country. Every first nation citizen who accesses this program will go to a dentist who will identify the treatment needed. If it will be over $600, that program will have to be sent to us for predetermination. That particular program will prevent in the vast majority of cases any replication of the information you see in exhibit 13.16.

So the predetermination model we have now introduced nationally will eliminate most if not all of the ability of practitioners to manipulate the system.

The Chairman: I think private insurers were able to implement this system years ago.

Mr. Paul Cochrane: We are using a private carrier to provide us with our claims processing system. We did not create a second-rate, made-in-a-black-box system. The carrier who provides this is providing the same coverage to Inco, the City of Scarborough, etc. This is a contemporary system that is being run by a private contractor. The renewed contract will be run by a private contractor in partnership with first nations.

This system is not different from all other systems run by private carriers in this country. The rules and regulations that govern this system are very much in line, and indeed this system has some checks and balances in place that most private carriers in the country do not have.

The Chairman: Okay. We'll look forward to the Auditor General's follow-up report in two years. In the meantime, I'll ask the Auditor General for some closing remarks.

Mr. Denis Desautels: I really don't have anything to add at this point except to say I'm quite happy that Health Canada has already started to respond to our concerns and recommendations. I would simply encourage them to stay the course despite some of the complexities they face.

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The Chairman: Thank you, Mr. Desautels.

As all the members know, the Auditor General is bringing down another report next Tuesday, December 2. I'm sure we all wait with bated breath. There is a briefing for all members of Parliament who have been invited to attend the lock-up, which I believe this year starts at 9 a.m. in, I presume, the reading room of the Centre Block. The report will be tabled at 2 p.m. in the House of Commons, at which time it becomes public.

There is a meeting of the public accounts committee the following day, December 3, at which time the Auditor General will be talking about his report.

The meeting stands adjourned to the call of the chair.