PACC Committee Report

In accordance with overall government priorities, Health Canada is moving away from direct delivery of health services to First Nations. Instead, status Indians and Inuit will increasingly manage and control their own health services at the community level.

Due to the large numbers of Canadians directly affected, the costs involved, and the crucial transition to community control that is currently taking place, the Committee decided to examine Health Canada’s management of this service. To this end, the Committee met with Mr. Denis Desautels, the Auditor General of Canada, and Mrs. Maria Barrados, the Assistant Auditor General, on 26 November 1997. Mr. Paul Cochrane, Assistant Deputy Minister, Medical Services Branch, Dr. Jay Wortman, Director General of Non-Insured Health Benefits, and Ms. Myra Conway, Director of Programs and Operations Coordination, appeared on behalf of Health Canada.

In his Report of October 1997, the Auditor General was critical of the Department’s management of these programs. He indicated that the Department was not paying sufficient attention to the delivery of Community Health Programs nor to the results achieved in terms of improved health. With respect to the Non-Insured Health Benefits, he found that the Department’s lack of rigorous management and control may have contributed to poor community health rather than its improvement. He also argued that in the absence of stringent audits, money was being spent in ways contrary to the program’s intent. The Auditor General reiterated these observations in his statements to the Committee.

The Department did not disagree with the Auditor General’s observations. Instead, departmental witnesses emphasized that Health Canada was already aware of many of the problems brought to light by the audit, and is now taking steps to correct them. The witnesses indicated that cost management measures are having positive results --- a factor noted by the audit. They also argued that delivery of health services to First Nations faces numerous challenges and that problems associated with the programs were not dissimilar to those found in other health service regimes.

The Department has agreed to virtually all of the audit’s recommendations and has pledged to implement each one of them. Some efforts are already underway to implement changes while others are being planned. The Committee welcomes Health Canada’s commitment to resolve the problems identified by the audit. While in some cases, the Department has been aware of these difficulties for almost ten years, the availability of new technologies and methodologies should result in a speedier response.

The Committee is anxious that the Department fulfil its commitments and that the changes will result in better management of health services and improved health for First Nations communities. Accordingly, the Committee makes the following recommendations.

Community Health Programs are delivered by First Nations’ communities under a variety of arrangements with the Department. These arrangements differ in terms of the degree of control exercised by the communities concerned. According to departmental data, as of 31 March 1997, 60 percent of First Nations’ communities were delivering programs under separate contribution agreements. In theory, this kind of arrangement gives communities the least amount of control and requires the greatest departmental involvement.

The Department’s goal is to encourage communities to exercise greater control offered under arrangements known as "transfer agreements." According to the Auditor General, the Department has estimated that by 1999-2000 approximately 60 percent of First Nations will be delivering their health services under this type of arrangement. (13.24) The Auditor General approves of the accountability framework, developed by the Department, that will govern the transfer process.

The Committee supports the goal of greater community control. Nevertheless, the audit’s findings give reason for concern that the transfer process may not be adequately managed. The Department was not carefully monitoring separate contribution agreements to ensure that program conditions were being met. The accountability framework for the transfer process--- although good in itself --- was not being applied with sufficient rigour.

The Department must ensure that the transfer process functions smoothly, that First Nations develop the capacity to control their health services, that the health of communities and individuals is enhanced, and that the Minister of Health’s accountability for the expenditure of public funds and health outcomes is properly supported. To do so, the Department must apply the transfer framework as intended. The Committee therefore recommends:

The director of the Medical Services Branch, Mr. Paul Cochrane, told the Committee that it is the policy of the Department that First Nations take control of the health programs "at a pace and at a time of their own choosing." (1545) As a consequence, some communities may decide not to enter into transfer agreements. In these instances, Health Canada must improve its monitoring, in accordance with its own policies, to ensure that it can fulfil its obligations. The Committee therefore recommends:

The Committee believes that it is essential that Parliament be kept informed of the progress of the transfer process and the results it produces. Parliament must also receive assurance from the Department that all Community Health Programs are being adequately monitored and that all reports and audits are completed and submitted as required. Accordingly, the Committee recommends

The audit’s most serious findings involve the Department’s delivery of the Non-Insured Health Benefits program. According to the Auditor General, poor management and control have contributed to the inappropriate use of benefits supplied under the program.

The Department has acknowledged that problems exist and has taken steps to resolve them. Most importantly, it has implemented a point-of-sale system designed to identify cases of possible prescription drug abuse. This system was intended to be fully operational by the end of 1997; the Committee asks that the Government confirm the same in its comprehensive response to this Report.

These measures have the potential to reduce many of the problems associated with provision of prescription drugs under NIHB. There are, however, areas in which the point-of-sale system should be improved. As a result of legislation in various jurisdictions, information is restricted to the last three prescriptions. Pharmacists can override warning messages sent by the system. As yet, there is no compensation scheme in place that will give pharmacists an incentive to decline prescriptions on the basis of these warnings.

The Committee notes that in British Columbia, privacy legislation has been amended in order to allow pharmacists to see a fourteen-month prior history of prescriptions. The Committee therefore recommends:

The Committee also recommends:

The Department has indicated that the Non-Insured Health Benefits program will become available for transfer to First Nations communities as of 1 April 1998. Greater community control over this program offers the potential for better delivery. The Committee is concerned, however, that First Nations communities not inherit systemic problems associated with the program. The Committee therefore recommends:

The Committee is also concerned that when the transfer of the NIHB program begins, it be conducted in a way that will build capacity in the First Nations communities and support accountability relationships. The Committee notes the Auditor General’s endorsement of the framework being used to govern the transfer of the Community Health Program. It therefore recommends:

The audit revealed problems in the processing of claims submitted by pharmacy and dental providers under the NIHB program. These problems were largely the result of an inadequate audit regime.

In October 1997, the Department announced that a new five-year contract for claims processing had been awarded. This contract will take effect as of 1 July 1998.

Dr. Jay Wortman told the Committee that the Department is aware that the language in the existing contract "was weak in the area of audit," (1640) and that it was planning to have stronger language incorporated into the new contract. (1615). The Committee welcomes this determination on the part of the Department and recommends:

It is the Committee’s view that Health Canada should establish optimal therapy as a central goal of the NIHB program. This would mean ensuring that those covered by the program get the appropriate drugs they need to improve their health status or particular condition. If this were the program’s goal, the Committee is convinced that there would be greater opportunities for savings because clients, physicians and pharmacists would be better informed and better care provided. While the Department does include aspects of an optimal therapy approach to some elements of the program, it should apply it to the program as a whole. The Committee therefore recommends:

Pursuant to Standing Order 109, the Committee requests that the Government table a comprehensive response to this Report.