PACP Committee Report

INTRODUCTION

Six federal government organizations (Health Canada, Department of National Defence, Veterans Affairs, RCMP, Citizenship and Immigration, and Correctional Service Canada) provide drug benefits programs. Approximately one million Canadians are recipients of benefits under these programs.

These programs represent one of the fastest growing areas of federal health expenditures. Their collective annual cost currently exceeds $430 million and costs have risen by 25 percent over the past two years. (Up from $350 million in 2000-01)

Because of their cost and impact on the health of large numbers of Canadians, and because of previous examination of a program that includes drug benefits (Non-Insured Health Benefits Program managed by Health Canada), the Committee decided to review the results of an audit contained in Chapter 4 (Management of Federal Drug Benefits Programs) of the November 2004 Report of the Auditor General of Canada. Accordingly, the Committee met with Sheila Fraser, Auditor General of Canada on 2 February 2005 to discuss an audit of the management of federal drug programs. Ronald Campbell, Assistant Auditor General and Frank Barrett, Director, accompanied the Auditor General.

Because Health Canada and Veterans Affairs Canada manage the largest drug benefits programs ^[1], the Committee decided to meet with representatives of those two departments at the same meeting. Hélène Gosselin, Associate Deputy Minister; appeared on behalf of Health Canada. She was joined by Ian Potter, Assistant Deputy Minister, First Nations and Inuit Health Branch and Leslie MacLean, Director General, Non Insured Health Benefits Directorate, First Nations and Inuit Health Branch. The Department of Veterans Affairs was represented by Verna Bruce, Associate Deputy Minister. She was accompanied by Ron Herbert, Director General, National Operations Division and Orlanda Drebit, Director, Operational Guidance and Direction Directorate.

OBSERVATIONS AND RECOMMENDATIONS

The audit found considerable variance in the practices, processes, and quality of management in each of the six programs. Certain drugs were considered effective and safe, and therefore were paid for by some programs but not by others. Some programs collected relevant data on client drug use while others did not. Sometimes, these data were analyzed and the analysis used to intervene with health care providers and clients in cases of suspected drug misuse or abuse. Under other programs, collected data were not analyzed, there being no interventions as a consequence — or only partially analyzed in which case, if interventions did occur, they may have missed certain patterns of potential drug misuse. Significant differences also existed in the strategies used to minimize the cost of drugs covered by the programs, and the intensity with which these strategies were pursued.

Some of this variance can be explained by differences in the client base served by the programs. But, on the whole, the Auditor General concluded that the collective shortcomings exhibited by the programs were the result of a lack of leadership and co-ordination among them. (4.1) The general absence of specific objectives and performance measures further hindered the ability of the programs to provide effective, efficient, and economical services to their clients.

The Auditor General made five recommendations designed to bring better co ordination of the drug benefits programs, improve data collection and analysis, and lower and contain costs. The organizations agreed to all of the recommendations, and the government informed the Auditor General that the details of the actions to be taken would be supplied to her Office within a few months. (4.6)

The Committee has reviewed the Auditor General’s recommendations and endorses them fully. Several months have now passed since the Report was tabled: it is time for the organizations to detail the actions they will take to implement the recommendations they have accepted. Two of these organizations — Health Canada and Veterans Affairs Canada — have already responded to the Committee’s request for action plans. The other organizations, including Health Canada and Veterans Affairs Canada, produced a collective action plan (First Level Action Plan) under the aegis of the Federal Healthcare Partnership (FHP) ^[2]. The plan addresses the initial steps that will be taken up to October 2005 in response to the audit, and the FHP intends to provide the Office of the Auditor General with progress reports on the implementation of the plan as well as a subsequent plan to address the next steps that need to be taken.

The First Level Action Plan is very preliminary and deals primarily with the schedules of the task forces that the FHP has established to review specific aspects of the audit as they relate to all entities involved in the delivery of drug benefits programs. The production of a second action plan is therefore necessary to identify the precise actions that will be taken to implement the Auditor General’s recommendations along with timetables and an evaluation framework. The second phase action plan and progress reports on both plans must be available to Parliament for review. The Committee therefore recommends:

RECOMMENDATION 1

That the Chair of the Executive Committee of the Federal Healthcare Partnership ensure that progress reports on the implementation of the First Level Action Plan, the next level action plan, and all progress reports concerning both action plans are tabled in the House of Commons immediately upon completion, with copies sent to the Standing Committee on Public Accounts.

Not all of the observations and recommendations in Chapter 4 of the November 2004 Report of the Auditor General concern all of the federal entities providing drug benefits programs collectively. Since many important recommendations relate to these entities individually, the Committee recommends:

RECOMMENDATION 2

That the Department of National Defence, Royal Canadian Mounted Police, Citizenship and Immigration, and Correctional Service Canada, provide action plans to the Standing Committee on Public Accounts detailing the measures they will take to implement the recommendations contained in Chapter 4 of the November 2004 Report of the Auditor General of Canada. These plans must reference each recommendation, contain timelines (target implementation and completion dates) for every action listed, and be submitted to the Committee no later than 30 September 2005

Clear objectives and performance indicators are crucial factors for the success of any program. They establish a framework that guides program delivery and helps identify actions that work and those that do not, thereby facilitating adjustments with the potential to provide greater efficiencies and lower costs. They also generate the information without which Parliament cannot perform its own responsibilities of scrutinizing expenditures and holding government to account.

The Auditor General found that objectives and performance indicators for the programs were either vague or missing. She recommended that they either be established or strengthened and the organizations agreed to do so. It is essential that this be done and that the accountability for the performance of these programs be strengthened. The Committee therefore recommends:

RECOMMENDATION 3

That beginning in 2006 Health Canada, the Department of National Defence, the Royal Canadian Mounted Police, Citizenship and Immigration Canada, Correctional Service Canada, and Veterans Affairs Canada include distinct sections in their annual reports on plans and priorities, and performance reports that address their drug benefits programs and begin with a clear statement of program objectives followed by the indicators used to assess performance.