November 17, 2009
Do Canadians really do it better?
Is a little healthcare better than none? What is the Silver Tsunami? When is a doughnut hole not seen at Tim Horton's? These were some of the questions broached by Frank Micciche and Janet Lambert at the PMCQ’s November breakfast as they took us through Health Care Reform in the US and its implications for Canada.
Frank Micciche, policy advisor with the Washington law firm of McKenna, Aldridge and Long set the stage by taking us back to 1935 when the National Health Insurance idea was in its formative stage in the United States. The Social Security Act was passed that same year. But, the plan never moved to fruition as it was overshadowed by a bigger priority: World War II. The issue gathered moss again in the 1940s when a labour shortage prompted employers to offer health benefits to attract workers. This continued into the 1950s and, in the 1960s, the first semblance of national insurance was passed in the form of Medicare (coverage for the elderly) and Medicaid (coverage for those with lower income). The debate on universal national insurance came closest to reform and a potential deal under the Nixon administration with Senator Ted Kennedy as a strong advocate until Watergate knocked everything off the rails.
Fast forward to the early nineties when the issue of national insurance was tabled under the Clinton administration. By 1993, thirty-four working groups, with 600 members had been convened. Because the process was closed to the media, critics deemed it non-transparent, adding to its perceived failure.
The core element HillaryCare, as it was called, was a mandate forcing employers to provide health insurance to all their employees through competitive but highly regulated Health Maintenance Organizations (HMOs). From 1994-1999, the HMO plan seemed to have contained costs, leading to a sense that the healthcare beast had been tamed and that perhaps the need for national health insurance was no longer a priority. During this period, Medicaid was expanded to include working adults and the State Children Health Insurance Program (S-CHIP) was introduced to give children at a certain level of the poverty line access to quality health insurance. Problem solved.
Not so fast. Healthcare costs continued to constitute 50-60% of the national budget with two thirds being paid by the federal government and one third covered by Medicaid. Eventually some states decided to take ownership of universal coverage with their own programs. Massachusetts was the first state to institute a full individual mandate whereby everyone is required to get insurance, footing the bill with a blend of Medicaid dollars and government subsidies.
Fast forward about ten years to 2009. Barrack Obama campaigned on the Healthcare Reform platform without a specific plan but with a proposal based on broad principles and timelines, perhaps taking a lesson from HillaryCare. This time Congressional leaders have been driving the process and, once again, one of the biggest advocates was the late Ted Kennedy.
Under the current proposal, the Pharmaceutical Researchers and Manufacturers of America (PhRMA have signed a deal with the White House promising to support “the doughnut hole” — the incremental cost of drug expenditures partially covered by the government. So, the government would cover the first $2,500, PhRMA would cover the next $2,000 and anything over $4,500 would then be picked up by the state again. PhRMA has agreed to support this deal if they can limit their cost burden to $80 million.
Wow. Makes you think twice before complaining about our healthcare system. While the Americans were debating the issue in the 1930s and 1940s, Canada introduced universal health coverage in 1946. with Saskatchewan paving the way for the other ten provinces to have similar coverage by 1957. By 1966, the Medical Care Act was passed, which set up the Medicare we know. Finally in 1984, the Canada Health Act was passed preventing user fees and extra billing by doctors.
“This may explain why Canadians believe healthcare is a right and not a privilege,” said Janet Lambert, our second speaker. A former Montrealer, Janet spent 15 years in marketing and policy in the Canadian pharmaceutical environment. She then moved to Washington and is now in the unique position of being able to offer a perspective on healthcare from both sides of the border. When Janet first arrived in the US, she compared governments. Canadians have 308 members of parliament (MPs) for a population of thirty-seven million or one MP for every 109,000 citizens. The United States has 435 representatives or one for every 470,000 citizens. What does this mean? Canadian MPs could feasibly connect with every single constituent. So what? Well, chances are that Canadians might have a better chance of having their voices heard. With 133 million Americans living with or caring for someone with a disability or chronic disease, they don’t have this level of connection.
Regardless of which side of the border you live, however, healthcare reform remains society’s unfinished business. In fact, you could argue that the business is still a startup. The aging population, coined the Silver Tsunami, and the advance of social media are just two of the catalysts that will amplify the debate and the need for evolution. By 2012, there will be more people over the age of 65 than under. Cancer, coronary artery disease, diabetes and dementia will lead the list of prevalent diseases. Health and wellness, safety and social connectedness will become the cornerstone of policy debates.
So, while Americans spend $2.3 trillion dollars on healthcare — double our entire GDP (the equivalent of 16% of their gross domestic product (GDP) and twice the rate of Canada) — Canadians cannot take the position that we know better or that it is good to over-regulate. Instead, we should harness our leadership in healthcare by shaping the future of personalized medicine and by impacting healthcare policy. As the number two player in the biotechnology sector, Canadians, and the pharma industry in particular, can take a lead toward change by leveraging the learnings of the North American business model and the multinational perspective.
What does this all mean for us pharma folks? Well, first we need to start listening to what is happening in the world outside our offices, outside our day-to-day projects. It is only by understanding the environment and its future trends that creative marketing, sales and market access strategies can tap into the countless opportunities that will present themselves. As the debate continues, we are now better educated to participate.
by ENZA CIGNARELLA