, 15 tweets, 7 min read Read on Twitter
I'm interrupting my vacation to share some thoughts on the @DrEricHoskins Report on pharmacare.

Read it for yourself here...

canada.ca/en/health-cana…

1/x
I'm not a health or pharmaceutical expert, but I do know a bit about taxes, government programs, and federalism--and those are pretty important aspects of the pharmacare proposal. So, my comments will focus there.

2/x
The proposal is a 'national' pharmacare program. I've always found this terminology to be obscure. It could mean:
a) one plan run by Feds
b) one plan run by provs; financed by feds
c) many plans, with public backstop to ensure national' complete coverage.
All are 'national'!
3/x
The @DrEricHoskins report is mostly b), with some c)..

* provs/terrs run their own plans.
* if provs meet fed standard for coverage they get 100% funding of incremental cost
* private plans can cover extras not on national fomulary.

4/x


*
Long-time readers will recall this meme I posted a few months ago noting the fed/prov challenges of pharmacare.

How does the Hoskins plan address this challenge? Like this

--> provs have control of design, but must meed national standards
--> provs can opt in or stay out.

5/x
Some, like @andrew_ajackson here, have argued that a program *run* by the feds is the best way forward. I disagree, as integrating a fed-run pharmacare into other aspects of provincially-diverse health systems would be hard.

6/x

..but @andrew_ajackson is right that there is a serious risk that some provs will refuse Ottawa's deal--especially if the financial terms are not generous enough or the conditions too onerous.

So, heed Andrew and keep your eye on this. Be cautious about 'national' claims..

7/x
@andrew_ajackson Ok, so who is paying for this new proposed pharmacare?

Federal taxpayers.

As a big picture item, does this make sense?

I think *yes*. Fed long-run fiscal situation is very healthy. Provs needs some help. This pharamcare proposal eases long-run provincial fiscal burden.

8/x
The way @DrEricHoskins proposes to finance pharmacare is through a new dedicated federal transfer.

He proposes it could only be amended with strong provincial consent, not unilaterally by Ottawa like other transfers.

9/x
@DrEricHoskins Note that the new federal pharamcare transfer would only cover the *incremental* cost, so provs with existing programs wouldn't get as much $.

@andrew_ajackson notes that will make some provs unhappy!

But to me there is a larger challenge there...

10/x

A large challenge with only funding the 'incremental' costs of pharmacare is that in, say, 2035, we have to calculate what the status quo provincial program would have cost if there had been no fed program in order to get 'incremental' cost.

That's...very difficult to do.

11/x
So, what would the @DrEricHoskins pharmacare proposal cost?

Gross cost is about $15B in 2027, but the *net* financial cost may in fact be negative--since firms and individuals will be relieved of paying for drugs and there may be $B's of savings available.

12/x
A big issue with public pharmacare is the fate of existing private supplemental health coverage.

The @DrEricHoskins proposal will partly crowd out--but not outlaw--private coverage.

If there are things not covered by the national formulary, supplemental plans can cover.

13/x
tl;dr summary on the @DrEricHoskins pharmacare proposal:

* Fed financing+standards/prov admin is good choice.
* fed govt has long-run fiscal capacity to take this on.
* fed-prov transfer $ may need work.
* how "universal"? Some provs opt out; private insurance continues.

14/14
...and now back to vacation.... Sunset at St. Paul's Bay, MaltaKinnie!
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