There’s a growing controversy over the coverage of very high cost drugs used to treat cancer and other catastrophic diseases in Canada. Most recently, Cancer Care Ontario(CCO)has proposed to change the way Ontario hospitals fund certain cancer drugs administered intravenously(IV)to patients in hospital.
The CCO is taking the position that hospitals are not bound by the Canada Health Act(CHA)to pay for provincially unfunded cancer drugs used in hospital. CCO’s legal interpretation of the CHA would allow patients, or their third-party plans, to pay for these drugs. The proposed change opens the door to catastrophic drug costs falling to private plans for payment.
Today, hospital-administered drugs are excluded from private drug plans—excluded because the CHA requires the province to pay for drug treatments given to patients when in hospital. However, not all drugs are approved for payment by all provinces. Many, including B.C., Alberta, Saskatchewan and Ontario undertake a pharmacoeconomic analysis of new cancer drugs to determine if they will be covered. The premise is simple: if the cost is not warranted by the incremental medical benefit, the drug is not covered.
The Ontario Ministry of Health and Long-Term Care has not yet responded to the CCO proposal. However, today, hospitals in several provinces are allowing private payment for oncology and non-oncology treatments.
What’s an employer to do?
When not paid by the province, IV drugs administered in private infusion clinics are being submitted to group plans for payment. Some claims are approved and some are not. Administrative policy is not yet consistent among insurance carriers.
What’s an employer to do with a claim for catastrophic drugs not insured under their plan?
How is an employer to respond to a terminal medical situation and why should they be put in this position?
How do employers evaluate whether to pay, or not, when they are not part of the healthcare team?
How can they possibly make a decision when there’s no consistent standard of care across the country?
And how do they handle the employee relations issue when asked for financial assistance?
This is a societal issue
None of the private plan management tools address the pharmacoeconomic analysis of a terminal situation. More often than not, when faced with the request to approve a cancer drug claim, employers respond on compassionate grounds.
There seem to be more questions than answers. But, we do know one thing: private group plans are not—and cannot be—the safety net.
The spirit of the law
The aim of the Canada Health Act is to ensure that all Canadian residents have reasonable access to medically necessary insured services without direct charges. These services include drugs administered in hospital. Private plans are designed to wrap around the services provided under the CHA.
Private plan sponsors must not be put in the position of becoming first payer of services that are directly addressed in the Act, regardless of costs. In any event, group plans are not in a position to pay for these high cost drugs any more than the government is.
The spirit of the Canadian healthcare system resides within the CHA. The principal of accessibility is only ‘guaranteed’ in the CHA. If an individual must turn to a group plan to cover medically necessary services, there may or may not be coverage. One employer may be able to afford ‘compassionate’ payment and another may not.
Complications and contradictions
Let’s look beyond drugs to the broader spectrum of patient care provided by the CHA. Life support refers to a set of therapies provided when essential body systems do not function, and may never function sufficiently to sustain life unaided. Even when there is no chance of recovery, our healthcare system administers and pays for this therapy. It is the individual, through a living will, or the next of kin who makes the ultimate decision to continue or discontinue care—not the government, and not the hospital.
Given that our public healthcare system supports other catastrophic conditions, should access to medically necessary services be different when it comes to cancer? Would administration of these drugs not be considered life support? Medically necessary?
So, how do we balance patient needs, societal values and cost effectiveness?
Plan sponsors need to revisit their plan objectives and contract wording in light of these recent developments. Plan objectives will direct coverage criteria and plan governance will ensure that the criteria for payment are met.
Private plan sponsors may need to adopt a similar evidence-based model as being used by the provinces. This would say: If the medical evidence is not strong enough to support payment in the hospital setting(public plan), then it does not meet private plan eligibility criteria either. However, with no national guideline on standards of care, inequities will persist.
In the meantime, current group contracts exclude investigational or experimental therapy. The initial period, when a new product enters the market, could be considered an investigational period, thereby precluding coverage. This protects the financial interest of the group plan, but does it address fair and equitable access to care?
Catastrophic drug coverage needed immediately
Clearly, neither public nor private plans can afford to cover all drugs. In particular, oncology drugs are straining the system. We need a national, transparent set of criteria for determining universal access to therapy for all medical conditions. The National Pharmaceutical Strategy has identified sound principles for catastrophic drug coverage for all Canadians. Even then, catastrophic drugs, when prescribed in hospital, should be deemed medically necessary and covered by the hospital as intended under the Canada Health Act.
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