1996 ANNUAL REPORT,
PROVINCIAL AUDITOR
ASSISTIVE DEVICE SERVICES ACTIVITY
MINISTRY OF HEALTH
CONTENTS
Thursday 13 February 1997
1996 annual report, Provincial Auditor: assistive device services activity
Ministry of Health
Ms Margaret Mottershead, Deputy Minister
Mr Mark Cox, director, assistive devices branch
STANDING COMMITTEE ON PUBLIC ACCOUNTS
Chair / Président: Mr Bernard Grandmaître (Ottawa East /-Est L)
Vice-Chair / Vice-Président: Mr Richard Patten (Ottawa Centre /-Centre L)
*Mr Marcel Beaubien (Lambton PC)
*Mr Dave Boushy (Sarnia PC)
Mr Gary Carr (Oakville South / -Sud PC)
*Mrs Brenda Elliott (Guelph PC)
Mr Gary Fox (Prince Edward-Lennox-South Hastings / Prince Edward-Lennox-Hastings-Sud PC)
Mr Bernard Grandmaître (Ottawa East /-Est L)
Mr John Hastings (Etobicoke-Rexdale PC)
Mr Jean-Marc Lalonde (Prescott and Russell / Prescott et Russell L)
Ms Shelley Martel (Sudbury East / -Est ND)
Mr Richard Patten (Ottawa Centre /-Centre L)
Mr Gilles Pouliot (Lake Nipigon / Lac-Nipigon ND)
*Mrs Sandra Pupatello (Windsor-Sandwich L)
*Mr Derwyn Shea (High Park-Swansea PC)
*Mr Toni Skarica (Wentworth North / -Nord PC)
*In attendance /présents
Substitutions present /Membres remplaçants présents:
Mr Tony Clement (Brampton South / -Sud PC) for Mr Hastings
Mr Bruce Crozier (Essex South / -Sud L) for Mr Grandmaître
Mr Pat Hoy (Essex-Kent L) for Mr Lalonde
Also taking part /Autres participants et participantes:
Mr Erik Peters, Provincial Auditor
Clerk / Greffière: Ms Donna Bryce
Staff / Personnel: Mr Steve Poelking, research officer, Legislative Research Service
The committee met at 1043 in room 228, following a closed session.
1996 ANNUAL REPORT, PROVINCIAL AUDITOR
ASSISTIVE DEVICE SERVICES ACTIVITY
MINISTRY OF HEALTH
The Acting Chair (Mr Pat Hoy): Good morning and welcome to the standing committee on public accounts. We would ask, as you begin, that you introduce yourselves. We'll allow 15 minutes for your presentation and there will most likely be some questions after that time. I leave it to you.
Ms Margaret Mottershead: Thank you, Chairman. I'm Margaret Mottershead, Deputy Minister of Health.
Mr Mark Cox: My name is Mark Cox. I'm the director of the assistive devices branch in the Ministry of Health.
Ms Mottershead: I'd like to start off by giving the committee some context around the assistive devices program and a little bit of history so that when it comes to having a discussion, there is a little better understanding of what this program is all about.
The assistive devices program and the home oxygen program are administered by the assistive devices branch, and Mark Cox is here with me to answer any questions you may have.
The ADP itself was introduced as a program in 1982, in response to the International Year of Disabled Persons, to assist parents of children who had physical disabilities with the high cost of assistive devices.
During the 1980s, as funding became available to government, a process got started in terms of gradually including adults on certain devices, and also expansion of other assistive devices in other categories happened.
I can let you know that there have been a number of changes with respect to home oxygen, which began in 1974 as a benefit under the Ontario drug benefit program for seniors, people on social assistance or home care or residing in long-term-care facilities. It was also at that time a benefit under the assistive devices program with a 25% copayment for those born after July 1, 1963. In April 1994 home oxygen was removed from the list of ODB benefits and all home oxygen funding was consolidated under the home oxygen program. As a result of this change, no one lost benefits that they previously had; however, coverage was extended and in fact increased by 75%.
The objective of both the assistive devices program and the home oxygen program is to financially assist Ontario residents with long-term physical disabilities to obtain basic, personalized assistive devices appropriate for the individual's needs and essential for independent living. Devices covered by the programs are intended to give people increased independence and control over their lives. The devices allow them to avoid costly institutional settings and remain in a community living arrangement.
The assistive devices program covers over 15,000 separate pieces of equipment or supplies in the following categories: prostheses; wheelchairs/mobility aids and specialized seating systems; ostomy and enteral feeding supplies; needles and syringes for insulin-dependent seniors; hearing aids; respiratory equipment; orthoses -- braces, garments and pumps; visual and communication aids; and incontinence supplies for those born after July 1, 1963.
The home oxygen program pays for oxygen and oxygen delivery equipment such as concentrators, cylinders, liquid systems and related supplies, such as masks and tubing.
Insured persons who have a physical disability of six months or longer are eligible for the assistive devices program. Equipment cannot be required exclusively for sports, work or school. Residents with a primary diagnosis of a learning or mental disability are not eligible for ADP, as are those on workers' compensation. There are specific eligibility criteria which apply to each device category and which are usually medically based.
The home oxygen program is available to anyone who is insured and has a chronic illness or dysfunction that requires long-term oxygen therapy. Funding is also available for short-term use by those on palliative care.
For the assistive devices program, initial access is often through a medical specialist or general practitioner who provides a diagnosis. In most device categories, an authorizer assesses the specific needs of the person and prescribes appropriate equipment or supplies. Finally, a vendor sells the equipment or supplies to the client.
Most ADP devices must be authorized by a qualified health care professional registered with the program. There are currently over 5,000 registered authorizers working in hospitals, home care agencies or private practice.
The program will only help pay for equipment that is purchased from the vendors registered with the assistive devices branch. In some supply categories, such as ostomy and incontinence, clients receive a grant and can purchase the supplies from whomever they wish.
ADP pays up to 75% of the cost of equipment and supplies, such as artificial limbs, orthopaedic braces, wheelchairs and breathing aids. For others, such as hearing aids and breast prostheses, the ADP contributes a fixed amount of money. With regard to such items as ostomy and incontinence supplies and needles and syringes for seniors, the assistive devices program pays an annual grant directly to the person.
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The home oxygen program pays 100% of the cost of oxygen and related equipment for seniors and those on social assistance, home care or residing in a long-term care facility, and 75% for others. A doctor's prescription is required and applicants must meet internationally accepted medical criteria.
The assistive devices branch also provides a grant to the Canadian Diabetes Association that allows it to reimburse insulin-dependent diabetics for 65% of the cost of monitors and test strips up to a certain maximum amount per year.
I would like to also mention to the committee that a number of improvements have been made in the management of this program over the last several years. We have introduced a number of measures that improve the administration of the program, the cost-effectiveness, and result in better accountability for the funding spent on this program on behalf of the taxpayers of this province.
I'd like now to turn it over to the director of the branch, Mark Cox -- I believe there is some time left in the presentation -- to directly address the recommendations that have been made by the Provincial Auditor in his report and to provide a little more context and a fuller response to some of those recommendations.
Mr Cox: There were six specific recommendations in the Provincial Auditor's report, and I'd like to brief you quickly on what steps we've taken to take action based on those recommendations.
The first one was a recommendation that we ensure consistency and fairness in the program. This requires a review of eligibility requirements and funding. The ministry has been acting on this recommendation, has been addressing it through its business planning process.
The program, as the deputy noted, started in 1982 as a children's program. As funding became available and as the health delivery system was able to accommodate expansion, funding was gradually extended to adults, starting in the mid-1980s and continuing to this day. When we extended to adults, the costs, as you can appreciate, increased dramatically, 10- or 20-fold, and this is the main reason it's taken so long to fully extend the children's benefits to the adult population.
There still remain two areas where there are age restrictions in effect: The incontinence program is only available for people born after July 1, 1963; and in the wheelchair program, we restrict funding for adults to adults who can actually independently mobile the chair. We don't pay for chairs if they're just required to move people from one place to another; they have to be able to independently manoeuvre.
We have been looking at options for finding the extra minimum $30 million we'd need to finish off age expansion. We can either water down the benefits for everyone, if we're going to do it within the current $80-million assistive devices allocation, or you could look at options -- and these have been addressed previously -- by doing something through the tax system, treating it as a taxable benefit so that those who are better off income-wise are paying some of it back. Another option we're looking at is whether to base eligibility on income, and that has some problems.
The second recommendation of the Provincial Auditor dealt with eligibility criteria around the home oxygen program, suggesting that the ministry implement some guidelines to do independent determinations of eligibility and to assess whether the appeal process is working effectively.
The current delivery system for the home oxygen program has a physician determining whether someone meets the medical criteria. The problem is that most physicians only prescribe oxygen for a couple of patients a year and they don't fully appreciate what the medical criteria are, so they rely on advice from respiratory therapists who work with the suppliers to determine whether someone meets the criteria.
Because of this delivery mechanism, we feel there are probably more people on the program than should be, and since it's costing us $5,100 a year for each person on the program, we are looking at the idea of conducting some independent assessment pilot studies where we use health care professionals employed by the ministry to use standardized assessment protocol to see if the applicants assessed by independent facilities are as likely to qualify and/or stay qualified as those who are assessed through the current delivery model. These pilots should start this spring. We're looking at the possibility of using the existing community health centres to minimize the cost of conducting the pilots.
In terms of appeals and why physicians' appeals are usually successful, it's primarily because most physicians, if they have someone denied funding for oxygen because they don't meet the criteria, will phone us. They'll ask us, "Why isn't my patient eligible?" We'll explain to them the criteria. We'll explain what information we need to accept someone for funding. The physician is left with the choice of whether they then feel their patient meets the criteria. If they feel they do, they'll send in that extra information. So we find that in most cases they're sending the information to us only if they know for sure that someone is going to meet the criteria. That's why we found most appeals were successful.
There are also still approximately 4,000 people on the program who have never met medical criteria. They were on the program before we started introducing medical criteria and we found that it is very difficult to wean them off the program. Physicians who appeal these cases are usually successful just because a psychological dependence on the oxygen has been built up in the patient and we end up approving them.
There was a recommendation on incontinence supplies. We've started implementing that. If someone asks for a higher-level grant because their medical condition has changed, we ask for confirmation from a physician for that. There are not many people who do have their condition changed. Once you're incontinent you usually require that type of supply for life, or you wouldn't be on the program in the first place.
Pricing for home oxygen: We have reviewed the costs related to oxygen concentrators versus the liquid oxygen system. The ministry's average payment for oxygen has dropped from $613 a month in 1991 to $425. That's the rate that will be effective April 1, 1997, a single flat rate of $425.
We have been successful in getting a shift of people off the more expensive modalities on to the cheaper modality and we've more or less met our target of having 35% of our expenditures on liquid, which is an internationally accepted figure.
Blood glucose testing strips: The auditor was recommending that we amalgamate our various programs for paying for test strips. The ministry has made the decision they will do that and this spring they'll be looking at options on how best to do that without taking benefits away from existing recipients.
The final recommendation dealt with tax treatment of grants. This is a suggestion by the auditor that we should notify our grant recipients that they're not eligible for a tax deduction to the extent of the grant. We've done that in a letter to each of our 35,000 people on the grant program and we've built it into our application form so that people will know up front that they can't claim for tax purposes the money that's paid out by the ministry as a grant. They can claim anything above that.
That concludes my remarks on the audit findings.
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The Acting Chair: Thank you very much. We would open it up to questions. As I mentioned, we'll do it by a show of hands in no particular rotation.
Mr Derwyn Shea (High Park-Swansea): I want to ask you a question about the qualifications for assistive devices. We're all aware that there are a number of different agencies that may very well fund assistive devices. It could be the Workers' Compensation Board, it could be veterans affairs; a whole broad range that are not just provincial but federal and charitable and so forth. Deputy Minister, do you have a mechanism in place that in the first instance indicates to any applicant that any request for assistive devices should be directed to any funding source other than a provincial funding source, if they are qualified, and do you determine if they are so qualified?
Ms Mottershead: I believe that a lot of people are aware of supports they have in their communities, whether it's Rotary clubs or March of Dimes or other organizations, and quite often they are approached and are told about other possibilities for funding assistance. As I mentioned, there are other sources. We have brochures, and I think Mark is going to show us one of them, where that kind of identification is made and people are made aware that there are other sources of help in their community, but by and large we find that when a person approaches the assistive devices program they have also explored other possibilities.
In looking at the kind of clients that come to the program, they're not people who would be really well-off. The very rich do not access this program. It is government support of a last resort. I'll ask Mark to add some more comments to that.
Mr Cox: We make it clear in our fax sheets and in our application forms that if you're eligible for workers' compensation benefits or department of veterans affairs benefits, you should go to them first. Most people will do that anyway because our program has a copayment where you pay a minimum of 25% in most device categories. Those other programs tend to not have a copayment. Generally, if you're eligible, you would certainly go there first and not have to pay any of the cost.
Mr Shea: Let me pick up on that for a second, because while I understand the deputy minister's response in terms of the more affluent, veterans are not always affluent, as a case in point. Let me rephrase this, because you used the operative word that got my attention; you used the word "should." Does the ministry in fact make it very clear that you "will" apply for these devices to other funding sources and that your program is the program -- I don't want to phrase it as "last resort" but the one that would be junior in application?
Is there a form, is there a mechanism that ensures that there is an appropriate, clear, consistent policy followed in terms of application, and that the applicant has given the ministry an undertaking that they have either explored or are not qualified to pursue any further direction in that regard, and so it's now then appropriate for your ministry to respond appropriately? Is that mechanism formally in place?
Ms Mottershead: First of all, I'd like to say with respect to workers' compensation, if you're on that system you're totally ineligible for this program. That is one of the eligibility criteria in the application form, so if you're a recipient of other benefits, also funded by other sources, you're not eligible.
Mr Shea: There's no way anyone could slip through the web on that?
Ms Mottershead: I suppose there could be a risk of that happening but it's not likely. Mark, do you want to add to that?
Mr Shea: As Mark is trying to find the other information for that, could you just help me understand, as a novice, how a person is likely going to get caught or identified in the system, so that they would not be weaving their way through?
Ms Mottershead: As was mentioned earlier in terms of the eligibility, a physician has to make a diagnosis, and the physician normally knows, or should know, that there is a different protocol in treatment -- and we'll stick with the workers' compensation issues for a moment -- that workers' compensation cases are treated differently. If they're a physician in the community, that particular consultation around workers' compensation has to be recorded and a claim for the consultation or the diagnosis or whatever is sent directly to the Workers' Compensation Board rather than the ministry. They know that. They have a different form to deal with their payment for providing that particular consultation.
Similarly, in the hospitals you have exactly the same thing. You are required to identify whether a particular accident which got you into the hospital was on the job, ie, workers' compensation or not. There are signs that are posted that say to identify whether you are or not. On the medical side, that is one of the key areas that makes that determination.
Mark may have other things to add in terms of the branch itself.
Mr Cox: I just wanted to say that people sign the application form verifying that the information is correct, and one of the questions we ask is, "Are you eligible for workers' comp or veterans affairs?" What we don't have yet, and this is something that came out in the audit, is the capacity to share information with those other jurisdictions to see if someone is accessing both programs.
Mr Shea: That's what I was leading towards. Are you in the process of trying to establish such a protocol?
Mr Cox: Yes. We're starting the process as we reprint the application forms. We put a statement in there that allows us to share that person's information with other third-party providers.
Mr Shea: I'm comforted to hear that. If I can ask you to pick up on one point, Deputy Minister, you talk about the physicians. Do you, from time to time, do a scan of physicians' requests and recommendations to determine if there's any pattern of potential abuse, through ignorance or whatever, excessive use of systems, to determine if there's a need to provide physicians any additional education? Do you have a system in place to monitor?
Ms Mottershead: As a matter of fact, we have sent letters on the topic to physicians to make sure that they really are aware of the program, its nature, the context of its application to clients they see. Mark can elaborate further because we have taken some initiatives on that front lately.
Mr Cox: We have an audit program in place and we monitor physicians' patterns. We find that people a physician has authorized always tend to go to a certain vendor. We would investigate and ask questions of the vendor and the physician. We check to make sure that people aren't signing the forms in the physician's spot on behalf of the physician. We have found that this is a real problem in our home oxygen program, where doctors don't understand fully the medical criteria and are relying on the staff of the suppliers to do a lot of the assessment work, even to the point where they're letting the assessor staff sign the form. That's a big concern to us and when we find that we bring it to the physician's attention and try to educate them a little better on the criteria.
Mr Shea: Has that happened with any frequency?
Mr Cox: No.
Ms Mottershead: If I can just add to that, there has been a concerted effort with respect, for example, to the home oxygen program to send a letter to every physician and every client of the program to explain and reinforce to them the criteria, the eligibility, the medical rules around that, including the preparation of fact sheets and handouts that people can refer to in case they forget and misfile the letter or whatever. There's a permanent fact sheet that they have in their offices.
Mr Shea: Home oxygen program -- sorry?
The Acting Chair: You have been about 10 minutes and I would like to give each member who wants to speak about that time. My indication is that you would have time yet to come back to if you have further questions. So I'll move on to the other members.
Mr Bruce Crozier (Essex South): Good morning. I want to see that I fully understand the funding for the home oxygen program. I have here, supplied by research, the Ministry of Health estimates for 1996-97, if I could refer to those. The 1994-95 actual in the home oxygen program was approximately $68 million. Then 1995-96 estimates, about $77 million. Is that what 1995-96 came in at, around the $77-million mark, do you know?
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Mr Cox: It came in at $56 million.
Mr Crozier: Oh, so the interim actuals aren't partway through the year; that's the actual.
Mr Cox: The 1995-96 actual is $56 million and change.
Mr Crozier: Good. The 1996-97 estimate is around $60 million, so a slight increase over that.
What accounted for the significant reduction, even from the 1994-95 actuals, of about $12 million?
Mr Cox: It was primarily the application of medical criteria. Prior to 1991, the ministry did not use medical criteria to determine if someone was eligible for funding under the home oxygen program. Starting in late 1991, we began to apply the criteria. The ministry started slowly, publicizing the criteria, working with doctors to educate them. Beginning in the mid-1990s, we started enforcing strictly the criteria. There was a significant drop in expenditures about that time. In 1992-93 we spent $84 million on this program. Then it went to $69 million and then $56 million and this year it'll be in the low 50s.
The other factor was that we negotiated much lower rates with the oxygen suppliers. We dropped the average monthly rate from $613 down to $425, the current average monthly payment.
Mr Crozier: The medical criteria that you strictly enforce would be for new recipients under the program? Because you mentioned that there were a number on the program who don't qualify but are there because they have been dependent on it. As I think you said, it's difficult to wean them off. So these criteria would be applied to new recipients. Is that the case?
Mr Cox: That's correct. We're much tougher on the new. We try on the renewals. There's an annual renewal to maintain funding and we try to work with the doctors on the renewal. We ask for some evidence that the oxygen is providing benefit if someone is borderline in terms of meeting the criteria. In some cases, we're successful. The ones where we've had the most difficulty are the ones that came on to the program before 1991 who are still on, who never had to meet medical criteria, even loosely applied. There just weren't any medical criteria.
Mr Crozier: Help me, as a layperson, with the medical criteria. It has something to do with a blood oxygen reading. There is a figure I've dealt with that I just would like you to help me recall.
Mr Cox: If you're an adult, you have to have a blood gas test and it has to register 55 milligrams of mercury or less. If you're in the range of 56 to 59, you will be eligible if the doctor can provide documentation that the oxygen is providing some benefit to you, some proof.
Mr Crozier: That was it. What was the term again?
Mr Cox: It's your blood gas; it's an arterial blood gas test.
Mr Crozier: Blood gas test, okay. Because I have encountered that with constituents who, notwithstanding the blood gas test, have appealed to me, and I suppose perhaps even appealed through their physician, to be reconsidered.
There seems to me to be some concern about the relationship between physicians and the respiratory therapists and the suppliers, I guess. Are the respiratory therapists employed by the suppliers? Do they benefit directly from the sale of oxygen?
Mr Cox: The Provincial Auditor found that 75% of people were being tested by employees of the suppliers. If you're an employee of the supplier, we have heard from the respiratory therapists that there is pressure put on them, from time to time, to make sure that if someone's close they will meet the criteria. It's inevitable. It's a possible conflict of interest. It's something we've been dealing with the new College of Respiratory Therapists of Ontario on. They're concerned about it, their members are certainly concerned about it, and that's why we would like to try this independent assessment approach.
Ontario still has far too many people on its home oxygen program, based on international comparisons. France, for example, has 300 people per million of population. The United Kingdom has 140 per million of population. We have 1,400 per million. The Unites States only has 1,000 per million. So we feel that with these independent pilots -- and the suppliers, as you can understand, are very anxious about these pilots. They've seen their revenues drop considerably in the last few years, so we've had to be very careful to work with them to get them on side in terms of how we're going to conduct the pilots so that they're done fairly and with the support of the industry.
Mr Crozier: Air quality is of course a concern in the southwestern part of the county. In my riding there have been some rather alarming statistics recently with regard to air quality, health and so forth. Do you have any information as to whether regions of the province are more prone to this higher-than-international-average use of oxygen?
Mr Cox: In analysing our statistics, we found there are areas of the province where a higher portion of the population is on the home oxygen program. We've noticed it in the Hamilton area, the London area and Kingston in particular.
Mr Crozier: Is that right? I can understand Hamilton, being an industrial city, but then when you get into London and Kingston, that's interesting.
You said that you're going to look at the program and have a pilot to do the assessing differently, but I thought that you mentioned earlier that the pilot would be employees of the ministry. Is that correct?
Mr Cox: I'm sorry, sir. What I meant to say was that they would be paid by the ministry. They wouldn't be on the payroll of the ministry. They're independents who would be reimbursed for their services rather than the suppliers reimbursing the person who does the test. We thought if we reimbursed the person, we might find fewer people qualifying -- we might.
Mr Crozier: Physicians are paid by the ministry, right now respiratory therapists are indirectly paid by the ministry and yet this independent group is also going to be paid by the ministry. The objective is fairness and based on need, and I appreciate that you are trying your best to do that. It's just that you're certainly moving away from the physicians, and they're the primary caregivers and they're the ones the patient has the most faith in, I think, their own physicians. What kind of a problem do you see there if you find that this independent testing further reduces use? How do I feel, I wonder, as a patient saying, "Gee, maybe they're just looking at that bottom line and have a directive to reduce costs in this area"? Do you think that might be a problem?
Mr Cox: Since oxygen is a drug, a physician would always have to sign the application form. So physicians would be part of this team that's going to be doing the independent assessments. That was the thought. In looking at the pattern of oxygen prescriptions by physicians, most are doing one or two a year. There are very few who are doing hundreds a year. One or two in the whole province are doing more than 20 a year. We felt that if we had in each geographical area some physicians who were specialists in interpreting the oxygen medical criteria and could work with a respiratory therapist or two who would do most of the testing and interpreting of the tests on behalf of the physicians, it might be a better delivery system in terms of reducing expenditures.
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Mr Marcel Beaubien (Lambton): Good morning. I guess my first question will be directed at Mr Cox. Looking at your expenditures, the actual budget for 1994-95 was $148 million and the actual for 1995-96 is $139 million, which is a reduction of about 7%. First of all, how many employees would you have in your branch, roughly?
Mr Cox: We have 48 now; we had 59 a year ago.
Mr Beaubien: If $56 million is spent on the home oxygen program and that is an item in your budget which is negotiated for a period of time -- I think the last negotiation for the oxygen price was in 1991 or 1993.
Mr Cox: The last one was last month.
Mr Beaubien: How long is the agreement for?
Mr Cox: The current agreement goes to March 31, 2000.
Mr Beaubien: So it's about a five-year, roughly.
Mr Cox: It's a three-year.
Mr Beaubien: You spent $56 million on this. You also have assistive devices, a total of $79 million, which are prescribed in most cases by physicians, or somebody. Am I correct in assuming that?
Mr Cox: Most cases are prescribed by what we call an authorizer who isn't a physician.
Mr Beaubien: But they're prescribed by someone somewhere?
Mr Cox: Yes, a health care professional.
Mr Beaubien: You have 48 people working in the department. What do they do? If we take $79 million and $56 million, that's about $135 million. The oxygen contract is negotiated for a period of three years. The assistive devices are prescribed by someone outside the department. What do these 48 warm bodies do within your department?
Mr Cox: The 48 warm bodies represent less than 3% of our total cost and what they do is process claims because each one of these is a piece of paper that has to be reviewed and either approved or denied. They pay invoices from suppliers, issue grant cheques to consumers. They review products to make sure they're safe and will do what the manufacturer says they will do before we list them with our program. They answer questions from the public about how to access the program, what we cover. They work with health care professionals whom we have registered as authorizers to make sure they understand what our eligibility criteria are. They conduct workshops throughout the province on a regular basis. They negotiate pricing with manufacturers and distributors.
Mr Beaubien: On the last contract you negotiated for oxygen you said you saved $12 million mainly because of a better deal with the suppliers. Am I correct?
Mr Cox: That, and the medical criteria.
Mr Beaubien: You also mentioned that some physicians are having difficulty in assessing the patient because the critical mass is not there in dealing with lung capacity. I don't recall the proper name, but we have lung capacity technicians or technologists in many hospitals today and I would imagine these people would be fairly well qualified to assess a patient.
Mr Cox: Yes.
Mr Beaubien: Does the physician rely on their expertise to prescribe oxygen or do we rely mainly, as you pointed out, on the employees of the suppliers of the oxygen?
Mr Cox: First time through, generally people are coming on to the program as they're discharged from the hospital. In many of those cases, it's the respiratory therapists who work for the hospital who are doing the assessment. It's the annual renewal where we have the biggest problem because on annual renewal we don't require one of these blood gas tests which have to be done in the lab and we don't require that someone go back into a hospital.
The renewal just requires that someone be administered what's called an oximetry test, which is an instrument that goes on the end of the finger or on the earlobe and it registers a certain level. Those instruments are subject to manipulation. They're easy and the ranges are not very precise. That's where we think we have the problem because it's generally the supplier's respiratory therapist, the employee of the supplier who's doing that test and determining whether someone qualifies to stay on the program for yet another year.
Mr Beaubien: Another question, and Mr Crozier sort of touched on this briefly, but with regard to negotiating a liquid oxygen contract with the association, I have great difficulty with this because I think it has been pointed out that in the past year you've been able to save substantially on the cost of oxygen by being able to negotiate a better contract. My gut feeling is there's probably a better deal to be had.
I can give you an example, and probably Mr Crozier's quite aware of this, we both probably belong to an association where the association had negotiated a corporate rate for rooms in Toronto when we were here on business, but in most cases I could negotiate a better deal on my own than what the association had done. What is your vision of the future in dealing with a supplier of oxygen? Because the way I look at the deal right now, you're giving somebody a blank cheque. You're giving somebody a key to the bank to go in and help themselves.
Mr Cox: I'm sorry, are you suggesting that the rate is still too high? Is that what you think?
Ms Mottershead: I don't think that the members are aware of the contract that was just recently negotiated in the last, I would say, less than 60 days. Mark, maybe you should give members an overview of the contract and the new pricing arrangement because the prices have been substantially reduced in this new contract.
Mr Beaubien: If we negotiate with an association, how do we know we've got the best price, our best bang for the buck?
Ms Mottershead: First of all, we have looked at the actual cost and we do the audits and evaluation on what costs are there for oxygen in cylinders, liquid oxygen and all of that. We know what the trend is and what the track is. We have done a review of costs in other places and know where we are in a range or out of a range, and certainly this time around we made a distinct determination that there could be significant savings and that we would get a better bang in terms of the contract by combining the two categories of oxygen, liquid and cylinder, into one. In that way we got a substantial price decrease.
Clearly, if any group of patients migrate to one type of oxygen or another type of oxygen, there will be fluctuations. In one instance, it could be that the government may be paying a little bit more on the contract than they should, but on the other side, if they migrate to another type of oxygen, it means that the association we contracted with could stand to lose substantially from the contract that they've signed over the three years.
It is a risk, and they've entered into this knowing full well that there is a big risk factor to their receipt of the contract from the government. So it works both ways. Mark can get into the specific numbers, but in looking at the contract, I was certainly satisfied that we were getting the best price possible.
Mr Cox: Just to elaborate on what the deputy said, it's very hard to compare our price to other jurisdictions because our price is an all-inclusive price. It doesn't cover just the oxygen, it also covers the equipment, the cost of delivering tanks to the home several times a month, the cost of the professional services, supplies such as tubing and masks. Other jurisdictions negotiated a much better price on just the oxygen than we have, but they don't have this all-inclusive package that we pay for in our monthly rate. We haven't found a jurisdiction that compares equally that way.
I'm sure the price could be reduced even further but you have to keep in mind what has happened to this industry. There were 140 companies that supplied home oxygen in Ontario five years ago. They're now down to less than 80, and that reduction of $30 million a year so that we're spending less on oxygen now than we did four years ago has had drastic effects on employment in that industry. We're trying to ease it down gradually rather than doing everything all at once and just have the whole industry disappear.
Mr Beaubien: Another brief question: I think you mention with regard to the criteria for qualifying that you have difficulties in using a financial benchmark to qualify somebody for the program. Why is that?
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Mr Cox: Problems that have presented to us in the past have suggested that maybe we should use income or means as a determinant of eligibility, but the administrative cost of getting involved in a means- or income-tested program is something to consider.
The other factor is that there are people who are relatively well-off but if they themselves have, or have a child who has, a severe or multiple disabilities, the costs can be quite substantial. You can be looking at a wheelchair that can cost as much as $20,000. If you happen to also be an amputee, you can be looking at an artificial limb that could cost as much as $15,000, and you might need vision aids, communication aids, ostomy supplies. It can be very expensive, and if it's a child and they're growing, every year or two you're faced with this expenditure. That has been one of the drawbacks.
The deputy has reminded me that the other factor is that since you need equipment generally only -- if you're an adult -- every three to five years, there's a thought that people might wait until their income is very, very low to come into the program. It's different than drugs, where you generally need that level of drugs every year for life. With equipment, there's this effect where it's every so many years you need it. People might just time their entry into the program in a year in which their income is artificially low.
Mrs Brenda Elliott (Guelph): I'm just trying to figure out the cost of this home oxygen. Am I right in remembering that you said that the cost per month is now $613?
Mr Cox: It's $425.
Mrs Elliott: That's the new price?
Mr Cox: Yes. The average was $613 in 1991, so it's dropped about 30%.
Mrs Elliott: So you've combined the liquid oxygen and the concentrator price, essentially, to come up with something new. The $425 accounts for everything. Is that correct?
Mr Cox: We used to have a rate for concentrators and a different rate for liquid. We now, starting April 1, 1997, as a result of the new contract just have a single rate so the supplier gets paid $425 a month. That gets us out of the adjudicating of modality and allows us more time to do these independent assessments and education of physicians.
Mrs Elliott: Right. So it's about $5,000 a year for the cost of the oxygen. I'm curious that the cost of the concentrator -- I see from an administrative point of view you're looking for cost savings, and yet the concentrator, with a life cycle of five to seven years, the cost of purchasing that was up to $1,500.
Mr Cox: That's correct.
Mrs Elliott: You figured this all out very carefully.
Mr Cox: Well, the $425, as I indicated, is supposed to cover a lot more than just the concentrators. It's to cover the cylinders that you need for emergency backup, or in case you want to go out for a walk and you can't take your concentrator with you, because that's a machine that plugs into the wall. It covers the costs of respiratory therapists going to the home a couple of times a month, the technicians that have to come to clean the machine, masks, tubing. It's an all-inclusive price, 24-hour emergency service, that sort of thing. So yes, the $425 seems very high when you look at it just in terms of the cost of the concentrator, but there's more to it than that.
Mr Shea: Very quickly, to make sure I'm very clear about a point, you did say you're now on track to achieve your 35% modality in terms of the oxygen?
Mr Cox: In terms of the liquid oxygen.
Mr Shea: Are you there yet?
Mr Cox: We're getting very close because we're finding that as new people come on, they're less likely to be on liquid, so another year or two and we'll be there.
Mr Shea: How close are you right now?
Mr Cox: Our target is to have 35% of expenditures on liquid. In 1991 it was 56% of clients; 72% of expenditures were on liquid. Last year 51% of our expenditures were on liquid, although for the new clients only 34% of expenditures were on liquid. So for new clients, we're there. It's the older ones --
Mr Shea: I appreciate that and I would answer the same way if I were in your seat. What I'm asking you to come back to is, where are you in terms of the 35% overall target? Would I take it from you're still in the high 40s?
Mr Cox: That's correct. Now, of course, with this new flat rate, we don't care any more about that particular target.
Mr Shea: You allow me now to segue into my last question and I appreciate that. Thank you. I thought you'd never get there. Let me ask you about your new price rate. Just how competitive is that? Can I take it that you do RFPs? Can I take it that you put out calls for submissions? Do I take it you go to the oxygen supply as you do with anything else?
Mr Cox: No, sir, we don't. We negotiate with the association that represents the oxygen suppliers, just like the ministry negotiates with the pharmacists around the dispensing fee and the doctors around the --
Mr Shea: So I'm dealing with a combine. When I'm saying "I," I'm speaking in your sense. You're dealing with somebody who controls oxygen.
Mr Cox: That's correct.
Mr Shea: It's either God or some association that's got a hand on this. Tell me, is this combine a national combine?
Mr Cox: No, there's no national association of the suppliers.
Mr Shea: There's a provincial one, is there?
Mr Cox: Yes.
Mr Shea: How long has it been in place?
Mr Cox: I've been dealing with oxygen since 1989, so it's at least that long.
Mr Shea: Really? That's intriguing.
Mr Cox: In Ontario the suppliers, I should mention, are owned by the multinational companies that produce the gas and the equipment.
Mr Shea: Could you go to any other source?
Mr Cox: Not really, but if the ministry wanted to it could tender the service. It's a thought we've had of tendering the service. Again, that frightens the industry because it would drive the price down even further and speed up the process of consolidating the industry.
Mr Shea: Is that a good thing or a bad thing?
Mr Cox: Well --
Mr Shea: I'm taking you into some dangerous waters here that for me are rather interesting because I don't understand all of the implications in terms of structuring. The auditor may want to bring me back to this at some other point because I'm sure he understands it entirely and I'd like to know the industry structure and the implications and so forth behind all of this. Do I gather this is a fairly complex issue that I am dancing in?
Mr Cox: Yes.
Mr Shea: I need your guidance, Chairman. I don't want to let this issue go but I'd like to have some time to at least perhaps discuss this a little bit more because I don't want to take up the committee's time on getting myself up to speed a little more quickly.
I'm intrigued in your response about the possibility of RFPs or of tendering and how you may proceed with that. Could I ask you to just give some sort of written information about what might be some thoughts about where you might want to proceed -- we're not pinning down the minister or anybody else just at this point -- without walking us into any unusual waters. It might help me to start to ask some more effective questions, if you follow what I'm trying to say in an oblique fashion. Could that be done?
Ms Mottershead: We could certainly provide you with information in terms of the industry, who the industry players are, what their connection is to the association, what its objects are, what we're trying to do in terms of a contract versus other mechanisms.
Mr Shea: That's why you're a deputy minister, because you put that in a better framework than I was putting it. Could you add to that perhaps some comparison to what's happening in other jurisdictions?
Ms Mottershead: Yes, we would be pleased to do the other jurisdiction comparison for you.
Mr Shea: Please, and I don't mean just Canadian either. Can you also look at Europeans?
Ms Mottershead: Yes.
Mr Shea: Marvellous. That would be very helpful for me and I won't take up more time at this juncture. I can start to deal through that one a little more effectively. That's the real concern I have in that area and I appreciate you. Thank you.
Mr Crozier: I think Mr Shea has brought up an interesting issue and I hope that perhaps that could be supplied through the clerk and then we could all benefit from what you bring for us.
Ms Mottershead: Yes, we can do that.
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Mr Crozier: I need some help understanding something. It says here -- I guess this is from the audit report -- "In order to receive funding for a wheelchair, new applicants 19 years or over must be able to operate the wheelchair without assistance."
I have a couple of questions. Does that go all the way up to including a very complicated electrical wheelchair from what I say is a regular wheelchair, where the person moves the wheels themselves? Can you explain for me why they have to be able to operate it?
Ms Mottershead: Certainly it goes back to the objective of the program: It is to help people in their daily functioning and living. The objective is not to provide equipment to those who are not going to be mobile and self-sufficient and on their own. If it requires another person to help, if you're in a nursing home or somewhere else and you can't propel yourself, then it's obviously not really helping in your independence. If someone has got to do it for you, you're not independent. One of the key objectives was the promotion of self-reliance, independence and looking after oneself. Mark may have other comments to add to that.
Mr Cox: That's essentially it.
Mr Crozier: I'm not trying to make an issue of it; I'm just trying to understand it. I understand what you're saying, and I agree with it, but are there some instances where a person would not be mobile at all unless someone helped them and just for their own wellbeing, to simply not be in a bed? Am I talking about something that just doesn't exist? Are there any cases where it would assist someone in being mobile but they couldn't do it themselves?
Mr Cox: That's true, it is useful for people to get outside in fresh air. It's essential for moving them from their bed to the dining room. It's just that our mandate has never been to pay for transportation aids. We get a lot of criticism from people because we won't pay for a substitute. We can't pay, because of our mandate, for a substitute, for a car or Wheel-Trans; we pay for basic and essential self-independence only. Even with people who can be independently mobile, we'll only pay for the device if it's required to get them around their immediate home environment or, when they get to where they're going, if they need something to help them get around the plaza or the church or whatever, we could pay for the device. But we can't pay for it and don't pay for it, because we don't have the funding or the mandate, if it's for transportation. If you're moving someone from A to B, we consider that transportation, you're transporting them.
Mr Crozier: What's significant about 19?
Mr Cox: The program started as a children's program, and children have always been allowed that benefit, the benefit of funding for a wheelchair whether they can move it or not. When the program expanded from being just a children's program to an adults' program and the funding went from about $1.5 million a year to close to $20 million a year, the decision was made at that time that benefits for adults would not cover wheelchairs if they couldn't manoeuvre it themselves either by moving the wheels or operating a joystick or a head-moving device.
Mr Crozier: Do you ever go back to that and think about it and get input from people who require this as to whether that should be reassessed and whether it still should be the same? Do you ever revisit it?
Mr Cox: No doubt about it, that's the area where we get the most criticism, that particular funding deficiency in the program. It would cost an extra $10 million to finance that benefit. It's something the ministry is looking at doing either through reinvesting money within the ministry from elsewhere or within the program.
Ms Mottershead: Can I just add that although we are looking at some of those issues, there is the question about staying with the objective of self-reliance and that particular point. We have to be cognizant that if we maintain that policy, then you're going to have others -- you're not going to provide every single piece of equipment for any kinds of purposes over any period of time.
The one thing I want to point out, though, is that in looking at other provinces we have in this assistive devices program and home oxygen program the most generous program, involving the number of supplies that are available, but also the issue around the very small copayments involved in the program. Many provinces, and I think we're probably going to be down to the wire and left on our own very soon, are getting out of that altogether because they feel that if someone needs an artificial limb or a wheelchair or whatever, those are practical things to their daily living that they should be paying for themselves. That's where we're at right now in terms of the overview of what's happening in the country.
It's not medically necessary. Some of these devices are not there to help you live longer, necessarily, putting home oxygen aside. They just happen to be artificial limbs or prostheses or other things that are helpful to getting around but they're not medically necessary or essential to life. I just wanted to share that little bit of information with you.
Mr Crozier: Thank you. I proudly come from that part of the province that, when it comes to the United Way, is the most generous community in North America. So when you say that we're the most generous province when it comes to assisting those who are less fortunate than ourselves, I have no problem with being the most generous.
The Acting Chair: I would remind members and all here that this is Thursday, so there is private members' public business, and you may wish to vote at noon.
We have two people left with questions. One is the auditor. I would ask that you make your remarks as brief as possible, both in questions and answers, so that we can accommodate those last two, at least.
Mr Erik Peters: If you have another member asking questions, I don't want to be exempted. Some clarification to help the committee on some of the issues: The first one is that when you were dealing with benefits from other government sources, the response was largely focused on the Workers' Compensation Board at the time that we discussed this with the ministry, and we agreed on the reporting. We also dealt with the Department of Veterans Affairs. Is there any initiative taken to also have some sort of cooperation with the Department of Veterans Affairs? That is the one question.
The second one relates to the price that you just negotiated, the $425, which is news to us. At the time when we did the audit, you indicated that the current rates were in existence until March 1998. From the comments I take it that there is an extension of the contract now to the year 2000 and that was negotiated in it.
There are two subquestions, if it's at all possible to address them.
One is that there would be an indication that the concentrator suppliers have actually achieved a 20%-plus rate increase, from $347 a month to $425, so they seem to be fairly well ahead on this deal. In that connection, is there the possibility at all of a breakdown between the equipment cost and the service cost that are provided by the organizer so that some assessment can take place?
As to how that happens, maybe there is a very good reason that, for example, your concentrator supplier has to provide more services than somebody who just provides liquid oxygen, in terms of cylinders into the home. But I hope that getting some clarification on those two points might help in assessing the situation a little bit further. Thank you very much.
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Mr Cox: On the question around the Department of Veterans Affairs, we've tried our best but there doesn't seem to be much interest at that end to cooperate at the present time. They are concerned about releasing information on their client base and sharing it with the provincial level. Until they can overcome that, I don't think we're going to get very far with them compared to the progress we're making with the workers' compensation portion.
We have the disclosure on the applications so that we can share that information with the federal government, but they've yet to change their form so that they can share their information with us.
On oxygen pricing, yes, we negotiated an extension of the current agreement. To the extent that a supplier provides a concentrator, they're getting a bonus. That was necessary to encourage that movement away from liquid.
We didn't break the costing into how much is equipment and how much is service. A costing study is something we've been trying to get with the industry for some time, and I think we now have that incentive for them to open up their books and let us really see. They see hospitals as competition and they're prepared to compare the hospitals' expenditures for hospitals that are oxygen vendors with their expenditures to see whether hospitals should get a different rate. I'm optimistic that we'll soon have access to the information we need to make that distinction between equipment costs versus servicing costs.
Ms Mottershead: I just wanted to add that there is a clause in the contract around termination. If we find that once we look at some of this information we want a reopener, we have the ability to reopen the contract and/or get out of it, so we've protected ourselves in that way.
Mr Beaubien: Concentrators, are they a high-maintenance item?
Mr Cox: No, they're very low-maintenance. The knock against them is the noise, which bothers some people, and also the electricity they use, but they're low-maintenance.
Mr Beaubien: Your target is to have in the future 35% of the patients on liquid oxygen; am I correct?
Mr Cox: Twenty per cent of patients, 35% of expenditures, that was our target before we got this flat rate. Now we want 20% of people on liquid.
Mr Beaubien: Where do you get that benchmark? Is that an international benchmark, provincial, federal? Why that benchmark?
Mr Cox: Our medical advisers tell us it's an international benchmark. In fact it's lower. They say 10% to 15%. We said for now we'll settle for 20%.
Mr Beaubien: What are the future goals?
Mr Cox: Getting down even further.
Mr Beaubien: I agree with Mr Crozier. I don't have any problem spending money for the quality of people's lives. I'm concerned that we have to be very cost-efficient. I do have problems with providing services based on age as opposed to financial needs. I think if we can save money in the system, maybe we can look at the people who fall through the cracks. I don't mind helping people who need the help, but if we don't get the best bang for our buck, I think we're short-circuiting the system and we're not helping some of the people we should help. That's my concern.
Mr Cox: I just want to make it clear that the reason people are on liquid is because they're healthy enough to be mobile. We say that if you're able to go outside for three hours or more three times a week, then you're pretty mobile, and if liquid is what you need to get you out, then we should be funding the liquid.
Mrs Elliott: Somewhere I read, and it relates to the veterans affairs issue, that there's a reluctance to share information because of breach of confidentiality of the patient's record. Is the ministry, in these programs or any of the other programs, moving to having a section on an application for a program or funding of any sort to request a patient's permission to correspond with other departments or other sections of the ministry so that we can facilitate a sharing of information?
Ms Mottershead: We actually would like to go one step further than just dealing with application forms and having people release information to us. We want to make sure the information that is released to us is also protected so that only those who need to see the information for decision-making around care for the individual,
whether it's physicians or other practitioners or others in the system -- that it is protected and is used only for the intended purposes.
We have been working on a policy and hopefully working towards legislation that will protect health information as well as allow some sharing of that information among professionals who require that information.
Mrs Elliott: This is the confidentiality?
Ms Mottershead: Yes. Helen Johns, our parliamentary assistant, took out the policy for public hearings during the summer in 1996 and we're working on that piece right now.
Mrs Elliott: Would this go beyond just provincial sharing, though, or are we thinking about federal-provincial sharing of information?
Ms Mottershead: We haven't put parameters around that yet because there are situations where you need to share the information to those outside the province. For example, for a patient who is on vacation or on a business trip who has a medical record somewhere, we should be able to have that medical record become available to whoever is treating that person so they are aware of the kinds of drugs or if they're a diabetic or whatever. We haven't grappled directly with that but we know it's an area we have to look at.
The Acting Chair: Thank you very much. Not seeing a request for any other questions, I thank both of you for being here before the public accounts committee. We appreciate your time.
The standing committee on public accounts is to meet again on Thursday, February 20, in room 228 for the consideration of section 3.11, the alternate payment program, and section 3.14, the independent health facilities, of the 1996 report of the Provincial Auditor. My suggestion would be that the time be divided equally for each of those two sections.
This committee stands adjourned until that date.
The committee adjourned at 1157.