Unbiased Analysis of Today's Healthcare Issues

Canada’s single payer system doesn’t cover drugs?

Written By: Jason Shafrin - Jan• 31•16

Yes it is true.  Wang et al. (2015) report:

Unlike physician and hospital services, which are universal in Canada, coverage for prescription drugs dispensed outside hospitals falls outside the Canada Health Act and provincial governments only provide public drug programs for some population groups,primarily seniors and social assistance recipients…Canada is still the only country that does not provide universal coverage for prescription drugs among all developed countries with universal health care system.

Outpatient prescription drug coverage, however, does vary over time and by region.  Before 1997, Quebec only covered prescription drug costs for the elderly and patients with certain illnesses.  Only the low-income elderly had prescription drug costs fully covered by the provincial government.   Beginning in 1997, Quebec required all residents to have drug insurance.

The public prescription drug insurance plan, administered by the Régie de l’assurance maladie du Québec (RAMQ), covers all Quebecers who are not eligible for a private plan. All persons under age 65 eligible for a private plan are required to join that plan and ensure coverage for their spouse and children

Using data from the longitudinal household component of the National Population Health Survey (NPHS), the authors measure trends in prescription drug insurance, use of prescription drugs, medical costs, and health status measured by health utility index (HUI3) and self-assessed health status.  They use a difference-in-difference strategy comparing changes in these outcomes in Quebec compared to other Canadian provinces.

Using this approach, the authors find that:

We find that the introduction of the mandatory drug program substantially increased drug coverage among the general population…[and]…also increased medication use andGP visits. No statistically significant effects were found for specialist visits and hospitalization…Furthermore, effects on drug and GP utilization for the previously uninsured are concentrated at the extensive margin, indicating that the reform improved access to these services for them. Subgroup analysis by presence of chronic condition reveals that the reform had a much large effect on the probability of GP visit for those with chronic conditions. Most importantly, results of quantile regressions show that the reform had differential health impacts. People with worse health outcomes experienced a large improvement in their health status.

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