All posts by James W. Breckenridge

Provincial

So Bill, Adrian…

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On the Monday (August 29th) news there were calls for BC Community Living to find money to keep care homes for the developmentally challenged open. Over the weekend there were calls for the government to find the money to open the top two floors at Vernon Jubilee Hospital’s new tower. Earlier this year there was a call to find the $10s of millions needed to build a new hospital on Haida Gwaii.

Calls by BC citizens, the media, the NDP for the government to spend more funds are a daily (or near daily) occurrence.

Yet with media acting as cheer leaders and Mr Vander Zalm, along with Mr Dix (and his NDP), acting as Svengalis – British Columbians voted to extinguish the HST and rip $2.6 to $3 billion out of government coffers over the next three and a half years.

On the heels of the announcement of the results of the vote, completely ignoring (refusing to accept?) the serious financial consequences of extinguishing the HST, British Columbians, the media, the NDP are all back calling for the government to ‘find the money’.

Perhaps, rather than patting themselves on the back or running around thanking people for helping them  extinguish the HST, Mr Vander Zalm and Mr Dix (and his NDP) will finally share with the public what $1.6 billion worth of  health care and education services they want to cut to offset the $1.6 billion repayment (forfeiture) to Ottawa they fought so hard and successfully for? Or the cuts they favour to offset the $1 billion revenue reduction in the first two years of the return to the PST?

Cuts to services, since Mr Vander Zalm, Mr Dix (and his NDP) fought so hard to extinguish the GST because it ‘raised taxes’ so one would not expect them to want to raise taxes to cover these massive revenue shortfalls.

Why speak only of cuts to healthcare and education? Because even drastic actions such as cutting all the gaming grants given to organizations in the province or cutting subsidies to BC Ferries and forcing them to balance their books through service cuts are  simply too small to achieve a re-balancing of the budget without significant reductions in healthcare  services and  education. Healthcare and education being the only budget areas large enough to provide the Hundreds of Millions of Dollars in cuts needed.

Not that I am opposed to making as many smaller cuts as possible to offset the revenue forfeitures Mr Vander Zalm, Mr Dix and the NDP so successfully (and disasterously) fought for.

I am very much in favour of eliminating the government pensions of Mr Vander Zalm, Mr Dix and the NDP as well as cutting the salaries of current NDP MLA’s to $32,667 (1/3 of their current $98,000). Since the behaviour of Mr. Dix and the NDP MLAs clearly demonstrates their outrageous salaries and gold plated pensions have resulted in them being totally out of touch with the economic and financial reality of British Columbia and most British Columbians

The leadership Mr Vander Zalm, Mr Dix and the NDP showed in extinguishing the HST, should be shown in living with the consequences.

It is just unfortunate that those consequences cannot not be limited to Mr Vander Zalm, Mr Dix, the NDP, the media and those British Columbians who voted to extinguish the HST – but will instead fall on, and be suffered by, all British Columbians.

Municipal, Snafu

More ad hominem mayor Peary?

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I see mayor Peary has changed the negative label he applies to any who dare disagree with him.

‘Naysayers’ have now become ‘critics’. Perhaps because the use of ‘naysayers’ reminds citizens that the predictions of the naysayers about the outcome and consequences of building the AESC have proven fairly accurate. Especially in contrast to the wildly inaccurate ‘everything will be wonderful’ predictions, claims and promises made by city staff and council.

When did critical review and evaluation of expenditures that will cost taxpayers hundreds of millions of dollars become a bad thing?

Without the feedback provided by critical review and evaluation companies, countries, provinces and municipalities can easily end up wasting millions upon millions of dollars on projects that become white elephants and money pits. At least companies, countries, provinces and municipalities lacking papal infallibility.

Admittedly one needs solid self esteem to accept and examine the feedback provided by critical review, acknowledging oversights or mistakes and making changes as needed.

Personally, I must acknowledge that in my analysis and evaluation of the proposal to build the AESC I did not foresee that council would saddle taxpayers with a $75 million dollar liability for the Heat (of which $60 million remains for the 8 years the revenue guarantee has left).

Fortunately (or should that be unfortunately?) taxpayers are only out $5 – $6 – $7 million rather than the maximum possible $15 million for the first two years of the revenue guarantee.

I admit I failed entirely to anticipate that council would ignore the law – flout the law -break the law – and put taxpayers at risk for $75 million dollars by signing an illegal revenue guarantee with the Heat ownership.

As to Mayor Peary’s latest derogatory term for those who disagree with him:

Labelling me a critic or naysayer does not change what I am.

A person of common sense with an appreciation of financial reality and the need to act in a financially responsible manner.

A person who believes council should be acting in the best interest of and to address the needs of the city and its citizens and not council’s ego.

A person of ethics who believes that when subsidizing a hockey team is against the law council should respect the law rather than, as this council chose,  ignoring or finding ways to circumvent the law.

A person who feels that if the only benefit (or beneficiaries) of an economic impact report is the re-election campaign(s) of elected officials, payment for the report should come out of the pockets of those seeking re-election and not out of the pockets of taxpayers.

Caveat emptor, Finances, Issues, Provincial

Facts???? We’re the Government.

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The response (below) to my call for the provincial government to stop bedevilling British Columbians struggling to survive serious health challenges (and the poverty that so often goes with it) has me pondering whether the government pays attention to what you say or, spotting a few key words – Air Miles®, PharmaCare – reply using a rote response or form letter.

Nowhere in the reply were the facts or points I raised addressed.

Of course the reply didn’t contain any facts or evidence to support the government’s  assertion ‘the government was subsidizing the incentive programs’. Further, the government’s reasoning (more accurately what passes for reasoning in government and the bureaucracy) is based on multiple coulds.

Could. And based on the speculation of could, the government took a benefit from the seriously ill who practiced good fiscal management.

Although……basing policies on what government insists on believing, on the speculation of could, rather than facts, does explain the sad state of BC’s finances, healthcare, education, housing, deficit, debt, etc.

Those collecting points were maximizing the bang for the taxpayer buck. By collecting points they got the medications taxpayers paid for and through the collection of points they got $20 worth of food or gas to supplement their (inadequate) support (and if the politicians and bureaucrats feel it is adequate, I propose we set the salaries of MLA’s and bureaucrats at this ‘adequate’ level).

So, not only is the government’s incentive program policy not saving the taxpayers any money, it is wasting the cash value of the rewards that are no longer collected.

I also found myself wondering if, after the Bureaucratese of the reply had been slapped together, anyone had bother reading what had been written.

Take the lecture on the free market. While it might be suitable as an introduction to economics in middle school its simplistic view fails to capture the complexity of the free market as it functions in the real world.

Such as the difference in the economics of standalone pharmacies versus pharmacies contained within (or part of) a retail operation such as grocery stores or London Drugs; or the consequences of a pharmacy being part of a larger entity (Safeway) which has an incentive program that applies to the goods of the entire store.

So, we have government policy based on the speculation of could and economics and finances suitable to middle school but not for application in the real world.

Then we have this beauty:

” pharmacies set their drug prices and dispensing fees based on what they believe the market will bear – or more specifically on what they believe their customers will pay.”

“ While PharmaCare does not have the ability to “shop around” it does set maximum amounts for which government will pay.”

PharmaCare sets out what (the maximum) it will pay. Therefore the pharmacies have no need to base their prices on  “what they believe their customers will pay.” If the pharmacies know what PharmaCare will pay, then by the governments own assertion that is what the pharmacies will charge for medication for those on PharmaCare.

According to the government reply, the amount PharmaCare would have been paying when British Columbians in need were allowed to collect Air Miles® (or other incentive programs) was the maximum amount PharmaCare had set for each specific medication being taken.

According to the government reply, the amount PharmaCare is paying now that government  policy prevents the collection of Air Miles® etc is the maximum amount PharmaCare sets for each specific medication being taken.

So, according to the governments own rational it does not matter whether Air Miles® (or other incentive program points) are collected or not, knowing what the maximum amount PharmaCare will pay for any specific medication, means that (the maximum) is what pharmacies will charge.

By the governments own rational, changing the policy on incentive program points collection has not saved the taxpayers any money. Conversely the collection of incentive program points did not cost the taxpayers any money.

The effect of the change in policy is to fail to obtain the maximum bang for the taxpayer buck by not collecting the rewards that are available as a result of taxpayer dollars spent on medication.

And then::

“Rather than offering loyalty rewards, if a pharmacy sets its drug price or dispensing fee at a lower amount to attract customers, then customers, PharmaCare and all taxpayers will save money.”

Setting aside for the moment the fact that, according to the government’s own rational, the price charged to PharmaCare (loyalty rewards or no loyalty rewards) will be the maximum that PharmaCare has set out as the amount it will pay for a specific drug, consider the following points.

In the free market cutting prices to attract business leads to price wars. Incentive programs tend to be offered by large retail chains/organizations (such as Safeway Wal-Mart) who have the financial  wherewithal to win such a war.

When was the last time (if ever) you heard or read advertizing for pharmacies that was based on the prices for prescription drugs?

Even if a pharmacy does charge a lower unadvertised price how are people going to find it? Do you check around to find the lowest price ever time you get a prescription?

If you are on PharmaCare it makes sense to make an effort to fill your prescription somewhere you earn rewards that are useful to you or your survival. If you cannot collect rewards, are you not going to choose a pharmacy  based on convenience or cost savings realized by using that pharmacy?

Also affecting the decision as to which pharmacy to use – I always get my medication at the same place. They have my records and we have a year’s long relationship. As a safety measure I have no interest in going to a strange, unknown pharmacy. (I have had my pharmacy catch and correct what could have been a fatal error in medication prescribed).

Then there is the question of how people are suppose to check prices. Pharmacies do not quote prices over the phone – you have to go to the pharmacy. How reasonable is it to expect people living on extremely limited budgets to spend their gas budget driving from pharmacy to pharmacy to compare prices – particularly after you have taken away the $20 reward they used for gas at the end of the month? How reasonable is it to want people to compare prices  when market forces dictate that all pharmacies will be charging the same amount – the amount set out by PharmaCare.

I do not have the information to properly analyze how PharmaCare sets the maximum price it will pay for each medication it covers. However I would assume that PharmaCare behaves at least semi-rationally (I know – a dangerous assumption when referring to government). Meaning that PharmaCare would set its maximum rate based on the wholesale cost (the cost to pharmacies) of the specific medications.

Unless PharmaCare is allowing for a ridiculously large mark-ups (if it allows any mark-up at all), then pharmacies make little or no money on the mark-up over cost on filling PharmaCare prescriptions. Thus if PharmaCare is behaving in a fiscally responsible manner in setting the maximum it will pay for a specific medication, a pharmacy will need to charge the maximum PharmaCare will pay.

Once again,  incentive or no incentive program, the amount charged by a pharmacy is going to be the maximum amount PharmaCare has set out as what it will pay.

If the government has evidence to support its claim that the collection of points in incentive programs is costing taxpayers dollars they need to present that evidence.

Evidence based on facts, not the speculation of ‘could’ or fairy tales. Because, if the government of BC insists on making policy based on speculation and fairy tales, I want to know why the government hasn’t solved all its financial and service woes by having Rumpelstiltskin in the legislature basement spinning straw into gold?

The government needs to remember it is suppose to help, not persecute or hinder, the Wellness of citizens in need.

It should be maximizing the bang for the taxpayer buck, rather than wasting the rewards that accrue to the dollars taxpayers spend on medication by allowing the collection of reward/incentive points – points that cost the taxpayer not one additional cent.

Perhaps if the government ceased to waste time and resources chasing mirages of nonexistent savings or dreaming up ways or excuses to abuse British Columbians in need of help, the government COULD address major issues such as the rationing and cutbacks of healthcare.

Whether malice or maladroitness it is time the government ceased to tyrannize British Columbians suffering from serious health issues and a lack of personal resources by allowing them to collect Air Miles® (or participate in other incentive programs).

*************************************

Dear Mr. Breckenridge:

I am writing in response to your emails of July 11 and 18, 2011, regarding the restriction on incentive programs such as Air Miles®. I am pleased to respond on behalf of the Honourable Michael de Jong, QC, Minister of Health.

As you are aware, the British Columbia PharmaCare program is the publicly funded drug insurance program operated by the BC Ministry of Health. The purpose of the PharmaCare program is to assist British Columbians, particularly those with lower incomes, with the cost of eligible prescription drugs and designated medical supplies.

Community pharmacies in BC are retail enterprises that operate in a free market. A free market is defined as an economic system in which prices are determined by unrestricted competition between privately owned businesses. Like other retail businesses, pharmacies set their drug prices and dispensing fees based on what they believe the market will bear – or more specifically on what they believe their customers will pay.

There is a wide variation on what pharmacies in BC charge for prescription drugs. If people purchasing prescription drugs at the higher cost drug stores shopped around, they could save up to 25 percent on their annual drug bill.

For example, people taking commonly prescribed atorvastatin (generic Lipitor) 10 mg once daily could pay over $40 for a 30 day supply of the drug at the more expensive pharmacies in the province. The same amount of the same drug could cost less than $30 dollars at less expensive pharmacies. PharmaCare currently reimburses up to $31.56 for a 30 day supply.

Incentive programs encourage people to shop at a particular pharmacy or pharmacy chain by enticing them with such things as loyalty points, coupons, discounts, goods, rewards and similar schemes rather than with lower prices. Incentive programs cost retailers money, which they build into the price they charge consumers. Customers, particularly those where an insurer pays all or part of their drug costs, may become more concerned about the rewards they are receiving than the cost of the drug. Over time this can contribute to price escalation.

This new policy respects the right of pharmacies to offer incentive programs for customers, but takes government out of the business of subsidizing them.

PharmaCare is also a community pharmacy customer, spending as much as $1 billion annually on prescription drugs for its beneficiaries. While PharmaCare does not have the ability to “shop around” it does set maximum amounts for which government will pay.

While PharmaCare sets a maximum amount it will pay, not all pharmacies bill at the maximum amount. Rather than offering loyalty rewards, if a pharmacy sets its drug price or dispensing fee at a lower amount to attract customers, then customers, PharmaCare and all taxpayers will save money.

Please be aware that the restriction on inducements only affects the portion of a prescription paid by PharmaCare. You may still choose to get your prescription from a pharmacy that offers incentives so you can accrue points/rewards on the amount you pay out-of-pocket.

Further information on PharmaCare’s policy on inducements has been posted on the PharmaCare website. The Information can be viewed at:

http://www.health.gov.bc.ca/pharmacare/pdf/inducements.pdf.

I appreciate the opportunity to respond to your concerns, and trust that this explains the rationale for restricting incentive programs.

Sincerely,

Bob Nakagawa, B.Sc. (Pharm.), ACPR, FCSHP

Assistant Deputy

Finances, Municipal, Snafu

Insult to Insult to Injury

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Over the years many people have compliment me on my willpower for my dedication in swimming 5 – 6 days a week. The truth is that it is not so much willpower or dedication as it is being highly motivated. 

As the years have accumulated all the contact sports, injuries etc have come home to roost with a vengeance. To maximize, to maintain, mobility and minimize pain I need to swim those 5 -6 days a week.

Which is why the sizable surcharge imposed on the users of the Abbotsford Recreation Centre (and the City’s other facilities) to pay the multi-million dollar subsidy for a professional hockey team and a multi-million dollar subsidy to the well connected members of the Heat ownership group is so painful both as a citizen of Abbotsford and physically.

The surcharges have pushed the cost of a pass for ARC from affordable (with planning and frugality) to out of reach for the best part of Abbotsford’s citizens – as well as propelling the cost of using public facilities well past the cost of using private facilities. Only in Abbotsford would you end up with the public facilities affordable only for the well-to-do and the private facilities affordable to the general public.

The reason I have not followed so many others to the private recreation facilities is that I am a length swimmer and it is only the public facilities that permit 25 metre lengths.

The limitations on swimming imposed by being able to afford to swim only during toonie swim times means that since pool fees moved into the stratosphere my mobility has been decreasing and my pain levels have been increasing.

Struggling stiffly, slowly and painfully up to start the day serves as a daily reminder of city council’s practice of serving the needs of council’s egos rather than the needs of the taxpayers – with the notable exception of well connected taxpayers.

Adding insult to the injury of the usurious surcharge is the decision to abuse perfectly fine walls with paint to caricature a mural – as opposed to using the money frittered away on the mural to keep the cost of admission less extortionate.

A mural that seems to have a great deal in common with a Rorschach inkblot adds yet another layer of insult. Filling balloons with paint and having patrons throw them at the walls would have gotten much the same look, at a negligible cost.

Council, in typical council fashion, painted murals in a building where the cost of painting the murals pushes the admission cost up leaving people unable to afford to use the facility and see the murals.

The purpose of public facilities is not to fritter away money on murals or to provide funds to provide multi-million dollar subsidies to/for a facility for a professional hockey team or to provide multi-million dollar subsidies for an ownership group to buy themselves (themselves – not the city that is paying the subsidies) a professional hockey team.

The purpose of public recreation facilities is to provide amenities that all citizens can afford to access.

Consider, Federal

Lybia

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The media coverage of the HMCS Vancouver setting sail to Libyan waters to relieve HMCS Charlottetown, which has been in action off the Libyan coast since March, underscores Mr Harper and his Conservatives lack of an ethical base.

Mr Harper justified the involvement of the Canadian military in Libya by stating that the Canadian military was there to ‘protect the Libyan people from Mr Gaddafi.

According to Mr Harper Mr Gaddafi killing citizens of Libya is such a grievous offence that military intervention by countries from around the world is required to put an end to this killing.

Conversely Mr Harper is perfectly fine with Canadian business (with the approval and support of the Canadian government) to kill Libyans and citizens of any other country by exporting asbestos – a substance whose use is banned in Canada because it causes death, cancer and asbestosis – profiting from the export of death.

Obviously Mr Gaddafi’s mistake was that he should have used Canadian asbestos to kill his victims; Mr Gaddafi’s sin lay in his failure to contribute to the profitability of the Quebec asbestos exports and thus to the electability of Mr Harper’s Conservatives in the province of Quebec.