TORONTO, May 2, 2018 /CNW/ - Centric Health Corporation ("Centric Health" or the "Company") (TSX:CHH), Canada's leading diversified healthcare services company, wishes to provide its stakeholders with an update on recent regulatory developments and their potential impact on the Company's business.
On April 1, 2018, the changes to the pricing of generic drugs resulting from the agreement between the pan-Canadian Pharmaceutical Alliance and Canadian Generic Pharmaceutical Association came into effect. These changes reduced the price of nearly 70 of the most commonly prescribed drugs in Canada by 25-40%, including drugs used to treat high blood pressure, high cholesterol, and depression that are collectively used by millions of Canadians, resulting in overall discounts of up to 90% off the price of their brand-name equivalents. As previously disclosed, the annualized impact of these changes on earnings, which is estimated at $2 million, will be offset by cost savings realized to date through the Company's business re-engineering plan.
British Columbia Update
The British Columbia Government recently announced that it is bringing into force certain changes to the Medicare Protection Act effective October 1, 2018 that were adopted by the Liberal Government in 2003 but never activated following widespread opposition from doctors at the time. The proposed changes would provide for fines of up to $20,000 to doctors who bill patients for expedited care for "medically necessary" services at rates higher than those prescribed by the Medical Services Plan and potentially de-enroll offending doctors from the public system.
While Centric Health is disappointed with the Government's decision to activate these changes given the ongoing constitutional challenge by Cambie Surgery Centre, it is taking a number of steps in response. Centric Health intends to join Cambie in seeking a legal injunction that would suspend the proposed new laws from being applied to it while the constitutional case is being decided. Cambie previously obtained an injunction suspending the application of certain parts of the Medicare Protection Act pending the resolution of its ongoing constitutional challenge, and the Company is hopeful that given the similarity of the matters to be considered that it will be successful again. In the event that the injunction is not successful, Centric Health will also be adopting a number of mitigation strategies, including using un-enrolled doctors to offer services, offering new technologies that are not covered by the public system, and treating out-of-province and out-of-country patients at its False Creek Surgical Centre.
As previously disclosed by Centric Health, the Government of Alberta recently announced a new funding framework that was entered into with the Alberta Pharmacists' Association to take effect May 17, 2018. Amongst other things, the announcement stated that dispensing fees in the Province will drop from $12.30 to $12.15 and a limit on the frequency of dispensing fees will be introduced. Daily dispensing fees will be limited to three per day per patient and monthly dispensing fees will be limited to two per drug per 28 days.
Centric Health has been actively engaged with the Government of Alberta over the past several weeks to discuss the proposed revisions to the funding model. Despite numerous positive meetings held with Alberta Health and government representatives over the past several weeks about funding alternatives, Centric Health has recently been informed that the Alberta government has rejected Centric Health's proposed solutions and broken off discussions, indicating that its decision is being driven by budgetary constraints. Centric Health is disappointed at this result, as it believes that the health and safety of Alberta seniors living in long-term care and supportive living facilities will be seriously compromised as services are cut to address these changes. Our pharmacists triage patient emergencies and provide 24/7 access to life saving medicine and onsite clinical care for Alberta seniors that prevent emergency room visits and costly hospital admissions. The proposed reductions in the compensation model will force difficult decisions on Pharmacare's service offerings that will not only jeopardize the health of Alberta seniors, but also lead to higher overall healthcare costs as emergency room visits and hospital admissions increase.
Centric Health's fundamental tenets, values and philosophies prioritize patient safety and achieving the best clinical outcomes; as a result, we are working closely with operators, senior advocacy groups and others to find alternatives to continue to deliver the high standard of care to the seniors that we serve. Centric Health wishes to reassure our home operator partners, residents and their families that it is doing everything possible to find a solution and secure the safety of patients.
The Company is employing a number of strategies to mitigate the effects of the above regulatory changes. However, these changes, if implemented as currently proposed and without any further amendments, may have a material adverse impact on the Company's business, which cannot be quantified at this time.
About Centric Health
Centric Health's vision is to be Canada's most respected and recognized provider in the independent healthcare sectors in which it operates, world renowned for delivering the highest levels of quality care and outcomes, innovative solutions and value to patients, clients and stakeholders. To this end, Centric Health primarily focuses on two core healthcare businesses:
- Centric Health's Specialty Pharmacy team is committed to delivering the highest standards of services and care focusing on "Senior's First". The current infrastructure is represented by a national network of 19 fulfilment centres serving more than 28,000 seniors in over 440 seniors communities (long-term care facilities, retirement homes and assisted living facilities) in four provinces. The Specialty Pharmacy division also provides pharmaceutical dispensing services for employees insured by corporate health plans.
- The Surgical & Medical Centres division is Canada's largest independent surgical provider operating five facilities across four provinces. It serves a diversified customer base with private paid non-insured surgeries and diagnostics, government outsourcing of insured surgeries and diagnostics and other procedures funded by third-party payors (including Workers Compensation) and is the proud owner of Canada's first Centre of Excellence in Metabolic and Bariatric Surgery.
With national networks of facilities in each of its businesses, deep knowledge and experience of healthcare delivery and extensive, trusted relationships with payers, physicians, and government agencies, the Company is uniquely positioned to address current and future healthcare needs in growing markets as the Canadian healthcare industry goes through a major transformation over the medium to long term. www.centrichealth.ca
This press release contains statements that may constitute "forward-looking statements" within the meaning of applicable Canadian securities legislation. These forward-looking statements include, among others, statements regarding business strategy, plans and other expectations, beliefs, goals, strategies, alternatives, objectives, information and statements about possible future events, including the impact of regulatory changes implemented in their current form on the business of the Company. Readers are cautioned not to place undue reliance on such forward-looking statements. Forward-looking statements are based on current expectations, estimates and assumptions that involve a number of risks, which could cause actual results to vary and in some instances to differ materially from those anticipated by Centric Health and described in the forward-looking statements contained in this press release. No assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur or, if any of them do so, what benefits Centric Health will derive there-from. The Company does not undertake to update any forward-looking information contained herein, except as required by applicable Canadian securities legislation.
SOURCE Centric Health Corporation
For further information: Dr. Jack Shevel, Centric Health Corporation, 416-927-8400, [email protected]