Canadian Health Care Cost Management

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These executive summaries were compiled from EMPLOYEE BENEFITS INFOSOURCE database, a source for information on employee benefits and human resources.

Nothing Really New Under the Sun.
Harrietha, Paul; Benefits and Pensions Monitor; v20 no4 pp 23, 26-31, 33, 36-41 Jun 2010; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : Regulations and client needs evolve, but the means of addressing changing needs remain remarkably stable. Pension and benefits consultants' strategies have gained from the expanding use of technology transforming raw data to useful information. For pension plan sponsors focused on investment and longevity risk, technology tools enable differentiation between risks, which may prompt use of longevity swaps and annuities. Automated systems can evaluate defined contribution plan member savings, contributions and investment patterns. In group health plans, technology can help address financial risk, possibly leading to risk sharing arrangements with drug vendors. Value-based design also depends on strategic data collection and analysis. Includes a directory with details on 146 consultants.
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Workplace Wellness.
Seward, Karen; Benefits Canada; v34 no6 pp 22-23, 25, 27 Jun 2010; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : Employers needing to control expenses are under increasing pressure to demonstrate how wellness programs provide return on investment (ROI). Once appropriate ROI metrics are established, it is important to show how the programs deliver ROI in the areas of financial management, operational efficiency, employee health and engagement and risk management. Wellness programs can reduce absenteeism and diminish the costs of disabilities, workers compensation claims and overall benefits. Integrated health and productivity programs can increase the efficiency of benefits offerings. Employee assistance programs and preventive health measures improve employee health and engagement. Health and wellness programs manage risk by improving compliance with laws and collective bargaining agreements and by reducing the liabilities associated with absence and disability.
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All for One.
Dumoulin, Josee; Benefits Canada; v34 no5 p 56 May 2010; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : The provinces of Quebec, Newfoundland and Labrador and Ontario have all handed down decisions on class action motions involving changes to postretirement benefits. In Quebec, a former retiree's motion for class action against changes including an annual deductible and the introduction of a $15,000 Canadian limit on all coverage has been taken under advisement. In the case of Acreman v. Memorial University of Newfoundland, the Supreme Court of Newfoundland and Labrador allowed a class action over the reinstatement of an old cost sharing formula for postretirement benefits. The Ontario Superior Court of Justice denied a motion for class action certification in the case of Nadolny v. Peel (Region), in which the employer realized it was paying more than its agreed upon share of postretirement benefits after beginning cost sharing on a plan originally paid for entirely by the retirees.
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Reinventing Primary Care: Lessons From Canada for the United States.
Starfield, Barbara; Health Affairs; v29 no5 pp 1030-1036 May 2010; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : Since the 1970s, Canada has had increasingly superior health statistics to the U.S. International studies have identified characteristics of superior health care systems as government efforts to distribute resources equitably, universal financial coverage and little or no cost sharing for primary care. Canadian health care policy achieves all of those characteristics, while the U.S. policy achieves none. In the area of primary care, Canada is behind most of Europe, but it works to close the gap in primary care coverage by funding primary physician training and family medicine support groups. The U.S. is the only member of the Organization for Economic Cooperation and Development to have no universal health insurance system, the only one to rely on employer-based health insurance and the only one lacking a national strategy on primary care.
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Vive la Difference.
Cote, Richard; Benefits Canada; v34 no5 pp 15, 17, 19 May 2010; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : A Hewitt Associates survey revealed differences between Quebec and the rest of Canada in flexible benefits and retiree health care benefits. Quebec employers are about as likely to offer full flexible benefit plans as employers nationwide. Of the other 27 percent with traditional plans, 83 percent are moving toward implementing flex plans, leaning more strongly toward a modular flex plan than employers in other provinces. Quebec employers cite cost as more important than meeting diverse employee needs and rank concerns over communication higher than administration. While 61 percent of Canadian employers offer postretirement medical and dental coverage, 79 percent of Quebec employers offer only medical benefits. Fewer expect to reduce benefits for future retirees.
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Better Buyers.
Smith, Brooke; Benefits Canada; v34 no4 pp 13, 15, 18, 20 Apr 2010; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : Employers and insurers are digging deeper to lower costs. Employers are settling for smaller price breaks with competitive plans and increasingly focusing on health management and claims monitoring. Insurers and larger plan sponsors are relying more on technology to lower errors, cut administrative workload and share information with members. Companies are more likely to use limited drug formularies and insist on generic drug substitution, and some large companies have negotiated rebate deals with manufacturers of drugs in demand. Canada is tuning in to cost management trends in the U.S. including consumer management of benefit funds, voluntary benefits and contracts with preferred providers. Article lists the top providers for group insurance overall, life, health and administrative services only for 2009.
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Drug News.
Warner, Scott; Benefits Canada; v34 no4 pp 29, 32-33 Apr 2010; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : Trends in pharmaceutical development, the drug industry and the legislative front suggest more effective drugs for critical diseases but rising cost challenges. The top ten drugs in 2009 by cost include three biologic drugs and three sizes of Lipitor. That drug's patent expires in 2010 and several others expire by 2014. However, generics do not offer the savings expected because of Bill 201, the Transparent Drug System for Patients Act. Plan sponsors are starting to negotiate directly with manufacturers, gaining savings but at the expense of the local pharmacist. By 2015 complex and costly biologic drugs are expected to comprise seven of the top ten drugs, with no generic versions possible.
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Drug Plan Reform in Canada: The New Rules and the Renewed Reaction.
Kealey, Marc; Canadian Benefits & Compensation Digest; v28 no2 pp 14-17 Apr 2010; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : Provinces are initiating reforms in drug plans and medication pricing, particularly for generic drugs. In 2006, Ontario introduced sweeping changes, including setting the price of generic drugs at exactly half that of the brand name drug. British Columbia established a task force to address the issue of expensive generic drugs. Alberta combined a reduction in the price cap on new generic drugs with funding for pharmacists to provide interventions to improve patient outcomes. Observers expect to see a continued push for drug price reform from provincial health plans and a concurrent push from the private sector to reduce drug costs.
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Play Fair.
Brereton, Caroline; Benefits Canada; v34 no4 p 49 Apr 2010; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : Canadians share a fundamental belief in access to health care for all, including essential pharmaceutical treatment. Yet access is highly variable by location and jurisdiction. This results in inequitable access to necessary drugs and higher health care costs throughout the system. In 2007 one in 12 Canadians cut back on dosage or did not fill a prescription because of drug costs. Since the government pays less than 40 percent of drug costs, the balance must be paid by consumers, employers and unions. It is time for federal, provincial and territorial governments to work together with employers, workers and patients to establish an integrated framework for drug cost management.
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Don't Reinvent the Wheel.
Buffett, Ed; Benefits Canada; v34 no3 pp 2, 4-5 suppl. Mar 2010; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : Much has been written about the need to prove return on investment (ROI) for wellness programs. Methods for measuring ROI are as numerous and diverse as the variety of programs. Comparisons between Canada and the U.S. are of little value since they are based on vastly different health care models. What is needed is data based on health risk assessments, short and long term disability, biometric screening, productivity, presenteeism and employee engagement. Standardized approaches to data collection and analysis must be established. With valid and useful data, employers will be more likely to evaluate their wellness programs and calculate and appreciate their ROI.
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Taking Care of Benefits.
Simons, Maureen; Stephens, Paul; Benefits Canada; v34 no3 pp 27-29 Mar 2010; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : Employers satisfied with their health care benefits are rethinking design with cost in mind. Analysis of the plan starts with understanding the business objectives for offering it. Benefits should be viewed as part of total rewards, permitting some rebalancing of compensation components. Employers usually want to be competitive in terms of salary and benefits. Self-insuring, cost benchmarking against similar organizations, claim adjudication and disability management all demand evaluation, and employee surveys can indicate perceptions about the program, revealing any gaps and possible tradeoffs. Employees need help to appreciate the value of their total rewards, so communications should be geared to target audience groups and presented through an easy-to-use website.
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A Delicate Balance.
Lepage, Suzanne; Benefits Canada; v34 no2 pp 20-21, 23 Feb 2010; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : According to ESI Canada's 2008 Drug Trend Report, specialty or biologic medications make up 14.7 percent of drug costs, and the amount spent on biologics is growing by 17 percent a year, compared to three percent for other drugs. Biologic drugs are best suited to intravenous administration, meaning they are often delivered in a hospital. Many insurers consider them insured hospital services under Canadian law and expect hospitals to pay for them. Sponsors may be unable to completely avoid paying for biologic drug claims, but they can manage the cost by ensuring the drugs are being used appropriately. Tiered formularies, requiring lower cost biologic therapies to be used first and therapy management for members on biologic drugs can also help reduce biologic drug costs.
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Mind Matters.
Scott, Liz R.; Benefits Canada; v34 no2 p 33 Feb 2010; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : Psychological claims have risen dramatically from 2000 to 2010. Experts estimate that as of 2010 psychological claims represent 40 percent of the claims cost of the average long term disability plan. Managing psychological disability claims requires a different mindset from managing physical claims. Employers dealing with possible psychological claims should distinguish workplace issues from psychological disabilities, ensure an accurate diagnosis of psychological problems and arrange appropriate treatment, develop return to work plans for psychologically disabled employees and train supervisors to identify behavioral changes that may be related to psychological conditions.
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Behavioural Shift.
Worb, Michael; Benefits Canada; v34 no1 pp 10-11, 13 Jan 2010; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : The economic upheaval of 2009 prompted both expected and surprising changes in employee benefits. Employers pulled in the financial reins, employee reaction showed as rising disability and absenteeism rates and aging continued to press the demand for health benefits. In response, plan sponsors are more focused on seeing strong return on their benefit investments, changing vendors for better arrangements, improving plan design and shifting more costs to employees. Likely changes for 2010 include more requests for benchmarking, increased cost sharing and higher expectations of advisors. Administrative service only arrangements and health care spending accounts are expected to increase, and changes in provincial drug plans will prompt drug cost shifting to private plans.
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Atlantic Canada Adaptations.
Kane, Cheryl; Benefits Canada; v33 no12 pp 22-23 Dec 2009; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : Statistics Canada projects 28 percent of the population in the Atlantic provinces will be age 65 or older by 2031. With more people staying in the work force, the numbers have serious implications for the region's employers. The rate of chronic conditions and the growing use of costly prescription drugs not paid from government funds are prompting the need for a strategic rethinking of employee health issues. Employers must become more proactive, promoting healthier behavior and better management of disease conditions. They must be ready to cope with pandemics such as the H1N1 virus. A growing number of employers understand the value of prevention and early intervention and of treating health management as an investment in their business rather than as a cost.
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91 Per Cent of Firms Offer Wellness Program.
Klie, Shannon; Canadian HR Reporter; v22 no19 pp 1, 12 Nov 2, 2009; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : Though the prevalence of wellness programs has grown dramatically, few organizations are looking at the programs' effectiveness. Of 634 organizations surveyed in 2009 by Buffet and Company Worksite Wellness, 91 percent offered one or more wellness initiatives, but just 51.6 analyzed health claims data and about one in four did further assessment on a regular basis. Available data on disability claims, drug use, employee assistance plan (EAP) use and other indicators are valuable for making the business case, a common hurdle for getting funding and help tailor offerings to meet actual needs. While EAPs, first aid and CPR courses and flu shots are the most widely offered initiatives, prevailing health risks point to the need for assessments and subsidies for fitness, blood pressure screening and cholesterol screening.
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Cheap But Highly Valued Benefits.
Pallone, Greg; Canadian HR Reporter; v22 no19 pp 16, 20 Nov 2, 2009; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : HR managers are challenged to find innovative but meaningful ways to attract and retain good employees without increasing costs to the organization. A direct rewards program is relatively inexpensive but can be a good way to express recognition and gratitude. Employee assistance programs continue to be an effective benefit, especially for helping employees handle stress and remain productive. Peer recognition, monthly team events and recognition of anniversaries and birthdays reinforce support among coworkers. Employees appreciate the freedom to telecommute and work flexible hours. Health benefit costs can be trimmed by using a preferred provider network.
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Not So Quiet on the Western Front.
Middleton, Glen; Benefits Canada; v33 no10 pp 14-15 Oct 2009; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : Companies in Canada's western provinces are having to balance the competing interests of their finance and HR departments, pitting benefit costs against staffing, recruitment and retention. Cutting back creates problems and does not address long term problems. Employers are focusing on health cost control through demand management, wellness programs and risk management. Recommended strategies include examining workforce demographics, claims and utilization patterns, and use of disability benefits and employee assistance plans. Plan design adjustments might include flexible benefits tied to health risk assessment scores, flexible spending accounts and voluntary benefits. Retiree coverage might be changed to individual plans or a health care spending account.
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Open Wide: The Importance of Dental Care in the Workplace.
Tapp-McDougall, Caroline; Benefits and Pensions Monitor; v19 no7 p 19 Oct 2009; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : Like medical insurance, the cost of dental benefit coverage is rising, and employers shoulder most of the burden. In 2000, employers and individuals paid for 86 percent of the care delivered. Most appreciate the important part dental care plays in overall health. Those with dental coverage are 2.7 times more likely to get dental treatment than others. Compared with health benefits, employees use dental benefits more often and focus on diagnosis and prevention. They view the benefit differently and perceive it to have high value. Despite the rising costs, employers should appreciate the importance of dental care for their workers and ensure they understand the benefit and use it appropriately.
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The Buck Stops Here: Changing Times ... Time to Change.
Kesteris, Karen; Murphy, Sarah; Benefits and Pensions Monitor; v19 no7 pp 50-51 Oct 2009; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : Traditionally employees with company-sponsored health care have not seriously questioned the price of care or their need for treatment, since costs have been hidden. But the paradigm is changing, making personal accountability a key in containing expenses. Health plan participants must understand how a strong consumer orientation will help them save money and maintain their benefits. To promote a consumer focus, employers must explain how the plan works, with full cost transparency, how comparing costs serves all and how to use plan benefits effectively. Simple informative pieces on various topics can help convey the message.
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Stretched and Stressed: Use and Possible Abuse of EAPs and DM Programs.
MacArthur, Bob; Rickard, Emma; Lewis, Jack; Canadian Benefits & Compensation Digest; v27 no4 pp 10-13 Aug 2009; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : The tight economy is causing greater stress, anxiety and negative behaviors and more demand for disability management (DM) and employee assistance programs (EAPs). While employers may want to cut back on such programs to control costs, they are more necessary than ever and must be managed and used in a way to maximize their value. Employers should watch for trends in utilization of the programs that can suggest misuse. Analysis by age, occupation, position, location and other factors can suggest the need for special kinds of assistance or preventive programs. Design features including the definition of a case, amount of direct contact by care providers and care integration between providers reflect important value differences between programs.
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Tight Squeeze.
Hodder, Alyssa; Benefits Canada; v33 no8 pp 10-11, 13, 15, 17-18 Aug 2009; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : Pension and benefits consultants are feeling fallout from the economic pressures on pension plans. While some employers turn to consulting as a service vulnerable to cost cutting, many are relying on consultants even more for risk management and governance advice. They are looking for more creative solutions for cost management, employee engagement and retention and communications. Being in tune with the client's needs and working as a partner is essential for sustaining a strong, long term relationship.
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Health-Care Costs Maintain Dramatic Rise.
Dobson, Sarah; Canadian HR Reporter; v22 no13 pp 1, 14 Jul 13, 2009; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : After a four year downward trend, pharmaceutical costs soared up 15.2 percent in 2009, surpassing last year's increase of 14.1 percent. Data from 11 major Canadian insurers reflected an uncertain economy and the tendency for anxious employees to use health care benefits while they are still available. Other cost drivers are the aging of baby boomers, the lower overall health of generation X individuals and the growing use of medications for depression. Medical plan costs rose 14.1 percent, up from 13.1 percent in 2008.
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Best Advice: Consultants in the New Reality.
Coutu, Camille; Sorhaitz, Kevin; Laird, Steven; Benefits and Pensions Monitor; v19 no4 pp 23-33 Jun 2009; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : In the economic downturn, plan sponsors need different kinds of support from the pension and benefits consultants as they look harder for ways to control costs. Sponsor clients need help negotiating with insurance carriers, designing a benefits program with manageable risks, complying with regulations and encouraging responsible individual behavior. Consultants must use all resources available to help control costs, such as audits for claims, beneficiaries and overall eligibility. In addition to educating sponsors about design, administration and other factors influencing plans, they are increasingly expected to handle member education. Consultants must provide these services with an understanding of the corporation as a whole. A directory details 157 consultants and their specialty areas.
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Drug Watch 2009.
Cowan, Cory; Benefits Canada; v33 no6 pp 23, 25, 27 Jun 2009; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : ESI Canada reports a 2.1 percent lower overall drug cost trend in 2009 compared to 2008, largely since 45 percent of filled prescriptions were generics. Despite representing under one percent of prescriptions filled in 2008, specialty drug spending is rising 17 percent annually, compared with three percent for others. Biologic drugs are the fastest growing segment. Generic versions of some biologics are promising but will not be available for some time. Some newer drugs are administered in nontraditional settings, resulting in a cost shift from the public sector to private health insurance. Plan sponsors must prepare for these changes by controlling costs where they can, such as by instituting mandatory generic substitution, encouraging generic biologics and establishing utilization management policies for high cost drugs.
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