July 8, 2010
Canadian Employers Look to Wellness Programs to Curb Health Care Plan Costs—Offerings Up 17%
New Survey Examines How Employers Are Managing Group Health Plan Costs
Brookfield, Wis.—To help abate continually rising group health care plan costs, Canadian employers are implementing wellness programs and prescription drug cost-containment strategies, according to a new survey conducted by the International Foundation of Employee Benefit Plans. The survey is a follow-up to a 2009 survey and examines how the benefits landscape has changed in the last year.
“Employers are struggling with rising health plan costs and are adopting additional measures such as wellness programs to improve employees’ health and better control costs,” stated Sally Natchek, Senior Director of Research at the International Foundation of Employee Benefit Plans. “In just one year’s time, there has been a rapid increase in the number of employers embracing wellness programs.”
In fact, the proportion of employers offering wellness initiatives rose nearly 20%, from 61% of employers in 2009 to 78% in 2010. In addition, nearly one in five organizations currently not offering wellness initiatives anticipates doing so in the future.
The most prevalent wellness initiatives include flu shot programs (71%), complementary and alternative medicine (52%) and smoking cessation programs (48%). Notably, the number of employers offering alternative medicine significantly increased between 2009 and 2010, from 29% to 52%, respectively. Other common wellness initiatives are wellness competitions (37%), off-site fitness program subsidies (31%) and healthy food choices in cafeterias or vending machines (26%). Nearly one in ten plan sponsors offering wellness initiatives report that they measure the return on investment of their programs, and a clear majority (88%) find the results are positive.
Employers Also Focused On Reigning in Prescription Drug Costs and Educating Their Employees
“Prescription drug costs are a leading reason for health care cost inflation, and employers are actively combating drug cost increases,” explained Natchek. “At this point, it seems inevitable that drug prices will be overhauled in Canada, most likely through the efforts of both provinces and private employers.”
To help control rising prescription drug costs, employers have implemented a number of cost-management techniques including: promoting the use of generic drugs (62%) and requiring participant contributions (59%). Nearly half of all employers (48%) are informing employees of the costs of filling prescriptions in an effort to make employees smarter consumers.
Compared to 2009, Canadian employers in 2010 are more apt to promote the use of generic drugs, place limits on specialty or biotech drugs, and use high-amount claims pooling, lowest-cost alternatives, the process of prior authorization or utilization management, pharmacy benefit managers, and step therapy/therapeutic substitution.
According to 64% of survey respondents, the aging population continues to be viewed as a top driver of the increases in prescription drug costs. The increase in specialty drug use, government cost shifting, as well as drug company profits also are named by employers as significant cost drivers.
Looking to the future, a large majority (83%) of employers cite building a culture of health (encouraging employees to be healthy, minimize risk factors and choose appropriate health services) as part of their strategy to improve health care quality and contain costs in the next two years. Other popular strategies for the future include wellness programs (63%), disease management programs (58%), consumerism (57%) and alternative medicine (35%). More than one-third of respondents indicated they are likely to increase their emphasis on voluntary (employee-paid) benefits.
“By embracing these initiatives, employers are continuing to emphasize the vital role of employees in making judicious health purchases,” said Natchek. “Employers believe that implementing these types of approaches will lead to lower health care costs, as well as a healthier and more productive workforce.”
About The Survey
Group Health Care Cost Control in Canada 2010 includes responses from 665 Canadian individuals representing a cross section of employee benefit sectors: corporations, multi-employer benefit plans, public/governmental plans and professional service firms serving the employee benefits industry. Those surveyed include Canadian members of the International Foundation of Employee Benefit Plans and the International Society of Certified Employee Benefit Specialists, as well as registrants of the International Foundation’s 2010 Canadian Health and Wellness Innovations Conference.
Group Health Care Cost Control in Canada 2010 (Item #6917E) is published by the International Foundation. The 35-page survey costs $50 and is free to Foundation members. To order visit www.ifebp.org/books.asp?6917E or contact the Foundation Bookstore at firstname.lastname@example.org or (888) 334-3327, option 4.
The International Foundation of Employee Benefit Plans is a nonprofit organization, dedicated to being a leading objective and independent global source of employee benefits, compensation, and financial literacy education and information. Total membership includes 36,000 individuals resenting 4,800 multiemployer trust funds, corporations, public employer groups and professional advisory firms throughout the United States and Canada.