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© Copyright 2000 Rogers Media. The following article first appeared in the September 2000 edition of
BENEFITS CANADA magazine.
Canada's managed care leaders
Making the business case for managed healthcare is a challenge. Telus and Magna International are
two success stories.
By Andrea Davis
Whether they like it or not, plan sponsors are in the business of healthcare. In fact, with rising drug
costs and the de-listing of some healthcare services by governments across Canada, more and more plan
members are looking to their employers for healthcare coverage. Progressive plan sponsors are implementing
a variety of initiatives that fall under the managed care umbrella, whether it be wellness programs,
managed drug formularies or flexible benefits plans.
While industry players tend to dispute the definition of managed care--many still associate it with
U.S.-style health maintenance organizations--plan sponsors are left to struggle with the issue of balancing
quality, access and the cost of their healthcare plans.
"Managed healthcare is about providing the right service at the right time in the right quantity," says Dr.
Arif Bhimji, vice-president, healthcare development with Magna International, Inc. "[And] this has to be
done within a fiscally responsible framework."
To showcase some of the best of Canadian managed care solutions, benefits canada profiles two companies
that are proactively managing their plan members' healthcare. We spoke with Sharon Blaney, director of
corporate health with Telus in Burnaby, B.C. The telecommunications giant employs about 25,000 people in
B.C. and Alberta, most of whom are unionized. We also spoke to Dr. Bhimji and Mike Kennedy, supervisor,
health promotion program, with Magna International in Aurora, Ont. The auto parts manufacturer, which has
no unionized plants in Canada, employs about 49,000 people worldwide.
Here's how these plan sponsors are managing the healthcare challenge.
HOW ARE YOU MANAGING CARE?
Sharon Blaney: At Telus, we have health centres where if an employee's not feeling well at work they can
come down and see an occupational health nurse. We see everything from paper cuts to cardiac arrests
although usually it's things like upset stomachs, headaches, colds and allergies. If it's a more serious
issue, we would decide whether they should go to their family doctor, a walk-in clinic or an emergency
room.
We also have a disability management program. It deals with employees who are off for more than five days.
We get information from the family doctor, reasons for absence, and then we work with the doctor, the
employee and the department to get the person back to work as quickly as we can.
The third area is prevention. We have a whole wellness program. We have fitness centres for employees, we
make sure that people have healthy choices in the cafeteria. We also do a lot of health promotion on our
intranet site and in face-to-face presentations by our nurses. Last year we did a presentation on the
correct use of antibiotics. We've done sessions on menopause, prostate issues, cancer awareness. We also
have a flu immunization program.
Mike Kennedy:[Magna's] employee health promotion program consists of a health newsletter, health education
seminars and health clinics. The seminars are delivered on paid time and provide general health information
on topics our employees have told us are important to them and their families and topics that management
has identified as being of issue to their division. The health clinics are designed to support the message
from the previous seminar. So, for example, a healthy heart seminar would be followed by a blood pressure
clinic.
Dr. Arif Bhimji: Disability management can have a substantial impact on benefits plans. We provide
return-to-work [programs], including modified and alternate work programs, at all of our manufacturing
facilities. Our safety and ergonomic programs help prevent workplace injuries. The disability management
program doesn't differentiate between work-related and non-occupational conditions, all individuals have
the opportunity to participate. As a result, we have very few people on long-term disability.
WHAT'S YOUR BIGGEST CHALLENGE IN TERMS OF EMPLOYEE HEALTHCARE?
Blaney: You're always having to defend your value to the corporation. If you're really good, nothing
happens, nobody gets sick, everybody's healthy, so there's no cost to the system. However, you're never
going to get there. But the savings you make to the organization are cost benefit savings. [The challenge
is] demonstrating those savings and having people understand those savings.
With our health centres, what I did was look at the productivity savings in having employees come to the
health centre in the building versus going to their family doctor or to an emergency room or going home. If
they come to the health centre, they're here for an average of 23 minutes. If they go to an emergency room,
they're there for an average of four to six hours. I extrapolated that down to productivity savings based
on an average hourly salary of $25 an hour. In 1999, that was around $717,000 in productivity savings
alone.
Kennedy: Getting time with employees [is] a challenge. We've had to work hard to show division management
that managing employee health makes good business sense. As we've gained support around the company, more
and more managers have been willing to ensure we get time with their employees.
DO YOU HAVE A DRUG FORMULARY?
Bhimji:We've had a couple of formularies in place for several years. One tracks the Ontario Drug Benefit
Plan, the other is an open formulary. The co-payments vary with each formulary. This [system] gives the
employees and doctors complete choice with respect to medications that are prescribed while helping contain
costs.
Blaney:Whatever prescription is ordered by the physician is covered 80% under the extended benefits
program.
DO YOU COVER LIFESTYLE DRUGS?
Blaney:Yes. It's not a big cost factor for us. A lot of the new drugs are very expensive, regardless of
what they're for. At this point in time, we've not said 'we'll cover this one, but we won't cover that
one.' Whether we continue along those lines or not, I don't know.
One that could be considered lifestyle that we don't cover is Zyban. We have a quit-smoking program where
if an employee has been smoke-free for a year, we reimburse the cost of the prescription. [So] we cover it,
but in an indirect way.
Bhimji:We do cover a number of lifestyle drugs. The way we have approached that is to try and make it fair
for both the company and the employee. In many cases, it's managed through the use of caps. For example, we
cover fertility drugs and impotency drugs but they have annual spending limits.
DO YOU USE DRUG UTILIZATION REVIEWS?
Bhimji: We have a drug utilization review program in place through our pharmacy benefits manager. The
information we receive forms part of the basis for the programming we develop for the health promotion
program. For example, we developed education and screening programs on ulcer care because one of the
highest cost categories for us is anti-ulcer and anti-acid types of medications.
Blaney: We have [done] one drug utilization study and we're talking about doing a second one. We looked at
the claims and broke it down by management and bargaining unit. We also broke it down into male/female and
employee/dependents. One of the things I wanted to look at was whether or not the profile was different for
the dependents and if so, could we look at creating some educational materials that we could send home with
the employees for their families.
DO ENOUGH PLAN MEMBERS UNDERSTAND THE COST PRESSURES PLAN SPONSORS ARE UNDER?
Blaney:I don't think employees really care what pressure the corporation's under. People will look at what
benefits they have and stay with those corporations where they feel they get the benefits they need.
From a bargaining unit perspective, I think they [plan members] see it as a right because they bargained
for it, it's part of their contract. From a management perspective, I think when you start to withdraw
benefits or pull back benefits and when there's so much competition [for employees], it comes down to what
your benefits package looks like versus what someone else's benefits package looks like. If you start
mucking too much with that, people will go to the competitor. It's a retention issue.
Bhimji: I think employees in the last eight to 10 years, especially since we've had the opportunity to
educate them a little bit, appreciate the benefits program as part of their overall compensation. They
understand that it has costs, they understand it has to be managed. We do make adjustments based on what is
competitive in the market on an annual basis. So they appreciate that it's not a program that's essentially
a dinosaur that hasn't been changed for 20 or 30 years.
Every month at Magna, we let our employees know how the business is doing, what the human resources issues
are, we show them the financials of the business. We try to educate our employees in general about the
business and part of that is the benefits plan. It's done on an ongoing basis, as opposed to sitting them
down once a year. It makes for a very open environment.
WHAT ADVICE WOULD YOU GIVE TO SMALLER EMPLOYERS WHO MIGHT NOT HAVE THE RESOURCES OF A TELUS OR A MAGNA TO
IMPLEMENT MANAGED HEALTHCARE PROGRAMS?
Blaney: My advice is to link what you do to the strategic plan of your organization. Make sure you talk the
language of your organization and the decision makers. [Also], if employees think that you're interested in
them as an individual then they're more apt to perform. Even a small company could contract an occupational
health service to come and look at what the health issues are, why people are away, what kind of problems
people have. It may be something as simple as there's not enough lighting in their room so their eyes are
sore by the end of the day.
Bhimji:Understand your population's healthcare needs. Understand the demographics of your employees. Gather
information such as drug plan utilization and use health risk appraisals to identify the current patterns
of healthcare consumption. Once you do that preliminary work, then you can come up with strategies on how
to manage consumption and financial risk. And it doesn't need to be expensive.
For example, we have roughly 40 manufacturing plants in Ontario. Our overhead cost for them is in the range
of $3,000 to $3,500 a year per plant. Our overall cost is between 1.5¢ and 2¢ per employee per
hour in North America. It's pretty cheap, it's about $30 per employee per year. If you save them
[employees] from having one prescription because they understand that what they have is a cold and not
strep throat, or if you get them to go see their family doctor and get them on a medication that cures
their ulcer one month quicker, you've more than covered the cost of the program.
Andrea Davis is assistant editor with BENEFITS CANADA.
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