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© Copyright 2000 Rogers Media. The following article first appeared in the June 2001 edition of
BENEFITS CANADA magazine.
Insights
Contrarian views, news and international intrigue
By Kathryn Dorrell
Stop blaming the baby boomers. That's one of the messages in a report on the rising cost of healthcare by
the Canadian Institute of Actuaries (CIA). Health Care in Canada: The Impact of Population Aging was
presented to the Senate committee on social affairs, science and technology earlier this year. It says that
demographic pressures are not the driving force behind soaring healthcare expenses.
"Factors such as new drugs, improvements in technology and procedures and overall rising expectations are
inflating costs," says Darryl Leach, chair of the CIA's healthcare practice committee. "The aging
population is merely magnifying these effects."
The CIA report points out that Canadian healthcare spending increased by $50 billion, or 224%, from 1980 to
1994 (measured in current dollars), according to a 1998 study by The Urban Futures Institute. The Institute
concludes that only $1.9 billion, or 3.8%, of that increase is attributable to the aging population. To
further bolster its case, the CIA says Canada has a younger population than European countries with
comparable standards of living, yet our healthcare costs are higher.
Fred Holmes, national practice leader, group health and welfare practice with Buck Consultants in Toronto,
doesn't buy the CIA's stance. He says it's "absolutely bewildering" that the group would conclude that
demographics are not a major cause of healthcare cost increases. "You really have to say, 'excuse me?'
There's a tidal wave [of aging citizens] going through the system," he adds.
Leach defends the findings, adding that the majority of health expenditures occur in an individual's last
year of life, whether he or she is dying from cancer at age 42 or from another ailment at age 80. He adds
that living wills with specific directives can lead to significant healthcare savings. "Most people don't
want to be kept alive on a machine but [living wills] are too politically sensitive to talk about."
The CIA calls for several measures to improve the cost efficiency of the current system. They include:
actuarial reviews of healthcare costs, a cost-benefit analysis of treatments and outcomes and prefunding a
portion of healthcare costs as is done with the Canada and Quebec Pension Plans. The report also stresses
that Medicare is a plan of insurance and that financial responsibility among individuals needs to be built
into the system.
The Senate is conducting a study on the role of the federal government in the delivery of healthcare in
Canada. Its study is expected to conclude in December 2002.
Self-serve still has a ways to go
Less than one-third of Canadian organizations provide employees with access to electronic self-service
pension and benefits tools, according to a new study by Morneau Sobeco. In fact, as far as information
resources are concerned, employees still rely on human resources (HR) staff more than any other source for
answers to their pension and benefits queries.
"A lot of employers are talking about self-serve but most have static intranet sites that don't allow
employee interaction," says Randall Phillips, executive vice-president, administrative solutions with
Morneau Sobeco in Toronto. The report identifies two key stumbling blocks for advancing the use of
self-service tools--access and multiple human resources information systems (HRIS) in a single
organization.
Less than 20% of organizations surveyed used one HRIS. And while corporate intranets are in 83% of
organizations surveyed, only 18% can support remote access. The report also finds that 46% of employees
cannot access the Internet from their workstations. Meanwhile, one-third of HR professionals prefer that
employees use online tools outside of work time, which indicates that remote access to intranets or home
Internet hook up is needed.
The strongest areas of growth for online, interactive communications, according to the study of mostly
large employers, are group benefits statements and annual pension statements. More than 65% of
organizations are planning to implement these systems in the next 12 to 24 months.
Carlson Wagonlit Travel put all of its flexible benefits communications online a year ago and conducted its
first online re-enrolment of the plan late last year. Peter Connelly, vice-president of human resources and
employee development for the national company, is pleased with the results. "It's easier and less costly to
make changes [to information] and its available 24 hours so it can be used from the home or office."
Connelly adds that the company is saving money on printing and distribution costs.
Q&A
Louis-Joseph Régimbal is retiring in August after six years at the helm of the Canadian Pension and
Benefits Institute (CPBI). He talks to BENEFITS CANADA about the changes he's seen in the industry and the
role he envisions for CPBI in the years ahead.
How has the pension and benefits industry changed during your tenure?
There's been greater awareness in the public at large about the significance of pensions. The other
phenomenon I've seen is a tightening in the industry with all the mergers and acquisitions, both on the
plan sponsor side and the provider side. There's also a need for more education on fiduciary
responsibilities of trustees. This has become of major importance.
What's been your biggest challenge?
The most interesting challenges we've had are in developing a strategic, long-term plan, evaluating and
restructuring and making the board more effective.
What's been your greatest reward?
What's extremely rewarding in this position is the opportunity to work with professionals and specialists,
both at the board level and at the regional level. I've met knowledgeable, committed people all across
Canada.
To me, there's no other association in Canada with 140 volunteers working with this common vision of
putting on educational programs.
What is the biggest issue facing the industry today?
There are several major issues. The industry has to innovate with new products and services. We've done a
great deal of that on the pension side. On the benefits side, there's this whole notion of wellness. As you
create awareness [of pension and benefits], you create an appetite for new ideas, approaches and plans.
The area of communications is also a challenge. It's very well and good to have pension and benefits plans
but the ability to communicate them is a tough job. We don't speak to our plan members every day. When you
only speak to them once a year or so, things get a bit complex.
What role do you see for CPBI going forward?
It's going to be a continued challenge to offer the high-quality programs and conferences that we've
developed. Maintaining that quality, as well as the number of events, will be a challenge.
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