Employers cautious about budget health initiatives
21-02-2003
Anna Sharratt
Plan sponsors are welcoming healthcare provisions laid out in Tuesday's federal budget. But although they are pleased that issues such as primary care, homecare and catastrophic drug coverage have been addressed in the $16 billion five-year Health Reform Fund, they caution that the success of the budget initiatives will depend on their implementation by provincial governments.
The three major areas focused on in the budget are:
Primary Care: The federal government wants to ensure that Canadians have more efficient and faster access to healthcare.
Homecare: Coverage will be provided to individuals who need short-term acute care and end-of -life care. The provincial health ministers will determine the minimum level of services to be offered before Sept. 30 of this year.
Catastrophic drug coverage: The amount Canadians will have to pay for steep drug costs, will be set at a certain amount. The idea is to protect individuals from paying for costly medications needed to treat serious illnesses. There are no details available to date on how this initiative will be effected.
"There is some potential good news here in the homecare and the catastrophic drug areas in that governments may be picking up more at some point in the future," says Tim Clarke, a consultant in the health management practice of Hewitt Associates in Toronto. "And all the indications are that this will be something that will save plan sponsors money. But they're just reluctant to get excited about something that is a couple of years away and so uncertain."
While the provisions laid out in the budget may be able to reduce the costs employers have to pay for homecare and drugs, the good news is conditional on how they are carried out. Critics add the budget is short on details, leaving questions about how these plans and programs will be structured.
"Of most interest to us is the catastrophic drug coverage," says Mark Daniels, president of the Canadian Life and Health Insurance Association (CLHIA). He says that CLHIA commented extensively on the issue to both the Senator Kirby and the Romanow Commission. Daniels says that it is too early to tell how this provision will work. "It would appear as though the federal authorities have no fixed model -- especially on the catastrophic drug side.
Two other items in the budget -- a compassionate care benefit for individuals who need a temporary leave of absence to care for a sick or dying family member and a pharmaceuticals management plan -- could spell trouble for plan sponsors.
With the compassionate leave proposal, there are no details on whether plan sponsors would have to provide benefits during the six-week leave time. If required to, this could mean higher benefits plan costs down the road.
The pharmaceuticals management plan involves getting new drugs approved more quickly -- and allowing Canadians to obtain them at a faster pace. But as Clarke point out, the provision has two different outcomes for plan sponsors. "There are two sides of this coin. One is that their employees will likely get access to some of the newer medications more quickly, which could be a positive thing in getting people back to work more quickly.
"The flip side is that the new medications approved more quickly are those that are often more expensive than existing therapies. So, depending on the ways plans are set up, that could costs plans more money."
To prepare for implementation of such a plan, Clarke suggests plan sponsors continue to evaluate the definition of what they're covering under their drug plans. He says that they should develop a policy in which the needs of their employees are balanced with their own need to manage costs.
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