In the face of rising overall health premiums, how can plan sponsors ensure the sustainability of their benefit plans?
“It’s not just about drugs,” says Joe Farago, executive director of health-care innovation at Innovative Medicines Canada, told Benefits Canada’s Calgary Drug Trends Summit on Nov. 2. “You have to look at everything if you want to make it sustainable.”
According to Farago, chronic disease is one possible area where employers could find savings that would allow them to afford new medications in the future. Chronic disease represents approximately 70 per cent of drug claims in Canada, he noted.
“If you want to find savings, one place to look is at your chronic disease spend.”
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Employers can save money by focusing on prevention, Farago told attendees at the Calgary event. “Invest in making people healthier.”
According to Farago, the challenge is to look at plan design changes that minimize the impact on access, while providing cost savings. One example is to reduce the frequency of prescription refills for medications to treat chronic conditions.
“The reality is that prescription drugs represent less of a drain on the overall health budget than they ever have but they’re still an important cost we have to look at,” said Farago. “The challenge is that we’re developing exciting new products and those products come at a cost. It’s about ensuring plan members have access to the right medications when they need them, versus everyone [having] access to everything. The good news is if you look at where the market is going with drug costs, there’s no visible tsunami around the corner in the next two years.”
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Farago suggested plan sponsors could take an in-depth look at their benefits plan to find out where the potential for savings is. “Have you thought about what diseases are costing you as an employer?” he asked.
“Have you targeted a couple of areas where you can improve employee health, both short term and long term?”
Farago expects the current model for private drug plans will continue to shift. “We’re going to need a lot of collaboration with all stakeholders, to have a holistic approach to ensure access for employees while managing drug costs for the future,” he said.
Read more articles from the Calgary Drug Trends Conference