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How to better manage drug plans

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Jim Cochrane:

Second time in the last week that Published Canadian Research paper about private Funding of Drug Plan Benefits was compared adversely to US Private and Public Processes and Claims results. In some cases the papers are contradictory. Concluding that employer cost improvements either through Plan Design changes to enhance employers overall cost of Disease or to reduce adjudication/administration costs (as a % of paid claims) fails to note the fundamental difference in Health costs and drivers in Canada from the US.
US private sector employers and their insurers incur total disease costs including Hospital, Medical, and Drug benefits. Disease outcomes impact both employee, and employer and ultimately insurer. The average administration and adjudication cost per Employee and the record keeping cost per employee is spread over an infinitely larger claim pie as compared to a Canadian employer insurer. In Canada no private employer pays for doctor and basic hospital costs. These are borne by the province and paid for largely by personal income and consumption taxes. The province and the patient/employee are the beneficiary of better outcomes. The employer benefits in both countries if his absenteeism improves.
The last time I checked my basic calculations a $1500 adjudication cost per claim is less than 2% of a $90,000 claim but $25 per claim adjudication cost is more than 2% of $150 drug claim…. a lot more

Finally I was moved by the research data they used, to check my new Government of Canada Social Insurance Card. I thought my new one might have changed the name as so many other things have. No it has not changed and the acronym is S.I.N. So my SIN is not understanding why after almost 60 years of free TV and HealthCare for all residents in Canada we think medicare and Pensions are a reward for long service and SIN is believing we deserve it cause we all have Social Security Numbers. I hope I haven’t offended anyone and that I don’t lose my pension a week before I retire.

The anticipated genericization in Canada (my word) of those costly NSAIDs , EDD medications and Proton Pump inhibitors, and High blood pressure and cholesterol medications of the 90s will be unfortunate for the insurers. The per script cost will become even lower. It remains obvious to me that our plan design changes will be given credit for that result as well. Pity there weren’t more of those.

Monday, March 31 at 3:37 pm | Reply

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