This spring, the Canada Health Accord—the 2003 agreement between the federal and provincial and territorial governments on healthcare delivery and funding—expired. Although the current federal government has set out a new funding formula for health transfer payments to provinces, funding will be tied to economic growth and population size without adjustments to account for healthcare inflation. And while there is a position on funding, there has been little apparent movement or discussion about the delivery of healthcare going forward, and that has many wondering what this means to Canadians.

Consequently, plan sponsors are growing increasingly concerned about how this will all impact the plans they manage and fund…and rightly so.

Public funding of healthcare and its escalating costs are frequent headlines in the media, with the Canadian Institute for Health Information (CIHI) reporting the total direct costs of public healthcare in 2012 at $136.2 billion, or 11.6% of GDP. Most Canadians would agree that our universal healthcare system is one of the things that define us as a nation. Changes to the Canada Health Act and the systems it supports are hotly contested and slow to come. As a result, many have expressed concern about the sustainability of the current public system and funding model in the context of our aging population and the increased prevalence of chronic disease. So how will government and the public health system balance future costs and expenses in this context?

As in any business struggling with rising costs, the answer lies in increased revenue or reduced expenses. Increased revenue for public healthcare is really increased funding, which would come from either taxes or user fees. Reduced expenses in this arena mean decreased services, through either continued delisting or a shifting of services to less expensive delivery models, or rationing of services through the public health model by way of income testing or age limits, for example. With changes to the funding model and changes anticipated to delivery or scope of services as a result, these methods are all up for discussion.

At the same time, the Canadian healthcare landscape is changing. Our average age is increasing. We are living (and working) longer with chronic disease. Baby boomers are now in or entering their senior years, a time associated with a bulge in healthcare needs and their associated costs. We are demanding timely access to new medical treatments and technologies, so that we can enjoy a better quality of life, longer. Public healthcare is already struggling to keep up with demands on the system…employers are also seeing the impact of this changing landscape on their plans.

Delisting, delivery of service change and rationing are certainly not new, with different provinces and territories adopting different methods of cost containment in their own regions. If we consider the shifting of service delivery, we can think of many examples of how treatment is now delivered differently than it was even five years ago.

Some treatments once delivered or performed in hospital are now done in community, or as outpatient procedures. Care provided only by physicians can now be provided in some provinces by nurses, nurse practitioners and pharmacists. Mobile health units now provide services that were once only provided in a formal clinical setting. While these delivery changes have increased access to care and made access more convenient and in some cases more pleasant for patients, responsibility for the cost of this treatment is also shifting from the public purse to private payer plans. How can employers prepare themselves for the further changes that will come with an evolving public healthcare system?

First, have a strategy. Make sure your organization knows what it wants the benefits plan to do, and what its priorities are. The framework set out by this strategy will guide decision-making down the road and allow your organization to pivot quickly when it needs to. Revisit the strategy regularly to ensure it still meets the needs of the organization and continues to evolve as the organization evolves.

Ensure your benefits plan design and plan management method aligns with this strategy. Make changes as needed, and implement cost management strategies that support your strategy and philosophy.

Manage your data, integrating your claims experience, absence management information, workplace health and safety, disability, aggregated health risk information, engagement information, etc., in order to get a complete, clear picture of what your current risks are and help your organization understand what drives the health and health-related costs for your organization.

Manage the health of your employees by focusing your efforts on your identified risks and facilitating behaviour change.

Manage your catastrophic claims risk for both the plan as a whole, as well as individual plan members. Ensure your organization understands the parameters of any pooling provisions in place on your plan and how these provisions renew in response to high-dollar claims.

Communicate with your plan members about the true cost of benefits. Help your employees understand the interconnectedness between the public health system and your plan, and your organization’s strategy around benefits management and health.

Stay informed about what’s happening in the public health arena. Consider how these changes will impact your plan and plan members over time.

With pressure on the Canadian public healthcare system coming from many sides, changes to our system are certain. By investing in a solid framework today, employers can ensure they will be prepared to react quickly and effectively to changes as they come.

Kim Siddall is a vice-president and local practice leader at Aon. She has more than 20 years of experience in the health and benefits industry. These are the views of the author and not necessarily those of Benefits Canada.
Copyright © 2020 Transcontinental Media G.P. Originally published on

Join us on Twitter

Add a comment

Have your say on this topic! Comments that are thought to be disrespectful or offensive may be removed by our Benefits Canada admins. Thanks!

* These fields are required.
Field required
Field required
Field required