There’s no question that Canadians value their private health benefits, even with pharmacare discussions back on the table.
In a recent Abacus Data study, 78 per cent of respondents said they feel group benefits plans increase the availability and affordability of health services in Canada, as opposed to undermining universal health coverage. Furthermore, 92 per cent of respondents said they want public policies that strengthen and encourage the use of employer group benefits plans across the country.
The federal government’s intention to pass a Canada Pharmacare Act in 2023 is an opportunity to assess how private health insurance plans can offer the most benefit for Canadians. At its most recent policy summit, Innovative Medicines Canada brought together key stakeholders in Canada’s private health insurance landscape to explore what’s next for private drug benefits and how collaboration and innovation are essential for their future.
More than 97 per cent of Canadians — or roughly 37 million people — are eligible for some form of prescription drug coverage through public or private plans, according to the Conference Board of Canada. More than 24 million Canadians are enrolled in a private plan and nearly 25 million Canadians are eligible for public coverage. The gap of uninsured Canadians has dropped to almost half of what it was in 2016 — down from 5.2 per cent to 2.8 per cent in 2020.
National health reporter and columnist André Picard, who moderated the summit, noted Canada’s dual-market system, while messy on paper, works “pretty well” for Canadians since almost everyone has access to some form of coverage if they want it. “There’s a fair bit of leeriness about expanding public drug coverage, because people fear what they might lose and they’re justified to have these worries. When I think of pharmacare, the focus has always been to ensure everyone has the best access possible to essential prescription medications. Who provides the insurance coverage doesn’t really matter to the public.”
The private health insurance market not only offers faster access to more medicines in comparison to public plans, but it has the agility to foster innovation in reimbursement models, data-sharing, business and collaboration, which are important for the future of the sector, said Pamela Fralick, president of IMC, speaking during the summit.
However, there’s an emerging risk to the value of the private insurance market, as some private insurers try to copy public plans, noted John Adams, board chair of the Best Medicines Coalition, which has 29 patient organization members and represents the interests of millions of Canadian patients.
Adams, whose son successfully took part in a clinical trial to treat phenylketonuria, stressed the importance of speed and breadth of coverage for patients as soon there’s a breakthrough treatment available and the need for those aspects to remain important differentiators for the private health insurance industry. “I challenge the private industry to continue proving your value by being better than the government drug plans in both speed and breadth of coverage.”
While Adams noted the future is in new therapies, he acknowledged the added risk for smaller companies that might face higher-cost claims. In addition, he suggested the industry needs more innovative thinking around national cost-sharing pools to help cover high-cost drugs.
He also called on private health insurers to create more opportunities for patient input into decisions about private reimbursements and commit to zero wait times to cover new drugs as soon as they’re approved by Health Canada. “Patients are employees and health insurance is about their health, wellness, well-being, productivity and longevity. Invest in your people — your human capital — and make sure they have access to innovative medicines they need.”
Also speaking at the summit, Sarah Beech, executive president for the central region at Arthur J. Gallagher & Co., highlighted the significant shifts in private health benefit trends, largely driven by the coronavirus pandemic and an employee-driven job market.
“When we look at trends in private health benefits, it’s really so much more than prescription drugs. In the past, prescription drugs may have accounted for 65 per cent to 85 per cent of private health plan costs, but the real shift in claiming patterns has been a huge increase in the use of alternate practitioners [like massage therapists or chiropractors], whereas prescription drug plans have levelled out in recent years.”
The private market plays an important role in the life sciences ecosystem when it comes to the adoption of innovation, said Jason Field, president and chief executive officer of Life Sciences Ontario, also speaking at the summit. “As health-care innovators continue to push the limits of modern medicine, health insurance payers need to consider the value and not just the cost of innovation.”
Looking ahead, further collaboration between private health insurers and pharmaceutical companies on creative reimbursement solutions, like pay-for-performance models, will be needed to cover more expensive drugs that have better health outcomes for patients, said Joe Farago, executive director of private payers and investment at IMC.
“The private market provides a valuable source of access for Canadian patients. The [pharmaceutical] industry is ready to work with private market stakeholders to ensure plan sponsors get the most value out of what they’re paying for.”