After living through a prolonged global pandemic, Canadian benefits plan sponsors are facing a professional environment that’s almost unrecognizable to pre-2020 years.
The coronavirus pandemic affected employees at a personal level and is also being felt by employers and their workplace benefits plans, said Jason Kennedy, general manager of virtual pharmacy for TELUS Health, during a webinar hosted by Benefits Canada in mid-August.
In 2021, an Aon survey forecasted that employer-provided medical benefits costs would rise seven per cent in 2022, driven by emerging trends in employee health and well-being, the growing prevalence of multiple chronic conditions, as well as inflation and other business factors.
“It’s our view that, now more than ever, there’s a need to make efficient use of this benefits spend as it’s becoming so increased,” said Kennedy. “But also, [plan sponsors need to] balance these program costs in a way that addresses emerging trends so we don’t ignore employee health and wellness and squeeze the balloon so we have an impact in one area while cutting costs in others.”
According to TELUS Health’s 2022 drug trends report, the average eligible amount per drug claim rose almost eight per cent from 2020 to 2021, well above the growth rate for the previous four years. It found specialty drugs used to treat rare diseases and unique conditions were the main driver of these costs — while they represent only 1.4 per cent of all claimants, specialty drugs contributed to more than 34 per cent of eligible claim amounts.
The report also flagged medication non-adherence as a concern for benefits plan sponsors, said Kennedy, noting 43 per cent of plan members said they haven’t always taken their medication as prescribed, which can reduce treatment effectiveness for those who are using medication to treat a chronic condition.
TELUS Health has also seen chronic illnesses make up nearly 68 per cent of benefits costs and affect one in every six employees. A quarter of employees with chronic conditions take three or more medications to manage their health.
According to the company’s claims data, musculoskeletal issues, cardiovascular disease, diabetes, cancer and mental health are the top five conditions affecting Canadians, with the latter becoming one of the fastest-growing health concerns during the pandemic.
In particular, the prevalence of diabetes has been rising about 3.3 per cent per year and is primed to take over the No. 1 spot for private group plan spend, said Kennedy. The progressive condition can lead to employees needing to spend thousands of dollars per year in drug costs, he added, recommending that every benefits plan sponsor make diabetes management a standard offering.
Improper management of these conditions can spill over from drug and medical claims into other areas of the benefits plan, said Kennedy. For example, mental-health issues now account for between 30 and 40 per cent of short-term disability claims and 30 per cent of long-term disability claims. “Appropriate care is just as important as cost-containment.”
Also speaking during the webinar, Vishal Ravikanti, director of pharmacy consulting and partnerships at TELUS Health, said benefits plan sponsors can make multiple modifications to their drug plans to optimize cost savings, such as prior authorization and dispensing fee caps. While he noted these caps can be passed on to the plan member, those with chronic diseases tend to fill their prescriptions every 90 days, so setting a maximum number of dispensing fees per year can help to promote adhering to that 90-day window and can also boost medication adherence because plan members’ medications will run out less quickly.
Ravikanti also noted the utility of reference-based pricing, which establishes a maximum reimbursement amount for all drugs in a therapeutic class and can manage costs in a particular disease space. Step therapy, mandatory generic substitution, biosimilar management and specialty drug programs can also help to decrease costs, he said.
Kennedy suggested benefits plan sponsors undertake a plan redesign to introduce virtual care and digital pharmacy options, which can help with chronic disease management, medication adherence and cost-containment.
He said these offerings can increase employees’ access to care with lower co-pay costs and free deliveries, give them refill reminders and improve adherence and allow them to manage their family members’ medications as well. According to TELUS Health data, one in three employees are likely to use virtual care in the next year for medications if it were available. For employers, these offerings reduce fees and markups, come with generic substitution, 90-day fills and seamless integration.
During the webinar, Francesca Armelin, director of customer experience at TELUS Health, said there’s an “urgent need” for a new way to support employees’ well-being at a time of unprecedented stress and burnout and as employers deal with attempting to recruit and retain key talent in a tight labour market.
An integrated virtual care offering can have significant value to employees, she said, noting the offering should combine round-the-clock access in both official languages, immediate connection to a care manager, consultations with registered nurses and nurse practitioners, continuity of care and the ability to access primary care, employee assistance programs and mental-health supports in the same platform.