Insurance companies expect health costs to rise by 11.8 per cent this year, according to an annual survey by Accompass Inc.
The survey determines the anticipated year-over-year cost increase or decrease — or health trend factor — by asking insurers to examine their businesses and take various factors into account, including legislation, claims utilization, inflation, fee increases and specialty drugs.
The survey noted that the average health trend factor has continuously increased at rates higher than inflation. In 2011, it hit a high point of 15.1 per cent but has mostly stayed around 12 per cent since then.
The health trend usually reflects prescription drug costs, according to Accompass, which found that the top three drugs by dollars paid are Remicade, Humira and Enbrel — all biologic treatments for autoimmune diseases. The survey found, however, that the top drug by volume of claims was methadone, a pain medication that has a higher frequency of filling because of smaller doses and controls to avoid abuse.
In terms of cost management, the survey found most insurers are seeing limited use of tiered-managed formularies, with an uptake rate of less than five per cent. “So, while it is a useful cost-management solution it has yet to gain traction in the Canadian market,” noted the survey.
Considering pharmacogenetic testing, the survey found that more education is needed to help simplify the process and the steps involved.
“This year’s findings indicate that two insurers have adopted the testing while another is reviewing the potential inclusion. It’s being used not only for [long-term disability] claims but short term as well, along with testing for the effectiveness of biologic drugs. One is also piloting a test in the area of mental health to combat depression, pain or anxiety for members who may be on disability or actively working,” the report noted.
The survey also looked at fraud and abuse, finding that the benefits claims most often reviewed are for paramedical services, followed by medical supplies and prescription drugs.
Lastly, the survey looked at what’s creating a positive impact for plan sponsors. It found a shift to focusing on the employee experience — as opposed to the employers’ wants — as well as a stronger emphasis on health and wellness and innovative ways to deal with the costs of drugs, such as tiered formularies, pharmacogenetics and the growing discussion around a national pharmacare program.