YOU’VE JUST RETURNED FROM ONE OF THOSE HALF-DAY sessions on drug plan costs. You’ve seen the Power- Point presentations on new biologics and antidiabetics in the pipeline, the aging population statistics. You worry. But it’s all OK, soothe the consultants, offering up their ever-evolving bag of tricks: managed formularies, prior authorization programs, increased co-pays.
Not so fast. According to the 2006 sanofi-aventis Healthcare Survey, plan members like their benefits plans the way they are. “What it’s saying is, people feel pretty good about the coverage they have now,” says Sarah Beech, managing principal, Consulting, for Hewitt Associates in Toronto and a member of the survey’s advisory board. “It’s the future focus that they’re worried about.”
Currently, plan members are a happy lot, with 63% reporting that their plan meets their needs “extremely” or “very well” in this year’s survey. Only 17% report that over the past five years, their benefits plan has gotten worse due to less coverage, with 69% citing cutbacks as the reason.
Benefits plans are clearly valued by respondents. Sixty-three per cent of employees would prefer to have their benefits plan versus $15,000 per year. “The data continues to illustrate that people would rather retain their benefit coverage than have the cash,” says Beech. “The value and the perception of an employee benefit program are very high perceived value.”
Employees are also indicating they have limits on what they’ll pay for. Though 47% of them “strongly” or “somewhat” agree that they would pay personally for extra health insurance coverage, there are limits to their generosity. Fifty-eight per cent of employees report that if a drug purchase leaves them out of pocket to the tune of $51 or more, they will seriously consider not filling it at the pharmacy. And 31% report they wouldn’t fill a prescription costing less than $50.
Beech cautions that with most employers covering about 90% of employee drug costs—and employees on the hook for 10%—a $51 out-ofpocket payment would mean the full cost of the drug is $510. But with higher cost medications coming onto the market, that $51 co-payment could become much more common.
For employers wanting to cut costs, this presents a challenge. “By just going ahead and reducing [coverage], and introducing more cost-sharing—be it through co-insurance or deductibles—you might adversely affect the ongoing health of the individual,” warns Beech. Of course, the less healthy the individual, the higher the absenteeism and disability costs.
Where does that leave sponsors? One option is to focus on disease prevention through education campaigns, says Beech. Another is to boost awareness about health issues, ensuring that plan members are as health-savvy as possible. Both approaches lead to less reliance on medication.
But employers also have to figure out what they want to deliver—and to articulate that to members— rather than just providing status quo coverage. They need to re-assess their current offerings and in light of new additions, to balance what their membership needs with cost containment. It’s a fine line that no seminar in the world can resolve.
Says Ron Gathercole, director, business development, Medavie Blue Cross in Moncton and an advisor on the survey: “It all depends on the role you want to play. [Employers] should ask: ‘What do I want to deliver?’”
Anna Sharratt is managing editor of BENEFITS CANADA.