As employers continue to grapple with rising benefits costs, there’s “room for change” in what their plans cover, a speaker at Innovative Medicines Canada’s conference said on Tuesday.
“Perhaps our plans should look different than they do today,” said Sarah Beech, president of Accompass Inc., during a panel session at the organization’s annual conference in Toronto.
Beech pointed out that while employees will typically emphasize prescription drug coverage, there are gaps between how much plans cover and what employees say is important when it comes to areas such as vision care, long- and short-term disability, health-care professionals, mental health and chiropractic.
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To make her point, Beech presented numbers showing the variations between what benefits plans cover each year and what people pay out of their own pockets:
- Paramedical/other professionals: private plans: $1.3 billion; out of pocket: $1.9 billion.
- Vision care: private plans: $0.9 billion; out of pocket: $2.6 billion.
- Dental care: private plans: $7.0 billion; out of pocket: $4.7 billion.
- Prescription drugs: private plans $9.8 billion; out of pocket: $6.4 billion.
But while Beech noted the need for a shift in emphasis on keeping workers healthy, panel members suggested employers aren’t necessarily being proactive about changing their benefits plans. Panel moderator Suzanne Lepage, for example, said employers often think about their benefits costs only at renewal time. “There is very much a knee-jerk reaction,” she said.
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Karen Voin, assistant vice-president of group benefits and anti-fraud for the Canadian Life and Health Insurance Association, said it’s important for employers to think about their goals for their benefits plans. “Am I competing with the next guy for talent or am I trying to keep my employees actively at work?” she said.
Costs, of course, are a continuing concern for plan sponsors. In 2014, the introduction of new medicines for such diseases as hepatitis C caused a surge in costs. During the panel session, Joe Farago, executive director of health-care innovation at Innovative Medicines Canada, presented a chart showing that in 2015, the total market growth for prescription drugs in Canada was 6.3 per cent.
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In response to the pressures, Farago noted many plan sponsors are turning to several cost-containment and cost-shifting measures. “We have seen increased pressure to look at the system holistically,” he said.
But the good news, according to Farago, is employers now have some breathing room because “we have two or three years when drug costs will be moderate.” Indeed, Farago’s chart, using IMS data, showed growth projections of about four per cent per year for 2016, 2017 and 2018.