Data from Green Shield Canada’s 2011 Drug Trends Study, produced in partnership with IMS Brogan, indicate that use of a managed, evidence-based drug formulary—in which new drugs are assessed and approved based on need, efficacy, safety and cost—can greatly reduce a company’s drug spend. The annual study looks at all of the drug claims that Green Shield Canada processes and compares costs for clients using its conditional drug formulary with those that aren’t. The differences are striking.
“The latter group is paying for newer drug therapies that are more expensive but for which research does not show more advantageous patient outcomes,” says Willows. While managed formularies have been available for some time, he believes usage will now begin to increase.
More research—or broader sharing of findings—is also needed for small business. “It’s incumbent on insurance carriers to make more resources available to smaller organizations, so that they understand the impact of their plan design,” Mark says. “One specialty drug claim could be more than they spend on their benefits plan annually.”
Brian Bockstael, president of Coughlin & Associates Ltd., agrees, pointing out that even self-insured employers with stop-loss insurance will eventually feel the pinch. “The cost of stop-loss coverage will increase with the prevalence of biologics.”
In the disability management area, many providers are focusing their research on prevention, heading off disabilities before they arise.
“Employers are no longer dabbling in wellness—they intuitively understand that wellness increases engagement and productivity and absolutely want to have a wellness plan,” says Stuart Monteith, senior vice-president, group benefits, with Sun Life Financial. “But research is needed that clearly establishes the financial benefit of investing in wellness.”
Sun Life Financial recently partnered with the Richard Ivey School of Business at Western University in London, Ont., to conduct such research.
However, new solutions require employer participation and support. “We look for proactive advisors and plan sponsors that will participate in pilot groups for new tools and products. We need their involvement to ensure that we’re meeting employer needs,” says Jean-Guy Gauthier, manager, strategy and product development, group insurance, with Standard Life.
Bringing employees on board
Communication is key to ensure that employees support efforts to preserve benefits. Canadian Tire, for example, uses a variety of media, including TV screens in office lobbies.
Says Goldman, “We want to raise the cost management issue with our staff, explain the situation and our rationale, and gain their buy-in.”
Insurance providers can help to get employees, plan sponsors and advisors on board by offering education and engagement tools, adds Fedorchuk.
And results from the 2011 sanofi Canada Healthcare Survey suggest that employees are willing to help. Of plan members surveyed, 41% say they would prefer to pay higher premiums to maintain their current benefits, in the event that their employer is unable or unwilling to pay for increased costs. Just 12% would opt for reduced benefits to avoid higher premiums.
It’s a challenging environment for plan sponsors. But insurers are confident they can help contain cost increases and provide valuable coverage for employees to keep benefits plans sustainable for years to come.
Marcia McDougall is a freelance writer and president of InteGreat Marketing. mmcdougall@integreatmarketing.com
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