However they will likely also result in a probable cost shift between the public purse and sponsors of employee benefit plans. Pharmacists want to be compensated for their services and currently a substantial portion of their costs are borne by the private sector. As new payment models evolve, it is not hard to imagine that employee benefit plan sponsors will be expected to pay for these expanded services even if the primary beneficiary in terms of reduced cost is the public system.
We saw a recent demonstration of this approach when the Alberta government implemented a transition fee (for benefit plan sponsors) on top of the normal dispensing fee to help compensate pharmacists for reduced rebates on generic drugs. Reform is needed, but the employer’s role should be negotiated. Could we some day see governments legislate the provision of employee benefits to full-time employees?
Finding a voice
Employers have a big stake in the politics, but corporations don’t have a vote. They need a voice, not unlike the special interest groups that influence policy. There have been some examples of employers organizing around health issues such as the Employer Committee of Alberta and Ontario and both groups have enjoyed some success. However, the issue is time, and staying in front of governments takes a lot of it.
There are several things employers should be doing today in anticipation of the shifts governments are expected to make:
Get in the political game
Governments react to public pressure. Employers need to form an opinion on healthcare reform and they need to invest the time and money to make their views known to provincial and federal politicians. The alternative is to simply react to the changes.
Immunize your benefits plan
There are steps that you can take to immunize your benefits plan from the impacts of government downloading of costs. Most plans are positioned to wrap around government programs – you can reserve the right to not automatically pick up costs shifted from the government (although in reality many employers still do). You can limit your costs through plan maximums or by employing more defined contribution type plans such as health spending accounts.
Control the distribution channel
If you control the distribution channel, you have more control over how these costs change. For example, if you negotiate a pharmacy preferred provider network, you have some influence over how government policy decisions in this space are implemented and impact on your benefit plan.
Transfer responsibility
Employee benefits are important in the war for talent so it is not likely or practical that employers will want to get out of the game completely. However, a portion of the benefit promise may be satisfied through the individual/voluntary benefits market. Dealing with the consequences of healthcare reform can then be a shared responsibility between the individual and the insurer.
Change your mindset
Most employers view benefits as a cost rather than an investment in the health of employees and their families. There is growing evidence linking healthy employees to productive employees to better products, satisfied customers and ultimately higher profits and shareholder returns. By any measure, keeping people healthy and productive is a good investment and even if the cost doubles or triples, the return on investment is very good. Healthcare decisions made for political reasons lead to imperfect decisions, the consequences of which employers will need to navigate. The fiscal challenges of healthcare are real and more costs will be downloaded to the private sector in a way (and at a time) over which employers will have very little influence. That is unless—of course, employers participate in the debate.
React to changes as the government makes them, or be proactive is shaping the future of healthcare in Canada – it is your choice.