Wellness programs deliver savings

The 2010 Group Health Care Cost Control in Canada, a poll of 665 Canadians from the employee benefits industry, finds that the proportion of employers offering wellness initiatives rose nearly 20% to 78% in 2010 of employers, from 61% in 2009. Further, nearly one in five organizations currently not offering wellness initiatives anticipates doing so in the future.

Popular wellness initiatives include flu shot programs (71%), complementary and alternative medicine (52%) and smoking cessation programs (48%). The number of employers offering alternative medicine jumped significantly between 2009 and 2010, from 29% to 52%, respectively. Almost 10% of plan sponsors offering wellness initiatives report that they measure the return on investment of their programs, of which 88% find the results are positive.

War on drugs
Many employers have implemented a number of cost-management techniques to help control rising prescription drug costs, including pay-direct card plans (71%), promoting the use of generic drugs (62%) and requiring participant contributions (59%). And, in an effort to make employees more price-conscious consumers, nearly half of all employers (48%) are informing employees of the costs of filling prescriptions.

“Prescription drug costs are a leading reason for healthcare cost inflation, and employers are actively combating drug cost increases,” says Sally Natchek, senior director of research with the IFEBP. “At this point, it seems inevitable that drug prices will be overhauled in Canada, most likely through the efforts of both provinces and private employers.”

Employers in 2010 are increasingly promoting the use of generic drugs, place limits on specialty or biotech drugs and using high-amount claims pooling, lowest-cost alternatives. And a majority (64%) see Canada’s aging population as a top driver of the increases in prescription drug costs. Cost drivers are identified as an increase in specialty drug use, government cost-shifting and drug company profits.

If you build it, they will exercise
A clear majority of employers (83%) said that building a culture of health (encouraging employees to be healthy, minimize risk factors and choose appropriate health services) is central to their strategy to improve health and contain costs over the next two years. Other popular strategies for the future include wellness programs (63%), disease management programs (58%), consumerism (57%) and alternative medicine (35%). More than one-third of respondents indicated that they are likely to increase their emphasis on voluntary (employee-paid) benefits.

“By embracing these initiatives, employers are continuing to emphasize the vital role of employees in making judicious health purchases,” says Natchek. “Employers believe that implementing these types of approaches will lead to lower healthcare costs, as well as a healthier and more productive workforce.”

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