Recently, a plan sponsor with approximately 2,000 lives asked its carrier for a potential program that centres on surveillance of narcotic drug claims. The sponsor was told nobody had ever requested that before.
Sick? Take a pill...or several. Canadians rely on medication to make them well when they are ill—and, for some people, to stay healthy. The medical system in Canada is treatment-based rather than preventative—the fact that full medical exams for healthy adults are no longer covered by OHIP reinforces that model.Employee benefits plans often follow this path as well and, ultimately, pay the price.
When drug plans are designed and managed properly, there is an opportunity for a win-win scenario for all key stakeholders involved. Drug plan management does not need to be a zero sum game, as it is often portrayed. A properly designed and managed plan that benefits everyone doesn’t happen automatically, but the process of getting there is far less complicated than many plan sponsors and advisors realize. The rewards can be significant.
Plan sponsors lack understanding of plan-spend issues, such as cost drivers, inefficiencies and forecasting. Thankfully, a number of tools are available to help plan sponsors comprehend and contain costs.
Using mandatory generic substitution when designing a benefits plan can help with control drug costs, but what measure of control can be offered when a brand name drug has no generic equivalent?
Insurance carriers and pharmacy benefit managers (PBMs) have long observed that plan sponsors rarely request many of the products developed to help contain drug plan costs (e.g., managed formularies, tiered plan designs, enhanced prior authorization programs, therapeutic substitution initiatives). Recently, a plan sponsor with approximately 2,000 lives asked its carrier for a potential program centring around the surveillance of narcotic drug claims and was told that nobody had ever requested that before. This paints a bleak picture of the discrepancy between what’s available in the marketplace and what’s being requested by plan sponsors.
Actions taken by U.S. employers in 2012 to better manage their health plans led to the country’s lowest average annual cost increase since 1997, according to results from a recent Mercer study.
In April, the Canadian Life and Health Insurance Association (CLHIA) announced the creation of an industry wide drug pooling agreement that will protect fully insured private drug plans from bearing the full financial burden of high cost drugs.
The federal government is getting out of the medicinal marijuana business and is looking to move the prescribing responsibilities to doctors and the manufacturing to the private sector. Right now, the impact on plan sponsors is moot, but that could change.
Chronic illnesses such as depression, cancer, heart disease, stroke and diabetes cost organizations big dollars in declining productivity, as well as soaring drug costs and claims for short- and long-term disability. It’s a problem many employers are addressing with an “ounce of prevention” approach, seeking to manage the impact of chronic diseases by improving employee health and wellness.