Are health-related reports typically available to plan sponsors too complicated or too simple? Do they serve the desired utility as a key decision tool? Given the rapid pace of change in the healthcare environment—and, in particular, with respect to regulatory, pharmaceutical, pharmacy and utilization trends—the need has never been greater for plan sponsors to access practical and user-friendly diagnostic reports that illustrate health-related opportunities and risks.
Compared to a plan sponsor’s other group benefits claims, only drug claims data provide a readily available and reasonably comprehensive view of drug and disease prevalence indicators among the majority of plan members. This, in part, is due to drug benefits being the most commonly used benefit provided to and used by members. It is also a result of the majority of drugs and, in particular, drugs for chronic medical conditions being used out of need versus want.
But while drug claims diagnostic reports can generate insights far beyond simply a drug view, there are challenges.
Language barriers
One of the common challenges in the current state of most standard reports is the language used. These reports have a built-in assumption that most plan sponsors would have a comprehensive grasp of the drug classification lexicon. But is it reasonable to assume that the average plan sponsor should be familiar with the commonly prescribed drugs?
Take Januvia as an example. Should the report provide the drug’s classification by its chemical category (hormones and substitutes) or by the common disease state treated (diabetes)? Given the intended audience of the report, the latter is more relevant—especially because many drugs for birth control, thyroid disorders and menopause would fall under the same chemical category as Januvia. If a chemical category is provided instead and generates confusion, what is a plan sponsor to do? Rely on the results of a Google search? While there are good drug information search engines provided by Health Canada (e.g., the Drug Product Database Online Query), provincial drug plans (e.g., the Ontario Drug Benefit Formulary/Comparative Drug Index) or carrier-provided health libraries, a plan sponsor should not be required to search for basic information about drugs claimed and medical conditions that they’re most commonly used to treat.
Drug landscape
Another challenge is the complicated drug landscape. There are thousands of drugs covered under a typical drug plan in Canada. Unlike the lexicon associated with dental, paramedical and disability benefits (which are more easily understood and recognized), perhaps carriers and advisors need to better recognize that since drugs often constitute the largest proportion of benefits cost to plan sponsors, diagnostic reports should be populated and summarized with key facts and insights using layperson terms whenever possible. It’s unreasonable to expect plan sponsors to become drug or health experts—especially since the majority of employers in Canada are small or mid-size and do not have internal or readily accessible external resources to guide them through the “DIN and disease abyss.”
Demographics and disease distribution
A plan sponsor’s people and plan design is a strong determinant of current and future risk exposure to health-related costs. There is a strong association between age, disease prevalence and drug expenditures. For example, a typical open drug plan will have more than 65% of drug expenditures associated with plan members over the age of 40. Drugs for attention deficit disorders represent the largest drug expenditure for male dependents under the age of 20; female plan members constitute the majority of drug expenditures within the 20- to 29-year-old age group.
Men over 40 and, in particular, those over 50, drive the majority of drug expenditures, especially for common conditions such as elevated cholesterol, blood pressure and diabetes. Mental health, and in particular depression, is common in Canada, but from a drug expenditure standpoint it pales in comparison with cardiovascular and diabetes conditions among plan members 50 to 64 years old.
Demographic insights provide important context as to whether a company’s drug and other health expenditure trends are reasonable or unexpected. Plan sponsors would value a better understanding of the demographic composition of their workforce, including spouses and dependents, who, as a subgroup, are typically associated with 30% to 45% of total drug plan expenditures.
Since demographics are such an important determinant of disease and drug utilization characteristics, it is also reasonable to infer that plan sponsors would highly value a more practical view of the connection between their demographics and disease distribution. While there are valuable insights generated by health risk assessments (HRAs), these are based on plan member self-reporting and self-awareness (see “Growing Pains” in Benefits Canada, December 2011). Determining disease prevalence and distribution based on actual drug claims is often a far more accurate measure of existing and emerging health trends, provided they are illustrated in a practical and visual manner.
Better understanding of disease prevalence characteristics and demographic distribution specific to a group also serves a number of other practical purposes. Plan sponsors have more ancillary health products and services to provide to plan members than ever before. Employee assistance programs, critical illness, health navigation or second opinion, mental health management, cancer navigation, HRAs and online and on-site wellness activities are just a few examples. Depending on the provider, some may be value-add or fee-for-service. Regardless of the funding arrangement, options selected should be premised on key health metrics that support the value they may generate for both the plan member and plan sponsor.
When a plan sponsor asks whether these health products and services are relevant for its organization, he is searching for information beyond general statistics, research or popularity among other employers. Value and diagnostic insights specific to a group would greatly increase the desired health promotion and health outcomes and product penetration. This is not to suggest that advanced and sophisticated predictive health and financial modelling is critical. But plan sponsors in the small to mid-market simply wish to have simple decision tools that provide guidance and reassurance of which ancillary health services are of value to plan members. They also want to know how the products selected should be communicated to plan members and targeted subgroups of members.
Considering diagnostic-driven drug plan management, especially given the increased attention by all health providers on generic drug penetration, plan sponsors are clearly not fully capitalizing on generic drug savings possible today and tomorrow. General metrics on percent of claims or dollars for all generic (or lowest-cost alternative) drug claims are not sufficient and, in fact, can often be misleading.
A highly customized view of which drugs and diseases are associated with opportunities associated with generic and interchangeable brand name drugs is critical and serves as an important decision tool. This is not simply to generate drug plan savings but to provide a view of how best to redirect some of the savings into the right core and ancillary group health products and services.
What is encouraging is the broad recognition among all healthcare providers—and, in particular, group insurance carriers and advisors—that current reports are not as effective as they ought to be. Advancements are being made in better diagnostic reports within a line of group benefits and, indeed, by some, integrated diagnostics that factor in multiple lines of benefit, demographic, health and financial metrics.
There’s no question that plan sponsors would benefit more from drug claims reports that are at once more sophisticated and simpler to interpret than most standard reports available today. But while it is a substantial undertaking to achieve both sophistication and simplicity, the art and science of smarter diagnostic decision tools supported by advanced analytical systems and subject-matter experts with practical know-how certainly will make it possible.
Martin Chung is assistant vice-president, strategic health management, with Equitable Life of Canada. mchung@equitable.ca