In 2021, an Aon survey predicted that employer-provided medical benefits would increase by seven percent in 2022, driven by emerging trends in employee health and wellbeing, the increasing prevalence of multiple chronic conditions, as well as inflation and other business factors.
Read: Research shows that the cost of employer benefits in Canada will increase by 7% by 2022
“We believe there is a need now more than ever to use these benefit spending efficiently as it increases,” Kennedy said. “But also, [plan sponsors need to] balance these program costs in a way that responds to emerging trends, so we don’t ignore employee health and wellbeing and squeeze the balloon, so we impact one area and cut costs in others.”
According to TELUS Health’s 2022 Drug Trends Report, the average eligible amount per claim for a drug increased by nearly eight percent from 2020 to 2021, well above the growth rate of the previous four years. It found that specialty drugs used to treat rare diseases and unique conditions were the leading cause of these costs — while representing just 1.4 percent of all claimants, specialty drugs contributed to more than 34 percent of eligible upcoming claim amounts.
The report also highlighted medication non-compliance as a concern for benefit sponsors, Kennedy said, noting that 43 percent of plan members said they didn’t always take their medications as prescribed, which can reduce treatment effectiveness. for those taking medication to treat a chronic condition.
TELUS Health has also seen chronic diseases account for nearly 68 percent of the cost of benefits, affecting one in six workers. A quarter of workers with chronic conditions use three or more medications to control their health.
Read: Fewer Plan Members Making Drug Claims, But Special Drugs Increase Average Eligible Amounts: Report
According to the company’s claims data, musculoskeletal problems, cardiovascular disease, diabetes, cancer and mental health are the top five conditions affecting Canadians, with the latter becoming one of the fastest-growing health problems during the pandemic.
Notably, the prevalence of diabetes has risen about 3.3 percent per year and is poised to take over the No. 1 spot for private group plan spending, Kennedy said. The progressive condition could force employees to spend thousands of dollars a year in drug costs, he added, recommending that any benefit plan sponsor make diabetes management a standard offering.
Improper management of these conditions can spill over from drug and medical claims to other areas of the benefits plan, Kennedy said. For example, mental health problems now account for between 30 and 40 percent of short-term disability claims and 30 percent of long-term disability claims. “Appropriate care is just as important as cost control.”
Vishal Ravikanti, director of pharmacy advice and partnerships at TELUS Health, also said during the webinar that benefit plan sponsors can make multiple changes to their drug plans to optimize cost savings, such as pre-authorization and issuance fee limits. While he noted that these limits can be passed on to the subscription member, people with chronic illnesses tend to fill their prescriptions every 90 days, so setting a maximum number of pharmacy charges per year can help ensure compliance with those limits. 90-day period and may also promote adherence by reducing participants’ drug depletion.
Read: 2022 Tech Insights: How a Virtual Pharmacy Can Improve Plan Member adherence and management
Ravikanti also pointed to the usefulness of reference-based pricing, which sets a maximum reimbursement amount for all drugs in a therapeutic class and can control costs in a given disease space. Step therapy, mandatory generic substitution, biosimilar administration and specialty drug programs can also help reduce costs, he said.
Kennedy suggested that benefits plan sponsors are redesigning the plan to introduce virtual care and digital pharmacy options, which can help with chronic disease management, adherence and cost containment.
He said this offering could increase workers’ access to care with lower co-payments and free deliveries, give them reminders and improve adherence to treatment, and enable them to manage their relatives’ medications as well. According to data from TELUS Health, one in three workers is likely to use virtual care for medicines in the next year if they were available. For employers, these offers lower fees and charges, come with generic replacement, 90-day refills, and seamless integration.
Speaking during the webinar, Francesca Armelin, director of customer experience at TELUS Health, said there is an “urgent need” for a new way to support employee wellbeing at a time of unprecedented stress and burnout and as employers face attempts to recruit and retain key talent in a tight labor market.
An integrated virtual care offering could be of great value to employees, she said, noting that the offering includes 24-hour access in both official languages, instant connection to a care manager, consultation with registered nurses and nurse specialists, continuity of care and the ability to access primary care, employee assistance programs, and mental health support on the same platform.
Read: Report 2022 Group Benefits Providers: Virtual Platforms Reshaping the Public, Private Healthcare Landscape