An Insurance Perspective
Irene Klatt Canadian Life and Health Insurance Association Inc. (CLHIA)
An Insurance Perspective
• An Overview of Private Insurance • Our Customers . . . and their Challenges • Impact of Changes . . . Legislative . . . Changing Role of Pharmacists • Interacting, Engaging, Succeeding
An Overview of Private Insurance
• Life, Disability, Health, Pensions • Extended Health Care
– – – – Prescription drugs Semi-private hospital differential Other healthcare practitioners Out-of-country emergency benefits, etc.
• Critical Illness
Understanding Group Plans
• Role and objectives of the Plan Sponsor (employer) • Benefits as non-taxable compensation • Disability, Life, Health, Dental • Double-digit growth • Economic factors
Private Extended Health Plans
• Offered on a voluntary basis (except Quebec) • Purchased on group basis by employers, unions, associations, etc. • Private extended health plans supplement, but do not duplicate the provincial plan coverages • Retiree benefits being cut
Employers’ Benefit Considerations
• Attracts, retains, maintains productive employees • Provincial consistency
• Value, awareness, demand for services
• Cost-containment
Extended Health Benefit Components
5% 3% 6% 9% Drugs Semi-Private Hospital Paramedical Services Aids and Devices Out-of-Country Emergency
77%
Private Drug Insurance Plans in Canada
Year Benefits Paid ($millions)
2005 2004 2003 2002 2001 2000
7,000 6,800 6,400 5,200 5,100 4,300
DISTRIBUTION OF HEALTH CARE COSTS
DOCTORS
DRUGS
HOSPITALS
HOME CARE
OTHER OTHER PRACTITIONERS
Recent Pressures
•Increasing health benefit costs
–increased utilization –health cost increases –cost-shifting from provincial plans –financial sustainability
Plan Sponsor Challenges
• Cost increases - new more costly products, increased utilization, etc. • Tough decisions on what drugs to cover • Plan maximums may limit coverage • High cost oncology drugs, biologics
Cat Rx Drug Examples
Drug
ENBREL
Treatment for
Rheumatoid Arthritis Chronic Lymphocytic Leukemia & Non-Hodgkin’s Lymphoma Crohn’s Disease or Rheumatoid Arthritis Chronic Myeloid Leukemia
Approved
Dec 2000
Estimated Cost
$20,000 $7,000 - $8,000 for 6 month treatment $5,000 $15-20,000 $60,000
FLUDARA
Feb 2003
REMICADE
June 2001
GLEEVAC
Sep 2001
FABRAZYME
Fabry Disease
January 2004
$300,000
. . . and more Challenges
Drug Program Changes
• Ontario Bill 102
– Generic price reductions to ODB – ODB as second payor for working seniors and federal program retirees
Impact of Changes . . .
• Transparent Drug System for Patients Act (Bill102)
– Cost savings for public drug program
• Volume buying • Generic pricing
– Changing role of pharmacists – Cost-shifting to private plans and payers
Cost Implications for Extended Health Plans
• • • • • • Plan experience Utilization Demographic changes Change in drugs prescribed Change in mix of health care coverage Co-payments, deductibles, maximums
Drug Spending
• Drug spending per claimant up $48 to $621 (ESI Canada, 2006) • Driven by increase in utilization and changes in drugs prescribed • Newer DIN: $75 • Older DIN: $40
Cost-Containment Options
• • • • • Dispensing Fee caps Generic Substitution - 39% of plans Mandatory generic plans – 7% Managed Formulary - 65% Few use Dynamic Therapeutic Formulary to encourage use of lower cost interchangeable generics; cutback to encourage switch
Addressing the Needs Ahead
• Which drugs are covered? On what basis? • Funding Challenges exist for Insured Public/Private/Uninsured • National catastrophic drug plan
Expanded Role of Pharmacists
• Prescribing authorities • Contractual definitions
Wellness Programs
Expanded Role of Pharmacists
• Is it cost effective?
• Does it enhance productivity?
• Is there employer demand for coverage of these services? • Can the service be quantified and understood?
Interacting, Engaging, Succeeding
• Important role in medication management and pharmaceutical advise • Compliance – improvements are welcome • Disease management - disability reduction • Point of contact in pandemic planning; trusted advisor
Prepare for the Future . . .
• Enhance linkages between health services for better evidence-based plan management and policy decision-making • Better use of advanced tools • Focus on efficient and cost-effective use of public and private resources • Promote sustainability and accountability